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This month, we are introducing a new column for questions relating to starting a business, managing a business, training, networking, tax-related issues, corporate security policy, fraud alerts and compliance. All answers are for informational purpose only, and are not intended to practice law, or are meant to provide tax advice or tax opinions. After reviewing our information, we both recommend seeking legal counsel or the advice of a tax professional. Please e-mail us at [email protected] to voice any questions or problems. We are here for you!
Uncertain in Bethesda, Md. asks …
I am in the process of closing a non-owner occupied streamline refinance right now. I just realized that the insurance my borrower provided is not a “Landlord Policy.” The bank, however, accepted the policy and scheduled the loan “Clear to Close.”
Here is my moral conundrum. Do I bring it to the bank’s attention and maybe delay closing or just let it slide.
Eric’s reply to Uncertain …
I can’t tell if you work directly for the bank or are a broker selling the loan to the bank, but my answer is still the same. You must tell the bank they made a mistake and help get it rectified before you close that loan. Whether the problem is a tiny problem or major mortgage fraud, it is your duty and obligation to assist the bank in producing a good, salable product. I am sure the bank has multiple levels of quality assurance, but you don’t feel you are one of them.
Everyone up and down the line must work in the bank’s best interest. It is the right thing to do. Look at it this way. If you let it slide and it gets picked up by some closer at the settlement table, it will cause more hassles at that point, then now, where it may not slow things down one iota. I am a big proponent of doing things the right, moral way. Not because I am a saint, but because you make more money that way. If doing things the right way in life were easy, everyone would do it. For further research on the topic, consult your local bible.
Laura’s reply to Uncertain …
Eric is spot on with this one. It will be caught either prior to closing, at closing, or post-closing audit, but most importantly your client could risk not being properly insured. What if something happened, like a fire (and it does happen) the insurance company could say, it was improperly insured, and who wants to get an attorney during a crisis to validate if their insurance was actually in affect.
Eric in Virginia asks …
I work at home in a small apartment with my two dogs whom I love very much. The problem is that sometimes I will get on the phone with a customer or real estate agent and they will start barking uncontrollably at a squirrel in a tree or a neighbor walking their dog. It is so embarrassing when the other person asks “Are you at home now?” What do I do?
Eric’s reply to Eric …
Eric, I know exactly how you feel. That happens to me all the time. I have tried stepping out in the hallway, locking myself in a bedroom closing and even pantomiming smacking the dogs. This is what I found works the best. Be honest. “Yes, I work from home. Do you have dogs?” Invariable, they will answer “yes” or say they have cats and we will get on the subject of how annoying they can get. It is a good bonding moment.
I am not exceedingly handsome, I do not dress like the cover of GQ Magazine and my nose is bigger than a small baby’s arm, but as Popeye says, “I am what I am.” Luckily, people are not as harsh on you as you may be on them. Some people find it endearing. If they don’t want to use me because I work at home or have a dog, well, I think the technical phrase in the industry is “screw them!”
Laura’s reply to Eric …
I agree in part with Eric, but not entirely. I also have a dog, and frequently work from home, and yes my dog can be annoying occasionally when the neighbor’s cat struts over here to peer in at her, or a squirrel gets to close. Of course it’s always when you least expect it, and I can easily be embarrassed by it.
I believe that if I choose to work from home, I still need to deliver the same element of professional standards I would if working from an office. I personally find it irritating to speak to a client who is so busy directing or yelling at their children than paying attention to our conversation, that I feel to be an important conversation, not chit chat. I would assume a client would expect the same of me.
So with that being said I would find it inappropriate to expect a client to tolerate me trying to speak over my dog barking. I have used two methods that often work, I say excuse me, and I get a treat or two to distract my dog, and I close the blinds or curtains so she can longer see out, and most of the time she has forgotten what she was barking at. Secondly, if I am on my cell, I simply walk outside away from her. One of the pitfalls of working from home.
Candy in Illinois asks …
I have a question for you guys. I have a real estate agent who never really sent me much business yet when she needs someone to help her sponsor (monetarily contribute) or physically man an open house she call me, with a promise to send business my way. Should I be glad to participate in hopes I get a client or two while working the open house, or should I be offended and let her know I haven’t gotten any business from her in quite a while?
Laura’s reply to Candy …
In my younger, cockier days I would say, absolutely let her know you are not satisfied with her referrals and that you don’t like being taken advantage of. Now in my wisdom days, I would respond differently. My first question is, “Do you like the real estate agent?” Second question, “Would you like to do business with the real estate agent?” If you answered yes to either question, do the open house.
It’s an investment of what probably less than $100 bucks and some time. Time invested with the possibility of either networking with other real estate agents from his/her office, or gaining new buyers from the open house. Even if you never got a deal from the agent, but you got one, two or even three good leads from the open house it would be worth your time.
Unless you walk in someone else’s shoes, you may not really know why the real estate agent didn’t send you a referral. Maybe their business has been down and they are uncomfortable letting you know their sales are down. Maybe they didn’t have control of their last buyers, there are numerous reasons real estate agents may not have control. So give the agent the benefit of doubt, and while working together on details for the open house, or food, whatever you are doing, try to strengthen your rapport, and build a stronger relationship. It does work. Happy spring!
Eric’s reply to Candy …
This time, I partially agree with Laura … only backwards. In my younger days, I was so desperate for business. I went to everything and did anything chasing a lead to support my family. In my dithering old age, I have now gotten more selective in my time management.
I have spent literally thousands on joint advertising with a real estate agent, only later to be told she was “Sharing the leads with her favorite loan officer.” I have known agents for years who promised me some business, but just never got around to doing it. My girlfriend’s mother is a real estate agent and I am still waiting for her loan officer to retire or have an unfortunate accident so I can get my first deal. When the fishing is not good in one spot, move to another spot.
Saying all that, I think you should go. One reason is that you might get some leads out of it. The second reason is that by spending so much time with the agents, it give you time to bond and maybe REALLY get her business. Do it for you, not for her.
Eric & Laura welcome your questions, please send your inquiries to [email protected].
Disclaimer: All answers are for informational purpose only, and are not intended to practice law, or provide tax advice or tax opinions. After reviewing our information we recommend seeking legal counsel or the advice of a tax professional.
Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. He may be reached by phone at (703) 505-8692 or e-mail [email protected]. Laura Burke is an author and trainer with 20-plus years of experience in the mortgage arena. She may be reached by e-mail at [email protected].
This article originally appeared in the May 2015 edition of National Mortgage Professional Magazine.