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the real cost of money

As an attorney and the president of a small title company I work with real estate and real estate financing as well as bankruptcy and credit rehabilitation. In other words I work with money: not directly mind you, but I help clients to deflect and cope with creditor harassment, get the benefit of their contracts, buy and sell real estate, and better their lives in other ways.
I have daily contact with mortgage lenders, bankers, credit card issuers and finance companies. And after all is said and done, I think I’ve learned a thing or two about the cost of buying money, which is exactly what we do when we obtain credit cards, mortgages, promissory notes, etc. We buy money at a price in the hopes that we can pay that price over the years or generate still more with it like a business person stocking up on inventory. Consider the sources of money for my clients:

  • mortgage lenders/brokers
  • finance companies
  • credit card companies
  • bank loan officers (small business lending, lines of credit, etc.)

And keep in mind, each of these is a kind of salesmen (I mean … account executive). In any case, each of these people sells money at a price (interest and fees) set by the market. They buy from a wholesaler, the Federal Reserve, who buys money from the manufacturer, the U.S. Mint.

when we borrow on credit cards, mortgages, and promissory notes we are buying money in the hopes we can pay for it over time or generate more using what we just bought (resale). this is where a good lawyer comes in … a good lawyer will work with prospects and lenders to smooth their path to a sale (that is, to a loan)

But there is a downside. Try getting a loan with credit scores outside a preset comfort zone, with a lien on your house, or if you were involved in a lawsuit (who hasn’t these days?). What you will find is that the same account executive dying to give away their product last week won’t know you name today.
But why? The answer is the underwriter. Even if the loan officer tries to push their prospect through the system … they can’t because lenders have a department whose job it is to say no: the underwriting department. Underwriters are natural enemies to loan officers; every time a loan officer says “yes,” an underwriter says “no.”

A good lawyer can help make a loan a success, putting money (literally) in the pockets of both the loan officer and the borrower. They key is to help the loan officer and their prospect clear credit issues, remove clouds on title including a lien, defend foreclosures, and where necessary use bankruptcy to allow for a fresh start. And remember, debtors in bankruptcy are often better credit risks because bankruptcy let’s them put the past behind them (chapter 7) or manage regular monthly payments, which builds credit (chapter 13). Either way you look more credit-worthy after bankruptcy than you did before.

After all, we can only pay so much for our money …

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