Long before I became the Anthony Kellum that I am today - before the recognition of Crain's 40 Under 40, president of the Michigan Mortgage Brokers Association, or the guy on the news who gave houses away for the holidays - I was Anthony Kellum, the guy with bad credit and a dream. I was a man with humble beginnings and an unquenchable desire for success.
Reminiscing to the early '90s brings back memories of my first house and how much I wanted this house with everything I had. However, poor credit and a new job isn't a strong compensating factor. Therefore, I negotiated to purchase the house through a land contract at an interest rate of 11 percent. This was the best day of my life. My wife and I were ecstatic. For the first time, my children had their own rooms. Whenever I pulled up to my driveway, I would think, "This is my house." I could finally see the wheels turning as I was moving forward.
I am proud to say I was able to pay my land contract on time. All delinquent payments on my credit report were negotiated with creditors and paid. This enabled me to obtain a loan through a local credit union to pay off the land contract. My interest rate decreased from 11 percent to eight percent. My payment decreased, which made living a little more affordable.
Someone took a chance on me. That piece of property began the whole dream to Kellum Mortgage. The back room of my first house was the soil used to nourish that opportunity; little did I know this opportunity would explode into the opportunity of a lifetime. Thus, a dream was born in the back room of that very house in 1995.
Today, the mortgage industry is more focused on fulfilling profits than dreams. I think both can be accomplished. I paid $30,000 for my first house in Detroit. The cost of my next house was $250,000. Not bad, for a guy who could barely get a loan for $30,000.
With that said, I receive numerous calls and e-mails that lenders are not doing loans in urban markets. The consistent themes to the calls are "Anthony, what are my options? Is there any hope to my situation?" Instead of looking for compensating factors, the lenders are scrutinizing the loan package for any loophole to deny the loan. This is more than how I feel; it is what loan officers who try to service urban markets are facing on a daily basis.
Lenders are not just denying loan applications in the urban market, but they are denying dreams. Those dreamers may be the next Oprah Winfrey, people who simply need the opportunity to flourish. Can you imagine how many dreams have been killed because of a lack of opportunity? A loan application is more than the loan amount.
True accountability is giving someone a place to grow. Interest-only products and adjustable-rate mortgage products are designed to assist buyers in qualifying for a mortgage. Lenders are not willing to lend in high foreclosure areas, but are more than willing to add to the foreclosure rate increase through products and lack of education in the community. I am fully aware the economy plays an intricate part of foreclosures. However, lenders are providing products and placing borrowers in products that will only worsen the situation and turn a buyer's dream into a nightmare.
It is time to sit down and come up with some solutions among Wall Street, corporate America and you. The value of your home should not be cut simply because the lender is not comfortable lending in urban markets. You should not have difficulty refinancing your home because the lender realized you reside in Detroit. Those who own homes are more likely to go to college, become positive stakeholders in their communities and less likely to go to jail.
What is the true cost of a dream? Should it have a numerical value, or a value full of substance? Hard work, plus the will to succeed, should equal opportunity. I am a living witness that dreams do come true. However, they cannot be recognized without a chance or the opportunity for the dream to flourish. Keep in mind, the loans we make can be the start of some amazing things.
Anthony O. Kellum is a past president of the Michigan Mortgage Brokers Association, as well as a speaker on a variety of topics regarding the mortgage industry. He may be reached at (248) 866-9292 or e-mail [email protected].