Why Experience Matters Less in the Mortgage Business

Who's the better loan adviser?  Ricardo or Brian?

Usual logic would dictate that my grey hair and 20 years experience in financial services make me the obvious choice.  Today, that just ain't so.

The mortgage industry went through a paradigm shift this summer.  Lending guidelines changed in 2003, changed again this summer, and have been continually evolving ,at the warp speed, since August 2, 2007.  Each week is a new experience as banks barrage us with e-mails about what they will or will not allow.  The well-coiffed, middle-aged lady, at the local bank, may be the absolute worst choice for you.  The spiky haired, tech savvy, and ambitious young mortgage broker may be the better choice.

Here are Five Reasons Why The Ricardos May be a Better Choice For You Than The Brians:

1- Brians are established.  That's a positive, right?  Maybe not.  Brians are dealing with past clients right now.  Many of those past clients "snuck a HELOC" on the home  and are running back to the Brians for help.  The Brians have to take care of their past clients.   Unaware of their clients' financial suicide, the Brians are scrambling to fix their problems amid declined values and tightened lending guidelines.

2- Brians are opinionated, which is a nice way of saying that they're "set in their ways".  They criticize the Fed, scoff at the 100% programs, and complain rather than do.  Their established client base feeds them enough business to keep them happy so the "fire in the belly" factor is absent.

3- Ricardos are more tech savvy than Brians.  Lending has completely moved to the goal of paperless transactions.  While Brians are trying to schedule you in for a loan application,  Ricardos are communicating with you via text on the cell phone, instant messaging, and e-mail.  It's no longer a matter of the big eating the small, it's the fast eating the slow in the mortgage origination business.

4- The Brians have no more experience than the Ricardos today.  Loan guidelines were completely reset this summer so both Brian and Ricardo need to "re-learn" the business.  The better originator is the one who commits himself to the principle of continued learning; the Ricardos are better suited for that because of their ambition.

5- The Ricardos are far less complicated with "life" than the Brians.  The Brians are running for office, chairing Chamber of Commerce committees, and raising money for their children's school.  They come into the office at 10AM and head out for a round of golf with a financial planner at 3PM.  The byproduct of their business success, responsibility, leaves them with less time for you, the aspiring home buyer.

Am I committing financial suicide here?  No.  I'm much more like a Ricardo than a Brian.  I have a team of young people who help keep the wheels turning at my practice.  I'm committed to technology and its utility to create a more seamless financing experience.  I spend a lot of time reading lending manuals to keep abreast of the ever changing guidelines.

So what's an aspiring homeowner to do?  Pick a lending guide carefully, like you would a doctor.  Establishing a relationship with a financial professional can make a significant difference on your wealth in twenty years. Comfort, confidence, and commitment are what you need when choosing that adviser.  If the silver-haired bank rep agrees to let you into her club, she may be the right choice.  The new club, being built by the purple tie wearing young man, may offer you VIP status.