Loan Qualification Standards have changed. Do you know the 3Cs?

By
Mortgage and Lending with Guild Mortgage Co - Oak Harbor WA

Three major concerns in mortgage loan underwriting have again come to the forefront with underwriters. Those three items, Credit, Collateral and Capacity are the three legs of intelligent underwriting in todays Real Estate Mortgage industry. What are some of the things that effect these three legs and what changes are new (again) in the consideration of underwriters. You can read the entire post here in my post on Eugene Loan Guy.

I would have thought that some of these points were just common sense, but as is evident with the foreclosure rate and amount of defaulting mortgage loans, obviously, common sense didn't have a lot to do with underwriting in many cases in the past few years.

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Location:
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Groups:
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Rainmaker
565,568
Mike Saunders
Lanier Partners - Athens, GA

Fred - simply put, looking forward to your next installment on the Eugene Loan Guy.

Jan 22, 2009 10:52 PM #1
Rainer
171,765
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Mike - I don't think you could have made a nicer comment. Thank you.

Jan 23, 2009 01:26 AM #2
Rainer
16,295
Sean Keene
Keller Williams - Salem, OR
Realtor - Salem/Keizer

Fred great information. I find dealing with people some times the simplest concepts are the hardest to explain and get them to understand. Well done.

Jan 23, 2009 01:55 AM #3
Rainmaker
671,751
Sandy Shores FL RealtorĀ®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Hi Fred, Loved the link to your blog. Great idea! I always learn so much from reading your posts.  You would think that common sense played a part in getting a loan, but as you indicated, that's why we're in the mess we're in today - no common sense in years past!

Jan 23, 2009 04:48 AM #4
Ambassador
273,238
Eleanor Thorne
Equity Resources - Cary, NC
Equity Resources 919-649-5058

I like the new format - hope that works for you!

Jan 23, 2009 04:59 AM #5
Ambassador
2,870,233
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I had an underwriter tell me recently that she used to give the okay on folks with another "C" Caution, but that she no longer is doing that.  I wonder how my "caution clients" failed to make their payments.

Jan 23, 2009 07:09 AM #6
Rainer
171,765
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Sean - KISS is always a good way to go. Especially on those times that someone is really acting the stupid part.

Sandy - Thank you. I think I will probably do a lot more linking to my blog in the future. Unfortunately, common sense was totally lacking in a lot of the lending that went on.

Eleanor - Me too.

Tammy - I would bet a very high percentage.

Jan 23, 2009 07:28 AM #7
Rainer
1,695
Marlene Wagner
Park Avenue Unlimited - Woodland Hills, CA

Fred, what a great well written article.  I know you must be a great loan officer to your clients as you truely have the ability to explain so very well.  I am 33 years in the mortgage business and pride myself in my ability to educate the borrowers.

Would you believe I am brand new to AR and this is my first response I've posted.  My first anything as I haven't even posted a blog yet. 

I think I must join this group.  I think I need to join the newbees group as well.

 

Jan 23, 2009 08:53 AM #8
Rainer
333,705
Danny Thornton
R & D Art - Knoxville, TN
WordPress Guru

Fred, as a former Branch Manager of one of the largest lenders around, I can tell you that common sense got thrown out the window and it became a free for all. Today's Special "Pick your Loan Criteria"

Jan 23, 2009 12:07 PM #9
Rainer
171,765
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Thanks Marlene - I hope you come back often. Let me know if you have any questions that I can help you with to get around the system.

Danny - You know, the stated income loan was a good product until it got used for wage earners and people that never paid anything on time in their life.

Jan 23, 2009 12:58 PM #10
Rainer
20,242
Eric McGowan
Moody, AL

Fred, great outside post and same for this one. Many people do not realize how complicated getting an approval can be now. Throw a little hair into the mix and it maybe near impossible. I also used to work for Countrywide and fast and easy used to be so easy to do. If one had good mortgage credit, overall good credit, and in the heyday a 660 score well "fast and easy" here we come. It was not always a bad thing as it expedited the process for current customers. Goodness, how times have changed and lets hope for the better.

 

Jan 25, 2009 11:36 AM #11
Rainer
171,765
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Yes Eric, I remember the "fast and easy." The last one I did with Countrywide was neither Fast nor Easy. Not all bad, but then not all good either.

Jan 25, 2009 12:24 PM #12
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Fred Chamberlin

Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant
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