Mortgage 911: A Financial First Responder Takes You on Call
It must have been around 6:30pm when the call crackled in. By the tone of the voice on the other end of the line I could tell "the crash" had happened some time prior, but now panic and shock had officially set in and the victim/borrower was not able to speak any longer. From the scene, the Good Samaritan/Realtor dialed the equivalent of Mortgage 911. The breath on the other end of the line was heavy and rushed.
Realtor John: "Rob, we haven't worked together before but you were referred by my broker...I just had a really important deal go south...the other lender told us he can't do the loan....it hit us like a bolt out of the blue... What am I gonna do, Rob? The buyer is my wife's close friend so it's not only my commission check on the line....it's my reputation too....I was the one who gave her the name of the other lender..."
Rob: "John....tell me about the deal."
John: "It's supposed to close in ten days....we have to remove financing tomorrow. Why me, Rob? Why now?"
Rob: "OK, John...I understand the timing is tight, but let's stick with the deal for now. What can you tell me about the specifics?"
When you get down to home loan emergencies, it's fundamentally always a question of income, assets or credit. That's the simple part. The complex part is the devil that dwells in those details and, trust me, it will always come in a different flavor. Like first responders, we've seen just about everything. But here's what we always do when we arrive on scene:
- We stabilize the patient(s). The first thing we do is make sure that no immediate or rash action by any party to the transaction creates additional harm. You'd be surprised at the degree to which panic can further complicate matters. No, the escrow officer does not need to know we're in hot water...yet.
- We gather all the information we can. What contributed to accident? Are there any witnesses (previous lender, for example) who are willing to cooperate with us? Are any important documents available to be shared right away, such as the appraisal, a credit report and maybe even the original loan application?
- We reconstruct the situation, then determine a program and solution that has a very high likelihood of success within a short period of time. At this step we don't want to let the perfect be the enemy of the good. We need a fast, robust alternative. Perhaps at a later date, we can work to make things better but everyone at this stage needs to prioritze close of escrow over trying to resurrect terms for which the buyer may never have been eligible. In other words, there can't be crying over spilled milk.
- We communicate the plan to all parties, reset expectations, if necessary, and get about saving the deal.
For most of my career I have worked for an independent mortgage bank, and one of the key reasons for doing so is the wide array of loan programs we can offer with competitive pricing. This makes us ideally suited to the role of rescuing fallout from other lenders --- especially single-entity large banks that have one set of guidelines. When those institutions can no longer approve a loan, there is often no Plan B. Even on the jumbo loan side of things, and depending on the characteristics of the scenario, I may have a dozen investor options that come into play. And maybe more importantly, I know their guidelines inside and out.
None of us want to be involved in an accident, ever. But accidents happen and when they do, we'll be on the scene in no time to help save the deal.
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Vice President of Mortgage Lending
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
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