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The Single Most Important Question You Need To Ask Your Loan Officer: Right Now.

by Justin McHood

in Justin McHood, Mortgage Related Topics

Pull up a chair, I need to have a serious conversation with you for a minute. Something happened this week that you may not be aware of yet and although I don’t want to alarm you unnecessarily, I want to help you protect yourself from the fallout of what happened.

What Happened This Week

This week something out-of-the-ordinary happened when the government effectively shut down a large wholesale bank named Taylor, Bean and Whitaker. Yes, it has been all over the news but I worry that many people just assume that it was just another bank failure – heck, they pretty much happen on a weekly basis (always on Friday of course) so what is the big deal, right?

Wrong.

Why Taylor Bean and Whitaker Closing Is Important To You

No matter who you are – or whether you are currently in the process of getting a loan or not, the closing of Taylor Bean and Whitaker will impact the way you shop for a mortgage. One of the reasons it will impact everyone is that Taylor Bean and Whitaker was one of the “last options” for many types of loans. As lenders have tightened up their guidelines, many lenders simply “don’t do” certain types of loans anymore. FHA Jumbos, FHA Manufactured Homes, FHA 203k Streamlines, USDA Loans – these were all loans that TBW did and loan officers all over the country used TBW for years.

The Single Most Important Question You Can Ask Your Loan Officer

With the closing of TBW, many loan officers are now scrambling to get their loan placed somewhere else – and the sad truth of it all is that many people who were just about to close their loan will not be able to close their loan somewhere else because no one else will do the loan that TBW would have done.

So, the single most important question that you can ask your loan officer — please pick up the phone right now and ask it if you haven’t already is:

Do you have a backup lender in place in case the current lender you have my loan with closes their doors?

And don’t settle for any answer other than yes or no.  Don’t let your loan officer go wishy-washy on you. This is an answer that you need to know. You need to know that your loan is in line at XYZ lender and should something happen to XYZ lender, is there a backup plan in place?

And if there isn’t… well – it is time that you demand that your loan officer get one.

Because in today’s mortgage market – as proven again this week by the closing of Taylor Bean and Whitaker – anything can happen.

And by being proactive and making sure you have a backup plan in place should something happen, you can mitigate the risk of a financial crisis of your own.

More Information:

HUD Press Release

Wall Street Journal Article

Taylor Bean Press Release

Dan Green does a great job of putting together a FAQ list for many questions people have about the Taylor Bean and Whitaker event.

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Zillow Mortgage Marketplace: Setting Expectations Will Make or Break You

Today, I thought I would take a minute to cover the fourth rule of negotiation and how Zillow’s Mortgage Marketplace puts the consumer in control of shopping for a mortgage and simply arms them with every advantage possible when it comes to the rules of negotiation . Previously: We learned that the first rule of negotiation is the first one to talk loses . The second rule of negotiation is that when you are explaining you are losing . The third rule of negotiation is the person with the least interest controls the relationship . And the fourth rule of negotiation? It is vital to set expectations and then over-deliver on under-commitments. In every negotiation… in every relationship… each party will have numerous opportunities to set the other parties expectations. This applies across life , not just when shopping for a mortgage. Become astute at under-committing and over-delivering and you will become known as reliable. As competent. As trustworthy. As someone who can be “counted on”. Fall into the habit of over-committing and under-delivering and you will become known as just another ordinary, every-day average idiot. This subtle -but-not-so-simple skill of being able to set and manage expectations and then over-deliver on those expectations is one that every lender on ZMM knows all too well — they absolutely * must * be stellar at setting expectations and then over-delivering on those expectations or they will simply go buh-bye . If you are a lender and you somehow manage to hose up this rule of negotiation, you will soon be marked with the digital equivalent of the Scarlet Letter thanks to Zillow’s feedback mechanisms available for consumers to report “how you did”. For example: look at a few of these top lenders on Zillow. Look at how many people they have helped. Look at their feedback scores. Think they know how to under-commit and over-deliver? Yes. And you can take that to the bank. And if you happen to somehow become one of those lenders who hasn’t learned how to set your client’s expectations by under-committing and over-delivering? Here’s your toaster, have a nice day. Toaster as in parting gift. Parting gift as in: you won’t win any of the “grand” prizes here. Sure, everyone still loves you, but it is back to cold-calling and LendingTree for you because no one that uses ZMM is going to want to be seen with you and your well deserved big, bright, shiny red “A”. Lastly: a personal note to anyone who is thinking of using ZMM to shop for a mortgage: Today, more than ever before (in my experience at least) it is difficult to get a loan done for a client. If your loan officer says to expect something and it doesn’t happen *exactly* in the time frame that he said – believe me when I say that there are crazy, crazy things happening regarding lending guidelines and turn times. So when leaving feedback – just keep that in mind. Maybe even give your loan officer the benefit of the doubt. Or hand him a toaster, tell him thanks for playing and maybe – just maybe it will be the thing that helps him become suddenly stellar at the fourth rule of negotiation: Set expectations clearly, then get busy under-committing and over-delivering.

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