Musings and Thoughts from Western Colorado

Does Active Rain work? Sometimes? Maybe? AND IN DIFFERENT WAYS

2008-09-04T08:35:07Z

Well since Eleanor doesn't or won't relate this story, guess it falls to me. You see Active Rain does work and the consumer will and can find you if you offer what they are searching for at the second. Example, of course I have one!!! About 2 months ago, I got a call from a potential client in NORTH CAROLINA (Eleanor's back yard). This lady was looking for a loan BUT no one would bother to help her. She has a UBC modular home, BUT since it had this "sticker from the state on it every one and She meant EVERYONE, told her that it was a double wide and ........ well blah blah blah. So being the good consumer that she is, she wen on line and did a google search..... for modular/manufactured homes (not sure of the exact words she used) but there I was with a few post about, yeppers, MANUFACTURED/MODULAR HOMES. As this client told me her story, the more I came to believe the sticker she was referring to is very similar to what we have here in Colorado, the state electrical sticker that is on all homes.

Long story short........ I asked the client if I could refer her to someone in her State that could help her and I then called Eleanor and explained what we had. Eleanor took it one step farther and contacted the dealer that sold the home and got the back up proof that yes we had a UBC/IBC MODULAR on our clients land. Now this is the important part of the story....... per Fannie and Freddie guidelines a home built to the UBC/IBC standards will be comped to the same. For those that are not aware UBC/IBC standards or specs if you will ARE STICK BUILT SPECS !!!!! Sure makes a small difference in value and finance options.

So, does Active Rain work? While I have not closed a loan through Active Rain, I have added a few wonderful people to my resources and yes, I have receive a handful of leads.... mostly like the one above and a wonderful person in Georgia that told me I ought to move there and put some of "those crooks out of business", which I thought was wonderful and funny. I guess the bottom line is, it works maybe? depends on what you are searching for............

Does your competition call you??????

2008-09-03T10:05:49Z

Well mine did yesterday....... and it was rather odd. It appears that the loan officers in this local bank do not know the guidelines for a manufactured home loan.

It appears that one of my potential client's mother works for this local bank and since this is a used doublewide that is to be moved,she wanted to know who and what type of loan, because as she said to me "we are all under the same guidelines". As I laugh to my self, yes we are........ but what do I know that they don't. While it is true that FHA will not do this loan, because it is "twice moved" (I think that is really stupid, but it is the guideline) and USDA Rural will only do it if it is new also. So, my fellow loan officers what type of loan is left for this client??????

Well, lets review the scenario...... The client owns the land and a old POS that we are going to replace with the newer used one........ so first we need the construction loan to buy the new used one, payoff the land and install the new foundation and utilities. Then we refinance the construction loan with a 30 rate and term conventional loan. As long and the client does NOT receive any cash back at the closing of the new permanent loan we can go 30 years...... if they want cash out it drops to 20 (again I think that is a little silly also,but it is guideline)

Yes, I did tell my competition how the deal is structured, afterall she is just trying to make sure her child gets the best deal.... BUT I did not tell her the investors that will do the loan.

Expanding the discussion of Pre Approved VS Pre Qualified

2008-08-05T17:20:19Z

Robert Rauf has written a nice post about What is the Difference between Pre Approval and Pre Qualification. But I feel he stopped short of what we as mortgage professionals need to help you as Real Estate professionals understand what we do and how and why. As I said in my comment to him

"Robert, The thing that is missing in this is the fact that if using an Automated Underwriting System that returns the magic words Accept or Accept Plus or Approved/Eligible. If we have this there is zero reason for the deal to fall apart at closing. I have ranted written about this before and it is something that we should be able to help the Realtors understand. (But if the buyer comes in and then waits 4 months to find a home then we could have guideline changes.) There is no reason to burn an underwriters time if you are getting automated approvals, If you are getting the refer decision then you as the loan professional better make sure you have your guidelines and your ratios nailed and if you are tight you better have your compensating factors or letters of explanation. Funny thing is this was the topic of a Realtor meeting today and my feeling and what I said at the meeting is if the deals are blowing up at the table then you are using the wrong loan professional." I should have added that if we do our job as the mortgage pro on tight files the underwriter will generally follow along. And as one said to me yesterday, document it all and paint me a picture.

As I have ranted on before here about Automated Underwriting (now some may not have their own AUS, but the investor they are sending the loan to does) there are different levels of approval with either DO/DU or LP. But if I input the information correctly into the system and I verify what I input (garbage in/garbage out) then the deal should close. The only thing that I can even think of OK 2 things are one the buyer has falsified the documents and we didn't catch that or they go out and "do something stupid to their credit" like buying a new $50,000 car. As I have said earlier, if you are having deals "blow up at closing" then you are working with the wrong mortgage professional. That maybe harsh, but it is my thoughts. Look bottom line is I can't do every deal, BUT I can close every "pre approval" I sign and if we as mortgage profession and real estate professional learn to honestly communicate with each other and our clients there should be ZERO closings that blow up; because if there are issues with a deal we should be talking about them sooner than later.

Question: How long does it take your mortgage professional to issue you a pre approval? If you answered anything over 48 hours you are working with the wrong person and I would dare say that it should not take more than 24 hours.

Scuba Joe and Radio Rain provide the soundtrack to your summer

2008-07-29T22:03:06Z

Oh my, you are asking the Active Rain DJ Scuba Joe about "Sounds of Summer". Comon now... you are kidding right???? You want Sounds of summer from this non reformed beach kid that is living at 6000 feet???? What??? You are serious oh man this might take a 3 hour show, maybe 4 but I have never been afraid of overtime....

Sit back and let the DJ take you back and yes we will weave a story... after all we are 13 years old and have the summer time blues , This is Scuba Joe and the request lines are open....... Wow I remember listening to that song as I was packing parts in a metal building at yes 13, and oh this one help a young man think about "cooler thoughts" and yes we looked for beautiful girls and where did we double date.......... Centerfield Ok so now we must pay tribute to The Beach Boys and Summer Nights

Ok and how can we have Summer sounds with out car tunes and since I am in a Grease mode Grease Lighting or how about Dead Man's Curve

Now by request.......... The Boys of Summer and how can I not do this California Dreamin and the quake didn't do much and I am a So Cal boy and I have never been a big Kid Rock fan but This song and his new one make me want to go to Rock Jam in Grand Junction Colorado next month. But back to the show.... And how can we have a summer show without The Waynes World Song but this is a real version and how about this Old Time Rock and Roll

Got to tell you this DJ is just getting started , Sit tight but lets do the Watermelon Crawl

Ok ya all

I can do this all night and all day but ya all cant afford me and you know that the request line has been so jammed we will end with Girls Girls Girls and how about The Sunlight Zone and Under the Bridge and Under the Sea

The Break Up Song

Ok I cant Just end this with out the ultimate boys song

The Boys Are Back

and

Bama Breeze

Afterall all we all have a "Bama Breeze"

Sometimes GOOD things happen to hard working people........

2008-07-29T20:04:51Z

This story has roots that started a year ago. A YOUNG couple comes into my office and I crushed them..... They thought by paying cash and staying debt free they were doing good and they were, BUT he was just recently self employed...... (ok, I have an issue with contractors hiring "employees" and 1099 ing them). And they had ZERO, NONE NOTHING credit. So they had a few negative things against them.

So we made a plan, they opened a savings account and got a "secured credit card" and started building credit. I like to tell people to use this card for "date night". Bill comes in, pay it off. You know everyone loves "date night" and it helps build credit..... Then they went and got a small loan and made 6 payments and then paid it off...... next thing they know they have a 700 credit score..... 11 months later..............

Ok, lets jump to last month. They call. The home they are renting is in foreclosure.... They have been making their rent payments to the management company and the owner, well wasn't making theirs. Now the home is for sale and they want to buy it.... makes sense so they don't have to move. ( By the way these kids are 22 and 24). So we sit down and run the numbers. The payment will be like $2200 bucks, they are paying $1400 but think, THINK, they can make that payment. After all, he is making more money now (a year and half self employed); but they have kids also, so we talked about working up a budget and not being house poor.

A few days later, they have the budget....

And now because they got served a notice of the foreclosure they are being evicted and we need to have something done by today..... So Sad, too bad thanks for paying your rent now get out......

What should be a nice enjoyable experience, looking for a "dream home" is now a race against a clock. But these kids are up to it. So, the rush is on. A side note...... both Realtors in this deal were doubtful about this deal; one in part I think to the couples age and second that by the time they found the home and got the offer written it was 2 weeks to closing and we were going USDA Rural Development. After reassuring both Realtors that we can and will get this done, we get under contract and one more issue, I am getting on a plane for a vacation as they are writing the offer.

No Worries, we will get it done

And yes we did, docs were to title last wednesday and we closed yesterday (we could have closed last friday, BUT sometimes I WANT TO BE THERE and I was out of the state) (KUDOS to my staff and the sellers that allowed the kids to move in friday 3 days before we closed, after all the docs were in). Did this "deal" fit the perfect guidelines......... NO, but these kids had the compensating factors working for them. The display a great attitude towards credit and have little debt. He has huge potential for increased wages. and they were buying within budget. The final house payment is within dollars of the rent they were dutifully paying. AND they worked their butts off to make it happen.

They came to be a year ago. They were hurt by what I had to say (truth sucks). They followed my advice and came back to me. There was no way I was going to let them down. They earned this home.

To Anthony and Lealoni....

ENJOY YOUR HOME AND YOUR 4 BEAUTIFUL DAUGHTERS. IT IS CLIENTS LIKE YOU THAT MAKE ME PROUD TO BE IN THIS BUSINESS.

Mid Summer Radio Rain Scuba Joe is on the air

2008-07-08T21:08:36Z

Mid Summer on Radio Rain

Ok so maybe I sang this song in 1979 not

Kid Rocks year but hey I love this and I was on the beaches of So CAL

Ok so I have brought SO CAL in so how about

Beach Boys

do you really need more?????

Ok how about this Romance song

Summer Nights

Ok hate to do this but this is a fav and sorry .... The meter is running

Hot Town Summer in the City

Ok so

As I prepare to get on a boat and scuba all next week

I have to do this

Under the Sea

Scuba Joe is out and diving and golfing

Online theft can happen to you........It almost happen to me today!!!!!

2008-07-08T20:23:57Z

Oh come on....... This didn't happen??? Yes it did!!!! Now we all get "phishing emails" and at first I was about to delete this one, but I was on my way to a closing and just set it aside and then I got the second 30 seconds later........

The first was "confirming my $1,000 transfer to another bank customer" the second was advising me of my "successful change of my password/username". To be honest the first would have probably gotten deleted without a second thought and since I get on a plane friday morning at 8 am, deleting that would have cost me $1,000. But the second...... that saved me..... I know I didn't change my user id/password........ How many of you do that EVER?????

So the first thing I do when I get back from the closing, is I attempt to sign in to my account and you know I can't...... Next thing I do is call the local branch and confirm the number for online banking..... This number was in the emails and on the screen when I attempted to sign in, but I want local confirmation. It is the same....... So already behind schedule and with my loan officers standing in line to ask questions...... I dial up the online banking and tell them what is going on......... after confirming that I am who I think I am........

Long story short...... I now have a new account and hopefully no damage to my credit with bounced checks or anything, but I have the issue of my automated deposits and withdrawls and everything else....... How did this happen..... No clue, I have my computers all password protected and the 10 in 1 protection from McAfee. According to the fraud investigator I did everything right and STILL..............

If it wasn't for that second email........

Side Deal, get your side deal here

2008-07-02T09:39:03Z

Stacie Colclasure was written a very nice post about her experience with a "season" veteran of the Real Estate world. She has a line in there that just made me jump up and say seasoned means "some one that has not kept up with the times and classes". She wrote

"He will give $2,000 cash to them if they will agree to original list price. "we can't have a paper trail so I will give it to you and you can give it to the buyer."

What jumps out to me first is the possible RESPA violation that this agent might be looking at if he actually does this

But what really gets me is the wanting no paper trail....... Almost like the lender won't know "wink wink"

Guess what Mr. Agent....... We don't care what you do with your commission, but you will put it in the contract and we will disclose it on the HUD 1

I will quote right from the guidelines.......... "the seller or other interested 3^rd parties such as real estate agents, builders, developers, etc or a combination of parties may contribute up to 6% of the properties sales price toward the buyer's actual closing cost, prepaid items, discount points and other financing concessions." Any amount over that is treated as an inducement to purchase and reduces the amount of the mortgage.

In this fun market that we are facing right now, I see a lot of banter about buy this home and receive a new car, or a trip or even that lady in Florida that is offer up the opportunity to marry her and buy the house..... any inducement (although I have a hard time placing a $$$ value on the lady) will result in a dollar to dollar reduction in the sales price, appraised value and then the LTV will be set on this lower amount.

So Mr. Wink Wink Realtor Agent...... lets keep it simple and if you want to bump the price up and give the extra back to buyer.... Do it in writing

Ratios, Ratios everywhere a Ratio

2008-07-01T16:56:37Z

Everywhere, I look there is discussion about ratios. An agent texted me this past weekend about what "generic ratios" to use..... that is a loaded statement...... "generic ratios to use". After all there have been 2 excellent post about Rule of thumb being 3 Times income for a loan amount by Eleanor Thorne and Don't be Mortgage poor by Jason Sardi. In both post they were writing about a generic scenario that we as loan officers always find ourselves faced with, that is trying to give you the Realtor an answer based on generic and limited information.

Now I know you want an answer, but the truth is...... I can not give you a straight one. Let us just look at the Housing Ratio. That is defined as principle,interest,taxes and insurance plus MI plus HOA dues if any as a percentage of GROSS INCOME. Now, to confuse you.... depending on what loan program and what investor you are talking to you will hear any thing from 29% (USDA), 31% (FHA)..... you might even see on some websites 28% to even 36%. Now to make the waters a little more clear.... add in all the credit card and car loans and yes even those "deferred payments" to get your total debt ratio......... Now again we will see anywhere from 41% to 43% to 50% to (with automated approvals 55% to 65%)

Now doesn't that just make it easy. Bottom line....... I prefer the "generic ratios of FHA 31/43. If they have awesome credit then they might be able to reach a little, BUT and this is the biggest BUT...... watch the budget. Yes the banks and ratios and the Automated System may allow your clients to buy that bigger more expensive home, BUT are they now buried and married by it and to it.......

Ratios can decieve you, they will lie and seduce you into possibly showing them homes that they can't pay for without giving up all the other things they like to do like taking a vacation or even just going to the movies.

Yes Ratios are a nice place to start, but the rest of the conversation should also include a little budget talk, maybe not for every buyer; but if you are talking ratios I bet you have first time home buyers and yes maybe, just maybe we ought to talk a little budget

What loan products are out there for Manufactured homes?????

2008-07-01T12:37:34Z

So you want a CASH OUT REFI on a manufactured home????? (one of my new loan officers takes this call) No problem, say I. Hows your credit? and income and ..... why? well there are a few programs and only a few, but the thing you need to worry about is how they change from FHA to Conventional.......... Cash out versus rate and term versus purchase

FHA

Cash out / Rate and Term --- as long as the home is on a permanent foundation we can go up to 95% LTV with 30 year terms. Even if you are under 80% LTV you will still have PMI for in all likely hood 5 years.

Purchase ---- the LTV goes to 97% and yes even on a single wide.

Side note to FHA---- get rid of the twice moved rule. If you want to promote affordable housing this old rule needs to go the way of the DODO Bird

USDA Rural Development

Up to 100% on a new Double wide. If you are looking to purchase a new home and a piece of land this is a great option for you permanent loan. And with the USDA option getting the construction loan is a lot easier.

Conventional

This is where everything changes

Cash out----- are you really sure you want this option just to avoid the PMI? ok you got it..... 65% LTV (I have one lender that will go to 85%) and 20 year term MAX.

Rate and term and Purchase...... 95% max LTV and a 30 year term BUT the MI is close to DOUBLE that of FHA (depending on credit score of course) Oh and no single wides.

An early morning phone call

2008-06-27T08:37:42Z

RING RING, now who is calling me this early on a Friday morning......

"Good Morning, Major Mortgage How can I help YOU?" Oh Hi Lenn ,

..... (you will only hear my side of this conversation since I hate speakerphone)

..... You have an interesting scenario there Lenn, wish I had them here in Colorado, I would love to do this loan...... My thoughts on a loan for this couple.....

Ok, First thought is always FHA, but we didn't add PMI to this and that will add (quick calculation) about 230 bucks to the payment.... The ratios are a tad high, but just last night we ran one with ratios of 42/55.8% and got an automated approval, so without knowing anything about their debt and I will guess if they have been able to save 10% they probably are carrying very little debt FHA is a good way to go for them, BUT.... You said they make over 120 grand a year..... so the PMI will not be tax deductible for them (check with you tax professional, but PMI is deductible up to an income level of $110,000 I believe)

Now we can look at combos and what not but how about this

LPMI

(Lender Paid MI)

We can go to 90% one loan

The rate this morning is 6.875% for a payment of

$3579.99 plus $100 for insurance and $500 for taxes for a total of $4179.99 a month

$4045 plus PMI of $230 for a total of $4275 a month.

Giving them a small savings of almost a $100 bucks a month

Now, I have made a few assumptions..... that they have a little more than the 10% saved for closing cost and while not needed with this investor, I would hope they have some reserves.

Well, Lenn it was great visiting with you. Good Luck with your buyers and have an awesome day and weekend.

Rate versus affordability

2008-06-20T10:58:31Z

Mr. Belonger has written another wonderful post about payment versus rate and that got me to thinking about a client of mine or 2.

About a year ago this young couple came to be and they wanted to get start the process of looking to buy their first home. So we pull their credit and lets just say that a year later we are ready to go.

So I ask the question what payment range will you be comfortable in.....

the response well we are paying $1100 in rent right now and the home we are renting is in foreclosure and we would like to buy it ( keep in mind that I am only speaking with the wife as the hubby is the sole breadwinner for this lovely lady and their 4 wonderful little girls) We really haven't talked about what we can afford and this all came up a little faster than we expected.

(she continues on) the home is listed for $270,000 so what are we looking at ........

Approximately, $2000 with insurance and taxes and MI (I can see the wind just deflate out of her sail).

Sigh, we can afford that, but...........

We spend the rest of our time together roughing out a budget and talking about the time frame for the foreclosure process. The court hearing that is coming up and she as the tennet will be attending. We worked through differnet price levels and what the payments would be, I showed her on the listing page that she had where the taxes were and what insurance might run per month. We worked up what every $10,000 would cost them on a monthly basis and if rates drop or went up just how that would make the payment move (an .25% move is approximately $44 on $265,000. She was shocked at how little it really was)

As we parted ways, her last comment was

it looks like we will be sitting down tonight and working up a budget.

As, I have written before in I dont care what my rate is and Mr. Belonger's point about shopping and shopping for that lowest rate and what it might cost you. Is an 1/8 th of a point that big of a deal or in other words is $20 worth losing your earnest money over becuase you can't close in time?????

What in the heck does ECOA,FCRA AND FACTA mean????

2008-06-19T12:05:53Z

Yesterday in my office we had a debate on why I give my clients a copy of their credit report and that lead into a discussion of the laws the protect and govern credit. And while a review of these 3 laws would take thousands upon thousands of words, being the brave or foolish blogger that I am, How about the HIGHLIGHTS if you will

EQUAL CREDIT OPPORTUNITY ACT (ECOA)

passed in 1974 to ensure all consumers are given the equal opportunity to obtain credit. This act was originally based on sex or martial status and was amended in 1976 to include race,age,color national origin. This is also where Regulation B comes from. In other words, it is illegal to ask about your sex,marital status, national origin or religion. I may not ask if you have a phone in your name. I may not consider the racially make of of the neighborhood. The only reason I may inquire about your age is if you are to young to sign legal documents.

I may not use any judgmental system to evaluate your credit worthiness unless it is an "empirically derived, demonstrably and statistically sound credit scoring system.

A few special interesting items in this act.........

As a lender we must notify you in writing of any adverse action taken on your application and generally within 30 days.

Also, starting in December of 1993 if you ask for a copy of an appraisal, I am required to provide it to you with in 30 days regardless if your loan was approved or denied.

FAIR CREDIT REPORTING ACT (FCRA)

Simple right???? This act came to be in 1996 and allows for you to receive a (now) free copy of your credit report every year. It requires the reporting agencies to treat your credit information with confidentially and accuracy. It gives you the right to dispute negative items and outlines the dispute process. It also set up a time limit for negative information to be purged from your credit report. Most negative information is to be removed after 7 years, but bankruptcy is 10 years.

FAIR & ACCURATE CREDIT TRANSACTIONS ACT (FACTA)

Passed in 2003 this act, brings even more to you to help fix negative information. Before you had to go to the reporting agency, now we can go to the provider. Personally, I still advise you to go to the reporting agency, because that way it gets fixed permanently. If we go to the provider it only gets fixed on that report. This act gives you the right to request a copy of your credit report from me and it also set into play some important consumer protection to help fight identity theft. This act set in place the "opt out" feature and allows you to put into your credit file a "fraud alert".

If your client ask, Do you give them a copy of their credit report?????

2008-06-18T16:26:26Z

I just love having new loan officers in the office, the topics of conversation are endless...... Today, we get a referral from a Realtor that Bank XYZ has told this client that FHA guidelines are 3 years out of bankruptcy..... So my loan officer comes to me and no it is still 2 years..... So the loan officer ask the potential client if he got a copy of his credit report from Bank XYZ. Bank XYZ declines to give it to him. But he tells me that I always give the client a copy...... of course I do (after I black out all of our company's information)..... So why do I he ask...........

Because under the

Fair & Accurate Credit Trasactions Act (FACTA) of 2003

"....... Any person who makes or arranges loans and who uses consumer credit scores in connection with a closed end loan (or the establishment of an open ended loan for a consumer purpose) that is secured by a one to 4 unit residential property shall provide a copy of the information (including credit scores) obtained from a consumer reporting agency used in the underwriting decision......."

Now, I read that to be a copy of the report. After all isn't the report the "information"?

Besides, it is a nice business practice.

Why DPA sould be saved

2008-06-13T11:31:23Z

There has been some discussion about HUD trying to do away with DPA (down payment assistance programs) and how loans that have utilized DPA have a "higher rate of foreclosure". Now I wonder if they really do or if it is just a sign of the tough times; after all every loan program has a much higher foreclosure rate right now....... but back to the topic at hand

WHY SHOULD DPA BE SAVED????

Look we are only talking about saving 3% right? It isn't that hard to do, is it? The average entry level home in Western Colorado is approximately $200,000.

3% of $200,000 = $6,000 and now add another $6,000 for closing cost and we are up to $12,000.

How long will it take to save that much? Probably way to long.

But, if the seller is willing and has the ability to "gift" the funds to the buyer through one of the many wonderful companies that offer the program then isn't that their right.

Instead of killing the program, lets fix it.

How about every buyer must have at least $500 or $1000 of their own money in the deal? And we also require that the buyer have another $1,000 in an account that can be used for the what if the water heater tank springs a big leak or other home repair item that happens.

If they do not have the funds, the buyer takes a mandated home ownership education class and purchases a home warrenty program.

Personally I also favor the "silent seconds" that cover the down for first time home buyers and are at a very low rate of intrest and are only paid on when the home is sold or the loan is refinaced.

Is Credit Repair a SCAM????

2008-06-10T20:31:45Z

DING DING... the bell has rung for round 1...... Ok just chill out and read what I have to type....... Most of your clients that have credit difficulties

ARE NOT IN NEED OF CREDIT REPAIR.......

especially if the mortgage professional is willing to spend some time and understand credit.

Now, I will tell you that 90% of the mortgage peopele

DO NOT KNOW HOW TO READ A CREDIT REPORT

and it isn't their fault. So much has been placed on credit scores that most people don't know what it is (relax this isn't another post on what makes up your score). Let us look at a few examples.....

Couple has 20 pages of collections and just horrible credit. Some of it is just and some of it isn't. As a mortgage professional; I would definately refer this couple to a credit clean up/counselor. I mean let's face it, I don't have the time or energy to deal with this one.
Guy has a bankruptcy 3 years old. There are still many things on his report that are in his bankruptcy (this is very common and something that I see 10 or more times a year). This case is easy and the mortgage professional should write the letters for the client along with copies of the discarge papers and list of debts (I actually have a form letter where I fill in the blanks). This person in 30 to 45 days has amazingly gain on average 80 points on his score.
Client has a low 500 score. Bankruptcy 5 years ago. Maxed out on all credit cards and has what may be a rolling 30 day late for 5 or 6 months on the report. BUT, the lates are over a year old and this person also has lates scatter here and there and a 30 day late from last month.

SCAM ALERT

A credit repair company claims that they can raise this person score by 50 points plus in 30 to 45 days!!!

By just disputing the late pays!!!!

As the rep said, most creditors don't even bother answering disputes. Which may or not be true. BUT, my first job out of college was as a collection/credit manager.... let me tell you if you where a PITA client i answered your dispute and now had a skip trace on you to come after you. If you were polite and nice and just bad luck.... I probably let it slide....

So ready for the TRUTH

Can credit repair companies help..... YES, I believe they can in limited cases and when you have time to make it work.... after all your score goes up if you make your payments on time. But, in a lot of cases and examples 2 and 3 and perfect.... it is a scam. A sales job..... How do I know.....

well I am case #2

and case #3

Do you know that we as mortgage professionals have a tool availible to us from our companies? It is a credit simulator and it is accurate to 10 points. In the case #3, I ran this and removed the 30 day lates.... and got

ZERO IMPROVEMENT

Why???? The lates are over a year old... impact is zero.

Now, remember this is a maxed out credit card situation..... we pay down to 50% balances and we got

77 point improvement

What will the client do???? I guess they will pay the fees to the credit repair company and then whine in 2 months that nothing has happened. Remember this...... if you are really late, these will not be deleted. You can not delete bankruptcy or foreclosure or tax liens. But if there are errorsand you don't have the documentation to prove it; it might be worth the 200 to 300 bucks to allow a credit clean up company to help you.

That is your call.

Tomorrows Lunch and Learn: A review of AUS (Automated Underwrting System)

2008-06-10T10:37:20Z

Thats right it is that time again. Have a little lunch and learn a little about the dark side of the business, otherwise known as the Mortgage Profession. And to be honest, this is a timely topic today; after all I have read and heard about Mortgage Professionals not pre qualifing your buyer correctly

First let us clear up "pre qualify" and "pre approve". The first is a simple matter of asking a few questions and taking the buyer/borrower at their word and saying ok the numbers work up to $$$,$$$. The second is when we actually see the credit and maybe a paystub and say yes I can do the loan or no I can not. "Pre Qualified" means you got NADA, "Pre Approved" means we got a serious buyer/borrower.

Now let us look at how I "pre approve" your buyer, my borrower. We use an Automated Underwriting System (AUS). There are DU/DO and LP or an investor may have one that they modified to run on their web page. So lets walk through the steps I and my loan officers go through. We will assume that we have gather at least a credit report.

After we take a complete application and interview the client, we upload the credit report into the system. We should have a high level of confidence in the numbers we have used for income and we have all the debt because we have the credit report. We may have been able to drop a payment (it has less than 10 months to go on an installment loan) or we may have to add payments because the student loans are due to start their payment in a few months. Our insurance and tax figures should be close, but they should not be so far off as to skew the ratios where they are not workable.
Then we hold our breathe (KIDDING) and run the application through a computer program scorecard (easy to think of it as a score card). The system then gives us....

APPROVED/ELIGIBLE(we might also get EA1,EA2 OR EVEN EA3, these levels come with higher rates)----- this is the best result and the one we want to see. What it means is you can be 99.5% sure and you can go to your managing broker and get that advance on your commission. The only thing that can screw this up is that if our client has lied to us about income level or something else. Really what the underwriter will do on this file is just review and make sure that we have inputed everything into the system correctly and that YES all documentation matches. This is a no brainier. I have seen this response with Debt to Income levels as high as 65%. As long as everything matches what we inputed we will close.
REFER/ELIGIBLE ------- When we get this, we need to step back and see WHY THE FILE IS NOT SCORING WELL ENOUGH. Maybe it is our ratios? Maybe our client has had some issues in the past and an underwriter needs to look it over and accept the file. Maybe our client does not have any credit history at all. There can be many reasons for this response. This file will close at least 95% of the time as long as we can make the ratios work (generally 31/43%) and we can document what the issues were and show that they are now taken care of and there is a high level of confidence of them not reoccuring. If I am taking this file to the underwriter I have the highest level of confidence that we will be closing. Now if I tell you that it is the underwriters call, the level of confidence has dropped to around 75%. The deal meets guidelines BUT, there are some issues BUT there were circumstances that make this deal "doable".
CAUTION LEVEL 4 ----- this is not good. This is when you hear me tell you that there is some work to be done and it might take 6 months to a year to clear up these issues. These people might be refered to credit clean up or maybe they just need to get their world settled down and get back on track. This client should not be DUMPED, but rather nutured and worked with becuase they will be able to buy int he future and we all need future deals.

Thats all for today class, thanks for joining us and I hope the food was good.

No $#%&* Monday night on Radio Rain and it is JAM night

2008-06-09T22:30:36Z

Lets start our Jam Band set with.... Well one of my favorites

Please Welcome to your audio receivers

Jethro Tull

FAT MAN

Now this next band might not be on your list, but this just might me the best rock band of all time and listen to the words of this song Closer to the Heart

I do hope our future leaders listen to this song and we all........ well take things to heart

And to just back it up how about

Spirit of the Radio

Oh my how many of you have actually been driving in a

Round A Bout

Now lets

Run Around

Ok NOW your loyal DJ will get deep

And this show will go longer

We all need some

Ribs and Whiskey

Because

Jenny Says

Nuff Said

Scuba Joe is out and heading to the water

Give this one 3 minutes

Grace Potter

Will heal you (and do yourself a big treat come to Telluride for Blues and Brews and watch this lady)

WOW, this show can go on and one but we still have the

The Dead ; Dave Matthews

Nuff said and done

Scuba Joe is

On the beach and out of the

Coconut Telegraph

Is a DO NOT CALL LIST need on Active Rain????

2008-06-09T19:55:59Z

or maybe a NO NOISE LAW????? How about just not call me or email me you credit counselors and lottery winner scam idiots.....

But Joe isn't Active Rain about "networking"......

YES

But

When I get 5 calls on a Sunday all from the same "company" wanting to network with me , I have to say

Maybe I am just special and these people have fallen in love with me..... but I doubt it. Sorry, but credit repair people are now a 24 pack for a buck. Guess the economy is really in the crapper! And those that can't teach, right? Isn't that the old story. Look I had one of my loan officers today call a "credit repair" guy to help a client that is just flat maxed out on 8 credit cards..... We KNOW why the score is so low.....

So , I made him a bet.... a six pack of the coldest beer going.... to be on my desk end of business Friday.

But to all you looking at my profile and thinking....

WOW I sould call and offer my services.....

STOP..... 10 people from your company have already called me today.

Now, if you really want to network and offer your services

JOIN THIS COMMUNITY

after all

it is free and we just might be willing to open a real conversation with you

So you're crying the no buyer blues????

2008-05-29T19:19:32Z

Just can't get the buyers off the fence? There they sit sipping their coffee

and browsing your wonderful website and kicking all the tires.....

and you

The Professional Realtor can't get them to commit, to pull the trigger.... to write the freaking earnest money check. Now your seller is asking you what and why and how and they are talking about dropping the price AGAIN. After all look at all the inventory and all of them are dropping the price.... low price wins right??????

I mean after all, your stager is wonderful and all the feed back is 110% positive......

So, how about we try something DIFFERENT?

Instead of dropping our price why don't we make our home more attractive to buyers.

Look, interest rates this afternoon reached 6.5% and yet buyers, your buyer is looking for a deal and they have been trained (yes I recall the 80's and rates, BUT) to expect lower rates.

SO LET'S GIVE IT TO THEM!!!!!

Instead of dropping our price let's offer to pay the discount points to get to say

5.875% fixed for 30 years.

Sounds good, right? Same house..... right next door at the same or even say 10,000 less in price. So we offer

"BELOW MARKET FINANCING"

Example on a $200,000 home lets say it will take 3 discount points to get to the target of 5.875% (and rate is not the point the selling/marketing idea is), but in this example we have a $6,000 cost to the seller. And you know what Buyer we will even kick in up to $4,000 for closing cost.

So, which home is the "deal"????

Don't you think it is time to take your favorite mortgage professional to coffee?

Where has Radio Rain been.....Summer is here (maybe)

2008-05-28T22:33:37Z

Tonight as your faithful , but MIA DJ was walking out to get ready for golf league....

Mr. Alan Brown stopped me and said

"Hey Mr DJ where ys been" ok so that wasn't out exact conversation but point received along with 3 other emails yesterday so

Here is the first official Radio Rain for SUMMMER

And lets start with the Lovin Spoonful and Summer in the City and this version from our local rocker, Mr. Joe Crocker. Ya know there is just something about

SummerTime Blues

Oh and how about the Summer of 69

And you know Scuba Joe and Beach Buddy Sean and the other

Boys of Summer are not going anywhere with out one last

Watermelon Crawl

Have fun ya all

Scuba Joe is out

with this

http://www.youtube.com/watch?v=uwIGZLjugKA

What Scuba Joe has a Theme Song and more on Radio Rain ...... NEXT

2008-05-15T21:11:09Z

A theme song???

WOW.....

Maybe we should really be looking for a soundtrack.....

but as overwhelming as a THEME SONG sounds.....

it was really rather simple

I mean there have been times in my life where a version of "My Way" (this version was picked for my Father/Coach or "Its My Life" would have been the perfect choice or maybe even "Simple Man" or even "Karn Evil #9" .Heck I can even think about times when "Hair of the Dog" or "Fight the Good Fight" or "Lay it on the Line"

Or let's go into the 70's with

"Songs From the Woods"

"Agualung"

BUT

If I have one it is so simple and so easy

LISTEN

To these words

And hear the steel drum

"....use to rule my world from a payphone....."

"......times are rough, got to much stuff, can't explain the likes of me....."

"...listen to the drummers and the night sounds listen to the singers make the world go round...."

"....makes me know the mountains that flow into the sea......"

"see the day, my hairs full of grey and I finally disappear......"

The hard part is picking the version

This one?

this

Heck this could go on all night

But

"One Particular Habour"

This is Scuba Joe

And I am in the Habour

What does our profession and golf have in common

2008-05-15T19:42:22Z

Well, for starters how about honesty?

I was visiting with a Realtor last week that was crying the blues that Sellers don't want to hear the truth and Buyers wont listen...... and I thought

DUH!!!!! The Media is telling them the exact opposite that you are!!!! So, maybe a slightly different approach might get them to listen.

Then, I had the privilege of doing Open Water Scuba Diving certification class last weekend and on the drive to the training facility. it felt like all my bride and I talked about was Politics, the "mortgage crisis" and being a RESPONSIBILE AND HONESTY HUMAN BEING.

This of course lead to my over thinking everything,

BUT

What can the game of golf teach us?

Golf is a game........ Well isn't our profession (or shouldn't it be more fun?)
Golf has RULES....... dam imagine that our profession has rules and ethics and morals
Golf has etiquette and well guess what so does our profession (return your calls and ok you get it)
Golf is a simple game and so is our profession if we don't over think

There is one MAJOR DIFFERENCE between the two

Golf is a "gentleman's game" (no offense to the ladies that play and the word gentleman is just an easy word to use). What that means is that we as golfers self police our selves and we enforce the rules and call PENALITIES on OURSELVES. Can you imagine a world and society when people that do wrong and break the rules call the penalities on themselves???? Can you imagine the MEDIA calling fouls on themselves? Can you imagine the GOVERNMENT calling fouls on themselves?

Now, I do not wish to discuss anymore "bail out plans" and ways for bad golfers to save their homes... maybe some didn't know the rules, BUT most did and in a golf match if you break the rules and get caught doing it you get kicked out of the tournament.

A Rainy Monday on Radio Rain

2008-05-12T21:14:03Z

Ok so here it is Monday night on Radio Rain and well it is Raining

Lets start with

Rainy Days and Mondays

How about a little

Blue Monday

Or for us older generation

Monday Monday

And well I have to say I just love this

Stormy Monday

And well how about a little romance on Monday

Come Monday

Well there you have it Radio Rainers

This is Scuba Joe with a sold Corona in his hand saying...

I am out

And happy MONDAY

OH MY MR. Realtor, you just admitted to anti-trust violations

2008-05-12T20:36:55Z

I can not believe this, but yet I do. Some friends of mine are wanting to buy a lot in the community that I live in and I think that is great. They have used me for their past business and oh I am one of the scuba certifiers on their diving certifications, so these are friends and clients (something that I do not take lightly). So when they came to me and told me their thoughts and they know I am out of the Realtor side and just the mortgage guy they asked for a few referrals. Which I gladly gave them and they picked this wonderful agent and I know why, they had met her at my annual duffers and divers party. So they are off and running.

BUT

as they are driving through the community the come across the listing agent and he shows them the property knowing that they are my friends and they are WORKING with this Realtor. He at some point goes into a speech about how they are trying to keep the prices up and knowing that the market is turning and BLAH BLAH BLAH. I was out of town that weekend (teaching another scuba class), But they called me and we had this nice laugh about all Realtors saying this to get the commission up car sales people and sales tactics.

So, tonight they have picked a lot and the Realtor drops off the WRITTEN contract. Normal right????? Well they have offer less than asking price on a vacant lot. And the listing agents says as he is accepting the written offer

"you know we have a pact here to not accept less than asking price"

Well, as you can guess my cell is burning. The selling agent knows that this is WRONG and wants back up.

(some side info: I do hold Employing Broker status in the State of Colorado, even if I am not practicing)

I have advised this Realtor to be the professional and to contact the listing agent in and to confirm his statement.

AND

IF HE CONFIRMS

TO ADVISE HIM THAT THE CLIENT REPORTS THE SAME TYPE OF COMMENT

AND

DOES HE REALIZE THAT

HE IS IN VIOLATION OF THE SHERMAN ANTI TRUST ACT

PRICE FIXING