Quantifying Gain and Loss in the Mortgage Business

Bad Example of Customer Service in the Mortgage Business

There is an overpopulation of mortgage originators in the game today. Quite frankly, the majority of originators have very little idea as to what they’re doing (and I’m not making this up).  I get this from former associates that are in industries vicarious to mortgage lending such as closing attorneys, title clerks, appraisers, realtors, family and friends that suffer through a poorly handled deal.

Here is an often-repeated scenario handled the wrong way by a knucklehead originator.

Joe comes to Daffy Mortgage for a loan.  Joe does not qualify for his loan for a number of reasons, but the problem is bigger than that because Joe is buying a house that Ted is selling. Ted is buying a house that Fred is selling.  Fred is selling the house that Ted is buying so he can buy the house that Jed is selling.  Jed is selling his house so he can buy Ned’s house. And there are couple more sales in this link going on but none of them are going to happen because the knucklehead that is handling Joe’s deal is desperate for a closing commission check and he holds up the entire chain for his dough.

He wants a closing.

However, he is too dumb to know that he is giving up the chance to get 4 or 5 customers (or for sure he is giving up the chance to at least address all the buyers, sellers, listing agents and selling agents in the link). Knucklehead wants a closing that is not going to happen.  He does not want, or is too dumb to understand that is he has chosen to recluse himself from doing business with the whole lot. I watched these guys for 28 years.

He blew the chance to make $100,000 off this deal by holding up the deal for 7 weeks, with all the others in the link sweating bullets, so he could make maybe $1,500.00. AND THE DEAL NEVER CLOSED.

Good Example of Customer Service in the Mortgage Business

Paul Karem (yours truly) and my IQ of 17 tried and tried to get the great realtor Kenny Reutlinger to add me to his list of mortgage vendors. I wanted  Mr. Reutlinger to give me a shot at financing one of his buyers, and in turn, show him what he was missing out on. It took a year and a half of calling on Mr. Reutlinger’s agency to get a deal. I frequently visited their offices and left my cards all over the place.

One day, I finally got a call back from Mr. Reutlinger.

He gave me the name and contact information of a buyer, as he did as well with 2 other lenders. I got the deal. Then I went to his office and took the buyers loan app. The buyer had horrible credit and did not qualify for the loan.

Now comes the moment of truth. 

  • Do I try to work this out some way?
  • Should I try to repair this guys credit (which might take two months)?

I spent hours weighing out the pros and cons but kept coming back to the old saying, “the truth will set you free.”

I decided to tell the truth.

I called Mr. Reutlinger and said “we can’t do the deal due to credit problems.” Side note: you could say that in those days.

To my surprise, he said “Paul, thank you for giving me the bad news fast.”

Over the next 15 years, I received at least $1 million a year in referrals from his company.

The moral of the story is to tell the customer the truth. Don’t hold up the chain. The

Fred’s, Ned’s, Jed’s and Ted’s are going through the same scenario right now.

Count on it.

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