The New Mortgage Economy

Many people who are looking to purchase a home in today’s ‘New Mortgage Economy’ have no idea the level of detail, liability, and accountability is put upon residential mortgage originators.  For the past 5 years guidelines have tightened, underwriters have become wary and the industry has experienced major changes, some for the better, others have experienced more challenges with taking a borrower successfully through the transaction, while maintaining their own sanity and that of their clients. 

This is a relationship business.  At the end of the transaction if the client does not feel you have done your best, or you have not set realistic expectations you probably will not receive any referrals in the future, let alone another transaction with the current client.  A few tips that I have seen successfully work.

1) Communicate to your clients that you might ask them for documentation (for sure) that they may or may not feel is relevant.  Realize that much of the documentation requirements has more to do with borrowers ability to repay a mortgage, this includes their paystubs, tax returns, and most likely letters of explanation.  Prepare the client for this ‘New Mortgage Economy’ that subscribed heavily to President Reagan’s famous quote, “Trust, but verify!”

2) Have frequent check-ins with the client.  Ask questions about expectations, feedback, and the like. This gives you the opportunity to manage the stress and challenges that the client is likely experiencing. This will also help fend off the build-up and blowout that can occur when the communication loop is not open or constant.

3) Have a face-to-face when things get really bad.  I often find that meeting together (sometimes with their Realtor(R) present) to confirm what is happening, what to expect next, and possibly working through any challenges–which are in support of a successful closing.

Remember that mortgage lending, like many other service industries, is about relationships, communication, trust, and hopefully a longterm relationship that is value-added and beneficial to all concerned.

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