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#1765468 - 12/09/12 11:22 PM Loan Officer's handling "Family" member loans
niche girl Offline
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Joined: Jan 2012
Posts: 163
Ok, let me first say the concept makes me uncomfortable but I have been asked to research it so here goes. Many of our Loan Officers are protesting that we do not allow them to take the applications and handle the loans of their own famly members as our policy considers it a conflict of interest. Their take is that their family and friends are some of their best origination resources and not being able to assist these people through the process is bad customer service and also impacts their compensation. They also bring up the point that in most cases unless the last name matched we wouldn't even be able to detect that they were doing it.

I realize that the files pass through so many reviewing hands that it would be difficult for a loan officer to sneak by a lower rate or waive fees or skip documentation steps. I can't find it prohibited anywhere or maybe I just am not looking in the right places, but it still leaves me feeling like it's not a good idea, even from appearances sake. However, I am willing to consider it if it can be done in a reasonable way. Anyone have any thoughts or experience on this they can share? confused

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#1765469 - 12/10/12 12:25 AM Re: Loan Officer's handling "Family" member loans niche girl
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,229
Galveston, TX
Simple answer is no. There is a reason for your ethics policy.
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#1765475 - 12/10/12 01:39 PM Re: Loan Officer's handling "Family" member loans niche girl
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
also impacts their compensation....the last name matched we wouldn't even be able to detect that they were doing it.

Quite honestly those statments tell me all I need to know about the loan officer, or officers, that are complaining.

I've been in this business since 1974 working for a finance company, a credit union and 3 banks. None of my employers in those 38 years have ever allowed a loan officer to handle loans for close friends or family members.
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#1765498 - 12/10/12 02:55 PM Re: Loan Officer's handling "Family" member loans niche girl
HRH Okie Banker Offline
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Joined: Jan 2003
Posts: 3,070
Oklahoma
Ditto Dan and Randy. It's just bad practice. I saw a lender loan is dad $50k once and lo and behold the lender was able to finish the last stages of building his house. The money was for the lender and not the family member. Sheesh!
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#1765572 - 12/10/12 05:53 PM Re: Loan Officer's handling "Family" member loans niche girl
niche girl Offline
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Joined: Jan 2012
Posts: 163
Thanks all. You have completely voiced my concerns with the topic too. Appreciate the feedback.
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#1765590 - 12/10/12 06:34 PM Re: Loan Officer's handling "Family" member loans niche girl
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Many banks apply it to close friends as well. It can often be found in credit policy as well as ethics policies. I, like Dan, really question employees who make statements like "how would they ever know?". Nice ethics.
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