Saturday, June 26, 2010
Thursday, June 24, 2010
Adjusting to the New Reality
What is the common denominator between a root canal, colonoscopy, giving blood and obtaining a mortgage? If you are buying a house, then the answer is you. I read an article as I was finishing my morning coffee that reminded me exactly what I was trying to avoid by writing the Mortgage Manifesto. (http://www.msnbc.msn.com/id/37831562/ns/business-real_estate)
There is an industry joke that getting a mortgage is like having a root canal. It isn’t a joke but a way to describe the reality of the situation to borrower. The article by Bill Briggs actually commented this….
“Even for successful buyers with sterling credit, seeking a mortgage these days feels like a simultaneous root canal and colonoscopy.”
I will not give away the article or point out my previous articles. I just suggest that you revisit previous articles to avoid as many sticky messes as possible. There was a lot of truth in this article; however I did have one objection. It was the comment on lenders being part of the whining during the process because they don’t have underwriting experience. The article didn’t mention that all the guideline changes have tied up the underwriters with extra processes and paperwork needed for a single loan. The truthful part is it has become more difficult for the loan officer to go to bat for buyers when underwriters see no grey area and buyers resist sending the proper documentation. Industry changes have made the stress seem like it out weighs the reward of helping a new homebuyer get into a house. All of the guideline changes, endless documentation and running around in circles ends up making everyone irritated. The lender/loan officer just happens to be in the way of the fire.
Another article on www.cnn.com wrote that “1200 prison inmates, including 241 serving life sentences, defrauded the government of $9.1 million in tax credits reserved for first time homebuyers.” This type of fraud and lack of crosschecking is the very reason it has become so difficult to obtain a mortgage. You have to prove everything which means document, document, document. These rules apply to everyone no matter the size of the home, credit score, size of down payment or homebuyer status. The industry has been burned and we all have to suffer together. If you are in the middle of obtaining a mortgage then remember to bring your positive attitude because there is a big prize at the end of your journey.
“When you come to the end of your rope, tie and knot and hang on”- Franklin D Roosevelt
“The artist is nothing without the gift but the gift is nothing without the work”- Emile Zola
“If you change the way you look at things, the things you look at change”- Dr. Wayne Dyer
There is an industry joke that getting a mortgage is like having a root canal. It isn’t a joke but a way to describe the reality of the situation to borrower. The article by Bill Briggs actually commented this….
“Even for successful buyers with sterling credit, seeking a mortgage these days feels like a simultaneous root canal and colonoscopy.”
I will not give away the article or point out my previous articles. I just suggest that you revisit previous articles to avoid as many sticky messes as possible. There was a lot of truth in this article; however I did have one objection. It was the comment on lenders being part of the whining during the process because they don’t have underwriting experience. The article didn’t mention that all the guideline changes have tied up the underwriters with extra processes and paperwork needed for a single loan. The truthful part is it has become more difficult for the loan officer to go to bat for buyers when underwriters see no grey area and buyers resist sending the proper documentation. Industry changes have made the stress seem like it out weighs the reward of helping a new homebuyer get into a house. All of the guideline changes, endless documentation and running around in circles ends up making everyone irritated. The lender/loan officer just happens to be in the way of the fire.
Another article on www.cnn.com wrote that “1200 prison inmates, including 241 serving life sentences, defrauded the government of $9.1 million in tax credits reserved for first time homebuyers.” This type of fraud and lack of crosschecking is the very reason it has become so difficult to obtain a mortgage. You have to prove everything which means document, document, document. These rules apply to everyone no matter the size of the home, credit score, size of down payment or homebuyer status. The industry has been burned and we all have to suffer together. If you are in the middle of obtaining a mortgage then remember to bring your positive attitude because there is a big prize at the end of your journey.
“When you come to the end of your rope, tie and knot and hang on”- Franklin D Roosevelt
“The artist is nothing without the gift but the gift is nothing without the work”- Emile Zola
“If you change the way you look at things, the things you look at change”- Dr. Wayne Dyer
Tuesday, June 22, 2010
Friday, June 18, 2010
Tuesday, June 15, 2010
Mogo :: Blog – Stop The Pain of Overspending » Blog Archive » 10 Ways To Tweet Towards Savings!
Share our secrets with all your friends. Pass this around, Share, Tweet, shout it out... Mogo :: Blog – Stop The Pain of Overspending » Blog Archive » 10 Ways To Tweet Towards Savings!
Wednesday, June 2, 2010
New Fannie Mae Requirements
As of June 1, 2010 Fannie Mae will require a 2nd credit report pulled on the actual day of closing prior to funding. This pull is to verify that the borrower's current obligations haven't changed. It was found that most foreclosures that resulted in the first 24 months was due to incurring new debt for the new homes. This is inevitably going to delay some closings. I encourage all buyers and sellers to keep their schedules open 3 days around the actual closing date. I cannot stress the importance of resisting temptation to buy anything for your home before funding.
If the credit scores drop more than 2% then it will have to go back to underwriting. If it drops below the allowed credit score then it will disqualify you form buying the house. Any new credit inquiries will have to be documented by writing letters. Simply applying for a credit card and not using it will force underwriting to add 5% of the high credit limit to the bottom line even if the card isn't active. If your debt to income ratio was tight then you could be turned down!
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