VA Home Loan Red Flags with Jodi Ulrich

Are there home loan red flags that are happening out there right now for veterans?

Definitely, there are a lot of red flags. One of the biggest ones I see is lenders guaranteeing approval or offering interest rates that are too good to be true, almost below market. If it seems too good to be true, it probably is. Often, these situations come with added costs or adjustable-rate mortgages that are only fixed for a short period but are marketed as long-term, 30-year fixed loans. So, if something seems off, it probably is.

No one can guarantee an approval. That’s what the underwriting process is for. It’s hard to guarantee approval when you don’t know a person’s credit, income, or asset situation. Every veteran is different, and there are many factors to consider. Another red flag is if someone asks for large upfront fees or doesn’t provide paperwork before starting the process. You should always receive a loan estimate early in the process. A lender has three days from the time you submit your application to provide this loan estimate, which will show the interest rate, monthly payment, and the costs to obtain the loan. If a lender is not providing that, it’s a red flag—they might be hiding something that you’ll only discover later in the process. And if anyone asks for money upfront or charges application fees, I would definitely say no to that. The only fee you should pay upfront is for the appraisal, and the VA has set prices for those.

So, how can borrowers confirm that a mortgage lender or broker is legitimate and properly licensed?

There’s a website that tracks all this information, called the Consumer NMLS (National Multi-State Licensing System). You can search for your loan officer using their name or NMLS number to check their work history and licensing status. If they have been jumping between companies frequently, that could be a red flag.

Are NMLS numbers state-specific?

Yes and no. Your NMLS number is a national license, but if a lender doesn’t work for a financial institution with a federal banking charter, they will need specific state licenses for each state in which they operate. So, for example, I work for a bank that is federally chartered, so I can lend in all 50 states without state-specific licenses. But if you’re working with a mortgage broker, they must be licensed in each state they operate in. You can check this through the NMLS website, which will show you if they are federally licensed or if they have state licenses for the states they operate in.

What types of personnel or financial information should never be shared with unverified home loan providers?

Be careful with unsolicited cold calls, texts, or emails asking for personal information. Always use a secure application platform when uploading documents. If you don’t know who you’re dealing with, don’t share personal details like your Social Security number, date of birth, or email address until you’ve verified the lender’s legitimacy. Technology is great, but it’s important to ensure you’re working with a reputable lender who has an NMLS number. If someone is asking for money upfront, that’s also a major red flag.

How can a veteran verify they’re using the right platform to share their personal information?

When we work with potential homebuyers, we send them a secure application link. Once they create their account, they can upload their information directly through a secure app or online portal. Any personal documents, such as their certificate of eligibility or DD214, can be securely submitted through the platform. Always make sure the platform is legitimate before sharing your personal information. Verify with your loan officer that the link and platform are secure.

What should someone do if they think they’ve been contacted by an unreliable lender or misled about a loan?

If you think you’ve been contacted by an unreliable lender, the first step is to verify if they are a licensed mortgage loan originator through the NMLS website. You can also file complaints with the Consumer Financial Protection Bureau (CFPB), the state banking commission, the Federal Trade Commission (FTC), or the Better Business Bureau. Checking online reviews and feedback from others can also give you insight into the lender’s reputation. If you come across a lender with only five-star reviews, be cautious—it could be a red flag. Sometimes, a review with four stars shows more credibility, as it suggests there were minor issues in the process that were resolved.

How does the complaint process work?

When you file a complaint with agencies like the Better Business Bureau or the State Banking Commission, the lender is notified and given a time frame to respond. If you don’t see a response, that’s a red flag because it suggests the lender doesn’t care about resolving the issue. It’s important to look for lenders who actively engage with complaints and concerns. If they respond promptly and address issues, that’s a sign they take customer service seriously.

What are some big red flags to look out for in the home loan process?

1. Interest rates that seem too good to be true or are significantly below market rates. If most rates are in the 6% range and someone offers you 4%, that’s a red flag.

2. Exorbitant fees—compare loan estimates to see if one lender is charging significantly more than another for similar interest rates.

3. Guarantees of approval—no one can guarantee approval without knowing all your financial details.

4. Lack of communication or unwillingness to answer questions—if the loan officer isn’t responsive or avoids phone calls and emails, that’s a red flag.

The biggest thing is making sure you have a loan officer who will be there for you, communicates openly, and answers all your questions throughout the process.

How can veterans reach out to you for help with the VA home loan process?

You can click on the link below to find my contact information. Feel free to reach out if you have any questions about purchasing a property, refinancing, or if you need me to review documents from another financial institution. I’m happy to help and ensure you’re getting a good deal.

Thanks, Jodi. So, guys, that wraps it up for today. If you have any questions, please reach out. Don’t forget to like, subscribe, and follow us for more updates. Have a great day!