How many of you make guarantees and or promises? We are all human and I think this is easy to do, because we just want our client or potential client to feel at ease. We want them to feel comfortable and in a tough situation, we want them not to worry. But how many out there, when it comes to mortgages and real estate, actually throw the word guarantee around to get people through their doors. Hoping by using such words guarantee or I promise, that it will solidify the deal.
A few months ago, there was a loan officer that debated with me, telling me that she believed that loan officers wouldn't do this knowingly. That someone wouldn't stick a deal on the wall hoping that it would stick. Knowing that it didn't have much of a chance, or wouldn't work at all. Or sometimes doing what is called "bait & switch".
This post is not about being negative, but educating the possibility of this happening to you, if you don't work with a true professional.
One would think that it would be easy to tell someone that you can't help them. A simple yes and or no. Well, it's not always simple to say no, but if you give a good explanation, that should work. Then again, I am sure that there are some consumers out there that don't take no for an answer, and will keep on trying.
Overall, just because someone says guarantee, it doesn't always mean it will happen. Here is an excellent example of that from over the weekend.
I received a call over the weekend from a gentleman that was trying to lower his 6.75% interest rate with a FHA loan. He told the loan officer that he was on workman's comp and had no idea when he would be going back to work. The loan officer said no problem, that he could get him a 5.00% rate by using his workman's comp income. Well, after 40 days and $500 for an appraisal, he was denied. He then tried another company and that didn't work. Thinking 3 times was a charm, he tried a 3rd company. He asked the 3rd loan officer to guarantee his loan, which the loan officer did. He stated that they are a direct lender and that they use their own money, which is how they could do this. To the average client, this doesn't mean too much. This company didn't service their loans, which means that they sell them. All they do is use their own monies from a warehouse bank to close the deal and then get reimbursed by an investor after it's funded.
Luckily this guy is not in dire straights, that he can make his mortgage payments, and that he doesn't need to be rescued. He just wanted to take advantage of the lower rates. I did tell him that I thought this could not be done, that I was 95% sure because of the programs out there. His only hope would be to do a No Doc loan, and those rates are very high. After talking to him for about 20 minutes, and both of us having a few good laughs, he said he would call me once he went back to work.
Overall, you need to be careful of who guarantees what. Maybe do some research on that company, person, or that product. If you ask any of my past clients, even though I say that I will get the deal done, I won't say "I promise" or "I Guarantee". .... I just won't, because they sound like phrases used to sell with desperation.
** For a good laugh with some truth to it, please listen to this movie clip from Tommy Boy. Listen : The Guarantee (1 min & 5 seconds) **
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Copyright © 2009 by Jeff Belonger
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Over 17 yrs in the mortgage industry & real estate market, I bring expert knowledge and creativity to financing options & loan programs. Being honest and serving your individual needs is my desire!
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Hi Jeff, I know some things can be guaranteed but I don't think it is so with real estate and mortages. I know I can guarantee buyers and sellers that I will do my very best to help them with their real estate transaction, but this market and business are not the ones for guarantees...too may variables. Nice post.
Jeff....there are no guarantees in the mortgage industry, especially now...but there are still people out there ready to make more money from the less fortunate or less advised.
Jeff - Words of wisdom to live by. Well put, my friend.
Jeff, Very thoughtful post. There are no guarantees in life in anything we do to help others. Many people will make promises but I don't believe they should. I'd trust someone who was honest with me.
Hi Jeff: Thanks as always for the post. Of course I only guarantee what can come true. I appreciate your candor on this as I feel our world is still populated by too many snake-oil salesmen. It gives all of us a bad name with our customer. I haven't had any call backs yet from people who initially chose someone else but expect it to start soon. Those of us who stick to our guns and promise only what we deliver will come out ahead in the long run. It's just frustrating sometimes to watch people get taken advantage of. Have a great day!
BARB..... . I don't see how you can guarantee anything in regards to mortgages and or real estate. Until it officially closes and the monies are disbursed, can you then guarantee a closing. But the word "guarantee" is that warm fuzzy word that makes people comfortable. And good point, stating that you can guarantee your very best in helping out. But sometimes things come up, so is that guarantee even appropriate? Just curious... yes, too many variables out there. Thanks for the compliment.
AMANDA..... . There was never a guarantee out there when it came to mortgages & real estate. But yes, more than ever before is more unlikely to guarantee anything. And yes, there will always be people out there that will take advantage of the less fortunate or less advised. Thanks for the comment.
TOM.... hey stranger.... thanks for the polite compliment. I just feel that we need to educate more people on this and to be careful of what is out there. If you don't know, how does one look for this or realize it.
CAROLE..... . I would think that there are very few guarantees that you could find out there. Maybe when a car dealership will guarantee a car for 1 year, if you pay monthly for that guarantee. I would bet it would be hard to find many guarantees that don't come with an additional price. Thanks for the polite compliment.
Jeff,
There are guarantees and there are guarantees!
Like everything else it all depends on who you are dealing with. In mortgage lending I would never, never, never, never trust anyone who guarantees any thing, but his own service! To do so is to lie and pray you get lucky!
Consumers want guarantees regardless of their value! People believe the Chev dealer will really give you a Corvette if they can't beat your best deal! Of course every one knows someone who's brother-in-law's best friend's 3rd cousin's neighbor got a free Vett! Believing a dealer would give you a $50,000.00 rather than lose a $100.00 off the model you wanted. In our business most guarantees are for $500.00 to $1,000.00 off at closing if they don't close on time and fools consumers believe them!
Direct lenders may use their own money, although normally it's a line of credit, but if anything it makes them more conservative! When you sell a loan after closing, mortgage banking, instead of before closing, mortgage brokering you have to be much more careful least you get stuck with an unsaleable loan or having to discount an under producing loan. Few lenders are portfolioing loans for the long term. Their money is in servicing not the interest.
What bothers me most is when these fools consumers go for the guarantees and even if they get the discount they are normally paying much more than I charge.
Bill
Wonderful! We have loan officer running around putting up signs in our community....VA LOAN SEMINARS and don't even have a mortgage solicitor license. Okay...that's a different subject. Bottom line is that we are in hard times...but solicting people with promises that can't be kept is deceitful. Good topic Jeff.
Jeff - Good post for the consumer to know. As for my promises and guarantees to clients, I promise them that I will do everything I can to get them the most affordable loan I can and I guarantee that I will always be honest and upfront with them about the loan process and I will never lie to them.
If that's not good enough for them, then I'm not the right LO for them. I wish them luck and send them on their way. Let them find some other person who may be less than honest to them by telling them what they want to hear regardless of whether or not it can be done.
Jeff,
Most guarantees aren't worth the papercardboard box they're written on...!!! Thanks, Fran
Jeff - The only thing we can guarantee is that the sun will rise in the morning and set in the evening. BTW Tommy Boy is a great movie! Too bad Chris Farley blew himself up (rhetorically).
ps this is your post # 666! Better write another one quick!
Brian.
Jeff,
in my humble opinion people who have to guarantee or make false promises are not professionals and lack people sales skills. if people only work with you because you offer a guarantee than you as professional provide nothing of value.
JP Lowry -- Preferred Financial Funding --
Jeff - for SURE there are lenders out there that throw numbers out there and give promises that they 'hope' will work out. I was lucky enough to pick up 2 loans about a month ago because of this situation. They were told they could get a 4.875% 30 year rate with NO FEES. Of course weeks went by and slowly but surely the LO was harder and harder to contact. Finally the borrower threw in the towel and called someone new. They didnt want to hear that deal could not be done, not without the LO going in the hole. So, there are still plenty of LOs making promises that they can not keep.
I NEVER make guarantees! Wait. Is that a guarantee? =P I guarantee that I never make guarantees. LOL OK, seriously, no. I don't make guarantees. I'm actually kinda paranoid about them coming back to bite me in the butt, so I go out of my way to explain why I can't make any guarantees.
I guarantee I'm not God. At least, I think;)
The only guarantee I make is to do my best.
BTW - did anyone see that 3 people got sentanced for duping people out of their money on loan mods? Bet there were some "guarantees" involved!
Very good, Jeff, honesty is 100% the right way, why take a bad or bad at the time loan just too look busy.
Dave