Homeowners With “Orphaned Mortgages” Pay More Money!

January 18th, 2008 - - filed in Tyler Ford & Todd Abelson

Do you have an orphaned mortgage!

If so call 520-331-LEND (5363)

Each year, the mortgage industry loses some of its employees. Some leave through attrition; some through layoffs; some through natural selection.

When business is growing, lost workers are replaced with new hires and the mortgage machine rolls ahead. When mortgage business is slowing, new workers aren’t hired.

Collectively, the industry loses experience, wisdom and general know-how.

A lot of folks look at the situation and say “good riddance”. It’s the complete wrong attitude.

Having fewer qualified loan officers in this country will cost Americans (hundreds of?) millions of dollars. This is because each time that a loan officer leaves the industry, he leaves his clients and their mortgages behind, too.

Owners of “orphaned” mortgages are at a tremendous cash flow disadvantage versus everyone else:

When rates fall, there is nobody there to tell them
When pricing policies change, there is nobody there to advise them
When mortgage guidelines change, there is nobody there to make a new plan with them

90,000 people left the mortgage industry in 2007. That’s a lot of orphaned mortgages and a lot of abandoned homeowners.

And it’s not like the “big bank” to which homeowners write their mortgage checks each month is going to proactively call and say “Let’s lower that rate for you”. Owners of orphaned mortgages are truly on their own in the mortgage world.

By contrast, an actively managed mortgage can save homeowners money.

As a personal example, when mortgage rates fell after 911, they fell hard. During that time, we were on the horn with all of our eligible clients and made two major wins:

We lowered their mortgage rates from their existing levels to something better which lower our clients payment
Were able to let our clients skip a mortgage payment

These were true “no cost” remortgages – our clients got better rates, lower payments, and it didn’t cost them a penny.

Owners of orphaned mortgages didn’t get calls like this. They’re paying higher rates than the rest of the country.

And the examples aren’t just isolated to getting lower rates:

A real estate investor converted his highly-leveraged ARM to a fixed-rate mortgage before new mortgage guidelines prevented it
A low-600 FICO homeowner remortgaged her home loan before Fannie 2.000% low-credit-score fee made it cost-prohibitive
A homeowner in Tucson remortgaged his home loan before falling values pushed his loan-to-value above 80% and required PMI

Owners of orphaned mortgages don’t get the advice and end up paying the price. When their loan officer left the business, they lost their “guy on the inside” and it’s turning out to be expensive.

Mortgage rates and mortgage markets change every day. It’s the homeowners with active mortgage managers that will always have the best rates, payment, and mortgage planning guidance.