Hello everyone and Welcome to another
episode of selling Greenville your
favorite real estate podcast here in
lovely Greenville, South Carolina I'm
your host as always Stan McCune realtor
right here in the Greenville area and as
always you can find all of my contact
information in the show notes if you
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today is a very special day I've been
trying to do this or I've been trying to
build up for this for a long time
to finally have a guest on the show and
so I'm I'm very excited to do this I'm
also doing a video of this now
we'll have to see I'm I'm trying to do
multiple things at once that I've never
done before so we'll see if I end up
moving forward with the video but
regardless I have today a very special
guest Derek Horton who is a senior vice
president and mortgage executive at
Southern first and
Derek and I got connected very early
on in my personal real estate career
he's handled since that time every
personal personal mortgage that I've
gotten as well as a huge percentage of
my clients loans over the years and
yeah we've had battles with appraisers
we've had battles with Underwriters
battles with unreasonable sellers the
whole gamut but I can say genuinely that
Derek has legitimately gotten deals done
for me over the years that I don't think
any other mortgage executive loan
officer would have been able to do and I
think that that is really the highest
praise that a realtor can can ever give
to some someone in the mortgage space so
Derek welcome to the show thank you
for coming on thank you for all the
work you've done over the years and
yeah welcome
man thank you thank you that's a great
introduction I'll take it yeah you're
right if a realtor can endorse you
that's that's As Good As It Gets
yeah absolutely so thank you for
having me on yeah you're very welcome
I'm I'm I couldn't think of anyone who
I'd rather have as my first guest on on
the show
just with all of the stories that we
could tell and I don't know if we'll
tell I don't know if we'll tell any of
the juicy ones but but we we could we
could do that all day
yeah maybe maybe you'll come back on the
show and we'll have to do that
another time but I want to start with
this
a lot of people these days
they just want to Google mortgage
lenders that and you know they they're
just looking up you know what's the
what's the cheapest rate that they can
get
or what's a lender that that they
can get that you know just has a little
chat feature that I can just upload
things online I don't have to talk to
anyone
that's what a lot of people are are
wanting to do these days or they think
that that's what they want to do and I
talked on the show in the past about why
I think it's important to go with a
local lender and a local loan officer
but I'd like for you to just take a
moment to give your elevator pitch on
from your perspective as a loan officer
someone who's been doing this for years
what is it from your perspective that is
the thing that separates a local lender
local loan officer from one of these
internet you know eye brokerage
companies that that does Lending
yeah I think the the number one thing
I would say and it just happened
recently
and I won't name the company but a
client came to me after a they were in
the middle of a transaction two weeks
away from closing they had an online
lender that they had found and they ran
into a little bit of a hiccup and the
online lender became unresponsive for
like a week so didn't hear from them you
know they couldn't get them the realtor
couldn't get them no one could get them
imagine that yeah and so they end up
calling me we end up jumping in we have
to getting the the transaction to
closing and I say all that to say the
number one reason I think is because
generally speaking the local loan
officer has tons of relationships that
matter to them they care deeply about
the particular realtor that they are
probably that is involved in the
transaction
and generally speaking they care
about the client that they're gonna have
to look in the eye at some point because
they're local and they run into them or
they see them at the closing table so I
think ultimately they care a little bit
more they're not just a person behind
a telephone or a computer that never
interacts really with with the client so
ultimately I think that's the the key
right is that they have skin in the game
themselves and so that makes all the
difference in the world in getting the
loan to the Finish Line yeah absolutely
and I think I think as well one thing
that I didn't really understand when I
broke into this industry that I
understand a lot more now is how a local
lender
they just they you guys have
relationships with with the underwriters
with the appraisers and there there's
just accountability kind of across the
board that you just don't you know I've
I've had closings with rocket mortgage
and Quicken Loans and whatnot over the
years they just don't have those
relationships and so when the you know
what hits the fan
they're not they're not going to be able
to to step in and and save the day we're
kind of at the at the whim of all these
other parties
yeah I would Echo that so when I was
getting into the mortgage business and I
was interviewing I interviewed with a
ton of companies because I was trying to
find the best place and another lender
who had been in the business a long time
said wherever you go make sure you can
see the underwriter make sure you know
the processor make sure that you have a
relationship with them and it's true so
if if I have a problem with a loan the
UN I can literally go talk to the
underwriter down the hall and it is much
harder for an underwriter to just it's
much easier for an underwriter in Idaho
to check a box decline alone move on if
they don't have to interact with me on a
daily basis the there's accountability
there that you just don't have when
they're distant and so I think a local
lender has the relationships around them
that that really
can can make or break the transaction
it's such a dicey we talked about this
you and I there's so many things that
can go wrong and so if you have a local
lender and a local realtor who have
relationships they can help navigate all
those problems versus you know someone
that you don't know you've tried to list
yourself or you tried to buy without an
agent I mean there's just whatever it is
having the right people around you will
make all the difference in the world
yeah yeah absolutely so a lot of
people and honestly I kind of put myself
in this category as well like we
don't necessarily know
what your day-to-day looks like like as
a loan officer mortgage executive
walk us through like what's what's a day
for you kind of a standard day look like
yeah so
we work
m generally speaking we work flex
flexible schedules like you do because
you know if I'm here I may not I may not
be as busy on a Tuesday I don't I don't
even work
as I am on as I am on a Friday because
you know listings come out on Thursday
or whenever and then all of a sudden all
these people want to see this house and
they need pre-approval so our schedule
is very you know we pretty much work
we're on call all the time
on a day just a typical day for
example this morning
I you know got up I got an office at
like 8 15. the crazy it's a little bit
busier than normal with applications so
we had about eight pre-approvals we had
to get done this morning
I did and so most of my day this
morning was spent pulling credit
reviewing the financials clients had
uploaded and sending out
pre-approvals most of them and not
and trying to work through issues that
the clients have right and so that's
a big part of the day when you have a
lot of applications
so I would say getting applications and
then reviewing those is a big part of
the day once the loan is underwritten
written another big part of the day is
getting all of the the financial extra
financial documents that the underwriter
has requested before the loan can close
oh yeah so that's a big portion of the
day
and then following up phone calls
being a being a loan officer is a
sales position and so you you you spend
a lot of time in those details of the
actual loans you're working on but then
if you don't dedicate a large part of
your day to building relationships with
financial advisors and Realtors and
other bankers and whoever you know then
you're not going to have any business
you know the next month and so you know
it's a balance constantly of not getting
too caught up in the weeds of one
particular loan and trusting the people
in the back office to do their job which
is not easy to do because there's a lot
riding on it and then also balancing you
know the sell side which is building
relationships out in the market so
I would say a good loan officer is
working
long days you know especially in the
spring and in Fall it's not a you know
it's like real estate you're on call all
the time and there's
there's always problems and so you're
just that's what you're dealing with
you're kind of a problem solver overall
and so I think that's
you know I always say the best loan
officers manage the chaos for the client
and the realtor to an extent right those
are the best yeah I mean it's all they
take all the anxiety and pressure of the
transaction and they absorb as much of
it as possible so that that the people
other people their client particularly
don't have to kind of deal with it yeah
absolutely now one thing that kind of
piqued my interest you mentioned an
uptick in mortgage applications is that
just a random thing or is that something
that that you're kind of seeing and
others are seeing right now I don't
really know
honestly I've just saw all the data
that said mortgage outpatients are down
yeah about that and so but since last
Tuesday for whatever reason we I have
seen me personally and I haven't really
checked with lot of the other Bankers
but I've personally seen an uptick in
application so
I don't know it's just an anomaly but
we'll have to keep track of that I
know hey I'll take it I'll take it yeah
absolutely absolutely
what so
one thing I was thinking about as I was
kind of thinking through some of the
questions I wanted to ask you and and a
lot of these questions are I'm not sure
I'm not like fishing for anything I'm
like legitimately I I want to actually
hear what you have to say so what's
something that you know now about real
estate or the mortgage industry that you
wish you knew earlier in life or earlier
in your career
yeah that's a good point so I think um
what's what's something that I wish I
knew I think I wish
I would have known
for me personally I wish I would have
known
how
how much easier it was to get a home
loan than I thought it was going to be
for me personally
so I
you know did not have did not have a
lot of money at 23 24 years old
I was you know
kind of throwing money away you know
with the lot how I was living you know
and
and eventually I started to get
married around 25 and I did not want my
wife living in the where I was living
and so I started looking into it and
realized like there's options out there
and where I didn't have to have a ton
of money to put down you know and so
and so I was able to buy my house using
a USDA program which is no money down
when I was 25 which was you know 20
years ago and and and so I think what
part what part of the was that in the
upstate yeah it was in Duncan in Duncan
okay yep yep and so I was able to you
know I think so looking back I would
have
I would have just started
maybe trying to buy a house earlier you
know because I didn't think it was
possible for me I actually grew up in a
single wide trailer we upgraded to a
double wide
and I was one of the first people in
my family to ever own a house and so it
just wasn't in my
realm really and had it not been my
wife's family I don't even know if I
would have pursued it they're like
you've got a good job you should just go
talk to a loan officer you know and so I
think for people out there
I think that just just take the first
step reach out to a realtor reach out to
me or a loan officer anyone you know any
local loan officer and just at least
have a conversation it doesn't hurt to
do that how much longer was it after
you bought that first house that you got
into the mortgage business
so interesting stories I was 25 I did
not get into banking until I was 31.
so I was kind of working in a call
center and then doing a couple of other
other types jobs
and then a friend of mine was in
banking and I didn't go straight into
mortgage
right away I was kind of a personal
banker and branch manager and kind of
morphed into just doing mortgage lending
but I became
really interested in mortgage lending
because
a couple of things number one the
first time I ever
thought I was gonna buy a house which
was right around 25 the loan officer was
not local and they fumbled the deal
that's with a local lender who got me to
the closing table so
it's all the value firsthand I always
remembered that experience and when I
decided I was going to get in the
mortgage I you know it was very
meaningful to me because I remembered
how much anxiety I felt through the
process and I wanted to try to figure
out a way to help my clients not it
really through constant communication
not experience the the The Angst that
you feel during the time you're under
contract to the time you close and so
and so that you know that was part of
me being in the Morty's business and
then
how critical
you know I don't remember where I
read it but how critical
owning a home is to our society right
the stability of families right kids not
being moved around a bunch of times my
dad had moved around a tongue growing up
you know from one house to another
and so
me and my parents luckily you know
they rented a lot but they did not move
me around a lot thankfully but and
generally when you rent you move around
a lot and so how you know home ownership
gives a lot of stability to families and
it's the primary tool by which most
Americans build wealth and so I
became early on in banking realized
like I felt like the most important part
of the financial world was being in the
housing market and so you know I made
that I made sure that that was kind of
the path I was on yeah that's great so
over the years that you've done this
which how many years is it now
I feel like we didn't we both start
around the same time I started in the
mortgage full-time in 2017. so yeah
about the same time I was in banking I
was in banking you know ER you know for
14 years or so but in a mortgage
specifically and
and kind of banking can be weird right
you can do mortgages in a lot of
different ways
there was a bank I was at for years
where I would do mortgages but I was a
salaried employee and I was like us I do
mortgages if somebody walking on the
branch and or I would refer them to a
traditional mortgage person so banks are
kind of Banks and you know there's all
kind of ways you can get in the morning
world I've been full full time only
doing mortgages since 2017.
um and so you know if you came to me for
if somebody came to me for a car loan or
you know any any other kind of loan I
can't do it I'm just doing I just help
people buy houses so yeah so I I got
licensed in
2016 that I started doing this full time
yeah
beginning kind of at our both both kind
of early stages of being all in or real
estate so yeah yeah I think you were the
one that reached out to me
probably so that's generally how we
yeah that is generally how it happens
we're desperate
well as far as
just kind of what you've seen over
the years what what's typically
what's typically like the most common
misconception that you feel like people
have when they're trying to get a
mortgage is it that they don't real is
it this the misconception that you had
that you didn't realize that you could
or or that you could get a mortgage
or is there something else that you run
into that's kind of like okay this is a
common Pitfall I think it falls along
those lines I think the biggest
misconception is that you have to have
20 down
you have to have a lot of money to to
buy a house and I don't know where
that comes from I do think that it is it
is becoming less and less a
misconception because of all the the
internet marketing out there now yeah
but I I think that there was Generations
before us our parents who private
mortgage insurance was astronomical if
you don't have 20 down on a property
you've got to pay an extra premium to
your mortgage payment and I think it was
astronomical and it was not worth it to
buy a house in their in their mind has
PMI come down a lot and it's come down a
lot so it's used to like when my when my
parents were buying a house
and they didn't have 20 down PMI was
astronomical because there was only
maybe one or two companies that offered
it well now there's a bunch and it's not
just that there's a bunch it's the
technology allows all lenders to quote
them all at the same time so in a
simultaneous quote so you hit a button
and every one of them will give you a
premium a price a monthly price and
you're just going to choose you're going
to choose the lowest one for your client
obviously there's no incentive for you
to choose a higher one so
and so they're daily battling to get
their rates as low as possible they want
to be barely the lowest they don't want
to be too low because then they're going
to lose money but they want to be right
there at the threshold so they're
they're constantly changing so I think
people for a long time thought 20 you
have to have 20 or you're going to pay
500 a month on private mortgage
insurance which is a big misconception
yeah that's interesting I would say
that's in misconception number one and
that flows into it's not possible for me
right right people think it's not
homeownership is not possible I've
rented my whole life my parents have
rented their whole life
and it's just not even in their sphere
of of being able to buy well yeah with
the median price point in Greenville
being 300 000 20 of that is 60. plus
you've got closing costs I I run into
people having misconceptions about
closing costs people will be like what
are closing costs is that fifteen
thousand is that twenty thousand no it's
gonna be way less than that typically
500 maybe 7 000 yeah yeah
yeah and so that that alone in of
itself
you know I think's a big
misconception so it's it's it can be
much more
possible to buy a house than people
think what about on credit are there any
misconceptions that you frequently run
into or is there like one big
misconception you frequently run into
with people about their credit or about
building credit or just about credit
scores in general
yeah I mean I would say
a big misconception is that
is that number one my credit is I I own
two two fronts my credit is too low
right people think their credit's too
low and sometimes it is but that doesn't
mean you're not going to be able to buy
a house it just means that you've got to
find a loan officer not a online because
they're not going to help you but a
local loan officer most of the time
values the relationship of whoever sent
them your way and they're going to work
with you to try to figure out if you've
got a 580 credit score how to get you to
a threshold where you can do something
right what's the lowest that you can
think of that someone came to you the
lowest credit that they had that at some
point they closed that alone with you
I think the lowest for me is 600. so
you can get FHA Loans down to 580.
we generally try to keep them we try
to get someone to 600 because of the
price the the rate hit that you take
when you're that even when you get under
under 600 and so if somebody's at 585
we'll say hey let's take 60 days do a
few things try to get your score up
um and what's what's the lowest though
that someone came to you
other they started what was their
starting point and then you got them
updated 5 15 5 20. you know
um and
um how long would it take for them to
get up to 600 typically well I I have a
client now who's buying a house
um she has rented this particular house
for 15 years okay
crazy she's rented this house she's
buying 15 years she probably came I
can't remember exactly 560 or so it took
her
um
it took her to get it up a hundred
points the particular program we wanted
to use required a 660 credit score so it
probably took her about a about a year
maybe maybe slightly over to get her
score up but she got it up she's kind of
closing like two weeks
um maybe even maybe maybe a week she's
she's ready for closing yeah and she's
been renting this house for 15 years
which is cool she's never owned the
house I don't think anybody in her
family has
um so I'm super excited about her buying
a house
um and so if you find a loan officer
that's willing to kind of stick with you
and you do the things that they tell you
to do and be disciplined you can buy a
house yeah yeah and it's like it's it's
extremely rewarding to see that to see
see people you know taking steps towards
breaking the poverty cycle you know
that's in some cases has been a
generational cycle
um you know starting to to kind of
finally have the family has their own
dirt you know and their own house and
that's an exciting thing man it's so so
exciting another misconception that's
that I think is a big one that I run
into a lot is I pay fifteen hundred
dollars a month for my rent why can I
only get pre-approved for an 1100
payment and so I have to do a lot of
talking to clients and say listen when
you go to an apartment complex they're
going to check your credit
they might ask for a pay stub but
they're not doing any kind of like
calculation as to what you can afford
right they're just checking your credit
you know you got decent credit you'll
probably pay us they're going to take a
secure deposit and they're done when you
buy a house you know an underwriter is
going to look at your credit they're
going to look at all those payments if
you have a 400 car payment and you have
a 200 steel loan payment and a 100
credit card payment and then you're
gonna buy a house and your mortgage
payments 1100 they're going to take that
1100 and they're going to add up all
those other debts and they're going to
go oh man they that's going to be more
than 50 of their income if we give them
this loan they can't pay a 15-hour
payment they can only pay a 800 payment
or whatever so
I think helping people understand like
hey just because you're paying that much
in rent doesn't mean necessarily you're
going to be able to buy a house sure
comfortably you know there's a lot more
expenses that come with by owning a home
right
um there's maintenance there's taxes
Insurance other things so I think
helping people understand and I do that
constantly I send them like a big
breakdown of all the numbers and when
they see it on paper they go oh yeah
yeah I see that now that that makes
sense you know yeah and it it makes
sense too that you know if you if you're
a landlord or a landlady renting out a
property it's it's only going to type a
property for a couple of months at least
in South Carolina if you have to to you
know call someone that isn't paying you
and ultimately evict them whereas if
someone forecloses that's what make the
process so it makes sense that it's a
it's more stringent yeah it's more
stringent and I think just helping
people understand that
um you know and there's a lot of times
it's the opposite you know I tell people
hey you can qualify AI up to this amount
and they're like what you would give me
a loan for that amount I'm like yeah I'm
not telling you to go buy that house
what you can qualify for and what you
can afford are sometimes two different
things you know yeah yep yeah oh I've
I've run into so many times where people
come to me and they're just like Derek
pre-qualified me for 550 000 from my
first house like how's that and I'm like
well that doesn't mean that you have to
buy that it just makes it I try to tell
people that all the time listen don't
you know you may you may have a lot of
room but you don't want your house to be
a burden right you want it to be an
asset that helps you grow wealth over
time and provides you know Financial
stability so you don't want it to be a
burden so don't
I tell people this is what you can buy
but I'm not saying you should buy that
so yeah absolutely similar thing to what
what Realtors have to say a lot speaking
of Realtors I I am curious to hear kind
of Shifting Gears here a little bit
you guys on on your side you see us as
Realtors from and and from a little bit
of a different perspective than maybe
the public do you see kind of a little
bit behind the veil we see a little bit
behind the veil of of what you guys are
doing as well probably a lot behind the
Bale
um I'm sure there's a lot more that we
don't see
um but I'm curious from from your
perspective as a person you know having
worked in banking in the mortgage
industry for as long as you have what
would you say separates an average
realtor from a really good one or a
great one yeah so I mean you know
obviously I do have a lot of thoughts
about that and people do come to mind
I would say what what surprises me a
lot of times
um is the lack of just basic knowledge
sometimes amongst Sometimes some some
real Realtors when I call about an issue
or a problem you know and I'm like you
know how how are you able to advise you
know I see myself as kind of an advisor
I think a realtor is somewhat of an
advisor they are sales positions but
they're more of they are an advisory
role you're giving advice a lot of times
and so I'm always surprised by
um some of the things that people people
don't know some of the things that
Realtors don't know I'm ultimately not
as bothered by that as I'm bothered by
poor communication
um and so I think the biggest difference
between
you and some of your peers is your
ability to communicate and keep just
answer your text answer your phone
answer an email it's not rocket science
it's just staying in touch with the
lender your clients the attorney whoever
else but I think the biggest frustration
for me is the the lack of of consistent
communication through a loan you know or
through a purchase so I get very
frustrated by that when I don't get
responses I am very frustrated is this
is this where the the the swear words
that you warned me about that I might
have to edit out
I could drop swear words in here
um really frustrated me recently and I
posted about this
um
I said on Twitter good morning to
everyone except the realtor who told me
to call their transaction coordinator
and and and so I cannot you know I'm
call I don't I generally tend to think
of when I'm working on a transaction
you've got a buyer's agent a seller's
agent and my client and those are the
people I interact with the most most of
the time the buyer's agent and my client
occasionally the seller's agent so when
I call
when I think of who do I need to call
about this problem the first person I
think of is the buyer's agent and then
the buyer's agent tells me no I'm not
I'm no longer involved call this person
it just blows my mind that you know they
have just pulled themselves out of the
transaction
um I just don't understand it because I
think
um one of the things that separates
our model here at Southern first from
other models is we don't hand our
clients off and we get more clients to
the closing table than most lenders
because
we stay involved we don't pass them off
to people so I think the the Realtors
the realtors that I work with that are
most successful and that are really good
at their job
I'm not saying they don't have help but
they don't pass responsibility off for
their clients and that transaction to
anyone else they stay accountable
through the whole process yeah and
oh man we could talk about this for
forever because obviously you know if
I'm a buyer's agent or a listing agent
and I'm you know
dealing on the other side with it with
another agent that is essentially they
only see themselves as a salesperson and
then once we're under contracted they
just pass everything off to their
assistant or their transaction
coordinator who's not licensed
um in many cases even if they are
licensed they they don't have all those
relationships they don't they're they're
kind of jumping in it's incredibly
frustrating A lot of times the the
transaction coordinators don't answer
phones after hours have you run into
that as often as I have yeah yeah so
or I don't have Channel I just have some
other number that I text and it says
it's a landline and I'm like yeah you
gotta talk to somebody unbelievable and
and probably the worst part about this
is that
we you know just as far as what me and
you like we all know this that that
these are issues but nobody can actually
say anything about the companies or the
teams or whatever that are known for
doing this there are some that have a
reputation for this but unfortunately
it's very difficult for the for the
public to find that out they have to
kind of find it out the hard way because
we can't talk badly about any of any of
those groups so and I would just say the
you know the top the top realtors in the
market
They Don't Really they don't follow that
model I mean you know I know them and
they they stay very active with their
clients through the whole process
um and they answer their phones and they
answer their emails and they're busy you
know you know so I I just think um you
know I think
being educated which is the same as a
lender being educated knowing your
products knowing how you can help people
they're they're and being able to
communicate well as a realtor I think
and and and value in communication
um really separates people and I
think when I say communicating I mean if
you're not communicating I don't think
you care very much and so I think the
good Realtors ultimately what separates
them is that they really really care
um and they really they really want that
client to get that get that
particular house and not anything to you
know destroy the transaction
um because they're not doing their job
well so yeah absolutely same thing for
line officers as well yeah it's so it's
so you know it is different but it
mirrors they mirror so closely what what
success could look like and what what
separates the good from you know the bad
there's a a lot more of you guys
which makes it probably harder for you
to do your job but you know I I still
think there's a lot of similarities yeah
I think the most one of the one of the
most important things for me that I've
done from day one and this was kind of
instilled in me from previous job
experience was I don't ever think about
my paycheck until I until I get my
paycheck that's when I think about it
yeah um because if you're focused on
your paycheck
um you're you're not gonna have the
client's best interest in mind at the
end of the day yeah um and unfortunately
there's there talking to other real
estate professionals there's a lot of
paycheck Focus
um that is that is unfortunate I mean
let's just get this done don't worry
about what's best just figure out this
situation and it might not benefit
either party or it might benefit one or
the other but let's just get it done
yeah yeah exactly you know like you know
I listed this house I mean
um I I know I I know he could
probably get more for it than what we've
listed it for but
um oh well this is you know he he did it
this way this is gonna be a quick
closing for me you know kind of thing
and it's just like you didn't you didn't
say that the person was leaving money on
the table it's just kind of astonishing
to me but those conversations happen
and and it's unfortunate
um
that so
obviously right now shifting gears again
here for for just a moment
um and this will kind of be the
the last little section here because I
know you're busy and and I'm busy and we
could talk for forever
um obviously what everyone wants to to
hear and what they're going to be most
interested in hearing from you is about
what's happening in the mortgage
industry as a whole we've gone from
rates at an all-time low when they were
in you know the third 30-year mortgage
what was the what was the lowest rate
you did for a 30-year mortgage the
past couple years
lowest 30-year was 2.375
2.375 oh my gosh no points no no points
unbelievable the lowest 15 no I did a
10-year at 175. that's insane and I did
a 15-year probably two two percent or so
um I guess but yeah yeah one seven five
or so to two three seven five when was
that two three seven five what do you
remember kind of month year or roughly
um
gosh I want to say maybe
early
early 2020 maybe
it would have been early 21 right
because early 2020 would have been
pre-pandemic yeah yeah early 2021
probably okay yeah yeah that's right so
yeah so
um yeah because early 2020 was we
haven't we haven't we haven't we heard
it was coming but we're like oh we're
good
yeah so either late 2020 or early 2021
um it it was just you know I I remember
I remember looking at the rate I
remember logging out of my system the
reason I remember the race was I
remember logging out of my system
because I thought something was wrong I
logged out because there's been times
that you know something doesn't update
right and you get an error and I was
like there's no way it's just 30 years
237 pounds
um and I remember logging out logging
back in and I called another lender who
works in office of saw me I was like
let's come look at this and we looked
and I'm like I like this person in it
two three seven five and I remember
locking it in sending the I didn't even
normally you call the client you tell
them hey here's what we can offer you I
just locked it in I was like this
whoever you know they're gonna they're
gonna do this because
so I locked it in before I even told the
client
um and I just it's just insane how low
they were and and it was and I don't
even know how I survived mentally and
physically during that time period
because the hours we were working
um but you and me both it did switch
very fast when it switched it did so
yeah so now now what are we hovering
around like seven percent we're we're
kind of in that range just on an average
level
yeah I would say
um six eight seven five to seven one two
five right now
um on the 30-year fixed the crazy thing
is four weeks and for for the audience
we're recording this on March the 8th
2023 just just for receipt keeping yeah
and so and so a month ago
um those rates were back
in the low our high fives again you know
um and so people were back on the
internet saying we hit the peak we're
headed we're we're back down
um and then the jobs report came out and
then the inflation report was not as
slow as they had liked it I think and
we were back at seven percent very
very quickly and it's been Rocky
because you you pre-approved people at
six percent and now they're at six eight
seven five yeah and that lowers their
ability their purchasing power
um the market is still very if you're
you know wherever you're listening
Greenville is still a hot market and so
you know house prices are higher and
rates do not allow that buying power
that people need so are there any
reblings that like assumable mortgages
will start to become you know
kind of come back in Vogue here in in
the next few years is that something
that anyone's talking about yet yeah I
mean I hear I hear a lot you know
there's a lot of lenders that talk about
assumable mortgages online
um it's less it's less
it's it's very it's less likely because
basically what happens is there's only a
few types of loans that are usually
assumable right FHA some VA
um and maybe some some Bank portfolio
loans depending on the situation
um most
but most of the time
if that client has bought a house and
it's been a couple of years
their house price has appreciated so
much compared to their loan and also
they may have paid down their loan a
little bit and so there's a lot of times
people don't have the money to make up
the Gap to get that loan to just
assume if the house is worth 300 and
that person has a 220 000 mortgage they
don't have the money to get you know but
the buyer would have to to in that
instance would have to bring eighty
thousand dollars down and then they
would be able to assume that was that at
300 and assume 220. yeah yeah that and
they'll be able to get the 2375 rate or
whatever it happens to be
um so I I don't think in theory is great
but I don't think it'll happen a whole
lot sure sure
um
so obviously a lot just in real estate
as a whole has changed pretty
dramatically since the the pandemic
obviously since we're now going on
close to three years I guess here we're
approaching that that anniversary of
when lockdown started
and um I'm just kind of curious what's
the different the biggest difference in
your opinion in the mortgage industry
the past three years and and more so you
know recently versus what it was
pre-pandemic
yeah so during during you know late
um
2021
um
you know mortgage rates were I think
December 18th I think I locked in a rate
at three three seven five you know
I think by May
um
May or June of 2022 so six months later
the rates were like five and a half or
five to five so
I mean
I mean that's
massively slowed oh yeah I mean
um and and so what loan officers went
from being extremely busy to honestly
um a lot of peers have moved they're
already they've started moving to other
jobs because
um there's
just not enough you know not enough
buyers
um that the the business that was there
has is gone because there's no
refinances and a lot of lenders
specialize in refinances well when
somebody's got a three percent rate
they're not going to refinance and
likely they're not going to want to move
either for a while so you know it's just
it's just changed the dynamic and it
changed it so fast it's like it was
just like Whiplash you know
um you went from a full you know full
days being extremely busy to
trying to figure out what you were going
to do you know and there's a I I made
this joke one time about
um online I I had this little voiceover
thing and it was about
um it was like a it was like Builders
calling lenders again because Builders
slowed you know they needed they had all
these inventory and they needed buyers
well yeah they've been offering us
commissions again all of a sudden
we love Realtors yeah you know so so
that's how drastically it's changed and
and
even lenders I'm sure you get bothered
you know I'm sure it ramped up on your
end where you start getting now all
these lenders come out of the woodwork
we wanted to maybe get business trying
to get oh yeah yeah I get taxed every
week yeah yeah so I think it's just
drastically changed things
um I am
very I did not think we were in the
when it hit 5875 I did I posted a lot of
videos online I did not talk I refrained
from Talking hey rates are low they're
down they're down because I felt like
we were in a nice sweet spot but it was
not going to be the you know it was like
it's it's like you get you're like oh
it's warming up it's spring and then all
of a sudden it's 20 degrees again so I
felt like we were going to hit that and
we kind of did no I didn't think they
would be back at seven percent I thought
maybe Seattle I don't think anyone
thought that not right now no six seven
five but I I've been shocked by that um
mortgage applications are up for me but
I I think that might be because people
got word that race had come down a
little bit and some of them have didn't
realize race were back where they are
until they did the pre-approval so I'm
interested to see how this plays out
over the next few months and seeing what
the FED does March 21st or I think
that's when they meet again
um you know I think the the mortgage
Market has priced in their next rate
hike already I'm anticipating maybe a 50
25 at least maybe 50 basis point hike so
hopefully we will can you explain that
for our clients just kind of for a
lot of
the people that are listening a lot
of I think I said clients I meant
listeners a lot of people listening or
potentially watching if I post this on
YouTube or or whatever
um they're gonna already kind of know
what causes interest rates and mortgage
rates to fluctuate but and I've
talked about a little bit on the show
but do you want to kind of explain from
from your perspective what what you see
happening how those rates go up up and
down yeah so I mean generally speaking
um mortgage rates are are not supposed
to follow what the the Federal Reserve
is doing with short-term rates okay
they're just they're just not supposed
to so when the fed's raising Prime
merger rates are supposed to be kind of
you know separate from that
um but I think the FED what's happened
is the Fed has has
raised them short-term rates so fast you
know with which is the Wall Street
Journal Prime
um from what was it at zero I mean it
was like it was Zero at one point I
think in the low lowest part two what it
is now
um
the The Wall Street Journal Prime I
think is 7.75 and so I mean
I think that the mortgage Market is so
uncertain as to what it's going to do to
the economy that they are pricing in the
risk in mortgage rates they don't know
so if you're a bank for example let's
just say you're you're a person you own
a bank
and you see the FED take rates and just
put them attach attach a rocket to them
and shoot it into space
at some point is going to cause drastic
not maybe drastic but significant
unemployment when people get unemployed
they stop paying their bills now the
mortgage is generally the last thing
that they stop paying but if it lasts
long enough they stop paying their
mortgage so if you are anticipating
people not being able to pay their bills
you you need to get a little bit more up
front maybe you're exactly you're
expecting it's high risk and so the only
way you can make money in a high-risk
situation is to have higher interest
rates and so
our mortgage rates should not be as high
as they are when you look at the 10-year
treasury which is what mortgage rates
you're supposed to follow they should be
in the high five percent range but Banks
and Brokers and lenders across the
country are like
they can't keep raising rates and did
not cause massive economic slowdown
which in turn causes people not to pay
their bills and and so that's that's
what's going on they're just it's just
risk being priced into the market so so
what what's your prediction and the
listeners like bold predictions so don't
don't be scared to be wrong I've I've
been I've made some bold predictions
I've been wrong on a few of them but
what would be if you had to make a a
prediction for what's going to happen
with rates whether whether we're at the
ceiling or whether it's gonna it's gonna
continue to go up or whether we're gonna
see them go down at by a certain time
period what what are what are you kind
of thinking is going to happen here bold
predictions I I will let me just preface
this that I am
I am very good at underwriting
guidelines I'm terrible at predicting
them okay I am I am as dumb as they
come when it comes to trying to figure
out what my portfolio stock portfolio is
going to do and what mortgage rates are
going to do but I would say most of what
I read
um I I do think that they will soften
later in the year you know I do
things later in 2023 later in 2023 I
think we'll see some softening I think
we'll see more softening in in 2024
um I think that you know you you've
probably read this too that a lot of
what's driving inflation is is is
housing
is you know the house prices in the in
the real estate market and so
the FED knows that by continually the
pump rates up they can impact that
drastically right yeah they're pricing
borrowers out of the market especially
first-time own buyers and they're
pricing a lot of people out which means
they can let inventory catch up a little
I don't know if it'll catch up fully but
catch up a little which will slow kind
of the the inflation numbers so I I
think we may see a little bit higher
rates from where we are now
um I don't I've never thought they would
hit eight percent and I still don't
think they will but I still think we
could see maybe mid to high sevens okay
you know and like the summer is that is
that kind of when you would anticipate
that happening late spring maybe maybe
late spring
um so and then and then maybe maybe some
pullback beginning slowly from there
um and I think we I don't know if we'll
ever I mean maybe it ever is a hard word
but I think if we can get rates into the
five percent range five to six percent
um we could have a healthy housing
market there and stay there for a while
um I don't think we have to have three
percent rates again I think that's that
was very unhealthy
um it was very good for a lot of people
but ultimately good for you guys yeah
ultimately I think if you think about
someone driving a car
covet happened and the FED pulled the
car to one side
all the way to one side and rates were
low and now they're trying to correct
and and some people say Well they're
over correcting I don't know if they are
but ultimately if they can just get the
the housing market and the mortgage
Market get interest rates back to us
just a a fair ground which I think is in
the five percent range where a lot of
people can still afford houses
um but money is not
two percent cheap right I think it'll be
good so sure what what do you um what do
you think it will take for rates to come
down like what what what needs to happen
for those rates to start to fall but by
the way I I want to mention as well I
think you're right the I went to a
conference recently that said 5.25 is
the magic number above that
dramatic slowdown below that buyer
activity starts to pick up a bit so yeah
but but what would it take for it to to
start to come down into that range I
think
um
again you know I failed economics not in
failed but I did not do well in time
economics was a lot harder than I
thought it would be in school
um I I do think that if we get
unemployment
um if unemployment increases a little
bit I mean it didn't create it increased
a little bit but it still was for is it
4.5 I mean it's somewhere around there
it's still historically extreme it's
very low it's like extremely low so if
unemployment increases a little bit and
they see a little bit more pullback on
the inflation numbers I don't think
there's an unemployment report I think
this week so it's interesting to see
what that is but I think once the FED
sees like part of me thinks maybe the
FED has not waited for some of this
stuff there have not waited for their
work that they've done to catch up right
so at some point because they just keep
going oh yeah unemployment let's do it
again let's raise again so I I'm hoping
that's not the case and I'm hoping that
each time they're doing it it is
impacting a little bit and not all of a
sudden we're going to have a drastic
recession
um that's that's really brutal for a lot
of people I tend to think hopefully as
the FED sees unemployment rise a little
bit and you know inflation come down a
little bit that they will have a couple
of meetings where they don't do anything
they don't raise rates they don't lower
their short-term rates and I think if
they do that it signals to the to the
economy into the markets that all right
we think maybe inflation kind of peaked
and and so now we're gonna just in a
holding power I think we're getting a
holding pattern I think you'll start to
see mortgage rates often a good bit sure
yeah that makes perfect sense and
yeah I'm not super optimistic about the
FED not doing anything but but I
think this I think in March they're
gonna rate I think the last I saw
there's a 22 probability they would
raise them 50 basis points
I prefer
and and if that happened how would that
impact the mortgage Market I think the
mortgage Market has built most of that
anticipation already in which is why
we've seen the steep climb since last
time so I don't think we'll see a big
upswing March leading up to March 20th
or 21st if the if after March If they
raise them a lot and then it looks like
it's not working then I think we could
see another climb sure which could get
us to the high sevens but I'm hopeful
that you know this next meeting
um you know we won't see what they're
doing is at some point what they're
doing has got to to work and so
um you know we'll see it's
hard to know you know and it's hard to
run a bank
um you know I'm you know we're we're not
a huge bank but we're not a small Bank
either but we're very close to the
leadership and so it's very difficult
for a bank to um
to manage these Waters because yeah it's
crazy they don't know they don't know
month to month what the fed's doing is
it is it is it crazier now than it was
like right after the pandemic when
things were so chaotic or was that a
more chaotic period of time
no I think it's way more stressful now
for banks okay trying to figure it out I
think they're you know I think
um you know the cost of money
um you know Banks need need
you know banks have to have deposits to
lend and so every time the FED raises
rates that's why UC Banks paying like
ours paying high money market rates well
if you're paying 475 on the money market
you can't lend it five two five yeah
right because you're not going to make
any money so I think it's just very
stressful trying to manage trying to
know what the fed's going to do and and
um and so I think you know it's
interesting times in the finance world
for sure for sure well we'll close with
this one one last question I have
what are you telling people
who would like to buy a home right now
but but do have concerns about those
mortgage rates being so high
yeah so that's that's a good um that's
that's really a good question I
um I'm not the kind of mortgage person
that thinks it's right at every moment
for someone to buy a house right there's
people that
um have all kind of situations going on
in their life
um my wife dealt with health problems
over the years and there were times that
we rented just because it was simply
easier you know it was we didn't have a
lot of other stress we could be near
doctors you know rent near near doctors
and so
I don't think everybody should buy
but I say this if you are going to be a
homeowner and you desire to be a
homeowner
the house the houses in the upstate of
South Carolina are not going to be any
cheaper
to me in my opinion than they are right
now
we have
a massive inventory shortage we have
massive amounts of people moving into
our Market because it's a great place to
live and so I heard I heard I heard
yesterday we have 20 people per day yeah
moving into our Market yeah and it was
19 a few months ago so I've seen that
status it's getting a little higher so I
I think if you're looking to buy a house
I think you should start the
conversation now with a lender and
realtor
because
you can you can always You're Gonna
when rates come down you're gonna be
able to get a lower rate
and so that's just you do that
through a refinance and so I think if
you can buy a 350 000 house right now
that fit 350 000 our house is going
to cost you a lot more two years from
now
in the upstate and that's just my
opinion
but I don't think we're gonna see
massive pull back
bankruptcies are
extremely low across the whole
industry they're even lower in the
upstate
because
foreclosures are despite some of the
misleading headlines saying that
foreclosures are up by 100 and all this
kind of nonsense they're still extremely
low yeah so I say bankruptcies because
generally that got overarchist too right
it brings into the Foreclosure Focus
foreclosures are
I mean they're nothing compared to what
they were so people that say housing
crashes come in it's not it's not going
to happen and I think my opinion is
there's a few reasons right Americans
have way more Equity than they've ever
had in their houses Americans have
extremely
low interest rates on their mortgage
overall their payments are very very
reasonable that even if they do lose
their job they may be able way more
likely to weather that storm and make
that payment than they did in 2009 or
10. so I just I just think and if not
they've got enough equity they can just
sell
they've got Equity to sell and and it'll
it'll buy them time to find a house pay
off other debts and so I think I think
people waiting for the market to crash
especially in I'm sure in certain
markets there's been pull back and and
that may be smart to wait a little while
but if you're in the upstate of South
Carolina if you're in Charleston if
anywhere really in South Carolina in in
you know a lot of places it Charlotte
North Carolina Atlanta it's just the
demand is so big I don't think you're
gonna you're gonna see a benefit from
waiting it's only going to cost you in
the long run yeah yeah and and that's
what I've been telling my listeners as
well so that I appreciate you
reinforcing what I've been already
saying on this show for for months and
really years at this point yeah let me
just say to your listeners too that you
you know if they
are thinking about buying a house or
you know or you know have never have
never decided you know or thinking about
it
how
definitely they should give you a
call because you are one of the best in
the market you care deeply about your
clients I've seen how well you
communicate I've seen your knowledge
which if they listen to you they
probably are aware that you're very
knowledgeable about all things real
estate so I don't think they could find
a better advocate for them than you
and so
you know if they're listening they
should definitely
I always think I don't think A
lender I think a realtor is the best
first call I just that's just my my
viewpoint I think they can have a lot of
you guys know enough about a lot of
things to have a a general conversation
and then you can refer that client to
the person the lender that you think
best fits them and so I think you
know just telling your listeners how
great you are at your job because I've
seen it firsthand and I've seen us
navigate
really wild situations and really
difficult situations that we've been
able to figure out so
and so that takes that takes
special people and you're certainly one
of those that are really good at your
job I appreciate that I did not pay
Derek to say any of that just for the
record
and we as Realtors we can't get
kickbacks from from these lenders either
that would be illegal so
and I intentionally said to Derek not
not to that he doesn't need to feel
pressured to pump me up so I do
appreciate that you did that in in
spite of all of that but Derek I
appreciate it's been well going back
from before we were recording this it's
been over an hour and and your time
is valuable so I really appreciate you
giving that time to me to the show to
the listeners
one shout out yeah go for it okay one
shout out because it's International
women's day all right so we're gonna
give a shout out to all the ladies out
there all the women I read this quote
earlier this morning whatever women do
they must do twice as well as men to be
thought half as good luckily that's not
very difficult
[Laughter]
when this records it'll be past it'll
be past that day but but we will
celebrate it sorry not when it
records when it when it airs but we
will retroactively so
retroactively enjoy and celebrate
International women's day so I
appreciate that Derek that was Derek
Horton with Southern First Bank if you
need to get his contact information you
can reach out to me my contact
information is in the show notes as
always as always please if you like this
show Please Subscribe please leave a
rating leave a review Derek again thank
you I appreciate it and to all the
listeners we will talk again next time