Evolve Bank & Trust
Q: What should a LENDER getting back into real estate AFTER 10/3 expect?
A: I have quite a few people reach out who worked in lending up until the crash and then went on to do something else. I always ask about their business model previously, what their expectations are and most important what their new business model would be. Thankfully, the environment we came from in the last decade is now nonexistent.
The industry had a “wild west” mentality of get the deal, throw it to the wall and hope it sticks. Worry about the details later. I hated that mentality, and regulations in place now will not allow for it. We are now required to be responsible, diligent and most importantly, professional. This is your craft,
learn it. You owe that much to your clients.
Q: Are Rates Going to Go Up Soon?
A: The truth is no one really knows, as there is a giant market contributing to fluctuations in rates. It’s not just one person with a ticker, unfortunately—it’s reactionary and involves monetary flow and the MBS market. The fed has been very vocal about the need to raise the federal funds rate, which could cause rates to increase. But we have also seen such volatility in Wall Street lately that it’s very hard to pinpoint when that would happen. My advice to clients is to take the environment today if you like it. Waiting for a huge decline in rates to happen can be a dangerous gamble, as rates can climb just as fast as they can drop.
Q: With All the Changes to Contracts and Regulations, How Are Transactions Different Now?
A: I actually love the environment we are in. There is zero room for unprofessionalism and honestly, that’s the way it should be. Applying for a mortgage is not hard, as long as you have the right team in place. When your Realtor, lender and real estate attorney are on the ball 24/7, it makes all the difference. A major factor contributing to this is training. With each of those relationships, it’s very important that we learn each other’s roles so we can help each other.
For example, if it’s a condo sale, having the Realtor request the condo documents at offer acceptance is a great practice. This isn’t the Realtor’s job, but taking that little step while on the phone with the other side speeds up the process. Communication is vital. We have contractual dates we must meet. Staying in front of these is not just helpful, it’s required to be a success in this business. Not every deal is going to go perfectly but if you are ahead of schedule, problems can be solved in advance instead of at the table.
Q: Why Do Different Lenders Have Different Guidelines?
A: There is so much diversity on our side. It all depends on the channel. What works for one lender may not work for another. This is referred to as an overlay, and it means that the person reviewing the loan has determined it is not acceptable to the bank or the investor’s guidelines they were taking it to. There are brokers, correspondents, banks and portfolio lenders involved. Each has a different rhyme or reason as to why the determination was made.
I always suggest clients have a network in place that allows for multiple people to review and give their opinion and this applies to all loans, especially luxury. Large loan amounts always go to a portfolio lender—this means they wrote their own guidelines for their portfolio.