HOHMAN FINANCE

We are committed to providing the best loan options and financing tools possible to every client. This is essential to what makes us different. We adhere to a fiduciary responsibility to suggest and provide the best-known financing terms available to our clients and always keep their financial well-being the priority.

At Hohman Finance, we understand that providing financial advice is based on knowing your customer and providing suitable recommendations based on that knowledge. As money managers have a legal and ethical obligation to offer investment advice in the best interest of their clients, we also feel compelled by a fiduciary responsibility to counsel appropriate suggestions that put our clients’ interests first.

These are just a few examples of how the origination side of the mortgage industry fails to act in the best interest of their clients.

If an applicant to be a mortgage loan originator fails the national licensing test, they may immediately originate mortgages at any bank or credit union without ever passing the test required to work at a non-depository lender.

• We find no reasonable explanation to justify this double standard. This logic suggests to us that a person who drops out of medical school can step right into surgery at a big, big hospital and be expected to provide the same standard of service.

Most mortgage loan originators are equipped with nothing but a script to get you to start an application. Coursework, licensing, testing, continuing education, onboarding, and training from one lender to the next spend relatively no time at all on mortgage math, mortgage pricing, interest rates, finance, economics, accounting, or in total, client suitability. 

• In our opinion, these are the exact elements necessary to make informed decisions on each mortgage and its specific characteristics. We contend these imbedded options have the largest financial impact on consumers. 

Many mortgage loan originators interpret the required “anti-steering” rules to mean that if a borrower asks for a certain type of loan, those originators feel they are not allowed to offer any other product even if it may save the consumer tons of money. In this sense, they are acting in an “anti-fiduciary responsibility” by denying their customer even the suggestion of a financially superior mortgage.

• This seems to be bordering on maleficence. If a person is about to accidentally step in front of a bus, we are obliged to provide help, are we not? Naturally, we will offer a mortgage as asked and when possible, a comparable and advantageous mortgage solution. We provide a choice and an informed client decision by explaining the differences and perceived risks & benefits.

Most if not all mortgage loan originators’ pay is largely based on the size of the loan. That seems normal. However, it is also true that most of these pay structures have triggers that considerably increase the compensation when they reach certain monthly volume levels. This creates at least three problems.   

• Oftentimes, mortgage loan originators are incentivized to push the closing into the next month where they may have a better shot at hitting those triggers. 
• Secondly, they may seek to inflate the loan amount even marginally. There are multiple ways to do so which may appear as no big deal. But this might cost consumers considerably more than they realize over time.
• Not rarely, mortgage loan originators will go to great lengths to qualify borrowers on a mortgage product that will provide the highest possible loan amount with no regard to whether a consumer can really, actually, sensibly afford the payments.