Your Questions About Mortgage Loan Originator

Paul asks…

Does a mortgage underwriter review file then asks for stipulations, then ensures all stips are met?

In other words, once all stips that are asked for are met, the loan is funded?

John answers:

The conditions are usually set by someone who does that specifically. One job I had in the past was to review the application the originator entered, fix the mistakes and set the conditions. Then I passed it to a processor who would communicate them to the borrower. Unless something was off, the underwriter didn’t even see most loans. There are conditions associated with the borrower, the physical property and the title. Our processors review everything except the appraisal. There’s a team who does just appraisals. If the docs don’t meet the guidelines, the processor gives it to an underwriter. Once all the documentation is in order, the file goes to a closer who prepares closing docs. There are some lenders who have one person do the whole thing, but most big lenders are very departmentalized and many of their loans are never seen by an underwriter. “Desktop Underwriting” decisions most loans. Only the ones that need a human eye go to an underwriter.

So the answer to your question is, “Sort of.”

Mark asks…

Did financial institutions fail to verify income and the ability to pay before they approved Mortgages?

Until recently, borrowers could simply state their income. Mortgage brokers would often “fix” the necessary documents to obtain a no income loan. This led to an alarming number of homeowners in houses that never should have qualified for.

John answers:

Unfortunately, banks that originated loans were not too concerned with borrower’s ability to pay because they would sell off the loans quickly. It ultimately ended up being financial “hot potato” because whoever is holding these loans now are becoming insolvent and sinking the banking industry. There is a moral hazard that exists to this day because originators are not holding the paper. Real income verification can solve this problem. This lack of regulation has caused default and foreclosures record high and lowered home prices in many states such as Florida, California. During the past 2 years these 2 states showed the highest default and foreclosure rates in the country.

It’s not a secret that a high percentage of people fudge their credit applications. If you want to learn more about how to fix this mortgage mess please click here to check out abilipay.com to learn what important Americans have to say about toughening income verification and the ability to pay for all home loans in the U.S.

Joseph asks…

Can an unmarried couple get a mortgage loan if one has a good credit history and the other has decent income?

The person with the income has poor credit and the person with the good credit score has no income . We both plan on occupying the home.

John answers:

Yes you can, but they will always use the lower score.

As an FYI… per the Federal Trade Commission (FTC) http://www.ftc.gov/freereports , there is only one source for you to get a free credit report from all three credit repositories, “annualcreditreport.com”. Https://www.annualcreditreport.com/cra/index.jsp

Do not give anyone else your personal info without seeing them in person.

Make sure to price out your loan with your LOCAL banks and mortgage brokers only.
A lot people giving advice on here are also looking to give you a loan (it’s not advice, its advertising), if they are not local to you and you can’t get to them within 1 hour don’t fall for it. They say they are licensed in all 50 states, what does that mean? Which state do you have to look in first if something goes wrong? KEEP IT LOCAL; DON’T GET RIPPED-OFF BY SOMEONE IN WHO KNOWS WHERE WHICH YOU WOULD HAVE NO DIRECT ACCESS TO.

Remember Buddha’s advice:
“Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense.” You are the only “expert” you can trust: All brokers, and every other loan officer guru giving advice here with a .com or contact me at the end is “selling” you something (it’s not advice, its advertising). Don’t buy “it.”

When shopping for a mortgage, here are a few things to do to maximize your savings and time:
1. When asking for a Good Faith Estimate(GFE), tell each mortgage originator (lender) what interest rate to use so you can compare apples to apples (rate affects closing costs). This is probably a different thought process for you because you always shop interest rates on a mortgage right? Remember all mortgage originators have identical wholesale interest rates. If you shop the same interest rate among mortgage originators, it levels the playing field and discloses what they want to charge you for their time to originate and close your mortgage. It is similar to shopping for a car. Why does the exact same new car vary in cost from one dealership to the next? Some dealers want to make more profit than others.
2. Secure Good Faith Estimates from various mortgage originators within a 4 hour time frame (rate and pricing can change daily and even multiple times in one day).
3. Do not compare the prepaids, reserves, escrow, title charges, and government recording sections of the estimates; third part fees are not controlled by the mortgage originator.
4. Ask each mortgage originator to base the interest rate on a 30 day lock unless you need longer.
5. If the loan allows you to waive escrow (paying taxes & insurance yourself), let the mortgage originators know because this will affect closing costs.
6. If refinancing, let the mortgage originators know if you are pulling cash out. A cash-out refinance usually increases closing costs.
Your Biggest Challenge
The mortgage industry today has never been more unethical. The industry has produced several record-breaking years in a row regarding total origination and as a result, greed is driving the industry. Your biggest challenge is receiving a Good Faith Estimate that is provided to you in “Good Faith”! We spend more time showing consumers how mortgage originators are lying to them in regards to an estimate given! That’s right, lying! “Bait and switch” has become a prominent sales tool in the mortgage industry. Bait you in with a bogus estimate then switch things after you are hooked. This is so discouraging; banks and so called direct lenders have become some of the worst at this practice. Education is your biggest weapon against this practice. Take the time to fully understand closing costs and rates before proceeding.
You should know exactly how much the mortgage originator is getting paid by all sources (no matter where it comes from, it’s ultimately coming out of your pocket). Protect yourself by asking for and receiving prior to application and origination a written guarantee stating the TOTAL amount of compensation (YSP, rebates, commissions, kickbacks) that will be received and kept by the mortgage originator. This will help assure that your best interest is kept in mind.
Originating a mortgage is a service, not a product; compensation should not be based on the loan amount or interest rate.
All ethical, honest, upfront, transparent mortgage originators will be more than willing to provide you with a written total compensation guarantee in addition to the (GFE) Good Faith Estimate (focus on the word “Estimate” because that is exactly what it is, an estimate of charges) prior to originating your loan.

William asks…

Loan Officers Charge per point do they charge the fee other than that as well?

I want to know that lets say i have a loan of $100,000 and i am charged 2 points for that to get a lower interest rate would i be paying the LO fees other than that $2000 correct?
I need to know if i am about to refinance having $100,000 loan balance. The LO is charging 2 points for that is that all he would charge for the docs and all or he would charge another $xxxx fee apart from this?
Thanks alot everyone who has answered.I am a offshore leads vendor and giving leads to numerous companies who are paying me a share on each closing but i think i am paid very less your answers have helped me if anyone of you can share more view i would appreciate.

John answers:

Many additional fees involved in mortgage loans. Points are broken out as a fee for the loan(Origination Points) and as a fee to buy down the rate (discount points) Have seen the following charges added to closing docs and many are necessary depending on your state and the terms of your new loan:

Credit Report
Appraisal
Appraisal Review
Doc Prep
Title Insurance
Closing/Escrow Agent fee
Survey
Flood Insurance Cert
Loan App fee
Prepaids for tax, insurance, PMI, etc…
Overnight Fee
Tax Stamps
Recording fees
Deed Release Fees
Etc….

Not all apply in every case but a reputable lender or loan originator will disclose all possible fees and costs upfront. I would let them know that if something pops up at the last minute. You have no issue not closing and not signing that loan and they will not get paid. If they tell you to quit making your payments on the current loan or any debt you are rolling into the new loan than please beware. This is a tactic of the unscrupulous lender looking to force your hand at the closing table.

Good Luck!

Sandra asks…

Does anybody know about a new law in Minnesota about getting rid of stated income mortgages?

My wife and I are going to be moving this summer in order to attend a nursing school in Northern Minnesota. The houses that are available in our price range are either money pits or just plain old nasty. So we have decided to build a small 1,400 sq. ft. house that is designed the way we want it and is clean (unlike the other houses in the area) anyway we have run into a problem. Because we are full time students the only mortgage we are able to get is a stated income mortgage, meaning we don’t have to prove that we are going to have steady incomes when we move. Well, I got a call from our mortgage lady last week and she said the Minnesota congress just voted to pass a law making these types of mortgages illegal. She said we need to close on a home soon before the Governor signs this into law in order to get anything. Does anybody know anything about this? How long after the Governer signs this will it take effect? Where could I call / write to get more info? Congressman?

John answers:

Some Minnesota lawmakers and local home loan industry officials say laws need to be change to better protect home buyers from unscrupulous mortgage brokers. The first hearing on several proposals is scheduled to take place later this week before a Minnesota House committee

The Governor’s proposal will help protect consumers from mortgage fraud as the real estate market in Minnesota and nationally slows down, exposing more homeowners to potential problems. Mortgage fraud has increased in volume and sophistication recently, with new cases involving unscrupulous real estate agents, mortgage brokers, appraisers and title companies that conspire to complete transactions for loans that often exceed the value of the property.

The new proposals support the Guidelines on Nontraditional Mortgage Products that were sent to all licensed mortgage originators by the Minnesota Department of Commerce in December of 2006. The guidelines encourage lenders to make more meaningful disclosures and more careful underwriting to protect consumers from mortgage products they cannot afford.

As of yet, the law has not changed. There are however changes in the Federal CODE

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