Issaquah Undressed

Mortgage And Loan Officer Tips

   Photo: Your blog writer and grandkids.

It’s been a while since I have made note of this: we own a small mortgage company. I bring this up as the industry has gone through tremendous change both nationally and in Washington State.

I provide you a list of important tips for you.

1– Mortgage Company Loan officers are generally independent contractors. They often pay a flat fee and/or a file fee to their broker, keeping the bulk of the fees for themselves. This gives them the ability to charge what they want on your loan.

2– In these times of greatly reduced business, some loan officers want to make a killing on one loan (like yours) while others are building a reputation of being competitive.

3– My experience is that online mortgage companies aren’t your best source of loans, even if they quote a good rate. Many just sell your name as a lead, taking a piece of the pie. They care most about closing you and least about you as a source of referrals.

4– Using a lender referred by a real estate agent is the best way to keep the loan officer in the mode of being competitive. It also places your loan as a high priority. The reason, the loan officer wants to look good to the real estate agent, hoping to deserve a steady stream of mortgages from the agent. I built my career as a loan officer on this concept. I had agents that trusted me.

5– This is a bad time to use a part time loan officer. Even me. People that want me to do their loans don’t get me. I know it is in their best interests to have me refer them to a competent loan officer. The lesson is important here, don’t use a loan officer that is part time.

6– In many cases, especially first time home buyers you may be best to use a loan officer that can quote FHA loans. Actually, use one that is very familiar with FHA.

7– Don’t go with the cheapest rate quote lender. Rates these days are volitale. By the time they take your ap rates will have changed. You are prey in the waiting if you choose a lender by rates. The chances are almost 100% you won’t get the rate you are quoted if you shop and pick that way.

8– Don’t be afraid that rates are too high to buy. They are higher than in recent months. However, prices are buyers market prices in most of the Puget Sound.

9– Don’t go shopping without a full loan approval. That means they have drawn your credit report and submitted you to an underwriter.

10– This may seem to contradict #9 – don’t go get a mortgage approval without having done some window shopping. You should know what neighborhood and price range you are happy to own. Do drive byes, pick up flyers, drop in on open houses (tell the agent you have an agent so you don’t get high pressured too soon), search the local webisites that have MLS search. Then talk with an agent for a lender referral.

An Educated Look At The Mortgage Mess:

This isn’t short but it is informative. An 83 minute panel on the problem and solutions.

“Click for Video on How We Got Into this Mortgage Mess and How We Get Out.”

• Alan Blinder, Professor of Economics and Public Affairs, Woodrow Wilson School, Princeton University
• Zanny Minton Beddoes, Economics Editor, The Economist magazine
• Peter Orszag, Director, Congressional Budget Office.

Location: Princeton Club of New York. Co-sponsored by the Woodrow Wilson School of Public and International Affairs, Princeton University, and The Economist Magazine

Tags: mortgage, implosion, bubble

If You Know Someone Who Is Thinking Of Walking Away From Their Mortgage -

If You Know Someone Who Is Thinking Of Walking Away From Their Mortgage -encourage them not to.

I have seen many businesses pop up to make money helping people come to grips with the mortgage crises, where the end result is walking away. The message is, hey just do it.

If you know someone thinking of this tell them not to do that. There are a lot of moral reasons not to, lots of reasons to buck it up, and a reason Fannie Mae warns:

From Kenneth Harney: “

The country’s two largest sources of mortgage money have a blunt warning for anyone thinking about joining the growing “walkaway” trend, where homeowners stop making payments and months later send the house keys back to their lender: You will feel the pain.

On March 31, Fannie Mae sent out new guidelines to lenders intended for walkaways and other foreclosure situations. Fannie will now prohibit foreclosed borrowers from getting another mortgage through the giant investor for five years, unless there are “documented extenuating circumstances.” In those cases, the mortgage prohibition is for three years.

Even after five years, borrowers with foreclosures in their files will be required to make at least a 10 percent down payment, and will need minimum FICO credit scores of 680.

Freddie Mac, Fannie’s rival, counts foreclosures as major credit blots for seven years, and a senior official said the company is now aggressively pursuing some walkaway borrowers “to preserve our deficiency rights”

Some people think take the easy way out: this one may not be so good.

Tags: walk+away, foreclosure, mortgage

So The Fed Made A Cut, So What?

What is the result to the mortgage consumer, really, because the Federal Reserve Board cut the federal funds rate -.75%.

We had a mimi cut in mortgage rates that lasted it seems only hours.

The big benefit is how the banks reacted in the Prime Lending Rate; from 7.25% to 6.50%. It’s the largest single drop since 1991 – (from 7.50% to 6.50% on 12/23/91); and, the lowest the Prime Rate has been
since 09/19/05!!!

This does affect some ARMS and most of your seconds and lines of credit. New or existing of these should go down proportionatly on the next adjustment. You credit card rates may go down also.

Tags: prime+rate, fed+cut, interest+rate

Here Today Gone Today

Yesterday I posted that rates were way way down and no one knew how long it would last. How long dit it last? A few hours. Some of our lenders upped rates 5 times during the day.

So what do you do if you missed the opportunity and want to be ready? Start the application. Have the loan in the system so if it happens again it is merely a computer transaction, fast and furious.

Mark this site. The first thing I do each day is look at rates. If I see the sub 5% is back, or close, I will post it here. Larry Cragun….. Remember I don’t do loans, just real estate sales, but we do own a company with select loan officers. Several of them serve people locally here in Issaquah.

Tags: interest+rates, issaquah

You Haven’t Been Thinking About Mortgage Rates Have You?

Here are a couple of articles from Las Vegas Undressed author, Mark Clawson to consider.

What does it mean when the Fed cuts rates?

I mentioned that weakness in the stock market can help mortgage interest rates

Tags: mortgage+rates, las+vegas, bond

There Are 0 Down Loan Programs

Recently I received a comment implying one had to put 20% down to obtain a mortgage now. That is incorrect. O down programs are still availabe and FHA 3% down is important.

Mark Clawson who is licensed with our company in Washington and has run from the rain to Nevada writes on Las Vegas Undressed about a Fannie-Mae 100% program.

Here he describes detail to MyCommunityMortgage.

There are a lot of common sense programs if you can prove your income and have decent credit.

Marks local number is 206–999–2009

Tags: o+down, mortgage

This May Date Me, But I Will Forgive You For Your Youth And Inexperience

In my teen age days there was a song that wouldn’t make the charts today, it was cute and fun not loud and dumb. It was called Mr. Custer. It goes like this.

(That famous day in history the men of the 7th Cavalry went riding on)
(And from the rear a voice was heard)
(A brave you man with a trembling word rang loud and clear)
What am I doin’ here??

Please Mr. Custer, I don’t wanna go
Hey, Mr. Custer, please don’t make me go
I had a dream last night about the comin’ fight
Somebody yelled “attack!”
And there I stood with a arrow in my back.

Please Mr. Custer, I don’t wanna go (forward Ho!!)–aaww

SPOKEN: Look at them bushes out there
They’re moving and there’s a injun behind every one
Hey, Mr. Custer-you mind if I be excused the rest of the afternoon?
HEY CHARLIE, DUCK YER HEAD!!
Hmm, you’re a little bit late on that one, Charlie
Hooh, I bet that smarts!

(They were sure of victory, the men of the 7th Cavalry, as they rode on)

(But then from the rear a voice was heard)
(That same brave voice with the trembling word rang loud and clear)
What am I doin’ here??

Please Mr. Custer, I don’t wanna go
Listen, Mr. Custer, please don’t make me go
There’s a redskin a’waitin’ out there, just fixin to take my hair
A coward I’ve been called cuz I don’t wanna wind up dead or bald

Please Mr. Custer, I don’t wanna go (forward HO)–aaww

SPOKEN: I wonder what the injun word for friend is
Let’s see-friend– kemo sabe, that’s it
KEMO SABE!, HEY OUT THERE-KEMO SABE!
Nope, that itn’t it
Look at them durned injuns
They’re runnin’ around like a bunch of wild Indians-heh, heh, heh
Nah, this ain’t no time for jokin’

Now here is my short re-do.

That famous day in history the men of the management of WaMu went riding on)
(And from the rear a voice was heard)
(A brave you man with a trembling word rang loud and clear)
Why did a stay workin here??

Please Mr. Killinger, I don’t wanna go
Hey, Mr. Killiinger, please don’t make me go
I had a dream last night about the comin’ flight
Somebody yelled “attack!”
And I felt like ther was an arrow in my back.

Please Mr. Killinger, I don’t wanna go (forward Ho!!)–aaww

SPOKEN: Look at them bushes out there
They’re moving and there’s an investor behind every one
Hey, Mr. Custer-you mind if I be excused the rest of the afternoon?
HEY CHARLIE, DUCK YER HEAD!!
Hmm, you’re a little bit late on that one, Charlie
Hooh, I bet that smarts! You should have taken that job with Boeing.

(They were sure of victory, the men of the WaMu employeary, as they worked on)

(But then from the rear a voice was heard)
(That same brave voice with the trembling word rang loud and clear)
What am I doin’ here?? I really could have worked for Boeing?

Please Mr. Killinger, I don’t wanna go
Listen, Mr. Killinger, please don’t make me go
There’s a Chase Manager a’waitin’ to lob, just fixin to cut my job

A coward I’ve been called cuz I don’t wanna wind up both broke and bald

Please Mr. Killinger , I don’t wanna go (forward HO)–aaww oh, no!

SPOKEN: I wonder what the Chase code for friend is
Let’s see-friend– kemo sabe, that’s it
KEMO SABE!, HEY OUT THERE-KEMO SABE!
Nope, that itn’t it
Look at them durned Human Resource hackers.

They’re runnin’ around like a bunch of wild Indians-heh, heh, heh
Nah, this ain’t no time for jokin’

Please don’t sell to Chase, please no no no nono.

Please you know what WaMu stands for: Washington Mutual

If you sell to Chase it changes to MaMu: Manhattan Mutual.

We don’t want no stinkin MaMu…Larry Cragun

I Encourage You To Use Your Real Estate Agents Loan Officer

I think that owning a mortgage company gives us an important insight. There are different degrees of skill level and product knowledge from one loan officer to another. We know this as we had as many as 100 loan officers at a time. Probably the single best decision you can make in picking a lender is to contact your Realtor (c) and get one or more recommendations for who you should use for a mortgage.

The call to the lender should go something like this. “Hi Joan, Larry Cragun, Realtor gave me your name as someone I could trust to do a good job on a mortgage for me”.

This accomplishes several things. The loan officer knows his total relationship with the Realtor is at risk. That is the way it is in real estate. No agent wants his or her transaction to fall apart because of a sloppy or unskilled lender. Even a good loan officer that gets too busy and goofs up closing, or is late to close, or doesn’t deliver the rate, term, fees, or program promised is in danger of losing all future business from the Realtor. It should play a big role in assuring you delivery as promised, a decent rate, and priority attention.

If any loan is going to be neglected or procrastinated, it won’t be one with a real estate agent involved.

So your job is to lock in a relationship with both the agent and the loan officer as a team. Communicate with the real estate agent how it is going, how it went.

I don’t do loans anymore, I don’t feel I am your best choice. But if I am your agent it is my job to make sure the person handling your financing is a professional in every way. So if you bring an unknown lender to me, or to any agent in fact, be prepared for an effort of persuasion to use a loan officer that agent knows is skilled.

What do I do every time I am asked for an out of area referral on a loan officer, I call a real estate office in that area. I ask the receptionist who is the top Realtor that I could speak to. I ask the real estate agent, for a referral of a lender. I do exactly what I suggest you do.

So, please do as I ask, I want you to have a good lending experience.

Larry Cragun

PS: You are welcome to call me for a referral, I will make the call for you.

An In Depth Look At Reverse Mortgages

The Reverse Mortgage Issue is picking up steam. I began covering this topic on our Real Estate Undressed and Mortgages Undressed blogs in 2006. I first posed the topic unsure of it but interested. In over a year of review I conclude, it can be a great help to many people. There is an FHA version that is somewhat restrictive. Like in regular mortgages, there are conventional and Jumbo Reverse Mortgages.

The one thing to watch out for is the fact the costs are high enough you should expect to keep the loan for 7 years or more. It is a loan.

You might find some recent comments interesting:

From Peter G Miller

I am not part of the reverse mortgage industry. I am a journalist and have certainly discussed the matter of negative amortization. As an example, I wrote on August 1st that:

“With all the news about failing lenders, you don’t hear much about problems with reverse financing.

“The reason: We’re not going to know how risky reverse mortgages are for a number of years.

“Reverse mortgages are really nothing more than negative amortization financing. Monthly payments do not cover the interest cost, so the unpaid interest is added to the loan balance. Of course, with a reverse mortgage there are no required monthly payments at all.”

My reverse mortgage blog — BestReverseMortgage.com covers reverse mortgages from an independent perspective and routinely discusses subjects not found on lender sites.

Craig Castle Says:

I think the term “risk” is the wrong one to use with regard to reverse mortgages. Because they are non-recourse loans, there really is no “risk” as such to the borrower. But, it is true that interest rates, which change, effect the overall cost of reverse mortgages.

You are correct to say that a reverse mortgage does not make sense for everyone, and that the length of time the borrower plans to remain in their home is an important consideration.

The truth, however, is that many older Americans have few other assets available to help ease financial problems. With residential real estate losing value over the last year, it is not a good time to sell. And those who do, will not find affordable rentals, either.

Reverse mortgages allow seniors to access equity without losing their place to live. By saving the cost of paying for other housing, they can often recover the cost of a reverse mortgage loan.

Peter runs a great website, I link to it as well, but I have to disagree with this comment… “The reason: We’re not going to know how risky reverse mortgages are for a number of years.” Yes, reverse mortgages are neg am loans but remember the lenders are only allowing seniors to take roughly 60% of the equity out of their homes. These arent the 90% LTV neg am loans that we have seen the past few years. It doesnt get much better than a 60% LTV loan with a Gov gaurantee even with neg am.

1. Just my two cents……
2. This would apply to FHA Reverse Mortgages
3. Karen of Loan Smart Says:Never fear. Just attended the NRMLA (National Reverse Mortgage Lenders Association)conference in San Diego this month and heard from the director of HUD that they are working on decreasing the up front costs for a reverse mortgage. This product is one of the best things ever offered for seniors and can dramatically change their lives for the better.

Philip Vernot Says: With so many Seniors struggling to make ends meet combined with the adage “You can’t take it with you”, a reverse mortgage makes a lot sense for many of the Seniors today.

John of Reverse Morgage Daily Says Larry, The costs are higher with a reverse mortgage but remember half of the costs are due to the 2% MI premium which offers the borrower protection if they end up being updside down on the house. As the reverse market evolves you will start to see the origination fees become lower as lenders start to pay on the back end.

1. Tom Evans Says:As Marketing Director for the Senior Lending Network, I have had a chance to speak firsthand with literally thousands of seniors who have taken Reverse Mortgages. In the overwhelming majority of cases, seniors have changed their lives for the better with a reverse mortgage. Many, in fact, go so far as to say that their RM “saved their lives”.I came into the mortgage industry from an entertainment background, and at first, I too thought that Reverse Mortgages were “too good to be true”. But to quote one of the testimonials from our latest campaign - “This is one of those things that IS good and IS True, and the government is backing it.”I was a skeptic, but I would proudly recommend a reverse mortgage to anyone in a position to benefit from it - even my own parents. Thanks………………………………..Click Here for those written on Real Estate Undressed.com …..and Here for those on MortgagesUndressed.com