I'm pissed off. I don't like being lied to. And I didn't like 2008 and what followed. It hurt us, our clients, our friends and the country, and I don't enjoy seeing evidence that the lessons from that fiasco haven't been fully absorbed into our business practices.
Mary and I have a challenging listing. It's a nice condo, in great shape and a great location, priced right at the market's sweet spot. Under other circumstances, it would have been long gone. The challenge? It's a non-warrantable condo, which means that it doesn't fit into traditional lending standards that would allow a loan on the property to be easily sold on the secondary market. There are basically two reasons for this - the owner occupancy rate is 31%, and the HOA governance has raised some questions that are answerable but not easily answerable.
We have been diligent in disclosing this situation in the MLS, and have worked hard to find financing alternatives. We've been able to identify several local lenders who have taken a good look at the property and can make a loan on it. Generally, for owner-occupied buyers, they're going to need very good credit and a minimum of 15% down. For investors, it's going to be 25% down. There's definitely a doable deal in there.
So imagine our bemusement when we received an offer with a 5% down payment and a pre-approval from Quicken Loans. We expressed our skepticism to the agent, who asked the loan officer at Quicken Loans to reach out to us to offer reassurance. No Worries! That loan officer not only assured us that he could do the deal as stated - non-warrantable or not - but that they did these "all the time" for as low as 1% down!
I'm sure I don't really have to elaborate any further - you know we didn't take that offer, and you know why. But what really bothers me is that there are still loan officers like this out there, oblivious to or uncaring of the harm they're doing to their customers and an industry that doesn't need more hits on its credibility. Is this loan officer just an out of control rogue? I hope so, but I'm willing to bet that his performance metrics are based to some significant extent on what he puts in the pipeline, rather than what successfully comes out at the other end.
I thought everyone had learned that lesson.
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