A Conversation With ... Brad Farris

How did you become part of the Guaranty Bank team in November?
It was more or less a mutual agreement that I would merge Farris Mortgage into Guaranty Bank. It’s not a purchase. It’s that I now work for Guaranty Bank, and (the bank) has taken over (1350 E. Bradford Parkway). It’s my building. What we’re wanting to do is hire and bring on more people to the mortgage center. … We have lots of room to bring on seven or eight new loan officers and processors. At one time, Farris Mortgage had 40 people working out of this building. Right now, we only have three, and (Guaranty Bank) has other people in its banking centers who will probably be coming over here.

Why did you choose to work for Guaranty Bank?
I was approached by six banks across the country that were interested in Farris Mortgage. I picked Guaranty Bank because it is locally owned and operated, and they understand the Springfield market and already had a mortgage center in place, so I didn’t have to reinvent the wheel or convince them how Springfield works for mortgages. … The (banks) I was talking with in Dallas and Chicago, they didn’t understand. All they saw were my numbers. … Farris Mortgage had zero defaults on (Federal Housing Administration) loans.

You speak on a call-in radio show, “Ask the Professionals” on KWTO. What concerns are you hearing about now?
Most people, when they start the refinancing process, their main concern is, “What will my home appraise for today versus what my home appraised for when I purchased it?” Loss of equity is the No. 1 concern for most consumers today. On the purchase side, it’s “How can I qualify for a new loan?” Everyone qualified for a home loan four or five years ago, no matter how bad their credit was or how (little) money they had to put down on a home. There was a program for everyone. Today … it is really ridiculous on the qualifications to buy a house. At least 30 percent of the people who have a loan today, if they sold their homes, are not going to qualify for a new loan. It doesn’t matter how much money they’re putting down. And that’s the problem with the economy today.

Do you think some of that restraint is necessary?
Not to that extreme. It’s way too much. And it’s the same with refinancing. Why should people refinance? It frees up cash (and gives) a homeowner a small amount of a raise. If (refinancing) saves $200 a month, that’s $200 in interest that’s now in your pocket (and) you’re going to feel better about spending a little bit of money. And what do we need today? We need consumers spending more money to stimulate the economy. What we should be doing is rewarding the 92 percent of America that is making their house payments. I get (radio show calls) from all over the country from people who can’t refinance their home loans because they owe more on their home than it’s worth. But they’re making their house payments, and all they want is to refinance and take advantage of the lower interest rates. But they can’t, because the home doesn’t appraise for enough.

What, if anything, can homeowners do if that’s the case?
Some mortgage people would tell you to stop making your house payments. If you stop making your house payments, you can do what’s called a loan modification, but to qualify, you have to be three months behind. So you stop making your house payments to do a loan modification, when all you were really wanting to do was refinance your home and free up some cash. … If you’re making your house payments on time, you should be able to refinance without an appraisal. If you can refinance without an appraisal, that’s going to stimulate the economy. And if we stimulate the economy, it’s going to lead us out of the recession. … I don’t encourage people to do loan modifications. … It destroys your credit. Write your congressman.
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