Wednesday, November 30, 2005

Some brokers will be BROKE-r than others

Since the market is definitely slowing down, I am having more time to talk with some of the brokers I visit. I like getting to know the brokers and building a relationship with them. I had really some really good conversations with a few brokers this week.

There were a few that I could tell were not happy doing what they are doing. Even though they have no formal financial background, they knew that many borrowers were setting themselves up for financial failure. One broker said "80% of the people I'm seeing now should NOT be doing a loan". Another one was telling me how they just cannot put borrowers into neg-am's (see my long option-arm post below for more info). They see other guys in the office making huge money and driving BMW 745's by sticking as many borrowers as possible into option-arms with the 3pt rebate. It was especially refreshing since this broker was in his mid 20's. The broker lives beneath their means...and as hard as it is, is not sidetracked by some of the other guys in their early 20's that are making 15-50k per month.

There are also quite a few brokers that have lost that "excited" look on their faces. I guess now that things are slowing down some, and that 20k a month isn't rolling in as easy now, it is putting a little stress on some people. I know of a 1 broker for a fact that refi'd so they would not be late on their mortgage. I know of a few others that are starting to stress about the 3-6k mortgage payments and other bills. The money isn't "easy" or "guaranteed" like it was the past several years.

BUT...there was also the broker that I talked to, who commented on how slow things were. I said "yup, most borrowers are maxxxed out...what can you do to help them?" The broker then proceeded to tell me they have some clients that are using credit cards to pay their mortgage. I played dumb..."are you kidding me??" Nope, the broker said, it really isn't that big of a deal....I HAVE DONE IT a few times when there have been slow months. Then they said that having a big mortgage payment "motivates them to work harder". Isn't that a nice thought process.

Yeah, I like to hit a bee's nest with a stick before I go for a "motivates" me!!


Blogger DEN said...

Yeah, I like to hit a bee's nest with a stick before I go for a "motivates" me!!

Man that is classic!!! hahahaha

Keep up the good work socal mortgage guy.

Just spoke to a friend a few days back...said his Mortgage Manager friend had to layoff some people at the end of the month..ouch, right before X-mas.

You know any big local socal lenders cleaning house? I know New Century is, Ameriquest, and I think Countrywide plans to.

11/30/2005 6:35 PM  
Blogger SoCalMtgGuy said...

I know of the big ones like you discuss...

From what I see, there are several companies that are looking for wholesale reps.

I guess that is not much of a big deal because they are 100% commission...and the sales force drives the business.

I'm seeing more turnover in the business. It is tough working 100% commission when things are slow...especially if you don't have solid accounts, or are just trying to get going.

11/30/2005 6:55 PM  
Blogger David said...

Using a credit card to pay off a mortgage. Classic.

What's next?

Using a PayDay loan to pay off a mortgage?

11/30/2005 7:05 PM  
Blogger SoCalMtgGuy said...


Sure, why not!

debt is in, debt is cool, everybody has it...

I can't wait for some rational thinking to return.

I stopped by best buy today...every lcd/plasma tv has a sticker on it..."take me home for 37, 45, 57 dollars a month".

Amazing that everything is financed now. You start living a lifestyle that EVENTUALLY has to be paid off. Oh wait...that is what homes are pay off debt with 10k a month appreciation.


11/30/2005 7:27 PM  
Blogger David said...

"everything is financed now"

Candy Bar Sticker:

Only 6 cents a month for 18 months.

11/30/2005 9:39 PM  
Blogger SoCalMtgGuy said...


That is a GREAT idea for kids!

We can teach them at an early age about leverage and how to s-t-r-e-t-c-h out that allowance!!

Call fisher price and mattel...we're taking this market! We'll get the backing from some major banks.

11/30/2005 9:51 PM  
Blogger desi dude said...

they are already doing this, in many cases--financing candy/burger

when they use their credit card and pay minimum payments for next 10/12/18 months!


you filled a void in the housing bubble blogs-- mortgages-- with your blog.

12/01/2005 7:15 AM  
Blogger SoCalMtgGuy said...

Thanks Desi Dude!

I'm so glad that people find my "insider" perspective informative.

It is nice to be able to reach more people than just the friends and other people I came in contact with.

There is a lot of CRAP going on out there...and people need to know so they can make an informed decision BEFORE they flip out about "being priced out of the market".

12/01/2005 8:11 AM  
Blogger AmazedRenter said...

Yep, add me to the regulars on this blow now too. (Albeit a quiet one!). Thanks sir.

12/01/2005 6:36 PM  
Blogger ChillinIntheOC said...

Great blog!

12/01/2005 9:25 PM  
Blogger WArenter said...

You can charge your mtg. payment to your credit card, then consolidate all your debt into your mortgage through refinancing. A never ending cycle, till the appreciation runs out...

12/01/2005 10:13 PM  
Blogger SoCalMtgGuy said...

Amazed renter and chillinintheoc,

THANKS for the comments!

It takes time to do a blog with good content. I'm not just linking to articles for people to discuss...I'm writing the content and trying to keep it informative, interesting, and entertaining.

Keep stopping by and giving me feedback!



12/01/2005 10:33 PM  
Blogger SoCalMtgGuy said...


until the apprecition runs out....


all is well while things are good.

eating ramen noodles to make 10k a month in appreciation is "worth it". eating ramen noodles why being upside down on your I/O mortgage is not sooooo good.

12/01/2005 10:34 PM  
Blogger Scott said...

I was hoping you were going to say that you met this broker that was like Lou, that older broker in the movie Wall Street. "The main thing about money, Bud, is that it makes you do things you don't want to do."

Are there any older brokers in the business? The way you made it sound, the average broker age was about 24.

12/09/2005 7:44 AM  
Anonymous Anonymous said...


Here is story from an RE Broker (me)that you might like...

After driving my buyer's around for a year and finally finding them a house in their price range that had a room with a wall big enough for their 50 inch plasma tv, we sat down to write an offer...when I explained (again, as I had before) about the 5% needed at P&S, all I got was a blank stare and the "we don't have that kind of money liquid"....I responded, no problem..many people don' can do a home equity line and then pay it off at closing with the proceeds from the sale of your home (I was putting in Contingency of Sale on their current home)...their response,"we can't..we already maxed it out buying the new car"...ARGGGH!

1/10/2006 2:58 PM  

Not to many will spare a tear for the real estate brokers.

1/09/2013 11:33 PM  

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