Work Hard, Play Hard, and Give Back - A Real Estate Podcast

S3E6 - Inside Today's Mortgage Market: Scott Rosenberg on Rates, Risk & Real Advice

• Coldwell Banker American Homes • Season 3 • Episode 6

Share episode

Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.

0:00 | 44:48

In this episode of Work Hard, Play Hard, and Give Back, Mike Litzner sits down with Scott Rosenberg of CrossCountry Mortgage, a mortgage professional with 35 years of experience navigating every type of market cycle. 

Scott breaks down today's mortgage landscape with clarity and candor from why Fed rate cuts don t always translate to lower mortgage rates, to the real differences between pre-approvals and commitment letters, rate locks, VA loans, first-time buyer programs, and jumbo financing. 

He also shares practical advice for agents on strengthening offers, reducing deal risk, and educating buyers for smoother closings. The conversation goes beyond numbers, touching on ethics, long-term financial responsibility, market misconceptions, and the importance of doing right by clients even when it means saying no. If you re a real estate agent, buyer, or industry professional looking for real-world mortgage insight without the noise, this episode delivers real advice you can use.

Thank you for listening

Stay connected with us:

Visit our website:

Interested in a career in real estate?

Need to get licensed?

Welcome & Scott’s 35-Year Journey into Mortgages

SPEAKER_00

Make sure the outtakes don't get online.

SPEAKER_01

Welcome to the Work Hard, Play Hard, and Give Back a Real Estate Podcast. I'm Mike Litzner, broker owner of Cobalt Banker American Homes, and we're here at the studio at American Homes here in the new regional Mount Sinai office. And today, as our guest, we have none other than Scott Rosenberg from Cross Country Mortgage. Welcome to the show, Scott.

SPEAKER_00

Thanks for having me.

SPEAKER_01

Awesome, awesome. So I think we have a great show today. Before we get into any questions, I want to remind our audience if uh you like what we're doing here, don't forget to like and subscribe. We'd love to have you at some of our future episodes. And remember, stay to the end. We always have to drop the mic question, which is always a lot of fun. We hope to catch you a little flat footed. Something interesting. So non-industry. So again, welcome to the show, Scott. We're excited to have you here. Obviously, um your mortgage loan officer 30 plus years.

SPEAKER_00

Yeah, 35 years.

SPEAKER_01

35 years. Wow, you've been doing this. What'd you start at like 12 or what?

SPEAKER_00

I started when I was late 20s. I'm 60, I'll be 61 in two weeks.

SPEAKER_01

All right, there you go. All right. Well, happy birthday. Thank you. So um so it's an incredible career span. You know, what first drew drew you to the mortgage industry?

SPEAKER_00

I just fell into it. It's the mortgage industry isn't something that somebody looks to get into.

SPEAKER_01

No, no, you're not in like elementary school and they say, What do you want to do when you grow up? It's like I want to be an astronaut, I want to be a cop. No, no, I want to be a loan officer, right?

SPEAKER_00

I was an executive recruiter. We're called headhunter, right? Okay. The computer science, computer programming business. Yeah. Right after kind of we had a big Black Monday stock market crash through a lot of Wall Street companies, they realized everybody got laid off and they didn't need to pay us the big commissions to find them employees anymore. Okay. They basically staffed up their HR for their HR departments, and they just hired people directly. So I think I need to do something else. And I was looking in the newspaper and I saw an ad for mortgage loan offers or representative.

SPEAKER_01

So for our younger audience members, uh a newspaper is that paper thing that they used to have before the internet, okay?

Accessibility And Seven-Day Service

SPEAKER_00

That's right. It was pre uh indeed ZipRecruiter, none of that anything. All that stuff, yeah. This at a time. And it was for the anchor savings bank. And it was if you want to be an anchor banker, you know, people your age probably remember them, right? I was working at a Rockville Center. And I said, Let me try this. Everybody needs a mortgage, everyone's buying a house. Yeah. So let me give it a shot. And that's how I got started.

SPEAKER_01

Yeah. Wow. So, Scott, your client reviews, they uh consistently praise your availability, which is so important, obviously, in mortgages. In a market that moves so fast, what is your core philosophy as it pertains to uh you know accessibility?

SPEAKER_00

I want to treat my clients just like I'd want to be treated if I was a customer. People don't realize the pressure a lot of home buyers are under when they're trying to buy a house, right? There's multiple offers going in on the house, the agents are putting deadlines in, it's gotta be in by five o'clock tonight.

SPEAKER_03

Yeah.

SPEAKER_00

So you want to make sure that if somebody calls, you're there. Because if they don't call me, they're picking up the phone to call somebody else. Because in all real reality, loan offices are all over the place. New York, in our area, it's the highest concentration of loan officers. So if it's not me, it's somebody else.

SPEAKER_01

Yeah, and you have to impress the client, the you know, the mortgage or right, right, as well as the agent who's referring you, right? And who's more demanding, the client or the the real estate agent who refers?

SPEAKER_00

Yeah, most of the time it's most of the time, believe it or not, it's the agent. Yeah, it it it is, but they're under the pressure. It's you know, and they're trying to get the deal and they're trying to do what's best for their client. Right. And having information, having their client educated so that when they make the offer and it goes through, that they don't change their mind. Right. So to me, just being available to them to answer any kind of questions, yeah. Um I've been in the Caldwell banker offices for about 15 years.

SPEAKER_02

Right.

SPEAKER_00

And what I've learned is that I'm part of their team, right? Right. I'm there to help them any way I can. And if they need something, whether it's nine o'clock at night or Sunday afternoon at three o'clock, you have to be available. Yeah. Because that's the nature of the business.

SPEAKER_01

100%. Well, you know, with real estate being a seven-day business, so that means if you want to play with the real estate agents, you gotta you gotta be available seven days. So how with such a demanding schedule, how do you how do you balance or or or manage that that schedule?

SPEAKER_00

Well, the first thing is uh bringing my family, understanding what the job is, right? Because it doesn't right. They're buying, right? They know now my wife knows that that phone is glued to me in the middle of dinner, I'm out to dinner, I'd step away from the table, because yeah, you know that that's what's paying the bills. So you just learn and it's in a it's an attitude.

Interest Rate Myths, Fed Cuts & Market Reality

SPEAKER_01

So the mortgage market today is dynamic, to say the least. What is one misconception that real estate agents or home buyers currently have about the interest rates, so to speak, or qualifications?

SPEAKER_00

I guess the biggest misnomer, as now the Fed is talks about cutting interest rates, is that when the Fed cuts interest rate, it doesn't directly affect the mortgage market. Right.

SPEAKER_01

The interest rate that the end user is paying.

SPEAKER_00

So last month the Fed cut rates a quarter percent. The phone is ringing off the hook for the person that had six and a quarter, thinking now will I get six percent.

SPEAKER_02

Right.

SPEAKER_00

And the last couple of rate cuts, the rate mortgage rates actually went up. Right. Right. So that is probably the biggest misconception.

SPEAKER_01

For our audience, because some of our audience obviously we have a big you know real estate you know following, but we also get some consumers out there. So would it be safe to say that the the end mortgage rate is affected by the Fed cutting rates, but the problem is more about timing, so to speak. Correct.

SPEAKER_00

Right. A lot of times the rates will as as the market is out there and the Fed is talking about a rate cut, that's when you'll start to see the mortgage rates drop. Right. Then when anticipation. That's right. And then now they make their announcement that they're gonna cut the rates. What did they what was the message that they said? Right. Does that mean rates are gonna continue to drop? They're looking for more cuts, right? What's unemployment look like? What's inflation look like? And based on their comments, we'll dictate what's gonna happen.

SPEAKER_01

What the actual rate the end user pays happening?

SPEAKER_00

Correct. And unfortunately, in our world, the more people are laid off and unemployment numbers are higher, the lower the interest rate's gonna be.

SPEAKER_01

Right, right. That's interesting. And you don't want to be rooting against the economy.

SPEAKER_00

No, I mean people be working so they can afford to pay their mortgage.

SPEAKER_01

Yes, exactly. It's a it's a combination. What misconceptions does the um consumer have on qualifications or available programs?

SPEAKER_00

Right. So there's a lot of consumers that took first-time home buyers, because that's the biggest part of the market right now. A lot of them think there's a lot of free grant money out there. Okay. And those programs are great. There's a lot of first-time home buyer programs. They're more of a buzzword.

SPEAKER_03

Right.

SPEAKER_00

Depending upon your incomes and where you're purchasing your home will really dictate what programs are available for you. Right, right. And that and that's the big that most people are like, what kind of grant money? I'm a first-time home buyer. What can you give me? Is my rate lower? Yes, on some of the programs they are, if their income level isn't that high. In our area, because the cost is so high, a lot of the people make more money and don't fit into the programs. Right.

SPEAKER_01

Is it safe to say that you need to still qualify for the loan? So you need to show enough income to qualify, and then you have to make a l uh not or not make too much income in order to qualify for the grant. So that's their counterweight counterweights, so it's that slim. Correct.

SPEAKER_00

And the guide guidelines for the first-time home buyer programs are tighter than the quality, the qualifying ratios. We call them a debt-to-income ratio. They are lower for a first-time home buyer program than they are for a regular conventional loan.

SPEAKER_01

Right, right.

SPEAKER_00

It makes it harder for them to get into those programs.

SPEAKER_01

Yeah. So what other programs do you see out there that are popular now, like fixed rates, adjustable rates? Is there, you know, Sony May at certain things which the State of New York Association?

SPEAKER_00

The State of New York Mortgage Association, Sony May, it's a great loan. It's a first-time home buyer loan.

SPEAKER_01

Yeah.

SPEAKER_00

They uh have the lowest rates out there based upon your income. Right. Right. Uh they have different programs based upon your nationality. If you're considered a minority, they give you, you know, a bigger, you know, a bigger discount to the rate.

SPEAKER_04

Okay.

SPEAKER_00

They're trying to foster homeownership into people that can't really afford it now.

SPEAKER_01

Okay. So that's that's maybe it's safe. I I I I don't like the way you frame that. And I don't mind being critical insofar as everyone has to be able to afford it, but they're if they they foster it by if you get a lower rate, maybe the payment drops and becomes m more affordable.

SPEAKER_00

So that's correct. Yeah, right. They right.

SPEAKER_01

Because we don't want people in the foreclosure, and the other thing is. No, we don't. So sooner or later you get them in the house, they gotta stay in the house.

SPEAKER_00

Right. And the biggest problem that always has been in the mortgage industry is that we tend to qualify people for more money than they probably should take. Right. Right? So you have to educate them and say, because usually I'll ask them, where do you want your payment to be? Right. Right? And then they'll give me a number, and I'll right. If we can qualify them, great. And then there are other people say, Well, I want to buy a house for$800,000. Right. I'm like, okay, but your mortgage payment might end up being six thousand dollars a month. Right. Can you really handle that? I might be able to approve you, but should you really buy buy that house? Because that's when we're gonna have a problem.

SPEAKER_01

Yeah, so so I guess it's the double question is the could you and or and or should you? Correct. That they they go in tandem, both sides should be a asked.

SPEAKER_00

And what what I do see now with the the younger first-time home buyers, they're much more fiscally responsible than let's say our generation was. These were the the people, the kids, when their parents went through the mortgage crisis 15 or so years ago, that watched their parents losing their home, absorb debt, run into problems, they they're more fiscally responsible, most of them. Right. Yeah. So they did watch their parents grow when they were growing up and see what was going on in the household and and learn their lessons.

SPEAKER_01

Soft years from 2007, 8, 9, 10.

SPEAKER_00

Yeah.

SPEAKER_01

Yeah. There was uh a lot of chaos in the housing market, uh, you know, slash mortgage market.

SPEAKER_00

Right. Basically, if you know, if you had five percent to put down and you had a pulse, that there was a loan out there for people.

unknown

Right.

SPEAKER_01

I remember 100% financing no income check back in the day. I always scratched my head, like, how can they do this? And then when it blew up, it's like, of course it blew up.

SPEAKER_00

Right. What were they thinking? Right. So yeah, well, you know what it was? I mean, if you if you read the stories and see what happened, Wall Street got greedy. Yes. And they just kept lower having these guidelines you know get lowered and lowered because they wanted more and more mortgage-backed security bonds to make more money because they were running out of high credit score, larger down payment customers. So, what do we do to make more money? Let's just keep lowering it, lowering it, and then you know, giving somebody a loan that they don't deserve, that's what ended up happening.

SPEAKER_01

Exactly. When when they lose focus of keeping the client's best interest first, then that's when we every industry. Every industry, real estate, if we don't stay focused on our client's best interest, we wind up in a bad place. The same thing as like the mortgage industry. Same exact thing. So we we lose our our our our internal compass, so to speak.

SPEAKER_00

So back in the day when that was going on, I never did the quote unquote subprime loans. That was just not my niche. Yeah, you know, I always felt that I want to give somebody a loan, I want to go home, I gave them a good deal, I made money for my family, right? But I could sleep at night. I didn't have to worry that I was taking advantage of somebody or you know, because it was just it was easy to be.

SPEAKER_01

Because you could.

SPEAKER_00

Yeah, exactly.

SPEAKER_01

Right. That takes a lot of discipline, and I have a lot of respect for that. So you specialize in obviously a wide range of products from conventional jumbo, FHA, VA, renovation loans. Right. So what what's the process for initially consulting with a client to ensure that you match them with the absolute best loan product?

SPEAKER_00

That's again, it's to me it's an education process. I'm trying to try to educate them. Yeah, get your information, what are you looking to accomplish, and then let's discuss how much money you have to purchase the home, because you never want to use all of your money, you never want to get into the house, drain your bank account, and now you have no savings. Because as we all know, you know, you're once you get in that house, there's things you need to do. Yes. You start one project, it leads to another, and you don't want to put people behind the eight bar where they feel they have to go take your credit cards or anything to go pay for all of this. So it's always an education process and try to get a feel for what they are looking to accomplish, and then give them a reality of what's out there.

SPEAKER_01

Right. You know. So what advice can you uh give them uh a potential client when it comes to say the difference between an adjustable rate mortgage and a and a fixed rate?

SPEAKER_00

Right. So I'll lay out the difference in the payment. First thing is how long are they going to be in the house for? Is this a starter home? Is this something for five years, seven years you think you might be moving? If that's the case, then maybe you can consider one of the adjustables. Right now, all the adjustables they're usually five years fixed, first five years are fixed, the first seven or the first ten.

SPEAKER_01

Right.

SPEAKER_00

So you know they're locked into that lower rate for that period of time.

SPEAKER_01

Typically, what do you see the difference in the say the as an average of for five-year uh adjustable rate? So between a fixed rate and adjustable, how much?

SPEAKER_00

It's probably about a half a percent at this at this point.

SPEAKER_01

Yeah, yeah.

SPEAKER_00

It's not as big as it's not as big as it is, yeah. Right. And to me, I always always tell people if a half a percent is gonna make you or break you from affording the house, then you're already buying, you're already spending too much money.

SPEAKER_01

Yeah, because it comes obviously with the adjustable comes the risk. Do you know change the interest rate change depending on what happens to the economy, the world?

SPEAKER_00

If you're counting that in the next five years, the rates are gonna drop and you have to leave. Right, you don't know. And you don't want to be forced into that because as we know here, the closing costs are so expensive that it's you know, yeah, it's not something you want to have to keep redoing.

First-Time Buyers, Grants, VA Loans

SPEAKER_01

Yeah. So um the VA, let me ask you a question because we, you know, at American Homeless Wear, we've recent recently launched a new initiative. It's um and uh for our agents to better serve the military and first responder marketplace. So we have a matter of fact our own designations, uh the uh military first responder designations, and these agents we have almost a hundred agents that are uh uh uh signed up to attend these classes, which will better engage them with that segment of the market, better serve them, better outreach and what have you. And one of them is what are the advantages of the of a VA loan? Are they possible in this marketplace?

SPEAKER_00

Yeah, so the VA loan to me is the best loan. Yeah, right. It's government-backed loan, the hundred up to a hundred percent financing for the veteran.

SPEAKER_01

Right.

SPEAKER_00

Um they can they cover closing costs or they're they can cover a certain percentage of closing costs in a seller concession if they want to do that. But again, in this market, yeah, trying to get a seller to accept that is a problem. You have a hard time, some of the people don't want to accept the VA loan because it's 100% financed. Right. Now, even though they might put 5% down on contract, that covers their closing costs. I gotta say, some of the agents are a little misunderstood to whether or not that's a good offer. Right.

SPEAKER_01

You know, for most of the yeah, so let me let me just quantify this for our consumers who maybe aren't you know in the licensing field. So when a seller is selling, you you know, I've heard this question asked, is like, what do they care how much I'm financing as long as they it's all cash, is all right, it's all cash are closing, whether the money's coming from the bank or from me, but the reality is the contingency. Standard contract has the one basic contingency traditionally, not necessarily, which is contingent upon financing, right? So there's a risk factor if I'm selling my house to somebody, the riskier their loan is, the more of a scam taken whether or not my house is actually sold. I'm now taking it off the market and only find out two months later that the deal's off, right? And then I gotta reset, and if I made plans. So it's I always say to agents, you don't negotiate just price. We sometimes, as agents as an industry, get focused on price and you negotiate price in terms, and the terms can be very, very impactful on a seller. So when it comes back to the seller, you can say, why do they care about what they're financing, right? Right. But they do care because it affects the contingencies that are.

SPEAKER_00

So that's one of one of the things that I always have a conversation with the agents. If you want to compare two borrowers, maybe one putting 10% down and one putting 20% down, right? If you ask nine out of ten agents, they tell you the one with the twenty percent down is the better buyer.

SPEAKER_02

Right.

SPEAKER_00

But not necessarily, right? Because there's other factors in there as debt to income, where their funds are coming from, right at the home.

SPEAKER_01

The appraisal. In a roundabout way, the 20% down might be a bigger risk with the appraisal. I didn't I don't know if you've seen this and tell me if I'm wrong and jumping here. But with a 10% down appraisal, if it comes in$10,000 short, we still might have loan to value and they qualify for the loan. 20%, if they only qualify for 20% uh no PMI is the correct is it still still called PMI?

SPEAKER_00

It's PMI private mortgage insurance. Right.

SPEAKER_01

So so anything with less than 20% down is a high risk for the bank. The borrower pays insurance, then not for themselves, but for the bank, based the the prevent um or limit the risk or on damages for default, right? And what happens is if you qualify only with a 20% or more down payment, it comes in the appraisal comes in one dollar short, you you don't qualify for that loan.

SPEAKER_00

Now, right, so the the PMI isn't as expensive as people think it is. I have to avoid PMI. If you're putting down between 15 and 19.99% where you don't need it, it's uh it's a minimal amount. Right. They could also just pay a small amount up front if it affects the debt to income ratio by adding that payment in there, right? But you have to make sure that they have the additional funds to cover it if it comes in short. But a lot of times, you know, I've had people putting down 40%. Well, the reason they're putting 40% down is because their debt to income ratio is so high. Right. That's what it takes to qualify. There's no whittle room for a short appraisal. Right. If somebody opens a credit card in the middle of the process, which we advise them not to do or something changes, get a new car lease. Right. So if you're not if you're the agent and you're not concerned about the value of the home, knowing that we can lend up to 95% on most programs, right? Why what does it matter what the down payment is?

SPEAKER_01

Right.

SPEAKER_00

Especially if you trust the loan officer that they did their due diligence.

SPEAKER_01

Correct, correct. Now I see as the markets pivoting a little bit, it we're still tight on inventory, and yet which means we're still getting bidding wars, but I've seen a little bit of a capping on the pricings. Like two years ago, prices were just jumping up, you know, people bidding, you know, 50,000 over asking, 75, seen stuff go over 100,000. Um, we it's not that we haven't seen stuff go over asking price, but it's not as aggressive, yeah, aggressively over or drastically. So um are you seeing the same thing happening on your side?

SPEAKER_00

Uh yeah, I'm starting to see the market, I don't want to use the word soften, but I am not I'm not seeing as many 50, 60,000, 70,000 over asking. Right. Right. Right. But I think that's because a lot of these buyers they read things on the internet, which isn't always true, but they think it's the gospel, right? So they hear the markets are soft, and it is in different parts of the country. Not in our area.

SPEAKER_01

Oh, I will tell you from our side, and we handle thousands of transactions from the mer at American homes. We are not. Seeing a decline in prices. We're just seeing the increase slow down. Right, correct. So the the appreciation is not going as aggressively. And I don't think it was at a sustainable pace. You know, you can't have a 10 or 20 percent appreciation rate when salaries aren't going up fast enough and expect the market to continue to respond to that. At a certain point, people just can't afford the prices, so they leave the marketplace. Not that people don't want to own real estate, they literally can't afford it. So they they leave the marketplace, supply and demand come into play. It's one of the fundamentals we always have to remember. Supply and demand commands the price of any product, right? Right. So it's interesting. So you're not seeing the issues with the appraisals as much as we were a year or two ago.

SPEAKER_00

No, I don't have any. None of the appraisals, knocked on wood, uh are coming in short. You know, and occasionally you do see it on maybe a condominium or a co-op because that value is really only what the last unit in that complex sold for. Right. Right. Right. Where a house does so many more different variables.

SPEAKER_03

Right.

SPEAKER_00

And I have not had an appraisal come in short on a home and I can't even think how long.

Pre-Approval Vs Pre-Commitment

SPEAKER_01

Yeah. Yeah. So let me pivot a little bit from the different types of loans and appraisals to really the relationship between a loan officer and and and real estate agents. What advice can you give an agent to better prepare their buyers for the mortgage process? Really Jim and sure, smoother or quick, quicker closing.

SPEAKER_00

Right. So the first thing that they really need to do is don't just take a you know a word that are you pre-approved when they're meeting with the client? Right. Let me see the pre-approval. Who are you pre-approved with with? And let me speak to them to see what they checked. Right? It's an it's a matter of do they just look at a pay stuff? Did they run a credit report? Because some of the bigger banks they call you pre-approval, pre-qualification, with the buzzwords. I know some of the bigger banks that don't pull a credit.

SPEAKER_01

I don't know how anyone could issue a pre-approval without one.

SPEAKER_00

But did the loan officer look at the bank statements and see do they have the assets? Are there deposits going in there? Things that could come up.

SPEAKER_03

Right.

SPEAKER_00

So the you need to be a little bit more thorough. I think sometimes some of the agents are so happy to have gotten a client that they just jump right in. Right.

SPEAKER_01

You know, without more or better questions.

SPEAKER_00

Right. Across country and a lot of other lenders, we have a, you know, we can issue a commitment letter on the borrower prior to them finding a house. Okay. So it'd be subject to the the contract, the appraisal, the title. Okay. So now you if we do that, it only takes a day or two to do that for the customer. Now you know they're fully approved. Right. Right. Underwriter looked at the file, not just the not just the loan officer, and now you know that you have a commitment. It should make them much stronger and more comfortable.

SPEAKER_01

Is there a reason why a buyer wouldn't get a like what we call a pre-commitment?

SPEAKER_00

No, there's no cost to them, so why not do it? Right. Right. I think some of the buyers feel like they're if they're doing that, they're locking in to that loan officer, which is not the case. Right, right.

SPEAKER_01

Since it's not costing them money, it doesn't, there's no downside.

SPEAKER_00

Right. And I and I'll tell most of the customers look, you shouldn't even worry about shopping interest rates until you find a house. Because they change like the stock market.

SPEAKER_02

Correct.

SPEAKER_00

So you want to get the pre-approval from me, the minute you know that your offer is accepted, that's when you should start making calls to other companies to see where rates are at.

SPEAKER_01

Correct. Now we let's talk a little bit about locking in because there's a I think this is another misnomer. You know, um so I'm shopping for a house, I'm pre-approved based on a six and a half interest rate or whatever it is, right? Um how much wiggle room on that interest rate do I have before I worry about uh uh you know my pre-approval? So if obviously if it drops a quarter percent, I'm I should be golden, but if it goes up a quarter percent, should I be alarmed?

SPEAKER_00

Well, on each individual client, that's the conversation we're having. So you're giving a pre-approval. When you as an agent see that pre-approval, is that the maximum that they can qualify? That purchase price, mortgage amount, and real estate taxes? Because a lot of people don't wild card, right? And the homeowner's insurance, as we know here in on Long Island, the homeowner's insurance costs have gone up dramatically. Correct. So when you're pre-qualifying them, it's okay, what did you use for the homeowner's insurance? How much is the maximum taxes on the house? Yeah, and where's the maximum interest rate? The agent should know the basics, what you know, what needs to be done for a pre-approval. They don't know how to do it, but they need to know. So when they're working with that customer, they can say, well, what did you to provide your mortgage guy for the pre-approval? Did he look at your W-2's pay stubs? What you know, what do you do? You know, you I know you have you can't ask certain questions, right? Right. You know, the discrimination, but I can, right? And it's important to know what they do for a living in my purpose because it determines what kind of documentation we might supply. Right. So it's important for that agent to speak to the mortgage person and find out what did you document from this customer. Right. You know, I have a lot of times if I have a customer I know you're talking that the rate might they're they're just qualifying for based on what's on that pre-approval. Yeah. I will tell both them and the agent, please text me the house you want to show them, and let's run the numbers before you go look at it and make sure they qualify.

SPEAKER_01

Right. Yeah. So let me ask you a question. What's the difference? We touched on VA first-time buyers. What's the major difference when you deal with a high net worth buyer?

SPEAKER_00

Job alone usually have a higher, uh more documentation required. Okay. A lot of times they need extra reserves, right? So they have to have so much, so many payments in reserve. So it could be a retirement fund, a 401k, it'd have to be liquid. Right. But the bank has to know that, God forbid, they don't have they have six, seven, eight, nine, twelve months, depending on the program in the bank, that they can make the payments in case they don't.

SPEAKER_01

Is it true that jumbo loans many times are a slightly better interest rate than the conventional loan?

SPEAKER_00

Because it's not it's a different mark, it's a different market, yeah. Sure.

SPEAKER_01

So you think there's higher risk there, but it's not a good thing.

SPEAKER_00

So in our in our area, the high cost areas where we live in, yeah, you have your conforming loan limit. Yes, which it's going up, I think it's 1837, I think they just announced. And then the jumbo loan limit, which is one two one two and change then?

SPEAKER_02

Change, yeah.

SPEAKER_00

And in between in New York and some of the higher price cities, they have what they call a conforming high balance.

SPEAKER_03

Okay.

SPEAKER_00

So they allow the the guidelines to stick to your regular conventional, okay, but that interest rate is higher than the conforming and the jumbo.

SPEAKER_01

Okay.

SPEAKER_00

So a lot of times we'll put somebody into the jumbo program, even though it might not be a jumbo loan, because it's it's allowed in this area to go over that initial conforming limit.

SPEAKER_01

Okay. There you go. And it's if they wind up getting better terms in the correct more reasonable payment.

SPEAKER_00

Correct. So it's a and again, you start getting into the three million dollar houses. A lot of times they're self-employed borrowers. Yeah. And they're not showing all their income. Documentation. Exactly. So now we start getting into the different types of not what we call the non-QM programs. Yeah. The bank statement programs, the profit and loss statements, and those are the the deals when you find out as an agent that your buyer is taking one of those programs. That's when you have to be a little bit more cautious to make sure that the due diligence was done. Did an underwriter review the 12 months of bank statements to verify the deposits? Right. Or is that the loan officer just doing his because there are things behind the scenes. They don't just take the deposits, they take an expense ratio out because if that's your business account, you're not getting all that money that was deposited. You have to pay out expenses, rent, salaries, things of that nature. So different programs have different expense ratios. So you you have to make sure that it was looked at and done properly. Yeah.

SPEAKER_01

Excellent. Excellent feedback there. So, all right, as an agent today, you know, and we're coming down to the end of 26 now, right? Into 26, end of 25, into 26. Where are rates today? And where do you see them moving in the near future?

SPEAKER_00

Rates today, low sixes, give or take. And again, you you have factors that dictate the rates. Yes. What are they doing with the property? Is it owner occupied? Is it investment property? Where's their credit score? What's their down payment? And then if it's a condominium and they're not putting 25% down, there's a price adjustment for that. So your standard 20% down borrower with good credit is probably getting around six and a quarter.

SPEAKER_01

Okay, given that.

SPEAKER_00

No points. Right.

SPEAKER_01

What you've got feeling, any anything you want to talk about beginning part of the first quarter of 26?

SPEAKER_00

I do think that you'll see a little bit of drop in rates. Nothing substantial.

SPEAKER_01

Okay.

SPEAKER_00

But you know, again, if you're ready, people are ready to buy, they're ready to buy. Right. There's not that many people anymore sitting on the fence saying, I'm going to wait till this rate drops to here and jump in. Right. Right. You know, you had that a little bit more when we had the rates in the sevens, sevens and eights, yeah.

SPEAKER_01

They were coming down. So if you were on the sidelines now, it'd be great if we started to if you got a little bit better rates, but I don't think they're going to sit on the sidelines and find the rates in six months being a point or two lower.

SPEAKER_00

Correct. And as we both know, inventory is low, unfortunately. So if you're looking, you should be out there looking because you never know what's going to come up, right? So you might just find that particular house that you love that maybe you were a few months early, but you know, you might not find that in six months.

SPEAKER_01

So um last thing on business front, you know, what what's your advice to clients that are coming in that are in contract about locking in the rate? Okay.

SPEAKER_00

So the first thing is we have to look at the contract and the closing date. Right. In New York we don't have hard closing dates. Right. So it's on or about, which gives or take 30 days. Correct. So what they have to understand is we can't lock you in for less than that on or about date. So if their closing date was January 10th, they need to be locked in through February 10th.

SPEAKER_02

Right.

SPEAKER_00

Now a lot of times you get the customers, oh, the seller told me they want to get out. And I will say, that's fine. Before I do that, I want to speak with your attorney and both your age and the agents on both sides to confirm that's the case.

SPEAKER_01

Yeah, it's not just hearsay or or or wish. It's you know updated. But when do they say that? Well when we looked at the house at the open house. And now it's two months later, and like, well, yeah, we're not backed yet.

SPEAKER_00

You find that is the title report in? Is there an open mortgage that they can't track down for 20 years?

SPEAKER_01

That's correct.

SPEAKER_00

And then you have a lot of the people now are relocating, right? I find that a lot of the sellers are leaving our area, right? Right, right. So they're having a house built in the Carolinas of Florida. Well, wait a second. We know it's not going to be built to the time that they think it is. So we have to be very cautious as far as the rate lock.

SPEAKER_01

You know, that's a typical rate lock time frame. Well, they they run it, they run a 15-day period.

SPEAKER_00

So you could do 15, 30, 45, 60, 70,000. The longer it is, the more expensive it is. Exactly.

SPEAKER_04

Okay.

SPEAKER_00

Exactly. So I kind of tell people you've got to be cautious and be smart with it. Because I I I compare rates to leasing a car. Right. Right? You lease a car, the dealer gives you 10,000 miles a year, tells you it's 25 cents a mile if you go over. Right. But if you put 12,000 miles into that lease, it's cheaper than paying the 25 cents by going over. Right. It's the same thing with the interest rates. If I lock you in for 60 days and your rate expires, the cost of the extension for another 30 days is more money than if you just took a 90-day to start.

SPEAKER_02

Right. Okay. So that's good advice.

SPEAKER_00

And again, you have to you have to explain all that up front. They have to know what they're getting into from the get-go.

SPEAKER_01

Risk reward. Right.

SPEAKER_00

There's too many customers that you give them a pre-approval and the rate today is six and a quarter. They find a house in a month and they think the rate's still six and a quarter. Right, right. Right. It doesn't, it's not as standard.

SPEAKER_01

It changes literally daily.

SPEAKER_00

It could like the stock market. Yeah, and minor fluctuations. Yeah.

SPEAKER_01

Yeah. That's interesting. So I think there's a lot of great information here, Scott. And I knew you would be a great interview on this because, again, 35 years worth of experience. I know a lot of our agents swear swear by your service. And uh I can see why, you know. So some great information from everyone involved.

SPEAKER_00

Just try to do the right thing by people. Right. I mean, you know, you gotta sleep. I want to sleep at night. I want to make sure I don't want anybody to call me up after the fact and said, Scott, you got me into this house, I can't afford it.

SPEAKER_03

Yeah.

SPEAKER_00

Or the agents like, you told me this person was getting a loan and now they're not. You know, you you're all you are what your reputation is, right?

SPEAKER_01

So so uh we want to pivot a little bit. We always like but you know, to get into the meat and bones of the industry, you know, real estate and obviously mortgages are so intertwined with uh the real estate industry, it's uh it's really helpful for our audience to really to hear different vantage points. So but we want to get the human side. So, you know, let's talk a little bit about personal side, Scott. So rumor has it, you you you can be the life of the party. You bring the energy.

SPEAKER_00

After a couple of cocktails.

SPEAKER_01

Anything's possible. Yeah. So uh what does life uh on the play hard side of Scott look like?

SPEAKER_00

Yeah, I mean it's uh you know, I love my I love my sports, right? So um Met games, Islander games, you know, Sundays in between open houses, I get my jet game DVR. Um I love going to concerts.

SPEAKER_01

So you're a jet uh a tortured.

SPEAKER_00

I'm a tortured jet fan, yeah. You know, it builds character for that.

SPEAKER_01

There you go.

SPEAKER_00

So uh, but you know, a lot of concerts, right? I've run into you and Tom, you know, at concerts at different occasions, you know, and that's my wife and I get out to dinner, things like that, you know. Always got to plan something, the calendar, weekend away, just that type of stuff.

SPEAKER_01

All right, so rumor has it that you have some mad dance skills. Is this true that you've been known to get down on the floor? You can you could do a split.

SPEAKER_00

There's probably some video out there, yes.

SPEAKER_01

Is this true? Can you do a split?

SPEAKER_00

Not fully.

SPEAKER_01

Oh, okay.

SPEAKER_00

You know.

SPEAKER_01

At 60 years old, you could can you still do most of it?

SPEAKER_00

I can get down pretty good. Considering I don't work really work out the stretch, it's gonna be amazing.

SPEAKER_01

Yes. All right. We have to have our guy work on it, see if we can find some pictures.

SPEAKER_00

I might have some pictures if you really can.

SPEAKER_01

All right, we're gonna have to have a few good laughs. I gotta see this move. I gotta see this move.

SPEAKER_00

We have the Christmas party in two weeks, right?

SPEAKER_01

So uh exactly. Well, this may come out after the Christmas party, so uh we we might have some updated information for you. All right, so as a serious Mets fan, what is the connection between emotional roller coasters of being a Mets fan and a high stakes pressure of mortgage business? What's what's what what makes you bite your nails away?

SPEAKER_00

Mortgage business isn't pressure, you know, right? Like you, the real estate business, it's what you do. It's your it's your everyday, you know what? And again, if you you you live your right your life the right way and do the right thing by people, there's no pressure, right? Yeah, you know, but you know, watching whether Volpete Alonzo's gonna get signed, that's pressure, you know. You know, you know, you know, that that type of stuff is different. You know, you live and die on those sport things, it aggravates believe it or not, I get more aggravated watching a Met game some days than I do what anything that happens in the mortgage business.

SPEAKER_01

Yeah, you know. All right, so which is more torturous, the being a Mets fan or being a Jets fan?

SPEAKER_00

Uh it's a Jet fan. Yeah. It has to be. It just has to be. Not making a playoffs in 15 years. Yeah. You know.

SPEAKER_01

And I think too with football. Is it still 1969?

SPEAKER_00

Was there a Super Bowl? Yeah. Yeah. You know, to me, with football, you got four or five months maybe of games, September to January, once a week, every Sunday for three hours. With baseball, you lost last night, the next day you got it again. So you're more tortured by the jets.

SPEAKER_01

Is that a little bit also because you're uh have the optimism of the you know off season being good for the Mets? What do you what are you thinking they're doing? Are we getting some good free agents?

SPEAKER_00

Uh you know what, get get our own free agents signed. Give me Diaz, give me Alonzo, let's go from there. Yeah.

SPEAKER_01

All right. So if you were jammed for a day of the Mets, you'd you'd sign both Alonzo and and Diaz.

SPEAKER_00

Correct. I would sign them both.

SPEAKER_01

All right, there you go. Uh, we're gonna have to look back in six months and see if he was right.

SPEAKER_00

That's right.

Give Back: Community And Literacy

SPEAKER_01

All right, so Scott, we're gonna really pivot a little bit here. We like to talk a little bit about charity, where we have a strong, strong uh charitable culture in our company. And um, you know, and I know you you're you're like-minded, you're like you know, part of the family. So are there any specific commu community programs or financial literacy initiatives that you support or that you believe in the lending community show?

SPEAKER_00

Well, I well I just joined the Kowanis Club. Okay, right, through uh manager Dawn in Smithtown. She got involved with establishing a Kowanis in the Smithtown St. James area. Great. And I kind of joined it because you and Tom, I've just got 30 years as members of the East Middle Qas, yeah. So that's helping kids, you know.

SPEAKER_01

Um kids and community. It's a non-denominational community organization. So it's a hundred percent focused on local community.

SPEAKER_00

But I'm I'm big behind the scenes. I I like getting involved the holiday time, um supporting a family, you know, people, you know, donating food, food banks, things like that. Because so many people are having so many problems and you don't where you don't know about it and they don't want to come forward. You know, so I I try to get involved with you know across country carpentine. We did some work with Island Harvest, great, you know, going in there and the food banks and that type of stuff. So I don't need to be out in the forefront knowing what I did, just behind the scenes, knowing it's getting to the people that actually need it. Makes an impact with right.

SPEAKER_01

That's great. That's great. In your opinion, what's one thing the mortgage industry as a whole could do better to serve people in the community or underserved communities?

SPEAKER_00

That's a good question. You know, because a big part of what's going on in the mortgage industry is trying to get the underserved communities to f to buy a home. Right. Right. Um and sometimes you they really shouldn't. They're not really financially ready. And everybody thinks the American dream is to own a home. Yeah. Not necessarily.

SPEAKER_01

The American dream is to keep a home.

SPEAKER_00

Exactly, because the cost of things now. And I and I it's it's what can they do to keep the costs down to get these people more affordable. I mean sometimes you know the cost of the homes are expensive, but it's the real estate taxes, you know, and everything else. And it's not much that we can do, you know, but it's hard to you're pushing to have these people buy a house, but they're gonna take every penny out of their bank out of the bank. Their debt to income rates are gonna be top and life happens, you know. You're gonna blow out your tire now, it's$250 to change your tire. Is that gonna affect them? Right. And so as much as it's a push, it it's probably more beneficial to get people educated on to how to save and understanding it the process managing debt, right? That process before worrying about buying a house. Right. Let's let's make a plan. You know, so a lot of times I'll get you know a lead from an agent, and this they're just getting started. So usually my first question is did you budget yourself? Where where are you at? And kind of go over that with them. Not that I'm a financial planner, but I'll tell them get your spreadsheet out, look at your paychecks, what do you bring home? Because that's what you're dealing with.

SPEAKER_01

You don't have to be a financial planner, but you know what, it's doing this for 30 plus years, you see a lot of things. You got a front row seat, right? So you learn what not to do, right? As well as you pick up a little bit of street knowledge. I mean, that goes a long way.

SPEAKER_00

Yeah, you gotta educate them, let them know it's not just a mortgage payment.

SPEAKER_01

You know what gets me is that um we have all this education, you know, colleges and universities, um, even high schools, they and there's no real financial literacy.

SPEAKER_00

Correct, you're right.

SPEAKER_01

And and we you know they should understand credit card debt, you know, good debt, bad debt. Not every debt is bad. You can make debt work for you and gain you know financial. You know, wealth and independence if it's managed correctly. So I always looked at my credit score as an asset, as an opportunity, and it served me well over the years by having good credit. It allowed me access mortgages, financing capital to make investments in properties that have paid tremendous dividends.

SPEAKER_00

What I think a lot of people don't realize is the credit score affects everything they do in the market, right? So their car insurance is affected by their credit score, right? So now if your credit's not good, your car insurance rates are going to be substantially higher, even if you never had an accident. Right. Right. So it affects their homeowner's insurance if the credit right and it people don't realize that. And it's it to me, let's educate you whether it means you're not going to buy for a year, but let's get you on a plan to understand what your expenses are. They don't take into consideration utility bills. Yeah. Right. You know, if you're handy, great, but if you're not, it's$200 for the plumber or electrician just to walk in the door before they fix anything. Right. So where are you getting that extra money to pay for all these things? You know, you like said before, you blow out a tire in a car or your car goes, what are you gonna what are you gonna do? Yeah, right. Yeah.

SPEAKER_01

So let me just ask you a little bit. I know you consistently contribute to the heart of American, our foundation. What other charitable endeavors are near and dear to your heart?

SPEAKER_00

Yeah, I I I got a couple different cancer societies. My mother had passed away uh from ovarian cancer, so I'll contribute to that. You know, um a lot of times I try to find things local that are help, maybe a family that's in need that's having the problem because I know they're gonna get it. Sometimes you make these donations into these big organizations and you don't know where it's going.

SPEAKER_02

Yeah.

SPEAKER_00

I know that if I donate money to your foundation, it's going to a local person family that's in need of something.

SPEAKER_01

100% of the money that's raised goes back in the community. We have no expenses in the foundation, no rent, no employees, what have you. The first thing I always look at at a charitable organization, I'm a big fan of St. Jude's, is I want to see what the percentage that goes to actual serving you know the needs. Right. And what I think I I I haven't checked recently, but I usually see St. Jude's as like 92% for a big organization. That's impressive. So I want to make sure my money's going there.

SPEAKER_00

But we just had the fundraiser a couple of weeks ago through your foundation and you know, raffles. I'll always buy extra because I know that money, and it's going right to the cause, right then and there. There's no expenses, nobody's taking a paycheck to manage things. Right. You've got all these. You've got all these agents and employees from the company that volunteer their time to do this and you know decide. And to me, that's where I'd rather put my money towards it.

Closing And Drop-The-Mic

SPEAKER_01

Well, just you know, for the record, Tom and I uh, you know, recognize we know we challenge our agents and our teams to really get involved. And you know, as an as a company, I think we raise typically somewhere around$100,000 a year for that foundation, knowing 100% of it's going back. But we also know that uh you're always there to support us. So we just want to say thank you. You know, we appreciate you. So thank you. So um we really come to uh one of my favorite parts of the uh episode is always the drop the mic question. Before I ask the drop the mic question, I just want to remind our audience if you like what we're doing, like what you're hearing here, we'd love to have you uh like, subscribe, and sign up to see some future episodes. So so Scott, superstition check. Okay. What's one ridiculous superstition or piece of clothing or ritual that you use when you know when the Mets are in a tight game?

SPEAKER_00

I'll switch my jersey. If I'm home, I might switch my jersey and I have dozens of them.

SPEAKER_02

Okay.

SPEAKER_00

I might switch my jersey to that player that's coming up or that pitcher that's coming in, just to give them the vibes that I got their back and I'm supporting them. You know, so that's my uh, you know, when I'm home. It's you know, I I have a certain like a certain like certain drink I'm gonna have a drink that day. That's my drink for the game, or whatever it is, or my food, or you know, I s you know you don't like to mix it up. No, uh, you know what? I'm a you can't, you know. Uh I I do change my underwear, you know, one of those, but uh you know, but uh you know, you know, it's it's don't talk to me things too. You know what? You know, I might walk into another room with my wife, you know, because my wife is probably a crazier Met fan than I am. There we go. So, you know, sometimes I have to we'll have to walk out of the room, you know, but uh you know, but uh yeah, because it's crazy.

SPEAKER_01

Well, Scott, I want to thank you for joining our episode today. We enjoyed having you on the show. You were very informative and um 2026. Let's go, Matt.

SPEAKER_00

That's it, that's it. That's correct. Thank you. Thanks for having me.

SPEAKER_01

Absolutely.

SPEAKER_00

All right.