How Do You Find an Ethical Lender?


On Rain City Guide, there are often debates that will arise about measuring one’s ethics (usually referring to real estate agents or loan originators).   So how do you determine whether or not someone is indeed ethical?    You can have a Code of Ethics plastered all over your web site and at your office…but it really doesn’t mean squat unless you do what you say.   

Cmpssmall As a Certified Mortgage Planning Specialist, I am to adhere to their Code of Ethics or I will lose my CMPS designation.  This includes 11 Statements of Commitment and 8 Duties to the Client Codes of Conduct.  There are 10 other Codes of Conduct that apply toward fellow CMPS members and the CMPS Institute.   It’s pretty elaborate.

The Washington Association of Mortgage Brokers (WAMB), which I am a member of, also has a Code of Ethics.   WAMBs Code of Ethics are more "short and sweet" than those of CMPS.Campfire

The company I am employed by, Mortgage Master Service Corporation, has their philosophy and goals on our website.    And I was a Campfire Girl while in elementary school.  (Our troop was the Blue Bird Blue Stars).

Jillayne Schlicke recently did a post on Vacation Mortgage about a local mortgage company who has "ethics in their name" and touts ethics on their web page.  However, if you contact them about their "vacation mortgage" which is heavily advertised on the radio, instead of providing information about the mortgage and answering general program questions (I emailed on several occasions inquiring about their vacation mortgage), they want to run your credit and obtain all of your information information to make sure you’re considering the proper mortgage.   Hmmm…dangling a vacation from your mortgage payment, then refusing to explain the program so they can offer you a different program…sounds like bait and switch to me.   Hardly ethical in spite of all their efforts to promote being an ethical company. 

This is why I will always return to relying on referrals from three different sources of individuals whom you respect to select your Mortgage Professional.   Such as a friend, co-worker, neighbor, Certified Financial Planner, CPA or Real Estate Agent.  Preferably, one who has recently gone through a purchase or refinance transaction themselves. Lego_gsr_2 Your referrals have all ready been tested by those you trust.

Unfortunately, you’re not able to submit a Loan Originator to a polygraph test to determine if they’re straight shooters with your best intentions at heart.  And, you cannot follow them around 24-7 (legally) to see what types of decisions they make throughout the course of a day.   And although the new legislation to have loan originators who work for mortgage brokers licensed (banks such as Washington Mutual, Countrywide and Wells Fargo; and credit unions are excluded from this law) is a start, it’s still no guarantee of the the person’s moral fortitude.   At least unsavory LOs who work for brokers will have a license to lose (or, at least they will not be originating loans at a mortgage brokerage). 

One of my favorite examples of a "Code of Ethics" is from Les Schwab Tire Company.   They promote that they treat clients just like they would their own mother.  I browsed through their web site and could not find a posted Code of Ethics…but I guess this is, perhaps my point.   They do what they say, it’s not all talk or print.   Simple.   Funny, I think some of the best things are!


  1. Hi Rhonda,

    I have also had several great experiences with Les Schwab.

    1) Tire going flat, pulled in to a Les Schwab and they patched it, for free.

    2) TWO flat tires while out in Monroe, Les Schwab patched them BOTH for FREE.

    3) I needed some new tires on my car, guess where I went?

    I like their philosophy.

    I spent a few minutes after reading your blog article this morning looking through the CMPS Code of Ethics. You’re right, this is much more stringent than the Nat’l Assoc of Mtg Broker’s Code. Thanks for teaching me something today.

  2. Jillayne, I’m honored. Especially coming from you, the Ethics Queen, or do you prefer Princess? 🙂

    CMPS is something that I had to earn. WAMB, I paid for. Not that I would want to be “kicked out” of either. CMPS is more special to me since I had to sweat and stress over the exam.

    CMPS has evicted at least one LO since their inception for complaints filed.

    Bottom line for me, I think a person either has ethics or they don’t. I’m not sure it can be taught. What CAN be taught and needs to be since there are grey areas in mortgage in real estate is ethical practices as it relates to our business. And I’m glad we have companies like yours which help do just that!

  3. Les Schwab is awesome. Plus, I think they “under promise and over deliver”. Another gold star in my book.

  4. Rhonda – Very solid and timely post. I’ve been asked this question numerous times and there is really no simple answer.

    Keep up the great work!

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