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Tuesday, January 6, 2009
Two days ago I heard from a would-be client, who quickly became a never-would-be client. I say this because I can practically guarantee that I wont be contacted by him again.
He began by flattering my marketing abilities. Once I was buttered up he opened the door to his true inquiry: How can choosing you instead of another lender, get me the largest cash sum possible from my house?
The truth is that nothing can be done differently. There is a formula, used by all lenders of reverse mortgages, to determine how much cash can be taken out of a mortgage.
After that he says he would like me to hire an appraiser that would do impressive work. I knew this meant he wanted someone who would alter his results a bit to have it work out in the end.
His reasoning behind this is that a bigger loan will be handed out if there is a higher report of home worth.
Many seniors have a desire to pay off their traditional mortgage using the reverse mortgage. It's the number 1 reason seniors are looking at the reverse. But, with waning values, it can be precarious.
However, with a low appraisal the reverse lender cannot always give enough to complete this goal for them. Instead, the borrower has to continue paying on the forward mortgage until the worth of his house goes up enough to try again.
Appraisers are in a tough spot right now. Yes, they had the luxury for many years to trump up appraisals.
An appraiser who comes across this article might be bothered by what I said and even dispute it, but its common knowledge that number adjusting was taking place.
Now the finger is pointing at everyone in the real estate industry for causing the big mortgage mess, even appraisers. They are being watched more closely than they were before.
Appraisal audits are more frequent than ever and appraisers are running the risk of losing their license if business is not conducted as it should.
So, that is what I told this guy. I haven't heard from him since. I told him other companies would tell him how their appraiser will definitely get him the greatest value.
Most lenders will promise it, but won't do anything differently when it comes down to it. I choose to let seniors know all the facts and risk losing them as a client.
He began by flattering my marketing abilities. Once I was buttered up he opened the door to his true inquiry: How can choosing you instead of another lender, get me the largest cash sum possible from my house?
The truth is that nothing can be done differently. There is a formula, used by all lenders of reverse mortgages, to determine how much cash can be taken out of a mortgage.
After that he says he would like me to hire an appraiser that would do impressive work. I knew this meant he wanted someone who would alter his results a bit to have it work out in the end.
His reasoning behind this is that a bigger loan will be handed out if there is a higher report of home worth.
Many seniors have a desire to pay off their traditional mortgage using the reverse mortgage. It's the number 1 reason seniors are looking at the reverse. But, with waning values, it can be precarious.
However, with a low appraisal the reverse lender cannot always give enough to complete this goal for them. Instead, the borrower has to continue paying on the forward mortgage until the worth of his house goes up enough to try again.
Appraisers are in a tough spot right now. Yes, they had the luxury for many years to trump up appraisals.
An appraiser who comes across this article might be bothered by what I said and even dispute it, but its common knowledge that number adjusting was taking place.
Now the finger is pointing at everyone in the real estate industry for causing the big mortgage mess, even appraisers. They are being watched more closely than they were before.
Appraisal audits are more frequent than ever and appraisers are running the risk of losing their license if business is not conducted as it should.
So, that is what I told this guy. I haven't heard from him since. I told him other companies would tell him how their appraiser will definitely get him the greatest value.
Most lenders will promise it, but won't do anything differently when it comes down to it. I choose to let seniors know all the facts and risk losing them as a client.
posted by Credit Counseling at
5:51 AM
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