I lost a quote today, not real worried about it but it brings up something that always has left a bad taste in my mouth. For better or for worse, I monitor and study the market as much as if not more than any other loan officer out there. I know where we are, have a decent idea on where things are headed (in the short run anyway and definitely in the long run....it's that middle ground that's always tricky, but I digress.) Point being, if I am being put up against another quote by a potential borrower, I know first of all whether I'm going to be competitive on the sheer numbers before I even know what the other quote looks like. Basically I know whether my pricing today is in line with the market. Secondly, if I find out what the other quote is, I also know whether it is legit or not based on the market. I know I am not always the cheapest but I also know that I will always close when I say that will at the terms I say I will deliver.
That said, here is my issue that is prompting this little vent session and the issue is two fold. First of all, I know that the quote I lost to is never going to close. I know that because I was up on a broker and they cant find an outlet for the product at the rate they offered and at the terms that it was offered. It just wasn't there at the time of the quote and I know it's either an originator betting on the come and he/she may get lucky....most likely they are going to have to find a way to crayfish out of it or they are going to take a loss. Small sliver of hope that between now and closing the market will come to them and they can close this all the same with the borrower none the wiser. I wouldn't bet on that though because it's deceitful and it's wrong because the more likely scenario will be a minuscule market improvement that will not be enough to compensate the outrageous quote given or the market will deteriorate and the problem will be magnified. So why is it that even in this new world of lending that we're in, are there still originator out there that just don't get it? I know that before it's all said and done, the wheel will come around and they will not be happy with the way that will play out.
My second issue is actually with the borrower themselves. I don't blame ANYONE for looking for the best deal, lowest rate, lowest fee, etc., don't get me wrong. But just follow me on this for a second. I have a couple, both wearing "top shelf" clothing, driving a BMW, purchasing a very expensive piece of property, and so on. So it is obvious that in literally every aspect of their life they discriminate. They are willing to pay a premium for everything from what they wear to where they live. HOWEVER.....they go with "Bargain Basement" for the biggest ticket financing they have. I will never understand that. Quality is right there and my quote is legit and deliverable not to mention that they know for a fact I deliver (they were referred by several very happy borrowers). So assuming that the lower quote was in line with the market and just better than mine was at that time, the total savings was around $29.43/month....On a half a million dollar house. Even if you take that savings out 30 years it's $10,500 which is 2% of the transaction and it's doubtful they will be there 30 years. So the bottom line is $30/mo was worth decreased service, decreased knowledge, decreased guarantee, etc., for people who regularly are willing to pay 20% premium on ever other good/service in their lives. I am truly at a loss.
Oh well, another day and that little vent eliminated some frustration. MBS finished up for the 3rd day in a row, we have $21b in 10yr Treasury notes being auctioned tomorrow and the Fed's Beige Book will be out. Can we break through our overhead resistance at the 25 and 200 day moving average and get an improvement in mortgage rates again? If we do, then it's time for action because anyone that continues to sit the fence is going to be in for a rude awakening at the end of the first quarter. The artificial cap on interest rates will die when the Fed MBS purchase program is gone and it's not "Doomsday speak" to say that we could literally see 1%+ jump in home loan rates almost overnight.
Educate and inform your clients first, it's the only way to truly do your job. If you're so focused on just securing the business then you run the risk of severely hurting a families well being and financial security. Helping, educating, long term planning, that doesn't get you one closing, that gets you a lifetime of closings from a borrower/client that is a true fan of yours and that will help you succeed long run the way you helped them succeed.
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