Mortgage originators cannot turn "you know what into shinola." I get it. But, the faster you define the file as "crap" the better for your referral partners. Within a day, you definitely have the credit and know what you face regarding credit. Right?
In recent weeks, one of my company's has run into this exact issue. Last year, after eight years in homebuilding exile, we built 10 homes that would be used as rental property. Everything went along very well. One thing for sure, at least in our area, the best subcontractors are available with just a few days notice.
The point I want to make is that one of the tenants wants to purchase the home. The contract was written on Jan. 5, 2009. Last week, the end of the month, finally I am notified of "credit related issues."
I responded "Credit related issues, are you kidding me? After four weeks, I am just now being told of credit issues?"
Now I know that over the past three weeks, all originators have been inundated with refinance files. Even though I know that only a small percentage of these files will close, originators have "felt good" about the market again with this flurry of activity. I understand. I get it. And, I've seen it happen a number of times over the past 25 years.
Not only do the refinance loans clog up the system, they seem to have the power to unhinge the purchase business files. Why do originators push the loans that come in relatively consistently over the year from agents and builders to the back of the line in favor of refinance loans?
Now, I also realize that in today's age of "privacy," originators are limited in the amount of information that they can provide to the seller/builder and real estate agent. I get it. You cannot just fax over the credit report. I get that.
But, there are a number of appropriate ways for originators to communicate that the file has a problem. That's all the referral source wants to know. They want to know:
- Have you ordered and received the credit; are there any problems?
- Have you ordered and received the appraisal?
- Have you ordered and received verifications and which ones?
And there are other items I am not listing here that your referral source should be kept advised upon.As the builder, I want to scream: Who wasn't doing their job? Why has this happened? What can I do about it? Who can I blame?
Most builders will vow never to tie up another property with a buyer if this originator is involved. Why? Because the originator failed, the loan won't close? No it will close, but the originator's reputation is still harmed. Builders and referral sources really have a right to be angry when they are kept in the dark.
The real problem: The originator just lost sight of their real customer. The originator failed to understand the real value that a small builder and agent referral partner bring to the table.
You need to feel the pain. You need to sense the financial difficulty that every builder in the country is under after the house has not closed as schedule. This pain is felt by sellers/builders/agents every day.
The originator is not a miracle worker. No one is expecting a miracle worker. But what everyone does expect: A partner that will communicate.
You may say, as many of you do, that this reason why I hate real estate agents. Why, because they are holding you accountable for communicating with them? Why would you feel that way?
The agent and the seller/builder trust originators with their paycheck every time they send you a loan. It's only right that you communicate with them on the file to the extent possible under the law.
I am convinced that the originator is a reasonably good originator. But, the avalanche of refinance files that have come in caused the file to be set-aside for "a few days" that turned into three weeks. It never ceases to amaze me that originators choose to forsake a referral partner's business in lieu of the refinance loan.
See, day after day after day, even in this market, sellers sell homes and buyers purchase homes. Over 70% of these transactions involve a real estate agent. Question: Do you have anyone working to bring you a refinance borrower? Yes, you work your past clients and you seek referrals, but, do you have anyone that will receive a paycheck if they send you a loan that refinances? The answer is no!
The agent must have someone successfully originate a loan in order to receive a paycheck. If you can learn how to successfully insert yourself into this market place, and then do a professional job, communicating each week the progress of the file to all parties, then, you will become the trusted referral partner of agents and small builders. Then and only then will they bend over backwards and do everything thing that they can do to have the buyer, that they are counting on to pay for their next house payment, use your services to originate the loan.
If you do a good job, and you communicate effectively with them, agents will break down your door to send you business. Want to know how, visit
