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- Andrew Adams, "203K Specialist"
- Contributions:9349
Wachovia owns another mortgage company called World Savings and their main product is the pay option ARM. I had the whole sale rep in my office and I had to ask her to leave when she just wouldn't listen to me telling her that I had no interest in learning any more about that product that I would not place any of my first time buyers in it. She left after I basically threw her out of my office, I called to have her removed from our approved vendor list.
Like any thing every loan program is right for someone. ARMs in general are not bad loans however the difference in the ARM and the fixed rate doesn't seem to be a big enough spread to justify the risk.
Like any thing every loan program is right for someone. ARMs in general are not bad loans however the difference in the ARM and the fixed rate doesn't seem to be a big enough spread to justify the risk.
- Doug Williamson, "Mr Loanman"
- Contributions:50
A first time home buyer GENERALLY does not need an ARM product. Pay Option ARMs are good for someone who plans to be in the house < 2 to 3 years. Example: corporate relos who will be in town 1 to 3 years and then move on to another office. If the mortgage company will not or can not listen to the buyer then move to another lender.
- frank1003
- Contributions:266
Depends on the dollars they're trying to qualify for versus their income. I've been seeing cases where the buyers have been successful in negotiating that the seller pays a point or two towards closing costs. Looking at Wa-Mu today, 30F is at 6.25 no points, 6 with a point and 5.75 with 2 points. 5/1 ARM is at 5.5 with no points, 5.125 with 1 point and 4.875 with 2 points. If I were a first time buyer, probably not staying in my first property past 5 years anyway, that 4.875 looks mighty enticing. You get alot more mileage out of points when using them to buy down an ARM as opposed to a fixed. Maybe that's why they were pushing the ARM, trying to qualify the borrowers for more dollars. Then again, they may have been just full of s*%t and trying to sell the most profitable product. DO YOUR HOMEWORK!
WHY NOT JUST GET A 30 YEAR FIXED AND FORGET ABOUT IT? WHATEVER THE TEASER RATE IS, YOU WILL PAY FOR IT LATER ON. JUST GET A 30 YEAR FIXED LOAN, AND GET ON WITH YOUR LIFE.
- Elsie18
- Contributions:40
Thanks, all. They are going to get a 30-year fixed rate. They just didn't know their own bank would try to railroad them into an adjustable rate they definitely do not want.
- jal74
- Contributions:1077
Infoseeking
Why not? because I wanted a lower payment and I was willing to take the risk of the reset. I am well qualified, as a partner at CPA firm, to understand the risks. Not all mortgage shoppers are stupid idiots.
As for first time buyers who are not financially saavy and would have trouble understanding the risks, it more than likely would not be a good idea to take out an ARM. However, as Andrew pointed out, there are situations where they work "as intended".
Elsie - tell your daughter to run, not walk, to the exit and get a decent broker to go through 30 year fixed options with her. As the customer, her wants come way before what the loan officer wants.
Kind Regards
JAL. I APPRECIATE YOUR EXPERTISE IN THESE MATTERS. YOU ARE STILL LIVING IN 2005 TO SUGGEST PEOPLE NEED TO BE THINKING ABOUT MORTGAGES 24 HRS A DAY. IN THIS DAY AND AGE OF CRASHING HOME PRICES AND UNCERTAIN ECONOMIC TIMES, JUST GO GET A 30 YEAR FIXED MORTGAGE AND FORGET ABOUT THE OTHER BALONY. GET ON WITH YOUR LIFE.
- frank1003
- Contributions:266
I don't totally disagree with you, infoseeking, but there is a glaring question that hasn't been answered at this point, while everyone continues to throw around ideas. Nobody would argue that a 30 year fixed is the safest bet right now, but we have no idea what the borowers' income and expenses are to know whether or not they need an ARM to qualify for the price of home they're looking at. I'm in no way, shape or form defending Wachovia, but they saw her application and we didn't. In this day and age, a lender doesn't usually sugest an ARM unless trying to qualify the borrower for more dollars. Let me be the devil's advocate for a moment; what if the borrower is a good customer, well known to the banker, and banker, rather than tell her that she needs to shop for a less expensive home, trys to sell an ARM to get her qualified and "make her dream come true." That wouldn't be right either, but there are some people who want a 30 year fixed, but the numbers don't work. As a lender, you can't slam a square peg into a round hole. Again, I'm not saying this was the case, I'm just sying that NO information whatsoever was given forth by the poser of this question about income, total debts, credit score, or even the price of the house they were trying to qualify for, yet some people are waiving their arms and damning everybody to hell. Based on information submitted, here's how I read the question posed. "I went to the bank and asked for something and they said I couldn't have it. What should I do." Logically, there is no way to answer this question except for the way I did, which is to say DO YOUR HOMEWORK.
- ELender
- Contributions:1479
They get paid more for Pick-a-Pay...
- frank1003
- Contributions:266
You're right e-lender, they do. But then again, it was never specified that the bank suggested an option ARM. The poser of the question simply said "an ARM." That could very well be a traditional ARM product, which there is little risk to if the borrower understands the pros and cons. Again, the poser of the question said little more than "I went to the bank to get a 30 year fixed and they said I should take an ARM." Well, why did they say that? What was the reason? What is the borrower's income? What are their current expenses? What is their credit score? Did they need an ARM to make the DTI work? There was no information whatsoever given forth by the poser of the question in order that somebody here may give a logical, fact-based response. What if that that borrower sat before you and you worked up the numbers and determined that they didn't qualify to buy the home with a 30 year fixed, but could with an ARM? Again, I'm playing devil's advocate here, which I really hate to do, but the fact of the matter is that there was no information given forth which could possibly evoke a well-thought response.
- DannyInSoCal
- Contributions:445
The pro's and con's of ALL products should discussed with each client.
Many, many clients shopping for a 30yr fixed - Decide instead on a 10yr Fixed Interest Only Arm will help them afford the home they plan on keeping for 7yrs - And allow them to contribute the max to their employer matched 401k.
Others have decided the payment savings of the 5yr Arm they wanted is not worth giving up the safety of a 30yr fixed.
Every client has different needs. That's why there are different programs.
If your lender won't invest the time - Find a new lender.......
Thanx, D
- frank1003
- Contributions:266
Danny, that was a mouthful, and the absolute truth. One must have a great deal of concern to ask questions and LISTEN to their clients. Help them, rather than help one's self. Not every client is a fit for one certain program. We are not merely mortgage salesmen. "Just stick 'em in this" "just stick 'em in that" is mortgage sales, it's not banking. Sit down with your client, find out what their goals are, find out what their needs are, find the best way to fulfill those goals and needs. You'll have a customer for life, rather than a sale today with a questionable tomorrow.
- DannyInSoCal
- Contributions:445
Well stated Frank -
No pun intended..........
Thanx, D
- Elsie18
- Contributions:40
Wow! Chill, people. I'm sorry I didn't provide a million details when I asked what I thought was a simple question. Our daughter and son-in-law's credit score is 750. No debts. Both have good jobs. $70,000 to put down on a $300,000 house. Our daughter did not even get a chance to fill out an application or even have the Wachovia person look at her account, which has the $70,000 and more in it. My daughter asked what the rates were for a 30-year fixed. Before the mortgage person even knew any of the details, she tried to railroad her into an ARM just the way the the broker said in a previous post. And my daughter kept repeating, "I only want rates for a 30-year fixed mortgage." And just as he removed Wachovia from the recommended vendor list, my daughter is taking her bank accounts elsewhere and will get the mortgage elsewhere too. Wachovia was obnoxious, like a car salesman trying to sell her a gas guzzler when she came in for a hybrid.
- jal74
- Contributions:1077
Elise. Good for your daughter. I still reccomend finding a good broker to shop rates for her, I find it always pays in the end to let a professional do the shopping. There are many good ones out there who listen and work hard for you.
Infoseeking. I fail to see how I am unable to move on with my life with a 5 year arm. Blanket generalizations are generally wrong. Please think hard before you make them.
Regards
- frank1003
- Contributions:266
No offense intended, Elsie. But there are really a million and one reasons people are advised to go one way or the other as far as financing options go and without any details, it's impossible for anyone to give you any worthwhile advise. Based on your recent summary of details, I'd say that they were trying to stick your daughter in the most profitable product to them at her expense. Shop elsewhere. Drop by your local Savings & Loan Association, Credit Union, Bank or reputable Mortgage Company. With credit, income, down payment, as you've indicated above, your daughter most certainly could and should command the best rate/terms available.
- Dave Mason, "DebtFreeDave"
- Contributions:1315
Ing only offers arms, they don't think 30 year mortgages are good for the consumer.
- DannyInSoCal
- Contributions:445
Many times my clients are "advised" into a program - When another would suit them better.
I find it's about 50/50.
50% of the loan officers are acting out of greed - The other 50% simply don't know any better.
Drop me an email and I'll share a few easy questions your daughter can ask - Which will help her eliminate those "bs-ing" lenders...
Thanx, D
- Andrew Adams, "203K Specialist"
- Contributions:9349
How about the Loan officers that try and convince people to speak with them offline so that their suggestions don't have to be scrutinized by other professionals?
- DannyInSoCal
- Contributions:445
How about loan officers who don't treat the forums as their personal ad campaign - And respectfully offer help via email instead.
Thanx, D
- Andrew Adams, "203K Specialist"
- Contributions:9349
What.......
when you go offline you exclude those that are seeking information but are afraid to actually post. I don't see how offering information online is in any way an add campaign.
"Drop me an email and I'll share a few easy questions your daughter can ask - Which will help her eliminate those "bs-ing" lenders..."
Why not share your magical questions with everyone....
Who is Bs....ing who?
- DannyInSoCal
- Contributions:445
Magical questions? Comical. In a 5th Stooge sort of way.
Anyone can click on my profile and follow the links -
If you need help finding them - Simply email me...
Thanx, D
- Andrew Adams, "203K Specialist"
- Contributions:9349
I already had and I found the appraisal question comical.
- Andrew Adams, "203K Specialist"
- Contributions:9349
I actually like the no BS approach.
I just think trying to get people to talk with you offline is on the shady side. I have been messing around online since December and have picked up clients as well as some really good contacts in the mortgage business.
I just think trying to get people to talk with you offline is on the shady side. I have been messing around online since December and have picked up clients as well as some really good contacts in the mortgage business.
- Nic Netherton, "Colorado Lender"
- Contributions:7219
"Free lifetime refinancing" priceless.....
- DannyInSoCal
- Contributions:445
Just because you think it's shady AA - Doesn't make it shady.
Will your company allow the client to reasign the appraisal to another company while you are processing their application? If you do - Great. But most competitors have never heard of the DRE form - Until our clients shows the one we sent over.
Since we started issuing the appraisal release form in 2004 - We haven't had one single competitor take advantage of it. They always tell the clients the same lame excuse - "If I'm not the only one working on the deal then I don't want to waste my time." Gotta love'em...
Well Nic - We've negotiated with First American to "rewrite" our returning clients title/escrow for a flat $500 fee. We also fully disclose our YSP used to pay closing costs. Our clients are educated enough to grasp the pass through - And understand free means zero profit.
Closing 9-12 "freebie" mortgages a quarter generates a 1/3 return on new referral fundings without additional capital expense. (Apx 3-4 new funded clients per 12 "freebies")
A bargain in the SoCal market where our average loan amount is $755k.......
Thanx, D
- Andrew Adams, "203K Specialist"
- Contributions:9349
Danny,
A lifetime of free refinaces will guarentee to either put you out of business or make you a liar.
In an enviornemnt when rates are at a historic low I suppose that's a low risk propostion but if you are in a refi boom it's going to do a number on your over head and or you just won't service the clients that you already closed on because there will be other folks out there that you will get paid on. I don't think you really thought that one through!
- DannyInSoCal
- Contributions:445
While I appreciate your concern - Our staff is well aware of their compensation on these files - Zero. And also understand the count towards their monthy and quarterly bonuses for volume and units.
We all get caught up in deals and meetings - And it is valuable to step back and look at the whole picture - Instead of just one deal at a time.
On a personal note - I took a great morning ride on my Indian Chief for breakfast in Laguna.
How's the weather out east...?
Thanx, D
- Andrew Adams, "203K Specialist"
- Contributions:9349
Doing 1 or 2 loans for free is one thing, I do that myself, it's just good business.
If you have 25 calls to return and you will get compensated on 5 of the 25. Which of the 25 calls get returned 1st?
Adding to bonus is great but that's the overhead issue, you are spending money that you are not earning, that's a bad recipe. Eventually it will put any lender out of business.
The best thing to do is go to your local bank and get a quote. Then go to a mortgage broker and get another quote. I wouldnt trust anyone on the internet (no insullt to everyone here intended) . Then I would see if the fee the broker was charging was worth the lower interest rate. Then I would get a 30 year fixed so I dont have to worry about refinancing if I have to anymore. Its the smartest and safest plan.
You guys can go around in circles about interest only loans and adjustables. Not for me thanks.
WACHOVIA STILL PUSHING ADJUSTABLE RATES
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