I have to write about this nutty last 2 days! I get an email from a Loan Officer that knows me from my Loan Processing Service and asks me to call another loan officer about a file. So, I contact the Loan Officer #2, that says that she has an FHA loan that needs help. Loan Officer #1 asks me to call the Real Estate Agent.
I call the agent and she says she needs a Clear to Close on this file ASAP. She sends me the Purchase Agreement and the contract was signed at the beginning of March. I call back the Loan Officer #2 and ask if they are an FHA Approved Broker.......Drum Roll Please........NO, they only do conventional. So what do you want me to do? I cannot process the loan for an unapproved broker. No, they say, just originate it and close it. No, not okay, I won't be paying you anything, but I will call the borrower.
So I call the borrower, he is very low income and claims that he has CASH for the closing. He also tells me that he lives in OHIO and wants to buy it for an investment property and that he lives in the Hotel that he works for.
Cash is an unacceptable source of funds, unless, the borrower has a history of not using banks, or has shown through 3 months bank statements a regular savings verses expense ratio, which he doesn't. He was very upset. I cannot believe that this transaction went this far. The poor guy. He was never sat down with by the loan officer and explained anything!
He knew nothing about closing costs, tax escrows, prepaid interest, NOTHING.. He was grateful to speak to me and I was grateful to advise him that this is not an approvable mortgage for many reasons. High Debt ratios, unacceptable source of funds and that FHA does not finance investment properties.
Can you sense my steam?? I am struggling here and there are these Unqualified Loan Officers out there just wrecking people.
So please, if you are a Realtor reading this, make sure that your client has been Pre-approved by a Licensed FHA Lender. You can look them up at www.hud.gov under the Lender Search Tab on the left side of the screen. And you can contact your State to find out if your Loan Officer is also Licensed.
If you are in Michigan, do your clients a favor and refer them to me!! Or a good loan officer that has at least 5 years of experience. The rules are changing every day and I have to keep up with them and so should every loan officer out there. Whew....I feel better for the Vent..Thanks for visiting!
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