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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For more information on FHA loans, please go to this link. The FHA Expert
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For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!
Copyright © 2009 by Jeff Belonger
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