Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
A few weeks ago a friend of mine called up asking a few detailed questions about a mortgage scenario. Knowing his personal financial situation, I quickly understood that he was really “asking for a friend.” A colleague of his, was in the midst of attempting to refinance their mortgage, and started discussing the details with my friend. The colleague was certainly going to be saving money, but the fact that the loan officer was putting them into an “FHA” loan even though he was currently in a conventional loan provoked my friend’s curiosity. My friend said, “regardless of what they are offering you, I am sure Shmuel can beat it,” (which I always believe to be the case), and told him he loses nothing by getting a second opinion of what’s available for him.
His credit was fair, his income was sufficient, and his home was in good condition. I twisted-and-turned the scenario every which way, but could not understand why the loan officer was recommending an FHA loan. With the proposal that this applicant received, he would be paying almost $300 extra a month in mortgage insurance, despite the fact that he had reasonable equity in his home. When I spoke with the individual directly and asked how he got to this company and loan officer, he revealed that it was an online recommendation from social media “friends.” He admitted that he was surprised himself by the suggestion of doing FHA, but “the numbers made sense” regardless. He forwarded to me some of the decorative charts and animated emails that he received from the agent, and said “it all seemed legitimate.” I explained to him that I never doubted the validity of what they were offering, however, I did question why they offered it to him in the first place. It made absolutely no sense to me.
In a world dominated by social media spheres, degrees of friendship separation, and circles of online influence, it seems like everyone “knows a guy” that can offer them whatever service or product they need. Platforms such as Facebook, LinkedIn, Twitter, Instagram, etc have made multi-billion dollar businesses out of grouping interests, sharing information and merging resources so that people can be more connected to one another. For some basic items and needs, these resources are invaluable and can lead to seamless transactions and discounted products. Yet, I continue to be amazed at how many people rely on lousy recommendations, unfit resources, and inexperienced professionals to handle major purchase items and important transactions.
When it comes to selling a house, buying a house or financing a house, the person with the most ‘likes’ or ‘shares,’ is not necessarily the one most suitable to handle your housing or financing needs. When selling, the highest offer isn’t always the best offer. When financing, the lowest term isn’t always the best mortgage; and when dealing with a professional, the lowest fee isn’t always the most advantageous. The realtor with the lowest commission is not always the best recommendation just because your friend or neighbor used them, and your friend or cousin who is in the mortgage business, or who “knows a guy” isn’t always the most suitable to address your specific needs.
I have heard countless horror stories in the last few weeks alone of mortgage recommendations from clumsy brokers that were useless, ill-advised and totally misguided. One of the most valuable services that I offer is custom-tailoring my approach and consultation to my clients unique situation. As for this fellow, his new mortgage is set to close in a few days with Approved Funding – without the PMI, with lower costs, and a much lower payment. In the end, experience, knowledge, and competence are what’s truly worth “liking” on and off line.
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