Dear Consumer,
I truly admire someone that doesn't give up. I love a fighter !!!! Let begin to say that I am not god, nor am I perfect, or do I know everything. But I do take pride in knowing a lot and if I am not sure, I will ask first. But what about when you call 5 lenders and all of them tell you that they can't help you because of your credit score. But then you find a loan officer, such as myself, that says that I can help you. Because I can go done to a 500 credit score and that your 553 credit score is workable, even with a manual underwrite. But we have a debt to income ratio issue, that your front end is a 41% and I need to get it down to a 39%. And that FHA's guideline says that it is suppose to be a 31% front and a 43% back end.
So now you are getting frustrated and I am fearful that you might just go back out there to find someone that says yes to your credit, and doesn't worry about the ratio. I am also fearful because we both know that there is an error on your credit report. I told you what to do and when you get the letter, to send it to me so I can do a rapid re-score. Now, you might be thinking that once you get the credit score up, that you will go back to these other lenders that never brought up the fact that there might be a debt ratio problem.
Let's look at the fact that you told me that it took one loan officer 1 whole week, to tell you that your credit score was to low to do the deal. Rut row... Do you know that a good, experienced loan officer would have been able to tell you this at the moment they spoke to you about your credit scores. Which takes no more than 5 minutes. That is a major red flag to me. But you argue the point that they never had an issue about your ratios.
Let's dig a little deeper. You also work overtime and your overtime income this year is doubled than last year. Do you know that another guideline in most cases is that you need to average out 2 years of overtime? I truly doubt that 3 of the 5 loan officers that you spoke to, even asked you about your overtime for 2007. Why do I assume this? After 16 years of mortgage experience, I have seen this happen to more than a few clients. Just this month, I closed a client that went to a big named lender who approved them for $30,000 more than I could. They went to this big lender because they are one of the biggest and thought biggest is better. Not realizing that you are dealing with a person who works for that large lender. And no, bigger is not always better. What was sad, after speaking to this client, was finding out that her husband just changed jobs in October of 2007. And this loan officer was using his overtime with the new company to qualify them. That would have been one of those deals that would have been denied at the last minute.
Overall..... when shopping, you need not only to use your gut, but also seek out a true mortgage professional. Interview them as they are suppose to interview you. And be careful, because not all information on the internet is true. The inexperienced or the true sales person uses misleading information most of the time to bring you in. Just be smart and not go with someone that makes promises or guarantees. Again, more Red Flags !!!
Sincerely,
Knowledge and 16 years of Lending Experience
PS.... I must not be the only one that has been thinking this. Read what Adam Waldman had to say : The Value of Expert Advice
- FHA Loans - FHA Mortgages - Conventional Loans - VA Loans -
Experience & Knowledge at its BEST !!!
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For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
ugg... I just had one of these buyers loose a home because they did not do what their lender told them too.... and now... you guessed it they don't qualify and the program is out of money - grrr we all tried to tell him
too many consumers are loan shoppers instead of mortgage professional shoppers.
Hi Jeff~ Some people just have to learn the hard way, don't they? It doesn't hurt to shop around and compare rates, but it pays to stick with a honest and knowledgeable loan officer like yourself!
THESA..... I am semi confused... what the lender told the client, the client finally did it? And now that program doesn't exist and that they now don't qualify? But yes, it is scary out there.
DANIEL..... I will admit, it can be hard, when so many make convincing promises. How does a consumer know. But when someone tells them how it works, but now they don't like that answer... I believe in risks, but that is very risky, to now try to find someone that will say yes to the high ratio. There are no true compensating factors involved.
VICKIE..... yes, that is so true. I have helped several people just this year, that had bad experiences in the past. And they had a hard time trusting me at first... but once they got to settlement and realized that nothing changed, they are truly happy now. And realize that there are some true professionals out there. And because of this, it can help me gain referrals now.
Jeff, you are so right, I am tired of rate shoppers, when someone calls me and asks me what my rate is. I tell them I don't know I have not looked since it really depends on the program and credit and...
Dave
All you consumers reading this... take heed... this is the mortgage industry in the year of 2008
Just like Jeff Belonger states above about himself
Knowledge and 16 years of Lending Experience
If your mortgage professional can't offer you that - find someone else......
Jeff: After reading this post, any consumer that would go back to a previous lender deserves what they get. If I found a lender as honest and helpful as you, I would be your client for life.
Jeff - Perhaps it will sink in eventually with people. If folks are simply shopping rate, they will be in for a rude awakening. There's no substitute for experience, knowledge, follow up, integrity, and a real heartfelt desire to look out for clients the best you can. The mortgage industry has become way too automated, as have the shoppers in it.
DAVE.... well, this post wasn't really about rate shoppers. But more so, loan officers not being upfront with the consumer to why they couldn't do the loan. Using the credit score as their out. And in this case, I can do the loan with her credit score, but I need to get the front ratio down some. But nobody else mentioned this to her... so now she is confused and wondering why nobody else told her this. And this becomes an uphill battle for me now.... and explaining this now takes more time out of my busy schedule, just because of other inexperienced loan officers... or those that take the time to why they couldn't do the deal.
LEWIS..... thanks for the flattering statement. Not to pat myself on the back.... but I had the same knowledge 10 years ago, when it came to all of this.... not the longevity in regards to experience.... but I pride myself in knowing a lot about FHA from my 3rd year on. And I have noticed that many loan officers, even with 10 years of experience, hardly know what they are doing. Or.. they know, but bait the consumer with the sales pitches, just to get a deal. Anyhow, thanks for the kind words and for the support.
DONNA...... yes, their previous lender or.... just keep calling until someone gives them a yes answer on both the credit and ratio issue. When the ratio issue in my opinion is the deal killer with 99% of all mortgage companies out there. There is hardly any compensating factors on this one....
JASON.... you snuck in there.... as I mentioned to Dave.... sorry for the misunderstanding, but this wasn't about rate shopping. More about not knowing what you do as a loan officer. And now we have a very confused and frustrated consumer. And she is wondering why nobody had an issue for her qualifying ratios but me. And this is the sad part about this business. That so many don't even know how to compute income... INCOME & CREDIT.... and this is why most loans don't close... just my .02.
Jeff,
What I will say now will sound uncharacteristically cold, but FIRE THAT CUSTOMER! Although as mortgage professionals we should feel obligated to help good people "achieve the dream", as human beings we should demand a certain amount of respect.
About 3 months back I had a customer come to me with a deal no one else could do. I structured it for him and he took my work to Wells Fargo because they under-disclosed an estimate for him. Well's failed so he came back to me and we did the dance again. This time he again took my solutions to another lender who again failed him.
Can you guess what happened the third time? He came to me and I stood my ground and told him he had violated my trust and I would not work for him any longer. He was offended and shocked, and my Realtor lost her commission on the deal but she stood by me too. In September I will be closing the Realtor's stepson's purchase of a super short sale deal we put together, and the other guy is still a renter...
Maybe he has learned, likely he just thinks I'm an a**.
Gerry Suarez, Jr.
Your HUD Loan Pro!
Jeff, I think some people are just unaware and they figure shopping around is the best way to go. They don't know what can happen if they don't hire a true professional like yourself...and they don't know the Red Flags....I didn't! So this is great awareness for the consumer.
Jeff, what can you say when you are right. Unfortunately, although less of them, there are still people in our industry that just don't know what they are doing. In my opinion, a lot of them work for the "big" lenders because they can't make it in the open market.
Good stuff Jeff. Hopefully you will have a few more consumers read this and appropriately shop for a good lender.
Jeff, the good news is that the market has seen literally hundreds exit the industry which include most of the type of LO's that you were referring to above. However, there are always some out there that will speak first and act later (shoot from the hip) and those are the folks that have always worried me. Unfortunately, there is not much we can do about them, but let the market weed them out. In the meantime, you simply control what you can, tell the truth, stay educated, be professional and the rest takes care of itself.
Good post though!
Bo
Hi Jeff -- i am simply awed by the depth of information in your posts...REALLY IMPRESSIVE (AND 16 YEARS OF MORTGAGE EXPERIENCE TO BOOT).
OMG! I was just having this same conversation with someone yesterday... close anyway. We were talking about home sellers who want to hear the price they have already decided their home is worth. They'll just keep calling agents until one says what they want to hear, even though there's no way their home will ever sell for that price.
GERRY..... fire her on the first pass?... when you allowed someone twice? Seriously.... I don't react that quickly, no matter how good I know I am. I wanted to basically pull her aside and explain one more time, what she is doing and possibly what she is asking for if she just doesn't trust me. We had a good 30 minute talk and are now on the same page. I have a very good idea that she won't be going anywhere else. Time will tell... but my gut is usually very good.
CAROLE.... even when they see some of the red flags, they get captured and pulled in by the false promises and guarantees. Just hearing these words, for some reason, makes consumers feel more comfortable. My sales pitch to each and every person? You will never hear me say these words... and there is a reason why. This sometimes works....
FRED...... I think saying that some in our industry don't know what they are doing is being very polite.. a purchase or a refinance, a loan officer really needs to know credit and how to read someones pay stub, to calculate income. I am finding so many basic mistakes, it's very sad and scary.
JOHN..... so do I, hence why I wrote it... and thanks for the luck.
BO..... yes, hundred's, which has made me very happy... and I hate to see families suffer because someone in their family lost their job. But I still can't believe how many are still out there that don't even know how to count to 3. Yes, it's that bad... and yes, there will always be a few like that in this business.... hence why training is so important. and thanks for the compliment.
TERRY..... thank you very much and for the support...
LISA...... hhhhmmmm... I guess it's going around a lot. Just when you think the consumer should be getting smarter and have common sense... along comes a sly sales person... giving the consumer what they want to hear. Unfortunately, that will never change.
Jeff, we can have this same problem as Realtors. I can't tell you how many times I've heard "Well how much is your commission?" before I've ever seen the house. Sometimes all they care about is what we charge, not whether or not we can actually sell the house.
Thanks, Jeff. As I'm currently working on a difficult loan right now, I understand the need for a customer to understand what's possible and what isn't. Sometimes people just have to wait these days. Have a great 3 day weekend!
Paul
That is exactly why I am staying with the company I have been with for the past year.... 2 years is a good guideline.....
Thanks for such a post to the consumer...they NEED to hear the truth, Jeff.....
Jeff, I agree. I don't like to quote a rate unless I have a true idea of what type of borrower I am dealing with. It never amazes me how often people go with what they want to hear rather than what reality is.
Jeff,
Excellent post and one that hopefully consumers will take to heart (preferably before it costs them too much money). Unfortunatey, "rate shopping" has been encouraged by the majority of mortgage professionals out there, fueled by the internet, because most consumers focus solely on "rate and fees."
Can you blame them for that? Not entirely. After all, we live in a "Wal-mart" society, where the consumer feels they can get the same "name brand product" for less. Unfortunately, in the financing business, this mentality can costs hundreds of thousands of dollars to the consumer over time.
We can only keep educating consumers, through posts like this one, to seek the best "value", even if it costs a little bit more. Knowledge...experience...expertise...all come with a price. The old adage about getting what you pay for reigns in this industry.
Great post Jeff - oh so true... happens to us every single day.... there ought to be a law!