Why NOW, Why ME, Why NOT?

It was early September 2008 and I along with 5000 employees with GMAC RESCAP just got off the phone from a not so nice Executive from Cerberus informing us we were officially let go.   The news hit the Wall Street Journals website before the call was made  so most of us knew what was about to happen, but the delivery was awful, as no emotion, no heart, and no sympathy was given to those that served GMAC for so many years.  You heard the saying, “It’s not what you said, its how you said it!”   Well no tears to shed for me as when you are 37 married with two girls 3 and 6 you got to stay focused and move on.  So that same day I was working the phones attempting to secure an opportunity in the same industry, selling mortgages.   Little did I know at that time how bad this industry was truly going to effect our County’s economic outlook as by the end of the week Lehman Brothers collapsed further fueling the fire in what was to change our housing industry  and effect millions of Americans in its wake.

David Bravo as he introduced himself on the phone to me, (not David…David Bravo..kinda catchy)  is a Texan from the Houston area  and mortgages is his game and in his veins.  A Regional Manager  and founding member of Cornerstone Home Lending, Inc which was established in 1988 was confident on his call with me, and I liked that.    David wanted me to come work for him at Cornerstone Home Lending, Inc and a plane ticket awaited me at the Jackson, MS airport to take the flight to Houston, TX to see all what CHL had to offer.   So I jumped on a plane and off I went on the friendly skies to Houston, TX within days after our phone conversation.   Ok before I go further you have to understand I spent over 10 years with GMAC and prior to then 5 years at Norwest Mortgage, (now Wells Fargo Mortgage) so I was use to a Corporate Mentality structure but after the pink slip papers delivery speech of letting everyone go over a 3 minute phone call from Mr. Cerberus Executive I realized I had enough with Corporate America.   So when I went to the Headquarters at CHL I was surprised to see a common sense approach to the mortgage industry.  I met the CEO and others and I did not see anyone wearing fancy suits, exotic furniture, expensive paintings, (well I did see a deer head mounted on the wall of our CEOs office if you considered that expensive), and thankfully CHL did not own a private jet either.   What I encountered was a privately held mortgage company owned by some of its very own employees and average 16 year employee tenure with the company and enough capital to weather a storm if such occurred along with a common sense insight to our industry with Southern Charm deliverance, (CHL never originated a SubPrime Mortgage even during those exotic mortgage times and the reality is neither did I at GMAC RES CAP or Norwest MTG  which fit within my  underlying convictions perfectly and that is one good reason CHL never had problems that other mortgage companies had dealt).  So the decision for me was easy to say goodbye to that corporate feel that I had come to know for so many years and embrace a company environment that put family at the hierarchy.  Extremely refreshing.

Right out of the Gate when I started at CHL my main focus was learning a product that I felt would one day be a game changer for Homeowners.   The name was FHA203k Renovation Mortgage and it was now October 2008 and mortgage inquiries were not something many lenders/agents were getting calls about as the housing debacle was in full force.  Many Americans were loosing their homes and here I was learning a program that would one day become a staple of my business and shape the future of homeownership for many of my buyers, but I was completely unaware of its potential in the very beginning.   In short the FHA203k program was pass by congress in 1978 to address the aging Pre/Post World II Existing Homes in the United States by allowing a borrower to purchase/refinance their home and add renovation repairs be major/minor to the mortgage loan under one mortgage note with all work to be held is an escrow account and started the day after you close/fund on the mortgage.  The problem was this program was not well received by many lenders, took forever to close/fund when first introduced.   Over the years Real Estate Agents who had heard about it stayed way clear of association of the FHA203k with their book of business pointed only at  traditional mortgages due to the horror stories on how long it took to close a FHA203k which only trickled down from one agent to another over the years which plagued this program.   Further the Real Estate Boom of the early millennium really closed the books on FHA203k altogether due to the robust economy at the time.  In fact to give you an example only 3400 of these FHA203k Renovation programs actually closed and were insured in 2007 when almost 8 million transactions were closed in the United States.   But move forward one year and a half a million foreclosures later and you will see  that number increased dramtacially.   As I was learning this program to kick start opportunities for homebuyers little did I know the wake of foreclosures that lie ahead as the need for this program was growing as many of these foreclosed homes had  deferred maintenance such as, missing A/C Units, Rotten Wood, destroyed Flooring, and the list goes on.  The more I preached on the success of this program the more I originated and closed on these homes with these eyesore of problems for customers and real estate agents.

So this September 2014 I looked back and evaluated where I stand today vs where I stood then.   After hundreds of FHA203k Mortgage loans closed since my first FHA203k Closing in December 2008,  and now with our new Homestyle Conventional Renovation Mortgages that we now offer I am grateful for the Real Estate Agents that supported me, the Clients that invested in me, and Cornerstone Home Lending, Inc that believed in me to help and ensure that Homeownership is attainable even if a buyer wants to buy a fixer upper as these programs are more alive today than ever before. As the foreclosure market starts to dwindle there is growing trend occurring with potential buyers who want an updated kitchen on a dated existing home and would prefer not to wait til months or years after closing to save the funds or expense it on a credit card to get it accomplished, (before and after picture above is from a renovation mortgage).   Because they want that HGTV look,  options exist to give them that HGTV Look today not tomorrow.  If you look further into the magnifying glass NOW is the right time to act because 75% of the 128,000,000 existing homes in the United States were built before 1990 and they are not getting any younger so we cannot expect to move Americans in homes that will eventually fail and when they do the solution exists and it starts with ME.   So as I finishing typing my first blog in a series of more informative blogs to appear I will be educating potential buyers/consumers on options that exists when buying a home that can change ones perception, create new opportunities,  and change their view when buying a home and leaving me with this ending statement for them.  Why NOT?

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