Standing Before The Bar / Why I Hate Applying For A Loan
I was 21 and out of the service just ten days when I went to
work for a small loan company, a week later I was making loan
decisions affecting peoples lives. Just two weeks more and I was
in the field making collection decisions that could literally
destroy peoples lives. 14 months later, and not yet 23, I was
now a bank loan officer with millions in authority! I sat in a
large dark red leather chair, behind a dark cherry desk in an
office paneled in rich cherry, with an impressively large 4
inches thick solid door!
Two large heavily padded leather side chairs sat across form my
desk. Those chairs or rather how people reacted sitting in them
are what this is all about. When friends or colleagues stopped
to talk they were comfortable and relaxed. I loved those chairs,
switch the desk for an ottoman ad a good book and I'd have been
in heaven! When the chairman of the board brought people down
and said "they need $23,000.00 would please write it up" these
people were relaxed. But, when our receptionist brought people
in and they had to say "we need $5,000.00" you would have
thought they were sitting on a bed of very sharp nails! At first
I couldn't believe it, these people were acting like my small
loan clients had when sitting in those little plastic chairs,
talking about their desperation to a kid in an open room full of
people.
It didn't take long in this new setting to figure it out. I was
a judge. These people felt like criminal defendants standing
before the bar. That beautiful huge desk and the large chair
behind it were as intimidating as the large raised "Bar" at the
county court house.
If the intimidating setting weren't enough, there sat a banker!
Bankers have some common traits that are even more upsetting
that the bank itself. Bankers start young, out of collage in
most professions, you are aged before having the huge authority
bankers used to have. Except for medicine no one gets as much of
your personal information as a banker. Bankers have settled for
a mediocre income with lots of security, they do not personally
take chances. Instead of money bankers have their egos stroked,
often causing a false sense of personal importance! Worst yet, I
started under the "Old System," if we didn't like you, you
didn't get the money!
It's now three decades later, the "Old System" died in 1972,
banks haven't dominated the mortgage market since 1974 and have
lost most other markets. "Loan Officers" no longer exist, "Loan
Officers" use to make decisions, we decided wheather or not you
get the money, almost no one has that authority anymore. And
yet, people still feel their being judged!
The idea of judgement exists because so many incompant loan
originators make their clients feel guilty. You, the client,
don't understand you are no longer judged, you haven't been for
the last thirty years. Today thanks to civile rights laws,
you're not judged, you're weighted! Your credit history is put
on the scale, it's nothing personal, you're assigned a number
and treated accordingly. Just like your doctor's scale tells
your weight.
The bad news is that credit scores are abatary. It's true that
most people with credit problems have low credit scores, but
it's not true that most people with low credit scores have
credit problems. Life is abartray, my doctor's scale is set so
that each pound contains 16 oucents, I think 24 oz. would be
just about right. The good news is that like my weight we can do
something about bad numbers.
There's more good news, like clooes for the pleasingly plump,
there's a loan program available for almost everyone. I pay
slightly more for my close at the large and tall stores, than
the skinny guys pay at Walmart. If you have low credit scores or
other high risk factors, you'll pay a little more for the money
from a non-conforming lender.
Is it fair? Yes! Under the "old system" the important thing was
"who you knew." Under the current system the important thing is
"who you are." I can change who I am, I like the system!
There are some things you can do to avoided that awkward feeling
of being judged. First you can make sure your credit is as good
as possible, you can determine who you are. Second, always start
with a mortgage broker, brokers are paid on commission they get
paid to get you the money not to judge you. Third, answer all
questions, fully and honestly, but don't over embellish. Many a
person has talked themselves out of the money. Fourth,
understand there is a difference between discussing facts and
condemnation "You didn't make two payments?" is acceptable. "You
didn't make two payments! Is not! Don't let your originator
condemn you, his job is to get you the money you qualify for.
Lastly, you're the judge, is the originator worthy of your
business?
William J Archambault Jr, reii, One house at a time, Finding &
buying single family rentals, Get the money, A guide to a
successful mortgage application, Flipping for fun& profit