The Power of No

Amongst the ads and emails we receive each day ranging from “how to lose 75 lbs. in 12 days by eating just Three Musketeers candy bars and milkshakes” and “the lessons learned from a dyslexic 1980s pop musician turned auto mechanic”, there’s an occasional gem that stands out and helps you look at life from a different perspective.  In that vein, I was recently directed to an article on Forbes.com titled “15 Surprising Things Productive People Do Differently” that I found interesting. 

Surprisingly, it didn’t have little tidbits like “only sleep standing up” or “drink the sweat of Hollywood actors who have won an Academy Award three times a day”.  The one that stood out most to me was something that is attributed to Warren Buffet: “The difference between successful people and very successful people is that very successful people say ‘no’ to almost everything.”  This doesn’t mean that such people walk around all day with a negative attitude just looking for a chance to be a contrarian – it means they must be presented with an overwhelmingly persuasive argument to buy into something or to change their minds.  This morsel of billionaire insight reminded me of mortgage underwriters. 

Contrary to popular belief, underwriters aren’t overgrown tree sloths who take an eternity to review your application – underwriters have, on average, five fingers on each hand.  With that said, though, they are employed by banks and investors to look for reasons to say “no” to your request.  It’s nothing personal – it’s actually a good business model.  On the marketing side of things, a bank or investor will tell you how they want to help you achieve the American Dream by getting you into a house – it’s good public relations.  On the operations side of things, though, they want to make sure they uncover ANY reason that it would be too much of a risk to give you a huge chunk of money to buy that rambling ranch or mid-century modern house.  It’s their money – you can’t blame them for wanting to make sure they’re going to get paid back.  If, at last, they can’t find a reason to tell you “no”, you’re good to go.  That IS a good business model.

Understanding the role of underwriters in this process helps you understand how important it is to pick the right mortgage broker – the individual who’s going to help you make an overwhelmingly persuasive argument to which the underwriters can’t say “no”.  Any warm-blooded loan originator who has a license can take your application and submit it to the underwriter . . . and cross his/her fingers that it’ll pass muster.  And if it doesn’t, you’re forced to start the process all over again (and perhaps cross your fingers that you picked the RIGHT mortgage broker this time).  Instead, go to a mortgage broker who has a reputation for providing unique solutions to strange circumstances – they’ve been trained to know what to feed the sloths without getting bitten.