Dec. 22, 2012: Borrower education is important; VA loan limit site; ULDD information; did state troopers really say that stuff?
bought a really cool shovel. It was ground breaking." What
isn't so clever is the "borrower brutalization," as one
veteran called it, that we see. He wrote, "I have been through
two purchase transactions in the last twelve months, both with
an extremely competent originator. She did a great job
specifically of guiding me through the paper trail process,
and explaining the SAR issues she faces. It was really
crazy. I, like many others, believe that the fear of
making a mistake at all levels of the credit process is
really crippling to the industry and to the housing recovery.
Whoever is making the rules is far away from the actual
process and I am certain that well qualified borrowers are not
able to participate in the intended QE3 stimulus of low
mortgage rates. Someone should get the Keynesian stimulus guys
at the Fed together with those in Congress who are pushing for
more documentation - they appear at cross purposes." [Editor’s
note: I agree with the “crippling to the industry” comment but
the “housing recovery” seems to be doing pretty well. And
continued mention of rising values in the press, which is what
regulators and politicians see, does not help the argument.]
And now, briefly, back to the broker and banker discussion. "I
have seen a lot of back and forth between bankers and brokers
in your blogs. Among other things, I man the scenario help
desk for our company, so I work with our salespeople on both
brokered and banked loans. One thing I can honestly say is
that the service level provided to the client is entirely
based on the individual salesperson and is not contingent on
the company they work for, outside of whether they have
received the proper training at some point in their career.
I think the SAFE Act has ensured that all salespeople,
brokered or banked, now receive an adequate base of training
in order to get licensed, which wasn’t the case before. Those
who are trained beyond this base (or seek it out themselves)
are usually the top salespeople. I’d bet that most who read
your blog (or any industry blog) probably value knowledge
enough to seek out professional education when needed. It
turns out that knowing your salesperson, or having a reference
to someone who is trustworthy is probably the best way to go
as a consumer. As for the level of service a salesperson gets
from the lender, I think there is some truth to the idea that
a banker will get faster underwriting and closing times, but
not everywhere. Most of our salespeople here will refer a
loan away if it needs to be brokered due to an extra 3 weeks
in underwriting at another lender (our total turn time is
about 45 days, application to closing). However, my friend
recently closed his refinance with a Wells Fargo branch (he
knows the MLO, personally) right around day 100, so not every
lender is faster. Correspondent lenders typically tend to be
the fastest because their entire revenue model is dependent on
turning over the pipeline as efficiently (not necessarily
quickly) as possible."
Regardless of who employs the originator, as the commentary
pointed out a week or two ago education is key. I
received this note from Justin L. out in California. "The
reason why I am e-mailing you is because I agree 100% about
how 'A successful LO is educating their clients on what to
expect with today’s current situation in the Lending
Industry.' I created a binder with pictures, examples,
explanations, definitions, and bullet points on how a loan
works, what is the secondary mortgage market, and what to
expect while going through the loan process about four months
ago. (I am new to this industry having only been licensed in
NMLS for six months.) The reason I agree with this position is
simple. I accept the responsibility that I think is
inherent to this profession and I refuse to hide behind the
old mantra, 'Well, the consumer should have known what they
were getting themselves into.' My responsibility to my
clients is to educate, the end result is they secure a loan to
buy a part of the American Dream. (I feel a better educated
borrower is a more responsible borrower.) If I did my job,
then my client and their family will have a home that not only
they can call their own, but they will be able to afford their
monthly mortgage payment and stop living paycheck to paycheck.
My attitude towards my profession stems from my experience as
a US Army Recruiter. It was my duty for almost four years to
help shape the lives of very young Americans in a way that
they and their families would benefit from the experience for
the rest of their lives and never have any regrets about their
And, "I especially liked the comments on setting expectations
with borrowers and realtors in today lending environment.
Unfortunately borrowers and most Realtors don't remember
anything you tell them at the beginning of the transaction and
are STILL surprised when you become their proctologist. I
always follow up my conversation with an email reiterating
the conversation and freely forward it back to them
later in the transaction as a 'friendly' reminder."
you for the input, and now on to the ever-present agency
news. As always, it is best to read the actual bulletin
for full details.
mentioned this before, but as a reminder the VA has
published its 2013 county loan limits, which apply to
all loans closed from January 1 to December 31, 2013. Out in
California, for example, all counties apart from Alameda,
Contra Costa, Los Angeles, Marin, Mono, Monterey, Napa,
Orange, San Benito, San Diego, San Francisco, San Luis Obispo,
San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Sonoma, and
Ventura Counties in California are subject to a limit of
$417,000. Here is an itemized list: http://www.benefits.va.gov/HOMELOANS/documents/docs/2013_county_loan_limits.pdf.
is revising its guidelines on Verbal Verification of
Employment for employed borrowers and business existence
verification for self-employed borrowers. These are both
required to be completed by a third-party source where
applicable after the note date but prior to the loan delivery
date. Lenders are also required to represent and the warrant
that all purchase document requirements have been fulfilled as
of the delivery date, as Freddie will not consider the loan
eligible for purchase otherwise.
As was announced back in November, the expiration date for the
Relief Refinance Mortgage program will now be based on the
date on which the loan’s application was received rather than
the note date. Relief Refinance Mortgages are still slated to
expire on December 31, 2013.
Freddie is also updating requirements for secondary financing
documentation to provide more flexibility when documenting
terms, fees and costs, and evidence of subordination of
secondary financing to the first lien. The Seller Guide has
been updated to clarify that all requirements relating to
secondary financing apply to all financing subordinate in lien
priority to the first priority.
As part of the FHFA’s Uniform Mortgage Data Program
initiative, the GSEs have published the Phase 2
specification for the Uniform Loan Data Delivery Dataset.
The specification consists of 19 data points, 15 of which were
optional under Phase 1 and one of which was optional for
Fannie but Conditionally Required for Freddie. The entire
Phase 2 specification will be mandatory for all loans whose
applications are received on or after March 1, 2014. For full
details, see the ULDD Phase 2 Notification from the Fannie
website. The Uniform Mortgage Servicing Dataset Overview and
January 2013 DU Release Notes have also been published and are
now available on the site.
In the continuing effort to provide relief in the wake of
Hurricane Sandy, Freddie has established several temporary
disaster policy guidelines. Properties in affected
areas with borrowers who were delinquent before the disaster
will need to be re-inspected, which will replace the next
regularly scheduled monthly exterior property inspection.
Properties with current borrowers are also required to have
their exteriors inspected. With regards to reimbursement for
inspection costs, the servicer will be reimbursed up to $20
per delinquent borrower’s property inspection and up to $10
per current borrower’s exterior inspection. For borrowers
transitioning from forbearance to trial period plans,
servicers must determine whether or not their financial
circumstances continue to be adversely affected by the
hurricane based on a property inspection and verbal
confirmation from the borrower. Based on the findings,
servicers may offer the borrower a new HAMP or Standard
Modification Trial Period Plan or obtain an updated Borrower
Response Package to re-evaluate eligibility for either of
Fannie Mae has published four “Quick Guides” for those
who seeking additional information about the Uniform Loan
Delivery Dataset, all of which are available on the ULDD
the most recent guides cover mapping data on Loan Delivery
reports for whole loans and MBS pools and MBS and Cash Loan
Schedule of Mortgages. The DU Version 9.0 FAQ has also been
updated and can be found at
are actual comments made by South Carolina Troopers that were
taken off their car videos:
"You know, stop lights don't come any redder than the one you
just went through."
2. "Relax, the handcuffs are tight because they're new.
They'll stretch after you wear them a while."
3. "If you take your hands off the car, I'll make your birth
certificate a worthless document."
4. "If you run, you'll only go to jail tired."
5. "Can you run faster than 1200 feet per second? Because
that's the speed of the bullet that'll be chasing you."
6. "You don't know how fast you were going? I guess that means
I can write anything I want to on the ticket, huh?"
7. "Yes, sir, you can talk to the shift supervisor, but I
don't think it will help. Oh, did I mention that I'm the shift
8. "Warning! You want a warning? O.K, I'm warning you not to
do that again or I'll give you another ticket."
9. "The answer to this last question will determine whether
you are drunk or not. Was Mickey Mouse a cat or a dog?"
10. "Fair? You want me to be fair? Listen, fair is a place
where you go to ride on rides, eat cotton candy and corn dogs
and step in monkey poop."
11. "Yeah, we have a quota. Two more tickets and my wife gets
a toaster oven."
12. "In God we trust; all others we run through NCIC."
(National Crime Information Center)
13. "Just how big were those 'two beers' you say you had?"
14. "No sir, we don't have quotas anymore. We used to, but now
we're allowed to write as many tickets as we can."
15. "I'm glad to hear that the Chief (of Police) is a personal
friend of yours. So you know someone who can post your bail."
AND THE WINNER IS....
16. "You didn't think we give pretty women tickets? You're
right, we don't. Sign here."
you're interested, visit my twice-a-month blog at the STRATMOR
Group web site located at www.stratmorgroup.com.
The current blog discusses the role of the IRS and REMIC’s in
the current credit crisis. If you have both the time and
inclination, make a comment on what I have written, or on
other comments so that folks can learn what's going on out
there from the other readers.