Do you remember that scene in Braveheart when William Wallace and the loan officers….er….I mean rebels descended upon the real estate agents….er….I mean the King and his nobles? The loan officers…er, eh hum….I mean rebels, were acting out of crazed desperation. How does this relate to YOU, the real estate professional? How does this relate to your clients, the would-be home buyers?
The desperate rebels are the refi-boom loan officers descending upon you and your clients. I see this every time we come out of a refinance boom. Every time rates trend up so does the pressure on these overnight refinance companies. As you read my blog these refi-boomers are practically giving loans away, slashing fees, cutting rates, doing whatever it takes to buy your business….at the risk of their own solvency.
But that’s not the worst part! Yes, they are risking their own solvency because, well, let’s face it, you can only give loans away for so long before you no longer can afford to pay your underwriters, processors, compliance officers, mid-level managers, and your $8 p/hour application-taking loan officers. HOWEVER, the worst part is that they are risking the livelihood of YOUR clients and YOUR reputation.
How does this affect you and your clients? My friend, these refi-boomers are skilled at taking an application and passing it along to pencil pushers. PERIOD. They are skilled in refinancing….which, quite honestly, does not require much skill.
Refinance Loans and Purchase Loans are night AND day different. They are completely different animals. Think about it…..in a refinance transaction there are NO deadlines, NO inspection timelines, NO contractual dates/deadlines, NO sense of urgency – if a refinance client closes in one week or one month, as long as they are still getting their rate, they’re fine! They aren’t concerned with moving vans, terminating utilities, establishing new utilities, moving phone lines, terminating yard services, enrolling kiddos in a new school, etc, etc.
Unfortunately I must make a prediction – you will begin to experience more 11th hour nightmares, more wheels falling off, more train wrecks than you’ve ever experienced before. UNLESS, you take control of your transaction and protect your client.
When you come across an unknown, seemingly internet-like mortgage lender use this checklist (email me for the complete checklist):
1. google search the company (if you’re directed to a site that screams REFINANCE now, tell your clients to run!)
2. pick up the phone and call the loan officer – put them on notice, let them know you/your team will be checking in weekly for a status update
3. find out their purchase-to-refinance ratio (should be 75/25 or better)
4. find out, from your client, what the true savings is from your preferred lender to the refi-boomer. surprisingly, in most cases is $10-$40 p/mo at best!
Email me firstname.lastname@example.org for a more complete and FREE checklist of questions to ask lenders. You owe this to your client AND yourself.