Author Topic: Choosing a loan servicer?  (Read 528 times)

jeromedawg

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Choosing a loan servicer?
« on: May 29, 2021, 10:02:48 PM »
Hey all,

How do you go about selecting the loan servicer after getting past the preapproval stage and getting an offer accepted? We haven't gotten the offer accepted but are preparing ourselves because we may have a decent chance at it. Right now I have gotten preapprovals from two different servicers who I've been working with to generate preapproval letters. I did have a couple more servicers that I was working with but they've been horrible at keeping in touch with me, so I'm inclined not to use them.

Do you guys pretty much go with the lowest priced servicer most of the time? One servicer is the one my realtor recommends through his network (she's local). The other is run-of-the-mill Quicken/Rocket Mortgage - he and his team are very on top of following up (a little too much) and some things they're a little 'slow' on (like getting my pre-approval renewed) but they're generally good with the communication.

How do you guys go about choosing? Or do you keep shopping around more? It's a bit overwhelming thinking about figuring out which one to choose or if I should be shopping for more...

iluvzbeach

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Re: Choosing a loan servicer?
« Reply #1 on: May 30, 2021, 08:29:29 AM »
I look for the best rates and lowest fees. We recently used PenFed.org on two purchases and they were terrific both times. I have no affiliation with them but highly recommend them. They were responsive, organized and really on top of things. We were actually able to close one week early on one transaction and they were ready two weeks ahead of closing on the other. Our escrow officer said she’d never seen a lender deliver docs so far in advance of closing. We got 2.375% on one and 2.50% on the other, no fees on either and they both offered lender credits at closing.

Good luck on your offer and hopeful purchase!

jeromedawg

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Re: Choosing a loan servicer?
« Reply #2 on: May 30, 2021, 08:46:59 AM »
I look for the best rates and lowest fees. We recently used PenFed.org on two purchases and they were terrific both times. I have no affiliation with them but highly recommend them. They were responsive, organized and really on top of things. We were actually able to close one week early on one transaction and they were ready two weeks ahead of closing on the other. Our escrow officer said she’d never seen a lender deliver docs so far in advance of closing. We got 2.375% on one and 2.50% on the other, no fees on either and they both offered lender credits at closing.

Good luck on your offer and hopeful purchase!

Funny you mention that - Penfed is one of the ones who has been super flaky and not good with following up or responding :( It could just be the guy I'm working with though - would you mind referring me to the loan officer you worked with? Maybe I'll reach out directly to them. I didn't renew my loan with them but am still within the window so I guess I can give them another chance. But I'm not a fan at least of the loan officer who initially helped me.

iluvzbeach

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Re: Choosing a loan servicer?
« Reply #3 on: May 30, 2021, 09:06:54 AM »
Yes, I’ll send you a PM with contact info.

P.S. I should have mentioned that the rates I referenced were for purchases that closed in late Feb & late March. I know rates have gone up a bit since then.

uniwelder

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Re: Choosing a loan servicer?
« Reply #4 on: May 30, 2021, 11:39:10 AM »
I'm currently doing a refinance with PenFed.  There have been numerous delays and I think they're mostly overworked right now.  Most of my correspondence seems to happen after their normal business hours.  Total processing time is running about 6 weeks for me, but the loan processor assigned also quit the company about halfway through, so that added to it.  I do like how streamlined their process is and their rates were about the lowest when I was looking around.

That said, when we were selling our home about 2 months ago, a lot of agents I talked with recommended local lenders.  They said there have been so many problems with appraisals (either delays in scheduling that pushed the closing date out or values coming in low) when dealing with online lenders, that sometimes sellers would choose between competitive offers based on which bank was being used.  The idea being that local lenders had a more reliable set of appraisers they engage with.

iluvzbeach

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Re: Choosing a loan servicer?
« Reply #5 on: May 30, 2021, 12:27:50 PM »
Although we used PenFed and were very happy with them, I can totally see where a Realtor might prefer a local lender and even suggest their client choose an offer that’s pre-approved with a local lender over a non-local one. In our situation, the seller’s agent happened to be the same one on both properties we purchased (actually on one of them she was even the seller) and she was leery about them on the first property but once she saw there weren’t any issues, she had no concerns on the second property. In both instances PenFed waived the appraisal and just had someone do a drive by and photograph the outside of the property. We were fine with this as we felt comfortable with the price we paid, and it helped expedite the process.

srad

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Re: Choosing a loan servicer?
« Reply #6 on: June 01, 2021, 10:07:44 AM »
I start and usually end with the lowest priced servicer.   Why would you want to pay more?

Check out loandepot and firstbank.  I've used both online companies in the past for owner occupied properties.  The service was great and the rates and fees were the best I found, and I compared many companies.

And for most cases, its not the servicer you are dealing with, its a mortgage company.  Majority of them sell off your loan as soon as its funds. 

jeromedawg

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Re: Choosing a loan servicer?
« Reply #7 on: June 01, 2021, 11:03:47 AM »
I start and usually end with the lowest priced servicer.   Why would you want to pay more?

Check out loandepot and firstbank.  I've used both online companies in the past for owner occupied properties.  The service was great and the rates and fees were the best I found, and I compared many companies.

And for most cases, its not the servicer you are dealing with, its a mortgage company.  Majority of them sell off your loan as soon as its funds.

Thanks! Is this the website for Firstbank - https://www.firstbank.com/ ? Or is this the one - https://www.efirstbank.com/ ?

srad

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Re: Choosing a loan servicer?
« Reply #8 on: June 01, 2021, 11:45:44 AM »
Ah, firstbank is now Consumer Direct mortgage...  cdmtg.com  - And I haven't used them since the switch.

joe189man

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Re: Choosing a loan servicer?
« Reply #9 on: June 01, 2021, 11:53:22 AM »
Amerisave is low cost and has done a good job for us. The local shop will end up selling your loan to someone after the purchase, not a big deal but likely.

jeromedawg

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Re: Choosing a loan servicer?
« Reply #10 on: June 01, 2021, 01:33:54 PM »
Thanks guys. Did any of you opt to escrow your taxes & insurance? Seems like it's better, if possible, just to handle paying the property tax and insurance separately from the actual principal&interest?

sailinlight

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Re: Choosing a loan servicer?
« Reply #11 on: June 01, 2021, 02:22:10 PM »
I always choose to pay myself unless the lender will charge extra. It always causes me anxiety when the due date creeps up and I notice that the taxes haven't been paid yet. There's no guarantee you'll get the late fees back without a hassle if you're forced to pay them.

jeromedawg

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Re: Choosing a loan servicer?
« Reply #12 on: June 01, 2021, 03:15:55 PM »
I always choose to pay myself unless the lender will charge extra. It always causes me anxiety when the due date creeps up and I notice that the taxes haven't been paid yet. There's no guarantee you'll get the late fees back without a hassle if you're forced to pay them.

In this case with Penfed they don't charge extra fees to pay the insurance and tax. My thought was that the money you are able to sock away (versus paying it out monthly) you can just invest and pay lump sums for insurance and tax each year (assuming you can stomach it too).

iluvzbeach

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Re: Choosing a loan servicer?
« Reply #13 on: June 01, 2021, 08:22:28 PM »
I always save & pay it on my own. I prefer to be in control, plus I hate how the payment changes from year-to-year as taxes and insurance change.

Finances_With_Purpose

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Re: Choosing a loan servicer?
« Reply #14 on: June 02, 2021, 05:19:16 PM »
Unlike auto loans, it doesn't matter much if you wrap tax & homeowners into escrow.  Just make sure that it actually gets paid--but you have to do that anyway.  It's not like it costs more.  And if costs jump up, they give you an interest-free loan for a year to catch up, effectively, so there's not much downside. 

As for loan servicers: get the lowest rate at the best price.  Why?  You don't choose a servicer: they choose you. 

Your loan will likely be sold.  Ours have been sold and sold again.  The bank has no loyalty to you as a borrower.  You're just a pawn in a giant scheme.  The banks make fees from selling the loans so that's the main goal of most of these banks anyway: sell it into wall street.  You may as well get the best price you can find. 

jeromedawg

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Re: Choosing a loan servicer?
« Reply #15 on: June 02, 2021, 06:25:47 PM »
Unlike auto loans, it doesn't matter much if you wrap tax & homeowners into escrow.  Just make sure that it actually gets paid--but you have to do that anyway.  It's not like it costs more.  And if costs jump up, they give you an interest-free loan for a year to catch up, effectively, so there's not much downside. 

As for loan servicers: get the lowest rate at the best price.  Why?  You don't choose a servicer: they choose you. 

Your loan will likely be sold.  Ours have been sold and sold again.  The bank has no loyalty to you as a borrower.  You're just a pawn in a giant scheme.  The banks make fees from selling the loans so that's the main goal of most of these banks anyway: sell it into wall street.  You may as well get the best price you can find.

Thanks! To clarify, you're saying there's not much downside to having the impound/escrow account handle the tax/insurance payments, yea?

Our realtor referred a lender he has used repeatedly and out of all the loan companies and brokers I've checked with so far, she offers the best rates so I'm planning just to use her.

dragoncar

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Re: Choosing a loan servicer?
« Reply #16 on: June 03, 2021, 01:23:31 AM »
As mentioned, assume the underlying loan or servicing will be sold unless you have good data points about the lender (Chase kept my mortgage, as did First Republic, Better sold it immediately)

you're saying there's not much downside to having the impound/escrow account handle the tax/insurance payments, yea?


The downsides are: opportunity cost since the impound is paying little or no interest and the impound is likely a few thousand more than the annual payments

Beyond that, flexibility.  I've paid my property taxes early to move a deduction into a higher earning year or the reverse (pay a little late and incur a fee that is less than the tax benefit).  I've also paid property taxes to meet credit card spend requirements or take advantage of a long introductory 0% APR.  I've paid property insurance for credit card points as well




Fishindude

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Re: Choosing a loan servicer?
« Reply #17 on: June 03, 2021, 07:07:36 AM »
You don't choose a servicer: they choose you. 

Your loan will likely be sold.  Ours have been sold and sold again.  The bank has no loyalty to you as a borrower.  You're just a pawn in a giant scheme.  The banks make fees from selling the loans so that's the main goal of most of these banks anyway: sell it into wall street.  You may as well get the best price you can find.

This is the truth.
With mortgage rates as low as they currently are, most banks don't want to hold these mortgages, as they are not profitable to hold.   Their only real opportunity to make any money on these deals are the fees for setting the loan up and selling it.

Your local banks don't hold many mortgages anymore.  Most of the loans they hold are commercial stuff where the rates are higher an they can make some money off them.