We made this for our borrowers and mortgage brokers, we all know in life things do not always go as planned or smoothly. We are here to help and work with our borrowers. We encourage communication’s with them.
“Jack: So, we’re making this today. It’s Marcy and Jack at Gelt, of course. And we’re really addressing this to our existing borrowers and really mortgage brokers of our borrowers. You know, currently, I don’t know if we’re officially in a recession or not. I don’t know; I’ll let the government decide. But we’re in a recession.
Marcy: Yeah, and we all know the rates are high.
Jack: The prices are going up; interest rates are going up. We want our borrowers and mortgage brokers to know that we’re not a huge company. You know, there’s 12 people in the office. We know every loan; we work with our borrowers. If our borrowers are hurting, we’re hurting. We really need our borrowers to be successful, and we want to work with them. So, if our borrowers can’t afford the payment or if— so a couple of scenarios, how we work, let’s talk about how we work with our borrowers. One is…
Marcy: Well, we always have open communication. I mean, that is the most important.
Jack: You can always get us on the phone.
Marcy: And, you know, it does leave us, and it goes to our servicing department after the loan closes. But you always can call myself or Jack.
Jack: Our servicing department is in this office, and the people work for us. We know them; they know us. And Marcy oversees them.
Marcy: Yes. So bottom line is that if someone’s having an issue, we want to hear about it.
Jack: A couple of issues could be is they have a balloon and they can’t pay us off by the balloon. Thing simple solution: call us; we’ll extend your loan. Not a problem. Even though we’re a short-term lender, most of our deals are a year or two years. I think we have, I don’t know the number, 42 or 43 deals on the books more than 15 years! More than 15 years! So, we’ll give you a three-year extension, a six-month extension, a three-month extension, a five-year extension. Not a problem.
Marcy: We’ll work with you whatever you need.
Jack: What other? Okay, other issues that they have, some rehabs, they run short. Here’s the reality of when you do a rehab. If your deal is a rehab, it’s always going to be doubled the amount of time, and it’s always going to be a fortune. We have a deal now in Chicago, the guy’s a great guy. He’s been on the books for two years; he can’t get the city to approve the plans.
Marcy: Yeah, he had problems with permits. Every phase of rehab requires inspections; he’s just had issues.
Jack: It’s terrible. I feel terrible for me; this guy was approved with the SBA. He’s a small business, and not for his fault, but we extend them; it’s not a problem. We work with them. Another thing is look; we know…
Marcy: We need to talk about the rates.
Jack: Let’s talk about the rates.
Marcy: Yeah, we gotta talk about the rates. I mean, they’ve gone up. Historically high in one year.
Jack: I think it’s the highest.
Marcy: The highest.
Jack: We work with the bars, you know, Marcy and I had a great call. I thought a great call with a borrower of ours. He owns an owner-occupied business, a local restaurant. It’s like a hamburger Joy. The guy’s had it, and the guy tells me he’s 59, 60, about my age. He’s had it for 19 years. He thinks this is going to be his retirement. He fell behind like, I think, two or three months, and the guy was so scared that he was going to lose the property, and his payment went up a little bit by about four or five hundred dollars.
Marcy: That’s a lot for them.
Jack: A lot, four or five hundred dollars a month. Within 10 minutes of us speaking to him, we said, “I’ll tell you what, keep the payment.” And we said, “What can you afford?” He gave us a figure. We said, “I’ll tell you what, no problem. What we’ll do is we’ll reset the payment to I think we said starting December for the next four months, and we’ll revisit it.” So, we have a lot of flexibility. We’re going to get like calls from every borrower we have wanting the payments to be 58 cents. It has to make sense.
Marcy: It has to make sense, and listen, I mean, obviously, we’re not waiving the difference; we’re putting it on the payoff, but we are going to work with you to get through this because everyone is feeling this.
Jack: This borrower who we spoke to, Marcy, of course, happened to step out when this borrower choked up. He got so emotional because he thought this was going to— this is he puts his— you know, this guy works 24/7. He puts it— he goes to bed, he sleeps it, he eats it, he thinks about it. He’s in the shower thinking about business, and he was scared that we were going to take a tough approach and not try to take his property back. And that’s not the case, man. He literally started to tear up when I told him, when I said, “How much can you afford?” He said the amount. I said, “Okay, no problem.” And he literally was so thankful and so grateful to us. And if borrowers call us, we work with them 99% of the time. We work with them. It’s when, unfortunately, sometimes—
Marcy: But then there’s some borrowers, Jack, that just go silent.
Jack: I know, it’s a big mistake. It’s always, I don’t know, I think people put their head under the pillow or what’s the expression, head in the sand?
Marcy: I mean, I will tell you, the thing is, though, we— We’re not gonna go away. So, like not communicating and being silent is not an option.
Jack: Not good, and it’s always sad because when borrowers go silent and they run from the problems, the problems compound, so it gets worse. So, I guess the bottom line is if you’re a borrower of ours or you’re a mortgage broker and there’s an issue, any issue at all, call us and let us know. We listen to it. We just had another one. I don’t want to give the name, but it’s a hotel in Branson. It’s the third time we’ve extended a guy. It was supposed to close two other times.
Marcy: But it never did.
Jack: Whatever. He sends in an email, I forget the day before Christmas or whatever, “Oh, the deal’s not going to close. I need an extension.” Not a problem. The bottom line is we try to be a small, family-friendly company. If you’re a borrower or a mortgage broker, we want to work with you again. That doesn’t mean— don’t misunderstand. I don’t want someone to go to court and we didn’t work with them, we didn’t do this. We can’t work with everyone in every situation.
Marcy: But at least if there’s open communication.
Jack: We can always come up with something. We can always. You know through COVID, you know, we can look back now and say we didn’t have one borrower going to foreclosure or going into legal during Covid. We worked with everyone because of their fault. We had one borrower who it got a little tough because what he did was, he went to a lawyer right away, and he didn’t reach out to us. He basically took it into his own hands. But we had a guy, I don’t know if you remember the guy, forget his name. He was in Atlanta. He had a car wash and a car rental place outside the Atlanta airport. No one’s traveling, no one’s renting cars, no one’s getting into the car, no one was getting a car washed. We worked with it. I think he didn’t make a payment for whatever it was, but we’re incredibly flexible. Call us, don’t put your head in the sand. And to those people, there’s nothing wrong. I just want to give a personal statement. Look, I lived through the crash of ’08 to ’11. It was terrible. You can’t, and I didn’t put my head in the sand. I worked on problems. I had tons of problems. I had more problems than you could believe. I had more problems, and it felt like anyone in the world, but you know what? Every day, you have to put one foot in front of the other and deal with the problems, and you’ll work it out. So, we’re here as a company to work with you.
Marcy: At any time, we’ll talk it out. You know, we literally try every single day to be kind. That sounds crazy in this business because, you know, we could be called hard money lenders, but we really do try to work with our borrowers.
Jack: We’re opportunistic lenders, you know what people say that we help people, you know.
Marcy: We do. I mean, we give people an opportunity they would not get somewhere else.
Jack: They’re calling us for two reasons. One, they’re making money with our money that other people said no, or two, they’re in trouble and we help them out, and they’re very grateful. We are fantastic.
Marcy: Or three, which we’ve been doing a lot of, is like that people in a different situation have 1031 funds that they have to reinvest. They need money quick, and we are there to answer that solution.
Jack: They’re using our money to make money with it. We just closed a 4.3 million dollar deal anyway, so I hope the message our borrowers and brokers get is we are here to work with you. Don’t stick your head in the sand. Even if you think you have a problem coming up in six months, let us know, communicate with us a lot, communicate with us often. We love to hear from our borrowers and mortgage brokers. Great, happy New Year. Remember when your bank says no, we say yes. Check us out at geltfinancial.com and call us anytime at 561-221-0900 ext. 103. Have a fantastic day.”
Category: Education
