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.