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July 25, 2006
A Complaint About E-Loan, And A Response
Here's an interesting complaint about E-Loan from "VelocityDC," followed by a reasonable response to the complaint that I solicited from the company. Hot Property doesn't make a practice of investigating readers' complaints, but this one seemed worth checking out.
THE COMPLAINT ...
I need to lock in a rate in the next week for a house in Silver Spring and have been shocked by how much the rates change from one day to the next. Besides the most recent interest rate hike by the Fed, what other factors affect the interest rate? Unemployment rates? Oil prices? COnflict in the Middle East?
For the real mortgage rate hawks out there: what are some general tips for trying to get the best rates? Are rates generally lower in the morning or afternoon or does it matter at all? (I'm not the day-trading type, but since I'm going to be stuck with this rate for some time, I'd like to shave as much off the rate as possible.)
I'm also a little perturbed by the loan officer from E-Loan who called me on Friday to tell me ostensibly that she got an email from her boss saying that rates are lower than they have been in months, and encouraging me to lock in that day. That didn't make sense to me then, and now I see that Freddie Mac is reporting that rates on a 30-year fixed are the highest they've been since 2002. Is this fraud? Should I drop ELoan now?
Thanks for any advice.
... AND THE RESPONSE
Again, thank you for bringing this to our attention.
I talked with our SVP of first mortgages. He feels that this sounds like a very common occurrence of a consumer being confused by the complexity of the various pieces of information out there that can factor into consumer lending rates. Specifically, what the Loan Consultant was referring to was the fact that the 10-year treasury benchmark had dropped in the previous couple of days to its lowest in 4 months. However, your writer is comparing this to the Freddie Mac rate which is a backward logging rate – always looking back about a week or so whereas most lenders tend to move with the market. In other words, the writer was not comparing apples to apples. Unfortunately, it seems that consumers are often misled – or tend to misunderstand – the relationship to mortgage rates of these Freddie Mac announcements.
And, I thought I’d take the liberty of providing a couple of tips that might help him and other borrowers make the best loan decision:
It’s usually best to lock in a rate in the morning since most lenders tend to increase their margins at the end of the day and put out their best price in the morning to encourage applications and locks.
As with any decision, it pays to be the informed consumer. Feel free to ask as many questions as necessary to be sure you understand what you’re getting – and what you’re NOT getting. As with the above situation, a consumer should feel perfectly comfortable asking to be convinced that this is the case – ask to understand how this compares with what you might be hearing about Freddie Mac’s rate.
Compare, compare, compare – as with any purchase, be sure to seek out more than one price or offer. Even if you know you’re going to use your local lender or broker, take full advantage of the internet and compare rates, fees, potential overages. Keep in mind that you can’t just compare rates – most lenders will lure you on rate only to surprise you with hefty fees at the closing. Demand a listing of all fees before agreeing to lock. ...
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In looking and comparing loans from different providers, ask for a GFE (good faith estimate) and a TIL (truth in lending) forms. Only then can you compare. Anything less than GFE and TIL is a waste of time.
Posted by: Vasile Ghidon at August 4, 2006 10:36 AM
Buyer beware E-Loan. Terrible service, terrible operation, terrible organization. I wouldn't recommend E-Loan to my worst enemy. They suck.......
Posted by: Carl at August 23, 2006 02:16 PM
BANKRATE= BAIT & SWITCH MORTGAGE ADVERTISING!!
STAY AWAY!!!!!!!!!!!!!!!!!!!! STAY AWAY!!!!!!!!!!!!!!!!!
What Bankrate.com really offers:
Bankrate.com offers a service to potential home loan and mortgage borrowers free of charge where you can enter your state, city and loan scenario to find out interest rates. After you enter in this information, you will be brought to a screen where dozens of mortgage broker shops display their prevailing interest rates. These mortgage brokers pay a substantial amount of money to have their information listed in order to get leads (or potential borrowers). Occasionally, you will see a stray bank or two listed among the brokers.
If you ever have tried this service, you will see that the majority of mortgage brokers offer a rate that is often times ULTRA LOW compared to the bank rates. Have you ever wondered why? It is called "Bait and Switch". Today I noticed that a mortgage broker on Bankrate.com listed their rates at 5.375% for a 30 yr fixed with no points or origination fees (the average rate without points is 6.25% today). I went directly to their website and yes, they are advertising that rate there as well. Let me be the first to tell you that this is an outright deception. I have access to the same rates as these mortgage professionals and unless you are paying 4-5% in points, you are not getting this rate..... period.
Why do they do this?
If I am offering a realistic interest rate at 6.25% and they are quoting a rate a 5.375%, who would you apply with? The person offering the lower rate. It's okay, admit it. No one is judging you. If I didn't know any better, I would definitely look into it. The sad thing is that after several weeks of processing, paying their application fee, and an appraisal fee, if they came back and said your loan was approved for a rate of 6.375%, would you take it? Now keep in mind that your closing is in 5 days, you have forked over $600+ for the appraisal and application fee, and you are closing on the sale of your old home in 3 days and the new buyers are moving in next week. Would you take the loan? You bet you would. Don't shake your head no. You would take it. Oh by the way, you have to pay a 1% origination fee now..... did they forget to mention that to you?
It is services and mortgage swindlers like these that make my it hard for people to trust the real professionals. Folks, be careful of services and brokers that offer the "too good to be true" rates. They are too good to be true and sooner or later, you are going to pay for that decision. Be very careful to request and meticulously review a good faith estimate PRIOR to paying any application or appraisal fees.
Posted by: C. Hanson at August 30, 2006 01:10 PM
E-Loan is indeed horrible. The service is an absolute nightmare. The loan consultants have no knowledge and do not understand (or pretend to not understand) reasonable questions. Not to mention that your application is reassigned to a different consultant every week and you will be asked to re-send all documents. To make matters worse, today my E-Loan consultant e-mailed me that he is "putting a stop" to my asking questions and that I can lock or find another company because they will not answer any further questions. Stay away from E-Loan.
Posted by: Ludo at December 30, 2006 10:30 PM
I borrowed from eloan for an auto and paid it off in Aug 2006. This is Jan 2007 and I am still trying to get the lien release and my title. What really makes me angry is that the "online" company suddenly can only be dealt with by phone when there is a problem. IF I tell them I want my lien release and title which is part of their obligation to me then they should git-r-done. It should have been done without asking. Instead I had to make several calls to find out they lost the title, probably when they were switching me back and forth between companies, and 6 weeks after the calls I got a form to sign for the BMV. So I emailed again and said look get this to the right management, don't make me call, don't make me do any thing else just do your job and I got "sorry for your trouble, call our office" Bullcrap!!!!!!! B
Posted by: belihe at January 10, 2007 07:16 PM
I am a mortgage broker and have been for many years. You are doing a disservice to readers by trying to educate them about the complexity of the marketplace including Wall Street, bond market, FannieMae and all the other things that can affect rates in general.
What really affects your rate are things that borrowers never want to believe when we tell them. Is this a cash out refinance? Are you going to be over 80% ltv? Will the loan size be under 120K? Are you willing to escrow?
People ask me every day "What's your interest rate"? As if there is one rate and one program. There are thousands of programs and thousands of ways to price them!
Want the BEST rate and terms?
Find a mortgage broker with plenty of experience and then ask them to provide 3 references for clients who they RECENTLY closed a loan with. Call the references and ask them how things went. There are honest people and dishonest people in every profession including judges, doctors lawyers, mechanics and evrywhere else. Be realistic. You really don't know more than your broker. Trust your broker after you find a good one by calling for references and then use that same broker over and over again.
Posted by: Kevin Schuyler at January 22, 2007 08:35 AM
Problem with E-loan???
After reading the postings about e-loan, I must say that I just had a wonderful experience with E-loan.
I was able to close the loan on my purchase in less than 30 day with no problems at all. The amount of documentation requested by E-loan was lower than in previous mortgages that I have obtained. Their service was quick and responsive. The loan consulatant was very helpful and accurate about the fees and rates. All in all, E-loan was the easiest mortgage I have ever obtained. Their rates were at or below local lenders. Lender fees were zero.
I know this will make conventional mortgage brokers unhappy but, E-loan has it right. They make it it simple and affordable.
Problems with E-loan?? Only for the future of non-competitive local lenders!
Posted by: Rob Nixon at March 3, 2007 04:26 PM
I had a school loan with Wells Fargo that somehow got trasferred to (or bought by) Eloan. I tried to pay it off several times with a lump sum payment (because of the high interest rate) and they rejected the payment. I tried to transfer the loan to a low interest credit card and they rejected the transfer twice! Then I tried to pay by check over the phone and they said the routing number was incorrect. I read the number right off the check! Finally I mailed them a payoff check and they posted the payment a week and a half late. This way they could accrue more interest on my account. I had to call them and pay $40 interest to FINALLY pay off the account. ELOAN (E-Loan) IS A COMPLETE SCAM! DO NOT DO BUSINESS WITH THEM. THEIR CUSTOMER SERVICE SUCKS AND THEY DO NOT LOOK OUT FOR YOU AT ALL. VERY SHADY OPERATION.
Posted by: EZE at March 21, 2007 10:33 AM
I applied for E-loan while I am looking for a purchase home loan. I applied for E-loan last time and got approved, but the purchase didn’t go through. When I applied it again, the E-loan representative run through the credit check and call med me back. She said I got excellent credit score of 802 and she said my loan is approved. Then the called was routed to a Sr. Loan Consultant. I asked for a no closing cost 30 years fixed loan. The consultant asked is it an investment or primary residence. I asked for both GFE. Later I received the GFE with Hugh closing cost of $6696 for loan amount $137,600 with 20% down. The rate he email me was 7.375%, which is much different from the representative told me earlier. I already had a loan offer of 6.375% without closing cost except the $350 appraisal from other lender. I pointed out the error since I asked for no closing cost loan. The E-loan consultant then changed the story, which really upset me. I said if you want to do the business with me, then you have to be consistent. It’s sad that if you discovered the inconsistence only after you paid for the fee and appraisal and close to closing date. I told him that I was disappointed the inconsistence. Later he email me that the loan has been denied. What’s an experience!!
It’s sad there are bad people there, which had detoriate the humanity and people trust.
Posted by: julliet at April 4, 2007 12:02 PM
I am using e-loan for savings.....Any experiences I should know about before commmitting more money to the account?
Posted by: rene merritt at April 7, 2007 10:41 AM
E loan is the worst I have ever had to deal with over the phone. I was trying to pay off my car loan. I called 2 to 3 times a day and I would get a different answer about new charges or amounts to pay off the acct. This was a wired pay off, they did not process in THEIR SYSTEM until 3 days later. Which in turn, incorps interest over this time. I followed their procedure of paying this off and still got my underwear torched!!!!!
Their customer service is as bad as I have ever encountered over the phone. I will NEVER deal with them again!!!!!!!!!!
Posted by: tony at April 12, 2007 02:21 PM
Thank you all for your comments. It seems that each experience others have had and posted here may be dependent on their unique situation(s). I was looking to apply for an E-Loan on a purchase of a new vehicle, however, after reading some of the comments here, I stopped that effort immediately. Thank you for the peace of mind. At this time, I'll pursue my normal loan shopping with my credit union, local banks, and other financing options first. I appreciate the tips to get a GFE (good faith estimate) and TIL (truth in lending), even though those typically refer to a mortgage and not a secured personal (vehicle) loan. I'm sure the negative comments posted reflect bad experiences that some people have had with E-Loan -- and I'm not positive this represents the whole picture, but I'm now confident that waiting or not applying online with E-Loan right now is the best decision for me.
Posted by: Dave Griffin at April 14, 2007 10:52 AM
I just applied for a mortgage preapproval from E-Loan, today actually. The consultant I spoke with was very polite and helpful, and seemed to me to be very knowledgable. He listed different rates and options for me, and provided several ways of contacting him directly rather than going through the company phone directory in case I have any questions. In reading a lot of your comments, I'm now a little queasy about what may happen over the course of the loan, but I obtained a conventional loan through a local loan officer five years ago and so far the E-Loan experience has been much smoother and faster. I was told by the bank this morning that no lender would touch us because my husband has less than a year in the Navy, but the E-Loan consultant pointed out the problems with that and then several options for obtaining a loan despite it. So far they have my confidence, I hope that I'll have a different experience from the posters here...
Posted by: Rebecca at April 16, 2007 03:34 PM
It's not fair to E-Loan to make specific allegations against the company without giving the company a chance to respond. I spoke with a p.r. rep for the company yesterday and she said it's unrealistic for the company to respond in public to each allegation that someone makes in a blog comment. First, these investigations take time. Second, confidentiality is involved. For legal reasons E-Loan can't publicly reveal information about its dealings with particular customers.
So, since the company can't respond to specific allegations, we at Hot Property won't let such allegations appear on the blog. You're still free to give your opinion of the company (e.g. "E-Loan is a crappy company/E-Loan is a wonderful company") or to cite publicly known stuff about E-Loan. It's just that in the interest of fairness, we are going to filter out comments that make specific allegations that we can't verify. This same policy applies to comments about other companies and individuals. In fact, this has always been the policy of Hot Property. We are going to enforce it more consistently.
Posted by: Peter Coy at April 17, 2007 02:56 PM
I OPENED UP A HOME EQUITY LOAN IN 12/2004 WITH E-LOAN,I WAS TOLD IT WAS A FIXED 4.75% LOAN. NEXT THING I FIND OUT, IT'S CHANGED TO E*TRADE TO A ARM AND THE INTEREST RATE WENT UP TO 8%. DON'T DEAL WITH E-LOAN OR E*TRADE. MICHAEL B. BIBB
Posted by: MICHAEL BIBB at April 22, 2007 11:59 AM