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What Should I have in 2008 When Applying for a Mortgage.....Patience

When Applying for a Mortgage in 2008 be ready to have Patience

As a Licensed Mortgage Broker in Florida (Palm Beach Gardens), I am seeing a trend in the later part of 2007 and predict it to continue into 2008 of each Lender (Bank of America, Countrywide, Indy Mac Bank, Wachovia, etc..) to really examine each application and each piece of paper. Maybe this should of been done from the beginning, but we really can not go back now and change what was. Gone will be the 24 hour turn times on a rush file.

Now please DO NOT get me wrong if you have good to excellent credit and have plenty of equity in the home their will be no problem getting a mortgage. In addition, keep in mind the appraisals will really be examined thoroughly and that will take some time.

When I started in the business I swore I would never submit to multiple Lenders at the same time. Well what is the old saying "Never Say Never". At this point unless the file is perfect clean file I find myself submitting to multiple lenders at the same time just to see who is going to close first expecially if the file contains either Low FICO's, High LTV's (Loan-to-Value), No Proof of income or assets.

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Posted by Matthew J Blum - MyFavoriteMortgage.net on 12/28/2007 10:23 AM

Comments (18)

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18 Comments on What Should I have in 2008 When Applying for a Mortgage.....Patience

DEC

2007

Matthew: I have seen the same trend with the lenders that I have left. You're right. They seem afraid to make a decision. I also think that a lot of them have laid so many people off that even though volumes are down, they don't have the people to work what they've got. Especially if there is any kind of bump in volume...

Can't wait until things settle back down, which I'm confident that they will.

Bob Mitchell

ValueList Real Estate Services, Inc.

Matt, I completly agree. The word of the day is options. With guidelines changing with the tide you must have the ablity to shop the loan to the place that can get it done.

Bob, You are so right and I never really touched on the lay off's but I know with Countrywide in South Florida right now forget about a quick anwer or even a return phone call the same day.

Nate, Agree I guess I should have changed it to Options... that would work as well..Thanks

Matthew... I am sure this is true, hence why I love being a banker and that we underwrite most things in-house. We are still taking the risk and still doing many things on the FHA level that so many can't or won't do. So I could only imagine. Just let time that I am not spending when submitting.... good luck in 2008. You will do good in 2008 because you know what you are doing and have integrity.

Jeff, Correct but they are still fannie and freddie loans and still have to have the ability to be sold. So having an underwriter in house is great but it still is not everything. I think where you a nice feature is having the ability to also broker your files as well.

Matt - It is a virtue now, isn't it?

Shucks. I expect that smart buyers agents are going to be making applications with more than one mortgage resource too.

Sellers accept contracts from buyers based on the lender's letter included with the offer. However, our contracts also permit a buyer to pusue financing with another source if desired. Of course, they have to pay for two appraisals and two credit report fees, but I've seen cases where it paid to have a back up.

Matt.... I can broker also.... and yes, you have to follow fannie and freddie guidelines, but underwriting our own appraisals is the key to this. Besides, hate to say this, but the best program out there will be FHA if you have a credit score under 680 and less than 25% down. Just my .02....

Jason you hit the nail on the head my friend..:-)

Lenn, It really depends if you have faith with the Mortgage person. Please keep in mind the majority of my clients are not Fannie Mae, FHA type clients so these are outside of the box. Lets face facts if they are approved thorugh fannie and they broker hands you the DU approval do you really need to keep going? (of course if the person provides the right documentation to back it up) however, we all know clients never lie.

Jeff, Correct but if they push crap through it will come back and you will have to eat it.. So you and I both know nothing will fly through. In addition, You still have my community programs that still price out well. You are correct with FHA is still a very strong program. Unfortunately the majority of my clients do to loan amount places them out of FHA guidelines and Fannie Mae as well.

Matthew.

You have no idea how many buyers come to us to help them find a home and hand us a "lender's letter" from an Internet lender. Now, we can usually get a contract approved with the letter we have because so many listing agents don't know the difference.

However, unless it's a lender that I know and can verify, I encourage the buyer to make another loan ap at the same time. It has paid off. I offer to reimburse them the cost of the second appraisal if it's not needed.

It's hard to suggest to a buyer that they switch lenders in the beginning of the relationship because the lender will tell them that we're taking kickbacks. It's not true but in the early stages of a relationship, buyers don't know the difference and I don't expect them to jump lenders quickly. But, I can often get them to make more than one application.

Often, the buyer doesn't know until a day or so before settlement that their Internet lender is changing the terms, conditions, fees, etc. If the buyer has a back-up, we can usually get to settlement in a day or so. Sure, the first lender got them approved, but not at the terms and conditions in the GFE.

Of course, if the GFE is reasonable in the beginning, I wouldn't think of suggesting a second application. It's not necessary. I don't care who does a loan. I just want the loan done.

I had one Internet lender this year trim $4,000 off his fees to keep the loan. My buyer was very happy. He was also tied up with a "travelling closer Notary". They were overcharing about $3,000. The whole thing was a scam, but even in the face of their overcharging the buyer by over $7,000, he didn't want to change lenders because he had gotten the names through The Mortgage Professor. Geez. I wonder how much the "Mortgage Professor" was paid for the recommendations.

I don't really care.

Lenn, You are 100% right on the Internet Lenders. A second opinion is always worth having. I have found many times (Maybe it is South Florida) that when The Realtors demand another lender it is for other reasons than yours. I am not sure if you have seen some of my other posts about some clients who sent me the GFE from their families home loans. I tell you it is scary. The B....T (you are a lady and I won't use the words to describe it) that is going around.

What really drives me crazy is when I see the term Mortgage Consultant.... In Florida that is an Illegal term.. So right off the bat. Most of the time it ranks right up there with the Mortgage Professor..lol

Thank you

You hit the nail on the head. Patients is key in this market!

Matt,

Good points. Underwriters are looking at everything with a magnifying glass these days. My company had an in house underwriter. Very sharp and very experienced. She went back to being an originator. Too much stress being tugged and pulled from different directions. Underwriters are worried about losing their jobs and are stipping us like you wouldn't believe.

Anybody except for the "A" paper borrower needs to have patience.

DEC

2007

My CountryWide Rep just today told me that every application has to be approved by management now - not just the loan but the application - things are still changing - but it will all work out for the best once it changes we will be accustom to the new rules

As they say, Patience is a virtue. We'll be learning that with the next mortgage application.

Jason, Thank you.

Cheryl, Even A Paper needs to have patience right now as well. It will go through without a problem but still the turn times are slower. I know how your underwriter must of felt...

Thesa, Don't even get me started on Countrywide..lol Down here in Florida the turn times because they let go of their staff are so incredible slow. Things should get better in about 6 months with guidelines.

Diane, Very Very true. I know one thing if a mortgage professional in todays world tells you know problem we can close this very fast.... Get a second opinion.

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