My most recent need to “WTF?” something was in response to an absurd left hook leveled at Americans by our governing body and its cracker jack cast of elected officials.

First of all, thanks for passing the Tax Cut Continuation Act of 2011; you guys rock the Congressional floor! But after the confetti for their self-indulgent ticker tape parade settled it seems that we’re simply talking about a re-distribution here. A component of this act includes a mandate by the Federal Housing Finance Agency to have Fannie and Freddie increase their guarantee fee on mortgage loans.

In the classic “give with one hand and take away with the other” we all only needed one guess to figure who was going to assume these new fees....yes, borrowers; aka the tax-paying public. And while some may argue that a 10 basis point is not a significant increase, that’s not the point.

First of all, this was the result of a classic shell game (moving a decrease over to increase something else) and second of all, once a fee gets its foot in the door there’s only one direction for it to go. On top of that, this is just one more “small” increase atop a host of other “small” increases that have been passed on to the consumer and can make the costs of borrowing ridiculously unaffordable. Every huge pile of crap starts with one fee increase.

Our housing market really doesn’t need another hurdle and the borrowers who are contributing to its recovery shouldn’t be penalized and the tax payers shouldn’t be subject to blown smoke.

At the end of the day I guess it will probably be OK. Sometime soon, the abolishment of the guarantee fee will make for some “atta boy” news. I wonder where this “tax cut” will show up next?

If Extreme Couponing can be a reality show, just think what some down payment assistance can do for your real reality. Both Pasco and Pinellas counties in Florida have revamped their programs and have rolled out some really impressive down payment assistance from their respective counties.

Pasco County’s down payment opportunities can range from $20K to 30K while the program in Pinellas ranges from 5K to 20K.
What makes these programs even more attractive to home buyers interested in living in Pasco County is that the qualified properties have been rehabilitated and remodeled and probably require very little to do in the way of repairs and overall beautification. (What more could you ask for?)

I’ve always believed home ownership is the best gift anyone can give themselves. I don’t say that because it’s my business, I say that because that’s the reason why I’m in this business. But still, it’s a consumer purchase and should be considered as you would anything you buy; is it the right fit and are you getting the most for your money?

At the end of the day, I prefer to consult with clients as soon as they are considering a purchase so we can get them the best bang for their buck.  

In a perfect world I would tower over most at an imposing height of 6’5”. In that same perfect world potential home buyers wouldn’t have to contend with credit disputes. Lately I’ve seen a lot of hiccups in mortgage processing with Fannie, Freddie and FHA due to judgments and liens and even minor credit disputes that hold up the works.

These are the types of “gotchas” we must get our arms around as soon as possible. It’s one of the many reasons I conduct such a thorough consultation/investigation when I first meet with a client.

The Mortgage Process is Like a Project

With the ultimate goal in mind, you must assemble the steps that constitute the plan while giving priority to long-lead items. By allowing sufficient time to complete those tasks they cannot pose conflict with subsequent ones.

What I’m saying is, even if it means paying off a minor balance you are disputing or submitting a letter to rescind a dispute so your mortgage process can proceed, you can move on with your life (and home purchase!).

How do our friends at Wikipedia define playing chicken? “The principle of the game is that while each player prefers not to yield to the other, the worst possible outcome occurs when both players do not yield.”

At the end of the day, sometimes you need to back down in order to win.

Despite the veritable murkiness of the rules regulating the mortgage industry, every week I get asked the same questions from Realtors about down payments. So every week these questions just reinforce the fact that there’s still confusion and that the mindset that “FHA is the only way” still exists.

In the wonderful world of mortgages everyone’s story is different and things are not always what they appear to be. Ironies exist. The assumption that you’ll come out ahead by financing with an FHA mortgage is not necessarily true.

Conventional loans with 5% down do exist and are still the gold standard as far as I’m concerned. With no upfront costs and a much lower monthly mortgage insurance payment to contend with, you still come out better off even with the extra 1.5% down.

At the end of the day, if your client is planning on occupying the property themselves, the conventional is truly their best bet across the board. Nessie does exist and so do great home financing solutions.

Well I got my Christmas gift early and it came from Mozy.com.  Everyone knows how I love me some technology, especially when one acts as a defense against the frailties of another! There’s no functioning without technology, but there are ways to arm yourself against these necessary evils.

What happened this time was the nose dive of my hard drive – although it was the one where I keep all my non-confidential data…gone were my go-to docs, my cheat sheets, form letters and computation spreadsheets. Or at least they could have been had they not be safe and secure beyond the world of cantankerous hardware and destructive software viruses. 

While this is not a paid endorsement for Mozy.com, I have been using this remote back-up system for the past few years now and the first time it saved my home computer and all the photos of my kids. While those could never be replaced and my work templates could of course be re-created, who has the time or even should have to devote any energy to something when Mozy’s got your back?

I take my business seriously and to tell the truth I sleep better at night knowing all my family’s pictures and all my data is protected. So while I am able to go out and save the world one mortgage at a time; Mozy is also on the job saving one database at a time.

At the end of the day, there’s nothing like a contingency plan.

Despite my sometimes caustic commentaries on regulations that don’t always provide what I would consider the most ideal solutions to fix real world problems in the mortgage industry, I will say that we have weeded out a bunch of the “in it for a buck” crowd. The alleged mortgage brokers and various bottom feeders who participated in the subprime feeding frenzy have done their damage and sank back into the sea and now (for the most part), the professionals left are honest people.

And isn’t this what me and my Realtor partners continue to strive for?  We’re not out to chum the waters and just be “sellers of dreams” -- our role should best be defined as “trusted advisors.”

We’re not just a website where you enter a few variables to get current mortgage rates or home prices – we are instead resources.  According to our friend Jeffrey Gitomer (who makes his money teaching sales people the art of earning and developing strong and long term client relationships) there are:

 “6 Levels of Competence you can rise to as a salesperson:

• Salesperson
• Consultant
• Advisor
• Strategic advisor
• Trusted advisor
• Trusted advisor and resource

PLEASE NOTE WELL: These are NOT titles. They’re roles you play, and positions you are regarded as, by the customer. If your card says “consultant,” that doesn’t mean you are one. The proof of title is that the customer PERCEIVES you as one.

The customer’s perception of you is your reality.”

At the end of the day I think it is really important to keep our functions and responsibilities in focus. It’s the only way any of us are going to get anywhere and conquer our clients’ fears of going into the water. Cue Jaws soundtrack…

Thanks to Jane Kolocotrones, our Underwriting Manager extraordinaire for some much needed sanity about allowable fees and payments on the Purchase of Pre-foreclosure or Short Sale Properties!  

The following is directly from Fannie Mae’s Selling Guide to distressed properties. While it is permissible for the borrower to pay a short sale processing fee for example, they do not allow the borrower to be reimbursed by an interested party (such as the seller or the real estate agent).  

If the buyer is reimbursed, the fee is then characterized as a concession. And as we continue down the rabbit hole, a concession spurs the need for a dollar for dollar reduction in the sales price of the property.   

In a recent transaction, the buyer was going to pay the $6000 short sale review fee because the seller wasn’t paying it. (In conventional loans, these aren’t typical fees that a buyer pays.) In this scenario, the fix was to move the seller paid contributions to the seller paid closing costs. 

As with these types of deals we have additions to our typical line to include short sale departments and lawyers and probably too many moving parts. These machinations tend to get a little gunked up unless every single move is checked and lubricated.  

As a mortgage professional I completely understand why the short sale lender needs to confirm that the buyer is willing to pay more money for the house. The short sale lender needs to know and have the ability to re-negotiate the short sale once they know the buyer is willing to pony up more money. The lender needs to get as much as they can to mitigate the short sale. However…I don’t believe these transactions should ever be about lining a lawyer’s pockets with outrageous fees.  

At the end of the day, if a buyer is willing to pay, then let’s add the expense to their side of the HUD and move on with our lives. The caveat here is the requirement by FNMA that the short sale lender get the opportunity to renegotiate and avoid slipping and sliding down the dark and winding distressed property rabbit hole. 

You would think that because our country’s veterans made personal sacrifices to defend and protect the United States that we wouldn’t pull a fast one on them wouldn’t you? Well, apparently the VA is all about bad magic tricks and pulling nothing but empty promises out of their shiny black hats.

It all started out on such a positive note: an existing funding fee was supposed to be adjusted giving veterans of our armed forces as much as a half a point off. But before the hats we tossed into mid-air had a chance to hit the ground it all got taken away. (AND HEAR THIS….we get to do this all over again on November 17th 2011!)

You see, the VA made this extraordinary announcement, but they did it with no approval; our elected officials never okayed the funding fee adjustment.

That’s bad enough, but if we know anything about this industry of mortgages we know that one thing affects another. Because of our Mortgage Disclosure Improvement Act we’ve got the happy three day disclosure time. SO…..if a vet had a pending closing at the new and improved rate, the paperwork now has to be adjusted to reflect the old rate which messes with due process of the loan transaction and can certainly affect a closing date and all the associated time sensitive elements.

I’m not necessarily “anti-Mortgage Disclosure Improvement Act”, but when dates are changed because you’ve got loose cannons at VA Headquarters, who wouldn’t take exception to that?

At the end of the day don’t raise any cheers in the VA’s direction. They didn’t really do anything at all except eat before they said grace.

We’re not actually in the mortgage industry; we’re actually in the business of navigating underwriting and guideline minefields. If you’re a recent home buyer, a Realtor, a title company professional or a fellow lender you’ll understand that I am not being overly dramatic! We tread cautiously with an eye for what’s ahead…that’s just the name of today’s game.

Today’s borrowers are different too. A larger percentage carries heavier baggage and less than stellar credit scores. Some borrowers, (more than you would think) are not even packing a W-2 – the standard statement for yearly income reporting. Certainly the economy and subsequent job losses have compelled many “ex-employees” to become business owners. And while being self-employed has tremendous benefits; you need to follow different qualification rules when buying a home. One of them involves getting “permission” from your CPA.

Basically, if you plan on taking money from your business and putting it toward buying your home, your CPA needs to provide a statement attesting to the fact that the amount you are “withdrawing” will not materially affect your business going forward. (Personally, if your CPA has that brand of crystal ball I have a lottery card I’d like her to fill out…)

At the end of the day, I just enforce the rules; I don’t make ‘em. If you own your own business just be prepared for some less-than traditional means of showing your mortgage-ability!

If a mortgage banker can have a fan club, I guess I sort of do. I have worked really hard for many years and I am as trusted for my in-depth investigations to assemble fair and honest mortgage files as I am for my knowledge of all the changes that swirl about the lending industry on a daily basis.

The thing is though; I sort of get all the credit because I am the face of the business to my clients. Although I never portray myself as a one-man show, because I work directly with my clients from Day One to Closing – it may appear that I am.

I am not just some figurehead who delegates tasks to a team of subordinates; a huge part of my success and the fact that there are so many new homeowners on our watch is because of the support I receive from the back office and the underwriters and our management. It’s not just because they’re professionals, it’s because we share the same business ethics and that all-important sense of urgency. If I had to make a list of tips for people in the mortgage (or any industry!) on how to provide the best possible service:

• Know what you’re talking about; if you don’t, say you don’t and get the right answer
• Don’t micro-manage, but provide mega-support
• Be days and steps ahead of the process so we are ready for any curve balls
• Never throw the other guy under the speeding train; always use the pronoun “we” and work the problem internally until it’s fixed
• Be honest

At the end of the day, myself and my company are a means to an end. We do our best to facilitate a challenging process and provide mortgages to home buyers who are a good risk. We’re a team.