Hey Mortgage Folks, have you ever asked yourself: “How does one sell against the negative amortization perceptions with the Pay Option Arm?” One of the first things I would suggest is to make sure you explain the Index you are using.
One of the worst things you can do is try to explain ALL the indexes. I would focus on one, maybe two, but that's it. Learn to explain it in the most simplistic way possible and relay it to your borrowers. One thing that most LO's don't get is that the non-mortgage world doesn't understand the same things we do, so therefore we need to make our descriptions and terminology more on the "every day conversation" side of things.
Does that make sense? As far as the perception of negative amortization being “bad”, first find out what the borrower knows and doesn’t know. Find out what they are thinking about “neg-am” before you assume you know what it is, then sell against that particular thought process. Most of the negative stuff out there is coming from people who want to put the blame on something besides the market, so the Pay Option Arm, because of the words "negative amortization", is a good fit for them to fall back on.
Also, there are brokers out there who haven't a clue as to what they are talking about with the Pay Option Arm. They only look at what they can make on the back end and don't focus on future business. Those folks don't stay in business long anyway, but they keep showing up to make the fast buck.
So your mindset shouldn't be to sell against the neg-am, change your mindset and sell against the people who don't understand the product and what they have done (bad) with the product. If you approach the neg-am thing with the mindset of it being a great thing to have, your chances of getting the deal will greatly improve.
Andrew has sold and has trained other Mortgage Professionals on how to sell the Pay Option Arm. He is the author of the E-Book: The A.R.M. Factor: Guide to Understanding and Selling the Pay Option Arm. He writes a free weekly newsletter called "The Mortgage Mailbag".
http://ezinearticles.com/?How-To-Sell-Against-The-Pay-Option-Arm-Mortgage&id=605650
