How to Swim With the Sharks (and not get eaten alive!)

Getting a mortgage today is a lot like swimming in a pool filled with sharks.

My role is to help you navigate these dangerous waters and get you to the other side safely. Here are just a few of the sharks we'll need to watch out for:

Buy-Back Sharks

Most mortgages today are sold after the closing to large financial institutions like Fannie Mae and Freddie Mac. These gigantic companies are in business to make money... a lot of money. These sharks have been under a lot of pressure by the government lately, and they're circling the waters looking for someone to blame. The way they bite is through something called a "buy-back". Here's an example:

• You get a $200,000 loan from me and my company; we then sell your loan to Fannie Mae, Freddie Mac or another large financial institution
• There's one piece of paper missing from the loan file, such as the back side of a bank statement or a pay stub that wasn't copied properly (gasp!)
• The bank or financial institution that purchases your loan does an internal audit of your loan file and discovers the missing document
• The bank or financial institution forces me and my company to pay them $200,000 and buy back your loan

As you can see, one small piece of documentation can literally be worth the entire value of your loan! This means that you'll be asked to provide staggering amounts of documentation during the loan process because everyone in my industry is super-afraid of the buy-back sharks.

Government Regulator Sharks

The US government has basically recruited the entire financial services industry in its fight against terrorism through a law known as the Bank Secrecy Act. The Anti-Money Laundering provisions of the Act went into effect across the mortgage industry in 2012. These rules are commonly referred to as the BSA-AML rules. In short, the BSA-AML rules require mortgage companies, banks, and financial institutions to analyze each and every document received from you to ensure authenticity.  It will seem like you're disclosing and documenting every minute detail of your financial life when you apply for a loan!

Furthermore, an avalanche of 14 new or amended regulations has hit the mortgage industry in the last several years.  These include Regulations B, C, D, E, F, G, H, N, O, P, V, X, and Z.  (And no, I'm not joking!)

The way that these sharks bite is by imposing huge fines and/or criminal charges on banks or financial institutions who fail to comply. This often leads to bizarre requests when it comes to documenting your loan file.  It may seem like the underwriter is trying to make your life (and mine) very difficult... but the truth is they're just trying to do their jobs. 

What does this mean for you?

I can't make the sharks go away or tell them not to bite. What I CAN do, however, is jump into the water with you and help you get to the other side safely. This includes:

• Giving you a list of documents needed at the beginning of the loan process so that we're not asking you for a bunch of paperwork at the last minute
• Conducting my affairs in such a way that my whole team works together in harmony on your behalf
• Maintaining a high level of communication with you during the loan process so that we remove uncertainty and create a more pleasant mortgage and home buying experience for you

This is probably one of the most important financial transactions of your life. My commitment is to make this a pleasant and rewarding experience for you... in spite of all the sharks out there!