This year has been one from the pages of Christopher Robin.
High inflation coupled with equally-lofty mortgage rates and rock-bottom housing inventory has had most loan officers feeling like Eeyore, all doom and gloom. But a lucky few have taken an existentialist perspective, like Winnie the Pooh discovering honey in the most unlikely of places.
When they meet first-time homebuyers and people anxiously waiting for rates to drop before they make an offer, LOs might consider taking a different stance. Motivating potential borrowers, giving them the “inside” scoop to make them feel like they’re ahead of the game.
“Avoid bidding wars!” one might whisper. Or, “Date the rate, marry the house!”
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Positive Linda
Fairway Independent Mortgage Senior Loan Officer Linda Davidson is a producing branch manager and loan originator in Garland, Texas, who has been in the business for 28 years. She carries a positive outlook.
Linda Davidson, Senior Loan Officer,
Fairway Independent Mortgage
“In my opinion, it’s a phenomenal time to purchase right now because we can always refinance the rate but they’re not having to compete against multiple offers,” Davidson says.
Much of her time is spent mentoring LOs and helping them grow their business. When everyone else is down in the dumps, she lifts them up and out.
“I grew up in government housing so to get to do this everyday is pretty cool,” Davidson points out. “There’s so much joy in helping families create that homeownership.”
Jerry Schiano, CEO of Spring EQ in Radnor, Penn. tells borrowers that the decision to buy a home should be about their life and not the market.
Jerry Schiano, CEO, Spring EQ
“I never pretend to be an economist that tells people where rates are going,” he says. “What I tell people is, it’s a good time to buy a house if you know where you want to live and you can afford the house, and you’re not worried about the house becoming a financial investment where it appreciates. You should buy a home to have a family, raise kids, or be with whoever you want to be with — your spouse or your dog … you shouldn’t buy a home because you think it’s going to increase in value.”
Nobody really knows where mortgage rates are going now, do they? Economic analysts have their “crystal balls” and historical perspective, but this era is nothing if not unprecedented.
“This is one of the most difficult markets most of the people in this business have ever faced,” Schiano says. “People are still shocked with the rates. There’s not a supply of housing. There’s not affordability. So for loan officers, they have to figure out a way to tough through this.”
He tells LOs to offer their clients home equity.
“You have all these relationships; go back to people and see if they love where they are or if they want to fix it up a little bit and finish a basement, put on a deck,” Schiano says. “Most loan officers are not used to doing that. But I think that’s the product that the customers need now.”
Relationship Brian
“The biggest challenge that I think that we all face right now is just a lack of inventory and homes not being for sale,” says Brian Atallian, mortgage consultant at Pike Creek Mortgage Services in Newark, Delaware. “Right now, 85% of people have interest rates less than 4%, so it makes it very challenging for people to feel justified in leaving and selling their home to take on a 7.5% interest rate.”
Brian Atallian, mortgage consultant at
Pike Creek Mortgage Services
He’s trying to spend more one-on-one time with clients these days, staying transparent and advising them as to how they should proceed in this market according to their circumstances.
“If they’re in a situation where they have to buy, it’s very challenging,” Atallian says. “Potentially being relocated for work, getting a new promotion, a new family member, a new child. Divorce is a big one as well. You’re going from two incomes to one income and trying to afford a new home.”
He’s prioritized relationships with realtors, divorce attorneys, and financial planners for those very reasons.
“They want to have a good referral partner and partnership with a good mortgage person,” Atallian says. “So I do that with them. But for the most part, my business is all referral based.”
So are things really all that bad that an LO won’t ever recover, and should they consider a new line of work? Are these brave buyers doomed for all eternity?
“Interest rates are certainly on the higher side right now, but the prices have sort of stabilized a little bit,” Atallian points out. “You don’t have as many offers and as many people paying cash and that sort of thing. These rates aren’t here forever and we can look to refinance at some point. Get into something now before prices start to change and continue to rise.”
Outsider Jeremy
Since its founding in Washington, D.C. in 1907, the American Land Title Association (ALTA) has been an integral resource for title and settlement companies in home lending. VP of Communications Jeremy Yohe has been writing about the industry for close to two decades.
Jeremy Yohe, VP of
Communications, American Land Title Association (ALTA)
He offers LOs an outsider’s perspective looking in.
“The ones that have been through the market ups and downs and understand the cyclical nature will come out probably even stronger after a down market,” Yohe says. “They’re the ones that have taken the proper steps to staff accordingly, look what’s going to be needed in the market two, five years down the road and meet those needs.”
This article was originally published in the NMP Magazine November 2023 issue.
