I have heard this over and over from some of the agents “My mortgage lender can do it, why can’t you?”. Even with the black and white kind of rules and guidelines in lending, there are still some niche programs and products that not everybody has access to or don’t know how to do properly.
There are different entities who do lending; Banks, Mortgage Brokers, Mortgage bankers, etc. Using or selling your loans to different investors (secondary market) is what determines how many programs and different products one can offer. The more investors, the more options and most likely better rates and fees.
So, is this the case all the time? How come a lender can do an FHA loan, and some can’t get it done? Well, most lenders, especially banks and mortgage bankers who use their own money to fund the loan and have some skin in the game, will put overlays to protect their warehouse lines and limit the buybacks on the sold loans.
Sometimes, Mortgage bankers who do their underwriting decide to get a file done that is considered “irresponsible lending” just to make the agent happy or make a buck. In my opinion, if you are a good Mortgage banker and company, you should know and understand this is why we are in a bad economic situation and our housing market is a mess because we did lending like it was giving out candy on Halloween if you had a right costume and could pretend to be who we want you then you got the candy!!
We need to pay attention to our lending practices and even though we all want our clients to be homeowners, sometimes it isn’t the right decision for them, and as professionals, we should understand that and prepare them to become homeowners not to set them up for failure while collecting our checks.