Signs of a Bad Loan Officer to Avoid in Your Mortgage

A bad loan officer can cost you thousands of dollars in unnecessary fees and interest, not to mention the stress and hassle of dealing with a difficult person.

They may push you into a loan that's not right for you, such as a loan with a higher interest rate than necessary.

If a loan officer is not transparent about the terms of the loan, that's a red flag - they may be hiding something.

They may also be overly aggressive in trying to sell you additional products, such as mortgage insurance or credit protection.

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A pattern of negative reviews can be a warning sign of a bad loan officer. One or two bad experiences out of hundreds should not be the focus, but rather a red flag indicating disorganization or disinterest.

Bad communication with the loan officer is a common complaint. If several reviewers note that it was hard to communicate with their MLO, that could be a sign of trouble.

A slew of 5-star ratings may not be entirely trustworthy. It's unlikely that 100% of clients are happy 100% of the time, so be wary of perfect performance.

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The Overpromiser is a loan officer who's too eager to accommodate loan requests, but can't follow through on their promises. This can lead to a term sheet that's overly optimistic, only to be adjusted during due diligence with excuses like "we can't actually do _____ because…".

Pressuring clients to act too quickly is another red flag. A good mortgage loan officer will take the time to explain loan products and answer questions, but a predatory lender will try to rush you into signing without explaining the fine print.

Constant delays and slow processing can also be a sign of a disorganized or overwhelmed loan officer. This can include taking too long to return emails or phone calls, or not notifying you of problems that can affect the processing of your application.

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The Overpromiser is a loan officer who's too eager to accommodate loan requests. They'll often send out a term sheet with glowing promises, but can't follow through.

You might get a term sheet from The Overpromiser outlining all the ways their loan beats the competition. But during due diligence, the excuses start to come.

Legitimate reasons may arise during the diligence process that warrant adjusting the loan's terms. However, with The Overpromiser, they'll change the deal without new information warranting it.

It's better to steer clear of this lender from the beginning, rather than getting caught up in their overpromising and underdelivering.

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Constant delays in the mortgage loan process can be a major headache, and if you're experiencing them, it may be a sign that your loan officer is not being diligent about your case.

If your loan officer is taking an inordinate amount of time to return emails or phone calls, it's a red flag. This can be a sign that they're disorganized or underwater.

Delays can also be caused by a lack of communication from your loan officer. If they're not notifying you of problems that can affect the processing of your application in a timely manner, it's a sign that they may not be on top of things.

Good luck getting the Can't Be Bothered loan officer to respond to your concerns, unless they receive an acute sense of their self-perception being bolstered.

A good mortgage loan officer will not only take the time to explain loan products in detail, but will also answer your questions, and be patient while you decide.

Pressuring clients to sign on the dotted line too quickly is a red flag, indicating bad client service. This behavior is often a sign of predatory lenders trying to take advantage of clients.

Predatory lenders will try to rush prospective homebuyers into signing up for loans that are meant to benefit the lender, not the client. The company and the MLO will make money while the client is left with a loan that may not be in their best interest.

Shady lenders who push clients to sign without reading the fine print should not be trusted. They neglect explaining the implications of the loan for the client's personal situation.

Be cautious of unsolicited offers from loan officers, as they can be a red flag. Unsolicited offers often come in the form of flyers or mailings from businesses you've never heard of before.

Flyers left on your doorstep or attached to your vehicle can be a sign of aggressive marketing tactics. Mailings from unknown businesses can also be a warning sign.

Telemarketers trying to convince you over the phone are another example of unsolicited offers to watch out for. These tactics can be a sign of a loan officer who's more interested in making a sale than in helping you find the right mortgage.

To avoid being swindled, be wary of these tactics and don't respond to unwelcome marketing attempts.

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If you notice unusually high rates and fees, it's time to take a closer look.

Request to have the FICO scores clarified to you and look at rates with other lenders. You can also contact another lender to inquire about the rate you're currently paying.

You'll have three days to reconsider your decision if you're refinancing.

A mortgage rate lock is a commitment by your lender to maintain the interest rate you're offered, regardless of market changes.

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Unsolicited offers from loan officers can be a red flag. They may drop flyers on your doorstep, attach them to your car's window, or send mailings from businesses you've never heard of before.

If a loan officer contacts you via phone, be cautious. They may try to convince you with aggressive tactics.

To avoid being a victim of fraud, don't respond to unwelcome marketing attempts. Legitimate loan providers will find you through your own research.

Here are some ways to identify untrustworthy loan officers:

If a loan officer is pushing you to make a decision quickly, it may be a sign of a scam. Take your time, do your research, and don't rush into anything.