I have to write about this nutty last 2 days! I get an email from a Loan Officer that knows me from my Loan Processing Service and asks me to call another loan officer about a file. So, I contact the Loan Officer #2, that says that she has an FHA loan that needs help. Loan Officer #1 asks me to call the Real Estate Agent.
I call the agent and she says she needs a Clear to Close on this file ASAP. She sends me the Purchase Agreement and the contract was signed at the beginning of March. I call back the Loan Officer #2 and ask if they are an FHA Approved Broker.......Drum Roll Please........NO, they only do conventional. So what do you want me to do? I cannot process the loan for an unapproved broker. No, they say, just originate it and close it. No, not okay, I won't be paying you anything, but I will call the borrower.
So I call the borrower, he is very low income and claims that he has CASH for the closing. He also tells me that he lives in OHIO and wants to buy it for an investment property and that he lives in the Hotel that he works for.
Cash is an unacceptable source of funds, unless, the borrower has a history of not using banks, or has shown through 3 months bank statements a regular savings verses expense ratio, which he doesn't. He was very upset. I cannot believe that this transaction went this far. The poor guy. He was never sat down with by the loan officer and explained anything!
He knew nothing about closing costs, tax escrows, prepaid interest, NOTHING.. He was grateful to speak to me and I was grateful to advise him that this is not an approvable mortgage for many reasons. High Debt ratios, unacceptable source of funds and that FHA does not finance investment properties.
Can you sense my steam?? I am struggling here and there are these Unqualified Loan Officers out there just wrecking people.
So please, if you are a Realtor reading this, make sure that your client has been Pre-approved by a Licensed FHA Lender. You can look them up at www.hud.gov under the Lender Search Tab on the left side of the screen. And you can contact your State to find out if your Loan Officer is also Licensed.
If you are in Michigan, do your clients a favor and refer them to me!! Or a good loan officer that has at least 5 years of experience. The rules are changing every day and I have to keep up with them and so should every loan officer out there. Whew....I feel better for the Vent..Thanks for visiting!
Neighborhood Stabilization Program Means 100% Financing to Buy a House For You! The Neighborhood Stabilization Program Grants States with High Levels of Foreclosures with this program. Many counties in MI qualify. The purpose is to fill vacant and foreclosed homes with families again.
Vacant homes pose a great risk to the stability of neighborhoods, often becoming a site of vandal's and drug dealer among other things. The decrease in their value also affects property values of homes in the surrounding areas.
This program assists a person who wants to purchase a home as their primary residence. The program works like this. A buyer contacts the local Housing Authority, they apply for the program. The housing counselor will pull their credit report and talk about credit counseling and budgeting income for a purchase, they will then continue to go through several counseling sessions.
They then look for a vacant/forceclosed property and negotiate a sales price. They then contact a lender and get a pre-approval. The Housing Authority visits the property with an appraiser who then lists the amount of repairs needed. Contractors are chosen and they apply for the mortgage.
Guaranteed Home Mortgage Company, Inc. is considered an "Informed Lender", because we are qualified and currently fund these types of mortgages. They are called FHA 203K loans.
Yes, that's right, we are in a cycle. An ever changing cycle. Markets will be down and poverty may be high. This is what can happen in a cycle. It will change. It's Getting Better All The Time!!
Better and Better. We are feeling a big pinch, no doubt. I know that history will tell us that this is also a great time of opportunity. We own our own property. If you still own a home, hang on to it. Do not allow this cycle to consume you. We are a free country. What makes us free? Property...That's right. Private Property. It is more valuable than anything. If I need to grow some fruit or vegetables on my property and feed myself, I can.
Buy property!!! Sell property!! If you can't sell it, look at it closer and find the value and sell it!! We all need to have gratitude and flow with the cycle. It is really hard for me right now, no doubt, but I know that this is a good time, because it is getting better all the time!!
Dear Diary, My passion is Mortgages. Today is Friday and I have never had such a roller coaster week. I am filled with joy and sadness all at the same time. Wednesday I had to Surrender my Mortgage Broker License. I was crying as I put the envelope into the mailbox at the drive-thru post office. I hesitated, even with three cars behind me. It took everything inside of me to let it go...My stomach ached soo bad...
I had to do it. My company has always been just myself as an originator. I applied for my license when I became pregnant with my daughter. I wanted to work for myself and originate for Realtor referrals, friends and family. I got my own office space in a great location. Lately, with the removal of Fannie Mae and Freddie Mac's Affordable Lending Programs. I just really have run out of loan products. I am not an FHA Approved Broker, because you have to have $60,000 net worth and 2 years audited financials, which would cost me $7000.
So, I have taken an opportunity with a Mortgage Banker out of New York. My office will now have their name on it. I will be the Branch Manager and use my expertise to Originate and Process FHA loans. We will specialize in the 203K FHA Rehab program. My new Sales Manager/Friend and great loan officer will expand and bring in 4 loan officers right away. I will use my previous management experience to make this a success.
I really believe that everything happens for a reason. I am a people person and for the last 4 years, while I have been focusing on raising my daughter, I have lost contact with allot of people. So I am excited to be a part of a large company and employ people.
There is a huge shake-out now. Chase closed their Wholesale Lending Division, which ultimately closed allot of loan programs/products on brokers. Many are scrambling to get approved with lenders, I am finding that due to my solid reputation that I will stay on top with the investors and continue to do business, when many will not.
Is it a failure? Not really, but it does hurt. I loved owning my own company. Maybe I will again someday!!
Yep, Whos Waggin the Dog? The PMI companies are. This week is a definitive moment in our, so called, Affordable Lending Stratosphere. All of these programs under the titles of "Emerging Markets, Gold, Flex, Affordable, blah, blah, blah"......Gone.. The Private Mortgage Insurance companies are changing the rules of the game drastically.
If you are in a Declining Market, your client must have a 720 minimum fico score to be the lucky contributor of 10% down payment of their own funds. That's right, their own funds. The days of gift money are over. Sure they can be gifted any amount beyond the customers contribution of their own funds of 10%.
If you are in a stable market, 5% down with a 660 fico score. So, we are truly in a bit of a caper my friends. It is apparent that affordable lending is at it's end. What about FHA? you say..... January 1st, that down payment becomes 3.5% for the borrowers contribution and we all know that down payment assistance programs are gone.
To keep our economy going, slashing these programs is not the answer. The PMI companies are looking at loss mitigation. An interesting dilemma that they are in, if you ask me. How did they get here? Well, they insinuated insuring Expanded Criteria Programs with Fannie and Freddie a long time ago. They were allowing all of these high risk loans into their pipelines. All under the guise of Affordable Lending.
If you have children or grandchildren, you can feel truly uneasy now knowing that there is no way that the, so called, "American Dream of Homeownership" is going to happen. We are looking at more homeless people and more slum lords to make their way into the mix. How can we move forward if people cannot afford to find a place to live?
It's called, Wag the Dog, and I don't like it at all...........
I was having a conversation with my 4 year old daughter this morning about FROGS. I remember dissecting frogs in high school. I kinda of feel like I am in this process now with my mortgage company.
We were talking about frogs because Animal Planet's Jeff Corwin will have a special called THE VANISHING FROG that premieres Nov. 20 at 8.p.m on the Animal Planet channel. Poor frogs are dying from a fungus that is threatening the species to extinction.
When we started dissecting frogs in high school, I had a very hard time with the task when it was first introduced. I did not think that I could bring myself to do it. The cutting, the smell and what about their souls, did they still know what we were doing to them.
Anyways, once it began I grew more curious. It was fascinating exploring the organs and nervous system. The smell is still in my mind as I write this, what can I say it was very rank.
I bring this up to draw on some correlations to my adult life right now. I am in the process of dissecting my business. It is the same thing. Getting started is uncomfortable and makes me feel uneasy. I am scared of what is beneath the surface. I know that a sharp utensil is needed, in this case my brain. I began this process last week. I have decided to reflect on my career and take a clear look at what has worked for me and what hasn't.
What I realize is that most of my success has been in wholesale. I own a retail business and it has not reached it's full potential. I have decided that I have been more successful calling on other mortgage companies than on realtors. I had this success for 8 years, than I opened my own mortgage company after the birth of my child. I have been in unfamiliar ground.
This process has been enlightening. It is not that I am not successful, it is just that I have to draw upon what I have learned and what has worked and the network that I have built.
My new division will be Contract Processing. Offering mortgage companies processing services, training and compliance. I am finding a huge need in the market as brokers try to cut costs to stay afloat.
The process is painful, because I have to be honest with myself for the life of my business. I also have to put my best foot forward. Originations will always be a part of my business, but the dissection process has taught me that the inside doesn't look like the outside. I have fascinating insides and abilities and need to share my talents with the networks that I have instead of trying to create new ones that are too challenging in this market to work on in this market.
I won't discontinue realtor business, I will just try to something a little different for awhile. I never imagined what the inside of a frog would look like, just like I never thought my business would go in this direction. I am happy we dissected those frogs and I am happy that I dissected my business.
I really do love frogs and so does my daughter Anna!
A common question. I recently met some new realtors and was asked this question. My answer, since 1991 when I started working for Great Western Financial. At that time, a huge S & L on the West Coast. I was put through rigorous training in processing, underwriting and operations. I am grateful for that foundation of training and mentoring experience that I was put through.
That company is out of business and largely became Washington Mutual today and may be out, as we speak, now. Bottom line, it was not enough for the realtor that I met. She said, "Oh, that's not very long".
It takes allot of energy to build trust these days. We are all involved together. I have no response other than I am still here. I own my own mortgage company and never anticipated these challenges. I will persevere because I try hard every day. I have always done the right thing at a fair price and have never had a client foreclose on a loan that I put them in.
I think as this market changes, realtors need to be more open and not so cynical. You may have your preferred lender that your are suppose to use, but there are many mortgage professionals out there that are working towards legislation and solutions for our clients. The shakeout of bad actors is here, finally. Licensing with Change the Rules of the Business!! Those left standing will be here to do the honest work that we were meant to do. Make it a Great Day!
Yes, it appears that this new program may help desperate homeowners to move out of foreclosure, but if you agree to the program, you have to sign a note promising FHA that they will receive 50% of the equity gained in the house. It just doesn't feel right to me.
Sharing equity with the government is taking away our private property ownership rights. Now the government is going to have ownership interest in private property. Does this sound like a free country to you anymore?
The deal is good for lenders and the government, not for the American People. So you get out of foreclosure, but the goal of having a "nest egg" for savings is gone. 50% is allot!! I just hope that Loan Officers are able to fully explain the parameters of the program and that people are clear about what is at stake here. If your home does ever experience appreciation again, this makes it very tough to move up to a bigger or better home. You may be lucky to walk away with anything after the government takes their 50%.
I want to help homeowners too, don't get me wrong. I am just concerned about the future generations and when they may inherit property they will be sharing it with the government. What are the long term effects of this policy going to be? Have a Great Day!!
Did you know that when a mortgage company, car dealership, department store, etc. pulls your credit report that it is instantly sold to another company as a Hot Lead?
Yes, that's right. It's called a Trigger Lead. These leads are expensive and very popular with mortgage companies. The information can include your phone number and address, what loan amount your applying for and your current loan balances. Have you been in the middle of a transaction, say a week before closing and the buyer is talking about using a new mortgage company?
This could likely be the result of a trigger lead. I really do not disagree with purchasing leads, although I have never done it myself. I just want to pass on this information to you.
When you meet a buyer and they are ready to speak to a loan officer, give them this website to visit first. They fill out a quick few lines of data and they are removed from this list for 5 years. You will be viewed by your buyer as a consumer advocate and caring person. It does work and only takes a few minutes.
Yes, I am a Kid Rock Fan. I like the theme and he keeps me upbeat. I like this song the most because when it comes to closings, this is usually the song that I hear in my head. I do this ahead of time, in perceiving the event to happen. It is taking all of my rock songs and positive thinking to keep myself upbeat these days.
This week alone I have had 2 buyers and 1 client in process to refi, that the "economy is in such turmoil that I should wait to see if I can still do this tomorrow". It is all gloom and doom. When hasn't it been? If the media had it their way, all of our heads would explode on the street from all of their negativity and then they would really have a great story. On the spot coverage..............
Whatever! Life goes on, here's me, yes with my crystal ball,...ha,ha......maybe.... We all know that we are in this together and we will persevere...I have faith that closings will happen this week!! By the Way, Wish Me Luck!!! And "Welcome To The Party"!!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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