Dennis' Mortgage Blog

Below is response I sent in to the Press-Telegram in Long Beach, CA to an editorial they wrote (here) deriding commission based professionals such as myself and suggesting those looking for mortgage advice spend a couple of hundred dollars for a financial consultant...are they licensed?  Typical media reaction to a problem they either no longer have the resources to devote to a story or they are too lazy to actually dig into and get information about:

Dear Editor:

As a mortgage broker with twenty years experience helping families obtain the American Dream of homeownership and helping those already owning homes with their mortgage and debt management I take great offense with your 8/28/07 editorial “Tips on Mortgages.”

Your editorial wrongly paints thousands of honest mortgage originators, such as me, with the same brush as those who have misled mortgage applicants and placed them in some mortgage products for their own benefit.  As can be attested by the California Association of Mortgage Brokers, Realtors® and most importantly the millions of homeowners throughout California and the nation who have benefited from the services of commission based mortgage brokers, our segment of the industry offers the widest range of products to best fit the financial abilities and needs of mortgage applicants.

Yes my compensation is commission based; does that mean I give poor advice merely to benefit myself?  Perhaps the many, many potential clients I speak with each year can address that by informing you of the transactions I have talked people out of because, while it would benefit me it would not be in there best interest.  You use the example of the $30,000 commission paid a Countrywide agent, I certainly have never had a commission even close to that amount.  Further, because I am a mortgage broker licensed by the California Department of Real Estate by law, and by conscience, I must disclose upfront and at closing to the borrower how much compensation is being paid to our company.  These disclosures includes processing fees, originations fees, rebates paid by the lender or any funds received by us—note that banks and mortgage bankers such as Countrywide are not required to make such disclosures.

As an active member of the Long Beach community who has assisted hundreds of homeowners in the area, has spent many, many hours annually and thousands of dollars assisting local non-profits—donations as a result of commission based compensation, to read your editorial accusing me as a commission based mortgage consultant of not acting in the clients best interests is an insult and reprehensible. Time and donations made by my wife and I to show our children it is the right thing to do and also to thank a community that has supported us in using my services.  How many will now look at us and think, “Dennis can do this because, according to the Press-Telegram, he rips people off for their mortgages.”  Ironically I read the editorial a day after leading an invigorating conversation for the Leadership Long Beach Class of 2008 on ethics, integrity, values and other leadership principles.  One of our conversation points involved judgment—while some of your editors were at the reception for the class that evening I now wish they had been in our classroom earlier in the day.

I am not surprised that the Press-Telegram, like the rest of the mainstream media, has misreported the situation in the mortgage and credit markets and has now taken the easy route of blaming me and others like me for the situation.  Thankfully my clients and business partners in real estate know a lot more than you and will continue to come to me for honest advice on home financing and mortgages.

Dennis C. Smith

Mortgage Broker

          Chairman, Board of Directors, Community Hospital of Long Beach

                                  Past President, Leadership Long Beach

                                    Past President, Long Beach Education Foundation  

                                  Past President, Southern Los Angeles Chapter,

                                            California Association of Mortgage Brokers

                                    Past President, Greater Long Beach Association of Realtors Affiliates

                                     Past President, Greater Long Beach Real Estate Club