As a professional mortgage originator/planner, part of our job is to put our customers in a better place financially. On March 5, 2007. I made a post titled "Do You Ever Feel Like Michael Jackson's Plastic Surgeon?" The article spoke to a financial crisis touching millions of consumers across America and the role we as professional originators/planners play in solving this financial crisis.
We are now seeing the results of this crisis with the current state of subprime. Don't get me wrong, I'm not against subprime products. Millions of homeowners have benefited from being able to either purchase or consolidate their debts utilizing sub-prime financing. Bad things happen to good people and sub-prime loans have helped them resolve their issues and put them in a situation later to refinance into a prime home loan. When sub-prime lenders utilize sound underwriting principles, it's a great financial tool for many consumers. The problem lies when some in our industry take advantage and profit (to the clients detriment) from their clients financial mismanagement.
Too many originators and financial institutions are only too happy to continue profiting from enabling their clients "out of control" spending habits. What happens to these clients when they run out of equity and are "Maxed Out" again?
Fortunately, I believe there are enough ethical and professional mortgage originators/planners in our industry to make a difference. It however is our responsibility to police our ranks and fight passionately to educate/protect consumers from those snakes who profit from placing them into neutron loans. What is a neutron loan? A neutron loan is a loan that leaves the house intact, but destroys the individual(s) financially.
Neutron loans can come in the form of credit cards, personal, car and mortgage loans or most likely a combination of them all.
As a professional mortgage planner, we are in a situation to assess a clients whole financial picture. Many times we can consolidate our clients debt and save them money via increased tax savings, lower interest rates and monthly payments, while increasing their cash flow which enables them to increase their savings/investment portfolio.
We also have another responsibility and that is to educate our clients. That process not only takes place during the loan process, but also after the fact. Are you sending your clients monthly/quarterly newsletters regarding financial fitness tips and planning. Do you contact them annually and conduct a comprehensive financial review to evaluate if their financial position or needs have changed. Do you work with their CPA or Financial Planner coordinating these needs?
Most importantly, ask yourself the following questions whenever your are doing a loan for a client:
- Am I doing this loan solely for the commission to the detriment of my client? (or)
- Will this loan put my client into a better position financially and have I acted in the highest accord of professional standards?
If you can answer affirmative to question number two on all your loans, not only will you be doing the right thing, you will be on the right track to building a long-term and lucrative mortgage originating career.
Please take the time to watch this trailer for the movie "MAXED OUT" and let's repair and uphold the professional and ethical standards of our wonderful industry.
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