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September 20, 1991
More news of a modest recovery has reinforced the potential for further interest rate declines.
Industrial Production continued its gradual climb, up .3% in August, while Industrial Capacity Utilization crept from 79.9% to 80.0%. New Housing Starts rose a meager .6%.
There is one thing every Realtor can do to make it easier for buyers to get mortgages. Just one thing, above all others.
Credit report? (Nope.) Prequalification? (Sure, but this one thing needs to be done sooner.) Ratios? (Not a chance.) Prepare statements, W2s, and such? (No way. Don't bore your clients. We'll do that.)
One little thing, as soon as the word "loan" comes up for the first time. Tell them: "DON'T MOVE MONEY AROUND."
When the buyer gives you the usual "Huh?" in response, explain: lenders are easily confused by transfers from account to account, and by familytofamily transfers.
The buyer is awake now. "Why?"
If you're brave, keep going, but, better to say "Trust me, until you get to a lender. Deposit paychecks and pay bills, but DON'T MOVE MONEY AROUND."
The main reason: too many people secretly borrowed money, said it was their own, and crashed into foreclosure under the weight of undisclosed debt. Now, any unexplained deposit must be proved not to be borrowed.
Who has to prove it? Your buyer. (And the lender, Heaven help us.) Maybe at the closing (if it closes.)
"The receipt for selling the mutual funds? I changed my mind my sister gave me the money yesterday."
"A copy of the gift check? You don't understand. Dad gave me the money."
"No, I don't have the 401K closeout statement. I decided to borrow against it instead. It's my money!"
"Well, we sold some jewelry. You know how it works. There are people who will pay you more in cash, and they don't write checks, or give you a receipt, or an appraisal."
"What do you mean 'It's not my savings'? I inherited it three weeks ago, and it's in my account."
"Of course the statement is in Mom's name, but it's my money. She told me so!"
"Yeah, that CD matured, so we put it in Fidelity for a week or two, and then split it up into the other money market and Magellan; but the yield dropped, and we cashed in another CD and took it to a TDA at Kemper; but the penalty was so big we could only take out half to put with Dad's loan, the stock sale, and the money Sis paid back Š."
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