Monday Morning Cup of Coffee takes a look a news coming across HousingWire’s weekend desk, we more coverage to come on larger issues.

Is C2 Financial cutting ties with Quicken Loans this week?

If a memo shared by lenders to HousingWire is to be believed, then the answer is YES.

The note, as of now unconfirmed and reportedly authored by C2 General Manager Brian Kent, claims: "Quicken has many excellent employees at the company whom we have great respect for, but as the leaders of C2 and the broker industry, we feel it is wrong for us to continue to partner with Quicken. Therefore, effective 8/15/18, C2 will no longer be working with Quicken."

The reason given in the memo is the charge that Quicken is not sending C2 borrowers back to C2 when they request a refinance. In a conversation late Sunday night with HousingWire, Quicken Loans CEO Jay Farner said he and his firm were shocked by the alleged memo.

"We are surprised and disappointed," Farner said. "That is the best way to put it."

"We've been growing our business relationship a while. QLMS offers competitive pricing, industry leading service and of course mortgage servicing which enables us to market on behalf of our broker partner," Farner said. "According to many C2 LOs we were doing a great job and our market share increase at C2 showed that. In fact C2’s Ron Temko, actually told us that himself, and we hadn’t heard any negative feedback until a random freelance reporter reached out for comment.”

“Having top competitors for the LOs to choose from helps the consumer, so how does withholding our product help C2’s loan officers or benefit the consumer?"

How lead-generation is being treated in the mortgage lending industry is becoming a huge, controversial topic. HousingWire will keep you posted as this story develops.

The conversation remains ongoing, check back more for the latest, or sign up to my LendingLife emails, which I send every Tuesday and Thursday with the latest in news and views directly impacting mortgage lending professionals.

The personal finance forum over on Reddit is usually a relatively calm realm to discuss money. However, this weekend, one conversation blew up, and it deals with things very, very close to the heart of HousingWire readers.

Here’s the question: Multiple real estate agents are telling us that online mortgage lenders are problematic, but they're offering almost 1% better APR than local competitors, what's the deal?

To put it more bluntly, why would real estate agents sabotage the opportunity for borrowers to go with an online lender?

An anonymous potential homebuyer, named Ecksters, posed the question and here is their comment in full:

We're looking at purchasing a first home, income is high enough that lenders have made it clear they're willing to lend us much more than we're asking, credit score is about a 770, and we're putting 20% down for a 15 year loan.

Online lenders appear to be offering rates just under 4%, claiming a flat $1500 fee, which they say part of which could potentially be waived in some cases, while local lenders are wanting closer to 5% with fees.

The real estate agents we've spoken with are saying online brokers are slow and sometimes that makes it hard to compete in a fast moving market, although I think that's typically for people whose situations are more complicated than ours.

It seems like we're fairly ideal people to lend to, so I'm wondering, is there something else about online lenders I should be wary of, or is this the same fear of online banks that was so common 5-10 years ago?

The post blew up. In less than 24 hours, there were nearly 1K comments; rare for this subject on Reddit.  Granted, much of those comments include anecdotes from borrowers and can easily derail into tales of negative personal experiences.

The best advice seems to be for potential homeowners is to look at online rates and then demand your bricks-and-mortar lender match the deals.

However, a few self-described Realtors explain why they personal advise clients to avoid online lenders.

Here’s the best explanation from one such Realtor/Redditor:

Some buyers think that brokers push clients to local lenders because they just want to send business to their affiliates. While there is a grain of truth to this, a bigger reason is that many online lenders use inferior or badly paid loan officers and underwriters who often have issues understanding the needs of a transaction and can put borrowers through the ringer with burdensome and unnecessary documentation requirements that often cause delays and can even result in the buyer losing the home or their earnest money deposit. That said, many of the bigger banks (BofA, Wells Fargo, Chase, PNC) also have issues with uninformed or uncaring staff in my experience. That's why we often say go local (with the rate matching strategy described above if you like).

Another Realtor/Redditor said the inability to communicate with online lenders is another mortgage-lending problem:

My buyer can lose the house in a bidding war due to a bad lender, they can lose the house in escrow due to a bad lender, and the buyer may have to pay a penalty if close of escrow is delayed due to a bad lender.

If you want to buy this house, it's my job to help you get this house. If I can't communicate properly with your lender, you're probably not getting the house. My buyers don't see half the emails I sent back and forth with a lender, escrow and the listing agent to track a transaction, as well as the calls, texts and occasional yelling I have to do to keep the lender on track. I would've been a bad agent if I had not at least warned you as a buyer about the issues that can arise when using an online/ out of area lender.

I give my buyers a solid list of lenders I've worked with at different mortgage companies and banks.

Habitat for Humanity is known for helping low-income Americans get their first home. But it's mortgage servicing affiliate down in Tampa is drawing criticism for its actions. According to this article in the Tampa Bay Times, written by Susan Taylor Martin, a few Habitat homeowners are upset with their servicer's methods.

"A recent sale of 12 mortgages by Habitat for Humanity’s Hillsborough County affiliate has raised questions and concerns about the non-profit’s policies," Martin writes. "Instead of selling the mortgages to a bank, as is typically done, the affiliate sold them to a Tampa company — Southeast Property Acquisitions LLC — with a history of buying and flipping foreclosed houses."

The homeowners complain about being rushed into distressed servicing solutions, and not being provide enough time to mull their options, in violations of federal regulations. Habitat does not share the concerns.

Tina Swai, chief executive officer of Habitat for Humanity Hillsborough, told the Tampa Bay Times that the affiliate did nothing wrong in its sale of the mortgages. She has given different explanations, though, for how Southeast Property Acquisitions ended up with the loans and how the transaction was handled.

That's enough for now, have a great week everyone!