Now are very challenging times for Mortgage Brokers.
One of the most important factors to surviving in this market is not listening to all the media and "bad news." A lot of the information is not based on fact and is being communicated by people who do not know what they are talking about. In fact I was flipping through the TV stations last night and I saw a woman who gives advice for credit & financial management on the TV. She said you need at least a 750 FICO, full income disclosure and money down to buy a home. She is a respected TV personality and she was telling America that you need a 750 FICO and money down to buy a home, that 100% financing is no longer available. The part about full income documentation for 100% is true but the rest is total garbage.
As we as brokers know, there are 100% financing programs such as VA and My Community. Individual lenders each have their own unique 100% financing program under their own proprietary names such as "Gain" "Champ" or "Flex100." Right now quite a few lenders will go down to 620 with 100% financing for a full doc loan. With the My Community and Flex 100 you can go down to a 580 if automated underwriting will accept the loan. We can also do FHA up to 97% and there is talk of the LTV being raised to 100%.
The point here is the media and TV personalities are giving out alarming news to get and retain viewers.
Have underwriting standards tightened up, absolutely!
Are there issues on the secondary market, absolutely!
However, you can still get a loan and you can still do 100% financing. Those who live by the sword, die by the sword… it was the media that created a panic several years ago that all of us benefited from. It was called the "Refi Boom." The media created a real sense of urgency to refinance before it was too late. Now we are experiencing another sense of urgency in our industry that is being fueled by the media. Unfortunately this one is not helping our business.
Now the next important item here is to continue to promote your business and get prospects like never before. If you listen to the media and your fellow brokers you can go into apathy and stop promoting. That is the worst thing you can do. In fact I stop socializing with and talking to brokers and realtors that are continually negative. You need to be continually talking to people, handing out cards, making calls, whatever you need to do to keep your business going. I must admit, I have fallen a victim of all the bad news and stopped wearing my hat getting prospects for my own business. I won't do that again!
The other item that will help you stay in business for a long while is to be vigilant for fraud. Make sure you check and verify all the information on the application is correct. If a borrower chooses to use stated, not verified income look up their profession on line and make sure their stated income is reasonable for that profession. Additionally, I have my borrowers sign a release form stating they actually make what they have stated and they have disclosed all their debts.
If you work with investors make sure you disclose all the real estate they own. You do need to disclose real estate owned whether or not it shows up on their credit report. Also, remember that a primary residence is owner occupied and the owner can only occupy one home. Don't be afraid to say, "no" to a client. Particularly if you are not comfortable with the loan.
Miles Loss
Florida Licensed Mortgage Broker | | Author Info: Miles is a Licensed Mortgage Broker with over 20 years of finance industry experience. Miles is known as the "go to guy" by the Realtors and real estate investors in his area. Miles brokers mainly in Florida but also covers GA, TN, NY & IN. Brokering in both residential and commercial Miles has all bases covered. http://www.milesloss.com & http://www.milesloss.com/refinance & http://www.milesloss.com/homebuyingproces |
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