I know mortgage folks these days are the target of jokes, rebuttals, recrimination. In fact, Congress practically wants to criminalize how we do loans. Despite this environment I have never felt more powerful. I’m actually starting to like the position we are in right now.
I’m no Castro or Stalin and not even a Bush, since I’m not necessarily one to lord over my position, but all of a sudden I’m starting to realize that I can reject loans, I can say no to agent referrals. Basically I can say no I can’t do this mortgage for you and feel like I’ve done justice. I’ve done the borrower well, I’ve done the economy well!
Over the past few years not being able to do a certain loan felt like committing abortion in a Catholic clinic. We always exhausted all options – surely there must be a wholesale lender out there who can finance a 90% stated income loan even though the borrower was only one day out of foreclosure. I knew the applicant was talking to another mortgage broker and it was a big race to see who could find the program first. To say no to a customer, was just not possible.
Not so today. If you have nothing to put down for the purchase, well then its either FHA or VA for you. Don’t like the 1.50% funding fee? Sorry, nothing I can do about it my friend – hope you enjoy paying rent. So you are a W2 wage earner with commission income huh? Let’s see your tax returns for the past two years. Sorry. Your accountant was too good. All those write-offs well, see that lowered your income and I can’t qualify you for a $200,000 mortgage when you only make $14,000 a year!
These are not make believe scenarios either. I’ve actually had these types of situations over the past week. Is it fun? No, not really. But that is where we are. The pendulum has swung and it’s gone way back the other way. The mortgage application now lives and dies on verification of income – forget credit score. If you can’t verify income then you’re pretty much toast.
Go ahead make a joke about my profession – I’ll even laugh, I promise.