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Some Phone Calls Are Just Hard To Make....

By
Services for Real Estate Pros with Auto & Home & Life Insurance throughout North Carolina

 Despite what your popular infomercial of the day has to say, it ain't easy giving bad news.  And it's not in my nature to take advantage of it.  I wrote a post not too long ago about a transaction that turned real dead, real fast, after the appraisal came back.  An adjustable rate came due, yet they couldn't do a thing...

Adjustable Rates were a popular phenom and always will have their place.  I didn't make them that original loan but I followed up like a madman to try to make sure I'd make them the next, and hopefully, final loan they'd ever need.  This story is like many others though, they were credit challenged and equity poor two years ago, they took a lower rate on adjustable terms to get a lower payment...with the idea of things would turn around.  Things didn't turn around.  Still falling behind on their mortgage, I had spoken to them 6 months after they entered that transaction...haven't let go of them since.

When the the time came that their rate adjusted (higher, which it almost always will be with these programs), I was there trying to work with them to see if there was a way out.  They were finally on-board and an appraisal was done...so was their transaction.  Turns out, they had no equity at all and their credit didn't do them any favors.  So, even though the phone call sucked to make, and I heard tears on the other end as we spoke, I had to give them the best advice I knew how to give them.

Many of you, across the states, may be in the same boat.  You have no equity (you owe what your house is worth and maybe even more than what your house is worth)  and your credit isn't anything to write home to Mom about, despite the fact that was the program you entered trying to correct things in your financial life.  If this is you, in any way, let me give you an alternative means of trying to situate the situation.

* Call the Company Who Currently Holds Your Mortgage!  Trust me on this, they are not in the business of owning houses, especially ones there is not equity in.  If your rate is starting to adjust and you realize you have no equity to refinance out of it into a fixed rate situation and won't realistically be able to afford the payments, call themCall them now!  If you are still reading this, you should of already dialed their number.  The worst thing you can do when dealing with creditors is to lack on the communication thing.  Explain your situation, professionally and  persistently and work out something that works for both of you.  That is, in my estimation, the best way in this situation to make things work.  If they are a smart lending entity and you are a consumer of your word, things can and will be worked out.

Banks hate balances that exceed what their collateral is worth, lenders dislike when they aren't being paid.  Both feel the same about the matter, use it to your advantage!  There is breathing room...just remember to breath and to communicate.  Do both with integrity and there will be plenty of air for us all...

 

 

 

Suzanne Sands
Pavao Real Estate - Somerset, MA
Somerset MA Real Estate

Jason,

Excellent post! You really put together a great piece for consumers, I would do business with you! :)

Jul 10, 2007 10:55 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Jason,

I keep hearing these stories about the consumer not understanding what they are getting into..they just want to see the low rate..but do not realize it usually is only for a short period then it could jump to a ridiculous point...good job to inform the consumer to really understand not to just look at the rate but the terms too. good to post in localism.

Jul 11, 2007 12:01 AM
Steven Shewell
Primary Residential Mortgage, Inc. - Ephrata, PA
The Mortgage Maverick

Excellent post!  Communication with the lender is always the best advice - your response, however, will depend greatly on who your current lender is and who you speak with at the company.

I have seen many lenders take hard stances against the client when there is no logical reason for doing so.  Some of them will not even try to work things out until you are already late on the mortgage!  Can you say bad customer service?

Keep 'em coming, Jason.

Jul 11, 2007 12:10 AM
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate
Jason - What a wonderful, timely post.  I just had a listing that died---poor communication that started too late.  The people just gave up.  I worked harder than they did to help them keep their home.  Unfortunately, I think I wanted it more than they did.  The home was sold at auction a couple of weeks ago.  Really sad.  Thanks for laying out a pragmatice plan of action for people who find thenselves in this situation. 
Jul 11, 2007 01:04 AM
Shawn Gerhardson
Waterstone Mortgage NMLS#186434 - Cambridge, MN
Top Rated Mortgage Professional
Very good information. That should always be their first step in that situation. Nice post!
Jul 11, 2007 01:59 AM
Sandra Cummings
William Raveis Real Estate - Guilford, CT
Real Estate Agent, Guilford Connecticut

Jason

This is a great post - gave it a 5 - should be a feature.  What  excellent consumer information. How many times do consumers know they can know longer handle the loan payments and instead of contacting the lender, just stop paying the mortgage. Many times is because they just don't know what to do. I bet you helped many today.

Sandra

Jul 11, 2007 02:10 AM
Desiree Daniels
RE/MAX Tri County - Robbinsville, NJ
Great post...   If only clients would listen.   So many are embarrassed when they get behind they aren't "candid" with you and feel no way out of a bad situation.   By the time you or I give them advise they are in too deep... at-least thats been my experience with sellers lately.
Jul 11, 2007 02:44 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Mike - Thanks, I think empathy is ultra-important.

Chris - Lol, you're too much:-)

Suzanne - Ditto!

Neal - There's a lot of it out there for sure, our job is to educate, educate, educate. 

Steven - I hear you there.  In my opinion, those lenders who refuse to work with a consumer out of the shoot are practicing bad business.

Marlene - Thank you for you're insight!

Shawn - It is so simple, yet so often not done.

Sandra - I hope, I can only hope. 

Desiree - I've seen this happen way too often, all we can do is offer our insight and help...it is up to the individuals whether they want to take it or leave it.

Jul 11, 2007 03:04 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender
Jason: So well said, and with such heart. Obviously you really cared, and that is so important. I had this happen to one client last year and it broke my heart. I only wish we could give kids that are just starting out advice that would allow them to make better credit decisions. Having said that, there were plenty of people trapped in the declining value/adjustable loan situation. I always say that adding poor credit is the 3rd stike...they're out. (unfortunately)
Jul 11, 2007 03:34 AM
Rey Gallegos
Supreme Lending (NMLS ID #2129) - Las Vegas, NV
FHA, VA, Home Loans Las Vegas, NV
Jason, Once again great post!  It is tough to give bad news but when you deliver it with a potential solution like you outline here at least they know you are trying to help them!
Jul 11, 2007 03:47 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Janet -  Agreed Janet, I really do wish we would have more of our curriculum in high school geared towards credit & mortgage understanding.  I think that could make a great impact.

Rey - Thanks Rey, it is tough...nature of the beast though.

Jul 11, 2007 05:21 AM
Thomas Weiss
Thomas R. Weiss - West Palm Beach, FL

Hey Jason,

I did just what you said, and when my client called their lender, they were told they are just a servicer of loans, but they would refer them to their mortgage dept who will be glad to Refi them, in a nut shell after two days of working on it, they got No where, I do think you are right though, but I am so tired of these banks hiring flunkies to do work for them...

Thanks,

Tom Weiss

Jul 11, 2007 11:50 AM
Dominick Gaccino
Dominick gaccino - Peekskill, NY

communication is always key in our business

 

good post

Jul 11, 2007 12:38 PM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Tom - I am going to be on a conference call with my clients and their current mortgage holder tomorrow, they accepted my invite to help even though I couldn't help them directly per se.  Whatever the outcome, I'll post an update of what happens.

Dominick - True, true.

Jul 11, 2007 03:10 PM
William Johnson
Retired - La Jolla, CA
Retired
A great piece of writing and one that warrants people paying attention to. How sad that people just don't seem to want to face the problem down and get a resolution. Life can be a crapshoot but even then, you can't just stand at the craps tables and hold the dice. Wonderful writing and great advise.
Jul 11, 2007 06:30 PM
Rob Robinson- Lehigh Valley PA
Bertrum Settlements (Title & Abstract) - Allentown, PA

Jason, not even one of those broker terms 'you guys' like to use to confuse people like me ? :^).

 

EXCELLENT ADVICE FOR THE PUBLIC... JUST EXCELLENT.

Jul 12, 2007 01:44 AM
Monica Simonsen
CalTex Lending - Rowlett, TX
Great Post!  If in this business long enough, we will all come across a client with this situation.  Calling their lender should always be the first thing they do after being turned down to refinance.  Communication is  the key.  Thanks for the wonderful post.
Jul 12, 2007 04:47 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

As always William, thanks for your insight and for stopping by.

Rob -  Was this simple enough:-)?

Monica. - Thank you so much.  I have a conference call with them and their current mortgage holder Monday morning.  I will let everyone know how it turns out.

Jul 12, 2007 05:13 AM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Fear holds so many people from making that call and it really can help. I always tell my clients what is the worst that can happen, they say NO? Then you've wasted 10 minutes of your time, but if they say yes! You have just saved $20,000 or more, is that worth 10 minutes?

Jul 15, 2007 05:15 PM
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public
As I did not take the time to read everyone's comments, please forgive me if I reiterate something having already been said.  My biggest thought on the communication factor is this ~ treat the lender with a great measure of respect.  The old saying, "You are sure to get more flies with honey than with vinegar", is 120% true.  The banking institutions have heard all of the excuses before.  They have dealt with jack a$$es who blame everyone but themselves, they have seen it all, and heard it all, and most of it was all a lie in the first place!  Be kind, be honest, and be patient.  What we do unto others is done unto us...eventually!  Stay true, and it will work out!  In the long run, what do you have to loose?
Jul 22, 2007 06:09 PM