Special offer

The NEW Loan Process for 2010, It's not what it used to be, AND it'll effect, well everyone!

By
Mortgage and Lending with Christensen Financial Mortgage 385907

Have you sold a property in 2010 involving a buyer needing a mortgage? If you have;

Are we having fun yet?

If not, your day will come.

Well the new improved GFE is now a reality. Live from HUD, it's GFE hell!

My important dates say I'm offering you this rate until the end of the business day, that's how I disclose it, and the costs are good for 10 days. The new GFE resulted in the need for other, somewhat supporting disclosures. So I have one to acknowledge receipt of the GFE on a specific day, one asking you if you would like to proceed, and another trying to show what you actually need to bring to the closing table, because the GFE does not.The buyers are staring at

A&B Total Estimated Settlement Charges and freaking out a bit.

They think that this is what they need to bring to closing, but the answer is noooooooooo. That requires a detailed explanation, some frowns from the buyer, and the supporting documentation showing cash needed to close. The details of purchase is also very helpful, but

I now have several documents spread out in front of the buyer.

Oh yes, the application package itself continues to grow; 80 pages +/-.

Page 2, our origination charge, woo, look at that number. It's the same total as before, but it sure jumps out at ya. If I bank/fund this loan with my own company, that number may be reduced by $2-3000. The actual cost to the buyer will not change, just the disclosure.

Advantage Banks!

What we are looking at here is that the time it takes to complete a face to face application has increased.

Okay if the buyer agrees to proceed, we go forward, if not we don't, until they do. They can always take the GFE and shop.

Going forward;

It is VITAL that the applicant supply ALL of the requested information upfront, immediately! NO delays.

Now, we need to deal with HVCC requirements so the appraisal order is sent to a AMC (appraisal management company) to be completed, whenever. I may have no contact, and no influence whatsoever. I can't get answers to your questions. I'm, personally, in Southwest Florida where value may still be an issue. When will I know? I'll get back to you. And yes, the underwriters are taking longer to underwrite the appraisals.

What do underwriters require?

I'm not sure that they know what they want, but you can expect more conditions, and some which defy explanation. Automated underwriting approvals are being trumped by layering and just don't stand up on their own anymore.There will be conditions. What will they be? It seems that they're not sure, so neither am I. Stay tuned. The shadow knows.

Last but not least;

At least for this posting, because this could go on forever. The pre closing compliance check is getting a little nutty. The most important issue is you best have your TIL within tolerance levels or your closing will be postponed, or cancelled. Also with the new GFE, if you did not disclose all fees properly, look out for government guarantee fees (MIP, VA funding fee, USDA guarantee fee) especially, your lender may refuse to close. Why because THEY must pay the fee and the loan would be a loss. 

So what's the point? what's the bottom line?

How long will it take to close the transaction?

Here's one man's opinion.

Conventional loans; 30 to 40 days

Government loans; 40 to 45 days minimum.

We'll undoubtably get better in dealing with the system changes as we go along. But without question;  

It's just not what it use to be!

so

Get used to it!

 

Comments (5)

Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Thanks for sharing article.  We always learn a lot of new things each week from Active Rain Blog.  Best Regards,

Jan 24, 2010 02:10 AM
Jay Beckingham
Christensen Financial Mortgage - Port St Lucie, FL
Seniors ROCK!

Edward & Celia,

I'm just trying to make some sense of an abundance of changes which were dumped on us all at once.

we will endure.

jay

Jan 24, 2010 02:18 AM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Jay - You sound like you're having the same kind of month that I'm having.  I just recently blogged about the crazy conditions I've been getting lately.  Furthermore, I am using fee worksheets for my pre-approvals in conjunction with gfe's in order to fully explain to my clients the whole process because the gfe doesn't show the whole picture of what a buyer needs to know about the loan transaction.

Jan 24, 2010 08:28 AM
Jay Beckingham
Christensen Financial Mortgage - Port St Lucie, FL
Seniors ROCK!

Donne,

at least we have customers, and we will get used to the new requirements. when i started many, many years ago we felt the underwriters job was to find a reason to turn down the loan.

jay

Jan 24, 2010 11:22 AM
Joan Mirantz
Homequest Real Estate - Concord, NH
Realtor, GRI, CBR, SRES - Concord New Hampshire

Jay....I'm glad I'm not you!! But this side of the table ain't too great either!
Maybe I'll look into making jewelry!

PS....it's cold, wet and snowy in Contoocook NH!!...that should make you feel better!

Jan 24, 2010 03:33 PM