For the latest in our series of Expert Interviews with top real estate professionals, we had the opportunity of talking with Richard Barenblatt (NMLS# 52951), NYC Mortgage specialist. Richard shares his take on what happened to the mortgage industry since the financial crisis and whether it is common to see wealthy buyers of multi-million homes apply for financing.
As for advice to homebuyers, Richard stresses the importance of choosing the right team of professionals, so read on for more useful tips and insights in our interview!
Q: In a nutshell, what has happened to the mortgage market here since 2008?
After the financial crisis, many lenders stopped working with independent mortgage brokers and a lot of companies closed. Lenders stopped offering exotic products such as interest only mortgages, and compliance regulations increased dramatically. Retail banks started gaining a larger share of the mortgage origination business. In recent years the industry has improved its image by imposing higher education and compliance requirements on mortgage originators, some exotic mortgage products are starting to make a comeback, and independent broker firms are regaining a foothold.
Q: Is mortgage an option also used by the rich in New York?
Very much so. New York is a high priced market and it’s not uncommon to come across multi-million dollar mortgage applications. Wealthy borrowers have the means to pay all cash, however many take advantage of their borrowing power to increase their wealth. They typically favor adjustable (and interest only) mortgages that have the lowest interest rates and considered riskier than fixed rate mortgages, and can be paid off at any time.
Their wealth managers take the view that mortgages are considered good debt. Why disturb an investment strategy when you can borrow at the lowest interest rates, and also benefit from a tax deduction on the mortgage payment.
Q: What is the single most difficult part of a mortgage specialist’s job?
Never before has the role of a mortgage originator been more challenging and relevant than it is today. Gone are the days when you could be a car salesman in the morning and show up at your mortgage job in the afternoon.
Today’s mortgage professional chooses this industry as a career, and not merely for a job. They are advisers, held accountable to a high standard of integrity and compliance. Stiff penalties and legal recourse can be imposed in the event a loan officer does not conform to industry best practices.
For example a loan officer can be held accountable for placing a borrower into a specific mortgage product they know they are not suited for “know your client”.
Q: How did you realize the need for “Who Lends Here”?
After working in the mortgage industry for 15 years, it hit me that an unacceptable number of people with impeccable credit are regularly turned down for loans because of factors outside their control. In response to this revelation, I created “Who Lends Here,” a free resource for buyers, sellers, attorneys and real estate agents that directly connects them with New York City-based loan officers.
By showcasing lenders who have experience closing deals in specific condos and co-ops, potential buyers gain streamlined access to competitive financing options. Who Lends Here empowers the consumer with a list of loan officers who have recently worked in the building they’re interested in.
The motivation behind the creation of www.wholendshere.com was to bring an element of human emotion to what can be an impersonal experience for some consumers. By helping to establish trust and loyalty between the borrower and the loan officer, Who Lends Here can help create meaningful and valuable connections
Q: What’s your most important advice for first-time home-buyers?
Purchasing your first home is an emotional and at times an overwhelming experience. For most people it’s their biggest investment. I always emphasize the need to choose your team. Do your due diligence then stay with them. Allow your real estate broker, attorney and mortgage professional to educate and guide you throughout the process. Let them “take the wheel”.
Q: How should buyers prepare for the co-op approval process? Any tips you’d like to share?
The co-op approval process can be for many buyers, a more intimidating experience than applying for a mortgage. The realtor normally guides their buyer in preparation for the co-op interview. In addition to providing personal and financial information including letters of recommendation, a buyer’s final step in the approval process is an interview with the co-op board. The buyer’s goal is to make the best impression as board members will be looking for assurance the applicant will be a good neighbor. Being confrontational, or asking too many questions is not recommended.
Q: Any other insights you’d like to share?
For domestic and international buyers alike, owning a piece of The Big Apple is a desirable goal. New York City just keeps getting better. Real estate ownership is a wonderful thing if you can afford it. Besides the potential for property appreciation, the mortgage payment is tax deductible making it a financially attractive proposition.
About Richard Barenblatt
Richard Barenblatt is a mortgage specialist in New York City and the sole owner of WhoLendsHere. He is also a mortgage loan originator (NMLS# 52951) at Guardhill Financial Corp. The goal of WhoLendsHere is to match Mortgage Specialists with co-ops and condos, and to assist borrowers so they can easily figure out if they can get a mortgage in a particular building.
Interested in being interviewed for our Expert Interview series? Don’t hesitate to contact me at [email protected]
Other interviews in the series
The post Expert Interview with Richard Barenblatt:
It’s Not Uncommon to Come Across Multi-Million Dollar Mortgage Applications appeared first on PropertyShark Real Estate Blog.