Special offer

Too much information...

By
Mortgage and Lending

Have you ever had a conversation that, upon reflection, you wonder what happened or what you were thinking?  You experience a pondering of why you didn't listen or hear cues that most certainly had to have been there?  This happened to me Friday last week. 

I had a referral from (shameless plug! Jubilee Credit Restoration, locally owned, knowledgeable, very reasonable and a proven track record) my favorite credit repair company.  Given the referral source; she is a sharp person that does not suffer fools (except for me) lightly, and since she had known him for some time I thought he would be at least a fairly intelligent human.  Yes, I really thought this.

I called the client and started the application on the phone.  My typical phone interview starts with a series of questions, and the first part includes "Are you working with a realtor?"  If not, one of my partner realtors would get a happy phone call- a qualified buyer!  He was already hooked up and in fact had a signed sales contract.  As we worked through that application a few details came out that, each one by itself was a potential deal killer.  Multiple bankruptcies with no re-established credit.  Fairly high debt to income ratio's.  No savings account. He was trying to purchase a  "flipped" property.  But as I continuously remind myself, if it were easy, everybody would do it.

And so, on a Friday at approaching 6 pm I explained some of these issues to this new (to me) client.  How FHA will require at least 91 days between title transfers to prevent, for example a $10K house being purchased one week and sold for 100K the next week.  We talked about his debt to income ratio's, and how a person with his credit history would probably be limited to a payment that was close to 29% of his gross income, a reported $9.50 an hour. We talked for a while, and we agreed on a time early next week to meet.  I asked him to bring income and asset docs, with both bankruptcy filings (all pages), picture ID, divorce decree, etc etc.  After we set the appointment, and after I saved the application information, stretched and looked at the time I decided to call his realtor and introduce myself.

"Hello," she answered the phone.

"Hello, this is Hollis Jensen, with American Acceptance Mortgage.  We have a mutual client, Mr. So and So?"

"Yes."  Her voice had noticeably flattened, not at all the cheerful hello I have come to know and even expect from professional sales people. The red flag finally started waving in my brain. "He just called me," she continued.

As the story unfolded, it turns out that he had grossly misunderstood and in turn, misquoted me.  The "flip" was only worth $10,000 (and now under contract for the mid 80's).  His interest rate would be 29%.  And on and on.  I most certainly have started relationships off on a better foot.

After I hung up the phone with the realtor I reminded myself not to over educate the possibly uneducatable.  Do not give too much information to a client that cannot handle it. (She re-enforced this as well.)  Explain what is necessary to close the loan and keep them happy.  Keep It Simple, Stupid.

And don't you know it!  That two times bankrupt, flipped property buying, high debt to income, no savings account person did not show up?

Comments (4)

Allison Ables
Allison Ables Real Estate - Gainesville, FL
Gainesville Realtor

Been there in a different conversation... good news is that I have quickly learned what to say and what not to say before I meet with new clients... especially with first time buyers.

Oct 14, 2009 06:53 AM
Patsy Overton
Patsy Overton Interiors, Atlanta, Georgia - Duluth, GA

I love your line about being sure not to over educate the (possibly) uneducated and, yes, I've definitely had my share of diarrhea of the mouth!  Thanks for sharing your story.

Oct 16, 2009 07:31 AM
Joel Prince
The Principle Group, Inc - Hixson, TN
Hixson/Soddy Real Estate Broker

Hollis:

I feel your pain.  There is such a fine line between coming off as a helpful expert and giving a lecture.

Oct 21, 2009 05:56 AM
J. Hollis Jensen
Ooltewah, TN

In this case, perhaps I should have kept my conversation monosyllabic, with directions and expected frequent phone calls?  :)

Oct 21, 2009 06:50 AM