MortgagesUndressed

This is the look of shock of a woman who realizes how different the rate she was quoted from what is on the closing papers. She doesn’t know what to do as she has to be out of her apartment in 3 days. Everone she knows has driven by the new home. What can she do? What would you suggest she do? Help her with your sound advice please.

Undress the competition with a pre-approval. Go through the process first.

If you are and this weekend finds your dream home on the market, you have the edge over the buyer that is merely pre-qualified. What is the difference? The pre-approval has either been reviewed by an uderwriter or has been approved by automated underwriting. Make sure your agent has you pre-approved. Beat the competing offer with your foresited approach.

This Woodbury lesson is for the first time home buyer. So you see the market going away from you. Prices are rising and you don’t qualify. What is the solution?

Woodbury would say, “Work Will Work When Wishey Washey Wishing Won’t”

Yep, go to work. Work on whatever is in the way. Also work on learning the mortgage game. Work on learning where affordable housing is and work on qualifying for it. Work on your income. Work on and work off your debts. Work on self control over your spending.

Pardon the Poem, some say pseudo poem.

Oh, your hopes are low

and your scores are lower.

Your wish for a home

sees a path slow, even slower.

But your body is strong

or you have brains - not brawn,

so in your quest for a home

just go to work - don’t worry.

So work is the answer and

get a new job or two.

Reign in the spending on her, on you.

Here the lesson is

work will work and carry you through.

Now, put those hopes on high

and from that new job gain hope

as work will work

when wishy washey wishing won’t.

Larry Cragun

Except, not the loan officer doing all the financing. He is overjoyed.
For the Santa Barbara Real Estate areas of Carpinteria Real Estate/Summerland Real Estate for Single Family Homes there were 7 that closed escrow in the last 30 days with a Median Sales Price of $919,000 and an Average Sales Price of $1,073,071.

This gives me an opportunity to get on my soap box. I attended a city task force meeting last week. It covered every aspect of our cities problems one could imagine. It is taking 240 plus initiatives to the city council as proposed actions.

When the public meeting to review the final draft proposal was opened for questions. I asked about two of the items I sensed there was little in the draft in the way of solutions.

One of the topics, traffic. The other I see as a problem most cities face. Housing that is affordable to those that work in our city. Our average income is over $150,000 per household. We have shopping, hotels, and terrific restraunts. Our merchants have a problem; it is difficult to find people to work here. Two of the people I interviewed last week drive over an hour to work for $14.00 per hour. They can’t afford to live here. I don’t know how they can afford to drive here.Home Depot told my wife they hire every one that applies, they are still short handed.

What are the solutions? Our task force seemed short of answers, as am I. Any ideas? Larry Cragun

This code is in many state laws now, and should be a matter of good business if it isn’t a law.

A mortgage broker or loan originator on behalf of a mortgage broker shall not charge any fee that inures to the benefit of the mortgage broker if it exceeds the fee disclosed on the written disclosure pursuant to this section, unless (a) the need to charge the fee was not reasonably foreseeable at the time the written disclosure was provided and (b) the mortgage broker or loan originator on behalf of a mortgage broker has provided to the borrower, no less than three business days prior to the signing of the loan closing documents, a clear written explanation of the fee and the reason for charging a fee exceeding that which was previously disclosed.

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The typical mortgage scam this refers to is quoting a standard program, then at the last minute coming up with a reason you have to go with a higher rate, exotic program.

This is the rest of the story to the article I posted on August 11th titled, If You Are A Rip Off Loan Officer”.

Because the borrower was in a bind, had to close the loan within a week, I have waited to finish the article. They asked me too, didn’t want the loan to not close. Doesn’t that tell you a lot?

This true story has a lot of lessons in it, yet it is a hard one for me to write. I hope you can tell I am an upbeat, positive, and full of hope type of guy. That person in me resists writing these types of articles. But at the same time, I began this blog to undress and make transaparent the home loan industry. This me, must write this article for you.

I was pretty upset with this situation August 11th and promised to expose this rip off loan officers name and all. I have all the facts documents and all. I will summarize them for you, you decide: Rip Off or Incompetency? In the end, it was the type of experience that give the mortgage industry a bad name, so does it really matter which it is?

This situation is a purchase. The borrowers were using a 1st and 2nd combination mortgage. They were given a good faith estimate showing they were to bring in $4700.

Five days before closing they received papers from the escrow company requiring $13,000.

Lesson number one: Require your loan officer to look at the papers first. Have them compare them with what they gave you. This would have found $1000 in errors and $1700 in things the loan officer would not have known about.

A big mistake was that the loan officer, I give her credit for it being a mistake, did not provide a good faith estimate for the second mortgage. It had an awful $1700 in fees, mostly to the lender. I dissaprove of charging for the second.

Another omission was an amout for property taxes. The loan officer just wrote TBD. This is a purchase. The amount of taxes were on the MLS listing. TBD is a slothful response and left the borrower with bad data.

The real shame is what the loan officer was trying to make on this transaction, almost $10,000. These borrowers have good credit, just needed a non standard loan, one hard to shop and compare for rates.

Had the loan officer cared about good will over the almighty dollar, had she been diligent and professional, none of this stress and uproar needed to happen. What professionals do, is fix it. Professionals deliver the terms and conditions they disclose in the good faith estimate. They make sure that they see the closing papers before the borrower, they fix their mistakes with a credit.

This mistake got fixed because I interfered. I found out the laws, that two were violated; the no good faith for the second and not disclosing the exact rebate up front. I threatened to turn them over to the state. Despite being told go ahead, they like me over there, a credit was issued for the errors.

Rip off or incompetency, greed or stupidity. You tell me. I won’t make you wait for my opinion - I say all of the above and it still ticks me off.

LarrY Cragun

It is very difficult for a loan officer to break into doing purchase business with a real estate agent. Why is that? It is because real estate agents have learned how fragile a transaction is. Loans must close on time or the whole transaction could blow up. Buyers have a set budget of money to use and if the loan officer makes a mistake now what? Real estate agents know a track record of dependability is critical.

If it is this important for a real estate agent, it should be important to you.

Larry Cragun

Thanks to TrassparentRE.com CLICK HERE

According to Dave Liniger of ReMax, speaking at the Inman Conference: Lending Tree has a 1% market share and an 83% brand awareness.

Your job Mr and Mrs Consumer, help that market share go down. You don’t want to be a lead. Not for any perks.

Q: If I buy a second home and move into it, and rent the old home, would that be fraud too?

A: Probably not. You would want to consider how long you had the first home’s mortgage and what you told that lender. It is your intent in that loan that will be important. Usually, if you had that mortgage 6 months, your intent to live in it as your primary residence would be probable.

Good Question.

Lar

      
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