"I Haven't Heard these Words Spoken in a Long Time"

As I was getting ready to leave my office early on Wednesday, as it was sleeting, I got a call from an account rep from a lender that I hadn’t heard of before. He had a value proposition that actually brought my blood pressure up a few notches.

He told me that his company specialized in difficult loans. That their business model was expecting 10-15% of the loans would eventually go into default. He told me that each loan they approved would be priced by them based on the risk they felt came with the loan. I asked him about rates, he told me that they would be between 6 and 9%, 20 year amortization and the loans would have a fixed rate for 5 years. I was waiting for him to tell me there was a prepayment penalty, but not the case. They do however charge 2 points on each loan.

At this point, he asked me if I wanted to sign up and I answered NO. I don’t think he expected my answer. Why not he asked, it just isn’t what I want my mortgage practice to look like. He told me that I was missing out on a huge market.

There will be more lenders coming back into the market place that will be doing mortgages that I am not comfortable doing. The fees and rates just don’t work for me. What would you do?

image courtesy of renjith krishnan/freedigitalphotos.net