After reading one of Broker Bryants blogs regarding short sales and foreclosures, it occurred to me that a lot of Loan Officers and Realtors tend to place the blame on not only themselves but everyone except the actual homebuyer for letting themselves slip in to an untenable situation.
Realtors....How many times have you sat at a closing and wondered to yourself...How are these buyers going to afford this?
Let's be realistic. The buyer comes to you and you help them out with choosing Mortgage Brokers. You may give them a list of some that you know. You already have a relationship with some of these Brokers and you think you are helping your buyer out by referring to them. These Brokers have all told you they will "take care of any clients you send their way". You believe that they will approach your client with your clients best interests in mind.
You follow as closely as you can without invading your client's privacy.
Finally, the Broker calls you and tells you he has found the perfect package for your client and you can now look at homes in a certain price range.
So, you breathe a sigh of relief and start doing your thing and finding the dream home. You notice that your buyers seem to be a little more nervous than when you first met them, but you attribute this to new home anxiety. Finally, the perfect home in the right price range is found. Your buyers bid and the seller accepts. You feel the house is priced right. You have done all you can for these buyers. Held their hands and prodded and pushed through the whole transaction.
Fast forward to the closing.
You are all sitting around the big table, minus your Broker friend, of course. You are listening to the figures and browsing through the paperwork. You see the PMI insurance. Was that mentioned to your buyers? It must have been, but they didn't say anything to you. Okay, well hmmmmm, what is this silent second? Do your buyers know about this? What, they don't have to pay, ever? hmmmmm. Where did that down payment come from? Oh.
Your euphoria has quickly faded. You had been under the impression that the Broker explained all this to your client, and maybe it has been explained, but looking at the transaction makes you wonder wny anyone thought this would be a good deal. You leave and congratulate your buyers, but as you are driving away. What are you feeling? (Here's the emotion, Ines)
Is this the Realtors fault, the Mortgage Broker's, the buyers? Or perhaps the lawyers???
Every time I hear about a short sale or foreclosure, which lately seems to be several times a day, I think back to those closings. It's not just that people go out and refinance after they buy the house. They couldn't afford it in the first place.
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