I think it’s critical for all of us to get the intrinsic reward from helping people out of our work. It’s a sign that your work is making a difference in the world and adding value!
When I got into the mortgage business about 30 years ago one of the things I loved about it was that people always left happy. You’re buying a house, you get your keys…you’re happy. You refinance, save money every month, lower your years remaining or take cash out to pay bills, tuition etc. No matter what the details of the transaction were, you left happy with the result.
Back in ‘08 things changed when we had a dramatic upheaval in the market. We found ourselves without solutions for folks that were in real trouble. That’s because when home values dropped there were no loans for folks who were upside down. Also, guidelines tightend and new loans were harder than they had been in the past to get approved. So people started to leave angry & disappointed. But my team and I never wanted to BS anybody so we did what we could to help. We just didn’t always have solutions.
Well we have been in a changing and challenging market for awhile now and we had a thing happen the last few weeks that highlights how we can help folks. Even if there is no loan to close as a result.
I got introduced to a borrower who was in the middle of dealing with her divorce. By dealing with I truly mean that she was surprised in the last 90 days or so to find out she was getting a divorce. Her soon to be ex had then wanted to move quickly. So he, or his attorney put together a list of terms that was pretty standard. He’s the maintenance number, here’s the child support, and you are going to refinance the property into your own name in the next 90 days. Her head was spinning.
She felt trapped by this and assumed it was a done deal of sorts. But this is where we can really help by asking the right questions. First I asked her if she wanted to keep the house. She explained that was not an option. I asked again, but frankly she couldn’t even “hear” the question because of what she believed she already knew. Knowing rates were up she felt doomed and was already trying to figure out her next real estate move and where to live next.
Her ex and attorney were kind of running the “standard” divorce playbook on her. I asked what her attorney said and frankly was not surprised that her attorney was kind of going along with it. The standard playbook creates a situation where both spouses are able to make a “clean break”. However, it comes with some assumptions about the spouse who remains in the house being able to qualify for the new mortgage needed to remove the departing spouse from the loan.
We in this case it turns out our gal had been a stay at home Mom. She was not really qualified for the current payment without a job and is going to rely on maintenance and child support to make the payments. Another factor is that refinancing the house from its low rate to the current 8% market would add $1000 per month to the payment, stressing her already tight finances. Additionally, after talking a while she tells me she’s got school aged kids. Not little ones that may be fine changing school districts. But older ones and transferring during middle or high school wasn’t an outcome she wanted for them after all. So now the question became, can we create a situation where she can stay?
Well a quick review found a unique situation. We found out that her ex does very well for himself financially. Not refinancing the house and qualifying for HIS next house while having the current payment on his credit report would allow him to still qualify for a $500K+ mortgage. That’s plenty of house for a newly minted bachelor. I advised her that if he was going to force the issue of refinancing she should direct her attorney to increase support by the amount of the increased mortgage payment.
Well lo and behold, our client now has an agreement to stay in the house for 5 years. Let the kids graduate from high school and sell on her own time frame. We helped her understand that first and foremost, everything is negotiable in real estate and divorce on the financial side of things. Additionally, we asked enough questions to get her the end result she wanted. No we didn’t close a mortgage, but this result is a great reward for the work we do. That’s how we help folks and how I sleep well at night knowing we did the right thing for the client!
