Mortgages and Loan Officers

In the real estate boom of the last decade there have been some major players in the mistakes that were made and then there have been those foot soldiers that knew little to nothing of what was going on at the higher levels. For those loan officers that didn't know what was happening, they hopefully did more than just review the numbers and acted in the best interest of the individuals applying for a loan, at least an advisory capacity.

There was a lot happening with what types of buyers or borrowers could get by way of financing during the real estate boom. Several individuals were being approved for mortgages that were about 95 to 100% of the value of the loan with virtually no down payment. These were known as 95% mortgages. There were specific products that were offered by the lenders that had this as their title.

When this happens, there is virtually no financial consequence from walking away from a home. If you have a down payment requirement of 20%, this means that a home worth $200,000 requires a down payment of $40,000 and also means that there is a level of dedication on the part of a potential borrower not only to save the required amount down, but then to keep the investment and fight to stay in a home versus what we've seen recently with people simply walking away.

Loan officers see things from a big picture perspective and as much as they tend to want to help people get into homes and are not the final say or answer in the process, they certainly have their fair share that have pushed mortgages dishonestly to borrowers painting a better picture than what it was really like. I can be heartbreaking to see people struggle with debt due to the dishonesty of others. Current mortgage rates are lower than they have been for a while, but there is a responsibility still for borrowers to know where they are at financially and then make the right decisions based on that knowledge.