our experience and the bulk of the experience of other agents in our broker’s office is that internet lenders tend to close only about 50% of the time. Pretty low numbers in my book. We usually discourage a client from only talking with one lender – instead recommending at least 3 lenders at a minimum. The clients we’ve heard about that have been burnt the most by their mortgage have tended to shop by rate only, and it was in a refi situation, and didn’t ask enough questions to know what the total package would cost them. They got their answer when the rate started rising on a monthly basis at the rate of an 1/4 of a point a month. After 8 months that meant they’d gone up 2 points total and the client was frantic. The worst part for him was that he learned AFTER the fact that the prepayment penalty was 3% in the first year, 2% in the 2nd year, and 1% in the 3rd year. Awful!

I think it’s a numbers game for lenders who have to rely on buying leads (internet, mailing, cold calling, trigger list, etc.)… the internet LO in this case I think only hung on to the buyer for so long because he’s pretty percesistant (he called/emailed me constantly even before we were working together) and because he’s a jumbo loan. The LO had more to loose or gain.

I would love to know if Lending Tree has a system where buyers could register complaints against LOs who did not perform. This one almost cost the buyer his earnest money of $15k and the home they wanted buy…not to mention time and stress.

But for Lending Tree, it’s probably the same numbers game to them with dealing with LOs and mortgage companies who need to buy leads in order to have business.