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   ARTICLE   |   From Scotsman Guide Residential Edition   |   November 2008

Provide Service After the Sale

Brokers who help past clients facing financial trouble can earn trust and referrals

It is true that mortgage brokers' best leads are their clients. This is why many brokers' business cards have that tattered, but effective phrase on the back: "One of the greatest compliments I can receive is a referral from a satisfied customer."

Many brokers, however, don't continue to provide post-sale service to ensure that clients remain satisfied. Consider, for example, a scenario in which a prior customer faces trouble. Whether the problem arises from an increased payment, a changing life circumstance or other reason, a great broker will work diligently to help them stay in their home, seizing the opportunity for service. Such situations separate the average brokers from the excellent.

In the past, many brokers and lenders either ignored such problems or foreclosed on the house with little to no due diligence. In today's turbulent market, however, brokers can't afford to alienate anyone. Compounding the necessity for providing service after the sale, some state governments have passed legislation to make sure that lenders do everything they can to help homeowners prior to foreclosure. Clearly, mortgage brokers should be aware of these new laws.

California's Senate Bill 1137, for example, lays out precise instructions for what a lender must do prior to initiating foreclosure on a property.

Steps include:

  • Making at least three phone calls to the main number
  • Sending a first-class letter
  • Following up with a certified letter, if necessary

Additionally, the lender must have a link displayed on its Internet home page that provides information for homebuyers having financial difficulties. If all these steps don't occur, then the lender can't issue a notice of default.

There also are government programs to help homebuyers. Many state governments have allocated millions of dollars to help stabilize communities hit hard by foreclosures. These programs include loan counseling and downpayment assistance. The best way to access these resources is to visit the Web site of your state housing-finance agency (HFA).

Although the main thrust of HFAs has historically been to help those buying their first home, the surge in foreclosure action has led some of these agencies to revise their missions. Many are getting into the refinance arena, prompted by the federal government's recent passage of the Housing and Economic Recovery Act of 2008. The act contains provisions for a Federal Housing Administration (FHA) loan program called FHASecure, which allows families who have been making timely payments to refinance into a fixed-rate loan before their loans reset to a higher interest rate. Some states have implemented similar programs, some of which preceded FHASecure.

Before suggesting these programs to your clients, check to see if there are any restrictions in place, some of which may exist because of tax-exempt-bond funding. Many programs, for example, have income restrictions and are intended for single-family owner-occupied homes. Duplexes and rentals probably won't qualify.

If your clients do qualify, competitive rates and predictable loan terms are some of the biggest advantages of using these programs.

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Mortgage brokers can and should be a valuable part of the affordable-housing market on the front end of such transactions. They can also help on the back end. Remember that a good client is an informed client, and an informed broker will have outstanding opportunities.

Stay up-to-date on affordable-housing programs in your state, keep track of important housing legislation, and keep in touch with your clients. If you do, they may pay you the greatest compliment you can receive.


 


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