Confessions of a former Predatory Lender


I recently received an email from a Loan Originator who wanted some advice on how to develop a "referral based business".   Having a referral based business means that you have provided such a high level of service to your clients that they feel compelled or at least comfortable in recommending you to the people they care about.   My business is dependent upon referrals from my clients and professional relationships.

I have mixed emotions reading this gentleman’s email.   I’m angry that consumers could be prey to someone who is not properly trained and suffer by possibly losing their home or at the very least thousands of dollars.   I almost feel bad for this person who really seems to have had no idea (he seemed almost brainwashed) at what he was doing to consumers with his former employer.   

""I have been in the mortgage industry for nearly 2 years. So I guess in the scheme of things I am relatively new …or maybe not the way that things are currently going. Anyway, I started at a mortgage company that I will not mention here for fear of being sued. It was an extreme predatory lender. I didn’t realize then how much so; I was given 2 weeks classroom training and thrown on the floor to sell. They taught me enough to sell the mortgage but not to properly qualify borrowers, so the rates, fees, etc. always changed.

I really knew nothing of the mortgage industry at the time. That particular company really keep the LO’s separate from the process. You sell the file, pass it off to the processor, and sell another one. Also act as a liaison between the borrower and the company. I was required to call them up every day to let them know that everything was fine then take the fall when the mortgage program completely changed.

The company that I am speaking of really had me sold on them for a while. I really had company pride and truly believed that my rates, programs, and ease of use were superior to any other mortgage company out there. I slowly began to realize that none of this was true. I studied relentlessly for several months on my own time. The more I learned about the industry the more I realized that the company that I was working for was horrible. I began to lose sleep over the fact that all of the “wonderful” mortgage loan products that I had been providing my clients were really the worst deals they could’ve gotten.

Needless to say I left that company when I realized what was really going on…."

When you are considering a mortgage or mortgage advice, please do select your Mortgage Professional carefully.   Don’t let them select you by "cold calls" or deceiving junk mail.   

Hat tip to Tim at Rain City Guide for the photo.  We’re not sure if he’s either a victim of a bad mortgage or if he’s an unemployed subprime Loan Originator.   What do you think?

Update:  Don’t miss America’s Mortgage Broker, Brian Brady’s response to this post:  The Difference Between Right and Wrong.


  1. Rhonda,
    This is a fantastic article! This is very powerful in the fact that you were able to post the email in his own words. This guy looks to be a guy with integrity that became involved with a shady outfit. I hope he’s able to turn his business around.

  2. Thanks Greg. I feel it’s important to tell his story…in a strange way, he’s “almost” innocent since his employer taught him wrongly.

    I almost didn’t post it because I don’t want him to be attacked. He is not a LO in Washington State.

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