Poor Credit and Depreciation....Do I have to call you back?

By
Mortgage and Lending with Primary Residential Mortgage Inc.

My cell phone rang again today.   Another potential borrower looking to refinance off a piece of my direct mail.    I don't think I get more excited than when I hear "I got a piece of mail from you and I would like to refinance.   Can you help me?"   The excitement is one thing......REALITY IS ANOTHER!

In the last 6 months, I have talked to at least a hundred homeowners that are upside down on their house.   They owe $200,000 on a house worth $150,000.    It is so difficult to do, but I have to call back and break the bad news to the homeowner.   Most already knew before even calling me.   They have tried in the past, have been promised the world, and never heard back from the loan officer they were dealing with.    I understand why a loan officer wouldn't want to call back, but it is the least we can do for a homeowner.

 

My thought process is simple.   Homeowners need help, but more importantly, they need a bit of advice and a little education.   At the very least, I offer my potential borrowers a game plan as to what to do over the next 6 months to a year, along with a little knowledge.    Some are only months away from help.   An FHA loan at 97% LTV may be the solution in December, but we need the housing market to pick up before we can do anything.   I never give a time frame, but I do tell all my borrowers that real estate goes in cycles, and hopefully, we are at the bottom of this one.   A good payment history and some luck will get them out of their jam in the future.

 

Something simple I do that I find so many mortgage professionals neglect to do is go over the credit report with potential clients.   How do you fix something that is broken without knowing which part is messed up?   A simple 5 minute conversation, along with a little hand holding can change a turn down into a client in 6 months.   Most borrowers don't know the difference between a 700 fico score and a 530, other than the obvious 170 points.    How does a borrower improve credit and what steps can a borrower take?   5 minutes of my time and at least I feel like I am contributing to the healing of this mess that we are in right now.

 

If the value of the house has dropped significantly, the time frame is much longer, but I am not going anywhere!   Maybe I can't help the homeowner for a year or two, but I will still need to close loans in 24 months won't I?    Any call I ever recieve is a potential client......I just don't know how long it is going to take.

 

I am sure there are many buyers out there that cannot qualify for a loan right now.    Just remember, they are renting now, but they are going to be a buyer some day.   You just don't know when.   It makes sense to be there when they are ready and qualified to do so.

 

 

 

 

 

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Rainmaker
112,155
Brenda Harmon
Century 21 Beal, Inc College Station, Texas - College Station, TX

Tim,

Patience and goodwill do pay off.  Too bad so few people are willing to help those you do not give them an immediate payday.  Keep up the good work.

Aug 28, 2008 03:30 PM #1
Rainer
25,404
Dione Sage
Nova Home Loans - Gilbert, AZ

Tim, Excellent blog. I agree with you 100% a client you can not help today may be a client that you can help in the future....So many forget that. Also to leave them with some information that is worth something & helpful to their situation then I think it is way more valuable then a smile and a business card. Great job again and good luck to you in the future, I think you will do great things.

Aug 28, 2008 03:33 PM #2
Rainmaker
248,147
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Tim: Sounds like similar things I'm seeing with prospective sellers of property. They've maxed out the equity and thwen want to cash out but they're way over market.

Aug 28, 2008 03:34 PM #3
Rainer
11,828
Tim Marose
Primary Residential Mortgage Inc. - Gaithersburg, MD
Maryland Buyer & Refinance Specialist

Brenda - it amazes me how quickly people disregard potential clients that cannot close now.   Thank you for the comment.

Dione - we try so hard to differentiate ourselves, this is an easy way isn't it?   Thanks!

Aug 28, 2008 03:36 PM #4
Rainer
11,828
Tim Marose
Primary Residential Mortgage Inc. - Gaithersburg, MD
Maryland Buyer & Refinance Specialist

Matt - that makes it nearly impossible for the client to move without equity.   Nobody wants to move and have to pay to get out of their current home.   Praying to the appreciation gods:-)

Aug 28, 2008 03:42 PM #6
Rainmaker
141,095
Anna Matsunaga
Team Momentum Keller Williams Realty Tacoma - Lakewood, WA
Seller specialist, Certified Negotiation Expert

Good for you.  We are here to serve our clients and give them options.  They will come back to you in the end because you did care.  Use a data base management system to to follow up you should have lots of business and also referrals from those folks friends who can do something now. 

Aug 28, 2008 04:12 PM #7
Rainer
218,585
Lisa Friedman
Alliance Realtors - Bedminster, NJ
Central New Jersey Real Estate

Tim, it sounds like you are one of the good ones.  Its sad that people don't call back.  Kudos to you for helping these people improve their credit scores and come up with a game plan.

Aug 28, 2008 04:41 PM #8
Rainer
11,828
Tim Marose
Primary Residential Mortgage Inc. - Gaithersburg, MD
Maryland Buyer & Refinance Specialist

Anna, I do have a pretty good contact management system.   Good advice.   Thanks for the tip.

Thanks Lisa.    Yes I want to help people, but I also realize there will be some gold at the end of the rainbow.

Aug 29, 2008 04:09 AM #9
Rainer
85,519
Rich Mielke
REMAX Results, Frederick MD - Frederick, MD
REALTOR, Frederick Maryland Real Estate

Tim, good point. Many agents and lenders want the here and now client, not the ones that need to save up and improve their credit scores in the meantime. Thanks for commenting on my blog

Oct 12, 2008 03:36 AM #10
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Rainer
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Tim Marose

Maryland Buyer & Refinance Specialist
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