Does Your Broker Explore All Options?

Does your mortgage broker explore all the available options for your given loan scenario? If they don't then they are doing you a disservice! This really came into play on 2 recent loans we closed and another one we are working on. Here is a brief synopsis of 2 scenarios.

Borrower #1
We were approached by a local realtor who uses us from time to time. Unfortunately he had a previous relationship with one of our competitors and he uses them primarily. They are a solid company so I really don't have much to say other than I am glad he still uses us from time to time. However, in this case his buyer was sent to our competitor first and couldn't gain an approval. After having him apply with us, I found he did qualify for a USDA loan. The trick was that he had no credit score. This obstacle requires us to build non-traditional tradelines in order to generate a brief credit history and then move forward. This is a step that takes some added work and is a bit of a pain. Either this other lender wasn't aware of it or simply didn't want to mess with it. This is just one example of how putting in the hard work by doing a bit of digging can gain you a client! Not to mention help the borrower out of a jam!

Borrower #2.
This borrower received an FHA loan commitment from a very large/well known bank. The bank required the borrowers to rent our their current home that they couldn't sell. Otherwise they would not debt to income qualify for the loan. They did so and they were all set to close on a Friday and the tenants would be moving into their previous home that weekend. 40 minutes before closing they get a call and say that due to the Hurricanes taking place, the closing would need to be moved. (the bank apparently had a processing/underwriting division there). The closing was moved to Monday and the sellers allowed the buyers to move in. This was done to accommodate all parties, but was only done after the bank gave them a 2nd loan guarantee that this transaction would close on Monday. Come Monday, guess what? That's right, the loan was declined! This was due to a very simple item, the borrower had an FHA loan on his previous home that he now rents out! So after all this mess and inconveniencing everyone, these borrowers were hung out to dry and had no place to live! All it took was some very simple underwriting and fact gathering in the beginning and this problem never would have materialized! Luckily the sellers were very generous and allowed them to rent the home for 1 month while they searched for a new loan. This was a very tough loan to get done. We had to run numerous scenarios and restructure his debt ratio in order to make the deal work. However, after it was all said and done they got a USDA loan. This was a better loan than the FHA loan. It came with no down payment, no mortgage insurance, and a lower interest rate than they were previously locked in at! Not too bad! I can't speak for them and say all the stress they went through was worth it, but it all worked out in the end!

I have to say this scenario is very sad. How in today's market can a lender or loan officer continually sugar coat things and guarantee thing are fine when it couldn't be further from the truth! You simply can't do business that way. I always tell it how it is and let the borrower know up front any and all obstacles that need to be overcome or that could come up. The borrower deserves this respect and will remember you for it!

So you can see it pays off to explore all available options. Yes it is more work, but a true mortgage professional knows it must be done!

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Professional Mortgage Group