What is the first question every consumer asks when they call a mortgage entity?
What is your interest rate for a _________? (Pick a program).
What is the second question every consumer asks when they call a mortgage entity?
How much do you charge?
First, these are the two worst questions a consumer can ask because it demonstrates a high level of ignorance to whoever the broker/banker is on the other end of the line. You pay for what you don't know in this world, asking these types of questions to the wrong mortgage pro is like waving a steak in front of a hungry dog...you can hear the saliva hit the floor.
Second, consumers aren't going to stop asking these questions because they don't know what else to ask. What else is there to ask? "Are you going to give me good service?", "Will you be honest with me?", "Are you really gonna give me a good deal"? "Will you do what you say?". Point made.
Consumers will likely never come off of this fixation for the same reason my wife will buy crap just because it's on sale. "Look honey, I just got back from Bed Bath and Beyond, they had a sale where if I bought $2000 worth of lotion I got 20% off!!" It's American consumerism, it's inbred and here to stay. Just the ability to say you paid a little less than the next guy is incentive enough to throw all reason straight out the window.
People are so fixated on rate that there seems to be bragging rights associated with the lowest, regardless of consequence or cost. If they can get one-eighth of one percent lower from one broker/banker over another, they're on it like white on rice. Show Joe $100 less in closing costs than the next guy? Done, sign em up. What are the repercussions? Who the hell cares? Joe's $100 in the black!
I was answering a comment on the Inman blog about a 3rd party service for mortgage shoppers that essentially uses non-licensed people to check a mortgage broker/bankers rate and term quotes to see if there are too many fees or 'dangerous' terms. What the F*%$? This is what it's come down to? Some hourly validating what should be a professionals work? Admirable idea but...
The perception of this industry is so far down the toilet, its festering in the septic tank.
So The Billion Dollar Question Is:
If consumers are so fixated on rate and cost, and this is where all the bad stuff originates...
WHY DOESN'T THE MORTGAGE INDUSTRY MANDATE 100% DISCLOSURE FOR WHOLESALE RATE PRICING AS WELL AS BROKER AND BANKER COMPENSATION??
Eliminate the problem at its core.
Put it all out there for consumers to see, let them jump up and down and rub wholesale rates all over themselves to satisfy their desires.
Stop the ridiculous practice of allowing bankers to play 'Hide The Fees', it's been proven to screw the consumer.
Make EVERY mortgage professional compete on SERVICE AND KNOWLEDGE.
You'd see 75% of the fat in this industry evaporate within 6 months.
If it's all this simple, then why isn't it happening? It would cripple too many businesses. Sad, but true...