July News

Personally complicated – no, but are your finances at all complicated? In our current COVID world, everyone’s income is complicated. When special attention must be given to your entire financial picture, you will need a mortgage originator that not only understands your finances but has the experience and commitment to get your loan funded. Too often in today’s frantic world, where everyone wants to refinance while rates are low, when a problem pops up, does your mortgage person have the knowhow and tenacity to get you to the finish line?

The difficulty in writing today’s article is that as a consumer you don’t have the ability to know if there are problems lurking in your documentation, or if your file is considered complicated, or if who you picked to provide you your financing will give up easily if a problem arises. Too often in my industry the originators – who are in reality “mortgage salespeople” have looked at you the applicants like collecting shells on the beach. You keep the good ones, and pass on the broken and/or ugly shells, or those needing too much work.

Maybe it’s the way I was raised, or that I’m in my early 50’s, but I take great provide and responsibility in what I do. The world functions on money. People count on me to deliver the goods to either buy a property or refinance to save money or get the funds they need to better their lives. If I fail, you the consumer is injured. It’s not that every applicant gets approved, but if I overlooked something or didn’t challenge an error by an underwriter that resulted in you not getting approved, I didn’t do my job. Unfortunately, there are too many in the mortgage industry that don’t do their job as best they can.

Today I’ll share two stories with you that illustrate the perils of being “just another loan” in the eyes of the people you chose to provide you your financing.

Our first story is about a family I helped refinance a few years ago. As rates dropped, they came back to me to get another refinance done. Before we ever really got started, the husband called to say that the people servicing their current loan reached out and offered them an amazing rate. If any of you have encountered the same situation with me, you’ll know that I truly believe in open competition. I would rather this person get the best deal possible than rather try and convince them to not take the amazing deal. But as with all those great deals, there’s bound to be something not so great. In this case, the borrower has some complicating factors in his loan scenario that this lender could not solve. Why? Who knows? Maybe they are inexperienced. Maybe they are so busy with loans, that they just couldn’t afford the time to figure out how to get the job done.

After trying for two months to get his refinance completed and still no light at the end of the tunnel, my former client reached back out to me. I was happy to welcome him back. Did his efforts with the other lender fail because the deal was too good to be true? No, the reason was that in order to offer such super deals, the lenders have to cut costs. Using inexperienced people to handle the sheer volume of new applications is a successful business model, but along the way your going to have some unhappy people who don’t get approved.

Today’s second story comes from Kauai. The applicant first called asking a straightforward question; “is my income sufficient to qualify for a refinance.” Now no one can answer that question honestly or accurately without getting an application, pulling credit, and reviewing the actual income documents.

The person was happy to complete all the required steps for us to determine if he met the qualifications for the loan he was applying for. After digging through his documentation, I learned that he had just been denied by another lender.

The lender he went through did not calculate his income correctly. Because of their error, the borrower when through the appraisal process and the cost involved, all in vain. The saddest part of the story is that after the broker he went through submitted his loan to the bank and the loan was denied, they simply gave up. They called him to say his loan was dead, and he never heard from them again.

I took the time to explain the borrower that when calculated correctly, he did indeed not have sufficient income to qualify for his refinance. We went over the aspects of his application that disqualified him. Because I took the time to go over everything, the borrower agreed to pay off some debt with some personal savings he had. Working with that and getting him a lower rate with less fees was enough to go from denied to approved!

Neither of these stories are shared for me to pat myself on the back. They are to illustrate that not everyone takes the same pride and commitment to the mortgage applications they receive. What makes this frustrating for me is that as a consumer advocate, I write these articles each weekend trying to better educate you, so you can avoid the pitfalls. The frustration is that I don’t know how to teach you to avoid the mistake of going with the wrong lender. I wish there were some telltale signs to avoid. Is the discount rate lender always going to be bad, no. The best advice I can give you is to ask lots of questions. The longer you speak with them, the better feel you’ll get of their qualifications. Another telltale sign is the amount of time they are willing to spend with you in that initial conversation. If they aren’t willing to commit time in the beginning, they probably won’t have time either if things go wrong.

July News

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