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So, I am a little too honest

By
Mortgage and Lending with Mortgage Financial Group, Inc (NMLS 219650) NMLS #359029

Alexander Harb, of "The Knights Team"/Keller Williams at the Lakes, has been talking to me lately about his problem child that he has mentioned here on AR.  I spoke to this client earlier this week to start gathering the information that I needed.

So, let's get into the details.  Before this file was sent my way, the client was working with a broker who qualified the client for $x.  The client was also trying to get down payment assistance through the state.  The broker was also telling the borrower to go for a 6% seller concession on top of all this.  Then there were employment issues regarding a second job.  This broker built the borrowers expectations up so high, that they rubbed off on the real estate agents that were involved.

Fast forward a several weeks to a month, there is no more communication between the broker and agents and the borrower.  Alex reaches out to Marc Blasi, who mentions our company Knightlines Mortgage Services, LLC.  Was it fate that we were meant to get together with us both using "Knight" in our names?  Who knows?  Anyways, I offered to take a look at the situation.

Upon talking to the borrower, I found out that his second job (started about 6 months ago) was in the same industry as his current job (has been in the industry for almost 5 years).  His current job was moving his position to a full time job.  So, now he may not qualify for as much down payment assistance, if any at all.  I asked him to please forward me copies of his pay stubs along with the letter from the county showing the down payment assistance award, so I could start working on getting this money together for him.  Now, here is the catch... the borrower wants his payment to not exceed $y  (a figure less than what they may actually qualify for).

With my new found information, I started my qualifying.  Based on the income situation and what he is comfortable (wants to) paying, I came up with a figure of $z (almost $50,000 less than what the other broker was quoting).  This was also assuming that he no longer qualified for down payment assistance.  If he did qualify still, we could increase the amount up from there accordingly.  I told the client, let's assume that you no longer qualify to be safe on the side of caution.

So, now I have been waiting a week for the borrower to forward me all the information.  I told Alex that once I got this information from the client, I could work on the preapproval, so they could go shopping.  The client has no longer returned my calls, Alex's calls, or Alex's partner's calls.  Apparently, the client is upset because he can no longer get the house that he has been eyeballing.  So, am I at fault for loosing this client because I was doing the right thing by qualifying them for what they want to pay versus what they might be able to pay (still don't know if they qualify for down payment because I cannot verfiy the income to give to the county to get state money)?  Is this client being unreasonable for throwing everything away because we were watching out for his best interest?  What would you have done if you were in my shoes for determining what the borrower would qualify for (want to pay versus qualified to pay, assuming want to pay is less than what the may qualify for)?

Ann Guy
NA - Allentown, PA

I want it all too.  The difference with me and your customer is that sometimes it's just not feesible. 

Wish him luck and bid him adieu.  That's all you can really do with customers like that.

Jan 05, 2007 08:02 AM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider

Wow... I step out for a couple hours to get some work done, and this happens.  I guess I need to work some more.

Teri - How does the saying go... "NO good deed goes unpunished."

Llyod - I offered to give a preapproval, but it was contingent on getting at least some information that was given proven.  (IE Pay stubs)...  I am could have run it through DU to get the preapproval/approval, but it could have changed once I verified the income situation, which is the biggest part of getting the loan done (down payment assistance v. 100% financing).

Netta - What amazes me the most is the other broker who was supposedly given the documentation still qualified them for more than what they were wanting to pay.  If the client wants to pay $y, base the loan on that figure.  Then you throw in the fact that they did not even think about d.p.a not being available because of the change in job status.  If they get d.p.a, they can get more of a home.  If the don't, less of a home.

Marc - Thanks... yes, the truth can hurt sometimes, but I would rather be hurt by truth than by reality of loosing a house to foreclosure.

Chris - I qualified the client based on the information that was verbally provided to me directly by the client.  I could have gotten the pre-approval if he would have just faxed over the pay stubs and the letter from d.p.a.  Plus, the client has still not signed the application or completed my online application.  I am not going to submit anything to a lender (to get the pre-approval/approval) unless I have a signed application were they have attested that the information they have given is true and accurate to the best of their knowledge.  There is no way I am going to take the blame when they lie to me.  I do agree that there is a big difference, where the pre-approval is more powerful than the pre-qualification.  And yes, there are a couple posts already about pre-qual v. pre-approval.

Carol - The previous broker had pre-qualified the borrower for a certain range.  The problem was that the broker did not listen to the client's wants of what they were willing to pay and qualified for what they could have possibly paid.  In a case like this, I am glad that the borrower wants to pay less than what they actually qualify for.  They want to be safe with their money and not extend themselves (as is they are/were considered low income).  They may be back, but I am afraid that they will go with the other broker now just to get the house they want even if it will be out of the range that they want to pay.

Angus - I agree.  The other broker if I am doing my math correctly was qualifying at just PI, and not PITI.  The clients wanted PITI to be $y.  Just a sneaky way for the broker to make more of a commission.  Plus the 6% concession on top of d.p.a.

Jeff - I am sure that if the borrower is willing to cooperate and return some calls, we could get him such a deal.  I am seeing a lot of home right now sell for less then what they may actaully be worth.  There is one down the street for me selling for almost $100,000 less than the appraised value because the sellers need to get out from under the mortgage.  (Sorry, investors... already under contract from what I hear)

Mikey - Is this the same Mikey that had the debate with Jeff B and Brian Brady earlier this week?  You seem to frequent the site quite a bit.  You really should join and become a member.  Anyways, yes... it is a shame that in our industry people get lied to quite a bit and then seem more upset when the truth is told them.  You would figure it to be the other way.  Happy to hear the truth for a change.

Bryant - Here is the funny thing... we were thinking about taking him shopping in your neck of the woods.  That is about the value of home that he could afford.  And yes, you are probably right that he will go back to the broker that will give him the figure that he wants to hear and not be able to close, or will close and loose the house when he can no longer make the payments.

Lenn - He did qualify for a home that was realistic in value.  The problem was that the drop in price might not necessarily change the quality of home, but rather the location.  He can still get a decetn home for that price range.  Everything can still work for him, he jsut has to realize that the neighborhood will change (and no it is not a bad neighborhood, ask Bryant)

Ann - I will keep trying because this was also Alex's client.  I do not want him to loose a client because I put the truth into him.

 

 

Jan 05, 2007 08:57 AM
"The Lovely Wife" The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Checking in (good way of putting that) and reading this discussion. :)

Hey. At least I let you know I am here. :)

TLW...ROAR!

Jan 05, 2007 11:10 AM
joanne Douglas
Terrie O'Connor Realtors - Ridgewood, NJ
Jason,  You can't tell em what they want to hear you must tell them what they must hear... 
Jan 05, 2007 11:12 AM
Diane Rice
Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL - Lansing, IL
SFR, SRES, CNC

Jason, you did the right thing!  Truth must be spoken. So many "possible clients" have heard information that has inflated their egos.  When they are like that, it's hard for them to come down!  Some of the ones who have just barely qualified for a loan have taken off on a "tripping journey" with expectations of buying the Sears Tower!!!  These are the ones who just got a toe in the door, and now they want to pry it open to make room for their WHOLE BODY!!!

If i sound a little sarcastic or negative....KNOW that it's just my E X P E R I E N C E speaking!  Stick to "whatcha" know...quit second guessing......and realize that Alexander is a professional who understands - and so are we!  I'm PROUD of ya!     

Jan 05, 2007 11:41 AM
Anonymous
Lillianne
Many clients do not want to hear what they need to hear but it is still our job to tell them. Honesty is the way to go... usually when they wake up and smell the coffee they come back or refer a friend.
Jan 05, 2007 11:46 AM
#22
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
Joanne - thanks... now if we can just spread that around to all the others out there in the field, so we don't have situations like this popping up.
Jan 05, 2007 12:23 PM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
TLW - thanks for checking in... I was wondering where you have been.  Madison is having her 1 year birthday next Saturday. :)
Jan 05, 2007 12:25 PM
"The Lovely Wife" The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

 

 

 

 

 

 

Jan 05, 2007 12:29 PM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
Diane - no you don't sound sarcastic.  I fully understand what you are saying.  It irritates me that the bad guys do what they, then us good guys come in and tell the truth.  It makes us look sometimes like we don't know what we are doing.  (Why are you qualifying me for so much less than what this other guy is qualifying me for?  You must not know what you are doing?)  They never look at the other way... wow, thanks for telling me this.  I could have lost my home becuase I could not afford those payments for too long, or I could have lost my deposit if I backed out of the contract when I saw what my real payments would have been. 
Jan 05, 2007 12:30 PM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider

Lillianne,

Thanks for stopping by... I see that you may not be a member.  If this is the case, I welcome you to join.  Perhaps I need to send one of the codgers over with a cup of coffee to make them wake up.  :) I hope this inspired you to look up Jay and Ambrose to see what I am talking about.  Honesty if the best policy.

Jan 05, 2007 12:34 PM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
TLW - thanks... I will have to print that out and put it in Maddy's scrapbook.
Jan 05, 2007 12:36 PM
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
Jason.... late to the party.... but as said before, nothing else that you could have done.
Jan 05, 2007 01:13 PM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
Jeff, where have you been hiding.  Thanks for stopping by.  I just put up another post about golf, marketing, etc.  I think you might enjoy it... plus, I mentioned you.
Jan 05, 2007 01:37 PM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Coldwell Banker Realty
Jason - IMHO you did exactly the right thing - and likely saved yourself some time and effort by not getting any further with the process just to have the buyer balk at the 11th hour.  Stick to your guns!
Jan 06, 2007 12:16 AM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider

Tony,

Thanks... I don't think that these buyers would be that difficult to deal with, but that other broker spoiled them with false hopes.

Jan 06, 2007 12:46 AM
Stefan Scholl
Buyer's Broker of Northern Michigan, LLC - Petoskey, MI
Northern Michigan Real Estate
Jason, don't beat yourself up.  You have saved everyone involved a lot of needless time and aggravation.  Hopefully the buyer will come back around as soon as they get a grip on reality.
Jan 06, 2007 01:49 AM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider
Stefan, thanks... not beating myself up.  Just showing that those bad apples out there make it difficult for the rest of us.  The being at fault question was more of a rhetorical one.  Even though I did right, it was not what the client wanted to hear after he had been told something else.  The real person at fault is the original broker that created false hopes.
Jan 06, 2007 02:04 AM
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate
You did everything right.  I wouldn't have wanted my mortgage girl to fill them with lots of smoke only to find out later (like right before or even at the closing table) that their eyes were bigger than their stomachs.  The truth does hurt, but smart people turn that knowledge into something useful.  I guess those people just weren't ready...to buy that house they wanted or to hear the truth.
Jan 06, 2007 06:14 AM
Jason Price
Mortgage Financial Group, Inc (NMLS 219650) - Tavares, FL
The Mortgage Rider

Jim & Maria,

Thanks for stopping by.  I am sure that the borrower just needs time to absorb the truth.  It is a lot to swallow when things are no longer what they seem.

Jan 06, 2007 06:24 AM