November 4, 2024 • 59 mins
Navigating Mortgage Complexities & Builder Market Insights
Discover mortgage tips, industry insights, and builder strategies from veteran loan officer Lisa Alonso. Learn how today's loan market, new construction trends, and personal financial strategies affect your journey to homeownership.
Podcast Description: In this episode of Key Factors Podcast: Real Estate AF, host Mark Jones is joined by veteran loan officer Lisa Alonso to break down the real side of mortgages. They discuss the advantages and hurdles of working with builders, navigating loan guidelines, and the hidden factors in today's mortgage landscape. Tune in to uncover critical insights into VA loans, the power of forward commitments, and how new construction pricing impacts home affordability. Whether you’re a first-time buyer or industry pro, this conversation brings transparency to the process and provides valuable advice for securing your financial future.
Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:31):
Wow, yeah, where did you get?
Speaker 2 (00:33):
that.
So people are wondering why?
Well, how is it that they cando this low rate and you guys
can't?
Well, we don't have the extramoney to play with behind the
scenes to increase the salesprice and give you this rate.
Speaker 1 (00:46):
And they hide that in the closing documents.
Speaker 2 (00:48):
They can't even put it in the closing document, but
we would have to do, we wouldhave.
The most we can typically do istwo points, unless the seller's
paying, etc.
Etc.
Speaker 1 (00:56):
So when, when, a when a builder owns a mortgage
company, they can do a forwardcommitment.
Absolutely, they're doing yep,and that forward commitment is
pre-furnished.
Speaker 2 (01:06):
You know exactly what you're talking about.
Yes, that's exactly the rightstep.
We're recording the behind thescenes and then we'll go.
Behind the scenes.
We like a raw intro, like outof nowhere.
Matter of fact, I'm ready tostart and if you are ready, I am
(01:32):
ready.
All right, we're ready andwelcome back to another episode
of Key Factors Podcast RealEstate AF, where the AF stands
for and finance, and I'm yourhost, mark Jones, and we're
powered by ReviewMyMortgagecom,the largest index of mortgage
programs in the nation, andtoday I am joined with a veteran
loan officer branch manager inSan Antonio that I've been
(01:56):
friends with for many years, andI'm looking forward to hearing
her insight on the topic that wehave today.
So, without further ado, Iwould like to introduce Lisa
Alonzo how you doing.
Speaker 1 (02:07):
Hey, I just want to be comfortable for two seconds.
I love it.
Thank you so much.
I'm so glad to be here.
Okay, I'm glad to be here.
I'm a little shy, but it'll.
Speaker 2 (02:16):
First podcast right.
Speaker 1 (02:17):
Yes.
Speaker 2 (02:18):
It'll go off without a hitch, guaranteed Okay,
perfect, okay.
So for our viewers, ourlisteners out there, we're now
up to 12,300 and some oddsubscribers on YouTube.
We've got plenty more onSpotify and Apple Podcast.
They're tuning in and I believeit's because we continue to
bring them experts that want tobe transparent and give them
(02:41):
real information, realperspective, without bias and
trying to sell them something,and that's we were talking just
before this.
You wish that there were morelenders that you could have a
melting pot with, and well,that's what we're creating here.
Speaker 1 (02:53):
I like that.
I think it's important that wedo that.
I think I just recently postedon my Facebook about that.
I love to see how realtors areconstantly together in things
and they're just always likepatting each other on the back,
and lenders should do that.
Speaker 2 (03:07):
I agree.
Speaker 1 (03:08):
There's enough business for everyone, and I
feel like we should just allcommune together as lenders.
Speaker 2 (03:11):
Well, it's funny that you say there's enough business
for everyone, and that bringsup another topic that we can
talk about here in a bit.
But before we dive into any ofour discussions today, I want
the folks out there listening toknow who they're listening to.
So, lisa, tell us aboutyourself.
Let's start in the beginning.
How long have you been in themortgage business?
(03:32):
How'd you get in?
Why'd you choose this industry,this crazy world called
mortgage?
Speaker 1 (03:36):
I'm going to try to not talk too long about it,
you're good.
So I started.
I actually lived in.
I'm from California but movedto Texas, san Antonio, in my
teens so I graduated from HolmesHigh School Holmes go Huskies I
know my parents did too 1987.
Speaker 2 (03:53):
No shit, my parents were 85.
Okay, I think 85.
Speaker 1 (03:58):
It was rough school.
It was rough, oh yeah.
And coming from California, Icame from Laguna Niguel, you
know I was definitely went fromhere to you know where am I.
So then I moved back toCalifornia after high school and
attended college.
There Now, I just did communitycollege, sure, and I wanted to
(04:19):
get into just working doinganything.
So back then you would go to theunemployment office and they
sent me to a mortgage company,really, to be a receptionist,
okay.
So I said, sure, I'll do that.
And so I went to this mortgagecompany and it was actually a
mortgage broker called SubroseMortgage and they had been just
purchased by a young guy.
(04:39):
Okay, he was like 20 years oldand, funny enough, I didn't know
this until a few years later.
But he had purchased thecompany because he had gotten in
trouble with the law forselling drugs.
So, yeah, I didn't know this,but I took the job as a
receptionist and from that pointis where I learned how to you
(05:00):
know, from the bottom up Iassisted the processor, so I
used to order the verifications.
This is back in 1989.
Speaker 2 (05:08):
Well, I mean, we're still like semi-setup positions
in many companies that do yourorder outs, your title work,
your appraisals Go ahead.
Speaker 1 (05:15):
But back then, you know, we didn't have computers,
we had the phone where you hitthe button and hello, you know.
So it was so different.
And our fax machines still hadthat really thin.
Oh yeah, when we ordered acredit report it would come
through that fax holy cow, wedid not know that that paper
would be transparent like itwould.
We didn't know that back, wow.
So, um, and they didn't havecredit scores.
(05:38):
Um, you know, when we did fhaand va loans, we would have to
call up for the case number, sowe learned about all of that.
Um, and I, working for a broker, you know we would have to call
up for the case number, so welearned about all of that.
And working for a broker, youknow we used to have to copy and
I had one of those copymachines where each copy would
be like the three the yellow,pink and the white.
Oh yeah, those were myverifications when I typed them
(05:58):
without a computer, so you knowyou had to use your whiteout.
So I mean I come back from wayway back then and it was fun
because I learned from then tonow.
It's so different.
I know how to complete a goodfaith without a computer.
Speaker 2 (06:12):
Yeah.
Speaker 1 (06:14):
And it was fun, it was learning, and I became a
processor.
Okay, so from processing Ithink I did that for eight years
I went to go work for amortgage banker and I then was
sponsored to become anunderwriter and I was one file
away from getting my DE and Idecided at that point to become
a loan officer.
So that was 1997.
(06:35):
And in 1997 is also when theycame up with credit scores.
Speaker 2 (06:40):
Yeah, okay.
They started using DU and theystarted doing all of that
Getting automated, using thecomputers to leverage, to
hopefully streamline and makethings more efficient.
We never thought it would work.
Speaker 1 (06:49):
You know, what's really crazy is when that
happened.
When we started using DU, wereally only did what DU said, so
, like I never got averification, I was one of those
LOs where, if the processorwanted anything, I would say, no
, you get your VOE, get your VOD, that's all we're using.
Speaker 2 (07:08):
I'm going by what the findings say.
Speaker 1 (07:11):
Yes, that's.
All I needed was a VOE and aVOD.
Speaker 2 (07:14):
Wait a minute, you guys don't do that now.
Speaker 1 (07:16):
Nope, I get pay stubs .
I try not to even get a VOE ifI don't need it.
I do whatever the DU says,still, because that's where I'm
from.
But nowadays, with loans beingso much more difficult, you know
, back then there wasn't aproblem with fraud.
Fraud was because of back then.
Speaker 2 (07:33):
That's so true.
Speaker 1 (07:33):
There was so much fraud.
So now, because of all thethings that have gone on now we
have to verify things so muchLike everything's verified over
and over and over.
We didn't do that back then,absolutely, we verified it once.
Speaker 2 (07:48):
And I want to pause just for a moment so that I can
explain to the listeners,because there's many out
listening that don't participatein the mortgage side of things
that are wondering okay, what isDU?
Why is she referencing it?
Du is desktop underwriter andthere's another one loan
prospector.
Essentially, this is theautomated system that we, as
lenders, run our loans, thescenario that the borrower gives
us into the system.
(08:09):
The system spits out findingsthat either say approve eligible
, refer eligible, referineligible.
There's multiple differentfactors, but within these
findings there's one tosometimes 50 conditions.
Those conditions are what weuse to clear, to sell that loan
(08:30):
off to the investor and based onthose conditions itself, I mean
you either have a loan or youdon't.
Right, you can still do what'sconsidered a downgrade or a
manual underwrite, but you'llalways want to strive for that
automated approval so you canhave the insurance of that
system backing you with thisloan.
But go ahead, continue.
Speaker 1 (08:51):
That's good.
I love that.
You're very detailed.
So learning, you know, goingthrough that process from 89 all
the way to now, and my journeyfrom being a loan officer from
1997 to current, and my journeyfrom being a loan officer from
1997 to current, you know it'sbeen a fun journey.
But you know programs,everything changes so often,
(09:11):
it's true.
I mean it does matter how longyou've been doing it, simply for
the experience.
For sure, yes, but you have tocontinue to learn.
Speaker 2 (09:19):
I agree, because programs consistently change.
Well and, like they say, theonly thing that is consistent in
our industry is change.
Yeah.
Speaker 1 (09:27):
Everything's changing .
All the time.
The programs change theinterest rates.
I mean back then, when I firststarted, fixed interest rates
were in the 12s and 13s.
Those were fixed rates and sowe used adjustable rate
mortgages all the time.
We used graduated paymentmortgages.
We used interest only.
Speaker 2 (09:43):
Yes.
Speaker 1 (09:44):
You know, because in California prices were extremely
high.
Speaker 2 (09:50):
Absolutely.
Speaker 1 (09:50):
And we used negative interest loans, which you can't
do anymore.
Right, we just did a completelydifferent type of loan than we
do today.
Speaker 2 (09:55):
Yeah, yeah.
Now question for you Do youthink that it is better that
we're doing it the way that weare now or in the past, or would
it be better to have kind of acomposite of the two?
Speaker 1 (10:10):
Well, I don't think we can do it better than we did
in the past at all.
I think that what we're doingnow is good because we have to
do those things, and what I meanby that is now we have non-QM
Correct, which before was hardmoney.
Speaker 2 (10:27):
Yeah.
Speaker 1 (10:28):
And I think the non-QM is a bit better than that
.
I think that all the policiesthat are in place are better for
the client.
Speaker 2 (10:36):
For sure.
Speaker 1 (10:36):
Because those policies are in place, because
there was so much fraud, it wasso easy for people to give us
fake pay stubs and fake bankstatements and just do things
they shouldn't be doing.
Speaker 2 (10:46):
Correct.
Speaker 1 (10:46):
And all those things are why people have to go
through what they're goingthrough today.
That's right.
So I do think today's policiesare better.
I recently asked my secondarymarketing VP why we don't have
ARM interest rates and he saidwell, because of the two-year
bond.
He said the difference is sominimal that there's just no
reason to use ARM.
(11:07):
So the ARM interest rate isgoing to come back when those
interest rates go up.
Speaker 2 (11:11):
Right.
Speaker 1 (11:11):
So there's a huge difference between the two.
Speaker 2 (11:14):
In that instance they should still provide you with
it.
But I do agree that it is hard,Like, for example, I do
construction loans with TitanFactory, brand new from the
factory concept manufactured,and in those cases the one time
close was very hard to keep upwith.
(11:37):
In regards to the hedge, Itsrates are changing so quickly
right now that it's like, OK,how do we hedge this if it's
going to be a short-term betthat doesn't end up panning out?
Isn't it interest only For thefirst part of it, correct?
But you're actually locking inthe final rate up front for the
one time right.
Yes, you are.
So I had to switch all of thisstuff to a two-time and learn a
(11:58):
brand new process of going aboutit.
And luckily it worked out forall the customers that had to go
through that because sureenough, rates did come down.
So they're 8% on their interestonly construction piece Three
months later when the home isdelivered.
Now we can go do theirpermanent loan and lock them at
6.875, seven and a quarter,something like that, versus them
(12:19):
being stuck with what they hadand have to wait six payments
minimum to refinance to get itlowered.
Speaker 1 (12:24):
Yeah, I don't like the refinance.
I mean, I'm not a big refinanceperson.
Speaker 2 (12:27):
Right.
Speaker 1 (12:29):
I don't believe in starting the clock over unless
you have a really good reason todo that A good reason.
Speaker 2 (12:32):
I like that.
I go about it the same way, andyou and I both, I believe are
going to be different than mostloan officers on the street
because we consider ourselvesexperts.
I, on the street, because weconsider ourselves experts, I'm
not going to sit here andrefinance you just to make a
paycheck when, in three monthsfrom now, your grandpa, your dad
(12:52):
, somebody's going to look atyour mortgage and go what the
hell, were they thinking.
Why did you do that Right?
Speaker 1 (12:55):
No, I look at everybody like they are a part
of my family and because Ireally I feel like and this is
I'm getting a little spiritual,but I do feel like God brings
those people to me Like I feellike every client I have is with
me for a reason, yeah, and so Itreat them like that.
I treat them, you know, I helpthem as best I can.
I hate to say no.
(13:16):
That is my biggest issue in mylife is saying no, especially
with loans, because I feel likeit's more like this is how you
can do it, rather than I can'tdo it at all.
Speaker 2 (13:26):
That's exactly right, and I believe that the newer
generation of loan officersalmost believe that it is a yes
or a no when it comes to aborrower.
But it's not at all.
It is no.
Even the yes is not a yes.
It's a yes, but this is youroptions yes or term.
Yes, you have to still do thesethings.
That yes.
And then your term yes, youhave to still do these.
That's correct.
And then the no aspect.
(13:47):
I don't think it's ever a no.
It's not right now, but you canfix this, this and this Now.
Mind you, there are somecustomers that are late on items
right now in the 400 scoresthat I will tell them.
The credit repair that's neededis out of the scope of my
expertise and I can't help youpay your bills on time, Like
(14:09):
there's just that one thing thatyou at least have to show the
responsibility that you appliedfor a mortgage knowing damn well
that you're late on yourpayments right now.
Speaker 1 (14:17):
Yeah, you gotta pay your bills, that's exactly right
.
Nobody's gonna lend you thebiggest loan of your life if
you're not currently paying a$50 payment.
Speaker 2 (14:29):
I mean it makes sense .
It's got to make sense.
That's a great little clipright there that the AI system
is going to pick up and you canhave.
That's perfect and I agree 100%with that.
So you let's go back to you.
In your journey as a lenderDuring the I guess last we'll
call it six years or so, we wentthrough a crazy uproar of loans
(14:53):
.
It was like holy cow more loansthan we know what to do with.
And then, all of a sudden, therug was pulled out from under us
.
And you mentioned that there'splenty of loans to go around.
I believe that's true as well,but many out there are going.
Well, what the hell is shetalking about?
How is that even possible ifwe're not doing loans?
(15:13):
What is your response tosomeone like that?
Speaker 1 (15:17):
Well, I mean honestly , if I go back to when I first
started being a loan officer,Nobody taught me how to sell
myself.
I was a processor.
I knew how to work a deal.
That's right I didn't know howto go out and say please give me
business.
I didn't know how to do thatand I was like, how do I do it?
So I still have never done that.
Really, I don't do that.
(15:38):
I build relationships just withfriendships, and so I can
honestly tell somebody.
When I first started, I startedwith a realtor that my boss
didn't want to work with.
So this realtor used to comeinto our office every day and
have coffee and he was just anuisance, I guess, to my manager
(15:58):
and I didn't have any businessbecause I was just beginning
with him as a loan officer.
And he said hey, lisa, I'mgoing to introduce you to Jose
and we start working with him.
I'm like, okay.
So Jose came to my office everymorning with his coffee and I
said, okay, jose, let's get thisgoing.
And I became, of course, afriend to him and his first deal
(16:20):
I did with him was a $50,000deal, okay, and this was back in
1998.
Yeah, right around there, andthat's kind of a good size loan
back then?
Speaker 2 (16:30):
No, it was still pretty tiny, and couldn't you
guys make like three, four, five, six points, as much as?
Speaker 1 (16:34):
you wanted.
I didn't have to have a licenseback then I could make whatever
I wanted.
But here's the key.
So the listing agent calls meat closing and she says is this
Lisa?
And I said yes.
And she said are you reallygiving this client this interest
rate?
And I said yes, I am.
And she says, wow, you're notmaking any money.
That's what she told me.
(16:54):
And I said, oh, it's not aboutthat.
I told her it's not about that,it's about the client, it's not
about me, it's about them.
And she said, wow, I'm going tostart working with you.
And that realtor I found outshe worked for Remax and she was
a top dog realtor.
Like, she was closing lots ofdeals.
(17:15):
So my $50,000 deal.
I inherited now 300, $400,000loans and she introduced me to
all of her friends.
Speaker 2 (17:23):
Do I know this person ?
Speaker 1 (17:25):
This was in Tucson, Arizona.
Oh, okay, Gotcha, Her name wasMary Frances.
Okay, Shout out Mary Frances.
And she sent me one of hernephews like a couple of years
down the line after I'd beenworking with her and I told her
her nephew.
I said hey, I don't know hervery well.
Can you tell me a little bitabout Mary Frances?
And he goes, yeah, he goes.
(17:47):
You know, she used to be a nun,yeah.
Speaker 2 (17:48):
Sister Mary Frances.
Speaker 1 (17:49):
Yes, do you know what movie?
Speaker 2 (17:51):
Yes, Do you know what movie that exact name is from?
No Sister Act.
Speaker 1 (17:56):
Oh I.
Speaker 2 (17:57):
Sister Mary.
Speaker 1 (17:57):
Frances, that's hilarious.
Going back to being spiritual,that's a sign right there too.
Exactly.
Speaker 2 (18:03):
That's why I can witness.
Yeah, back when Whoopi was kindof cool.
Speaker 1 (18:06):
I'm telling you, when I found out she was a nun and
then he said, yeah, so she met aguy like she met her husband,
and that's when she got out ofthe nunnery and then she had
children.
Speaker 2 (18:16):
She had to divorce Jesus.
Speaker 1 (18:18):
Yes, so I realized then just how you know how that
was where I was supposed to be.
Speaker 2 (18:24):
Like I realized that and that was super cool for me
because I was like, wow, okay.
Speaker 1 (18:32):
Thank you guys.
So she left the nunnery for aman and real estate and to have
a family and to make some money.
Speaker 2 (18:35):
Yeah, yeah, that's.
That's pretty cool.
Um, so, as you, I guess in thelast several years that we've
gone through this ebb and flowof transactions being readily
available.
Speaker 1 (18:52):
Yeah, let me answer your question now.
Okay, let me answer yourquestion now.
So, answering that question,the reason why I went all the
way back then was becausethere's going to be times in our
lives when we have a little bitof business and we have a ton
of business, and because I'vebeen doing this for so long,
I've seen that, I've seen thatup and down and you've got to
prepare yourself for that.
Yeah, as a loan officer, we'rea straight commission, so we get
(19:15):
to have all the money and thenwe get to have a little bit of
money.
Speaker 2 (19:18):
Right.
Speaker 1 (19:18):
So we have to learn how to conform to that.
Conform to that.
Hopefully you're saving, youknow.
Hopefully you're investing itproperly, hopefully you've
gotten a couple of properties.
I mean you, you have to workyour business properly and I
feel like that's in in 2018,that's when I secured a position
with a builder and got alltheir second look loans.
(19:39):
So I was doing so much business.
So I mean I almost got divorcedover doing so much business
because I just I couldn't stopyeah, and again my problem not
being able to say no it was evenharder because I just had to
make these loans work for thesepeople.
Speaker 2 (19:54):
Totally.
Speaker 1 (19:54):
They'd already been denied, you know.
So I had tons and tons ofbusiness and then, like you said
, like down to like I rememberdoing 30 loans in one year, in a
year, correct, it's like wait aminute From 300 to 30.
Huge difference, but I stilldidn't skip a beat.
(20:14):
I paid all my bills.
I did everything on timebecause I wasn't living the 300
loan life.
Speaker 2 (20:18):
Correct.
That's beautiful, and I'm gladthat you did mention that,
because many folks out thereover leveraged, thinking that
this was never going to end, andwe know that never ending
anything isn't true.
Even what do they say?
Never ending French fries ornever ending this, it's just
it's.
Speaker 1 (20:36):
You can only eat so much in 2007, 2008 as well,
right, and it happened beforethat, so you know.
So I've been a part of all ofthat already.
Speaker 2 (20:44):
That's a good question there, because you do
have some perspective on that,seeing the difference in the
2008, 2009 crisis, where tons oflenders got out of the business
.
They couldn't hack it, theyweren't really experts, they
were going through the motions,whether they were waiters,
(21:05):
teachers, jumping into our sideof the industry and I can't say
our just yet, because I wasn'teven thinking about this
industry in 2008,.
To be honest, I was at Chase asa banker, a business banker.
I would refer all the deals outto my loan officer in branch
Nice.
So the idea behind that andwhat we've gone through and are
(21:28):
going through currently how dothey compare in regards to all
of it?
Speaker 1 (21:34):
Their reasons are completely different.
Speaker 2 (21:36):
For sure so completely different.
Speaker 1 (21:37):
So back then in 2007, again, great market, everything
was going great.
I worked for a builder then,okay, and at that time, you know
, doing tons of loans, superbusy, and we were all hearing
that the market was going tochange.
And and what happened was whenthat change happened.
(22:00):
I remember the builder got soldand the builder only wanted to
keep two people out of all theLOs.
They only wanted to keep twoand they wanted to move
everybody else out.
And I convinced because me andanother LO, we were asking will
you stay?
Yeah, and we said no, we didn'twant to stay for just a
paycheck.
We were at that time workingfor the, just a paycheck.
(22:20):
We were at that time workingfor the builder, we were
actually earning a really goodcommission.
So we were, it was awesome.
But they were just going togive us like a you know a salary
and we said, we said no.
I told everybody hey, you guyscan all be loan officers, you
can all be retail, come with me.
We all went to a mortgagecompany and starting over, and
what we did was call on our pastclients to do refinances and
(22:45):
again, I probably closed 40loans that year.
Sure, so you know, you got toagain up and down so I went from
closing a ton of loans now juststarting over again, starting
with you know buildingrelationships again, because I
really didn't do that when I was, you know, with a builder, with
you know building relationshipsagain, because I really didn't
do that when I was you know,with a builder and you just kind
(23:08):
of you have to learn how towork that market.
Speaker 2 (23:09):
There you go.
You just said it again, thatone thing that you've mentioned
probably three times thus farsince the introduction of this
question, which is work yourbusiness.
And I don't believe that thenewer generation of loan
officers one have a book ofbusiness to work, and if they
did, for example, I've got mybook of business, I've got loan
(23:30):
officers that are working mybook of business to bring and
uncover those opportunities.
If there's no one to help trainyou, give you a little bit of
confidence, a little bit of,maybe, role play and
understanding what type ofquestions you should be asking,
to get more information out ofthe borrower to then inject your
(23:50):
recommendation that they cansolve whatever problem with your
solution.
I don't think they're doingvery well right now because,
regardless and it goes hand inhand with your concept of
there's plenty of business to goaround there is, but you have
to work it versus it justfalling into your lap, like in
(24:11):
2020, 2021.
People were buying because theywere induced by the low rates,
low payments, not theopportunity of owning a home and
building equity.
Meanwhile, myself and you, Iwould imagine that we never stop
talking about building equity.
Stop paying rent, let's getyour credit fixed.
Let's get you to a position towhere, yeah, you may not have
(24:34):
the lowest rate right now, butif you look up in two or three
years, you've now got someequity built in.
Speaker 1 (24:40):
I think the difference between you and I,
and maybe people who are gettingout of the business, is there's
just no passion.
I think that you've got to havepassion in what you do.
And otherwise you're not reallydoing what you're meant to do,
because in our business if youdon't have the passion, then
you're saying no a lot.
Speaker 2 (24:56):
Yeah.
Speaker 1 (24:56):
You know what I mean.
You aren't asking the questionsBecause, yeah, you know what I
mean.
You aren't asking the questionsBecause I was a second look
lender for so long and I kind ofjust am.
I just I can't help myself Samehere.
Speaker 2 (25:05):
No, and I think that's a recession-proof
business.
Yes, if you know guidelines,you know how to speak to people,
you know how to present thesolutions in multiple different
facets to that consumer that'ssitting in front of you.
That's already been told.
No, maybe once, twice, threetimes.
You can do just fine.
Speaker 1 (25:23):
And I think the biggest question with clients is
and I get this a lot well, iftwo people have already said no,
how can you do it, how can youdo it?
And I'm like, yeah, I know, Iknow, I know that's a very good
question.
And I tell them you know, Idon't even know how to answer
that.
All I can say is I like touncover.
Speaker 2 (25:44):
I'll answer it for you.
I like to uncover the rocks.
I'll answer it for you, righthere, Not all lenders are
created equal.
Speaker 1 (25:50):
Yeah.
Speaker 2 (25:50):
And you could have been to two lenders that were
subpar to the abilities that youhave, the experience that you
have, the lack of the experiencethat you have, the lack of.
I don't know what it is.
It's like a lack of fear andactually, telling the borrower
what they need to hear.
Speaker 1 (26:08):
Oh my gosh, that's so true.
Speaker 2 (26:08):
Does that make?
Speaker 1 (26:09):
sense.
Yes, there are so many loanofficers out there that are
afraid to tell the client thetruth.
That's right.
I explain it like this.
I say look you, this is notyour situation, this is their
situation.
You are there to help them withtheir situation.
So if their situation causes anobstacle for you as a loan
(26:30):
officer, you immediately tellthem because you only have $5 in
your account, this isn't goingto work.
That doesn't mean it's a no.
It means do you have a relativethat can give you a gift?
Do you have, because this isthe only way we're going to be
able to make this work, orbecause you've only been earning
your overtime for three months?
Speaker 2 (26:49):
That's right.
Speaker 1 (26:50):
I need to prove you've continued to earn it in
the past, have you?
Because when you told me youearned overtime, I thought it
was like the whole time you'vebeen here.
That's right, you know, youhave to always remind the client
that it's their situation, andwhen you do that, it should be
super simple to give them thebad news.
Speaker 2 (27:06):
Absolutely.
And I'll give you anotherscenario that recently occurred,
kind of similar to what you'retalking about here, is the
borrower went from one job totwo working similar hours, but
has only been doing that forabout 10 months.
If we go, fha requires twoyears.
Yes, there's exceptions andthere's gray, but it's got to be
(27:28):
pretty clear and your reasoninghas to be right.
Conventional only 12 months.
So we switch that to 12 months,but still are short two months
of doing that.
And when we asked the borrowerokay, is there anything else in
your history?
She mentioned yeah, I wasself-employed 1099.
Okay, great, get us those.
She wasn't able to.
So it's like, okay, so youeither really didn't or they
(27:51):
didn't keep track of it, orwhatever the case.
But no worries, here's asolution.
We're already under contract onthis home.
If the sellers of that homewere to go and relist it,
they're now going to have towait who knows, 15, 30 days to
get a contract and another 30 to45 days to get it closed.
And who's to say that thisdoesn't happen again with the
(28:12):
borrower that they have now?
So why don't we offer to leaseforward the property with more
earnest money and we close youin January?
Now you've got 12 months.
There is no unless you misspayment.
I mean your bullet credit 780,I don't see there being a risk.
(28:33):
It's just the concept ofarticulating that to the sellers
in the right way that theyunderstand and don't go.
Well, we've been duped.
Let's just put it on the market.
Speaker 1 (28:41):
Okay, sellers need to buy a house by selling that
house.
That could be an issue, butit's definitely something to put
out there.
Speaker 2 (28:48):
You're solving a problem.
You're providing solutions atthe minimum.
Yes, you are right.
Speaker 1 (28:52):
Yeah, and I think that's great.
I had a situation like that,just that I just closed.
But.
Speaker 2 (28:57):
I will tell you many loan officers would be faced
with that and they'd sit on itfor a week and just let time
pass, thinking that something'sgoing to get resolved.
And what is the resolution forthis?
Speaker 1 (29:11):
They don't ever tell them until the day of closing.
Why are you waiting?
I just tell them immediately,that's correct.
Remember I told you I had ablow up yesterday and had to
work at this point yes.
I wasn't lying, so I'm going totell you about that blow up.
Tell me, because it happens toall of us.
I'm not perfect.
So when I pre-qualified aclient, he already used his VA.
Okay, and I said, well, we canuse the rest of your VA.
(29:31):
And so I didn't have a that.
And I said your max is $558,000.
Because I'm a max person, so Idid that.
Of course he bought max, yeah,and so I'm here working these
loans so that I can disclose.
And when I said, hey, I needthat COE, like now.
So we got the COE and I saw Iwas only a few thousand off, but
(29:54):
that few thousand.
Speaker 2 (29:56):
It's the down payment .
That's now Right.
Speaker 1 (29:57):
So I'm like shit, I need $19,000 the down payment.
That's now right.
So I'm like shit, I neednineteen thousand dollars now.
So, and I knew he didn't haveit, but I thought maybe, maybe
he has it somewhere.
So I called him immediately,right?
And and I, well, I called myrealtor first to tell him let
them know, yeah, and then hedidn't answer.
So then I called the client andI I told him immediately and I
said do you have any money, likeanything?
And he's like no, like.
(30:18):
And I said, oh my god, I'm sosorry, I'm so, and he's like no.
And I said, oh my God, I'm sosorry, I'm so sorry.
And he's like no, no, no, lisa,it's okay.
I said, man, we were only a fewthousand off, but what a
difference it made.
Speaker 2 (30:26):
Absolutely.
Speaker 1 (30:27):
And so I let him go.
Speaker 2 (30:29):
And if you don't have a resolution for this, I would
suggest parlaying it.
Okay, go, go.
Speaker 1 (30:34):
So as I hung up with him, I was like so I called him
back and I said do you want tomaybe do a HELOC on your current
property?
I said, if I do a HELOC, you'llhave money for the down.
And he says, lisa, whatever youcan do, I said okay, but he
didn't have the greatest credit.
So I did try the HELOC, got themoney.
So then I was like okay, calledhim back and I said, okay, he
probably would have beenapproved.
Speaker 2 (30:55):
There's no way we can buy it down to make it work.
To make that situation Well, itwould have been fine ratio wise
.
Speaker 1 (31:01):
The problem was is most HELOCs were on a 680.
Okay, I didn't have that.
Yeah, I was just trying.
So then I called him and said,okay, that didn't work.
Okay, I have one other solution.
He's like, yeah, I said, whydon't we go with the down
payment assistance?
Boom, let me tell you what thepayment.
Because I was going to give hima tax vet at five and a half.
Yeah, now I'm going to be at6.875.
I said, let's see if you likethe payment first.
Speaker 2 (31:23):
Right.
Speaker 1 (31:24):
So I told him about the payment 100% disabled vet.
Didn't have taxes, no taxes,yep.
So he's like, no, I'm fine withthat payment.
I said okay Then tomorrowbecause that was 7.
I'm going to work on your file.
I need to make sure I'm okay.
Price point, I'm okay.
Income I got to make sure I'mokay, okay.
So that's what I did thismorning.
(31:45):
I made sure, you know, I wasokay on my price point because
the max is $571.
And I was a $536.
And then your income can't bemore than $130.
I was $164, but I lowered it byremoving some income Right, and
lowered it by removing someincome Right, and with that
income I removed, I paid somedebt.
Like you know how you can useit for something else.
Speaker 2 (32:03):
And you know what?
Pause right there because thatreminds me of something.
It was a video that I needed torecord and I'll probably still
do it for you folks out there.
But the idea behind the maxseller concessions on a VA loan
people still believe is only 4%and that is incorrect.
It is 4% in addition to anycustomary charges to a
transaction.
Speaker 1 (32:30):
And you can use some of that 4% to pay down debt.
Sure, you can, you know you can, but I didn't pay down any debt
.
I used all the money towards mycosts and I used the income
that I took away from him.
So I had to take away income,away income, because otherwise
I'd be over the income limit.
So I took away his retirementand I used that retirement to
pay some of the debt, becauseyou can offset debt on a VA if
you're not using the income.
(32:51):
So I offset some of myinstallment debt.
That was within 24 months and Igot my automated and right
before I got here I called himand told them Problem solved why
Because he was working with anexpert.
Speaker 2 (33:03):
Yes, there is truly a definitive difference between
somebody that is going throughthe motions or just trying to
get a paycheck and somebody thattruly has a passion for this.
They love the guidelines.
It's not necessarily I lovereading the guidelines, but I
love finding the guideline thathelps me solve this, yes, yes,
and sometimes it's really crazythat it's a super simple fix.
Speaker 1 (33:27):
Yes, that kind of freaks me out when it's super
simple.
Speaker 2 (33:29):
I think we overcomplicate it at times that
we get so tunnel vision intothis one thing on the deal, when
you could either have somebodyelse take a look at it and then
you're like, oh that's right, Itotally didn't even think about
that, or just take a bird's eyeview, take a breath, take a step
(33:50):
back and then be willing totell that borrower what actually
needs to be done.
Speaker 1 (33:55):
Yes, so when we used to have files?
Remember we used to have files.
Yes, I do so.
Speaker 2 (33:59):
When we used to have files, Matter of fact, I think
my first day in the mortgagebusiness was the day that I
first saw a loan officer throw afile against the wall.
It was like, oh my God, is thisnormal?
Speaker 1 (34:11):
Or throw it up and see if it sticks.
Yeah, so when we used to havefiles, I used to call it my
corner.
I put the file in the cornerbecause I would be like that's
like my mind is going to thinkabout that at all times to find
a resolution for it.
That's what I would always do.
Speaker 2 (34:25):
Wait.
So you're saying you don't worknine to five like these bankers
out here?
Speaker 1 (34:28):
No, I work whenever I need to work.
Speaker 2 (34:30):
That's right.
So I guess let's see here whenare we at on time JC 40 minutes.
Okay, so let's get into themeat and potatoes of this
discussion, because throughoutyour journey you've mentioned
working for a builder workingfor a builder and I never got
the opportunity to work for abuilder directly early on in my
(34:52):
career.
I did get a preferred lenderwith Roush Coleman back in the
day, but it turns out everybodywas the preferred for Roush
Coleman.
I do have one now with TitanFactory, but manufactured homes.
But what we are seeing since2020, and I think this is pretty
true and accurate is buildersstopped needing us, stopped
(35:15):
needing us for turndowns,stopped needing us, for that's
pretty much.
It specifically is turndowns.
I mean, I used to do a KBHolmes turndowns all the time DR
Horton turndowns.
We were upstairs right abovethem and we were willing to say
hey, yeah, give me your shit,I'll look at it.
Let's turn it water into wineconcept.
(35:35):
But since 2020 and the frenzyand the lack of inventory that
was out there, we kind of took abackseat to all of the builder
concept for a long period oftime and are still facing going
hand in hand with the.
There's enough business to goaround.
We're still facing an upagainst the hurdle of how do
(35:58):
they have this four point ninenine rate?
How do they have this fivepercent rate rate?
How do they have this 5% rate?
What are your thoughts onwhat's happening in the new
construction world?
Because I will tell you, I'vegotten maybe a handful of
turndowns from builders thisyear, and we're already in end
of October and we normally wouldget half the business coming
(36:22):
from turndowns in that regard,yeah, but they just don't.
They're like oh, they don'tqualify, we're moving on to the
next one.
Speaker 1 (36:28):
Yeah, yeah, and they can do that if they have plenty
of clients coming their wayright.
It's when they don't haveenough clients.
They need you to work it todeath, and builders are I mean
they are going to use you up ifthey need to.
Right.
Speaker 2 (36:49):
And it's a business.
Speaker 1 (36:50):
You can't take it personal and, having that
experience working with builders, I can tell you that I know
that's for sure.
They are strictly business.
They have their requirementsfor the year.
They want to close 6,000transactions for the year.
They're going to make thathappen and if they need you to
make that happen, then they'regoing to employ you to do that.
If they don't, then they're not.
They want to have a capture.
They want to have 100% capture,if they can with their own
lender, you know, by havingtheir lender in-house, that
(37:11):
makes them have more money tohelp buy down that rate.
Speaker 2 (37:14):
That they're going to offer you.
Speaker 1 (37:16):
So it's unfortunate, but it's just something we have
to deal with.
To me it's a monopoly, yeah,and there shouldn't be any
monopolies in America, but it isa monopoly and nobody's paying
attention to that.
But it's absolutely a monopoly,because we cannot compete, and
when you cannot compete, that'sa monopoly.
That's exactly right.
That's a monopoly.
And the reason why we can'tcompete is because they are
(37:38):
doing things internally that'scorrect by buying that rate down
internally, so that they don'thave to pay the points
externally like we do.
Speaker 2 (37:45):
That is correct, and I was talking to JC about this
before, but let me throw this upon the screen.
We can use this reference Boom,jc, can you see this?
Mm-hmm.
All right, I'm going to see ifI can make it bigger.
Okay, so now I got to put myglasses on here.
I can make it even bigger.
Boop, boop.
So what you folks are looking aton your screen is a backdoor
(38:08):
pricing sheet that we got a holdof from one of the builders I
won't say the name, anythinglike that, because it's
irrelevant.
They're all doing it, and is itunethical?
I don't think so.
I think that they're justdeploying the what they can.
They're doing what they can.
That's exactly right.
They're living within theboundaries of what they've
(38:28):
created.
So if we look at this and studyit for just a moment, we'll see
here multiple different pricesfor the same actual home.
There are a couple of facets tothis that I want to hone in on,
and at the top you've gotlisting price, rock bottom price
, new price with government, newprice with conventional, and
what you'll notice is thedifference between the list
(38:51):
price, as is does have the lowerinterest rates that you can get
, with this difference betweenthe rock bottom price, meaning I
walked in and I'm paying cashversus somebody that is
financing who is now paying$40,000 more in your home and
(39:14):
when Lisa was talking about, wecan't actually buy down the rate
on our side to the same extentas this.
Let's say, in this case scenario, if I do some quick math, two
(39:37):
points would be just under sixgrand or so.
That's typically the max thatwe can show on the charge to the
borrower.
In regards to discount points,unless we've got seller credits,
then we can move those over tothat side.
But we're talking a $40,000difference in buying down from
the market the market rateversus what they're giving them.
So how in the world is itpossible that they're buying
(39:58):
this rate down $40,000 worth andnot showing it?
You were talking about itearlier, but if you could
enlighten us again becauseyou're dead on.
Speaker 1 (40:07):
Well, it's a forward commitment, so a builder can do
and it can be us, we can do itas well Absolutely Okay.
So any mortgage company can dowhat's called a forward
commitment, and what that is isthey are pre-purchasing an
interest rate.
So they're pre-purchasing itand they're holding onto this
because they've alreadypurchased it for thousands and
(40:28):
thousands of dollars.
And now, if you're a builderand you're doing this, you are
offering it to the homes thatyou want to sell.
So let's say, you have homessitting there that you got to
sell them and so you're going togo.
These are homes with a 4.99rate, so not every home gets
that rate right.
And this is for government let'sjust say government and then
some are conventional.
So what they're doing is theyare increasing your price
(40:50):
because they are paying for thatforward commitment.
And then they're telling youplus, we're giving you 6%, but
in reality all of that isalready included in the total
price.
And that's what you see on thescreen, where you have that
$40,000 difference.
It's because they are doing theforward commitment, so you're
paying for it.
You just don't see it, but youare totally paying for it.
(41:11):
And another thing you might notsee is and I want to talk about
this.
It's about how real estateagents now have to have you sign
a buyer's rep agreement wherenow you, the buyer, are
responsible to pay your realtoror the listing agent.
You have to include it that theseller pays and they have to
(41:33):
agree to it.
Before it was just a given theseller was always going to pay
that fee for you.
Now it's something that youhave to negotiate that payment,
and what's crazy is that is onlynecessary because your realtors
, the listing agent and yourbuyer's agent they have licenses
with Texas or wherever.
A fiduciary responsibility.
They have a license, just likewe have a license Now when
(41:55):
you're dealing with builders.
They don't have a license sothey can say we're going to pay
6% to any realtor that comes ourway.
So if you have a realtor you'reworking with and not to be ugly
or mean, but if you have a,realtor you're working with and
the first place they take you isto a builder.
They might be getting 6%.
Speaker 2 (42:12):
That's right.
Speaker 1 (42:12):
Because they want to get a big paycheck and they
don't want.
They're just doing somethingeasy.
You want to always Nor do theyhave to disclose it, because I
believe it's important that you,the buyer, know that if you're
walking into a brand newcommunity, there's nothing wrong
(42:33):
with wanting a brand new houseand there's nothing wrong with
getting a 4.99 rate.
Oh, that's great, absolutely,and we want you to get it.
But remember you're paying$40,000 over the price if
they're giving you that greatlow rate, because they're paying
for your realtor's 6%, they'repaying for your incentives,
they're paying for the forwardcommitment of the 4.99 rate.
All of that is you're payingfor it because you're buying the
(42:53):
house at that price.
Speaker 2 (42:54):
That's right.
Speaker 1 (42:55):
There's nothing wrong with that, but I'm just letting
you know, because we're beingtransparent If you go and look
at homes for sale by owners andyou go and look at that as well
there might be something that'salready built that you might be
able to also buy for less.
That's also something you wantto look at.
You just want to make sureyou're looking at everything and
not just going straight to thebuilder.
(43:16):
Sometimes sellers will dosomething wrong and they will
sell their home based on whatthe seller is selling their home
for.
They can't be doing that.
They cannot be doing that.
If you're a seller and you havea community that's still
building homes, be aware of this.
Absolutely If you're trying tosell your house for that 270,
where they have 40,000 built in,to give you know a Ford
commitment 4.99 rate and they'regiving 6% close.
(43:39):
Well then, you better be givingthat too.
That's right.
If you want to sell your houseat that price, so think about as
being a listing or somebodywho's selling and you're talking
to your listing agent.
Be aware of what is going on inyour community so that your
house can sell properly,absolutely, and fast.
Speaker 2 (43:56):
So you mentioned a couple of things that I want to
hone in on here.
Number one is not every homegets that same price, right?
Should that be against sometype of regulation?
I do believe so.
It's a subtle way of steering,in my opinion.
Sure, the other thing that youmentioned is the realtor
(44:17):
fiduciary, and I already hadthat written down to talk about,
because you are right, my wifeis a realtor.
Same concept talk about,because you are right, my wife
is a realtor.
Same concept.
And in training her and coachingher in the beginning, it was
always ask questions of yourborrower to determine the best
way to move forward.
Because if they're telling youthat they're only here for two
years or something along thoselines, new construction is not
(44:41):
the best route to take with them.
And the concept that you werementioning before about
competing with the builder I'llbring that full circle is let's
say, you go to this newconstruction community, the
payment is within your budgetbecause of the rate that they're
offering, but they did add thatmoney to your sales price, so
(45:02):
essentially, they are using yourmoney to buy down that rate.
Fast forward two years, it'stime to sell.
Well, guess what?
That community is probably notdone, being built out.
So when you've got the sameperson, let's say you two years
prior, walking into that newcommunity, are you going to buy
that pre-owned one?
Are you going to buy the brandnew one that probably has a rate
(45:25):
incentive, that probably hasclosing costs, et cetera, et
cetera.
Speaker 1 (45:28):
That's why the costs keep going up.
Speaker 2 (45:29):
Isn't that crazy.
In addition, you've got tounderstand that we lend based on
collateral.
The collateral is the property.
When we do an appraisal for anew construction property, guess
who the comps are that arebeing provided?
It's only the new constructionhomes within that mile radius.
So who's controlling the price?
(45:50):
Is it the market?
Not really.
It's kind of the builder.
It's the builder.
They keep going up every threeto six months, so you don't
necessarily find out what yourproperty value is until the
first person.
Two or three people sell theirhome in that community, and
that's just the cold hard truth.
I want people out there to startconsidering these things, both
(46:14):
as a consumer and as a realtorrepresenting your client,
because there's a fiduciaryresponsibility and it goes past
your paycheck.
It has a lot to do with doingthe right thing based on what
you know about that borrower.
There's been many times whenwe're working with a borrower on
our side, repairing theircredit, getting them ready to go
what have you?
And once they're ready, theyall of a sudden switch to new
(46:36):
construction and it's like well,wait a minute, do I now stop
and have this conversation withthe realtor about did they
mention to you that they're onlystaying here two years.
Did they mention to you this,that and the other?
Because they mentioned it to meand this doesn't seem to be the
right path for them to take.
But hey, you're the realtor,you're the one.
I'm not going to tell you howto do your job, but just know
(46:59):
that this is that's a toughie,that's a tough one.
Speaker 1 (47:00):
You it absolutely is you?
Know I'm going to be honestwith you.
If my client has credit issues,I do have the conversation with
them.
I do tell them, okay, whetherit's.
If it's easy, I'm going to tellthem exactly how to do it.
If they're not paying theirbills, well, you just need to
pay your bills, that's right.
And I do ask are you wanting tobuy a brand new home?
Are you buying an existing home?
(47:21):
And I see what they say.
Speaker 2 (47:23):
Yeah.
Speaker 1 (47:24):
I just recently had a conversation.
I had a realtor ask to pleasecall, please call, please call.
And I called him like eighttimes and the lady finally
called me and she was supersweet.
She's like I'm so sorry, I wasjust so busy, no problem, total
great conversation, cause shehad a grand baby brand new.
I had a grand baby venue, so wehad a great conversation.
In the end I found out she isbuying a DR Horton brand new
home.
I said hey, okay, so if you are100% sure that's what you want,
(47:48):
they're going to offer you allthese beautiful incentives that
I don't want to take you awayfrom, right.
So only if they are not helpingyou, come back to me, right,
but you need to go directly tothem.
And then I messaged the realtorand said she's buying a DR
Horton home, take.
And then I messaged a realtorand said she's buying a DR
Horton home, take her straightthere.
That's right, you know.
(48:09):
So I do have the conversationbecause I don't want to run a
credit again.
I don't want to spend thatextra time with them knowing
that they are just going to gosomewhere else and do it all
over anyway.
So I ask those questions Now ifthey do need credit repair.
Speaker 2 (48:20):
I have to have the conversation with the client,
not I have to have theconversation with the client,
not so much the realtor, becausethere's a lot of folks out
there that, from my branchmanager, hat is on You'll have
loan officers that will fixtheir credit because they think
that that's the right thing todo for the customer, with the
inclination that maybe theywon't go back to that new
construction that they wereessentially absolutely not.
(48:42):
They're going to go back to thenew construction and all you
did was help them and also addmore expenses to your branches.
Speaker 1 (48:52):
Absolutely.
So what I do with the client isI say I have a conversation
before I even run the credit.
I say how's your credit?
And they know do you have acredit karma?
We all have credit karma.
So what's your credit karmascore?
They tell me okay.
Cause if they say, even I don'tknow, you know if you have a
credit karma.
We all have credit karma.
Yeah.
So what's your credit karmascore?
They tell me Okay.
Because if they say, even Idon't know, you know if you have
good credit, right.
And then I say why are yousaying I don't know?
Speaker 2 (49:11):
Tell me what happened .
It's almost a good time tochuckle with them on the phone.
Speaker 1 (49:15):
You know damn well what your credit score is so and
if I do have thoseconversations with them because
I don't want to pull a hardcredit report if they're in
repair.
Absolutely Okay.
And then I do ask, of courseare you wanting to buy a brand
(49:35):
new or existing?
And if they say brand new, saylook, if I'm going to be working
with you, go, get denied,that's right Go right now.
Right now, go get denied.
Make sure they're buildinghomes.
If they're building homes, geton a three-month build.
Get on two months.
I can fix this.
In this much time they mightjust keep you and that's where
you stay.
Speaker 2 (49:51):
That's right.
Speaker 1 (49:52):
Or come back to me and you're not going to help me.
I've gotten people to sayyou're not going to help me.
Well, okay, I can't help youtoday, right, but if you?
Speaker 2 (50:04):
have to take you have to go there first.
Because even still and I do thesame thing, but to a certain
extent there was a long periodof time where you would do that
go to them first.
They'd get denied, they'd cometo you time to help them.
You roll your sleeves up, youdo what needs to be done and
they pull them right back fromyou.
Speaker 1 (50:22):
No, no, no, I get a contract.
Speaker 2 (50:23):
Very good.
Speaker 1 (50:24):
I get a contract, you go to them.
You get denied.
You still write the contractfor me to do it, and then I'll
do it.
Speaker 2 (50:30):
Very good.
Speaker 1 (50:30):
That's how I do it with a contract.
Speaker 2 (50:33):
I'm sorry, I'm not going to do it any other way.
Speaker 1 (50:37):
There's no reason to apologize.
I'm just not going to do it.
Any need credit repair, but Iwant to boost them.
Yes, let's say they're at a 615.
I say, well, you're only fivepoints away, we can do down
payment assistance.
Maybe you know, let's get youand I'll look at it and go just
pay this card down.
Do it right now.
Do it today.
Speaker 2 (50:54):
Yep.
Speaker 1 (50:54):
You know and you're going to boost up and you never
know, like three to five days,yeah it and get the credit card
if you don't have it.
So that way we'll know when itgoes up.
Speaker 2 (51:03):
Yeah.
Speaker 1 (51:03):
You know.
So I try to school them on this, but there's so much to tell
someone.
It's true.
So much to tell someone.
I would love to come back andwe talk about that.
Speaker 2 (51:12):
That would be a great , great discussion right there.
Yeah, jc, how are we doing ontime?
We're going to be seven minuteson the dot.
Okay, we are good.
There's a couple of things thatwe can kind of round this thing
off, but thus far, man, not badfor your first podcast.
Speaker 1 (51:29):
Kind of a natural.
I can talk a lot if I have to.
Speaker 2 (51:31):
And what I found is that it's easy to discuss things
intellectually with those thatknow what the hell they're doing
.
It's tough Matter of fact.
I've only had it one time whereI'm like you know what I'm
talking about.
Tough Matter of fact.
I've only had it one time whereI'm like you know what you're
talking about.
And it makes it very difficultin these situations, because
(51:54):
this intention, the intention ofthis podcast, is to give the
folks whether you're a buyer, aseller, a realtor, a lender,
just somebody that is a novicerunning across this I want you
to be able to take somethingfrom this and say I didn't get
sold, I just learned a wholebunch that I didn't know before.
Speaker 1 (52:10):
That's what I'm here for.
I'm here just to give knowledge, you know, and I love what I do
.
There's a passion.
If you're a loan officer, youdon't love what you do, just go
do something you love, that'sright.
Get the hell out to be doingthis.
That's right.
I spoke to two people todaythat want a job as because I
posted for los, sure, and neverhave they been los yeah and I
(52:32):
said you okay, that's not whatyou apply for.
Speaker 2 (52:34):
You apply for receptionists that's right
that's what you reply apply forbecause you don't get in and be
taught well, lisa, we've seen somany of us throughout the years
leverage what we do into socialmedia and the onlookers are
seeing that, but they don't seebehind the scenes.
We're giving them a bit of whathappens behind the scenes right
here, but they don't see allthe work that goes into it All
(52:58):
the hours.
Just like you mentioned at thebeginning of this that you were
up thinking about the filesolutions, you know that is a
very common thing when you getto our level and they just see
the facade that we paint onsocial media, which is intended
for marketing purposes.
Guys, we show you what we wantto show you.
Speaker 1 (53:18):
We're not going to show you closing day.
We don't show you like thebeginning and how crazy it was
Right, how we got there.
Speaker 2 (53:23):
Yes, and I think they go into it with the
expectations of this is anothersales job and that is not the
case.
Is there sales involved?
I'm not a salesperson.
To a certain extent, in myopinion, you're educating and
providing solutions more thananything these days, these days,
because if you had your stufftogether, you could just go to
(53:46):
the credit union, put your 20%down, get the best rate you
possibly can get and go throughwithout a hitch.
Let's not pretend that that'snot there.
Matter of fact, my last severalhomes that we purchased I mean
it was I didn't even realize Iwas going through the mortgage
process.
Why?
Because I had my stuff together.
It's like here is this, here'sthat Matter of fact.
I already did the research onthis here you go and we're
(54:09):
veterans.
Speaker 1 (54:09):
I would just do that Correct.
So you know.
I think that honestly, when youare searching for a mortgage,
you have to remember if allyou're searching for is rate,
that's all you're going to getis rate.
You're not going to get theservice, you're not going to get
the same person, you're notgoing to get the eight o'clock
phone calls, you're not going toget solutions, you're just
going to get the rate, which isgreat if you're perfect.
(54:29):
Okay, if you're working with abroker, you're also going to get
rate, but you're not going toget convenience.
You're going to get somebodywho has to send everything out.
Not to be ugly to brokers, butthat's you and if you're working
with a mortgage banker, you'vegot somebody who has their own
money.
They've got a whole lot ofsolutions and this is all they
do, absolutely Matter of fact.
Speaker 2 (54:48):
I want to look something up real quick, jc, I'm
going to go to chat GPT.
If I can find it, here we goand I would like to see.
It may not have the answers,but what percentage of mortgages
in let's go 2023, whatpercentages of mortgages were
(55:14):
originated at a credit unionversus a mortgage banker or
broker?
Let's see if it has it.
It's pretty smart.
I've trained it pretty well.
Yeah, it sits when it'ssupposed to sit.
Okay, in non-depository Okay.
(55:35):
The majority of mortgageoriginated account for 68% first
liens, the increase from around60% in 2022.
Credit unions, on the otherhand, typically originate a
smaller percentage of mortgages,with the market share usually
seven to 10%.
So exactly what I thought wasgoing to come up came up,
(55:55):
because what we're talking abouthere is the idea of I call them
bullets.
If you've got a bullet buyer,you be very direct, very upfront
with them and don't shy awayfrom the fact that they can get
it cheaper somewhere else, butthey're not going to get you.
When they do that, right, andlo and behold, 7% to 10% out of
(56:18):
100% that are buying end upgoing to that credit union route
, going to that credit unionroute.
So there are very few people.
Even if you are perfect credit,you still have some hair on
your deal that needs to becombed through by an expert that
can provide you the options orsolutions to get you to that
finish line.
Speaker 1 (56:38):
Your credit isn't the only thing that we look at no,
there's so much more than that,it's true.
Yeah, there's so much more, andit's unfortunate that so many
go to their bank, it's true, andthey get denied Yep, and they
stop.
Speaker 2 (56:50):
And then they're discouraged.
Speaker 1 (56:52):
They just stop.
Speaker 2 (56:53):
That's right.
Speaker 1 (56:53):
So sad, but I want to come back and do another one.
Speaker 2 (56:56):
I agree, lisa.
Is there anything that youwould like to let our viewers
listeners know?
Speaker 1 (57:07):
viewers, listeners know it can be advice, tips,
anything like that, that we canclose this thing out on Don't
give up.
I like that.
Don't give up.
If you really want to buy ahouse today, in today's market,
you need to buy your house.
You need to buy your housethere's.
I mean, if you Google who ownsmost of America, it's not
America, it's Canada.
So you need to own your housebecause they're these big
companies are buying upeverything and they're buying it
(57:28):
up because they want you torent from them.
Speaker 2 (57:31):
That's right.
Speaker 1 (57:31):
So if you are renting , get with your friends, get
with your family, buy a freakinghouse, that's right.
There is no reason why youshouldn't buy a house if you're
renting.
That means you can affordsomething.
Speaker 2 (57:42):
That's right.
Speaker 1 (57:43):
And get together and do it together.
I mean, that's my advice.
Speaker 2 (57:46):
I love that.
Speaker 1 (57:48):
Be smart with your money.
Stop wasting your money.
Speaker 2 (57:51):
I'll even add to that I can't even be upset at these
big corporations that are buyingproperties, because, at the end
of the day, you had theopportunity as a consumer to do
that.
You weren't brave enough totake that risk do that.
You weren't brave enough totake that risk.
You didn't work with the rightperson that at least filled you
with the right hope that youneeded in order to move forward.
(58:11):
But I put it back on you as theconsumer there's still property
out there.
There's still opportunity.
Get your butt and throw yourhat in the ring, or else you
will be stuck as a renter.
Speaker 1 (58:22):
We can show you how to do it.
Absolutely we can show you howto do it.
So hopefully in our nextepisode we can talk about how
you can do it if you don't thinkyou can afford it right now, I
love that and how you can.
Speaker 2 (58:34):
That sounds like a great episode to me.
Yeah, lisa, I want to thank youfor doing this.
I know I made it, I am't?
That's awesome.
Well, lisa, thank you again forjoining me on this.
Thanks for having me.
Thank you for being transparentwith the folks out there.
Thank you for being real.
(58:55):
That's something that is veryrare in this industry is being
your true self, no matter whatthe situation is.
And some advice for you guysout there be yourself, be real,
work hard.
At the end of the day, it isgoing to be the effort that you
put in what you get out of thisindustry.
So I think that we talked abouta whole lot of good stuff here,
(59:20):
and I will end it with that.
Ladies and gentlemen, we willcatch you on the next one.
Bye.
Wow, yeah, where did you get?
Speaker 2 (00:33):
that.
So people are wondering why?
Well, how is it that they cando this low rate and you guys
can't?
Well, we don't have the extramoney to play with behind the
scenes to increase the salesprice and give you this rate.
Speaker 1 (00:46):
And they hide that in the closing documents.
Speaker 2 (00:48):
They can't even put it in the closing document, but
we would have to do, we wouldhave.
The most we can typically do istwo points, unless the seller's
paying, etc.
Etc.
Speaker 1 (00:56):
So when, when, a when a builder owns a mortgage
company, they can do a forwardcommitment.
Absolutely, they're doing yep,and that forward commitment is
pre-furnished.
Speaker 2 (01:06):
You know exactly what you're talking about.
Yes, that's exactly the rightstep.
We're recording the behind thescenes and then we'll go.
Behind the scenes.
We like a raw intro, like outof nowhere.
Matter of fact, I'm ready tostart and if you are ready, I am
(01:32):
ready.
All right, we're ready andwelcome back to another episode
of Key Factors Podcast RealEstate AF, where the AF stands
for and finance, and I'm yourhost, mark Jones, and we're
powered by ReviewMyMortgagecom,the largest index of mortgage
programs in the nation, andtoday I am joined with a veteran
loan officer branch manager inSan Antonio that I've been
(01:56):
friends with for many years, andI'm looking forward to hearing
her insight on the topic that wehave today.
So, without further ado, Iwould like to introduce Lisa
Alonzo how you doing.
Speaker 1 (02:07):
Hey, I just want to be comfortable for two seconds.
I love it.
Thank you so much.
I'm so glad to be here.
Okay, I'm glad to be here.
I'm a little shy, but it'll.
Speaker 2 (02:16):
First podcast right.
Speaker 1 (02:17):
Yes.
Speaker 2 (02:18):
It'll go off without a hitch, guaranteed Okay,
perfect, okay.
So for our viewers, ourlisteners out there, we're now
up to 12,300 and some oddsubscribers on YouTube.
We've got plenty more onSpotify and Apple Podcast.
They're tuning in and I believeit's because we continue to
bring them experts that want tobe transparent and give them
(02:41):
real information, realperspective, without bias and
trying to sell them something,and that's we were talking just
before this.
You wish that there were morelenders that you could have a
melting pot with, and well,that's what we're creating here.
Speaker 1 (02:53):
I like that.
I think it's important that wedo that.
I think I just recently postedon my Facebook about that.
I love to see how realtors areconstantly together in things
and they're just always likepatting each other on the back,
and lenders should do that.
Speaker 2 (03:07):
I agree.
Speaker 1 (03:08):
There's enough business for everyone, and I
feel like we should just allcommune together as lenders.
Speaker 2 (03:11):
Well, it's funny that you say there's enough business
for everyone, and that bringsup another topic that we can
talk about here in a bit.
But before we dive into any ofour discussions today, I want
the folks out there listening toknow who they're listening to.
So, lisa, tell us aboutyourself.
Let's start in the beginning.
How long have you been in themortgage business?
(03:32):
How'd you get in?
Why'd you choose this industry,this crazy world called
mortgage?
Speaker 1 (03:36):
I'm going to try to not talk too long about it,
you're good.
So I started.
I actually lived in.
I'm from California but movedto Texas, san Antonio, in my
teens so I graduated from HolmesHigh School Holmes go Huskies I
know my parents did too 1987.
Speaker 2 (03:53):
No shit, my parents were 85.
Okay, I think 85.
Speaker 1 (03:58):
It was rough school.
It was rough, oh yeah.
And coming from California, Icame from Laguna Niguel, you
know I was definitely went fromhere to you know where am I.
So then I moved back toCalifornia after high school and
attended college.
There Now, I just did communitycollege, sure, and I wanted to
(04:19):
get into just working doinganything.
So back then you would go to theunemployment office and they
sent me to a mortgage company,really, to be a receptionist,
okay.
So I said, sure, I'll do that.
And so I went to this mortgagecompany and it was actually a
mortgage broker called SubroseMortgage and they had been just
purchased by a young guy.
(04:39):
Okay, he was like 20 years oldand, funny enough, I didn't know
this until a few years later.
But he had purchased thecompany because he had gotten in
trouble with the law forselling drugs.
So, yeah, I didn't know this,but I took the job as a
receptionist and from that pointis where I learned how to you
(05:00):
know, from the bottom up Iassisted the processor, so I
used to order the verifications.
This is back in 1989.
Speaker 2 (05:08):
Well, I mean, we're still like semi-setup positions
in many companies that do yourorder outs, your title work,
your appraisals Go ahead.
Speaker 1 (05:15):
But back then, you know, we didn't have computers,
we had the phone where you hitthe button and hello, you know.
So it was so different.
And our fax machines still hadthat really thin.
Oh yeah, when we ordered acredit report it would come
through that fax holy cow, wedid not know that that paper
would be transparent like itwould.
We didn't know that back, wow.
So, um, and they didn't havecredit scores.
(05:38):
Um, you know, when we did fhaand va loans, we would have to
call up for the case number, sowe learned about all of that.
Um, and I, working for a broker, you know we would have to call
up for the case number, so welearned about all of that.
And working for a broker, youknow we used to have to copy and
I had one of those copymachines where each copy would
be like the three the yellow,pink and the white.
Oh yeah, those were myverifications when I typed them
(05:58):
without a computer, so you knowyou had to use your whiteout.
So I mean I come back from wayway back then and it was fun
because I learned from then tonow.
It's so different.
I know how to complete a goodfaith without a computer.
Speaker 2 (06:12):
Yeah.
Speaker 1 (06:14):
And it was fun, it was learning, and I became a
processor.
Okay, so from processing Ithink I did that for eight years
I went to go work for amortgage banker and I then was
sponsored to become anunderwriter and I was one file
away from getting my DE and Idecided at that point to become
a loan officer.
So that was 1997.
(06:35):
And in 1997 is also when theycame up with credit scores.
Speaker 2 (06:40):
Yeah, okay.
They started using DU and theystarted doing all of that
Getting automated, using thecomputers to leverage, to
hopefully streamline and makethings more efficient.
We never thought it would work.
Speaker 1 (06:49):
You know, what's really crazy is when that
happened.
When we started using DU, wereally only did what DU said, so
, like I never got averification, I was one of those
LOs where, if the processorwanted anything, I would say, no
, you get your VOE, get your VOD, that's all we're using.
Speaker 2 (07:08):
I'm going by what the findings say.
Speaker 1 (07:11):
Yes, that's.
All I needed was a VOE and aVOD.
Speaker 2 (07:14):
Wait a minute, you guys don't do that now.
Speaker 1 (07:16):
Nope, I get pay stubs .
I try not to even get a VOE ifI don't need it.
I do whatever the DU says,still, because that's where I'm
from.
But nowadays, with loans beingso much more difficult, you know
, back then there wasn't aproblem with fraud.
Fraud was because of back then.
Speaker 2 (07:33):
That's so true.
Speaker 1 (07:33):
There was so much fraud.
So now, because of all thethings that have gone on now we
have to verify things so muchLike everything's verified over
and over and over.
We didn't do that back then,absolutely, we verified it once.
Speaker 2 (07:48):
And I want to pause just for a moment so that I can
explain to the listeners,because there's many out
listening that don't participatein the mortgage side of things
that are wondering okay, what isDU?
Why is she referencing it?
Du is desktop underwriter andthere's another one loan
prospector.
Essentially, this is theautomated system that we, as
lenders, run our loans, thescenario that the borrower gives
us into the system.
(08:09):
The system spits out findingsthat either say approve eligible
, refer eligible, referineligible.
There's multiple differentfactors, but within these
findings there's one tosometimes 50 conditions.
Those conditions are what weuse to clear, to sell that loan
(08:30):
off to the investor and based onthose conditions itself, I mean
you either have a loan or youdon't.
Right, you can still do what'sconsidered a downgrade or a
manual underwrite, but you'llalways want to strive for that
automated approval so you canhave the insurance of that
system backing you with thisloan.
But go ahead, continue.
Speaker 1 (08:51):
That's good.
I love that.
You're very detailed.
So learning, you know, goingthrough that process from 89 all
the way to now, and my journeyfrom being a loan officer from
1997 to current, and my journeyfrom being a loan officer from
1997 to current, you know it'sbeen a fun journey.
But you know programs,everything changes so often,
(09:11):
it's true.
I mean it does matter how longyou've been doing it, simply for
the experience.
For sure, yes, but you have tocontinue to learn.
Speaker 2 (09:19):
I agree, because programs consistently change.
Well and, like they say, theonly thing that is consistent in
our industry is change.
Yeah.
Speaker 1 (09:27):
Everything's changing .
All the time.
The programs change theinterest rates.
I mean back then, when I firststarted, fixed interest rates
were in the 12s and 13s.
Those were fixed rates and sowe used adjustable rate
mortgages all the time.
We used graduated paymentmortgages.
We used interest only.
Speaker 2 (09:43):
Yes.
Speaker 1 (09:44):
You know, because in California prices were extremely
high.
Speaker 2 (09:50):
Absolutely.
Speaker 1 (09:50):
And we used negative interest loans, which you can't
do anymore.
Right, we just did a completelydifferent type of loan than we
do today.
Speaker 2 (09:55):
Yeah, yeah.
Now question for you Do youthink that it is better that
we're doing it the way that weare now or in the past, or would
it be better to have kind of acomposite of the two?
Speaker 1 (10:10):
Well, I don't think we can do it better than we did
in the past at all.
I think that what we're doingnow is good because we have to
do those things, and what I meanby that is now we have non-QM
Correct, which before was hardmoney.
Speaker 2 (10:27):
Yeah.
Speaker 1 (10:28):
And I think the non-QM is a bit better than that
.
I think that all the policiesthat are in place are better for
the client.
Speaker 2 (10:36):
For sure.
Speaker 1 (10:36):
Because those policies are in place, because
there was so much fraud, it wasso easy for people to give us
fake pay stubs and fake bankstatements and just do things
they shouldn't be doing.
Speaker 2 (10:46):
Correct.
Speaker 1 (10:46):
And all those things are why people have to go
through what they're goingthrough today.
That's right.
So I do think today's policiesare better.
I recently asked my secondarymarketing VP why we don't have
ARM interest rates and he saidwell, because of the two-year
bond.
He said the difference is sominimal that there's just no
reason to use ARM.
(11:07):
So the ARM interest rate isgoing to come back when those
interest rates go up.
Speaker 2 (11:11):
Right.
Speaker 1 (11:11):
So there's a huge difference between the two.
Speaker 2 (11:14):
In that instance they should still provide you with
it.
But I do agree that it is hard,Like, for example, I do
construction loans with TitanFactory, brand new from the
factory concept manufactured,and in those cases the one time
close was very hard to keep upwith.
(11:37):
In regards to the hedge, Itsrates are changing so quickly
right now that it's like, OK,how do we hedge this if it's
going to be a short-term betthat doesn't end up panning out?
Isn't it interest only For thefirst part of it, correct?
But you're actually locking inthe final rate up front for the
one time right.
Yes, you are.
So I had to switch all of thisstuff to a two-time and learn a
(11:58):
brand new process of going aboutit.
And luckily it worked out forall the customers that had to go
through that because sureenough, rates did come down.
So they're 8% on their interestonly construction piece Three
months later when the home isdelivered.
Now we can go do theirpermanent loan and lock them at
6.875, seven and a quarter,something like that, versus them
(12:19):
being stuck with what they hadand have to wait six payments
minimum to refinance to get itlowered.
Speaker 1 (12:24):
Yeah, I don't like the refinance.
I mean, I'm not a big refinanceperson.
Speaker 2 (12:27):
Right.
Speaker 1 (12:29):
I don't believe in starting the clock over unless
you have a really good reason todo that A good reason.
Speaker 2 (12:32):
I like that.
I go about it the same way, andyou and I both, I believe are
going to be different than mostloan officers on the street
because we consider ourselvesexperts.
I, on the street, because weconsider ourselves experts, I'm
not going to sit here andrefinance you just to make a
paycheck when, in three monthsfrom now, your grandpa, your dad
(12:52):
, somebody's going to look atyour mortgage and go what the
hell, were they thinking.
Why did you do that Right?
Speaker 1 (12:55):
No, I look at everybody like they are a part
of my family and because Ireally I feel like and this is
I'm getting a little spiritual,but I do feel like God brings
those people to me Like I feellike every client I have is with
me for a reason, yeah, and so Itreat them like that.
I treat them, you know, I helpthem as best I can.
I hate to say no.
(13:16):
That is my biggest issue in mylife is saying no, especially
with loans, because I feel likeit's more like this is how you
can do it, rather than I can'tdo it at all.
Speaker 2 (13:26):
That's exactly right, and I believe that the newer
generation of loan officersalmost believe that it is a yes
or a no when it comes to aborrower.
But it's not at all.
It is no.
Even the yes is not a yes.
It's a yes, but this is youroptions yes or term.
Yes, you have to still do thesethings.
That yes.
And then your term yes, youhave to still do these.
That's correct.
And then the no aspect.
(13:47):
I don't think it's ever a no.
It's not right now, but you canfix this, this and this Now.
Mind you, there are somecustomers that are late on items
right now in the 400 scoresthat I will tell them.
The credit repair that's neededis out of the scope of my
expertise and I can't help youpay your bills on time, Like
(14:09):
there's just that one thing thatyou at least have to show the
responsibility that you appliedfor a mortgage knowing damn well
that you're late on yourpayments right now.
Speaker 1 (14:17):
Yeah, you gotta pay your bills, that's exactly right
.
Nobody's gonna lend you thebiggest loan of your life if
you're not currently paying a$50 payment.
Speaker 2 (14:29):
I mean it makes sense .
It's got to make sense.
That's a great little clipright there that the AI system
is going to pick up and you canhave.
That's perfect and I agree 100%with that.
So you let's go back to you.
In your journey as a lenderDuring the I guess last we'll
call it six years or so, we wentthrough a crazy uproar of loans
(14:53):
.
It was like holy cow more loansthan we know what to do with.
And then, all of a sudden, therug was pulled out from under us
.
And you mentioned that there'splenty of loans to go around.
I believe that's true as well,but many out there are going.
Well, what the hell is shetalking about?
How is that even possible ifwe're not doing loans?
(15:13):
What is your response tosomeone like that?
Speaker 1 (15:17):
Well, I mean honestly , if I go back to when I first
started being a loan officer,Nobody taught me how to sell
myself.
I was a processor.
I knew how to work a deal.
That's right I didn't know howto go out and say please give me
business.
I didn't know how to do thatand I was like, how do I do it?
So I still have never done that.
Really, I don't do that.
(15:38):
I build relationships just withfriendships, and so I can
honestly tell somebody.
When I first started, I startedwith a realtor that my boss
didn't want to work with.
So this realtor used to comeinto our office every day and
have coffee and he was just anuisance, I guess, to my manager
(15:58):
and I didn't have any businessbecause I was just beginning
with him as a loan officer.
And he said hey, lisa, I'mgoing to introduce you to Jose
and we start working with him.
I'm like, okay.
So Jose came to my office everymorning with his coffee and I
said, okay, jose, let's get thisgoing.
And I became, of course, afriend to him and his first deal
(16:20):
I did with him was a $50,000deal, okay, and this was back in
1998.
Yeah, right around there, andthat's kind of a good size loan
back then?
Speaker 2 (16:30):
No, it was still pretty tiny, and couldn't you
guys make like three, four, five, six points, as much as?
Speaker 1 (16:34):
you wanted.
I didn't have to have a licenseback then I could make whatever
I wanted.
But here's the key.
So the listing agent calls meat closing and she says is this
Lisa?
And I said yes.
And she said are you reallygiving this client this interest
rate?
And I said yes, I am.
And she says, wow, you're notmaking any money.
That's what she told me.
(16:54):
And I said, oh, it's not aboutthat.
I told her it's not about that,it's about the client, it's not
about me, it's about them.
And she said, wow, I'm going tostart working with you.
And that realtor I found outshe worked for Remax and she was
a top dog realtor.
Like, she was closing lots ofdeals.
(17:15):
So my $50,000 deal.
I inherited now 300, $400,000loans and she introduced me to
all of her friends.
Speaker 2 (17:23):
Do I know this person ?
Speaker 1 (17:25):
This was in Tucson, Arizona.
Oh, okay, Gotcha, Her name wasMary Frances.
Okay, Shout out Mary Frances.
And she sent me one of hernephews like a couple of years
down the line after I'd beenworking with her and I told her
her nephew.
I said hey, I don't know hervery well.
Can you tell me a little bitabout Mary Frances?
And he goes, yeah, he goes.
(17:47):
You know, she used to be a nun,yeah.
Speaker 2 (17:48):
Sister Mary Frances.
Speaker 1 (17:49):
Yes, do you know what movie?
Speaker 2 (17:51):
Yes, Do you know what movie that exact name is from?
No Sister Act.
Speaker 1 (17:56):
Oh I.
Speaker 2 (17:57):
Sister Mary.
Speaker 1 (17:57):
Frances, that's hilarious.
Going back to being spiritual,that's a sign right there too.
Exactly.
Speaker 2 (18:03):
That's why I can witness.
Yeah, back when Whoopi was kindof cool.
Speaker 1 (18:06):
I'm telling you, when I found out she was a nun and
then he said, yeah, so she met aguy like she met her husband,
and that's when she got out ofthe nunnery and then she had
children.
Speaker 2 (18:16):
She had to divorce Jesus.
Speaker 1 (18:18):
Yes, so I realized then just how you know how that
was where I was supposed to be.
Speaker 2 (18:24):
Like I realized that and that was super cool for me
because I was like, wow, okay.
Speaker 1 (18:32):
Thank you guys.
So she left the nunnery for aman and real estate and to have
a family and to make some money.
Speaker 2 (18:35):
Yeah, yeah, that's.
That's pretty cool.
Um, so, as you, I guess in thelast several years that we've
gone through this ebb and flowof transactions being readily
available.
Speaker 1 (18:52):
Yeah, let me answer your question now.
Okay, let me answer yourquestion now.
So, answering that question,the reason why I went all the
way back then was becausethere's going to be times in our
lives when we have a little bitof business and we have a ton
of business, and because I'vebeen doing this for so long,
I've seen that, I've seen thatup and down and you've got to
prepare yourself for that.
Yeah, as a loan officer, we'rea straight commission, so we get
(19:15):
to have all the money and thenwe get to have a little bit of
money.
Speaker 2 (19:18):
Right.
Speaker 1 (19:18):
So we have to learn how to conform to that.
Conform to that.
Hopefully you're saving, youknow.
Hopefully you're investing itproperly, hopefully you've
gotten a couple of properties.
I mean you, you have to workyour business properly and I
feel like that's in in 2018,that's when I secured a position
with a builder and got alltheir second look loans.
(19:39):
So I was doing so much business.
So I mean I almost got divorcedover doing so much business
because I just I couldn't stopyeah, and again my problem not
being able to say no it was evenharder because I just had to
make these loans work for thesepeople.
Speaker 2 (19:54):
Totally.
Speaker 1 (19:54):
They'd already been denied, you know.
So I had tons and tons ofbusiness and then, like you said
, like down to like I rememberdoing 30 loans in one year, in a
year, correct, it's like wait aminute From 300 to 30.
Huge difference, but I stilldidn't skip a beat.
(20:14):
I paid all my bills.
I did everything on timebecause I wasn't living the 300
loan life.
Speaker 2 (20:18):
Correct.
That's beautiful, and I'm gladthat you did mention that,
because many folks out thereover leveraged, thinking that
this was never going to end, andwe know that never ending
anything isn't true.
Even what do they say?
Never ending French fries ornever ending this, it's just
it's.
Speaker 1 (20:36):
You can only eat so much in 2007, 2008 as well,
right, and it happened beforethat, so you know.
So I've been a part of all ofthat already.
Speaker 2 (20:44):
That's a good question there, because you do
have some perspective on that,seeing the difference in the
2008, 2009 crisis, where tons oflenders got out of the business
.
They couldn't hack it, theyweren't really experts, they
were going through the motions,whether they were waiters,
(21:05):
teachers, jumping into our sideof the industry and I can't say
our just yet, because I wasn'teven thinking about this
industry in 2008,.
To be honest, I was at Chase asa banker, a business banker.
I would refer all the deals outto my loan officer in branch
Nice.
So the idea behind that andwhat we've gone through and are
(21:28):
going through currently how dothey compare in regards to all
of it?
Speaker 1 (21:34):
Their reasons are completely different.
Speaker 2 (21:36):
For sure so completely different.
Speaker 1 (21:37):
So back then in 2007, again, great market, everything
was going great.
I worked for a builder then,okay, and at that time, you know
, doing tons of loans, superbusy, and we were all hearing
that the market was going tochange.
And and what happened was whenthat change happened.
(22:00):
I remember the builder got soldand the builder only wanted to
keep two people out of all theLOs.
They only wanted to keep twoand they wanted to move
everybody else out.
And I convinced because me andanother LO, we were asking will
you stay?
Yeah, and we said no, we didn'twant to stay for just a
paycheck.
We were at that time workingfor the, just a paycheck.
(22:20):
We were at that time workingfor the builder, we were
actually earning a really goodcommission.
So we were, it was awesome.
But they were just going togive us like a you know a salary
and we said, we said no.
I told everybody hey, you guyscan all be loan officers, you
can all be retail, come with me.
We all went to a mortgagecompany and starting over, and
what we did was call on our pastclients to do refinances and
(22:45):
again, I probably closed 40loans that year.
Sure, so you know, you got toagain up and down so I went from
closing a ton of loans now juststarting over again, starting
with you know buildingrelationships again, because I
really didn't do that when I was, you know, with a builder, with
you know building relationshipsagain, because I really didn't
do that when I was you know,with a builder and you just kind
(23:08):
of you have to learn how towork that market.
Speaker 2 (23:09):
There you go.
You just said it again, thatone thing that you've mentioned
probably three times thus farsince the introduction of this
question, which is work yourbusiness.
And I don't believe that thenewer generation of loan
officers one have a book ofbusiness to work, and if they
did, for example, I've got mybook of business, I've got loan
(23:30):
officers that are working mybook of business to bring and
uncover those opportunities.
If there's no one to help trainyou, give you a little bit of
confidence, a little bit of,maybe, role play and
understanding what type ofquestions you should be asking,
to get more information out ofthe borrower to then inject your
(23:50):
recommendation that they cansolve whatever problem with your
solution.
I don't think they're doingvery well right now because,
regardless and it goes hand inhand with your concept of
there's plenty of business to goaround there is, but you have
to work it versus it justfalling into your lap, like in
(24:11):
2020, 2021.
People were buying because theywere induced by the low rates,
low payments, not theopportunity of owning a home and
building equity.
Meanwhile, myself and you, Iwould imagine that we never stop
talking about building equity.
Stop paying rent, let's getyour credit fixed.
Let's get you to a position towhere, yeah, you may not have
(24:34):
the lowest rate right now, butif you look up in two or three
years, you've now got someequity built in.
Speaker 1 (24:40):
I think the difference between you and I,
and maybe people who are gettingout of the business, is there's
just no passion.
I think that you've got to havepassion in what you do.
And otherwise you're not reallydoing what you're meant to do,
because in our business if youdon't have the passion, then
you're saying no a lot.
Speaker 2 (24:56):
Yeah.
Speaker 1 (24:56):
You know what I mean.
You aren't asking the questionsBecause, yeah, you know what I
mean.
You aren't asking the questionsBecause I was a second look
lender for so long and I kind ofjust am.
I just I can't help myself Samehere.
Speaker 2 (25:05):
No, and I think that's a recession-proof
business.
Yes, if you know guidelines,you know how to speak to people,
you know how to present thesolutions in multiple different
facets to that consumer that'ssitting in front of you.
That's already been told.
No, maybe once, twice, threetimes.
You can do just fine.
Speaker 1 (25:23):
And I think the biggest question with clients is
and I get this a lot well, iftwo people have already said no,
how can you do it, how can youdo it?
And I'm like, yeah, I know, Iknow, I know that's a very good
question.
And I tell them you know, Idon't even know how to answer
that.
All I can say is I like touncover.
Speaker 2 (25:44):
I'll answer it for you.
I like to uncover the rocks.
I'll answer it for you, righthere, Not all lenders are
created equal.
Speaker 1 (25:50):
Yeah.
Speaker 2 (25:50):
And you could have been to two lenders that were
subpar to the abilities that youhave, the experience that you
have, the lack of the experiencethat you have, the lack of.
I don't know what it is.
It's like a lack of fear andactually, telling the borrower
what they need to hear.
Speaker 1 (26:08):
Oh my gosh, that's so true.
Speaker 2 (26:08):
Does that make?
Speaker 1 (26:09):
sense.
Yes, there are so many loanofficers out there that are
afraid to tell the client thetruth.
That's right.
I explain it like this.
I say look you, this is notyour situation, this is their
situation.
You are there to help them withtheir situation.
So if their situation causes anobstacle for you as a loan
(26:30):
officer, you immediately tellthem because you only have $5 in
your account, this isn't goingto work.
That doesn't mean it's a no.
It means do you have a relativethat can give you a gift?
Do you have, because this isthe only way we're going to be
able to make this work, orbecause you've only been earning
your overtime for three months?
Speaker 2 (26:49):
That's right.
Speaker 1 (26:50):
I need to prove you've continued to earn it in
the past, have you?
Because when you told me youearned overtime, I thought it
was like the whole time you'vebeen here.
That's right, you know, youhave to always remind the client
that it's their situation, andwhen you do that, it should be
super simple to give them thebad news.
Speaker 2 (27:06):
Absolutely.
And I'll give you anotherscenario that recently occurred,
kind of similar to what you'retalking about here, is the
borrower went from one job totwo working similar hours, but
has only been doing that forabout 10 months.
If we go, fha requires twoyears.
Yes, there's exceptions andthere's gray, but it's got to be
(27:28):
pretty clear and your reasoninghas to be right.
Conventional only 12 months.
So we switch that to 12 months,but still are short two months
of doing that.
And when we asked the borrowerokay, is there anything else in
your history?
She mentioned yeah, I wasself-employed 1099.
Okay, great, get us those.
She wasn't able to.
So it's like, okay, so youeither really didn't or they
(27:51):
didn't keep track of it, orwhatever the case.
But no worries, here's asolution.
We're already under contract onthis home.
If the sellers of that homewere to go and relist it,
they're now going to have towait who knows, 15, 30 days to
get a contract and another 30 to45 days to get it closed.
And who's to say that thisdoesn't happen again with the
(28:12):
borrower that they have now?
So why don't we offer to leaseforward the property with more
earnest money and we close youin January?
Now you've got 12 months.
There is no unless you misspayment.
I mean your bullet credit 780,I don't see there being a risk.
(28:33):
It's just the concept ofarticulating that to the sellers
in the right way that theyunderstand and don't go.
Well, we've been duped.
Let's just put it on the market.
Speaker 1 (28:41):
Okay, sellers need to buy a house by selling that
house.
That could be an issue, butit's definitely something to put
out there.
Speaker 2 (28:48):
You're solving a problem.
You're providing solutions atthe minimum.
Yes, you are right.
Speaker 1 (28:52):
Yeah, and I think that's great.
I had a situation like that,just that I just closed.
But.
Speaker 2 (28:57):
I will tell you many loan officers would be faced
with that and they'd sit on itfor a week and just let time
pass, thinking that something'sgoing to get resolved.
And what is the resolution forthis?
Speaker 1 (29:11):
They don't ever tell them until the day of closing.
Why are you waiting?
I just tell them immediately,that's correct.
Remember I told you I had ablow up yesterday and had to
work at this point yes.
I wasn't lying, so I'm going totell you about that blow up.
Tell me, because it happens toall of us.
I'm not perfect.
So when I pre-qualified aclient, he already used his VA.
Okay, and I said, well, we canuse the rest of your VA.
(29:31):
And so I didn't have a that.
And I said your max is $558,000.
Because I'm a max person, so Idid that.
Of course he bought max, yeah,and so I'm here working these
loans so that I can disclose.
And when I said, hey, I needthat COE, like now.
So we got the COE and I saw Iwas only a few thousand off, but
(29:54):
that few thousand.
Speaker 2 (29:56):
It's the down payment .
That's now Right.
Speaker 1 (29:57):
So I'm like shit, I need $19,000 the down payment.
That's now right.
So I'm like shit, I neednineteen thousand dollars now.
So, and I knew he didn't haveit, but I thought maybe, maybe
he has it somewhere.
So I called him immediately,right?
And and I, well, I called myrealtor first to tell him let
them know, yeah, and then hedidn't answer.
So then I called the client andI I told him immediately and I
said do you have any money, likeanything?
And he's like no, like.
(30:18):
And I said, oh my god, I'm sosorry, I'm so, and he's like no.
And I said, oh my God, I'm sosorry, I'm so sorry.
And he's like no, no, no, lisa,it's okay.
I said, man, we were only a fewthousand off, but what a
difference it made.
Speaker 2 (30:26):
Absolutely.
Speaker 1 (30:27):
And so I let him go.
Speaker 2 (30:29):
And if you don't have a resolution for this, I would
suggest parlaying it.
Okay, go, go.
Speaker 1 (30:34):
So as I hung up with him, I was like so I called him
back and I said do you want tomaybe do a HELOC on your current
property?
I said, if I do a HELOC, you'llhave money for the down.
And he says, lisa, whatever youcan do, I said okay, but he
didn't have the greatest credit.
So I did try the HELOC, got themoney.
So then I was like okay, calledhim back and I said, okay, he
probably would have beenapproved.
Speaker 2 (30:55):
There's no way we can buy it down to make it work.
To make that situation Well, itwould have been fine ratio wise
.
Speaker 1 (31:01):
The problem was is most HELOCs were on a 680.
Okay, I didn't have that.
Yeah, I was just trying.
So then I called him and said,okay, that didn't work.
Okay, I have one other solution.
He's like, yeah, I said, whydon't we go with the down
payment assistance?
Boom, let me tell you what thepayment.
Because I was going to give hima tax vet at five and a half.
Yeah, now I'm going to be at6.875.
I said, let's see if you likethe payment first.
Speaker 2 (31:23):
Right.
Speaker 1 (31:24):
So I told him about the payment 100% disabled vet.
Didn't have taxes, no taxes,yep.
So he's like, no, I'm fine withthat payment.
I said okay Then tomorrowbecause that was 7.
I'm going to work on your file.
I need to make sure I'm okay.
Price point, I'm okay.
Income I got to make sure I'mokay, okay.
So that's what I did thismorning.
(31:45):
I made sure, you know, I wasokay on my price point because
the max is $571.
And I was a $536.
And then your income can't bemore than $130.
I was $164, but I lowered it byremoving some income Right, and
lowered it by removing someincome Right, and with that
income I removed, I paid somedebt.
Like you know how you can useit for something else.
Speaker 2 (32:03):
And you know what?
Pause right there because thatreminds me of something.
It was a video that I needed torecord and I'll probably still
do it for you folks out there.
But the idea behind the maxseller concessions on a VA loan
people still believe is only 4%and that is incorrect.
It is 4% in addition to anycustomary charges to a
transaction.
Speaker 1 (32:30):
And you can use some of that 4% to pay down debt.
Sure, you can, you know you can, but I didn't pay down any debt
.
I used all the money towards mycosts and I used the income
that I took away from him.
So I had to take away income,away income, because otherwise
I'd be over the income limit.
So I took away his retirementand I used that retirement to
pay some of the debt, becauseyou can offset debt on a VA if
you're not using the income.
(32:51):
So I offset some of myinstallment debt.
That was within 24 months and Igot my automated and right
before I got here I called himand told them Problem solved why
Because he was working with anexpert.
Speaker 2 (33:03):
Yes, there is truly a definitive difference between
somebody that is going throughthe motions or just trying to
get a paycheck and somebody thattruly has a passion for this.
They love the guidelines.
It's not necessarily I lovereading the guidelines, but I
love finding the guideline thathelps me solve this, yes, yes,
and sometimes it's really crazythat it's a super simple fix.
Speaker 1 (33:27):
Yes, that kind of freaks me out when it's super
simple.
Speaker 2 (33:29):
I think we overcomplicate it at times that
we get so tunnel vision intothis one thing on the deal, when
you could either have somebodyelse take a look at it and then
you're like, oh that's right, Itotally didn't even think about
that, or just take a bird's eyeview, take a breath, take a step
(33:50):
back and then be willing totell that borrower what actually
needs to be done.
Speaker 1 (33:55):
Yes, so when we used to have files?
Remember we used to have files.
Yes, I do so.
Speaker 2 (33:59):
When we used to have files, Matter of fact, I think
my first day in the mortgagebusiness was the day that I
first saw a loan officer throw afile against the wall.
It was like, oh my God, is thisnormal?
Speaker 1 (34:11):
Or throw it up and see if it sticks.
Yeah, so when we used to havefiles, I used to call it my
corner.
I put the file in the cornerbecause I would be like that's
like my mind is going to thinkabout that at all times to find
a resolution for it.
That's what I would always do.
Speaker 2 (34:25):
Wait.
So you're saying you don't worknine to five like these bankers
out here?
Speaker 1 (34:28):
No, I work whenever I need to work.
Speaker 2 (34:30):
That's right.
So I guess let's see here whenare we at on time JC 40 minutes.
Okay, so let's get into themeat and potatoes of this
discussion, because throughoutyour journey you've mentioned
working for a builder workingfor a builder and I never got
the opportunity to work for abuilder directly early on in my
(34:52):
career.
I did get a preferred lenderwith Roush Coleman back in the
day, but it turns out everybodywas the preferred for Roush
Coleman.
I do have one now with TitanFactory, but manufactured homes.
But what we are seeing since2020, and I think this is pretty
true and accurate is buildersstopped needing us, stopped
(35:15):
needing us for turndowns,stopped needing us, for that's
pretty much.
It specifically is turndowns.
I mean, I used to do a KBHolmes turndowns all the time DR
Horton turndowns.
We were upstairs right abovethem and we were willing to say
hey, yeah, give me your shit,I'll look at it.
Let's turn it water into wineconcept.
(35:35):
But since 2020 and the frenzyand the lack of inventory that
was out there, we kind of took abackseat to all of the builder
concept for a long period oftime and are still facing going
hand in hand with the.
There's enough business to goaround.
We're still facing an upagainst the hurdle of how do
(35:58):
they have this four point ninenine rate?
How do they have this fivepercent rate rate?
How do they have this 5% rate?
What are your thoughts onwhat's happening in the new
construction world?
Because I will tell you, I'vegotten maybe a handful of
turndowns from builders thisyear, and we're already in end
of October and we normally wouldget half the business coming
(36:22):
from turndowns in that regard,yeah, but they just don't.
They're like oh, they don'tqualify, we're moving on to the
next one.
Speaker 1 (36:28):
Yeah, yeah, and they can do that if they have plenty
of clients coming their wayright.
It's when they don't haveenough clients.
They need you to work it todeath, and builders are I mean
they are going to use you up ifthey need to.
Right.
Speaker 2 (36:49):
And it's a business.
Speaker 1 (36:50):
You can't take it personal and, having that
experience working with builders, I can tell you that I know
that's for sure.
They are strictly business.
They have their requirementsfor the year.
They want to close 6,000transactions for the year.
They're going to make thathappen and if they need you to
make that happen, then they'regoing to employ you to do that.
If they don't, then they're not.
They want to have a capture.
They want to have 100% capture,if they can with their own
lender, you know, by havingtheir lender in-house, that
(37:11):
makes them have more money tohelp buy down that rate.
Speaker 2 (37:14):
That they're going to offer you.
Speaker 1 (37:16):
So it's unfortunate, but it's just something we have
to deal with.
To me it's a monopoly, yeah,and there shouldn't be any
monopolies in America, but it isa monopoly and nobody's paying
attention to that.
But it's absolutely a monopoly,because we cannot compete, and
when you cannot compete, that'sa monopoly.
That's exactly right.
That's a monopoly.
And the reason why we can'tcompete is because they are
(37:38):
doing things internally that'scorrect by buying that rate down
internally, so that they don'thave to pay the points
externally like we do.
Speaker 2 (37:45):
That is correct, and I was talking to JC about this
before, but let me throw this upon the screen.
We can use this reference Boom,jc, can you see this?
Mm-hmm.
All right, I'm going to see ifI can make it bigger.
Okay, so now I got to put myglasses on here.
I can make it even bigger.
Boop, boop.
So what you folks are looking aton your screen is a backdoor
(38:08):
pricing sheet that we got a holdof from one of the builders I
won't say the name, anythinglike that, because it's
irrelevant.
They're all doing it, and is itunethical?
I don't think so.
I think that they're justdeploying the what they can.
They're doing what they can.
That's exactly right.
They're living within theboundaries of what they've
(38:28):
created.
So if we look at this and studyit for just a moment, we'll see
here multiple different pricesfor the same actual home.
There are a couple of facets tothis that I want to hone in on,
and at the top you've gotlisting price, rock bottom price
, new price with government, newprice with conventional, and
what you'll notice is thedifference between the list
(38:51):
price, as is does have the lowerinterest rates that you can get
, with this difference betweenthe rock bottom price, meaning I
walked in and I'm paying cashversus somebody that is
financing who is now paying$40,000 more in your home and
(39:14):
when Lisa was talking about, wecan't actually buy down the rate
on our side to the same extentas this.
Let's say, in this case scenario, if I do some quick math, two
(39:37):
points would be just under sixgrand or so.
That's typically the max thatwe can show on the charge to the
borrower.
In regards to discount points,unless we've got seller credits,
then we can move those over tothat side.
But we're talking a $40,000difference in buying down from
the market the market rateversus what they're giving them.
So how in the world is itpossible that they're buying
(39:58):
this rate down $40,000 worth andnot showing it?
You were talking about itearlier, but if you could
enlighten us again becauseyou're dead on.
Speaker 1 (40:07):
Well, it's a forward commitment, so a builder can do
and it can be us, we can do itas well Absolutely Okay.
So any mortgage company can dowhat's called a forward
commitment, and what that is isthey are pre-purchasing an
interest rate.
So they're pre-purchasing itand they're holding onto this
because they've alreadypurchased it for thousands and
(40:28):
thousands of dollars.
And now, if you're a builderand you're doing this, you are
offering it to the homes thatyou want to sell.
So let's say, you have homessitting there that you got to
sell them and so you're going togo.
These are homes with a 4.99rate, so not every home gets
that rate right.
And this is for government let'sjust say government and then
some are conventional.
So what they're doing is theyare increasing your price
(40:50):
because they are paying for thatforward commitment.
And then they're telling youplus, we're giving you 6%, but
in reality all of that isalready included in the total
price.
And that's what you see on thescreen, where you have that
$40,000 difference.
It's because they are doing theforward commitment, so you're
paying for it.
You just don't see it, but youare totally paying for it.
(41:11):
And another thing you might notsee is and I want to talk about
this.
It's about how real estateagents now have to have you sign
a buyer's rep agreement wherenow you, the buyer, are
responsible to pay your realtoror the listing agent.
You have to include it that theseller pays and they have to
(41:33):
agree to it.
Before it was just a given theseller was always going to pay
that fee for you.
Now it's something that youhave to negotiate that payment,
and what's crazy is that is onlynecessary because your realtors
, the listing agent and yourbuyer's agent they have licenses
with Texas or wherever.
A fiduciary responsibility.
They have a license, just likewe have a license Now when
(41:55):
you're dealing with builders.
They don't have a license sothey can say we're going to pay
6% to any realtor that comes ourway.
So if you have a realtor you'reworking with and not to be ugly
or mean, but if you have a,realtor you're working with and
the first place they take you isto a builder.
They might be getting 6%.
Speaker 2 (42:12):
That's right.
Speaker 1 (42:12):
Because they want to get a big paycheck and they
don't want.
They're just doing somethingeasy.
You want to always Nor do theyhave to disclose it, because I
believe it's important that you,the buyer, know that if you're
walking into a brand newcommunity, there's nothing wrong
(42:33):
with wanting a brand new houseand there's nothing wrong with
getting a 4.99 rate.
Oh, that's great, absolutely,and we want you to get it.
But remember you're paying$40,000 over the price if
they're giving you that greatlow rate, because they're paying
for your realtor's 6%, they'repaying for your incentives,
they're paying for the forwardcommitment of the 4.99 rate.
All of that is you're payingfor it because you're buying the
(42:53):
house at that price.
Speaker 2 (42:54):
That's right.
Speaker 1 (42:55):
There's nothing wrong with that, but I'm just letting
you know, because we're beingtransparent If you go and look
at homes for sale by owners andyou go and look at that as well
there might be something that'salready built that you might be
able to also buy for less.
That's also something you wantto look at.
You just want to make sureyou're looking at everything and
not just going straight to thebuilder.
(43:16):
Sometimes sellers will dosomething wrong and they will
sell their home based on whatthe seller is selling their home
for.
They can't be doing that.
They cannot be doing that.
If you're a seller and you havea community that's still
building homes, be aware of this.
Absolutely If you're trying tosell your house for that 270,
where they have 40,000 built in,to give you know a Ford
commitment 4.99 rate and they'regiving 6% close.
(43:39):
Well then, you better be givingthat too.
That's right.
If you want to sell your houseat that price, so think about as
being a listing or somebodywho's selling and you're talking
to your listing agent.
Be aware of what is going on inyour community so that your
house can sell properly,absolutely, and fast.
Speaker 2 (43:56):
So you mentioned a couple of things that I want to
hone in on here.
Number one is not every homegets that same price, right?
Should that be against sometype of regulation?
I do believe so.
It's a subtle way of steering,in my opinion.
Sure, the other thing that youmentioned is the realtor
(44:17):
fiduciary, and I already hadthat written down to talk about,
because you are right, my wifeis a realtor.
Same concept talk about,because you are right, my wife
is a realtor.
Same concept.
And in training her and coachingher in the beginning, it was
always ask questions of yourborrower to determine the best
way to move forward.
Because if they're telling youthat they're only here for two
years or something along thoselines, new construction is not
(44:41):
the best route to take with them.
And the concept that you werementioning before about
competing with the builder I'llbring that full circle is let's
say, you go to this newconstruction community, the
payment is within your budgetbecause of the rate that they're
offering, but they did add thatmoney to your sales price, so
(45:02):
essentially, they are using yourmoney to buy down that rate.
Fast forward two years, it'stime to sell.
Well, guess what?
That community is probably notdone, being built out.
So when you've got the sameperson, let's say you two years
prior, walking into that newcommunity, are you going to buy
that pre-owned one?
Are you going to buy the brandnew one that probably has a rate
(45:25):
incentive, that probably hasclosing costs, et cetera, et
cetera.
Speaker 1 (45:28):
That's why the costs keep going up.
Speaker 2 (45:29):
Isn't that crazy.
In addition, you've got tounderstand that we lend based on
collateral.
The collateral is the property.
When we do an appraisal for anew construction property, guess
who the comps are that arebeing provided?
It's only the new constructionhomes within that mile radius.
So who's controlling the price?
(45:50):
Is it the market?
Not really.
It's kind of the builder.
It's the builder.
They keep going up every threeto six months, so you don't
necessarily find out what yourproperty value is until the
first person.
Two or three people sell theirhome in that community, and
that's just the cold hard truth.
I want people out there to startconsidering these things, both
(46:14):
as a consumer and as a realtorrepresenting your client,
because there's a fiduciaryresponsibility and it goes past
your paycheck.
It has a lot to do with doingthe right thing based on what
you know about that borrower.
There's been many times whenwe're working with a borrower on
our side, repairing theircredit, getting them ready to go
what have you?
And once they're ready, theyall of a sudden switch to new
(46:36):
construction and it's like well,wait a minute, do I now stop
and have this conversation withthe realtor about did they
mention to you that they're onlystaying here two years.
Did they mention to you this,that and the other?
Because they mentioned it to meand this doesn't seem to be the
right path for them to take.
But hey, you're the realtor,you're the one.
I'm not going to tell you howto do your job, but just know
(46:59):
that this is that's a toughie,that's a tough one.
Speaker 1 (47:00):
You it absolutely is you?
Know I'm going to be honestwith you.
If my client has credit issues,I do have the conversation with
them.
I do tell them, okay, whetherit's.
If it's easy, I'm going to tellthem exactly how to do it.
If they're not paying theirbills, well, you just need to
pay your bills, that's right.
And I do ask are you wanting tobuy a brand new home?
Are you buying an existing home?
(47:21):
And I see what they say.
Speaker 2 (47:23):
Yeah.
Speaker 1 (47:24):
I just recently had a conversation.
I had a realtor ask to pleasecall, please call, please call.
And I called him like eighttimes and the lady finally
called me and she was supersweet.
She's like I'm so sorry, I wasjust so busy, no problem, total
great conversation, cause shehad a grand baby brand new.
I had a grand baby venue, so wehad a great conversation.
In the end I found out she isbuying a DR Horton brand new
home.
I said hey, okay, so if you are100% sure that's what you want,
(47:48):
they're going to offer you allthese beautiful incentives that
I don't want to take you awayfrom, right.
So only if they are not helpingyou, come back to me, right,
but you need to go directly tothem.
And then I messaged the realtorand said she's buying a DR
Horton home, take.
And then I messaged a realtorand said she's buying a DR
Horton home, take her straightthere.
That's right, you know.
(48:09):
So I do have the conversationbecause I don't want to run a
credit again.
I don't want to spend thatextra time with them knowing
that they are just going to gosomewhere else and do it all
over anyway.
So I ask those questions Now ifthey do need credit repair.
Speaker 2 (48:20):
I have to have the conversation with the client,
not I have to have theconversation with the client,
not so much the realtor, becausethere's a lot of folks out
there that, from my branchmanager, hat is on You'll have
loan officers that will fixtheir credit because they think
that that's the right thing todo for the customer, with the
inclination that maybe theywon't go back to that new
construction that they wereessentially absolutely not.
(48:42):
They're going to go back to thenew construction and all you
did was help them and also addmore expenses to your branches.
Speaker 1 (48:52):
Absolutely.
So what I do with the client isI say I have a conversation
before I even run the credit.
I say how's your credit?
And they know do you have acredit karma?
We all have credit karma.
So what's your credit karmascore?
They tell me okay.
Cause if they say, even I don'tknow, you know if you have a
credit karma.
We all have credit karma.
Yeah.
So what's your credit karmascore?
They tell me Okay.
Because if they say, even Idon't know, you know if you have
good credit, right.
And then I say why are yousaying I don't know?
Speaker 2 (49:11):
Tell me what happened .
It's almost a good time tochuckle with them on the phone.
Speaker 1 (49:15):
You know damn well what your credit score is so and
if I do have thoseconversations with them because
I don't want to pull a hardcredit report if they're in
repair.
Absolutely Okay.
And then I do ask, of courseare you wanting to buy a brand
(49:35):
new or existing?
And if they say brand new, saylook, if I'm going to be working
with you, go, get denied,that's right Go right now.
Right now, go get denied.
Make sure they're buildinghomes.
If they're building homes, geton a three-month build.
Get on two months.
I can fix this.
In this much time they mightjust keep you and that's where
you stay.
Speaker 2 (49:51):
That's right.
Speaker 1 (49:52):
Or come back to me and you're not going to help me.
I've gotten people to sayyou're not going to help me.
Well, okay, I can't help youtoday, right, but if you?
Speaker 2 (50:04):
have to take you have to go there first.
Because even still and I do thesame thing, but to a certain
extent there was a long periodof time where you would do that
go to them first.
They'd get denied, they'd cometo you time to help them.
You roll your sleeves up, youdo what needs to be done and
they pull them right back fromyou.
Speaker 1 (50:22):
No, no, no, I get a contract.
Speaker 2 (50:23):
Very good.
Speaker 1 (50:24):
I get a contract, you go to them.
You get denied.
You still write the contractfor me to do it, and then I'll
do it.
Speaker 2 (50:30):
Very good.
Speaker 1 (50:30):
That's how I do it with a contract.
Speaker 2 (50:33):
I'm sorry, I'm not going to do it any other way.
Speaker 1 (50:37):
There's no reason to apologize.
I'm just not going to do it.
Any need credit repair, but Iwant to boost them.
Yes, let's say they're at a 615.
I say, well, you're only fivepoints away, we can do down
payment assistance.
Maybe you know, let's get youand I'll look at it and go just
pay this card down.
Do it right now.
Do it today.
Speaker 2 (50:54):
Yep.
Speaker 1 (50:54):
You know and you're going to boost up and you never
know, like three to five days,yeah it and get the credit card
if you don't have it.
So that way we'll know when itgoes up.
Speaker 2 (51:03):
Yeah.
Speaker 1 (51:03):
You know.
So I try to school them on this, but there's so much to tell
someone.
It's true.
So much to tell someone.
I would love to come back andwe talk about that.
Speaker 2 (51:12):
That would be a great , great discussion right there.
Yeah, jc, how are we doing ontime?
We're going to be seven minuteson the dot.
Okay, we are good.
There's a couple of things thatwe can kind of round this thing
off, but thus far, man, not badfor your first podcast.
Speaker 1 (51:29):
Kind of a natural.
I can talk a lot if I have to.
Speaker 2 (51:31):
And what I found is that it's easy to discuss things
intellectually with those thatknow what the hell they're doing
.
It's tough Matter of fact.
I've only had it one time whereI'm like you know what I'm
talking about.
Tough Matter of fact.
I've only had it one time whereI'm like you know what you're
talking about.
And it makes it very difficultin these situations, because
(51:54):
this intention, the intention ofthis podcast, is to give the
folks whether you're a buyer, aseller, a realtor, a lender,
just somebody that is a novicerunning across this I want you
to be able to take somethingfrom this and say I didn't get
sold, I just learned a wholebunch that I didn't know before.
Speaker 1 (52:10):
That's what I'm here for.
I'm here just to give knowledge, you know, and I love what I do
.
There's a passion.
If you're a loan officer, youdon't love what you do, just go
do something you love, that'sright.
Get the hell out to be doingthis.
That's right.
I spoke to two people todaythat want a job as because I
posted for los, sure, and neverhave they been los yeah and I
(52:32):
said you okay, that's not whatyou apply for.
Speaker 2 (52:34):
You apply for receptionists that's right
that's what you reply apply forbecause you don't get in and be
taught well, lisa, we've seen somany of us throughout the years
leverage what we do into socialmedia and the onlookers are
seeing that, but they don't seebehind the scenes.
We're giving them a bit of whathappens behind the scenes right
here, but they don't see allthe work that goes into it All
(52:58):
the hours.
Just like you mentioned at thebeginning of this that you were
up thinking about the filesolutions, you know that is a
very common thing when you getto our level and they just see
the facade that we paint onsocial media, which is intended
for marketing purposes.
Guys, we show you what we wantto show you.
Speaker 1 (53:18):
We're not going to show you closing day.
We don't show you like thebeginning and how crazy it was
Right, how we got there.
Speaker 2 (53:23):
Yes, and I think they go into it with the
expectations of this is anothersales job and that is not the
case.
Is there sales involved?
I'm not a salesperson.
To a certain extent, in myopinion, you're educating and
providing solutions more thananything these days, these days,
because if you had your stufftogether, you could just go to
(53:46):
the credit union, put your 20%down, get the best rate you
possibly can get and go throughwithout a hitch.
Let's not pretend that that'snot there.
Matter of fact, my last severalhomes that we purchased I mean
it was I didn't even realize Iwas going through the mortgage
process.
Why?
Because I had my stuff together.
It's like here is this, here'sthat Matter of fact.
I already did the research onthis here you go and we're
(54:09):
veterans.
Speaker 1 (54:09):
I would just do that Correct.
So you know.
I think that honestly, when youare searching for a mortgage,
you have to remember if allyou're searching for is rate,
that's all you're going to getis rate.
You're not going to get theservice, you're not going to get
the same person, you're notgoing to get the eight o'clock
phone calls, you're not going toget solutions, you're just
going to get the rate, which isgreat if you're perfect.
(54:29):
Okay, if you're working with abroker, you're also going to get
rate, but you're not going toget convenience.
You're going to get somebodywho has to send everything out.
Not to be ugly to brokers, butthat's you and if you're working
with a mortgage banker, you'vegot somebody who has their own
money.
They've got a whole lot ofsolutions and this is all they
do, absolutely Matter of fact.
Speaker 2 (54:48):
I want to look something up real quick, jc, I'm
going to go to chat GPT.
If I can find it, here we goand I would like to see.
It may not have the answers,but what percentage of mortgages
in let's go 2023, whatpercentages of mortgages were
(55:14):
originated at a credit unionversus a mortgage banker or
broker?
Let's see if it has it.
It's pretty smart.
I've trained it pretty well.
Yeah, it sits when it'ssupposed to sit.
Okay, in non-depository Okay.
(55:35):
The majority of mortgageoriginated account for 68% first
liens, the increase from around60% in 2022.
Credit unions, on the otherhand, typically originate a
smaller percentage of mortgages,with the market share usually
seven to 10%.
So exactly what I thought wasgoing to come up came up,
(55:55):
because what we're talking abouthere is the idea of I call them
bullets.
If you've got a bullet buyer,you be very direct, very upfront
with them and don't shy awayfrom the fact that they can get
it cheaper somewhere else, butthey're not going to get you.
When they do that, right, andlo and behold, 7% to 10% out of
(56:18):
100% that are buying end upgoing to that credit union route
, going to that credit unionroute.
So there are very few people.
Even if you are perfect credit,you still have some hair on
your deal that needs to becombed through by an expert that
can provide you the options orsolutions to get you to that
finish line.
Speaker 1 (56:38):
Your credit isn't the only thing that we look at no,
there's so much more than that,it's true.
Yeah, there's so much more, andit's unfortunate that so many
go to their bank, it's true, andthey get denied Yep, and they
stop.
Speaker 2 (56:50):
And then they're discouraged.
Speaker 1 (56:52):
They just stop.
Speaker 2 (56:53):
That's right.
Speaker 1 (56:53):
So sad, but I want to come back and do another one.
Speaker 2 (56:56):
I agree, lisa.
Is there anything that youwould like to let our viewers
listeners know?
Speaker 1 (57:07):
viewers, listeners know it can be advice, tips,
anything like that, that we canclose this thing out on Don't
give up.
I like that.
Don't give up.
If you really want to buy ahouse today, in today's market,
you need to buy your house.
You need to buy your housethere's.
I mean, if you Google who ownsmost of America, it's not
America, it's Canada.
So you need to own your housebecause they're these big
companies are buying upeverything and they're buying it
(57:28):
up because they want you torent from them.
Speaker 2 (57:31):
That's right.
Speaker 1 (57:31):
So if you are renting , get with your friends, get
with your family, buy a freakinghouse, that's right.
There is no reason why youshouldn't buy a house if you're
renting.
That means you can affordsomething.
Speaker 2 (57:42):
That's right.
Speaker 1 (57:43):
And get together and do it together.
I mean, that's my advice.
Speaker 2 (57:46):
I love that.
Speaker 1 (57:48):
Be smart with your money.
Stop wasting your money.
Speaker 2 (57:51):
I'll even add to that I can't even be upset at these
big corporations that are buyingproperties, because, at the end
of the day, you had theopportunity as a consumer to do
that.
You weren't brave enough totake that risk do that.
You weren't brave enough totake that risk.
You didn't work with the rightperson that at least filled you
with the right hope that youneeded in order to move forward.
(58:11):
But I put it back on you as theconsumer there's still property
out there.
There's still opportunity.
Get your butt and throw yourhat in the ring, or else you
will be stuck as a renter.
Speaker 1 (58:22):
We can show you how to do it.
Absolutely we can show you howto do it.
So hopefully in our nextepisode we can talk about how
you can do it if you don't thinkyou can afford it right now, I
love that and how you can.
Speaker 2 (58:34):
That sounds like a great episode to me.
Yeah, lisa, I want to thank youfor doing this.
I know I made it, I am't?
That's awesome.
Well, lisa, thank you again forjoining me on this.
Thanks for having me.
Thank you for being transparentwith the folks out there.
Thank you for being real.
(58:55):
That's something that is veryrare in this industry is being
your true self, no matter whatthe situation is.
And some advice for you guysout there be yourself, be real,
work hard.
At the end of the day, it isgoing to be the effort that you
put in what you get out of thisindustry.
So I think that we talked abouta whole lot of good stuff here,
(59:20):
and I will end it with that.
Ladies and gentlemen, we willcatch you on the next one.
Bye.
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