What specific steps do you use to help your customers find the best home loan for them?
Each of my home loan clients is unique. Their mix of credit and income history, career path and personal dreams are unlike anyone else’s. A big part of my job is listening to understand the true goal my client is trying to meet with their mortgage application. Is this a starter home? Is the time horizon short-range, or long-term? Will the next move be the trophy house, downsizing to a comfortable, low-maintenance patio home, or is it likely to be a retirement condo? Is the primary concern equity growth, minimizing their monthly housing expense, or planning for investment in a new business? What’s the wisest current use of available assets – increased down payment, or something else? What about the “opportunity cost of money?”
I’m a mortgage professional, not a financial planner or tax expert. But how you structure your real estate purchase can have an effect on both your retirement and your tax liability. My job is to get to know you, then make intelligent suggestions – in concert with your other financial professionals, if you like – so you can make the wisest possible home loan decisions.
How has the mortgage industry changed since you started, and what would you expect in the future?
My first job as mortgage loan officer was decades ago. I took applications, face-to-face with my client, using pen and paper, then handed the file to my loan processor. She got it in shape for underwriting on an electric typewriter. I spent a good deal of my time driving physical files back and forth to the local HUD office in downtown Louisville. Underwriting turnaround was 2 to 3 weeks. With careful planning, we could close most loans in less than three months.
The process today is, thankfully, different. I recently had a client moving to the Louisville area from Florida. From his living room in Tampa, he found a house he liked on Realtor.com. He called his agent and decided to put in an offer, sight-unseen, contingent on an inspection of the property. He called me to begin his loan application. I took his call, despite being in Florida myself, literally sitting on the beach at Amelia Island. I answered his questions, discussed his needs and referred him to my website to begin his mortgage application. I found out the next day that his Realtor was also in Florida, vacationing near Sarasota. She prepared his offer from her hotel balcony looking down at the surf. By the time I returned to my office, his application had been through initial underwriting. We closed the loan ten days later. Start to finish, less than 3 weeks, though none of the players were within a thousand miles of the property at the beginning. At closing, I met the borrower and the Realtor for the first time.
As the world continues to shrink, more opportunities open to all of us. Smartphones, electronic signatures, document aggregation and electronic underwriting allow for a faster and easier client experience. I don’t see this trend changing. It will, I think, continue to accelerate as technologies we can’t currently imagine become mainstream.
What part of the home loan process do customers find most difficult and how do you help them through it?
There are many things about mortgage lending that are not what the typical borrower would expect. Some can even be counter-intuitive to those outside the industry. But the most universal difficulty I’ve noticed is that borrowers tend to take underwriting requests personally. Many are offended, assuming the loan underwriter doesn’t trust them.
I guide them through this by explaining what’s really going on.
Years ago, loan decisions were judgment calls made by experienced human underwriters. There was a high level of instinct involved as the underwriter attempted to apply the mortgage industry guidelines to each unique situation.
Today, the first level of decision-making is done by software. The underwriter’s job is largely a process of validating the information provided, and watching for unusual circumstances that may have affected the outcome. This does not remove human beings from the process, or eliminate the need for creative thinking. It does mean the underwriter has less latitude than before, and that it’s less likely he or she can waive a requirement listed by the software printout.
The process yields faster and more uniform decisions across the pool of loan applicants. The system works brilliantly most of the time. But it does sometimes ask for documentation of things that may seem obvious. It’s not personal, it doesn’t hate you. It’s just software, and it has its limits.
Still, the old way took two months for a loan decision. Now, we generally have that in two minutes. I suppose that’s worth something, even if the paperwork requests don’t always seem to make sense.
What provides you with the most satisfaction in your job as a Loan Officer?
Getting to know my clients! Mortgage lending is a complex transaction, one that doesn’t happen in an afternoon.
You don’t have the time, or the need, to get to know the checkout guy at Costco. And he certainly doesn’t have time to become friends with each of the six hundred faces he sees every day.
In the mortgage business, the time horizon is continually shrinking. But it’s still measured in weeks. And a home purchase or refinance is the largest, the most complicated transaction most folks will ever attempt. It makes sense to take time to discuss your needs with an industry professional you trust. It’s a common thing for my initial client interview to turn up unforeseen opportunities, or potential problems, that might have gone unnoticed otherwise.
In the course of my career, I’ve been personally involved in over eleven thousand real estate transactions. Chances are, whatever your needs or issues, I’ve seen something like it before. Let’s put that experience to work for you.
Tell us something that makes you unique or something wacky, yet interesting about you?
I’m a huge fan of mid-century modern architecture and design, from Frank Lloyd Wright to Charles and Ray Eames to Joseph Eichler. My college major was history. I’m active at church and a proud father and grand-father. Over the past three decades, I’ve worked as title company paralegal, closer, Realtor, investor, manager and loan officer. And, I just finished writing my third novel. Pretty standard stuff, really.