In today’s competitive mortgage market, when a lender pulls a credit report on a borrower, the credit bureaus (Experion, Equifax and Transunion) are selling that borrower’s information to other internet lenders. Some unscrupulous lenders then try to solicit borrowers already in a mortgage application with another lender, offering what seems to be a better deal.
At Indigo Mortgage, we call these internet lenders “bottom feeders”. Here’s how extreme it is: I had a borrower sitting at my desk as I pulled his credit for his mortgage loan application. Thirty seconds later, his phone rang with a bottom feeder on the line.
These internet lenders don’t know the borrower, they don’t know Indigo Mortgage but yet they promise the borrower they can beat our offer.
As we’ve said for decades, we encourage borrowers to shop for the best mortgage rate and fees, but we believe the borrower should decide who they shop with. Often, when one of these bottom feeders do entice the borrower to change loan companies mid-stream, by the time the loan goes to closing, it looks nothing like what they were promised.
Our advice: shop your mortgage but stick with local mortgage companies and avoid the bottom feeders at all cost, as it’s probably going to cost you if you take the bait.