I’ve been there. It’s true. March 2007.
That’s when my real estate meltdown occurred and alerted me to the upcoming problem with the subprime mortgage market.
Sure, there had been rumblings since January. But it hit home for me in March. I had come out of a tough January and February with little to show and just barely enough money to pay the bills without dipping further into savings or credit. Thank God March had arrived…or so I thought.
With three closings on the board I was going to be okay.
I was working with two buyers and one seller. The seller property hit the fan first. The buyer’s agent called me and said that the lender had pulled the loan. The buyer’s credit hadn’t changed but the underwriter was now demanding more. More confirmation. More documentation. The buyer would rather forfeit his deposit than provide more. So he walked. Three days from closing.
Nothing is as exciting as getting all the work done with only 3 days to go…and having the rug pulled out from under you. The seller decided to take the duplex off the market and wait ’till next year.
The second deal to crater was another investor. This time the buyer. And while the previous story involved a guy putting 5% down for his non-owner occ loan my buyer was going for the 100% variety. Stated.
While we weren’t three days from closing on his rehab project it still hurt when the loan disappeared. His lender, and two others we checked with wouldn’t take the paper. Underwriting had changed. With his score and lack of documentable income, he was through on the 100%.
When the loan officer called on the third deal, another 100%, I knew what the call would bring.
But the sun came up tomorrow, as it were.
I focused in and redesigned my blog posts. My interview process and my emphasis with each and every lead I generated changed. My target was now investors that had wherewithal. I went after the 720 and above category. They have to have 10% liquid plus a 3 month reserve for me to consider them an “A” prospect. Oh, and a job. Documentable income.
I made enough in April to pay for itself and in May made enough to pay for May…and March. Here’s the point. I fell to the floor when I took the hits. That’s where a lot of you find yourself today. But get up. Refocus. Take a day to figure out the clients that can still get the loans and go after them.
There is still money out there to lend. And there are still potential borrowers out there. Maybe you have a law degree or a doctorate to fall back on. I didn’t. I just had to get up and go to work the next day. You can do it, too.
The roughest stretch I ever went though was in 1994. It was pretty much the end of the great refi boom of the early 90’s. I was lucky that my sales manager had forced me to call on RE Agents, even when business was booming. Still, rates were up and times were tight. I ended up getting a second job to make ends meet. Luckily, Pulp Fiction came out in October and heroin really took off. It was a seller’s market and I scratched out a decent living for quite some time until the market picked back up.
Bottom line, all this will pass. If you are left standing, smile. Much of your competition is gone.
And the great thing about heroin sales is that you are helping people to lose weight.