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What’s Really Going on Out There? And How Will This Affect Me?

 A few years back I read former Speaker of the House, Tip O’Neill’s, autobiography “Man of the House” and found it very entertaining. The master politician had, throughout his career, made observations about life and human nature that had served him well in achieving his goals. His political savvy came to my mind this week as I watched some of the unprecedented negotiations going on in Washington. In my opinion, his famous quote “All politics is local” rang truer than ever. I might paraphrase that today and say, “All economics is local.

I received several calls this week, asking the question, “what’s really going on out there?” and many asked “how will this affect me?”

As I have repeated in the past, we just don’t have all the answers. That being said, in an attempt to try and answer, factually, a very small portion of the questions in many of our minds, I want to recap some of the mortgage industry’s current circumstances.

 Fact #1: As an industry, lenders have returned to more traditional underwriting standards. Many of those standards are the same ones that were in place when I started in this business 23 years ago. At this time, with good credit, a reasonable down payment and verifiable income, you can get a loan at pretty remarkable rates. Without those items, it’s tough.

Fact #2: Lenders are scared. They may not verbalize it to you that way but the reality is, they are scared. That is not a criticism, heck most days I am scared. Everyone is looking over their shoulders, questioning every move they make. The affect of that fear is that they scrutinize every loan and ask questions to the point we often say “you’re kidding, right? But they are not, and answer we must.

Fact #3: Every one is treated the same.  What I mean by that is, because “all economics is local” and there is nothing more local than our own households, we tend to take it personal when an lender asks us to dig a little deeper with an answer or verify a particular circumstance. You should see my face turn red with frustration and I wish I could tell you that will change soon. I do not think it will.

Fact #4: What can change is our preparation and our ability to take a “can do” approach. We must know that it is not us personally being challenged but an industry, attempting to right the wrongs of the recent past and we are all caught in the current. No need to fight the current, it is stronger than us as individuals and it will only wear us out. Swim with the current, like it or not, and look for the opportunity and we will make it through. A bit tired, somewhat bruised but make it we will!

I hope this information is useful this week. I wish I could offer more but truth be known, I know little more than most, supplemented by what I read in the industry news, and of course what I experience in my small world. All economics is local, even at BWA.

All the Best!

Floyd Walters

BWA Mortgage
1035 Foothill Blvd
La Canada, CA 91011

818 952-2726
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