Real Estate Agents - Fact or Fiction.... Learn the Underwriting Requirements of 2011

Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

As we begin 2011, underwriting guidelines remain the tightest that many in the mortgage and real estate industries have seen in recent years.  Today's rules/requirements echo those of the pre-2000 era.  Given that a great number of today's players in the real estate industry have been in the industry less than 10 years, many simply cannot understand these changes.  For those who have been in the business longer, many of those have forgotten the old days when today's guidelines were common practice.  Every still has the 2005-2006 era stuck in their head.  That is now what is know as HISTORY.  It's now time to move on with the reality of the present. 

This brings to us to the issues that many of us face today.  Some of it comes down to a basic lack of understanding about what really goes on in the mortgage industry.  Most of the requirements of today incorrectly get blamed on the underwriter.  I am sure there are a few underwriters who would like to wield that must power.  Sadly, for them, they don't.  Underwriting guidelines are, for the most part, standardized and set by the Secondary Mortgage Market. 

For conventional mortgages, those underwriting guidelines are set by the agencies themselves, Fannie Mae and Freddie Mac.  Both Fannie and Freddie will periodically update and revise there guidelines to better meet the ever changing market.  HUD mandates the requirements for FH and VA mortgages. 

What is important to note is that while each of agencies do set the minimum standards, it is now common practice for each lender to add their own guideline overlay.  For more on overlay, check out What Is An Underwriting Guideline Overlay?

Many real estate agent and borrowers who complain about unrealistic underwriting requirements really just do not understand the huge risk that a mortgagecompany take on with each and every mortgage loan approved and closed.  The default of one mortgage can cost a company tens of thousands to hundreds of thousands of dollars.  Too many of those can easily bankrupt a company.

I would imagine is the real estate companies started to have to share in the costs of the defaults, they would not longer complain about anything being too strict.  Imagine if you own your own real estate office, XYZ Realty  You have the risk of the loan if it defaults.  Your agent, Sally Smith, sells John and Jane Miller a home for $200,000 and they take out a $190,000 mortgage.  After 11 months, John loses his job and they default on the mortgage.  That now leaves XYZ Realty on the hook.  How many defaults do you think it would take to force you into bankruptcy and close your company?  Not very many I would bet. 

With the sheer number of mortgage companies and banks that have been forced to close since 2007, agents do need to be more understanding and knowledgeable about the current market conditions for mortgages.  Current mortgage companies want to only make loans which will enable them to continue to stay in business.  Without make viable and sale-able loans, a mortgage company cannot continue in business.

Many real estate agents complained their way through underwriting in 2008, 2009, and 2010.  Let's start 2011 with a brand new and more positive attitude.  Learn more about the requirements of the mortgage industry and make your closings more stress free.





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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!


Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  


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  • Rodney Mason is a Licensed Branch Manager located in Atlanta, GA.   He can be reached at (404) 591-2453.
  • Providing financing for all cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

    Providing financing for all cities across Alabama including:
    Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

  • Providing financing for all cities across Florida including: Altamonte Springs, Atlantic Beach, Boca Raton, Bradenton, Cape Coral, Clearwater, Coral Springs, Daytona Beach, Delray Beach, Destin, Fort Lauderdale, Fort Myers, Fort Walton Beach, Gainesville, Hollywood, Homestead, Jacksonville, Jupiter, Key Largo, Key West, Lake City, Largo, Marathon, Mexico Beach, Miami, Naples, New Smyra Beach, Ocala, Orlando, Palm Coast, Panama City Beach, Pensacola, Pompano Beach, Port St Joe, Sanibel Island, Sanford, Sarasota, St Augustine, St Petersburg, Tallahassee, Tampa, Vero Beach, West Palm Beach, & Winter Park, and many more.


  • Providing financing for all cities across South Carolina including: Aiken, Anderson, Beaufort, Bluffton, Charleston, Columbia, Conway, Edisto Island, Florence, Greenville, Hilton Head, Johns Island, Myrtle Beach, North Augusta, Orangeburg, Rock, Hill, Spartanburg, Sullivans Island, Summerville, and many more.  

    Providing financing for all cities across Tennessee including: Athens, Brentwood, Bristol, Chattanooga, Clarksville, Cleveland, Cookeville, Dyersburg, Franklin, Gatlinburg, Greeneville, Johnson City, Kingsport, Knoxville, Maryville, Memphis, Morristown, Murfreesboro, Nashville, Newport, Oak Ridge, Pigeon Forge, Sevierville, and many more


All mortgage lending guidelines are accurate at time of post, but are subject to change without notice.  Please call for the most current information.




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Christine R. Sutherland
Sun Realty USA, Inc. - Punta Gorda, FL

Good post, Rodney, anything to make business easier in these tougher times! Thanks!

Jan 04, 2011 03:33 PM #1
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Rodney - Great post!  Definitely info that many need to know more about.  I recently did a review of my top 10 posts (based on consumer clicks) and while many of my local dpa programs made the list, so did a few of my posts on u/w guidelines.  U/W is something that so many people (buyers, sellers, Realtors, etc.) want to know more about. 

Now if we can just get them to accept the fact that most guidelines as well as overlays are always subject to change with little to no notice.

Jan 04, 2011 03:55 PM #2
Sheila Newton Team Anderson & Greenville SC
Berkshire Hathaway HomeServices - C. Dan Joyner - Anderson, SC
Selling the Upstate since 1989

thanks for the post Rodney.. I have great relationships with my lenders... I think that is a crucial part of our business now days..

Jan 04, 2011 03:56 PM #3
Cece Blase
Paragon Real Estate Group - San Francisco, CA

You are asking me to swallow a bitter pill. I see your point, but when a lender asks to see my client's medical school diploma (no, I'm not kidding), I think it's a bit much. . .

Jan 04, 2011 03:57 PM #4
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Christine....You are so right,.  The more than real estate agents and borrowers understand the "why" behind a guideline, theeasier it is for everyone to move forward smoothly.  Believe me, everyone guideline requirement has a justification behind it.

Donne....Your are 100% correct.  I went back and looked at mine too.  Coincidentally, two posts that I wrote on 01/31/09 both have over 8,000 hits each.  One is on HomePath financing and one is on Fannie condo changes.  Getting everyone to accept reality and move on is always our biggest challenge.

Jan 05, 2011 01:19 AM #5
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Sheila....Bravo to you for having a great relationship with you preferred loan officers.  That is a critical piece to you continuing to be successful.

Cece.....For anyone with less than a 24 month employment history, a copy of their college transcripts is standard practice.  I can only assume that you have not worked with very many first time home buyer fresh out of college.    That is a requirement of every agency (Fannie, Freddie, FHA) and has been for many, many years.

Agents must remember that they incur no financial loss if a mortgage defaults after closing.  The mortgage company, not you, is the one with the bitter pill to swallow then in the form of tens of thousands of dollars of losses.   Once real estate agents, their brokers, and NAR start sharing in the costs of a foreclosure, then their input into underwriting guidelines would probably be welcome.  Only those entities incurring risk have a say though until then.

If someone does not want to comply, they are always free to pay cash instead of obtaining a mortgage.

Jan 05, 2011 01:26 AM #6
Donna Yates
BHGRE - Metro Brokers - Blue Ridge, GA
Blue Ridge Mountains

Rodney: I could play devil's advocate here but suffice it to say that your post is well noted and I think it's absolutely critical to have a great relationship with a network of lenders so that agents and mortgage specialists  work together to educate the consumer to the very thing you point out.  Wouldn't it be nice, if we could all switch roles for a day so we could know what it's like to walk in the other one's shoes?

Jan 07, 2011 01:08 AM #7
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Donna....You are so right.  So many agents are not properly educating their buyers then adding fuel to the file when an underwriting condition surfaces.  Switching shoes just might be what it takes one to grasp what is our reality today.

Jan 07, 2011 05:38 AM #8
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Rodney:  Being educated about the entire process ... not just the portion you are directly involved in ... is increasingly helpful within transactions.  Having one clear message and direction carved out for the buyer and/or seller is also important.  Too much bad-mouthing and arm-chair quarterbacking goes on between professionals.  Knowing and understanding the other professionals stance and legal obligations is very helpful and avoids and solves many problems.  Working with other professionals that "pull in the same direction" as I am during a transaction sure makes life much easier for ALL involved ...

Totally agree with Donne ... good post ...


Jan 11, 2011 07:10 AM #9
Deborah "Dee Dee" Garvin
C2 Financial - San Diego, CA
C2 Financial

Rodney,  Your post brings to mind my favorite lament from my wholesale days:  "you like the file so much, writer the check yourself!!!"  Great post!  It is always refreshing to see the focus on the big picture!  Love it~

Jan 12, 2011 10:59 AM #11
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Gene....That is so true.  It especially makes the agents look bad when other loan officers subsequently confirm something that the agent is adamant that is "unreasonable".

Deborah....I wrote a post on just that back in October.  No Underwriter Needed....Get Your Buyer's Loans Approved With No Underwriting Conditions to Clear

Jan 12, 2011 04:43 PM #12
Not a real person
San Diego, CA

I think that for too long there was easy money in the mortgage industry, which is why so many people bought homes they could not afford – those pesky liar loans and ARMs. I think the mortgage industry needed to be cleaned up.

Jan 16, 2011 01:45 AM #13
Donna Yates
BHGRE - Metro Brokers - Blue Ridge, GA
Blue Ridge Mountains

Rodney: My office would welcome any loan originator, mortgage consultant to come and help educate us to the process.  Most agents I deal with do want to learn and not blame.  There's enough blame game for everyone but I choose not to participate.  I'm ready to learn and have a question for you now so expect a call from me soon.  Thanks.

Jan 28, 2011 12:59 AM #14
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Russel....Yes, things did need to change.  There were definitely people in this business that did not need to be here.

Donna.....That is the best attitude to have.  I just wish that more shared it.

Jan 28, 2011 01:03 AM #15
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