Over the weekend I received a phone call from a referral asking me if I was able to help them with a Construction Loan for his home. Now living in Northern Palm Beach County for so many years I have built up a reputation as an honest and to the point Full-Time Mortgage Professional which leads me to this post. The Client who was referred to me, informed me that he was already approved from another Mortgage person (I can't say Professional)who approved him for $300,000 and he had great credit.
When I received the phone call I was in line signing up my son for Baseball in Palm Beach Gardens, so I could not really speak to him in depth. However, I was able to find out that his current Mortgage person (Not Professional) informed him that they could not get the "Right Comps" (Most loans require a minimum of 3 comparable properties) for his appraisal and therefore would not be approved for his loan. I informed him that I have some very professional Appraisers that I use and if it can be done they would do it.
I asked him since I was in line to please go to my web site and send me as much information as he can. I will look at his application and the property on Monday and I will get back to him with a STRAIGHT Forward answer.
Please remember the following:
Credit + Documentation + LTV (Loan-to-Value of the property) +DTI (DEBT-To-Income)+Employment History=
Home Loan
Just because you have great credit and a good Loan-To-Value does not mean you will always get a home loan or the loan you are looking for. The lenders (with the exception of hard money) want you to demonstrate that you have the ability to re-pay your loan. They do not want your property.
Ok... Let me get to the Reader's Digest version.
After reviewing his application the client does not earn enough income to repay the loan. This is the bottom line. If he went through with the loan his Debt-to-Income would of been in the 85% range. I explained this to the client and informed him how much he really would qualify for. This is where I become the "Bad Guy". He told me that the other people would do the loan and they did not even want proof of income. I calmly informed him they where probably going to choose a stated product and over state his income. (yes this is Mortgage Fraud) When I informed him of this fact I was still the "Bad Guy". I went on to inform him that know matter what the application states he just simply asking for to much money and that he would not have any money left over to live. Once again I am the "Bad Guy" he told me what the other Mortgage person told him his payments would be and what is taxes where. This is where it even gets worse they where using the current tax bill from Raw land. I told him that come November his Tax bill would change and it would go from 1,500 a year to most likely $6,000. Once again I am the "Bad Guy".
The funny thing is I never charged the client an application Fee (unlike the other Mortgage person) and I am the "Bad Guy"
In closing, I just want to thank you for allowing me to vent. I am now getting off my soapbox. I just really enjoy looking back at my post "Mortgage Industry Shrinking bye...bye.."
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Full-Time Mortgage Broker in South FL. Palm Beach County. Specializing in Hard Money / Private Money, Foreign Nationals, Jumbo and Super Jumbo Loans. In addition I work with Today's Premiere Lenders.
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Good job, Matthew. Honesty is a rare commodity these days and I am sure you sleep well. The thing is, working with Mr Unqualified would lead to him referring like-minded duffers to you: not a happy prospect. YOU will still be standing when others have fallen by the wayside.
Matthew - you did the right thing by sticking to your guns and trying to get this guy to understand that he is headed for disaster. But, in the grand scheme of things, he will probably get the loan, build the house, default on it and then want someone to save him from those evil lenders. He will not take responsibility for not listening to a professional.
Matthew- whatta gonna do? You can talk to some people until you blue in the face, but unless you are telling them what they want to hear they don't listen. He will get the loan from someone else, build his home, fall behind in his mortgage payments and they complaint it was his loan officer's fault. Your not the "bad guy", your the only guy telling him the turth - not your fault he doesn't want to hear. Keep doing what your doing.
Sandra
You can lead a horse to water... but it's really hard holding their head under...
Maybe.... just maybe... after he has time to reflect... he will realize that you did him a great favor.
Sometimes all you can do is plant a seed.
Alan, Thank I plan on sleeping well tonight after me and my friend Johnnie Walker have one. I was just so upset that he would blame me for his problems.
Carol, You are right he will get the loan and then be foreclosed on and blame the lending industry for his problems
Sandra, Thank you .. I know I am doing the right thing but it just gets me upset when he see's me as the bad guy
Victor, I hope your right. Thank you
Matt,
Thats so true, you can have perfect credit, and still not qualify for a loan, I think this is great that you brought this up, because no one brings up the truths like you did. I also noticed you brought out the soap box, I think your steaming :0)
Tom Weiss
Matthew - I know it's upsetting to you because your such a "good guy", go have your drink and move on. Sometimes no matter how are we try to help someone we just can't. We have all been there - buyers wanting a home they can't afford, sellers wanting to carry two mortgages, etc. All we can do is give them our advice and expertise, if they don't want to listen, so be it, we tried. They will find someone who will do what they want, but I know it won't be me and because of this I sleep well at night. I bet you do too.
Sandra
Tom, I was really steaming.. You could tell..:-) feel better now though
Sandra, I will take your advice.. Thank you
Matt,
I think a word of advice for all of us is, when Matt has his Soapbox out, make way :0)
Tom Weiss
Tom, Thank you...I feel better now..
Matt - I often call this the big bad wolf syndrome - and often times I am the wolf, or I let my honest loan officers be the wolf.... I am proud of you.
"You want the truth, you cant handle the truth" - Jack Nicholson. We cant help them all, or get those type of clients to understand that we are not the "bad guys" They will one day. I once had a client that made me out to be a bad guy in a questionnaire we send out. About 2 months later I received a referral from her....Sometimes they realize we aren't so bad! Glad your feeling better! GREAT post!
Good for you for telling it like it is. I'd rather be the "bad guy" and be able to sleep at night knowing that I steered my clients in the right direction. Vent away... good job!
Thesa, Thank you I appreciate that
Kim, Great quote! Thank you
Irina, Thank you for letting me vent
I love reqading your posts, they are always informative, and that touch of humour makes my day. Marilynn
Marilynn, Thank you so much I really appreciate that.
You bad man... not bad guy.... lol Seriously, Matthew, you and me both, in regards to the mortgage industry shrivilling up some. I am busy right now, very busy. This guy is a crook and probably needs a loan very bad, that's if this guy doesn't walk at the end. Did you ever get a rate from this guy? How much he would need to put down? You and I know that stated loans have become tougher. Don't forget though, there are no doc loans out there. To me, that isn't fraud. But hey, we know that you are the good guy... just keep plugging along. The others will hopefully drop by the waste side.
Jeff, Thank you hopefully they will continue to drop off.
Not only Mortgage Industry Shrinking, bye bye but bye bye to this character who contacted you. I agree with Jeff, this man must have needed a loan very badly and unfortunately, he's probably going to go with a lender who misleads and worst of all, committing mortgage fraud. Good for you for being honest. So what if you were the bad guy to his particular man, you did the right thing and that always makes you a good guy.
Donna, Thank you.. I always told my loan officers that worked underneath me I Don't look good in Orange and Chrome. :-)