A Question of Professional Integrity

A recent personal experience has triggered this post. I will start out by letting you know that this is likely to be more of a rant than an educational exercise, but I feel the words need to be said and at the very least, I will vent and feel better.

My wife and I are looking to buy a new house here in Palm Beach County Florida. I will tell you, past experience we have had with the “professionals” we have encountered has taught us a great deal. Florida isn’t known as the fraud capitol of the country for no reason and given what I do for a living; you would think I would be in a position to find quality people to work with. Clearly, I have yet to develop the proper skill set, but after this recent experience, I think I have it figured out. Let me explain.

Since a large number of transactions here in Palm Beach County are short sales or foreclosures, you do get used to the fact that homes will be listed at below market prices and provide a limited window for people to make offers, or even be placed in a position to enter almost an “auction” like situation. Not that this is a bad thing, certainly if the process is transparent, no complaints from me on that count. It is when you start to see that the “highest bidder” was not the person who got the house. To make matters even worse, the very professionals who are engaged to handle the process are often the people who either know nothing about the process, or ignore the corruption of that process.

I have two recent situations that have really got me questioning if there is any professional integrity in the local real estate community? Here are the two situations I speak of and I will let you decide if I have a case here. First situation was a short sale put on the market at well below its value, $299,000. Property came on the market on a Saturday, bids were being accepted through Monday, and the sellers would make their choice by Tuesday afternoon. After viewing the house and looking at recent sales in the area, I offered $350,100 for the subject property. By Tuesday evening my agent had called to say that no choice had been made and as soon as they knew something, we would be notified. It was Thursday morning when I was told our offer wasn’t accepted.

While disappointed, we kept looking. While searching the internet for homes a few weeks later, the same property is once again on the market, this time listed at $349,200. The listing states that this is now the bank set price and that offers will be accepted for 48 hours. Imagine my surprise. I had a firm offer in for more than the bank asking price, “lost” the prior bid, and now the house is back on the market for LESS than my offer. I once again called my agent who spoke to the listing agent. It appears that the seller of the house wanted to negotiate a private deal for all the appliances, light fixtures, closet units, etc. All things that were listed as not being conveyed with the house, but could be purchased from the seller and help reduce possible damage to the property by their removal.

So let me get this straight, I have to buy the things from the house that should have come with the house from the seller, or they won’t accept my highest offer, which is more money than the bank is willing to accept for the property? Really? My agent speaks to the listing agent and gets back to me saying that my offer satisfies the banks requirements; we just need to take care of the seller so they accept my offer. Now I guess I don’t have a choice here. If I want the house I have to buy the stuff from the seller. Not fond of the idea, but I don’t get much of a choice. So I tell my agent to find out what the seller wants for the property and let’s see if we can put together a deal. Next day I am told the sellers have accepted an offer, not mine, and that the house is off the market. Very fishy if you ask me, but we move on.

We locate a home, not a short sale, just a seller trying to sell a house. The property is listed at $479,000. Given the area and the condition, the property is much more likely worth $425,000 to $450,000. I offer $400,000 to get things started and the counter offer is $458,000. Nice to see solid movement, so I come back with an offer of $425,000. This is met with almost an instant reply from the listing agent that there is another offer, but if I want the house, I can have it for $448,000. My reply was for them to take the other offer, because I wasn’t going to go that high.

A few days later, the property appears as available for $459,999. I once again call my agent to find out what happened to the “other” deal. I am told that it fell through. Really, in just a few days, what could have happened? So I tell my agent to offer $430,000 on the house. The counter is $450,000, and I counter with a final and best offer of $440,000. The seller comes back at $443,000. I tell my agent that I am as high as I am going and if they want to lose the deal over three grand, I have no challenges with it.

My agent comes back and states that if I am willing to use the listing agent’s mortgage company for my loan, we have a deal at $440,000. Seriously, do you have any idea what I do for a living? Do you think I am going to throw my L/O under the bus to put this deal together? So I ask my agent about this and the reply I get is astounding. I am told it happens all the time and that some of the time when closing happens, the people are shocked at the terms and conditions of their loan.

So I ask all of you, where is the professional integrity? Is it no wonder so many people have such a low regard for the real estate and mortgage profession when things like this are allowed to happen and nobody does anything about it?

If the seller in my negotiation was willing to “give up” $3,000 in order for me to use his agent’s mortgage company, what could possibly been the motivation? They certainly weren’t going to match the terms I had from my current lender. Since my credit package was already underwritten and approved, couldn’t be an issue if I were going to qualify for the loan. Since I had a guaranteed close in 30 days or less from my lender, it could not have been about timing. So I ask you; what could possibly been the motivation behind such a condition?

I also need your opinion on why my own agent acknowledges that this happens, yet it doesn’t seem like anyone ever complains to anyone about it. So here we go, I am going to forward this blog post to my local real estate board and to the Florida State Attorney’s office to see if they think this is how business should be conducted in Florida.

Integrity is not an option as a professional. If I am wrong, and the local real estate board and the State Attorney think that what took place is acceptable, then I will accept their findings and continue to write, speak, and educate as many people as I can about raising the bar of professional integrity because, in my opinion, the industry needs to do better.

What are your thoughts?

Visit http://www.improvemytomorrowcoaching.com


Do You Know Michael White from Improve My Tomorrow Coaching?

If you answered no and you’re in the mortgage industry, you should!

Michael White is a nationally known mortgage coach who looks at the challenges facing the mortgage and real estate communities and provides a complete plan on what is actually taking place in our markets. His philosophy is simple: when change happens, you need a plan and a strategy.

He has more than ten years as a coach to mortgage professionals and companies all across the country when coupled with more than 25 years directly involved as an originator and manager in residential loan origination.  This gives Mike a unique perspective to not only understand the mortgage business, but the insight on how to take information and prepare a message and a plan for any market.

Mike offers Private Coaching, Group Coaching, and Training for companies and individuals.  You can visit Mike White at http://www.improvemytomorrowcoaching.com


Loan Orginators and Mortgage Brokers Assessing The State of The Union

Mortgage Brokers all over the country are trying to figure out what their future looks like, now that the largest mortgage lender in the country has left the wholesale arena. While this information is not a surprise, many had hoped that it wasn’t going to be a reality. While there are still many smaller wholesale conduits, when the 800lb gorilla gets going, it is hard to see how bright the future can be for the broker side of the industry.

In the past, brokers had significant local and national channels to place their loans. One area that comes to mind where insurance companies; at one point, many insurance companies were engaged in wholesale mortgage lending for both residential and commercial applications, not now.

Brokers are a huge part of the mortgage market. This is a blow that will have many looking to see if they can survive. Those that have the financial ability to make the transition to the correspondent lending will have to strongly look at this option. For those that don’t, they are going to have to hope they can find smaller entities to welcome the business.

Either way, contraction is here. Those that aren’t already gone have to become more professional and productive if they want to survive. For many, finding a new career is a solid option, especially if they have been living off churning refinances for the last few years. If you don’t have a pipeline of consistent purchase business, you might as well start looking for the exits, the party is soon over.

For those brokers with a high level of purchase business and significant referral channels, the next option is to locate a solid correspondent lender in your market and see if making the more will work in your best interests. Since many high volume brokers are responsible for most of their own originations, the idea of making less money on each file while someone else is responsible for the overhead and operations side of things may just be a wonderful marriage.

There are always good companies looking for great people. Networking with other mortgage professionals and other professionals like your Title Reps, PMI Reps, and wholesale reps can often point you in the right direction if you are thinking about finding a new home. Whatever you do, you need to be aware of the current market trends and have a plan in place to ensure your personal and professional survival.

For those of you who are managing originators or own correspondent branch operations, now is the time to RECRUIT! Thousands of mortgage brokers are reeling from the news that the largest wholesale lender has left the building. You need to be aware of your market and start pounding the pavement. There are quality people, solid loan originators that need to find a new home. You need to be engaged and active to find the cream of the crop in your area that may need you to provide a new home for their business.

You need a strategy and to be ready to engage now. You need to talk to your Realtor® referral partners about who they know, and get them to help you set up a meeting. Same holds true for all of your associates. Every mortgage broker with a purchase pipeline is now in play. Do you have a plan to find, connect, and convince them that you are the direction they need to be moving in?

Remember, mortgage brokers are already licensed. They know the business and are in a position to add to your bottom line if you take the time to find them and make it easy for them to get on board. An added bonus can also be found in the possibility of additional support staff that may also need new homes. Processors, openers, closers, and other support people could be part of the recruiting process as well.

With every change in the industry, we must look at the opportunities that present themselves. With thousands of mortgage brokers now looking how to move forward after the latest news, you need to see how you can profit from the change, and set up a plan to take more market share.


Summer Schedules for Mortgage Professionals


Loan Originators are often challenged by the demands of a hectic summer schedule. With large numbers of purchase transactions trying to close before the new school year, and the over-stuffed refinance pipelines most mortgage professionals are now carrying, it often makes it difficult to keep everyone happy. Part of my coaching process is to be sure that all my clients have a realistic work schedule that allows the proper amount of time for both professional and personal responsibilities.

Here are a few simple steps that I used with my clients to help them be productive and profitable while having the time to enjoy the summer lifestyle with their family and friends.

1)      Set your schedule through the entire summer and work within the schedule instead of adding to it.

2)      Leave a day on either end of your travel plans to clear your head before the trip, or to prepare yourself to go back to work.

3)      Communicate your availability to your co-workers, your referral partners, and your clients.

4)      Be real with your time expectations.

5)      Do not over commit or become emotionally attached to any outcome.

6)      Do it right the first time.

7)      Do not spend time with those who won’t commit.

My clients have found it very helpful to look at the summer as a segment of time from June through September. By understanding all of the personal and professional time demands in advance, you have a reasonable expectation to get in everything you want to do, along with all the things you need to do. Some people go on a single long vacation. Others like to schedule a series of long weekends or middle of the week excursions. Either way, taking time off is great and should be done. You just have to take the time and do a little planning. Get all of the major events on the calendar so you can set yourself up to succeed. Each Sunday night you should then look at the upcoming week and be sure you have a clean schedule of events as well as a set list of tasks to be completed. Being proactive goes a long way in being productive!

If you are taking more than a few days to go on vacation, be sure to add a day on each end to prepare to have fun, and then to prepare to get back to work. Decompression before a vacation will help you enjoy the time away. The extra day to prepare will allow you to enjoy your entire vacation and be ready to get back to work refreshed.

Mortgage professionals need to be great communicators. People want, need, and deserve information. Being clear on how you will communicate with people is paramount. You can never be 100% accessible. You can be professional in the manner in which you communicate and set the expectations with all of your people about how and when you will communicate with them. Set a regular pattern of returning calls and emails. Set up a schedule of how and when you share file status, follow-up, and other important information with your people. Set reasonable expectations and then deliver on schedule!

Loan professionals are often guilty of not knowing how long things really take to do. They often over book their own schedules, or have unrealistic expectations about how long their own work takes to complete. This often leads to a great deal of stress, and often incomplete or sloppy file submissions.

Never make a promise you can’t keep. Things happen. Things go wrong and sideways sometimes. You have to be honest and quick with the information, along with any potential solutions you may have to resolve any issue. The point is, you can NEVER become emotionally attached to the outcome. Not to the client, not to the company, and certainly not to the commission. This is a business. Nobody dies when a mistake is made or a challenge comes up. There is no need for drama or implied heroics. Just know your job, set realistic expectations, define the process, keep solid communication with all parties, and have solutions ready for whatever challenge that may come up.

Do your job correctly the first time. Being a mortgage professional now requires you get it right from the very start. Compliance and regulatory requirements dictate that you have an obligation to knowing what is, and isn’t a deal. As a coach to some of the best loan professionals in the industry, I see every day the difference between how a true professional works, and those who are simply trying to put together a deal. The difference is in getting the file PERFECT from the very start. The old saying, “measure twice and cut once” comes to mind. Taking a few extra minutes to double check your work, to double check the numbers, to review the documentation, can save you hours down the road.


The last piece of the puzzle is to not spend time with people who won’t commit. The market is ripe with opportunities. Spending more than ten or fifteen minutes with someone that won’t commit to your process is a waste of time. Everyone has questions. Everyone wants answers. The point is, without all the details and documentation, you are just talking hypotheticals, and that helps nobody. Explain to your prospective client about the value of real specific information. How what they can borrow and how they can borrow it is a very specific situation that requires real factual information. You are the professional. You need to control the process. Remember these words: “Documentation beats conversation every time!”

These are just a few tips on how mortgage professionals who do a great deal of business, get it done in the summer time, while being able to enjoy themselves as they service their clients and referral partners.

Origination Systems are critical to productivity in the Loan Origination Business

The July 4th holiday is behind us and the heat of the summer buying season is in full swing. Any professional loan originator who isn’t busy right now closing loans has only one person to blame, himself. All areas of loan opportunities are bursting at the seams with activity, rates are at all-time lows, and the ability to get loans closed couldn’t be more specific. So why are some mortgage originators dealing with full pipelines and multiple closings and others are not? Simple, they don’t have a system by which they identify and work on the business that will really close.


As a business coach to some of the best loan originators in the country, I get to see on a daily basis what the best of the best do, that the others don’t. The difference isn’t as big as the numbers would indicate. Here are five very simple things you can do that will improve your ability to work on the deals that will close, instead of wasting time on rate shoppers and wannabe buyers.


1)    Utilize the ten minute rule. If you spend more than ten minutes speaking with a potential client without seeing qualifying documentation, you are wasting your time.

2)    Set clear and specific expectations about what can be done and how long it will take.

3)    Do NOT lock-in a rate or terms of a loan, until you have a deal you know is going to close.

4)    Make sure all your file submissions into processing are “bullet proof” when you submit them.

5)    Keep consistent and scheduled communication with all parties and hold everyone accountable for their obligation to the loan time line.


If you don’t set the value of your time, others will set it for you. You must accept the fact that people want to go at their pace of events, and that you need to lead them toward the path that tracks the result we all want; a closed loan transaction. All the loan scenarios in the world are meaningless without knowing if the people you are talking too can qualify for the money.


Simple Loan Strategy #1 is to be sure you spend no more than ten minutes or so with a prospective borrower until you have seen the five key items:

1)    Tri-merge credit report on all borrowers

2)    W-2s on all borrowers last two years

3)    Paystubs on all borrowers last month minimum

4)    Bank statements showing all funds, even those not needed for the transaction.

5)    Last two years tax returns for all borrowers, all schedules


Why engage in a conversation without know the facts? Some borrowers may want to shop from place to place before they commit to supplying this information. It is up to you to share the wisdom of having a real factual conversation about what they can really do, verses a hypothetical conversation about thing that may, or may not happen. You may “lose” a few opportunities in this process, but the time you save in working “real deals” will far outweigh any you might “lose”.


Simple Strategy #2 is to be very clear about time expectations. All markets and companies are experiencing different time lines to close both purchase and refinance transactions. Between appraisals times, processing times, underwriting times, and the ability to get a closing scheduled, all need to be clear and well within a predetermined set of reasonable expectations. The phrase “under promise and over deliver” comes to mind. If you get a purchase contract into your office for 15 days for a firm commitment, you need to be very clear with ALL PARTIES as to what will be needed and BY WHEN to meet this time frame. If you get a purchase contract calling for a 21 day closing on an RDA loan, and your RDA region is running 9 day turnaround time, you need to get the contract changed on day one, not day 20!


Simple Strategy #3 is to be very careful about when you lock the terms of your deal. Once you tell the customer their deal is “locked”, you lose all leverage in getting that client to supply any additional materials you may need. Also, once you have “locked” the terms of the deal, the client now has full ability to “shop” your terms in a fluctuating rate market. You need to have a clear and specific conversation about rate locks and lock extensions before making the commitment on your terms, if the borrower isn’t as committed as you are.


Simple Strategy #4 is to get your loan files “bullet proof” before submission. Nothing is a bigger waste of time than chasing conditions and documentation. Know what you need and get it before it goes into processing. Create a checklist with your processor as to what they need from you to make the file flow smoother. Solid and complete files take a little more time upfront, but are well worth it down the road. Be a professional and turn in great files!

Simple Strategy #5 is to have a clear and specific communication schedule with everyone in the process. Certain specific points of communication are required and easy to schedule. A few things you want to include would be:


1)    Connecting with both Realtors® on a purchase transaction within 24 hours of file submission to be sure about appraisal issues.

2)    Appraisal review with the client and obtaining all need insurance information so the policy provided meets the requirements set in the application.

3)    Commitment conditions and clear to close dates to be certain everything is tracking the schedule.

4)    HUD-1 review prior to closing.

5)    Wire receipt confirmation with Realtors®

Five simple steps that take you from being busy, to becoming productive!

You can learn more by visiting http://www.ImproveMyTomorrowCoaching.com