“A mortgage product would not exist or at least for very long if there was no consumer demand for it. Now consumers should be smart enough to know how to budget money, pay bills on time, sufficiently save for retirement, and not over extend themselves by locking into a monthly housing payment which puts them in a position where they are living pay check to paycheck…

…People should have known better than to take on mortgages they did not understand or purchase a home with a monthly payment they never budgeted for. I cannot tell you how many times I have counseled clients with no true savings history who want to purchase a home with 50% to 100% payment shock and when I ask, ‘What makes you think you can meet this new monthly payment each month given your track record for saving money’ the response is almost always the same: ‘We feel we can handle it, we just may need to cut back on a few things’. The reality is most of the time on paper these clients can qualify for the payment they are seeking.”, Anonymous Mortgage Branch Manager, February 2015

Excerpt from February 2015 Mortgage Industry Newsletter:

 

“Are LO’s on their way out, soon to be replaced by computers? Not according to several. Anonymous, a branch manager with Anonymous Mortgage writes, “I read your report from this past Saturday and simply cannot agree with the statement Technology will replace the function of a loan originator within the next 5 years. I am 31 years old and have been a 100% commission earning originator since 2008.  That is right, I got into the business during the melt down worked hard, and not only survived but thrived! Let me just say the meltdown has been blamed on many things but no one has truly mentioned what I believe to be the only true cause of the meltdown and that is the lack of fiscal education in this country. 

 

“A mortgage product would not exist or at least for very long if there was no consumer demand for it. Now consumers should be smart enough to know how to budget money, pay bills on time, sufficiently save for retirement, and not over extend themselves by locking into a monthly housing payment which puts them in a position where they are living pay check to paycheck. People should have known better than to take on mortgages they did not understand or purchase a home with a monthly payment they never budgeted for. I cannot tell you how many times I have counseled clients with no true savings history who want to purchase a home with 50% to 100% payment shock and when I ask, ‘What makes you think you can meet this new monthly payment each month given your track record for saving money’ the response is almost always the same: ‘We feel we can handle it, we just may need to cut back on a few things’. The reality is most of the time on paper these clients can qualify for the payment they are seeking.”

 

Anonymous’ note finished with, “Loan originators have to be more than just an amortization calculator and a rate quoter. We have at the time of loan origination enough information to determine if the consumer is not only fit to purchase a home but also can determine if they are currently financially fit to one day retire with dignity. I am not saying it is our job to be a financial planner but  I do see is as our duty to provide a financial status reality check and plant the seeds of practical financial management in the minds of our clients. This is something technology simply will not be able to do. The simple fact is a very small percentage of Americans have their financial house in order due to the lack of financial education provided to them growing up. Technology may weed out weak originators who do not know how to sell or provide sound advice but I cannot see it replace the function of good loan originators anytime soon.””

Posted on February 2, 2015, in Postings. Bookmark the permalink. Leave a comment.

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