Internet Lenders Are Actually Middlemen

The Internet Web sites recommended by Jack M. Guttentag in his Jan. 17 article “Log On for a Home Loan” are not directing the consumer to a direct lender but channeling the loan application through the intermediaries who operate the Web sites. This is obvious as one reads further and deeper into those Web sites.

Reputable national mortgage lenders are well-known and have branches all over the country. The best way to eliminate the middleman is simply to contact those primary mortgage lenders and ask for quotes or promotional offers.

If one is looking for the best combined loan services in terms of lowest rate and fees, an intermediary such as a competent mortgage broker may be useful. The broker can offer the consumer a lower price from lenders’ wholesale pricing, while going direct to lenders will get only the consumer retail pricing. The spread between wholesale and retail pricing can be as much as two points or a quarter of a percent in rate.

In addition, the broker could match the consumer with the right lender in terms of special hard-to-qualify circumstances and documentation.

As an old saying goes: “A straight line is not always the shortest distance.” Going direct to a lender or going through a broker can only be decided after comparison shopping.

PETER SRISAVASDI

First Banker Mortgage Corp.

Encino

*

Letters must include the writer’s name, address and daytime telephone number and should be sent to the Real Estate Editor, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053 or faxed to Real Estate Editor at (213) 237-4712 or E-mailed to Real.Estate@LATimes.com Letters may be edited for reasons of space and clarity.