Hud released mortgagee letter 08-16 on June 11th, 2008. In this letter, Hud is changing the FHA requirements for calculating both the Up Front Mortgage Insurance Policy (UFMIP) and the Annual / Monthly Insurance Premium (MIP).
This impact brings both an improvement in these costs for higher FICO score borrowers and/or higher down-payment transactions AND an increased cost to lower FICO score borrowers and/or lower down-payment transactions. This brings 2 definite impacts to FHA borrowers:
1) Some borrowers with FICO scores 499 and below who are not putting at least 10% down-payment will be unable to get FHA insuring and thus no FHA mortgage.
2) Borrowers with FICO scores at or above at any amount of down-payment will benefit from less expensive Up Front Mortgage Insurance Premium
If you look at the chart, I'll walk you through how to read it. The sample below is for 30 year fixed, FHA loans:
LTV
850-680
679-640
639-600
599-560
559-500
499-300
NON-TRADITIONAL
> 95
125/55
150/55
175/55
200/55
225a/55
n/a
200/55
If the loan to value is ABOVE 95%, and you look at the FICO score range of 680-850 you see it says "125/55". What that means is the UFMIP is 125bps (1.25% of the loan amount) and the Annual MIP is 55bps (.55%). So on a $150,000 loan the UFMIP would be 1.25% or $1,875 and the Annual MIP would be .55% or $825 (so the monthly is $68.75). Currently, this loan would have a HIGHER UFMIP at 1.50% of $2,250 and a LOWER Annual/Monthly MIP at .50% of $750 annual / $62.50 monthly.
A couple of key bullet points about this change:
UFMIP will range from 1.25 percent of the loan amount for lower-risk borrowers to 2.25 percent for riskier borrowers.
No borrower who qualifies for a FHA-insured mortgage will pay more than 2.25 percent on the upfront mortgage insurance premium (UFMIP) and 55 basis points for the annual premium.
Borrowers with credit bureau scores must be risk-classified by FHA's TOTAL Mortgage Scorecard.
Those in risk categories without a premium shown are not eligible for FHA-insured mortgage financing.
The borrower representing the greatest risk to the Department will determine the premium charged. For example, if the decision credit score for one borrower is between 559-500 and the other borrower is in the non-traditional credit category, the decision credit score between 559-500 is used to determine the premium. However, if the decision credit score for one borrower is between 639-600, and the other borrower is in the non-traditional credit category, the non-traditional credit category is used to determine the premium.
First-time homebuyers (as defined below) who will be obtaining a mortgage with an LTV greater than 95 percent and whose decision credit score is in the 559-500 range are entitled to a reduction of their upfront mortgage insurance premium from 2.25 percent to 2.00 percent provided the homebuyer completes HUD-approved pre-purchase counseling.
Make sure to read regarding the FHA Streamline refinancing impacts. These are worthy of knowing which Mortgage Insurance rates to use depending on when the original loan was created.
With FHA growing from less than 3% in 2004 to an estimated 30% for 2008, the higher FICO scoring consumers who perhaps could have gone conventional in the past can now benefit from lower Up Front Mortgage Insurance Premiums in the present.
In all fairness, I actually like the excerpts from "Greed, Fraud & Ignorance: A Subprime Lender's Look at the Mortgage Collapse". Daniel McGinn, a correspondent writing for Newsweek.com wrote a reviewof this new 'from-the-trenches' tell-all about the subprime industry. Written by Richard Bitner who co-owned Kellner Mortgage Investments, it is a review and perspective of the subprime lending mess from the inside. Kellner, a sub-prime mortgage company who took loans from mortgage brokers, went out of business in mid-2007. Richard Bitner reviews his companies experience and the lessons that can be learned and issues corrected.
The most refreshing perspective about the subprime mess is summed up in this excerpt from the book. On a loan that Kellner was required to buy back from an investor because the borrower defaulted in the first 3 payments, Mr. Bitner reviewed the file to see what went wrong.
"As I went down the list, my thought was someone must've made a mistake. Aside from a good property value, there was not one redeeming factor to this loan. The credit stank, income was light, employment was spotty, and there was no rental history or savings to fall back on. Put all this together and it was a foreclosure waiting to happen. What the hell were we thinking closing this loan?"
Have you heard that one before? Finally, a reality check. He continues,
"I checked everything in the file against the investor's guidelines, trying to figure out the mistake. Then it hit me. We did nothing wrong. Our underwriter approved the deal, we funded it, and the investor purchased it from us because it fit their guidelines. There was nothing manipulative or fraudulent about the loan. Everything from the income to the appraisal was accurate."
There it is. In simple, straight-forward truth. Loan officer's in many cases weren't to blame nor were customers at fault. Mortgage lenders like Kellner probably should have figured it out, but relied on a perception of security because so many larger lenders and banks were doing these same loans....giving a false sense of stability. Bitner's reaction to his discovery?
"I was pissed off but I didn't know who to blame. It's not like the guidelines suddenly appeared. We'd been closing loans with similar borrower profiles for over a year. In fact, the 5% down payment product was a niche we'd been promoting to our brokers. For the first time I was seeing this product pushed to the extreme, and from a risk standpoint, it made no sense at all."
As Bitner describes it, sub-prime lending started off as a means of providing financing to a higher-risk client whereas before there was no means of financing for those people. It was still a choice. My first boss in my first job once taught me 2 things about sub-prime lending.
1) Always offer a customer choices. Don't give them one option for a 30 year fixed rate loan at 8.00% but show them a 30 year fixed rate at 8.00% OR a 3 year fixed rate at 7.50% and ask which did they feel more comfortable with.
2) In addition to rule #1 (above), always include the third option. What's the third option? That they don't have to do any loan today.
It was ingrained upon me and many others that did sub-prime lending 10+ years ago (when 10% down-payment was the LEAST a buyer could put into a transaction) that customers could and often should choose to wait and improve their credit. But ultimately, it's the consumer's choice. Otherwise, who in their right mind should be buying $70,000 SUVs? Who should be purchasing $30,000 media room packages?
Like erosion, the edges of acceptable risk and sound standards were gradually pushed until people like Mr. Bitner reviews a loan as described above and realizes things have gotten beyond acceptable risk and common sense lending.
So does Richard Bitner have a unique perspective on the situation? Perhaps. Does he have ideas and solutions for how to FIX the industry? Buy the book. One thing I do know....he has a blog....but then, who doesn't?
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
Bloomberg.com on 3/5/08 reported that the economic stress from both sub-prime mortgage loan failings and decreasing housing values is now being felt by all borrowers. The people taking out mortgages who have excellent credit and qualifications, the best borrowers, now feel interest rate pain due to investors requirements for yield on mortgage-backed securities.
"...[the] yield that investors demand to own agency mortgage-backed securities over 10-year U.S. Treasuries reached the highest [spread] since 1986, boosting the cost of loans for homebuyers considered the least likely to default.
The difference in yields on the Bloomberg index for Fannie Mae's current-coupon, 30-year fixed-rate mortgage bonds and 10- year government notes widened about 12 basis points, to 215 basis points, or 79 basis points higher than Jan. 15." read full article here
If that paragraph is confusing, let me provide some basic definitions and background to assist you in understand.
When a home owner takes out a mortgage loan, that loan ultimately is packaged with others and sold as a mortgage-backed security. A comparison can be made that investing in a mortgage backed security is very much like buying a government (US Treasury) bond. You invest $10,000 and receive a guaranteed rate of return, but the return is a lower percentage then one would expect putting money into stocks or mutual funds because there is a perception of less risk. You are supposed to get the 4% return on your investment with a bond, there are no guarantees when buying stock, but there is more potential upside.
Note the word "agency" in the first sentence? When you see "agency mortgage-backed securities" the term agency means that those securities are created either BY Fannie Mae or Freddie Mac or by another entity but the security includes loans underwritten to Fannie Mae and/or Freddie Mac underwriting guidelines. Today, with the exception of "government" loans such as the FHA, VA, USDA rural housing, etc. programs the only conventional loans to make up a mortgage-backed security that investors are willing to buy are "agency" loans.
So the article quote above is saying that "investors" - meaning those who buy "shares" of AGENCY mortgage-backed securities (bonds) are requiring a HIGHER rate of return than the US Government is paying on 10-year US Treasury Bonds. For the last dozen years, the same type of investor purchased mortgage-backed securities that purchased 10-year UST bonds. Because we are talking about agency mortgage-backed securities, the investors believed that those securities were as safe and secure as a 10-year UST bond. Therefore, the rate of return was fairly similar between the two.
A quick explanation of the term YIELD is appropriate here. Yield is the percentage earned from investing in a bond or security. If you invest $10,000 in a bond with a 4% yield you expect to earn $400. Your $10,000 "yields" $400. Mortgage industry professionals have used the 10-year UST bond yields as an indicator of interest rate movement. If the yield on a bond is HIGHER today then yesterday that is an indicator that the yield on mortgage-backed securities will also be going up.
If you can follow the mathematics that if investors require a higher return (yield) for putting their money in a mortgage-backed security then consumers have to pay a higher rate of interest. If a loan being made today at 6.00% and the yield is 3.50%, but tomorrow investors require the yield to be 3.75% you can assume interest rates for a loan being made tomorrow will be higher.
The current spread, as reported by Bloomberg of 215 basis points, is more easily understood if expressed as a percentage (2.15%). In other words, a 10-year UST bond is being purchased by investors at 3.69% yield and the Fannie Mae MBS is having to pay 5.84% in order to attract investors. This is the highest spread between the 2 since April of 2000 and is nearly the highest ever which was seen in 1986.
What this means to consumers is that even having excellent credit, job stability and money in the bank is not enough to offset concerns of securities investors. Partly this is due to a fear of further declining real estate property values. Another cause is a lack of investor trust in Fannie Mae and Freddie Mac as being equally safe as the US government. Although both agencies enjoy a status of "government sponsored entity" that's a status without definition. Investors aren't fully sure they know what the government would do if either agency were to actually fail. So when investors feel there is increased risk in an investment, they demand increased yields. On mortgage-backed securities, that means increased interest rates to the best consumers.
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
I'm needing help with understanding how to manage my group participation and here's why. For example, take the group "description" for each group:
Lone Star Real Group = A place for those in the real estate industry and affiliated business's to network within the state of Texas.
Texas Real Estate = For the Real Estate Community of The Great State of Texas ...EVERYTHING posted here has to be about Texas or at the very least have Texas woven into the post
All Thing's Texas = A place to discuss issues, listings, trends, football ( all things Texas).
Does that help anyone? I'm still in need of some guidance because to me it seems that a post on "The Bluebonnet Festival in Nowhere, TX" would be posted in all 3 groups. Trends on coastal market values? Still all 3. Updates on the next Texas down-payment grant program?
So I read some of the articles to try and get a feel or "vibe" for each group. Apparently I'm not alone in this confusion. Take for example, the really good article by Carl Winters on Greune, TX which is posted in....
Lone Star Real Estate Professionals Group
Texas Real Estate Group
All Thing's Texas Group
or the really great article by Marchel Peterson on Property Taxes in TX which is also posted in all 3 groups. To add to my confusion, Marchel is a co-moderator of the Texas Real Estate Group!
Please understand, that I mean absolutely NO disrespect to any of the group moderators or participants. But if you read the featured article on the Lone Star Real Estate Group titled "Important Group Announcement" by Judi Morgan you see that this group in particular has suffered from lack of leadership and Judi is kindly volunteering to moderate and lead the group. Am I the only one that thinks a merger of these groups would make more sense?
So can somebody write me a scrip for prozac and help me understand why we need 3 groups that are seemingly the same?
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
On Monday February 11th, I took the day off from work and spent it at Cox Elementary School as a Watch D.O.G.S. volunteer. This spring, Wylie ISD in Wylie, TX added the program to Cox Elementary after success on other campuses last year in the district. The program which is sponsored by the National Center for Fathering was launched in 1998 by Jim Moore in response to a middle school shooting in Jonesboro, AR.
The purpose of the program is to get fathers, grandfathers, uncles, and any other male father-figures to participate on the campus of their child's school. The program firmly believes that more fathers and father-figure involvement in the student population cuts down on bullying and harrasment and most pointedly school violence. Fathers have historically taken a "back seat" to mother's involvement in PTA and other school activities. The Watch D.O.G.S. program provides an opportunity to remind their children and their kids' peers that Father's care about school and about the students.
When I arrived in the morning I was met by the school counselor, given my t-shirt which signifies to the students and faculty that I have passed a complete background check (every volunteer must complete this prior to their volunteer day). The really neat part was my son got a matching t-shirt so everyone in school knows who's dad is the D.O.G. that day. We got our photo taken and I was given a very thorough agenda for the day.
My time was spent in 45 minute increments with my sons kindegarten class assisting them in a project to write their numbers from 1-100. From there I visited a 4th grade class and worked with 5 students on converting fractions to decimal points which you KNOW the math geek I am just loved that! From there I helped a 2nd grade class do creative writing and a 1st grade class practice learning how to tell time. (that one seemed kind of odd to me because I figure most of these kids are going to live in a digital world and probably don't "need" the skill of knowing the little hand from the big hand, but hey....I'm not the teacher). I also helped 2 3rd graders with reading comprehension.
The best part is the time spent assisting with lunch and recess. Most of the adults kids see at school are obviously faculty who are there to work. Recess and lunch is a much-needed break time for teachers. So for the kids to have an adult there that was excited to be there was a big lift for them. I had so much fun during the day that I really am tempted to do it again next month. It certainly makes me excited about the things I'll be able to do once I retire.
So fathers, if your school has the program you need to suck it up and take the day off of work. You have no idea how cool your kid really is until you see them in their normal school day. Just like you should take them to your work once a year so they can see how cool you are at work.
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to aid clients in making a smart home mortgage loan decision. Contact by email at Ken@KenStampe.com
The scenario is that a military serviceman has been purchasing homes as a primary residence, with primary residence mortgage terms. In 2-3 years, the military relocates him and instead of selling that house, he keeps it as investment property. But now he is at a point of needing some real estate investment strategy and asking a very good question.
Perhaps you or someone you know is in the same situation or plans to start investing in rental real estate.
As can be seen from the responses so far, the answer varies depending on the perspective of the person answering. There is a tax perspective, a liability protection perspective, and a financing strategy perspective and perhaps others.
As mentioned by Greg Nagel in his response, by purchasing the homes as he has done in the past as owner-occupied transactions there is the benefit of getting the lowest cost mortgage financing. But the caution provided by Brian Sajdak is not to be taken lightly. When purchasing a home with a conventional mortgage you are going to sign either a mortgage document or a deed of trust depending on the state. That document is going to describe conditions under which the lender is giving you a loan. If you violate these conditions, you default on the loan even if you are paying on time.
The actual "trigger" term involved is called the "Alienation Clause" which typically states if a transfer in ownership of the property to another entity is considered as having "sold" the property and that brings about the "due-on-sale" or “acceleration clause”. The lender is within their right to demand you repay the loan upon learning of a title transfer. For clarification, an "Acceleration Clause" means the payoff of the loan can be accelerated to happen NOW and that can happen for several different reasons, not just alienation.
Some people may advise you to still transfer the property claiming that if the loan payments are made on time, the lender will "never know" about the title transfer. That advice contains a definite risk because if the transfer IS "caught" the loan will need to be refinanced or otherwise paid in full in a very short time period.
All I'm experienced to give advice on is the financial perspective, and I believe the way it is being done now provides the best overall mortgage loan terms. One last thing to keep in mind is that once a borrower has 10 conventional mortgages, that person is capped out. Conventional loans that meet Fannie Mae or Freddie Mac guidelines limit the total financed properties for a borrower at 10. Once an investor reaches that size of a real estate portfolio it is required that they come up with a commercial financing strategy.
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
1) The new loan limits go into effect on CONVENTIONAL mortgage loans originated beginning on July 1, 2007 and ending on December 31, 2008
2) Conventional Loans can be made to the HIGHER of the current conventional loan limit ($417,000) or 125% of the area median home price as determined by HUD Secretary. So unless the area median home price in your area is greater than $333,600 you will see no increase to the conventional loan limits.
3) FHA loan limits are available for loans "for which the mortgagee (lender) has issued credit approval for the borrower on or before December 31, 2008. So it appears the FHA limit changes go into effect immediately upon enactment of the legislation.
4) FHA loans for 1-unit, Single-Family Homes, can be made up to the LESSER of 125% of the area median home price OR 175% of the dollar amount limit for HUD loans for 2008. So again, this will mainly impact only those areas with a high median home price
5) FHA loans, however, WILL be eligible to a loan amount not LESS than 65% of the conventional loan limit for 2008 which is $417,000. So 65% would be an FHA loan limit of $271,050.
6) The HUD secretary will publish a list of area median home prices and mortgage principal loan limits NO LATER than 30 days from the enactment of the stimulus package legislation
7) The HUD secretary maintains the authority to make future changes to the loan limit nationally or in targeted markets as he determines is necessary.
For a full transcript of the HR 5140 you can click HERE
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email Ken@MortgageLoanDallas.com
Lawmakers continue to push the current administration to find more ways to help out homeowners facing foreclosure. Debate continues regarding the foreclosure rate as to the responsibility of government to step in and aid home owners who took out sub-prime adjustable rate loans. While not consistently divided among party lines, a majority of Republicans in congress feel personal accountability on the part of consumers is key and government's role is not to "bail out" consumers who made poor choices. Whereas democrats continue to avow that consumers didn't understand their choices and were victims of a mortgage industry pushing adjustable rate programs on unaware and under-informed homebuyers.
The latest push by Senator Chris Dodd (D-CT) who is Chairman of the Senate Committee on Banking, Housing and Urban Affairs was made in a letter sent August 23rd to Treasure Secretary Henry Paulson and Alphonso Jackson the HUD Secretary. In it, Dodd urges them to allow FHA to insure home loans for people currently facing foreclosure.
"Many of these families have been victimized by ‘bad lending practices', and every effort must be made to ensure that these abusive mortgages do not result in needless foreclosures," Dodd wrote in his letter. "In addition to [FHA programs] being an engine for creating new homeowners, the program could play a very important role in saving from foreclosure American homeowners who have been taken advantage of by unscrupulous subprime lenders and brokers".
The issue at hand is changing FHA insuring guidelines to provide for FHA loans to be originated refinancing homeowners who are currently past due on their mortgage. By providing, in effect, a new sub-prime mortgage with federal government insurance guaranteeing lenders against the default of the loan.
While anyone with sensitivity can agree with Senator Dodd's desire to help people who have been "abused" by an "unscrupulous lender", the trouble with this solution is obvious.
1) Subprime delinquencies by lending to people with an inability to pay their credit obligations on time is the PRIMARY reason for the subprime market disintegrating.
Using government funds to insure loans that the REALITY turned out to be that the consumer either wasn't creditworthy or bought too much home or both seems an unsound way to use the FHA insurance fund.
2) How can you define whether a consumer was "victimized" by a lender or given full disclosure of their options, chose a bad loan for their circumstances? Who gets to make the determination as to whether we are helping Americans who were abused or enabling Americans to avoid the consequences of their choices?
It remains to be seen whether this type of change will come about. I for one am contacting my Senator asking her to speak sensibly about pushing the FHA modernization legislation but not to supplant those efforts with ideas of radically changing FHA guidelines as a "stop-gap" measure.
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
Over the years I have been blessed to work with many seasoned and knowledgeable real estate investors. At the same time I've met many people starting out on the Carlton Sheets plan to wealth....or perhaps not to poverty....but either way I've met some that made it and some that lost it all.
LEGAL property "flipping" is the concept of financial investing 101....buy low, sell high. But if you don't keep in mind economics 101....supply vs. demand...you will get burned.
Right now in the Texas market foreclosures are up over 50% over last year. That means...more foreclosures, short sales and homeowners selling to avoid foreclosure. In other words...supply is UP. That drives prices down on buying these properties.
HOWEVER, foreclosure rates means the number of buyers with eligible credit is DOWN. Add to that the erasure of sub-prime loan programs and you have a marked decrease in demand or at least demand from qualified buyers.
So just because you can buy that home for $125,000 and comparable sales tell you the market value of $170,000 is that enough information? If you are only using 4 or 5 comparable sales does that really take into account the increased number of homes on the market today vs. the past 6 months? Does it really predict future market stability with changes in the mortgage business?
Here's a strategy that several of my top clients are executing with their own specific tweaks but overall the same basic perspective.
1) Cash-out refinance existing properties now to take out equity. Create as much liquidity to handle vacancies and also to take advantage of cash sales that are more available then ever.
2) Refinance existing properties with little to no equity to improve cash flow. Create a positive cash flow situation
3) Restructure rental agreements. Offer longer term agreements with incentives for staying in the property or renewing. One such idea I heard last week was that every year the tenant renews the lease, the owner will completely repaint and refloor one room of the house. So if you renew your lease at the end of that year, the investor will repaint and replace carpet in one room that both the landlord and tenant agree to. Start creating a stable of happy renters.
4) Any properties you have that you wouldn't want to keep for a year or more, now is the time to try and move them to other investors. Perhaps location, perhaps the size of the property (too small....or too large). Get other investors interested in buying it from you now. Once other investors are tapped out you may not be able to move the property.
5) Take slightly stricter review of tenants before leasing. Credit guidelines are going to be tighter for some time. Just having them rent from you for 12 months to create a positive rental history probably won't be enough in and of itself to qualify them for a home loan next year. Be more selective and don't expect a return of sub-prime programs as part of your exit strategy.
This is a great opportunity to grow your real estate investment business and when the market comes back you will be sitting on a ton of real assets and equity. Develop a strategy for today's market, not last years.
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
For those people interested in getting a mortgage loan officer or mortgage broker license in Texas, the requirements are getting tougher....in fact they are doubling in many respects.
Effective 09/01/2007 the educational requirements for a mortgage loan officer increase from 30 hours of coursework to 60 hours. Below is a summary of the changes for loan officer licensing:
License application fee increasing from $175 to $275
Loan officers with experience can apply for an expedited license, requires a $100 additional fee
Loan officers who change their name, now have 10 days from the date of the legal name change to submit a name change request to the commissioner and pay a $25 fee
One significant change applies to applicants who have prior mortgage experience. The current code states that an applicant must have one of the following:
completed the 30 hour course
can document 18 months experience as a mortgage loan officer.
The new requirements change this to the following:
applicants requesting an exception to the 60 hour course requirement are considered applying for an "expedited license"
expedited license applicants must pay an additional $100 application fee
expedited license applicants must verify 18 months experience in the past 20 months
applicants who submit an incomplete application will not be allowed to reapply but will be declined for the expedited process and must take the 60 hour coursework.
Another change for mortgage brokers is that unless in cases of a sole proprietorship, mortgage brokerage COMPANIES must now be approved. The company itself will now be approved with a designated approved mortgage broker, duly licensed by the state. There is a $175 processing fee and a $50 fee per branch location. This goes into effect 1/2008.
I'm very pleased with the change in licensing to include the mortgage company. Under the present rules, if a mortgage broker lose his license for violating the state rules, the company continues and in fact, the same individual often stays in an ownership and management of the company getting another individual to get a mortgage broker license in order for the company to stay compliant. This has been a loophole in the past that hopefully this new legislation can close.
As an instructor, I can tell you that when the state changed from 15 hour course requirements to 30 hour courses it took about 5 months for us to get approved course materials. So if you are looking at getting your loan officer license or mortgage broker license there will be no way to fulfill the 60 hour requirement come 9/1/07 and there may not be an approved course by the end of the year.
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
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.
Ken Stampe iBrandPlan (iBrandPlan.com - Grow your e-Profile & Brand)
Great 
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