You gotta have both

You Gotta Have Both

After high school I joined the Marine Corps, it was by far the most intimidating time in my life other than getting married. The combination of excitement and nervousness, is the mixed high one experiences in life that has an effect on you forever. Going into the Marines I was 5’7” and a mere 147lbs exiting I was 5’11’ and 205lbs and felt I could move a house by myself and not referring to a real estate sale. The Marine Corps training took men and women from all different shapes and sizes, speeds and strengths, to develop as close as possible the perfect Marine.

So you’re wondering “why am I reading about the mortgage guy’s Marine Corps history in a mortgage blog”. Well Continue reading

What Do You Need Now

What Do You Need Now!

On the mortgage side of the real estate transaction we see many different types of people. It really is amazing that I find there is no difference in orientation, color, or even wealth. The differences I do find in people is in attitude, discipline, and ‘coachability’. I feel these are the things that make people different. These are the things that truly matter when taking a borrower from application to the closing table.

There is a section on the loan application (Fannie Mae form 1003 which is referred to as a “ten o three”) where there are a series of questions asking the borrower and co-borrower about, sex (m or f), race, and if you are hispanic or non-hispanic. I have found this set of questions very offensive and they really upset me to even have to ask them. I don’t care if they are male or female, or purple or green, I don’t care that they are Hispanic or not. All I care about, is can I really help them get into a home. I want to know about their attitude, are they buyers on an emotional high and buying too much home or are they reasonable with their purchase and budget.

Just as importantly, are they coachable, even when I tell them, do not put cash in their accounts, don’t apply for credit for the new furniture, don’t move money around from account to account without first talking to me about it. Don’t go on a shopping spree loading up on the credit cards. This may sound crazy but even wealthy people do it. Filling up the credit cards, changes your credit score and could affect the final rate you’re offered.

Most importantly I want to know how disciplined they are, are they going to get their documents to me in a timely manner, do they have all their paperwork ready to go or do they even know where to find their stuff?

The undisciplined people are the hardest to work with. They are the complainers.

They spend more time and energy trying to figure how to avoid getting you documents than trying to figure out where they put them. These are the people who can’t find the shoes they took off the night before. These are the people that cannot tell you how much money they make or how much they spend a month on bills.

It seems like every day the government is coming out with new laws that drives us absolutely nuts, but these new laws have the undisciplined consumer on the edge of suicide. Some of these so called laws are designed to help actually cause more stress and problems because the people who write these rules are clueless when it comes to reality.

 

The law makers most often have no idea how to even monitor or measure the success of the rules they implement and specifically, how QM’s 3% cap on points and fees is affecting credit availability. Lenders continue to argue that the cap is too restrictive and even the National Association of Realtors began surveying mortgage underwriters on the QM rule last year and found that roughly 47% of the respondents said they were unable to close a mortgage during the first quarter of 2014 because of the QM rule. That number grew to 64% of respondents who said they could not close a mortgage in the third quarter, according to the latest report available.

“There’s a small number of people who aren’t getting houses because you just can’t document the repayment proof. You just can’t get there no matter how hard you work the loan,” said Robert Messer, executive vice president and chief financial officer of the $2.5 billion-asset American National Bank of Texas based in Terrell.

It’s bitter sweet to know that we are not alone with this issue in our state and that the problem is nationwide. There are a lot of people who do struggle through the loan process. Documentation is the most irritating part of the process were as the underwriters actually go through every line item on your bank statements. They need to prove that you do not have any other debts which you are paying for, that do not show up on the credit report or that you are receiving cash of any sort which may seem illegitimate to them. I guess the proper term would be to say undocumented.

All this leads to back to the loan process where, as the loan originator has to go back to the borrower requesting more documents to justify a debt or check written out of the borrower’s bank account. These items often snowball into bigger events such as getting complete documentation of divorce papers or probate and estate documents. This further adds frustration with having to deal with other family members or ex-relations.

Something as simple as a deposit into ones bank account can lead to several questions from an underwriter to satisfy the rules with in ATR/QM (ability to repay and qualified mortgage). For us, having to call the borrower whether disciplined or not the first words out of their mouth is almost always “What do you need now!” The sound of frustration and irritation.
This is something that no matter how much we prepare a consumer at the beginning of the mortgage loan process, it seems to be a surprise to them when we reach that point in the process. It’s very common for most people to underestimate what we have told them in the beginning. We find that if the consumer is coachable,then we can get most anyone into a home, sometimes it just may take a little more time than we first expected.

 

Its Not Mine I just Co-Signed

It’s Not Mine I just Co-Signed

It’s absolutely shocking! From all sides it just continues to amaze me how many people do not fully realize the impact of co-signing a loan. Confusion and shock hits their faces when I pull their credit report for a mortgage loan and I tell them we have a problem because they have a collection for non-payment of $500 to ‘insta-check’. It’s an instant explosion “What the heck are you talking about?” So Continue reading

Tax preparers

TAX Preparers

I wanted to get this short note out about tax preparers, the people or companies we hire to do our taxes. I know most of you are thinking about the holidays and really do not want to think about tax season in what seems like so far in advance. However I wanted you to think about it just for a moment in hoping it triggers a good thoughts for you as this year comes to a close.

So first of all, who we hire is important. I am not sure if I am more fortunate or not that I get to see all the differences in the people and companies which prepare your tax returns. I have seen good CPA’s and bad; I have seen great certified tax preparers and some very bad ones Continue reading

Did you select a stooge

Did You Select A Stooge

Do we really know who we are working with? Most of us see this everyday where we work. Some people are more than capable of doing their own thing, having the ability to succeed on their own. Then there are those that have their heads up in the wrong place. I find it amazing that we can see these differences in the people around us but when we are looking to purchase a home for ourselves we can’t see the forest through the trees.

Selecting who we work with, is more than just walking into a real estate office and meeting the “On Duty Agent”. What do we really know about them? Here we are, about to make the biggest financial decision in our lives without out making a single inquiry as to their ability and success.

It may be OK to work with Continue reading

Predator or Prey

Predator or Prey

I was not sure if I wanted to talk about fishing or hunting. If it was a fishing story, we might have talked about the biggest fish, the most caught or the ones which got away. Either way it might not be believable. So instead we are going hunting.

For my animal lovers don’t run away, I promise I won’t upset you or my youngest son will have my head on a pike.

Predatory lending practices are Continue reading

Licensed Professionals

Licensed Professionals

It seems to be everywhere today; signs, messages, commercials telling us to hire a licensed professional. You would think that that would be commonsense. But is it really enough in today’s world?

More often than not in a typical real estate transaction there are a multitude of problems or mistakes made by experienced licensed professionals. The issue is actually two fold; Continue reading

Make Your Loan Originator Think

Make Your Loan Originator Think

 Make your loan originator think when you are sat with them as it is their job to get you the right mortgage loan for you. Most often when I sit with couples looking to get a mortgage loan they are so excited about just getting qualified, that they never ask if there are any other options available to them than what is being presented to them.

A loan originator’s job is to find the best program for them. Sometimes figuring out the best program takes a bit of digging into on both sides of the table. It is very typical for a Loan Originator to just simply fill out the Fannie Mae 1003 form (standard loan application) with the borrower. Typical loan originators Continue reading

Mistaking Good for Bad

Mistaking Good for Bad

Many people are mistaking good for bad and I am continuously seeing good people making bad decisions because they believe the advice they have been given from a person they have been working with for years is correct.

Let’s take a look at what I am trying to convey to you without losing your interest. What I want to do is tell you how to better protect yourself. We all have heard the story about how to boil a frog without the frog knowing it. If you throw a frog into a pot of hot water he jumps out, but if you put the frog in nice water and over time slowly raise the heat he will relax and pass out allowing you to cook him.

Today I see more people being treated like frogs Continue reading