Category: Home Loan

Obviously trying to appeal to the Millennials, some mortgage companies are starting to advertise an online mortgage process – you “simply” upload all your financial information, complete the application, click on a few buttons to customize your interest rate and mortgage terms, use their e-signature option, and bam: you get instant notification concerning your loan approval. While that concept is very appropriate for registering your car at the Motor Vehicles Department (it’s a wonder they haven’t done that yet), there’s SLIGHTLY more to it than that.

I don’t want to lose you here, so I won’t go into all the nerdy details, but suffice it to say there’s abundant reason you WANT a loan originator talking to your client and walking her through the process from start to finish. Let me give you just two:

• If a borrower’s information is input incorrectly or placed in the “wrong box” on an application, that can stop the process dead in its tracks. A computer’s not going to give an applicant a “heads up” – it’s just going to kick out a message that the person’s application is not approved. The applicant, in this instance, is either going to give up and continue renting for another year or start over (and perhaps get the same results because she’s being forced to guess what went wrong the first time). While we, of course, are trained to put the information in the right boxes, we’re also human – if a mistake is made, or there’s something that comes back from underwriting that needs to be addressed, we human LOs pick up the phone and speak with another human; it gets corrected. The process continues without a delay and stays on time.
• Giving the applicant the option to just click a few buttons and “customize” their interest rate and terms doesn’t explain all the other options available to them that could be better suited to their current situation and, perhaps, their long-term goals. Also, giving them such an option doesn’t guide them to let them know what’s truly available to them based on their financials, their debt-to-income ratio, etc. When we talk with your clients, we walk them through the available options and give them a detailed understanding of how those options will play out in both a short- and long-term fashion.

The challenge here is addressing this “online” mindset. They went online for ease, convenience, and options. There’s really no way to “stop” people from going online and giving this option a whirl, but when they come to you frustrated from having a less-than-optimal experience, you’re going to want to refer them to a mortgage company that has the most options and the most knowledgeable LOs so your client has a fantastic experience. We might just know someone like that.

You may want to sit down for this. While you’re at it, make sure you’re not operating heavy machinery or drinking milk – you might shoot it right out your nose when you read this. Don’t say I didn’t warn you.

Fannie Mae – the residential finance company, not the maiden aunt who always brings a tuna casserole to every family gathering – recently announced that it would allow lenders to use employment and income information from a database operated by the credit bureau Equifax to verify borrowers’ creditworthiness. This means that the paper chase of tracking down and collecting pay stubs and tax data for a home loan application would be a thing of the past. Yes, you read that correctly: Fannie Mae is doing something to HELP streamline the home loan process. (If the shock of that news just caused you to shoot milk out of your nose or drop your clipboard into the gaping maw of a large machine, you have no one to blame but yourself – you were warned.) But wait, there’s more!

Good old Fannie also announced changes that could ease mortgage credit: in mid-2016, it would ease the lender process for granting loans to borrowers who don’t have a credit score. What?! In that same time frame, Fannie said it would start looking at “trended” credit data from Equifax and TransUnion. This information will help Fannie Mae see if borrowers are paying off their credit card bill every month or just making the minimum payment and/or if they’re allowing the balances to rise. Borrowers who are making the full payment could see perks. According to Steve Chaouki, head of TransUnion’s financial services group, this would enable lenders to approve more customers and give customers better rates.

Very Interesting!
According to the NAR, first-time home buyers comprised 32% of existing-home sales in August of this year. That’s only mildly interesting, sure, but look at how those sales break down:

•Buyers age 34 and under accounted for 29% of those sales
•Renters accounted for 38% of first-time home buyers

Are you ready for this?

•Almost 50% of those first-time home buyers were 35-55 years old!

Not to discount The Millennials (that sounds like the name of a wedding band), but there’s a huge segment of first-time home buyers who are older that should not be taken lightly. It’s fair to say that the 35-55 year-old segment is reasonably tech savvy, so mobile apps and such are still a big part of their lives, but they’re of the generation that still likes to do things face to face – we should all keep that in mind when we’re marketing to first-time home buyers.

We have this guy in our office who took up swimming a few years back to lose weight, and it worked – he lost thirty pounds (but don’t worry, over time, he was able to get most of them back). He didn’t want to be deterred in his goal, so he decided to use a “swimmer’s snorkel”. By doing this, he received quite a few odd looks from his fellow gym members (even when he was wearing it in the pool); he really got the stink eye from those hardcore “aquatic athletes” who seemed to be training to swim the English Channel.

Odd and shaming looks notwithstanding, our intrepid office mate was not deterred. His goal was to swim a mile each day until he lost those thirty pounds – quite honestly, he didn’t care how he looked. His single-minded focus on reaching his goal and not worrying what others thought of his methods mirror how we approach our goal: to find and provide the EXACT RIGHT product and close the loan on time (or earlier) – we do what it takes, no matter what!

For example, when I recently told a real estate agent how we can give new life to old and dead leads, she looked at me like I was nuts – it was probably a similar look our swimming friend got at the gym – and said, “No one does that!” I smiled and said, “Well, we do. It’s one of the ways we significantly increase your production without your spending any more money on marketing.” The odd look quickly turned to a knowing smile!

With TRID now in full effect, we’re still able to close loans in thirty days or less. How? We’re not going to give you the “recipe” to our “secret sauce” – we’ll share it with you when you come in to see us (you know you want to) – but we’ll happily share two tips with you – help us help your buyers:

• Have title confirm fees at the opening of escrow (or even prior)
• Help ensure borrowers are getting docs back to us on time: Intent to proceed, borrower docs, etc.

How do we breathe new life into a dead lead? What do we do, in this post-apocalyptic TRID world, to close loans in thirty days or less? Come on in and sit with us for fifteen minutes – you’ll be beyond impressed. Maybe we’ll ask our co-worker to show you his swimmer’s snorkel – we promise not to have him in a Speedo when he does.