Some times I feel I should make this phrase my motto.

Let’s take on the items in order from the last post.

1-Contact, What could go wrong here, you ask? Hm. Let’s see. You talk with someone get into a great conversation & hang up the phone. Wait, I didn’t get their name! The display on the phone said “Private”. Talk with the receptionist, did you get “Fred’s” number? No. Or you do talk, get the name & the number, only when you call back, you get the message “that number has been disconnected”. You figure you mis-dialed a digit and do a lookup on their name or reverse lookup on the number. They don’t exist ANYWHERE. I’ve yet to have any of these folks call back.

2- Gathering of details. Again, seems fairly straightforward. You ask & get a response. Write it down. You verify a few details. They send you a fax confirming a few key critical items…except one. You make the same request again. Nothing. The lender makes a request for something slightly different. You ask for that, then the story begins. “Well, you see. I can’t give that to you because…” The explanations at this point range from comical (my dog ate it) to outright verbal abuse (how dare you ask me for that).

I’ve come to discover that people live in their own little world and that sometimes when you ask for things, this disrupts this image that they have so they respond to put things back in order in their mind. I don’t want to accuse anyone of lying. Let’s just say people get a little too wrapped up in their own story that they don’t realize fully what they are telling me. They’ve said something for so long, it just comes out naturally. It’s what they truly believe.
3-Match game. This is where the fun starts for me. Based on the information collected, I start forming and idea of where to go. I start getting into the minute details of each lenders offering and questions come up. I ask the client and to their credit, they answer precisely the question I asked them. Sometimes however they neglect to include vital pieces of information, which to them don’t seem important (“What does that matter? I just want a mortgage.”). Hopefully, I find these things out well before closing day, but it has happened that folks decide the have been approved for a mortgage, now it’s time to go get that new car loan. The call I just love is when the lender calls to ask if I knew the client just bought a car. I call and they don’t see the connection. Your mortgage is based on your current financial picture. I’m not saying you can’t buy a car, just wait until AFTER you get your mortgage.
4-Submission – I’ll be the first to admit, sometimes I forget to add information, or the details I’ve entered are just plain wrong (like the time I entered my home phone number into the clients file. I was a little tired that day). Sometimes I enter information only the software doesn’t save it for some reason. Some lenders are kind enough to call and check facts with me. Other times, I know the lender will reject the submission if the slightest thing is wrong. I put extra effort into these to make absolutely sure everything is correct. The lender will call and always ask for that one thing I don’t have. On to plan B.

5- Acceptance or Rejection – I do everything right, the application is accepted. I call the client to confirm and they add some new piece of information not previously mentioned. Or I call with the details of rate & term and they say thanks, my bank has given me a better rate or another broker just called to tell me the same thing. I’ve accepted his offer. My favourite line, “I think you can do better.” Yes, that’s right, I make an average attempt first before I go for the really sweet deal. Isn’t that the way all brokers work? Save the best for last? NOT!

6-Limited time offer -some people are even more laid back than I am (hard to believe I know). I try to impress upon folks that I have the offer and they need to sign it as soon as possible. Sometimes we’re down to the day before closing and they say, “I’ll be in to sign in a couple days. I’m a little busy right now.” Let me try to explain how this works, you want the property, you need a mortgage. No sign. No mortgage. No property. Simple? My question is, why isn’t their lawyer calling and telling them the same thing? I guess some of them figure they still have 24 hours.

Well, that’s my fun in the sun for this week.

Next week, I’m moving. I’ll be taking a break for a week. My own story is probably interesting. I’ll try and cover that in the next post.

Take care everyone.

JRW

This past week has been a very busy one for me.

One of the recurring things that I encounter and was echoed recently by several of the other brokers in the office is that people just don’t seem to have any idea what mortgage brokers do.

“What takes so long to arrange a mortgage? Don’t you guys just call up your favourite lender and say I need a loan for client X?” Presumably the lender just says, “Yep, let me get that for you right away.” And the job of the mortgage broker is done.

Well, let me try and demystify the world of mortgage brokering a little for some folks.

The process… at least this is the way it should go.

1- The contact -fairly straight forward, someone has found my business card or preferably have been referred by a satisfied customer and has decided to give me a call
2- Gathering of details – a little more complex, looking for answers to basic questions, what are you buying, how much of a mortgage, how much of a downpayment, etc. Generally trying to sketch out a “picture” of what your needs are.
3- Matching game -usually I have a few products in mind based on the information that has been provided to me. Every case is unique in some way. I tend to start with that unique item and start talking with either other brokers who may have dealt with this situation before, or one of the lender representatives who’s product I have in mind.

4- Application Submission -once I have answers to the unique variables discovered in step 2, I start with the preferred lender or best fit lender
5- Acceptance or Rejection – the more clearly I state the request to the lender and structure the deal around that submission, the higher the chances are that the lender will agree and send an acceptance. But there are still times when, for some reason something isn’t quite communicated correctly and the lender doesn’t connect the dots the way I had hoped. In that case, we go back to step 4 with the next lender who’s product is a close fit.

6- Limited time offer – that’s right, we have the commitment from the lender, but it doesn’t last forever, anywhere from days to a couple weeks. It’s at this point where all the documentation & questions I asked for in step 2 come into play, because the acceptance comes with conditions.

Now just as each borrowers situation is unique, so it seems are the conditions of the commitment from the lender.

Based on previous experience with these lenders, I know there are certain things they *ALL* ask for. For example, in the simplest cases, pay stubs and letters of employment. Now I never know for certain which lender is going to say yes, so I have to hedge my bets and ask for additional items, such as notice of assessments (NOA or that thing you get back from the Government with a check attached).

My goal is to ask you for as much up front as possible, that way after step 2 all I have to do is say, I have a mortgage for you, please come and sign the commitment and bring a void check.

Unfortunately there are still, seemingly strange things that the lenders will ask for (like a $1 check written to yourself), but I assure you they have there reasons or “systems” in place as to why they do things in certain ways.

So that was the “simple” and “straightforward” mortgage application. Next week, I’ll try to cover off some of the things that can go wrong in each step.

Stay tuned.