Facing high-net-worth challenges

High-net-worth individuals often face unique challenges when it comes to securing mortgages, especially when traditional financial metrics like tax returns don’t reflect their true income. For instance, the Bank of New York Mellon reported a 30% increase in mortgage loans of $2 million or more, including a $7 million refinance for a second home in California.

But for Phong Truong (pictured), a loan officer at Nexa Mortgage LLC, solving these challenges isn’t just part of the job – it’s the part he finds most rewarding.

“I like to tinker with difficult cases,” he told MPA, recalling how a reputation for tackling complex files gradually turned into a specialization in serving high-net-worth clients. Speaking to MPA, Truong remembered a case from 2021 that pushed his problem-solving skills to the forefront.

“The client needed additional income to qualify for a loan but didn’t want to dip into retirement savings,” he said. “We realized he could set up a trust account to receive income without actually spending the money. That lowered his debt-to-income ratio, and he was able to stick with a conventional loan at a low rate – about 3% at the time. He was thrilled, and it encouraged me to look deeper into the guidelines to find creative ways to keep clients on the best programs without resorting to non-QM loans.”

And this approach has proven especially useful for high-net-worth clients with unconventional income profiles. As Truong knows all too well, the net worth of a high earner isn’t always evident on paper. According to research from Butterfield Mortgages Limited,  12% of high-net-worth individuals were declined for a mortgage in the decade between 2009 and 2019.

It’s a similar case for Philip Bennett, president of Bennett Capital Partners Mortgage Brokers, who also told MPA that despite an impressive net worth, these individuals can struggle with getting their credentials down on paper.

“Believe it or not, a lot of high-net-worth clients don’t have the highest credit scores,” he said. “They're busy traveling all over the world, or they're working 100 hours a week. And they don't necessarily pay their bills on time all the time – so customers could have credit challenges.”

‘We try to stay within our lane’

As Truong went on to explain, this is an area that he enjoys working in – being given complex cases and unique circumstances and trying to make it work for all parties involved.

“A lot of them are business owners or entrepreneurs, and their tax returns don’t reflect their real income,” Truong told MPA. “We might introduce them to profit-and-loss, bank statement, or asset depletion programs as a temporary solution. Then, we connect them with tax specialists to prepare returns that qualify for a conventional loan down the line. It’s a two-step process that lets them move forward without unnecessary compromise.”

Truong’s passion for solving intricate cases is rooted in his belief in the power of collaboration. As he told MPA, while he’s always looking around at what’s going on in the sector at large, he understands his own – and by extension his clients’ – specific sector knowledge.

“We try to stay within our lane,” he said. “In the end we are in the market 'advice zone’. We don't want to advise them to invest in anything that’s [beyond] our knowledge. [Because] the mortgage industry is always changing. New rules come out all the time, so staying informed is crucial.”

One key way Truong keeps his finger on the pulse is through social media channels and self-promotion – as well as staying ahead of any and all purchasing sector changes.

“I’m part of several professional groups on platforms like Facebook and LinkedIn where people share unique cases and solutions,” Truong said. “That kind of collaboration means when I see a similar situation, I already have an idea of how to approach it.”

‘We’re mortgage advisors, not financial advisors’

“[Because] each of our partners has niche programs for unique situations. For example, one client had recently moved from the UK to the US,” Truong said. “He was a doctor earning over a million dollars a year but had no US credit history. Traditional lenders wouldn’t work with him, but one of our partners had an expat no-credit program. He needed 20% down, and they treated him as if he had a 680 credit score. Once he built his credit, we refinanced him into a conventional loan. It’s about connecting the dots to find the right solution.”

And, while Truong thrives on complex cases, he remains clear about his professional boundaries.

“We’re mortgage advisors, not financial advisors,” he said. “Our job is to understand the guidelines and find the best solution for the client within the mortgage process. I really enjoy working with clients who have complex situations because it’s rewarding to help them achieve their goals. At the same time, we’re building long-term relationships that often lead to new opportunities. That’s what makes this work so fulfilling.”