Re: “flipping hysteria” - Posted by JPiper
Posted by JPiper on April 22, 2000 at 18:55:23:
Just a few comments.
First, in my opinion, your broker should have known this PRIOR to taking the loan to this lender. It?s gratifying that he recovered quickly, and got the deal done. But had he known his lender the way he should have, you and he might not have been exposed to this problem to begin with. From your perspective I think it?s important that you understand this is a growing problem, that of owner seasoning, and that you should discuss the lender with your broker regarding the issue before he takes the borrower there. I personally don?t trust that brokers have carefully looked at this issue in much detail for each of the lenders that they deal with.
Second, this issue of owner seasoning is one that I think we need to start battling with. It?s completely nonsensical in my view. I bail a lender out on their REO that has been trashed, pay cash for their problem. Then I fix it up, do the community a service, the lender a service, and provide the buyer with a good house that has been repaired into excellent condition. Now the lender wants to stiff me by saying that I haven?t owned it long enough???
Don?t know about you, but this attitude p*sses me off royally! I think it?s time that lenders should start to get some feedback from their customers! I understand why the rule exists. They?ve managed to get themselves fooled by some less than ethical investors. But let?s face it?.making a blanket rule of no financing if the owner has owned it less than a year is completely nonsensical. I have no problem with a lender verifying my repairs. I think they should verify the market value of the property carefully. But don?t tell me that assuming they have verified the above, that DESPITE that I haven?t owned the property long enough. Not when I bailed out one of their lousy loans to begin with.
My attitude is that the mortgage broker needs to give them some feedback. I think it should go something like this: ?THE IDEA OF A BLANKET POLICY ON OWNER SEASONING IS STUPID. MY CLIENT HAS REPAIRED A HOUSE. THAT CAN BE VERIFIED. THE HOUSE COMPS OUT. THAT CAN BE VERIFIED AS WELL. WE AREN?T GOING TO DO ANYMORE LOANS OF ANY TYPE WITH YOU UNTIL YOU START TO LOOK AT THESE DEALS INDIVIDUALLY AND LOGICALLY. WE AREN?T WILLING TO LISTEN TO YOUR STUPID IDEA OF A BLANKET POLICY CONCERNING THIS ISSUE?AND IF IT CONTINUES YOU WILL GET NO BUSINESS FROM US. BY THE WAY, WE JUST PUT THIS LOAN DOWN WITH XXX MORTGAGE?AND FROM NOW ON THEY WILL BE GETTING OUR BUSINESS.?
I think if a few mortgage brokers actually grow some cajones, and step forward with a strong stance and a logical point of view?.perhaps this situation will begin to change. And I believe that we investors should encourage our brokers to educate their lenders, encourage them to express their viewpoint to someone in a position to make a difference.
Hope you don?t mind me expressing my viewpoint in response to your post. It seemed like a logical place to do so.