They’re Still Out There

You would think the downturn in the mortgage business would have finally “separated the wheat from the chaff.” Unfortunately, there are still people hanging on the fringes of the mortgage business claiming to know what they’re doing.

You would think the downturn in the real estate market and subsequent downturn in mortgage originations business would have finally “separated the wheat from the chaff.” Unfortunately, there are still people hanging on the fringes of the mortgage business claiming to know what they’re doing.

I know there are many Realtors who have moved on. My wife the Realtor said to me in the middle of the boom how “everyone and his brother is a Realtor!” A lot of those folks have gotten out of the business. Good, they shouldn’t have been in it in the first place.

Same holds true for mortgage originators. The fantasy years attracted so many amateurs and slimebags and idiots who jumped on the “million-dollar-mortgage-bandwagon” and contributed greatly to the mortgage meltdown of 2007.

I lost business to these idiots as they lied to Borrowers, whether through intent or sheer ignorance. The lies where simply a way to garner a commission check from an unwitting consumer.

Experienced mortgage pros like me could only look on and shake our heads.

My business has been picking up as of late. We’re seeing people coming out to buy homes again. It’s no great rush for the gates, but it’s a healthy pickup after the incredibly slow market since ’07.

I’m receiving referrals from Realtors who have been around longer than 5 years; people with experience who are truly professional Realtors. But I’m noticing a disturbing occurrence in the past two weeks: clients are being solicited yet again by former mortgage people who are still hanging on the fringe, hoping to originate a loan or two while working their new day job (you know, the one they had to take when the mortgage meltdown hit BIG time).

Tuesday of this week a Realtor informed me that a client he’d referred to me was pre-approved for $500,000 by a mortgage “guy” who lives in the client’s building. Interesting because the client IS NOT qualified for a anything near that amount according to current guidelines. I know, because I ran the client’s credit, reviewed his income and assets. I advised the client who would definitely need a co-signor on the loan so that he could qualify for a $365,000 single family house. There’s no way around the math. There’s no calculator that exists that can make the numbers work any other way. And there are no programs as flexible as the FHA insured mortgage—the one I used to qualify said client.

So, how does “the mortgage guy in the building” qualify the client for $500k? I dunno. But it sounds a lot like what I heard from clients back in the boom. All kinds of amazing claims and feats of magic (but not heroics) to get people approved for mortgages they couldn’t and can’t afford.

Same thing yesterday. A woman earning $41,000 a year with less than 3% down payment told the Realtor that a woman she knows “in the mortgage business” suddenly has her qualified for a mortgage of $425,000 for a 2 family house.

The math just doesn’t work! The woman told the Realtor her mortgage whiz kid had all kinds of programs available to help her get the house without a cosignor and without the 3% downpayment.

You would think that people would watch the news or read a newspaper once in a while! Don’t they know these losers are just leading them on and wasting their time?

Met a Realtor yesterday who knew me from way back in the early 1990’s. Back then he was an agent; today he owns his own office. I walked in his office and he literally said, “Thank God you’re back! Where have you been? I have needed you to close my deals!”

He went on to tell me how he has referred 8 deals—that’s folks buying houses—to his next door neighbor, a mortgage broker. The mortgage-broker-next-door hasn’t closed a single loan. And these are transactions that have been kicking around for something like three months.

So, these losers and slimebags and idiots are still out there, wasting everyone’s time, claiming to know how to originate and close mortgage loans. They don’t know how to do anything but lie to clients and waste Realtors’ time. Immediately these losers should fill out those applications for employment at their nearest fast-food establishment; I hear they’re hiring.