Originators: Consumers Need You More Than Ever!
Loan locked, Loan Estimate out, Intent to Proceed signed, appraisal inspection scheduled for today. What could go wrong? And then the call…customer letting me know she canceled the inspection. No, she didn’t want 0.00% 30 year fixed!
She and her husband are both physicians working in an E.R. where there are two active Coronavirus patients. She is 8 1/2 months pregnant due in April. Yesterday her doctor told her she may be delivering…this week! When she asked about an appraiser coming to her house today her doctor “instructed me to cancel the appraisal and not let anyone in.“
I get it…volume is great! But taking applications in this environment, without having in-depth discussions with customers about the current, albeit temporary, new reality may cause them harm.
There are many issues seasoned originators can and should anticipate that will interfere with transactions in process. Consumers deserve the benefit of our knowledge to make choices that are in their own best interests. Knowledge and foresight changes the conversation. As consumers refinance into the lowest rates in decades, many are paying for appraisals. They expect to close; some may NEED to close!
We cannot control a pandemic, we can control how we set appropriate expectations during this unprecedented time!
What about getting to the closing table? Depending on state law, some transactions may close by Remote Online Notarization or “RON.” Here is a state-by-state map from the MBA identifying states that permit RON.
First American Title has a state by state map showing laws already passed, pending legislation, proposed legislation and no legislation on this topic. Take steps to also verify lender, specific guidelines at the time of origination.
In speaking with a representative of MERS and another owner of a title company, unless borrowers and settlement agents are able and willing to physically come together where WET signatures are required, closings may get delayed or not occur. Many states require wet signatures on deeds and other documents.
Many town and county clerk offices may have short hours or be closed, preventing the recording of deeds and notes. I believe one of our responsibilities as originators is to make every effort to be proactive and anticipate and mitigate any challenges consumers may face as early in the transaction as possible.
And then there is the Force Majeure clause. If you have purchase contracts in process, you may want to read it! This little often ignored, boilerplate clause will now come become a popular defense in some real estate transactions. In a nutshell, it’s a clause that outlines when a party to the contract would NOT be required to perform obligations under the contract. Since I am not an attorney, I will leave it to you to research your own situations, when and if it would apply.
People are scared. The mortgage process is a big black hole during the best of times. They need calm and guidance. If you aren’t staying in touch with your customers you are missing an opportunity to provide value, create loyalty and possibly save their transaction. What is happening to their reserves? Were their hours cut? Does the loan need to be restructured? Are they still employed? Do you really want to be surprised when that VVOE is done? I know it takes time…but there’s a reason we are in a “SERVICE” business. We provide a valuable service that cannot be commoditized. Now’s the time to prove it.
Consider your employers too! Banks, credit unions, lenders, brokers and investors may be struggling due to high volume, physical limitations, offices closing, liquidity issues, servicing issues, staffing issues and other unknowns yet to surface that puts the entire mortgage market at risk. It’s time to face where we are and work together. Okay now. Breathe….
Get your loans closed faster. Email me: email@example.com 866-256-3766