Not usually included in Becca Summers. wells fargo to the recommended list of lenders she gives her clients. But when mortgage rates started to rise in the spring, Summers encouraged his clients to take advantage of the bank’s mortgage rate lock product.
“Wells Fargo had a program to lock interest rates indefinitely. , as opposed to closing their mortgage now that their house is finally built and the interest rate is around 7.0%.
Whenever a buyer of mine brings a lender to the table I’m not familiar with, I’ll ask that lender a few questions.
Amy Breach, real estate broker at Keller Williams’ Hill Team in Seattle
In retrospect, Summers is happy to have advised the buyer to switch lenders. It’s made quite a difference for her clients, but it’s also paid off in another unexpected way.
“The builder realtors switched mid-transaction, so things got a little chaotic, and no one was there to update the client’s files to reflect the change in lenders,” Summers explained. “So, about two weeks before we were scheduled to close, the builder called me and was like, ‘The loan officer on file with the client has been laid off, so we’re assigning a new one.’ At that point, my client’s interest rate had been fixed for a few months, but if I didn’t switch lenders, my monthly mortgage payments would skyrocket, and who knows how the deal would have turned out. . ”
Rising mortgage rates, inflation, and high stock market volatility have reduced demand from homebuyers, making it difficult to make a successful deal. Next, real estate agents are doing everything they can to ensure that their clients move into the home of their choice. A lot of this depends on the home buyer lender.
“That partnership is everything,” said Amy Breach, a Seattle-based agent for Keller Williams. “Lenders and LOs can make or break the deal.”
But some of these partnerships are scratching their heads as the mortgage industry takes into account the slowdown in the housing market. There were 263,494 his LOs in 2019, before the COVID-19 pandemic began, according to a mortgage data technology company. genius. A historic refinancing boom and a significant increase in homebuyer demand have pushed the number of LOs nationwide to balloon to 353,119 in 2021, but by July 15 of this year, the number had fallen to 276,837. Did.
Garth Graham is a senior partner and manager of M&A activities. stratmore grouppredicts LO headcount should drop to 2019 totals.
“About 80% of our industry volume is done by about 40% of LOs,” Graham told HousingWire in November. “And the bottom 20% of volume [handled by 60% of LOs] This is the part that hasn’t appeared yet [the layoff] data yet. “
Trouble in Partnership Paradise
Operations staff, such as processors and underwriters, are totally dependent on salespeople to generate work, and if deals don’t close, it’s not good for anyone.
Fahad Janvekar, Loan Officer, Fairway Independent Mortgage
“It’s hard right now to see so many people lose their jobs in our industry,” he said. Fairway Independent MortgageSaid.
Janvekar feels insulated from chaos with a 100% commission-based compensation structure, but still has concerns.
“Operational staff, such as processors and underwriters, are completely dependent on salespeople to do their job, so if a deal doesn’t go through, it’s not good for anyone,” he said. “But my view is not that I am not worried about my role right now. I need to start.”
In 2022 alone, nearly every major mortgage lender has laid off a significant number of jobs. Mortgage processors, underwriters, and other support staff were usually cut first. Tens of thousands of jobs will be laid off in 2022, and output will fall far short of the highs seen in his 2020 and his 2021, so another 150,000 industry jobs could be cut next year. there is.
The upheaval in the lending space can be incredibly frustrating for agents who work as hard to build strong relationships with trusted lenders and LOs as they do to build customer relationships in their CRMs. I have. , lenders or startups.
“Whenever my buyer brings to the table a lender I’m not familiar with, I’m going to ask that lender a few questions,” Breach said. You’re there to be, so make sure you go out and talk to those lenders in a sort of interview process and then give that feedback to the client and let them make a decision .”
Summers said she’s always open to working with lenders that buyers bring into the deal, but feels that things always go smoother and more seamlessly when she gets to work with the LOs and lenders she prefers. I’m here.
“I closed a deal with my first buyer last month, and then I asked him what he thought of the process. has worked for you,’” Summers said. We worked very well together and solved problems before the client even knew there was a problem.”
Number one is definitely communication. Whether it’s good, bad or ugly, it’s essential that you keep me informed.
Marsha Riccio, re/max agent in Racine, Wisconsin
Summers has a personal favorite LO, but I try to make recommendations based on who is best suited for my clients.
“I have one LO who has a portfolio loan that only his company does. It’s a first-time homebuyer and a great no down payment loan,” Summers said. “And for buyers who may have credit issues, I work with another lender because he’s willing to help guide them to their ultimate goal of buying a home.” , because they are really good at explaining more difficult situations to buyers. LO is very good at technical transactions and makes sure every detail is taken care of.”
Raleigh-based Andrew Wilson eXp Realty An agent who just started practicing real estate two months ago was lucky enough to have access to a pre-vetted list of preferred lenders from her team leader, but after coming up with it on an unlisted LO, she took the chance. , recommended. Make her one of his clients. For Wilson, LO felt like a perfect fit for her client, not because of the types of loans she specialized in, but because of her personality.
“I was working with a personal friend who was buying a home for the first time,” explained Wilson. “LO her phone conversation was so much fun. She knew she and my client would click and I was right.”
stand out from the crowd
But what makes an LO or lender stand out to agents and what motivates them to be added to the recommended list?
Marcia Ricchio, based in Racine, Wisconsin, said: RE/MAX Agent said. “Whether it’s good, bad or ugly, it’s imperative that you keep me informed.”
For Anne-Marie Wurzel, mainframe real estate The Orlando, Florida-based agent says the ideal standard of communication with lenders is a weekly check-in call to discuss all ongoing deals.
“You should never have to wonder what is going on with your deals, and you are in touch with your preferred lender at least once a week, so you don’t have to worry,” Wurzel said. say.
If you see a large interest rate differential between lenders, it means that the lender is looking to buy your business. Because they are out of money and trying to survive. That’s a big red flag for me.
Anne-Marie Wurzel, Agent for Mainframe Real Estate in Orlando, Florida
“Some of these lenders only work 8 to 5 Monday through Friday and that’s it,” says DFW-based Mandy Nichols. Brixstone Realty Agent said. “If you’re dealing with one of these lenders and need someone for an evening or weekend, you’d better say goodbye to many deals, especially earlier this year when the market was crazy.”
Nichols said one of her favorite LOs to work with even got a call from her while vacationing in Cancun.
“Even if it’s nine o’clock at night, he’ll find a way to get me a pre-approval letter,” she said.
In addition to poor communication, the agency is said to be wary of lenders offering far lower interest rates than their competitors. Because some lenders struggle to generate business thanks to low starting volumes of purchases and essentially non-existent refinancing volumes. Agents said these lenders may be looking to acquire businesses in order to continue operating.
“When you see a big interest rate differential between lenders, it can be a lender trying to buy a business because it is draining money and struggling to keep the business going, so this is another one for me. It’s a big red flag,” said Wurzel. “If the rate seems too high, it probably is.
An agent with just two years in the real estate industry, Memphis-based Jenny Bergos Markus Bensdorfsays it took trial and error to find an LO that he felt confident recommending to his clients.
“Most of the buyers who come to me for lender recommendations are first-time homebuyers,” she said. “I have LO who did a good job on some personal transactions a few years ago and recommended her to my niece who made her first purchase. I think the lender thought my niece knew more than she did how things went so it was a bit of a learning curve for me And now I have an LO that runs educational seminars for a local realtor organization that I met through another client I was helping with the purchase of their 6th property. So I usually recommend her to first-time buyers.”
With the housing market slowing down, Vergos is happy to have found an experienced and stable lender to work with LOs, but how changing market conditions are impacting lenders and LOs working on her deals. I am concerned about how it will affect me.
“I was certainly a little worried,” said Vergos. “I’ve noticed a lot more activity from lenders reaching out and seeing if there’s a deal. They can help me. It’s mostly lenders I don’t know and they seems like they are really trying to rev up their business. So my deal hasn’t been affected by layoffs or lender closings but all of this made me think the business side must be really bad .”