When it comes to lenders, who’s your superhero? Who is the guy or gal that you may not necessarily use the majority of the time, but is the one you rely on and call when your client needs someone to get the deal closed? That lender who can approve buyers that have less than spectacular credit, just changed jobs, or just got through a divorce, major medical issue, are buying a home in poor condition, etc. The one you turn to when a deal needs saved 30 days in, after the buyer’s original lender suddenly claims that they cannot close the deal. So… think about it… who’s THAT person?
Now I’m going to ask you a truly important question: Have you spoken with that company lately? If you haven’t had a serious discussion with them within the last two or three weeks, you might want to give that person or company a call. Why? Within the past 14-20 days, lending throughout the country has changed immensely.
With that there has been a ton of uncertainty and misinformation being spread. As the industry has reacted to recent events, we here at Amerifirst Home Mortgage have tried to report news that we feel impacts YOU, Ohio’s REALTORS®, the most while also being factual. If you have read some of our recent articles from the last few weeks, you’d have a fairly good understanding of many of the changes that many lending institutions have made. If you haven’t had that opportunity, I’d direct you to these few articles – written for YOU, the agents, by a fellow licensed agent who happens to also have the perspective of a lender as well. See here…
I won’t rehash what’s already been reported on. The main takeaway is that banks all over have been modifying how they do business when it comes to lending. Not all lenders, but many. From your local credit unions, banks, or mortgage brokers to larger institutions that are either regional or national brands. A large percentage of the industry has taken a more conservative approach to lending. For example, Chase Bank has now set a credit score of 700 as their new “low bar” for borrowers. In addition, it was reported by HousingWire that Chase “is also increasing its minimum lending standards to require nearly all borrowers to have at least 20% down in order to buy a home.” Not only does that eliminate all government backed loan products like: FHA, VA, or USDA loans… it also eliminates other conventional loan types that previously allowed for lower than 20% down payments.
The point is this – not all lenders who you may be familiar with are still using the minimum standards you are used to.
What was OK for the deal your client closed on last month may not be now. The industry is continuing to change on an almost daily basis. Great agents should take five minutes and communicate with the lenders they regularly work with once every week or two. Ask those lenders the important questions about what changes, if any, their company has instituted. We can all agree that it’s much better to catch an unavoidable problem sooner rather than later. This brings me back to your superhero lender.
One of the first calls to lenders you work with should be to your superhero one. It’s unavoidable, some borrowers who would work with other institutions during “regular” times may not have that ability to currently. That’s not to say that those buyers cannot get financed elsewhere. They just may have to find somewhere other than those like Chase. Knowing this, it makes sense to talk with the person you turn to when you have those deals that need “saved.”
Make sure that the person you turn to in those difficult situations can still possibly take those 580 credit scores, the people who are self-employed, moving into your area from somewhere else, or have less than 20% down. There are still a ton of buyers who will fall into those categories. Make sure you still have that ROCK of a lender that you can rely on. If their company has had to adjust (and most have), just be sure that you understand what those changes are and how those may or may not affect any future deals.
We all want the person who has saved our deals in the past to still have that same ability. Hopefully, they do. If so, great! If, however, that institution has become much more conservative for the foreseeable future, realize that you should start seeking a new superhero – at least for the time being. There are still some lenders who haven’t changed, (or have very minimally changed), their lending standards. Regardless, identify those who can still do FHA loans, 5% down conventional loans, or can still use lower credit scores, etc. There will be more business to refer to those places than there was prior to COVID-19. That’s not debatable.
You need to have at least one of those lenders in your back pocket. Believe me, you’ll need them.
Lastly, I take a certain pride when I author these weekly articles that they are not just direct advertisements for the company kind enough to pay me. Editing and authoring our weekly newsletter is not any part of my original job description. It’s done more for the betterment of the industry that I love than for anything else. Our goal is always to be informative on subjects I feel are important to agents in order to help make them better professionals. Rarely do I ask our readers to outright use Amerifirst Home Mortgage for all their clients’ lending needs or anything close to that. I bring this up this week simply because our company happens to be one of those who feel like we do not have to swing significantly over to the conservative-side of lending. Our lending minimums are the same as the government’s and have not changed during this process.
So… if you are one of the agents whose superhero has unfortunately been dealt a bit of kryptonite, and for the time-being you are now in need of a new superhero – I would sincerely urge you to give us a try. Our branch, specifically, has always prided itself on closing those hard deals. We love them! I promise you won’t be disappointed.
Have a deal that requires a superhero? Let us know:
Down payment and terms shown are for informational purposes only and are not intended as an advertisement or commitment to lend. Please contact us for an exact quote and for more information on fees and terms. Not all borrowers will qualify.