This a story about an odd storm called a derecho that blew through the Washington DC area in late June, and storm damage, and mortgages. I know it is hard to imagine what mortgages have to do with an odd storm called a derecho. A derecho is defined as a widespread, long-lived, straight-line windstorm that is associated with a fast-moving band of severe thunderstorms. The one that blew through the Washington DC Metro area was severe and caused lengthy power outages, and damages to homes, mostly from falling trees. When there is damage to a home, a mortgage lender will not close a loan on a home that is in need of repair. So how this relates to the mortgage industry is the need to know how a lender will take care of their clients when there is a delay in settlement due to needing to wait until a home is repaired.
More specifically, if you have locked-in a low interest rate, and on day number 48 of your 60 day lock-in you have major storm damage, and that damage requires three weeks to repair, what happens to your lock-in since the lock-in expires before the damage will be repaired? Many lenders would pass the cost of extending the lock-in on to the client. However, we paid for the extended lock-ins needed to cover our clients to give them time to repair the damage, and go to settlement at their original terms.
So this is one more story of why there are benefits in going with a local, direct lender, over a large bank, online lender, or a mortgage broker. As a more local, direct part of the community we have a vested interest in making clients as happy as we possibly can.
A few of the pictures you see above are of a client’s deck, one after the damage that destroyed a large portion of their deck, and one after the repair. It would have added insult to injury to ask a family who went through the terror of the storm and the cost of the deck repair, to then add insult to injury and ask them to pay .25 to 0.50 points to extend the cost of their lock-in to allow time for the deck repair. This would have added $1,000 to $2,000 onto the cost of their refinance. We felt that since the clients cannot control mother nature, we should pitch in and help out. Out of the approximately 400 clients we had in process at the time, there must have been at least 5% of them that had storm damage that delayed settlement. As you can imagine, the cost of extending these 20 lock-ins was not cheap for the company. But we are part of the community, and pitch in to help when we can. Buying local is not only for vegetables. Use local, direct lenders and you will have a better mortgage process.