You know, there was a time in the mortgage business when you had to actually use your brain to qualify your clients and work your loan applications. It took a certain amount of intelligence and dedication to read and understand the underwriting guidelines for any given loan program.
I remember when we would conference with an Underwriter with questions such as, “There is a loss of income on the Borrower’s tax returns for the two-family investment property he owns. How do I use that income, or loss on the application for my new purchase?” OR “The Borrower has salaried income as well as a Social Security pension paying her $1400 a month. Can I ‘gross up’ the Social Security income for this FHA loan application since it’s tax-free?”
Those were the OLD days: we actually asked for, received and read the Borrower’s tax returns!
Yes indeed, back in the day we loan originators used our brains for issues far more complicated than “What’s a good job title on this Stated Income loan?” We didn’t depend on Account Representatives from huge Sub-Prime Banks to tell us what to fill in on the loan application or how to structure the loan file. (When confronted with that kind of treatment in the past few years, I would fairly bristle at the notion these reps. had that I didn’t know what the hell I was doing or that I wasn’t capable of understanding their guidelines. I would describe what my client really had while the rep. was trying to get me to change things to “fit” their loan requirements. The experience was a lot like speaking Latin to and elephant)
And, when confronted with valuations falling below what you need to help a client refinance a home, you had to come up with other creative—and intelligent—solutions to achieve the client’s goal of lowering the monthly mortgage payment or converting an ARM loan to a Fixed Rate loan. Solutions such as, “Mr. J. the appraisal is not high enough to justify a loan which will payoff your existing loan as well as cover all your closing costs. But, if you can bring money to the table to pay for part of your closing costs in cash, then I can lower your mortgage payment by $223.00 a month.”
Or to attempt to perform a complicated legal maneuver here in New York State called a CEMA; a necessary legal assignment of an existing mortgage to a new Lender so as to avoid paying the exorbitant NYS mortgage transfer tax (now up to practically 2% of the loan amount). By doing this legal dance-step you could substantially reduce the Borrower’s closing costs.
That was OLD. Now we’re doing those CEMA’s again, even on purchases! It’s all NEW I tell ya’.
Solutions. Problems. Brain-power. Problem-solving. Yes, yes, indeed, those were the days and that’s what it was all about.
Well, those days are back again. Everything that was OLD is now again NEW.
We’re spending the time thinking and working out problems to help our clients achieve their goals—whether that be purchasing a home or refinancing a mortgage loan.
The loan products are out there, too. You just have to take the time to read the guidelines and ask the pointed—and intelligent—questions of your Lender reps. so you come to understand what Banks are doing today in their corner of this otherwise confusing “mortgage-world.”
I spoke to a Realtor a few minutes ago. He has been in the business just over four years. He told me of a conversation he had recently with a mortgage professional with twenty years experience. The mortgage pro said, “The last four years were like a Dream. Before that four year period, that was a REAL market. And that is what you are seeing today, a real market where we have to think to work out the problems and really earn our income.”
The Old REAL market is back again, and it feels brand NEW.