The Bitter Side of Being a Mortgage Broker That No One Talks About
The real estate industry could be a misleading business, after many years of working in the elusive mortgage industry; I learned that it could be very challenging and sometimes entertaining work. It pays well, but you have to put up with a lot of upset borrowers on a different occasion, and deal with borrowers who are excited, mad, or just plain crazy.
Buying a house is undeniably an emotional and stressing process (even though it shouldn’t be), and as it turns out, some people get very angry when you can’t get them qualified for a mortgage.
I realized that for some reason, people always think they are entitled to get a mortgage, even if their credit is less than stellar. This makes it a tough business to be in because not only do you get angry borrowers calling you from time to time but also angry realtors and sellers as well. Sellers want to sell, buyers want to buy, and realtors want their commission — hey, what could go wrong?
After working in the mortgage industry for so long, I’ve witnessed and been a part of everything from mounting frustration when I couldn’t get a viable loan closed to shock when a bad loan actually did get approved. I’ve seen it all — good, bad, ugly, and just plain psycho.
There were many times I pulled a new borrower’s credit only to see dozens of credit cards, pages worth of collection accounts, a couple of car loans, and student loans out the wazoo.
Sometimes I even thought, this is a foreclosure waiting to happen, or, you really have no business buying a house, but since I wasn’t an underwriter, I had to do what I could to get these people qualified anyway. It was my job, and it’s the nature of the mortgage-lending world.
When the underwriter didn’t want to approve the loan, guess who got to bear the bad news to the borrower? The broker, of course! Good, bad, and ugly, you’ve got to pass along the news. I definitely had a few panicky breather-sessions in the backroom before facing some of my clients.
Sometimes I wanted to shake people or just yell at them. I once pulled credit on someone who had $1,800 worth of car payments and therefore didn’t qualify to buy a home.
They were upset, but I had to tell them that they basically had a mortgage payment in their car payments. (And could they possibly live in their cars since they ruined their chances to buy a house??)
Sometimes common decency flies out the window. I had a borrower once who did not qualify to purchase a home, but couldn’t take no for an answer.
Instead of moving on or trying to find another broker, she constantly called and texted me, even when I was at the funeral of a friend. Telling her I was at a funeral did not seem to embarrass her at all, and the next thing I knew, she was trying to get me to meet her so she could bring me some baked goods.
She clearly thought I was trying my hardest not to give her a loan and thought she could possibly bribe me with some baked goods after my friend’s funeral.
In another unfortunate incident, I was perusing a borrower’s bank statements (we had to get them for most borrowers), only to find a charge for some inappropriate charges on his statement. I’m guessing he either forgot it was on there for my eyes to see, or he was just plain creepy.
I’ve had borrowers who can’t remember the address where they lived six months ago and ones that don’t seem to have a clue how much money they earn. How is it even possible not to know your income? And if you don’t know how much you actually earn, clearly you don’t budget, so how do you keep up with your bills and whether or not you can afford them?
Focus on First-time Homeowners
It may come as a surprise to find out that first time home buyers are the best clients, but this hasn’t always been the case. The problem with many seasoned home buyers is most of them remember the few years before the housing crash (that dreaded sweet spot, if you will), when you could get a mortgage company to lend you a few hundred grand by merely stating your income and assets, and then signing a few papers.
“Stated Income, Stated Assets”
There were many loan programs out there called “Stated Income, Stated Assets” where you could just tell the lender what you made, with no real verification. Not surprisingly, that is exactly why the housing market crashed shortly thereafter.
Needless to say, it was always frustrating to me when a seasoned client would come in, after the crash, asking to borrow $200,000, and then whine and complain to me when I asked him for bank statements, pay stubs, W2s, and general proof of the borrower’s financial situation.
So many people would actually tell me they weren’t going to provide me with all of their personal information and, after a few weeks of the back of forth about it, they would generally relent and provide me with the documentation I needed to get them a loan approval. First-time homebuyers, however, typically made a list of what they needed, provided it quickly, and closed just as quickly. Easy!