Mortgage Connects an MGIC Podcast

Building a financial legacy through smart real estate investment

• MGIC MI

Share episode

MGIC Connects Podcast interviews Marc Williams, Senior Loan Officer at Paramount Residential Mortgage Group. Marc is responsible for developing and providing mortgage loans, training and business consultations to consumers and industry partners throughout the state of Florida. Through his educational seminars on homeownership and foreclosures, Marc offers individuals help with developing self-reliance and control over their own economic destiny. In this episode, we discuss:

  • The challenges of homeownership, from low inventory to affordability
  • How to lay the foundation for generational wealth through smart real estate investment
  • The advantages of down payment assistance programs and how they're reshaping the landscape for new investors
  • Strategic benefits of multi-unit property ownership

Marc shares the wisdom he has gained from his years in the housing industry. You'll learn how financial literacy and a shrewd grasp of loan products can be game-changers for prospective homeowners, especially those venturing into the market for the first time. 

Thanks for listening to Mortgage Connects, an MGIC podcast. If you have questions, comments, or want to get involved, send an email to mortgageconnects@mgic.com.

Looking for even more expert insights? Check out our mortgage industry content portal, Mortgage Connects knowledge hub. Subscribe today so you don't miss out on the latest! Subscribe

Speaker 1:

Welcome to Mortgage Connects by MGIC, bringing you the latest insights from top mortgage professionals around the industry. I'm your host, stephanie Budnick, and today we have Mark Williams, senior Loan Officer from Paramount Residential Mortgage Group. Mark has been responsible for developing and providing mortgage loans, training and business consultations to so many individuals throughout the state of Florida. Through his educational seminars on homeownerships and foreclosures, he's offered individual self-reliance and control over their economic destiny. Hi, mark, thank you so much for being here with us today. I'm very excited about today's episode.

Speaker 2:

Thank you, stephanie. I'm glad I'm here, just really glad to be here and honored to just kind of share a lot of the information that's out there as well. So thank you for having me on.

Speaker 1:

Absolutely. If you don't mind, can you just give our viewers a little bit of background on where you came from and why you're so passionate about what we're talking about today?

Speaker 2:

Great. So once again, it's a pleasure to be here. I've been in this industry of housing or real estate for the last three decades and so I'm a licensed real estate agent and a licensed loan officer, because I wasn't always that. I started off working for a HUD certified counseling agency and I'll talk a little about that today as well and I was a director of a housing agency that helped a lot of first-time homebuyers really understand how to prepare themselves for home ownership and then being pre-qualified or qualified by a local lender. And so I decided hey, with all that work, why not become the loan officer? Work with the lender in tandem and really being there in that space and then also being able to help a lot of first-time homebuyers understand the real estate market.

Speaker 2:

So that just led into that transition of also getting a real estate license. But that's a little bit about me. I'm really passionate about affordable housing and definitely down payment and closing cost assistance programs, which I'll talk a little bit about as well. So glad to be here and glad to just kind of share a lot of that information.

Speaker 1:

Awesome Thanks. Well, what I would love to start with is maybe just about early on, because you know we all have a foundation and it helps us get to where we are. So have you, in your early experiences in sustainable homeownership and financial education, influenced your approach to helping borrowers as a loan officer?

Speaker 2:

Yes, it absolutely has. So great question and I'll say the deeper the understanding I have related to what pain points a lot of first-time homebuyers are going through really helped me understand how to help them.

Speaker 2:

Remember I was mentioning that starting off with a HUD-certified counseling agency really helped a lot of those first-time homebuyers understand financial literacy, looking at their budget, creating a spending plan, saving for their down payment. So early on I was exposed to helping that client based on a lot of the information that I had resources to, and so financial education was key to helping empower them, and so I would say definitely just a deeper understanding of what to look for, how to guide them. Maybe they weren't ready immediately, maybe they were working on credit and they needed to wait three months or six months to a year, but that was okay, and understanding that point of view from a HUD certified counseling position really helped me to have that conversation in a way that prepared them short term or long term for that home ownership process.

Speaker 1:

Yeah, that really sounds like it allows the individual, from your early experience, to shape their outlook on sustainable home ownership. Their outlook on sustainable home ownership. I know when we went to look to buy our first home, we didn't really know what to even think about, what to do, how to assume a budget and not just what the mortgage payment was, because there's so much more than just that to it. So, from the budgeting perspective, there was a lot more than that you think about. So I love the passion that you share behind that and how that helps. Great that you think about. So I love the passion that you share behind that and how that helps.

Speaker 2:

Great, thank you.

Speaker 1:

So, thinking about today's market and some of the challenges that we have, what are some of the biggest challenges facing homebuyers in today's current market in your opinion?

Speaker 2:

You know that's another phenomenal question and I would say there's typically three that we're seeing Definitely low inventory out there in the market, unfortunately tightened lending standards and then definitely affordability as a whole. So, in talking about the low inventory, a lot of individuals right now who are first-time homebuyers and are searching for properties realize that there's a shortage of available homes, right Homes for sale, which lessens their opportunities to purchase right, based on the fact that property values are increasing. And in addition to that, it's just the competition that's out there for a lot of first-time homebuyers is kind of daunting if they don't understand what the next steps are, right. So we have to understand that we have to educate buyers on how to budget, how to look for properties that are within their budget and price point and realizing that, hey, this is a starter home for you. It doesn't necessarily mean you're going to be in this home 30 years from now, right, but you've got to get in the game. And I think when we talk about some of those challenges the low inventory, but also the mindset for a lot of buyers it's also something that sometimes needs to be changed. And when I talk about the type of lending standards, right. So it's really important that first-time homebuyers tap into their lenders, understand what products are best suited for them, whether it be down payment assistance or whether it be a type of loan that talks to their credit score. Maybe it's an FHA product compared to a conventional loan product. So, understanding what those guidelines are and how tightened those guidelines are, I truly believe that the better you understand the requirements, the easier it is to kind of play the game, if you will, and so I urge folks to always be thinking about those standards.

Speaker 2:

And then affordability. A lot of first-time homebuyers believe that homeownership is about and I did. I know I did that white picket fence, two-car garage, overlooking the ocean and all of that and not necessarily understanding. You have to get in the game of where you are, and so affordability is going to be an issue. I've had some families that have said you know what, okay, I'll call my mother-in-law, who I don't like, I call my brother, who I may not like, and I'm going to buy a home with them, but now I'm in the game and I'm able to purchase something and I'm not restricted to whatever just alone my income might look like. So now I'm more competitive in the market when I make an offer because I'm pulling all my other resources together financially in order to get in the game. So I get it. But I would say those would be the three low inventory, affordability and definitely tight and lending standards. You gotta know what those standards are.

Speaker 1:

There are so many items that you hit on there that I kind of want to highlight for our audience.

Speaker 1:

I think mindset was one of the biggest takeaways that I just took away from your answer.

Speaker 1:

Whether that be that I can't have this high image of a house, that I think for my first house, is that you need to shift right and get in the game, understand that it might not be just what you think it was going to be, but again you're building equity instead of renting where you're not able to do any of that. So I really appreciated that mindset and level there. And then, in addition to that, I think, the education piece, not only for the consumer, but to remind loan officers every day to be so you know, educated within their markets, to understand what's available. Because I know for sure if I talked to my friend next door, they would have no idea. If I told them, well, did you look into any down payment assistance program? And they would be like I don't need that or I don't, you know, they just don't even think that they will qualify. Those are really key takeaways there. Are there any other ways that you can foresee that people can overcome these challenges that you're seeing in the market?

Speaker 2:

So I would say, definitely reaching out to a HUD certified counseling agency in your area. So if you go to FHAgov Federal Housing Administration, you can tap into those types of resources in your local area. There are easily over 2,500 HUD-certified counseling agencies nationwide and what they have been chartered to do is really help first-time homebuyers understand budgeting, understand homeownership as a whole, financial literacy. All of those are components of the HUD-certified counseling agency, among other things, such as credit. So I would say, seek financial guidance by reaching out to those HUD-certified counseling agencies and then looking for creative financing solutions.

Speaker 2:

Right, and I'm a firm believer that education is all about empowerment. So when you're seeking those knowledge and those resources, you also, as that homebuyer, have to feel comfortable in asking the hard questions and realizing that you might not be ready today, as I mentioned, but it doesn't mean that you couldn't be ready in three months, you couldn't be ready in six months. And what I've seen, Stephanie, is a lot of individuals self-select themselves out of the process by all this information that they're getting, whether it be a friend told me or a family member told me, or I searched on the internet and I looked at what came up first. That might not be the best resource right. So do your due diligence and get as much information as possible to be able to continue to grow and overcome those challenges.

Speaker 1:

Yeah, assumptions aren't good for anybody. I've learned that at a very young age. One of the other things that, when we had earlier conversations, the thing that you were passionate about was closing the racial home ownership gap, and I wanted to touch a little bit on that as we talk about challenges that we have in our market and our day to day, and so we've made some great strides in that area. So how has the mortgage industry's focus on narrowing the racial homeownership gap evolved in recent years, and what are the key elements of this emphasis?

Speaker 2:

So a big buzzword and this is another wonderful question because I've dealt with so many lower modern income families that are struggling right now on one understanding the home ownership process but realizing that unfortunately they're in that gap as it relates to, maybe, race or even income and affordability. And so one of the big big things that are out there right now are diversity, equity and inclusion initiatives, dei initiatives and I love them because a lot of workforce housing, a lot of workforce entities that are out there and nonprofit and housing counseling agencies are really looking forward to pushing those types of initiatives to close that gap. And they do that by creating home ownership centers providing information to all different ethnic groups and races to be able to make sure that whatever media messages that we're putting out there, that it can be interpreted correctly, right, because sometimes, as even loan officers and real estate agents, we understand jargon and terminology from doing this day in and day out, but for the average consumer they might not understand what an adjustment in their rate may be, they may not understand what their credit score really truly is when a mortgage professional pulls their credit report. So I think the more inclusion that we have, the more diversity that we have, the easier it will be to close those gaps. We're also noticing that there aren't that many loan officers or professionals in certain markets that look like them right, or look like me. So they're doing a lot of initiatives now on a national and a local level to try and encourage housing professionals to be a part of the industry, to making sure that those changes are there.

Speaker 2:

And then fair lending practices. You know we're coming out of we're still in the middle of it Fair Housing Month right April. There are a lot of communities that have been affected due to redlining, due to income, due to affordability, and so we have to make sure, as loan officers and housing professionals, that we're providing good lending, that we're not creating any redlining situations or predatory lending situations that deter a home buyer from really purchasing a home or getting information that's great information. And then the other part of that is down payment assistance programs. We've got to put as much information out there, which is my passion about down payment assistance programs.

Speaker 2:

So for the average individual and I was looking at a study by the National Association of Realtors, nar, where they identified that the average individual between the ages of 35 to 44 has, on median, about $27,000 saved for their purchase of a home and on average, it's really about $4,700, right. And so I say that and I share that, because I don't know too many people that have $27,000 in the purchase of a home, right, when we know that you're using 3% of that, or even 4.5% of that, to cover all your down payment and your closing costs. So those are the issues that I think a lot of individuals are gonna see and that's the way that we kind of close the gap Affordable housing initiatives, definitely looking to diversity and equity inclusion types of initiatives as well and then contact your local fair housing organization and making sure that you're a part of what those policies look like for your communities in order to help close that gap.

Speaker 1:

Yeah, there are a lot of different misconceptions that it comes to, you know, in the mortgage process, whether that people still believe in any 20% down, which, to that point, it's like, okay, I'm never going to get there with today's market, living with other family members. I think it's just creating more of an awareness as well, from building generational wealth and understanding that that's acceptable to do and like, yes, just get into the home, get started and you're able to do that. Are there any other ways that you feel that we can do a better job of building that generational wealth? Is it just behind the education aspect, or are there other components in which we can do that?

Speaker 2:

I think the example that you reiterated related to doubling up on incomes is a great way and realizing that five years from now, seven years from now, if your income changes, it doesn't mean that you can refinance and take that other individual off. So you have to put that in perspective as well. But in addition to that, I would say, you know, looking at other opportunities related to affordable housing, there are a lot of affordable housing developers that have been chartered to build affordable housing units within certain areas. Now some people might say, well, I don't want to purchase in that area because that area is this and it looks like that. And I say this getting in the process of buying a home is so key. We're coming off a market where the last year to two years, values in certain areas have increased by 221%. Now I say to the naysayer or the home buyer now, if you had waited or if you didn't wait, you'd be able to take advantage of that value and increase.

Speaker 2:

So when we talk about building wealth, that's how you build wealth. The dynasties, the family, the huge multi-billion dollar families of the world, individuals of the world they always have real estate as a part of their portfolio. They may do so many other things, business-wise, investing-wise, but for the average American, the way to build wealth is always through property and increasing your value and knowing exactly when to buy and when to sell. So those would be the things that I would mention tapping into a lot of affordable housing developers, as I mentioned, who have been chartered to build affordable housing within communities to be able to keep that affordability low, at a price point that you can get into the market and afford it.

Speaker 1:

You know, being closer to 40, for me, I know a lot of my friends have duplexes and they have other things that they are doing to grow that, their own wealth. And so it's really interesting too to think about, because until my husband and I started hearing about multiple couples that literally live in the same cul-de-sac as us having multiple properties, we were like, oh my gosh, even even being in the industry I wouldn't really think about, I'm going to go buy, you know this to do that. And I think that that's even more of a point too, that everybody needs education. It's not the first time home buyer, because there's so much to learn about the advantages that you can set yourself up for.

Speaker 2:

Right, you know, and so you mentioned the duplexes, and I love that.

Speaker 2:

That's another great example of being able to get into the game, if you will, and understanding that it's also about the investment correct and those types of investment properties.

Speaker 2:

So, remember, we talked a little bit about the tightening lending guidelines, right, and so lending guidelines in the last eight months or so have also shifted, related to duplexes. So now it used to be a point where you had to put down 15 to 20 percent right to be able to purchase a duplex. Now Fannie Mae, freddie Mac have changed the guidelines related to that and now you can only, you only have to put down a minimum of 5 percent, right. So big difference you only have to put down a minimum of 5%, right. So that's a game changer for a lot of families. And then being able to count the rental income from those other units as well to help offset your income in a duplex 75% of that. So that helps increase your buying power, right? And I tell my family I say, listen, it's time for us to start really looking at duplexes or triplexes and putting people that are family members on one unit and being able to own that totally. So I love that and I thank you for that example.

Speaker 1:

Yeah, I think that that even goes to the fact of you being willing to live with other family members. It even makes it a little bit more that you have your own place. It doesn't feel like, OK, well, they're literally in the room next to me.

Speaker 1:

It gives them a little bit more, you know, ability to be on their own, so I wanted to talk a little bit more about some of the critical partnerships that we can utilize for financial literacy, and you did talk a lot about HUD agencies already. Are there other partnerships that loan officers should look at? Getting you know, invested into learning more about that can help within their communities.

Speaker 2:

Yes. So nonprofits, your local nonprofits. You'd be surprised that some of the local nonprofits have housing as a component of their services. So I would say, tapping into the nonprofits to be able to do that because they're going to talk similar to the housing agencies about budgeting, about credit repair and things of that nature but help navigate them through that process of homeownership. So, definitely your local nonprofits. And then also reach out to your local housing authorities, right. And housing agencies through the city, through the local county government. They have also been chartered to not only tap into down payment and closing cost assistance for you as a first-time home buyer and closing cost assistance for you as a first-time homebuyer or even to really help as a loan officer for you to get educated. But those are great resources to help you, as that loan officer, have in your toolbox, in your arsenal, to be able to say you know what, I can point that homebuyer in the right direction, or how can I sit on my local community board to be a part of that initiative that that local nonprofit or that housing agency and housing authority is trying to push in the community? And then community reinvestment agencies, right.

Speaker 2:

So the Community Reinvestment Act was an act that basically said, we're going to deal with this issue of home ownership across our nation, so local banking institutions have to, as a part of their charter, must also lend but also open up home ownership to certain communities, and so that's where you're going to see a lot of those products that are now geared towards specific census tracts to really help that first-time homebuyer.

Speaker 2:

So what I tell a loan officer is you've got to understand in your lending institution or another lending institution where those census tracts are, because those are opportunities for you as a professional to share valuable information and to tap into those resources, and I also say your human resources departments, for a lot of mid-sized to large-level businesses may or may not have, but may have a homeownership benefit and component that you as a loan officer can tap into and say hey, you know what I want to see, how I can do possibly a lunch and learn.

Speaker 2:

I want to come out and make a presentation on maybe down payment assistance or our loan products, because I understand that there are a lot of individuals who may already own their home that may become a victim to foreclosure, may already own their home that may become a victim to foreclosure, and I want to share information on how we can help refinance their home and help them, but I also want to share information about down payment assistance. So it's all I believe, stephanie, about really connecting those pieces and filling in those gaps, as that loan officer, professional or even real estate agent to be able to say you know what, this is, what we can offer. This is how I want to be of value a value agent, if you will to that overall process of homeownership, and that's how I think that we can effectively change communities by loan officers, real estate agents, not just looking at it as a transaction of the state agents, not just looking at it as a transaction, but more looking at it as how you transform the individual that you're working with.

Speaker 1:

I think that that's so powerful for everybody, even around that person, to be able to do that. We also are very passionate about similar products and bringing information to helping the loan officer better understand. How do I leverage it like, just like you mentioned, a human resource angle. That's not a normal thought process. That's like, oh no, I just I just talked to real estate agents and then maybe I'm diverse enough and I'm financial advisors too, but again, there's so many different ways to try to overcome that affordability challenge. I think that these are great resources for that. Love it, mark. We're coming to the end of our episode here. I just wanted to let you leave us with a lasting comment, because I have enjoyed this conversation so much today, anything that we can leave our audience with today.

Speaker 2:

Thank you for that, and so what I will say is, for the professionals that are out there and those individuals that are doing this day in and day out, I salute you, I applaud the work that you're doing.

Speaker 2:

I will say that you are really and I heard this the other day the power behind the transaction, and also not looking at it as a transaction that I mentioned, but also how we transform individuals, transform communities.

Speaker 2:

I think you know the saying is rising tide right Lifts all ships boats. And so I say that because I'm a firm believer, over the years that I've been doing this, that the most rewarding thing is to work with a first-time homebuyer that might be marginalized, might not understand the overall process and the moment that that light bulb turns on and they get it, they follow the steps to become a homeowner and then they get the keys at the end, and they still doesn't stop right there You're also talking about now. They're on the path to truly understanding homeownership and wealth building for their community and wealth building for themselves and how they are part of their community, and so I leave you with that, just remembering that you are really the power behind the transaction and the better that we are of getting great information out there and realizing that people do business with who they like and trust no like and trust.

Speaker 2:

That's the easier part of all our business and it always comes back. I truly believe that. So I thank you again for having me on. It was a pleasure and I look forward to hearing from you all again and seeing if we can continue to just push the envelope a little bit more on how we connect with our homebuyers.

Speaker 1:

Mark, thank you so much.

Speaker 2:

Thank you for having me on.

Speaker 1:

Thanks for listening. For all the latest industry insights, subscribe to Mortgage Connects on Apple Stitcher, google Podcasts, spotify, amazon Music or simply go to mortgageconnectscom.