Solano Real Estate Scene: Jim Porter
Article By: Jim Porter – July 25, 2025
I wrote a column and did a Facebook video in 2005 on the subject of unethical real estate people from out-of-town preying on our local clients and neighbors.
From 2003 to 2007, there were hundreds of mortgage broker boiler rooms in Southern California near Countrywide’s headquarters sending out mass mailers and cold-calling homeowners to refinance.
Steve Carell, Christian Bale, Ryan Gosling, Brad Pitt, Marisa Tomei and Margot Robbie did a movie in 2015 called “The Big Short.” It is based on a true story about college graduate kids making $20,000 per week selling loans to our neighbors over the phone and using FedEx for the loan applications and mobile notaries for the loan docs to be signed at the homeowner’s kitchen table.
What triggered the rampage I went on in late 2005 was some of the outrageous things, I and the other local real estate people were witnessing.
One day, a longtime client of mine came in to see me and said, “Jim, I think I made a stupid mistake.” He and his wife had just closed a refi with a mortgage broker in Los Angeles and paid off his 4% fixed rate $300,000 mortgage, closed out his $40,000 home equity line of credit and got a check for $60,000. The entire transaction only took 25 days.
The only documents the lender needed from him were the mortgage statements and the homeowner’s insurance info. No proof of income was required.
The smooth-talking, well-trained boiler room salesman sold my clients an adjustable-rate mortgage with a prepayment penalty for three years. The broker charged 1.5 points up front and got paid 2 points on the back with a rate that was fixed for three months at 1% and then became an ARM loan where the rate changed monthly at 3% over London Interbank Offered Rate.
The 3% margin would have only been 2% if the loan broker hadn’t charged the sneaky 2 extra points on the back end. The extra 2 points is what triggered the prepayment penalty. The $420,000 loan produced revenue for the boiler room of $17,000 and the 24-year-old kid got a $12,000 commission for five hours work.
There were local brokers doing this kind of thing but those were all people that just got in the business because selling mortgages required no skill or financial intelligence. It was like fishing for a 5-pound salmon in a 5-gallon bucket of water.
My mom called me one day in 2006 after responding to a very attractive letter that came in the mail. She said, “Sorry Jimmy, but your dad and I cannot pass up this offer.” Tony, from a 213 area code, was telling my mom that he could get her a $300,000 refi at 1% fixed for five years.
Boy oh boy, did I have fun busting Tony. I called him and said, “Wow Tony, my mom tells me you can get her a 1% rate fixed for five years!” He said, “That’s right, the payment is fixed for 5 years.”
I told him I am in the business and my brother is a CPA and we cannot find any lender in the USA offering this rate. He then explained “the payment is fixed for five years based on a 1% start rate that is only fixed for one month.”
At the end of five years my mom’s loan would grow from $300,000 to $375,000 with negative amortization and in reality, the payment would probably go up dramatically in years three or four because there was a clause limiting the loan balance from going up no more than 125% of the original loan amount.
The internet and AI can be very alluring and attractive but there is nobody more ethical than a local loan broker and real estate agent with a great reputation that lives right here in town. You may not have met the local professional before, but they are not a stranger from out of town or a robot on the world wide web.
We have to live here with our clients, and shop and dine at the same places after we help them buy a house. Huge numbers of laws and rules exist today that protect consumers from predatory lending but getting financial and real estate advice from out-of-towners is risky. Don’t let strangers in your house or your wallet.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
