One of the things I love about it is the ability to monitor the conversation about my company, and respond quickly when someone has a problem.  Okay, not MY company, because frankly, nobody on Twitter is talking about us.  But my industry, yes.  There is a LOT of complaining going on about mortgage people, companies, brokers, all of that.

I didn’t really have any idea.  Most of the time when people come to me they’re not complaining.  Afraid, yes.  Worried that things are bad and not going to get better.  But they don’t come into my office and say “you never explain anything, your service sucks, and the entire mortgage process makes me feel faintly nauseous.”

This is, however, how they feel.  And I didn’t know it.

I had a short back-and-forth with @mototom (Tom Parker), in which he said, in part, “Same old — daily auto-dialer calls with pre-recorded voicemail messages. Crap follow-up once you’re working with them.”  And this was worse: “But it may be impossible to humanize it. No matter what, doesn’t it still come down to numbers plugged into a machine?”

Oh.  My.

Now I admit in this space all the time that I am not perfect.  I am far from as disciplined as I would like to be, and that lack of discipline shows up most often in communication, where I don’t do as well as I should at keeping my clients apprised of what is going on.  But I hope – I pray – that my clients don’t feel that they’re not human to us.

I guess I had better ask.

No, Tom, you are not a couple numbers plugged into a machine.  You should not be treated that way.  You should never feel that way at all, ever, at any point in the process.  That you do feel that way is a terrible indictment of mortgage brokers and loan officers, and on behalf of the entire industry, let me offer you a sincere apology, and my personal commitment to do things better in the future.

So that even if we never work together, your willingness to speak out will have helped someone.

I think it’s stupid.

There are lots of reasons for this, but I’ll start with just one, and that is that if you underpromise, you’ll never get a chance to overdeliver, because the other fellow – the one that is promising the moon – will get the business and you won’t.  I even remember hearing one very brave and almost certainly now unemployed speaker mention that very thing.

I echo, and amplify, this sentiment.

And I brought witnesses.

Three times just this year – and remember, it’s only March – I have had clients that I spent hours and hours educating about mortgages.  I do this a lot, and I do it very well, and I do it for free.  I have several avenues for this education, from this blog to RateWatch to private consultations.  I do a lot more than just quote somone a rate; I help them understand what loan is best for their situation, figure out how to budget appropriately so as to pay the loan off in the shortest possible time, even discuss (for those who are really interested) the inner workings of the mortgage market, where things are likely headed, and what economic indicators to watch to figure out when is the best time to move.  I even perform that market watching FOR them, so that they get the rate they want when it becomes available, even if they’re on a cruise (true story – it’s happened).

I’m not bragging when I say that this is a level of service that is unavailable to the general public.  The average loan officer cannot and will not do the things I do for my clients.

All three of these guys, after several hours apiece of this service, locked loans with other mortgage companies and ended up doing their deals somewhere else.

Why?

One of them was shopping the rate between me and another guy, and when I refused to cut my fees, he went with them.  He then referred his brother, who got RateWatch on the day he wanted to lock and assumed that meant he couldn’t get the rate he wanted, so he called up someone else out of the blue and locked with them.  He never called me.  The third fellow clocked my rates for three weeks, heard something on the radio, called them, locked, and called me later to tell me he was sorry, but.

In all three cases, the fact is that I could probably have matched the rate and fees of the competing company (had I known about them).  In one case, I wouldn’t do it.  In the other two, I might have, if I had been given a chance.  But in all three cases, I provided hundreds, even thousands of dollars of value and ended up with nothing.

There are two pieces to this puzzle.  One is the spiritual piece, and that part is in favor of doing what I did.  Cast your bread upon the waters, that sort of thing.  I believe this and I live accordingly, at least most of the time.  I do believe in a God that keeps score.  My life is an example of how a good heart and virtually no sense can work pretty well over the long term.

The second piece is the business piece, and that piece says I’m a fool.  If you provide people free help, they’ll screw you.  There are a thousand examples of this.  The most obvious one to me is the bookstore example, where people go into a bookstore, find a book they like, read a piece of it, then go to Amazon when they get home and get it for half price.  I used to do this, too, and I understand the behavior.

But I don’t do it anymore, at least, I don’t do it except to Borders and Barnes and Noble, or other big chains.  When I shop at my local bookstore, I always buy there when I find the book I want.  I know the $15 book there is available at Amazon for $7 (or even less, used).  I don’t care.  I want that little bookstore to be there when I want to go read a book sitting in a chair in the sun.  If I don’t patronize them, they’ll die.  I want the bookstore, so I give them my money.

The business piece of the puzzle says that this is lovely sentiment, but what I’m doing not only doesn’t maximize my financial power, it also encourages inefficiency in the market.  If I provide these free services myself, I’ll get taken advantage of and eventually I’ll get ripped off so hard I’ll go out of business.  This is a rather persuasive argument, right at the moment.

So I’m in a quandary.  Last Thursday, a client of mine that has been working with me on his loan for about two months, getting all this free consulting, and who is also a friend of fifteen years, called me and said he’d been hearing on the news that rates were really low, so he called his credit union and their rate was .25% below mine.  Did I want to match (“you know, I’d really rather do the business with you, but..”), or should we just call it a day?  Now, this guy LOCKED his rate with me about three weeks ago, which protected him through all the market turmoil from having his rate jump.  He got this protection, again, for free.  Now he wants a lower rate, and if he doesn’t get it, he’s gone.  I have certain contraints on what I can do once I lock a rate.  I have secondary lenders that will charge me if I break locks, or even cut off funding for my loans if I break enough of them.  I called them and renegotiated the lock (costing me $450), but could only get within .125% of the deal he was being offered.  On his loan, that’s a monthly difference of less than $15.

Will it be enough?  I don’t know.  He was going to take a weekend and think it over.  He absolutely has to do the right thing for his family.  No question about it.  His argument is that the lower rate will save him $4-5000 over the life of the loan.  This is true, if he holds the loan for 30 years.  My counter-argument is that this is not the same thing, as COSTING him $5000 to do the loan with me.  Not only is he not going to hold the loan for 30 years, he is also going to get a substantially better package of services, more information, etc., and down the road there absolutely will be an opportunity he will be able to take advantage of if I am advising him.  I concede his argument, and he concedes mine.

So here’s my question: suppose he decides he’s going to do the loan with the credit union.  What do I do?  Do I provide my services anyway, on the spiritual principle that doing good is its own reward?  Or do I cut him off and refuse to be blatantly taken advantage of?

I really don’t know what to do.  I want to make a living.  I also have to not only be true to myself, but recognize that the more service I provide, the better chance there is of earning the business (and referrals) in the future.  So even if I know a guy just ripped me off, isn’t it good business to continue to provide my best service?

Maybe it won’t come to that.  But I’m still going to want to know the answers to my questions.