We reduced our staff this year as most did in response to the credit crisis. In the process, we shuffled our more experience staff into key positions, lost two employees for personal reasons and moved two closers in to fill those spots. We hired a new closer but were still left with only two full time closers and that's not enough. I decided to be the third closer and we have two other inside employees able to jump in and take closings if needed.
As the third closer, I'm not full time, I just jump in if the schedule gets too crazy for two people to handle.
Yesterday afternoon I got a panicked call from one of our favorite loan officers. He was on the beach with his family, hoping to enjoy a vacation. There was a renovation loan - FHA 203K - that he had been working on since February. It was finally ready to go but there was a catch. If it didn't close today, it would have to be postponed until next month because the borrowers were on their way out of town this morning.
I looked at the schedule and saw that our Saturday closer was already booked for a ten o'clock in Altoona. The 203K was in Pittsburgh, so I said, OK, I'm on it! We booked the closing for 8:30am so we'd be done and the borrowers could get out of town by 10am which was really important to them.
All went well and it did close, but I experienced a bit of disengagement with the borrower that I thought was worthy of a mention here.
In a construction loan or renovation loan, I take my time going over the obligations of the borrowers in the construction phase just to make sure they fully and completely understand. I do this by reading the construction or renovation agreement to them verbatim.
Trust me, it's not boring to the borrowers. This is a big project and they have spent a good deal of time thinking through the logistics. It's important that both lender and borrower are on the same page. So, this morning I read the rehabilitation agreement - including the part about the default of they don't comply with the terms. We paused. They expressed surprise and I said, yes, you must carefully consider the terms of this agreement. You cannot make changes without the lender's approval.
We continued and got to the deadline for the completion of the work. The borrowers both said "That ain't gonna happen." I said that they must take seriously the date in the contract. They expressed once again that there was no way that they expected to get the work done by that date. I once again reiterated that the terms are clearly spelled out and that this is the agreement. They decided to sign the agreement and proceed with the transaction commenting further that they would discuss it with their loan officer. I stopped and said that I have no idea to what extent the loan officer can adjust or change the agreement after closing. It is likely that he will not be able to do so. They decided to close anyway.
I offer that discussion here so that I can express to borrowers in the most sincere but firm way that you must take seriously the terms of any loan document you sign. I do hope that all works out for these folks. I hate to see anyone walk into a contract with the mindset of not taking it seriously. It's their choice. The lender's terms were clear. They accepted. Let's hope all goes well.