It's funny now that refinance business has slowed down and how many lenders have jumped into the FHA 203k, Homestyle and HomePath renovation loans the last 6 months. Agents be careful who you trust to handle your renovation clients. The New Renovation Specilist not only originates renovation loans the are also originating their prime business FHA, VA and conventional loans. These new renovation specilist will usually attend 1 day class offered by thier company on the ins and outs of renovation loans. I have even been told some companies will do 1-2 hour training over the phone....Really.
This is a true story that happen this week........
I attended Boker's Open house and had the chance to talk with agents this week about renovation financing. They all seemed very interested about what I had to say. There was one agent in the group that stated his loan officer's company has now doing the FHA 203k loan and was working with one of his customers. I asked how the loan was going and he stated everything was fine. So I started asking detailed questions on the renovation. How much are the repairs? He stated we have bids for $35,000. I asked Who is your HUD Consultant....a blank stare came across his face. He asked why would we need a HUD Consultant we are doing the FHA Streamline. Then asked how long ago did you ratify your purchase contract. He stated 30 days ago but we just asked for extenison on the closing date for 30days. I just smiled and asked why? The agent just looked at me stated I am not sure why. So he walked away and pulled out his cell phone and made a call. I went back to talking with with the rest agents in the group and finish my lunch and was heaed to the door. Guess who was waiting on at the door.... That's right the agent had just gotten off the phone with his loan officer. I asked... are you OK, all he could say was NO. The long and short of the story the loan officer did not understand that the fees and contengency need to be included into the $35,000 on a FHA 203K Streamline.
I walked out the Broker's Open with one new agent and client.
There is a great article about 203K Loans on Bob Vila web page written by Joanne Y. Cleaver. I just love this statement from the HUD Consultant "A bumbling loan officer can hopelessly tangle an already complex process. “Don’t be a guinea pig for a loan officer" Read the rest of the article at the link below.