Tag Archives: loan officer

Your Questions About Mortgage Loan Application Form

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Charles asks…

Help!! Any loan officers or experience home buyers out there? Loan approval question/?

Why would my mortgage broker not update me on my mortgage application status daily? I am not the one to bug people twice a day either.The closing has already been scheduled at the lawyers office and the loan officer had the home appraisal done yesterday (the seller told me). Do I get the hard proof in the form of an approval letter or something? Would they even appraise the house if I hadnt been approved and ready to close? Why do you loan officers keep people waiting and on the edge of curiosity?

admin answers:

If nothing’s happening, or nothing that is worth nothing, that wasn’t already explained to you was going to happen, you may not get an update – daily sounds a bit ridiculous unless this is on an extremely tight deadline.

If there are issues or actions for you to take, or you are not getting return phonecalls, then your loan officer would appear to be dropping the ball.

I would think you should be updated on appraisal status and results and not have to ask if you are approved or not, so give your broker a call and get it all straightened out.

John asks…

Does denial of a loan harm my credit score?

My credit is excellent, but I’ve had difficulty refinancing because one of the owners in my Condo is suing the association.

I applied for a loan, and was ultimately denied — probably because of the lawsuit, but the explanation given was a form letter with a list of standard reasons. The box checked said “We do not grant credit to any applicant on the terms and conditions you have requested.” I have no idea what that means

The question is: WILL THIS LOWER MY CREDIT SCORE? By a lot or a little? and for how long? Should I bother objecting to the broker or lender?

ADDED DETAIL: The lender was taking a long time to process the application; My 45 day rate lock was about to expire. They kept asking for more documents, both related and unrelated to the lawsuit. (They even asked me to write a letter explaining my last three credit inquires, one of which was made by their own mortgage broker! for this application!) I finally told the broker that I would use an alternate lender that had refinanced other people in my building so he’d already investigated and concluded that the lawsuit was not a risk.
The original lender sent one more request for documents to my condo manager — maybe the broker had told them to cancel the application or maybe he didn’t? — Then a few weeks later I got the denial letter.
The original lender did NOT check the box labeled “Loan Application was withdrawn”

admin answers:

While credit inquiries do ding your score a few points, an actual loan denial does not hurt your credit/score.

Daniel asks…

husband hasn’t paid for mortgage in 2 mths. what the mortgage company said to us is “Once we receive and begin

your application and the documents we requested, some of the options that may become available to you include:
Repayment Plan, Loan Modification, Short Sale, Deed in Lieu of Foreclosure.” I know I don’t have a choice but can someone explain to me which path to take? Mortgage Co asking for budget form, income, and a letter explaining our situtation.

admin answers:

The key in working something out with your lender is very similar to qualifying for a home loan. The lender is assessing your ability to repay the loan and requires you to re-qualify in certain areas.

Must have qualified income
The hardship must be over
You must qualify for the lenders ratios

A certain percentage of income is allowed towards housing expenses and other monthly debts. The lender looks at both the housing and debt ratios. It is these ratios that the
lender does not tell you about until it is too late… And each lender has different qualifications, so there is no set guideline across the board.

We have trained mediators who know these ratios and know the appropriate way to submit a your case to your lender.

If you would like additional information, please feel free to contact me directly and/or visit www.2ndChance4Solutions.com.

Wishing you the best!

Ken asks…

I received an email clearly intended for fraudulent purposes. Who should I alert?

Judge for yourselves, is this creepy or what?:

Flag this messageUrgent (Please Respond Swiftly)Wednesday, October 8, 2008 9:22 PM
From: “James Gordon” Add sender to Contacts To: undisclosed-recipientsHello,
Are you a property owner in the United States? Do you have an existing home equity line of credit or personal/business with any US/CANADIAN Bank? I am Mr. James Gordon from James Gordon Designs London, UK. I write to solicit your assistance in working with me as my Payment Officer who can help me establish a medium of getting across to my customers in USA and CANADA as well as making wire transfers to you on my behalf. I made and Export furniture into Canada, America/Europe and have Clients who make bulk transfer of funds and due to large sum of money involved, they prefer making the transfers into an Equity Line of Credit account. If interested do get back to us with your details below and we will do furnish you with more details. You will be allotted 5-7% of total amount wired into your account.

PERSONAL INVESTMENT FUNDING APPLICATION FORM

First Name: Last Name:

Address: City: State: Zip Code:

***Mark “x” in the bracket below**

Own a House ( ) Rent ( )

Home Tel: Mobile: Email.

Social Security #.

Occupation:

Date of Birth:

Investment Amount:

Duration: 30 days ( ) 60days ( ) 90 days ( ) Above 90 days { }

**Mark “x” in the bracket below**

1. Are you a property owner in the United States Yes ( ) No ( )

2. Do you have an existing home equity line of credit or personal/business with any tire One US Bank? Note: Credit cards, mortgage loans, checking accounts are not accepted.

Yes ( ) No ( )

3. Provide line of Credit / home equity account number:

4. What is the credit limit on your line of Credit / home equity account USD$

5. What is balance presently owed on your line of Credit/ home equity USD$.

6. What financial institution is your line of Credit / home equity with?

7. What are the address and 1800 number of your financial institution?

I hereby authorize the investor to verify the above information for investment decision. I certify that the information is true and to the best of my knowledge.

Applicant’s Signature Date

************************IMPORTANT NOTICE***********************

This form must be returned with the following:

* A copy of beneficiary’s identification (Drivers License or International Passport) will be required. This is an investment program that offers 100% funding upon approval. This program is not a loan program and has no direct liabilities to the beneficiary.

James Gordon
29 Niton Street,
London, SW6 6NH.
http://www.timwood.com

admin answers:

You could report it to Fraud Watch:

http://www.fraudwatchinternational.com/report_fraud/report-fraud/

or to the United States Department of Justice’s site for Spam/Fraud email:

http://www.usdoj.gov/spam.htm

Lizzie asks…

Should I take my loan officer or mortgage company to court?

Our escrow was supposed to close on August 13, 2010. We would have been able to close on time, but the underwriter ordered some “desk review” of our appraisal and demanded more comps to support our price. The appraiser mysteriously got these comps after looking for DAYS–btw, we have not received a copy of this desk review yet. We ended up closing on August 17, 2010 ( 2 days after the state of California stopped accepting applications for the $10,000 home buying tax credit–California has apparently run out of funds). Do I have any recourse at all against the underwriter or my loan officer that lagged on ordering the initial appraisal and had us date some papers earlier so that she remains in compliance. I think it was the GFE or the appraisal order that had to be done within 72 hours of them running our credit. One of these forms was the one we were asked to change the date on.
Could I get the $10,000 that they cost me from a government program I would have qualified for? Does that even sound like a case?

admin answers:

The short answer is no, you can not sue anyone for refusing to give you money until they were completely sure they were willing to part with it. You can not claim a loss of anything because they had their money in their possession instead of yours.

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Mortgage Brokers

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When applying for a home loan, it can be difficult to ascertain your options and the best deal out there. Mortgage brokers can help you shop for the best loan for your situation.

Mortgage Brokers

A mortgage broker is an independent professional assisting homebuyers with their mortgage needs. Instead of a loan officer for a bank, a mortgage broker typically works with tens or even hundreds of lenders. This independence lets mortgage brokers hunt for loans that fit the credit history and particular lending needs of a person.

Lets assume you have less than stellar credit when you apply for a loan at ABC Lender. The lender pulls your credit report and determines you dont qualify for any of the loans offered by the lender. The lender is going to drop you like a rock and move onto the next potential borrower.

Now, lets make the same assumption regarding your credit score, but put a mortgage broker in the place of a lender. The mortgage broker is going to look at your credit score, income and overall borrowing circumstance. The broker is then going to give you options and a recommendation regarding the best loan for you. Instead of hoping to get financing, you are now in a situation where you are evaluating the best financing options.

Mortgage brokers can help anyone, but are particularly valuable in two circumstances. The two circumstances are bad credit and document overload.

If you have bad credit, even horrible credit, a mortgage broker is going to be able to hunt down loan options. Many people make the mistake of believing bad credit precludes them from getting a loan. It doesnt. The loan terms may require more points or a higher interest rate, but bad credit doesnt preclude home ownership.

For some borrowers, the monstrous amount of paperwork required in the loan process can be overwhelming. When you use a mortgage broker, the documentation is all taken over by the broker and his staff. In fact, mortgage brokers have people known as processors on their staff who do nothing but compile, organize and process all the documentation needed for loans. The do this everyday and are masters of the process.

The decision to use a mortgage broker is often a good one. A good broker is going to help you get the best loan while making the actual loan process a lot easier than going it alone.

Mortgage Brokers vs. Banks

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When it comes to searching for the right kind of mortgage to meet your needs, you will probably come across a decision about who you should borrow from: Do mortgage brokers or banks make better lenders?

A mortgage broker is a mediator that facilitates the process of acquiring a mortgage for individuals as well as businesses. Essentially, they are like home loan supermarkets. Their broad access to lenders as well as their wide offering of various programs makes them a convenient source of help for many borrowers. If you have less-than-perfect credit or are in unusual circumstances, mortgage brokers can still find you the type of funding you need. Mortgage brokers will charge a brokers fee, which you should ask about and take into account when calculating your initial payments.

Mortgage brokers will typically originate, process, and pass the loan on to a lender who will subsequently sell it to an investor. They take commission and will have higher closing fees. Beware of gouging, as brokers have full discretion on how much they want to charge the borrower for processing the documents necessary for the loan.

Today, about 20,000 mortgage brokerage operations account for more than 80% of mortgages are issued by mortgage brokers in the U.S. The convenience and resources they offer to borrowers is the key to their popularity.

The term mortgage banker refers either to an individual loan officer who works at a bank or to the bank itself. They specialize in originating mortgages and selling them to investors and continue to service them. Both the origination and servicing processes require fees, which are the two primary sources of income for mortgage banks.

A key difference between mortgage banks and mortgage brokers is that banks have more of a standardized and set approach to setting fees. Bankers are told what fees to charge and are told not to stray away from them. This allows for more stability and prevents the borrower from being surprised when it comes to discovering what the fees for the home loan will be.

Now the question is which is the better option? The answer is quite simple: Whoever gets you the better deal. It should be noted that while some borrowers enjoy the comfort and help of having a mortgage banker see them through the life of their loan (though not all do), while others do not mind either way. This discernment, along with a thorough comparison of deals that you can get from mortgage brokers and bankers, should give you a fairly clear idea of which path to take.

Mortgage Options for Self-Employed Buyers

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Self-employed homebuyers generally have more difficulty getting a mortgage, because of the way their income is reported and because they are often perceived as not having the job security of others if they get sick, for example, their whole operation may be down for the duration. Even self-employed real estate agents and mortgage loan officers encounter this roadblock en route to mortgages. But there are a number of options available to those who are self employed and trying to secure financing to buy a home.

If you have good credit and enough money to pay a significant down payment, you can use so-called low-document and no-document loans, two of the most popular options for self employed borrowers.

Low-doc loans require a larger than normal down payment, but in exchange; you dont have to verify your income by showing tax returns and other financial paperwork. Usually a credit check and one or two bank statements is sufficient documentation. The process is streamlined, simple, and advantageous for those whose income may look smaller on paper than it actually is.

The closely related no doc loans require no documentation of income at all. These are one of the easiest loans of all to process, so if you qualify for one of these, your mortgage application will not take very long at all.

The downside is that both of these loans require larger down payments usually 20 percent or more and they carry slightly higher interest rates. But for those who dont mind paying a little extra for the convenience of qualifying, both mortgages represent excellent choices.

Many do-it-yourself home sellers will also offer to arrange their own owner financing for those who are self-employed. They know that this gives them an edge in a competitive market, and they often understand that self-employed people constitute one of the highest income brackets, and are usually dependable borrowers. Even if you arent dealing with for sale by owners directly, you can request your Realtor to show you houses that offer seller financing, in order to discover more mortgage options as you house hunt.

In addition to owner financed purchases, self-employed people can look for funds from professional private lenders. Many private investors sell mortgages for a living, and they offer competitive and unique kinds of loans, in order to gain their share of a niche market that is not normally served by the traditional banking community. If you are self-employed, chances are you can borrow money to buy a house by going to a private lender in your area. You will probably pay a higher interest rate, but that is going to be the case with almost any special loan made to assist those who are their own bosses. Once you own a home and have equity in your property, you will probably qualify to refinance into a conventional type of mortgage, so that is a good plan for the future for those whose choices may be limited in the beginning because of self-employment status.

Mortgage Rescue Scams Are On The Rise

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One type of mortgage rescue scam involves a predatory real estate investor stealing the equity a victim has built up in their home. Typically, the scammer will tell the victim they want to help save the home from foreclosure. This real estate investor will tell the victim he or she will buy the house personally, or will arrange to have another investor purchase the house.

The scammer promises to lease the house back to the victim for a period of 12 to 24 months to allow the victim to recover financially, repair their credit, find a better job, etc. They say that after the victim is economically healthy they will sell the house back at the end of the lease.

The real estate investor will often also attempt to sell credit repair services, mortgage broker services, and job placement services to the victim as part of the scam. Eventually, the scammer will force the victim out of their home and then sell the house, keeping the equity for themselves.

Government officials are seeing more of this type of criminal scam as mortgage rates increase and increasing numbers of homeowners are facing higher mortgage payments.

The scammers often use company names reflective of church affiliations. Often they use connections through social organizations or churches to meet victims.

Another type of mortgage rescue scam is a lease back transaction built on a series of lies. The scammer has no intention that the victim will be able to avoid losing the home. The scammer leases the house back to the victim with lease payments as high, or higher than the mortgage payments the victim was failing to make in the first place.

The scammer will often fail to provide the promised credit repair services, mortgage broker services, or job placement services that would be needed to put the victim in a position to repurchase the property at the end of the lease. As soon as a lease payment is missed the scammer will move to have the homeowner evicted.

Once the homeowner is evicted, the scammer will sell the house, pay off the underlying mortgage, and keep the equity. The victim end up with ruined credit and any mortgage obligations not satisfied by the sale of the home in the scam transaction.

There are many other variations on this scam. Sometimes the scammer will purchase the house from the victim below market price. The loan application may claim that the scammer intends to occupy the house when, in fact, there is already an agreement to lease the house back to the seller which is not disclosed to the lender. This lie helps insure that the loan will be approved and will give the scammer a better interest rate on the mortgage than if it had been an investment loan.

Sometimes the scammer will use an investor to purchase the house with a mortgage loan at below market value. The investor, who is often another victim, will then immediately quit claim the house to the scammer, often for a fee being paid by the scammer. The investors loan application will often claim the property is to be owner occupied when there is a lease agreement already in place with the seller. The existence of the lease will not be disclosed to the lender.

Scammers find vulnerable people through marketing, public records, or personal networks. Marketing includes direct mailings, radio and TV ads, or simpler approaches such as posting fliers. Public records may be found at county recorders offices where notices of trustee sales are available to the public.

Personal networks often include churches or community organizations. Professional networks can be used to locate victims when the scammer is also a real estate agent, mortgage broker, loan officer, attorney, or appraiser with inside information about the victims vulnerable financial position and pending foreclosure.

If you know people involved in these types of scams, call the Department of Financial Institutions Enforcement Unit with details.

Mortgage Terminology Explained

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When you first apply for a mortgage, you may feel youve stepped into a different culture with a language all its own. More than likely, your mortgage professional is throwing many new terms and expressions your way. Its the responsibility of that same mortgage professional to make sure you understand everything thats being explained to you, so you should never hesitate to ask them to stop and clarify. However, if you can approach your application meeting armed with some familiarity with mortgage terms, everyone can be more comfortable from the very beginning. Familiarize yourself with the following and youll be a step ahead of the average first-time borrower.

HUD: HUD stands for Housing and Urban Development, and refers to the US Department of Housing and Urban Development Settlement Statement documents pertaining to the house being financed. When your loan officer talks about having you sign the HUD, they are referring to that settlement statement. The HUD will detail all payoff information, including any fees associated with your mortgage loan.

LTV and CLTV: LTV and CLTV stand for Loan to Value and Cumulative Loan to Value (or Combined Loan to Value). LTV refers to the percentage of the homes value that is being financed. Thus an $80,000 loan for a $100,000 home constitutes 80% LTV. Higher LTV loans may carry higher interest rates and mortgage insurance than lower LTV loans. CLTV refers to the combined amount being financed between two loans for the same property. If the $100,000 home mentioned above has a first mortgage of $80,000 and a second mortgage of $20,000, the LTVs of those loans would be 80% and 20% respectively for a CLTV of 100%.

Designation 80/20: Designation 80/20 in the same line of thought, refers to the technique of obtaining 100% financing for a borrower without using a program that offers 100% in one loan. 80/20 refers to the percentage of the home that will be financed with each loan, 80% with the first mortgage and 20% with the second mortgage. 80/15s, 80/10s, and so on are also available and are options you should consider under the advisement of your loan officer or financial planner.

Stips: Stips are stipulations, and they are the requirements handed down by your lender and its underwriting department in order for your mortgage to be cleared to close. Common stips are copies of pay stubs, bank statements, and verifications of rent and employment.

VOR and VOE: VOR and VOE stand for Verification of Rent and Verification of Employment. Both may be required by your lender in order for your loan to be approved. Not all lenders and not all loans require either one of these.

HELOC: HELOC, while not something you will probably hear during your first mortgage experience, is one of the most common mortgage acronyms. It refers to a Home Equity Line of Credit, which is one option borrowers have for taking equity out of their homes. With a HELOC, borrowers can draw up to the full amount of the loan as many times as they choose, paying down all or part of the amount and drawing it back out again. In this way, a HELOC is a loan similar to a credit card, except that the interest paid on a HELOC is tax-deductible.

This is not a comprehensive list of the new terminology you may encounter when securing a mortgage, but familiarity with these terms will help you understand what your loan officer or financial planner is talking about when it comes time to finance a home.