The Mortgage Professor as Your Ombudsman: What Does it Mean?

The ombudsman concept developed as a protection, or a source of redress, for individuals treated unjustly by governments, corporations, universities or other entities whose powers vastly exceed theirs. To be workable, the larger entity must recognize and be willing to deal with the ombudsman.

The concept is relevant to home mortgages not so much because of the difference in power between borrowers and lenders, but because of the vast difference in knowledge. Indeed, because many lenders compete for mortgage business, absent the large difference in knowledge, borrowers could shop on a level playing field. The professor’s objective is to do exactly that – to create a level playing field by eliminating the knowledge difference between borrowers and lenders.

Unlike other kinds of ombudsman, however, only a small part of his function involves dealing with borrower complaints. The larger part consists of developing systems that facilitate the process of assuring a level playing field, so that complaints seldom arise. When they do arise, the lenders offering loans on his site have committed to accepting his judgment on the merits.

The remainder of this article describes the components of the level playing field he has developed.

Mortgage Prices Come Directly From Lender Pricing Systems

Borrowers need direct access to the prices posted by the lenders they are shopping. These are the prices at which the lender is prepared to lend at that point in time. Since lenders cannot be held to a price quote until the price is locked, the prices quoted by a loan officer (LO) can differ from posted prices.

When first contacted, LOs may price below the posted price, referred to as “low-balling,” in order to convince the borrower that his prices are the best around. When a loan has been cleared for a lock, the price may be “high-balled” -- above the posted price. At that point, the borrower is usually committed and backing out would be costly.

On this site, the prices displayed are always posted prices, and LOs have no power to change them.

Assurance of Anonymity

Borrowers should be able to shop prices anonymously. While they must provide the information needed to price their loan accurately, disclosing information that can be used to contact them is a sure guarantee that they will be besieged by low-balling LOs competing to see which is the better liar.

None of that happens on this site, lenders hold their peace until they are contacted by the borrower. At that point, they relinquish anonymity, but only with respect to the one lender they select.

Prices Are Fully Adjusted

Borrowers shopping for the best deal want the prices they shop to be adjusted for all the features of their transaction that affect the price. If there are 12 such features and the site asks about only 6, it means that the site is assuming values for the other 6. Since the assumptions are always those associated with the lowest prices possible, sites that limit their questions in this way often price understate the price.

Why would a web site ask only 6 questions when 12 pieces of information are needed for accurate pricing? The reason is shopper impatience. More of them will complete the questionnaire if it has fewer questions. Since the objective of most sites is to compile the largest list of leads possible, the loss of accuracy is not considered a major problem.

Prices Are Timely

You want the prices you see on the screen to be live, not obsolete. Since lenders reset their prices every day, and sometimes during the day, a system providing timely prices must be directly linked to the system that generates prices. The button push that delivers new prices to LOs should also deliver these prices to the web site on which you are shopping. That is the case with this site. If web prices must be updated through a separate process by someone who might be at lunch or out sick, which is oft en the case, the web-based prices may become obsolete.

You Can Qualify Yourself

You want to be able to qualify yourself on the site before you price a loan so that you don’t waste your time. If you can’t qualify, the next step should be to determine why and what can be done about it, which is where this site takes you. There is no point in pricing a loan for which you don’t qualify.

Help in Deciding the Best Loan Type

You want decision support in selecting the loan program that will cost you the least over the period you expect to have the loan. This removes the risk that an inexperienced or careless loan officer will place you in the wrong loan. This site provide s that support.

Help in Deciding Whether a Refinance Pays

If you are refinancing, you want decision support to include your existing mortgage, as it does on this site. This assures you that the new mortgage will cost you less in total than the old one.

Help in the Unlikely Event of Trouble

Mortgages are complicated, as is the mortgage process, things sometimes go wrong even on the best systems, When that happens, it is helpful to know that there is an informed and objective third party with the clout needed to find a solution. The professor or his agent is that party.

Want to shop for a mortgage on a level playing field?

Why Shop for a Mortgage with the Professor?

  1. Receive His Help in Finding the Type of Mortgage That Best Meets Your Needs
  2. Shop Prices Posted Directly by His Certified Lenders
  3. Shop Prices Fully Adjusted to Your Deal
  4. Shop Prices That Are Always Current
  5. Get Him as Your Ombudsman Just in Case

Read More About the Support and Protections Listed Above

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