Generally speaking, we like to believe in the basic goodness of people. That when push comes to shove, people will inherently do the right thing.
When it comes to mortgage financing, we want to believe this of our borrowers too. In the world of alternative lending, there’s even an acronym: GGWP. Good Guy Will Pay.
Obviously, our lives would be much simpler if every file was made up of borrowers with provable income and good property to lend on. As we’re all too aware, that is not always how it works.
So, in situations where the borrower has neither the good property or a provable income, what can we as lenders do? Cut and run? Or look at the situation as a whole in the hopes to put our faith in the acronym, GGWP?
In the world of MIC’s and alternative lenders, we are fortunate that not all our clients are required to fit into a tiny little box. Unlike lending through the banks, we can examine the situation and the client as a whole. We can make a judgement based upon more than the criteria laid out by a traditional lender.
While provable income is always important, the world of alternative lending allows for us to offer non-traditional options.
Options like no-payment mortgages and vendor-financed mortgages are solutions that we have been able to offer our past clients. We are able to often come up with creative solutions for our borrowers while always maintaining a reasonable level of confidence in our lending decisions.
Creative lending types of deals are not always typical. We know that the file still needs to make sense from a business standpoint. However, finding a solution for a borrower feels pretty great when not only is their story credible, but their character is unimpeachable, and you just know in your gut that this is a case of Good Guy Will Pay.