You read that right. Unlike the famous idiom that reads, “All’s well that ends well,” - that a person can forget about how unpleasant or painful something was because it ended reasonably. That proverb never resonated well with me. I am indeed an advocate of “making the best” in every situation, and of course, I am a tenacious believer in “everything that happens is for the best,” – but a decent conclusion doesn’t negate an otherwise adverse consequence.
I have been in the mortgage business for over twenty years, and while I believe that I have experienced almost everything there is to see, that is far from the case. I say this not impress the readers with my resume, but to relate how delicate and complex mortgage lending is, even for me. As everyone has heard (or might have experienced first hand when working with large banks and financial institutions), mortgage guidelines and loan compliance are unyielding and apply across-the-board to all applicants equally. Yet, as you can imagine, there are so many variables that need to be evaluated, that are unique and specific to the individual applicant.
One of the things I frequently hear when referring to the “benefits of homeownership” is that a person’s home is likely “the most valuable asset” that one will ever own. That sounds extremely impressive and grandiose. They always fail to mention, however, that the mortgage that is needed to own that home is likely the “most expensive debt” that one will ever incur. It can only be considered a “good asset” when the liability is appropriately structured, and when the person doing the analysis is capable of giving the absolute best guidance possible.
Over the past few months, I have seen first hand, too many times, how bad the initial advice or guidance (or lack thereof) has been for some mortgage candidates. Some might even “get the job done,” and the loans might close, but just because they “end well” – that doesn’t mean “all is well!” I am not only talking about bad experiences during the process that finally gets resolved and lead to a smooth conclusion; I am talking about, even “pleasant” transactions, that have been completely “misdiagnosed”… for lack of a better word.
I am very limited in time and space to write the countless examples of what I have been seeing, but I will describe a few. There have been refinancing candidates who were encouraged to “pay points” or paid “full closing costs” when doing a refinance loan, and are now in a precarious situation of trying to refinance again a few short months later. Some applicants have been given a higher rate simply because the loan officer didn’t bother trying to quickly improve the credit score that would have saved the applicants thousands of dollars a year.
I recently spoke with someone who was told that his income was needed on the application to qualify for a mortgage. His poor credit score, however, would cause a higher interest rate on the loan. That was lousy and inaccurate advice. I recently closed on a purchase mortgage for a wonderful couple who was told they needed to pay over $300 a month in “PMI,” when I was able to avoid it in their unique situation altogether.
From appraisal mishaps to botched bank statement blunders – the wrong initial advice has cost individuals tens of thousands of dollars over the life of their loans. Unfortunately, the list goes on and on. We are currently experiencing a significant “refinance boom,” the likes of which have never been seen before. With technology making the process of financing more accessible than ever – the “personal touch” is being pushed to the side, in place of apps and portals that do not include sensible solutions.
While we at Approved Funding utilize all of the latest technologies and systems to help with the loan process, it is behind the scenes and just one of the many “tools” we use during a transaction. Our loans are navigated by our loan officers who are on the frontline asking the pressing and essential questions in advance to help us mold the right mortgage, decisions, and strategies upfront. I find that so often, everyone is in a rush to expedite their application when it is, in fact, the most crucial part of the loan process. Indeed, all is well that begins well. Shout out and Happy birthday to Marty Elefant, Elie Y. Katz, Talia Pollak, Bonnie Silfen, Miriam Tennenbaum, and Ruth Wiseman.
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]