You Are Approved: Arbeit Macht Frei! Oops, Not Really!

On two occasions this past week I had two different Realtors call me to screen their buyers who came to them with pre-approval letters from a mortgage lender/mortgage broker. In both circumstances their clients needed 100% financing with up to 6% seller contribution.

In the first case, the client had a pre-approval for a $250,000 purchase. Credit score was mid 500’s and she made $12.50 an hour in a service industry job. She could not qualify for even a $100, 000 purchase much less stick out her proverbial neck for a reduced documentation loan. Furthermore, she had a stretched comfort zone of $900 a month for a piti payment. After discussing all this in detail with the client thanked me for the time to discuss her needs and being straight forward with her and that she knew all this “WAS TO GOOD TO BE TRUE!” ……Arbeit Macht Frei!

In the second case, the realtor (seller’s side) got the loan officer with “that other company” on the phone to me. The Realtor had negative vibes as he had previously had a less than desirable experience. My realtor wanted the mortgage broker to fax me a copy of the credit report to review. At first the mortgage broker indicated that he would do this as I assured him that I would take no interest in his deal. As we got deeper into the scenario and the buyers qualifications he started changing his tune and became un-cooperative. The selling Realtor says “ok great, that’s enough; I’ve got what I needed to know!”…..just another…..Arbeit Mach Frei!

As I reflected on the events of the past week and was exploring ideas for my first formal blog the thought of all the incompetent and unethical people we have in this profession. How is it so easy to “tell them what they want to hear”….we’ll throw it against the wall a little later and see if it sticks……Arbeit Macht Frei!

For much of my professional life I was on a dual career path; Financial Services/Mortgage Lending and a Career Reserve Commissioned Military Officer retiring after 25+ years of service. I spent three years active duty stationed in West Germany with my family present. During the summer in two of these years my wife’s parents came over and spent 4-6 weeks with us.

Her father was a veteran of WWII having landed on D-Day and fought thru Germany ending up in Dachau near the end of the war. I managed to get some leave time hear and there and a few long weekends. Her father decided that he would like us to visit Dachau which was just a 2 hour drive form where I was stationed. Upon arrival at this Nazi WWII Concentration Camp we were greeted by this massive iron gate with this Nazi slogan (propaganda) scrolled across the front of the gate. “ARBEIT MACHT FREI!

For those of you who don’t speak German….translation….Work Shall Set (or Make) You Free! Now imagine if you can the 100’s of thousands of Jews that passed through these gates only to be systematically exterminated. Arbeit Macht Frei…….the setting of False Expectations!.....in the cruelest of ways.

A fundamental tenet of our business is setting the appropriate level of Expectation with our clients. With decency and respect, not like animals on the way to the slaughter house!