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.
I know that the Yanny-vs-Laurel phenomenon is slowly starting to fade, but I didn’t want to miss the opportunity to relate how this debate can have real-life consequences to the untrained eye (or ear for that matter). The computer-generated voice stating a single word from a vocabulary website has become perhaps the most divisive subject on the internet since the Gold-vs-Blue dress of 2015. On a Twitter poll of over 500,000 people, 53% answered that they heard a man saying the word “Laurel,” while 47% reported hearing a voice saying the name “Yanny.” Numerous creative and scientific answers were given, but the fact remained true that even people listening in the same room, from the same device, at the same time, heard two different words.
So, what does the Yanny-Laurel argument have to do with mortgages?! This Tuesday I returned to work, and like the rest of the population that was out of the office for the extended weekend, I was preparing myself to spend the first few hours of the day “catching up.” Needless to say, the first call I got bright and early was from one of my senior managers who was distraught over “losing a client” who he had been working with for over a year. After getting the background, I quickly understood why he was upset. He painstakingly coached these applicants on repairing a few of their credit issues, he methodically guided then on properly documenting their down payment funds which were coming from erratic sources and he astutely advised their co-signer on all of the requirements of being an obligor on this mortgage. All in all, he had been working with this family since February 2017, and this came as a complete shock.
What I soon found out was that “a friend” suggested that they contact “their guy” who they were certain would offer a better deal. They made the call, presented their case and got quoted a rate that was 3.99% compared to our 4.25%. I contended that it didn’t make any sense knowing that rates had only gotten worse from when we locked them in. I reiterated to my colleague asking if the rate quote was a true apples-to-apples comparison. I reminded him, “did the other company hear about his credit issues?!” He called me back and confirmed that they were presented with the exact same scenario. “Are you sure heard about the asset complications?!” Again, he confirmed they were provided identical information.
We were dumbfounded. How could it be that two independent mortgage companies were being presented with the same data, yet they were both coming up with entirely different results?! We know that we don’t have the monopoly on the lowest rates and terms in the industry (yet), but to be off to such a degree, especially in this tumultuous market was surprising. The Yanny-Laurel phenomenon came to mind and we were forced to resolve that the same information-at-hand can, in fact, yield different outputs for two different people.
The client did feel bad for all of the efforts that we put in for naught, but we graciously told him that if it was indeed that significant of a difference, we encouraged him to take that offer without any ill-will. At the same time, we emphasized that he should demand the loan estimate from the other mortgage company as soon as possible so that he can confirm the terms. He called back to tell us that the loan officer on the other end requested a lock-deposit of $2,500 before he could release the paperwork, and he wanted to confirm if that “was normal.” We told him that it wasn’t, and it made these circumstances sound even more suspicious. We encouraged him to demand in writing all of the terms and fees before he gives them a penny.
Less than 24 hours later he called us back to say he is moving forward with us! Upon receipt of the paperwork from the other company, he saw that there were over $7,000 more in fees compared to what we offered him. It didn’t take much for him to realize that we were not all on the same page hearing the same thing. If it weren’t so common, it would be laughable. It was also the perfect way to wrap-up the Laurel and Yanny phenomenon which turned out to be more like Laurel and Hardy in the end. Astute listening and honest advice is usually not something everyone sees and hears eye-to-eye on.
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