One of my favorite movies during the July 4th holiday is The Patriot. The sacrifices Benjamin Martin and many others make to win a chance at freedom against insurmountable odds always inspire and remind me what an incredible blessing it is to live in America.
I find a kindred spirit in the ragtag militia that Benjamin leads into battle. They aren’t well respected by the regular army, and often run at the first sign a skirmish is not going their way. Leadership falls apart, the lines disburse, and they are quickly overrun by the more disciplined redcoat forces, causing many battles to be lost.
Within housing, up until now, I have felt as if mortgage brokers represent that disorganized militia, unable to stand their ground in extended volleys with regulators, politicians, or legislators before breaking lines and running, surrendering or abandoning the cause altogether by getting out of the business.
The homeowner casualties were too high, battles seemed unwinnable, and I was on the verge of leaving the cause thinking it was a losing proposition. A few inspirational voices on this site spoke words about leadership, and the value of educating and helping customers one loan at a time. Those words helped me stay the course.
Now, the tide is turning.
In the last two months, I have helped customers I had never been able to help before.
A fireman and his family of five are saving $200/month even though their equity has dropped to less than 5% of their house value. They weren’t required to incur the expense of an appraisal or mortgage insurance.
A software engineer caring for a large extended family is saving $551/month after 75 days of skirmishing to get his loan approved and MI transferred on his 123% LTV house with no appraisal requirement.
A VA nurse with a growing case load of distressed veterans returning from multiple tours of duty reduced her payoff period by 10 years, and still lowered her payment $100/month on her 105% LTV house, with no appraisal required.
A couple with a 170% LTV investment house purchased for an elderly father and care taking brother were facing an adjustment from interest only to fully amortizing. Now they have a 30 year fixed fully amortizing loan that will keep their payment from going up $250/month—and they were not subject to the agonizing unpredictability of an appraisal.
My biggest success story—Mr. Mrs. A—whom I spoke about a few months ago in the Community Commentary, just signed last week, while their family of four children happily colored pictures, and fought over who was cheating at Go Fish. The new loan will save them $350/month. It was a long 4 year battle that included a bankrupt builder, TB W servicing their loan before their servicing disappeared into a black hole for 6 months, a failed refinance attempt when an appraisal came in at 105% of their loan balance in 2010, a trip to the Arizona Department of Housing to propose the use the billions of federal dollars allocated to Arizona to develop a HARP 2.0 type loan which the state ignored in favor of a doomed “you must be 90 days late to be eligible for principal reduction loan program”, an LP accept for the HARP 2.0 program in March, followed by a two month wait to find an investor who would offer unlimited LTV, and an HVE appraisal waiver, and a rate with a big enough credit to cover their prepaids and closing costs, keeping them from adding anything to their principal on their 131% LTV house.
Mrs. A had tears in her eyes as we left the closing, her twin 3 year old girls, 9 year old and 6 year old boys scrambling around her. She thanked me for never giving up.
It was not just me that didn’t give up.
This administration pushed for HARP 2.0, product development geniuses developed a market for these loans, mortgage bankers found ways to fund the loans by working with Fannie and Freddie on all the complex issues related to pricing and selling them, creating guidelines for them, and then bringing them to the market. Account representatives, underwriters, doc drawers, and funders all learned the nuances of the programs to approve, get the docs to closing and fund them. Forgive me if I’ve left anyone out; I’m sure many more experts were involved in this process behind the scenes and they all deserve credit for these victories.
Just the five examples of closed loans I provided above represent $17,000/month in payment reduction. The savings in potential rational defaults? Priceless. At many of these closings, customers who never dreamed of walking away said they don’t know what they would have done if these refinances hadn’t gone through.
I will celebrate this Independence Day knowing that my efforts, along with industry colleagues who saw these programs through to fruition, have provided and can continue to provide some financial freedom in the form of lower payments to distressed homeowners. Our lines held long enough after HARP 2.0 was introduced to do some good, and we are gaining momentum for an offensive. Homeowners finally get to gain some ground lost after five years of home equity bleeding.
Perhaps we can build on these success stories, and present them as a united front with a single mission and focus on what we do—help as many homeowners as possible–to the regulatory, legislative and political powers that be. If we show them enough successes, there may be a day when we will no longer be subject to regulation without representation, and can demonstrate we are capable of governing our own industry, with the best interests of American homeowners in mind.
That is an Independence Day I look forward to.