I worked for this company from 4/3 until 4/28 (I quit, and was not fired). I informed them on 5/1 that my reason for leaving was my ethical concerns over their business practices. See the following list:
1) 30 YEAR FIXED MORTGAGE AT 5%. They advertise a 30 year fixed mortgage at 5% in the business section of the Los Angeles Times, and at the latimes.com web site (if you enter a stock into the stock-lookup function on the LA Times web site, their advertisement comes back with the stock information you requested). However, they specifically told me on multiple occasions that this rate is impossible to get (par during this time was around
6.5%).
They told me that a mortgager COULD buy their rate down by paying points, but that they would be unable to actually buy the rate down to 5% (since there are limits to the number of points you can pay on a loan). However, we were specifically told to give customers made-up examples of loans we closed recently at 5%. To get the rate lower, they also sold people into adjustable rate mortgages rather than fixed mortgages.
2) MISLEADING PAPERWORK. Before my first appointment, the sales manager sat me down and showed me how to go through a contract with a customer. He highlighted certain items on the paperwork and explained that the strategy was to guide the customers' eyes around the numbers and items they might ask about.
On one page, it showed the amount of each of the payments over 30 years; he'd highlighted a line with an empty checkbox and the words "demand feature." He said that you want to concentrate on defining the demand feature, and telling the customers that Coast to Coast's loans do not have a demand feature (balloon payment). He said that this diversion keeps their attention away from the payments and interest rate above this highlighted item on the same page.
As well, I was specifically told not to explain that an interest-only loan is only for 10 years. Many times, customers who called were under the impression that an interest-only mortgage is interest-only for 30 years; this is not the case, and I was told to avoid this issue. I asked the sales manager when I should explain how the interest-only concept works to a customer, and he said not to, and that the customer will find out later. When asked to clarify when later' was, I was told that it was his and the Company's intention never to inform the customer.
3) CREDIT REPAIR PROGRAM. I was told that if someone with bad credit called, to tell them that I could get them the 5% rate if they followed our guidelines. The plan is to put them into a 2 year adjustable rate mortgage and send them to a credit repair program, with the intention of putting them into a new mortgage in 2 years at a lower rate (assuming that they paid no late payments on their 2 year ARM).
We were forbidden to use the word, "Refinance, " to describe what the customer would be doing at the end of the 2 year fixed portion of the ARM. We were told to tell the customer, "After two years of paying your mortgage on time with no late payments, we'll STREAMLINE you into a new mortgage at 5%." All of this is off a script all loan officers were ordered to memorize.
4) NON-PAYMENT OF FINAL PAYCHECK. The first two weeks were training. I worked from April 3 to 14 part-time while they trained us. The training was capped by an exam which I got a B on. They'd told us that we had to get an A - on the exam, but never discussed repercussions. Nobody was fired or penalized for getting below an A - (from what I understood). I, and 3 others, worked 4 hours per day during training 5 days per week.
At the end of training, the four of us received paychecks for about $600; we were told it was 'training pay.' From April 17 to April 27, I worked full time 5 days per week (I came in at 9 AM on April 28, but left at 2:30 PM when I realized I had a serious ethical problem being there). I was paid for only 4 days of this. Jon Spica, the CEO of the firm, claims he only owed me for April 24 to April 27.
He claims he doesn't owe me for the entire week of April 17 to April 21, because he says he already paid that. He wrote in a letter that when I was paid previously, it was not for training pay but for that first week of full-time work. He claims that since I got below an A - on his exam, he didn't have to pay me the first two weeks. I'd never heard this before, and wouldn't have accepted employment with him in the first place had I known this.
On top of that, he owes me pay for the 5.5 hours I worked on April 28 (my last day). I walked out at 2:30 PM to go to lunch, but never returned (moral decision I made while at lunch).
I calculate the company owes me $1089; he claims Coast to Coast only owes $369.20.
5) ILLEGAL DEDUCTION FROM PAYCHECK. He informed me in a letter included with the paycheck for $369.20 that he deducted $95 from my paycheck for a parking pass to the parking garage. I mailed it to him as soon as I got the letter and demanded my $95. I had no pre-existing contract stating that he could deduct any monies from my pay for unreturned parking passes.
As far as items 4 and 5 on my list, I sent the paycheck back to him with the parking pass and a demand for the full amount owed. He sent the parking pass and check back in the amount of $369.20.
6) LACK OF CORRECT TAX WITHHOLDINGS. The paycheck he sent does not have an itemized list of my taxes and deductions. Upon demand, he sent this in the form of a letter. I calculated what my tax liabilities should have been, and the numbers he sent appear made-up.
7) TURNOVER. Nobody ever gave me a straight answer regarding employee turnover. Jon Spica said that the industry has a high employee turnover, and their's is less than the industry. However, the company has been in business since and the oldest employee (besides the CEO and sales manager) has been there since August. They've fired or 'mutually let go' a lot of people, but can't answer why or how many.
8) CUSTOMER WITH ACCENT. On Thursday, April 27, the Sales Manager called one of my customers for me (I was in the room). I'd talked to the customer the day before, and the manager called him back for me. The manager's name was Brian (mine is Ryan). The customer misheard him, and thought Brian was me. Brian decided to let the customer think it was me, since he thought it'd be easier.
This customer had a heavy Spanish accent (though he understood everything we said, and spoke English very well). Brian mislead him, and treated the customer harshly. He kept telling the man that he had to be realistic and that he couldn't get a free loan, though the man hadn't asked for a free loan.
As far as misleading the customer, the customer asked how he could get a lower interest rate. Brian told him, "You can use the equity in your home to get a lower rate." He said this confusing statement rather than saying, "You can buy down the rate by paying points on the loan." The customer was very confused by this, and when he asked for clarification, Brian again told him he couldn't get a free loan.
During the call, the customer asked, "What's your name again?"
I said, "Don't tell him it's me." I didn't want to be associated with this phone call.
Brian muted his phone and asked, "Why not? I don't understand."
"Fine, " I said. "I don't care. Do whatever you want."
Brian told the customer his own name instead. The customer asked, "What is your phone number?"
Brian answered, "You called us, sir."
"That was the other day, " the customer said.
"It's in the ad in the newspaper. You called it."
"I know. I don't have it anymore. I think I threw the ad away. What's your phone number?"
"It's in the newspaper, sir.in the ad."
"Can you just tell me your phone number, please?" the customer asked. He was very polite about it, and yet sounded hurt and insulted.
At the end of the call, Brian asked why I didn't want him to tell the customer my name instead of his. I told him I thought he was being harsh and rude to the customer. Brian stated that he's been in the industry quite a while (2 and 1/2 years), and he knows customers. He said he knows how to talk to customers, and he wasn't being harsh.
He told me that since the guy had a thick accent, he didn't understand the harshness in his voice. He told me that he wasn't even being harsh, but that he was keeping control of the conversation. And he also thought it'd be easier if he told the customer it was me, rather than explaining that there's a Ryan that works there as well as a Brian; he told me it would take half an hour to get the customer to understand this.
Brian gave me an ultimatum. He told me that if I couldn't speak to customers the way he just did on the phone, then I better let him know right then.
I quit the next day.
FINAL NOTE: If you came across this while doing background research on this company after receiving a Careerbuilder email from them asking you to come in for an interview, I would be very careful and ask as many questions as you can.
Also, consider the environment in a workplace of 10 employees where the 29-year-old broker never refers to himself as a broker, but as a CEO and mortgage expert, and ask yourself if this is for you.
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