I guess as an industry we’ve earned that reputation. We sold too many of the wrong types of loans to the wrong types of people. There were too many crooks out looking out for their own paychecks, and not their customers best interests.
Its really a shame because mortgage transactions are usually the biggest financial transaction the average American makes. Mistakes in this industry can really damage peoples lives. I guess the broker charging 4+ points and YSPs didn’t care about anything but their own paycheck. Didn’t the phrase caveat emptor originate with real estate transactions? I guess not much has really changed in the past 2000 years… Illuman23 December 28th, 2007 at 3:28 pm
Welcome to mortgage brokering and banking 2.0.
Business will never be the same for the mortgage industry. There is a lot of self cleansing going on in this once very lucrative, easy to enter field and also a lot of debate as to what the future holds for the mortgage business.
One thing is for sure. The image of the mortgage professional has been tarnished and what was once a respectable and rewarding career, has been viewed by many in the public as akin to being a used car salesman.
An image that will be very hard to shake in a society that likes to place blame and point fingers.
“From Art Of War…” HE WHO CONTROLS THE GOLD..CONTROLS THE LAND” big banks and wall street controls the gold right and probably forever so they can do what ever it is for them to survive and be in control.” quy December 28th, 2007 at 2:33 pm
Wall Street and lenders control the gold that they in turn gave to their whipping boys (mortgage brokers), and now that the subprime gold has dried up and turned into subprime coal, these same gold hoarding mongrels have now thrown the mortgage professional under the subprime bus.
Talk about Hypocrisy. (the act of condemning another person for an act of which the critic is guilty)
“The greed was two part. The hedge funds and the rating companies. Take a look at there earnings. Just look at the top five. Let me ask you guys and girls a question. Was that not a form of brokering?You think with all of the brilliant minds in Washington they could see the trees through the forest?”Doug December 28th, 2007 at 8:41 pm
It seems that lenders and Wall Street had their way with brokers, made their money, and now that the heat is on, they have washed their hands clean as they now break bread with the US Secretary Treasurer, Hope Now, the President and various high power non-profits such as NeighborhoodWorks and NACA, where many of these lending executives share a seat on the board of directors.
They helped create this massive mess and now, they get to help clean up their mess with the Bush Administration’s Hope Now and these powerful non-profits that have been and will be allocated hundreds of millions, if not billions, in funding for foreclosure prevention.
Most of these non-profit entities despise mortgage brokers and would like to see that this industry never sells a loan again.
While I am a strong consumer advocate and a huge advocate of non-profits, I feel that an ethical and honest mortgage broker also does their community a good service and is very valuable in the market place. But I know one thing for sure, the future doesn’t look so bright for this industry.
Especially now that the non-profits are in the mortgage game.
This is something that I think everyone in the mortgage industry is not getting. The day of the non-profit has come and it looks like they might very well be taking over this industry for good.
This is a Moe prediction and you heard it first on LoanWorkout.org. (I’m ready to get flamed, bring it on!)
Will this be good for the people of America to have options for mortgages where there is no greed (commissioned salesperson) in the equation? Many predict a plain vanilla loan society in the future, where you can just pick your mortgage off a menu based on FICO and LTV and proceed to closing. Why would a broker be needed if that is the case?
Billions of dollars in financing is being offered to organizations like The Neighborhood Assistance Corporation of America. (”NACA”) is a non-profit, community advocacy and homeownership organization. Yes, BILLIONS!
This is a great organization operated by one of the most aggressive consumer advocates and anti-predatory lending pioneers in the world, Mr. Bruce Marks. Trust me, you do not want to see this man or his organization protesting your office.
The incredible NACA mortgage allows NACA Members to purchase or refinance homes with:
- no down payment,
- no closing costs,
- no fees,
- no requirement for perfect credit,
- and at a below-market interest rate.
Everyone gets the same incredible terms, including the below-market interest rate, regardless of their credit score or other factors. NACA also provides free, comprehensive housing services. NACA counsels Members into the extraordinary NACA mortgage using character-based lending criteria that takes each Member’s circumstances into account to determine whether they are ready for homeownership and what they can afford. This is in contrast to risk-based pricing where people are often given loans they cannot afford while brokers and others make tremendous fees and profits.
America’s Best Mortgage!
One Mortgage Product – $10 Billion Committed5.375 (as of 12/28/2007)
No Down Payment, No Closing Costs
How the hell is any mortgage broker or banker going to compete with the above terms? They’re not!
Ladies and gentleman, NACA may very well be the future of the mortgage industry and if you do not believe me, then you might as well keep your head in the sand because the sky will fall where you are standing, sooner rather than later.
I write these posts for the ethical and honest mortgage professional (the few the proud), to open your minds and free your souls. I understand you all have families and are people too. I do not wish suffering for anyone. While I am a die hard consumer advocate and an anti-predatory lending advocate, I am also a people advocate that wants the best for all law abiding citizens.
Stay optimistic but please read the negativity because most of it’s real, very real. Most optimists are hopelessly not realistic and most realist are negative. Try to find balance here everyone. How about optimistically real?
This is just one more news angle that is not being reported on. Maybe I can open your eyes to see the changes that are happening in this business that you all do not see from your side of the fence. While you may not agree with my views and observations, at least you have taken the time to read my blog and see a different point of view from the typical status quo that is being reported on every other mortgage blog on the web.
More from NACA;
The NACA homeownership program is our answer to the huge subprime and predatory lending industry. NACA has conclusively shown that when working people get the benefit of a prime rate loan, they can resolve their financial problems, make their mortgage payments and become prime borrowers. NACA’s track record of helping people who have credit problems become homeowners or refinance out of a predatory loan debunks the myth that high rates and fees are necessary to compensate for their “credit risk.”
Started in 1988, NACA has a tremendous track record of successful advocacy against predatory and discriminatory lenders as well as providing the best mortgage program in America with $10 billion in funding commitments. NACA is the largest housing services organization in the country and is rapidly expanding by growing its existing 30+ offices, headquartered in Boston, MA, opening many new offices nationwide, and expanding the servicesit offers its membership. NACA’s confrontational community organizing and unprecedented mortgage program have set the national standard for assisting low- and moderate-income people to achieve the dream of homeownership.
As I said in my previous blog post titled, Are Mortgage Brokers Ancient History in 08?, “One things for sure, the smart people that are left in the turbulent mortgage industry waters are devising an emergency back up plan and exit strategy because from the looks of things, the horizon isn’t looking to sunny.”
NACA, coming to a town near you! (good for consumers, bad for brokers)
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hey that guy did my home loan
P
I’m glad that this post was highlighted, because I read often the sale of a home by a dishonest Mortgage Broker being compared to the sale of a lemon by a used car salesman and I believe there is a great big difference.
A car is expendable. If the car breaks down and you’ve been had, at the most you’ll lose what, 5, 10 maybe even 20K as any everyday American. The kids have to go back to taking the bus and walking or riding their bike. No biggie. Everyone will lose a little weight in the process. They’ll end up healthier.
But a home is a huge purchase and investment. There are lots of other costs that come along with buying home, like heat, insurance, water/sewer charges, et cetera. If you lose a home you CAN end up homeless. Children have to be uprooted — it’s a lifechanging experience.
For someone, a professional with a fiduciary responsibility to toy with the lives of a family, children is reprehensible. Cashing out on money that’s been saved in some cases for years to obtain the goal of a lifetime for some, and to have all of that go to pay for some Mortgage Brokers life in the fast lane, it makes me so angry.
$10 Billion? That’s not very much money in the grand scheme of things. Who pays the bills at these “non-profits”? They have overhead just like any other organization don’t they?
You are asking who pays the bills of these non-profits? You, taxes and governement funding.
$10 Billion is not a lot? You are joking right? This is one non-profit Larry and just the beginning of many more billions to come.
Just wait, Bruce Marks and NACA will be in a town near you, soon. Like I said, good for consumers, BAAAAAAAAAAD for brokers.
JacMac, yes a HUGE difference. Spot on, again
naw
loans cant be closed properly by min wagers.
they will figure that out soon
and when they realize they need mortgage professionals, and have to pay more… they will.
do pendulums swing one direction, then return and stop in the middle? i forget.
Whipping boys? You brokers are a bunch of goddamn babies. Fuck your crying. I’ve spent the last 8 months trying to stop the fraudulent loans sent my way, but as long as sales commanded the ship the Titanic sailed on. Now I see this and it makes me want to puke. I don’t blame lenders or borrowers….I blame you! Be a man and quit acting like you were a part of the cure for cancer…you were the cancer.
loans cannot be properly closed by minimum wage earners? LOL….. That’s why most loan officer’s have college degrees, wrong. A lot of people that work for non-profits are educated consumer activists and not greedy capitalists (some may beg to differ).
This is the future Chuck.
Borrower walks into local non-profit mortgage co.
1. App taken & Credit is ran.
2. 689 mid fico and that borrwer is sent to window 3
3. Window 3 has 5 or so motgagte options with fully disclosed terms and fees.
4. Borrower picks loan and signs disclosures
5. Sent to processing and then underwriting.
6. 30 days later loan closes
Doesn’t seem like rocket science to me.
But, hey, I know some LO’s that make a stated/stated SISA, 600 FICO wage earner 100% refi’s seem like they are puting together a skeleton fossil from an ancient dinosaur in the Egyptian Desert.
OK, you heard it from a pissed off underwriter. The person that sees the files that brokers submit and apparantly these files have fraud all over them.
While I agree to some of this, underwriter, to not place blame on lenders as well, hypocritical. Oh wait, you work for a lender who pays your salary. My bad.
Lenders knew full well, that there was masssive fraud going on in mortgage originations. All they had to do was sell that damn loan on the seconday market (like they all did) and it was out of their hands. Done.
Fraud or no fraud, they were now off the hook and whoever bought the loan that has now transfered 3 or 4 times has the liability.
It’s like you stealing a car and then selling it and then that same car (loan) is arbitraged and sold time and time again, where the cops can never track the owner and everyone (servicers and investors) who got the car turned a profit.
Well until, the car broke down and the guy driving it (lender) was stuck in rush hour (subprime imlposion) traffic in front of the LAPD. No one (secondary market) is going to buy that stolen car now and now the owner just wants the REPO yard to come take it and hopefully the cops (AG’s) don’t figure out it’s stolen before it gets sold at auction (foreclosure sale).
the end………………………………………….
Just a point about NACA…You must have rate over 10%, 24 months in your property,owner occ., live in certain area codes…
If you have 689 credit you would not have rate over 10% and if you did either your Lo drilled you or just plain out of touch!!
NACA does good work but it will not replace mortgage business!
The job of the underwritter and LO AS A MATTER A FACT is to verify information!!!! Job does not make sense…call employer….asset out of line….see more statements……income out of line……..see more pay-stubs/ tax returns…how about pulling a 4506. How about using coman sense…… If underwritter checks all information and is verified, than at a latter date turns out to be fraud the borrower should go to jail and anyone who helped him falsify documents!!!!!
Its unfortunate that the industry is viewed as similar to a used car salesmen. There are still good and honest people in this business. And in time, the bad stigma will fall off. However, mortgage brokers aren’t going to go completely away. Like anything new to society, a product must be infused into our society and then recalled for an overhaul and to remove malfunctions. That’s where we are right now. In the recall era. Complaints, laws, regulations, blame, money lost and money gained is what happens with any product is introduced, then the new improved model emerges. It will operate smoothely and then it will break again. So as long as there are consumers, brokers will still be in business.
WallStreet doesn’t want to deal directly with consumers. Never had, never will. But they want that money. They put buffers in front of them to get that money and not have to interact with consumers directly. In any industry thats how it’s set up. In the real estate industry the current mortgage buffer has been exhausted. The result is foreclosure, companies shutting down. Is this the end. Everyone please. Do you not think all of this is planned? Money is being made because of this mess. WallStreet is going to play some hocus pocus with the media. Blow blue dust at the already confused consumer and confuse them even further, get the politicians to change the rules they themselves created for brokers and blame the brokers for the change, then get some lobbists to attack every aspect of real estate; Title Co, Realtors, Appraisers, etc, just to buy time to cement the new money plan.
Just look at what’s happening in MA and NV. That not going to last long. GA tried this years ago and lenders came back when the rules adjusted more realistically and people complained that they couldn’t buy a home. Wallstreet is the only entity that knows when the reset will take place. As some sort of joke, they are allowing us to guess at before they do something. Will this end in 08′,09′, never? Now we are all panicking and shortly will be willing to accept any new solution to the current problem, wether its to our benefit or not. When it reaches its zenith and everything is appearing to completely not work, is when you will see the roll out of the new mortgage industry. Most of the same players we are complaining about if not all, will still be there giving us a new improved product. The funny part is we are going to forgive them and fall in love with them again.
To the customer, which I’m apart of: We are just as guilty as the industry is for this mess. Enough of us wanted houses we couldn’t afford. We knew we couldn’t afford it. We didn’t need someone else to advise us on that one. We wanted to live like our rich neighbor or our t.v. hero. We convinced ourselves that we are “owed” having a piece of the american dream of being a homeowners, even if we didn’t work at it or properly prepare for it. Why buy a 1500 sqft house when a 3000 sqft is right up the street? I have good credit but no money. I have a little money but bad credit. I have money, good credit but I can’t afford it. Something can be down for me if I keeping bitching because I(consumer) want what I want. So complain and complained we did and banks, lenders, realtors, appraisers, insurance agents obliged us.
Now we are losing our ass off. The same “i deserve to have this” attitude now has us blaming everyone for us not paying our bill. And yes, some consumers were deceived but not to the tune of all the millions of homeowners losing their homes as you are seeing now. Some of these mortgages are going bad not because they are adjusting, but because they weren’t being paid for. Some of these mortgages are fixed rate mortgages. So as these nonprofit companies make this “run,” remember this. Doing the loan for free won’t stop foreclosure. There will be lots of those clients still who won’t pay their note on time or at all. My question then will be, who’s fault will it be then? And allowing nonprofits to take over mortgages completely. Nahh. Its only going to be a new facet of generating money for WallStreet. Check the criteria of getting one of these non-profit loans. If it was that easy, then brokers would have been eliminated years ago. Bank lending too. Everyone needs to relax, get their credit back in line and be prepared to spend a little money next time they want to buy a house. Just this time, make sure its something you can afford.
Really great article. Thanks for the post. I am new to your blog and I look forward to your future work.
If you need a loan go to your local Bank or Credit Union, while they are still around, be aware to read your Settlement Statement or HUD 1, there should be no garbage fees other than points if any, appraisal, and/or rebates-YPS, remember if larger than .375% this is really costly to your rate, and how these brokers make their money and can be extremely costly in the long haul, pay no garabe fees such as Admin, Processing, Discount fees, Underwriting, Credit Report, ETC…NO POINT, NO FEE LOANS are becoming very popular, it is usually the unfortunate ones without good credit and desperate borrowers (Subprime) that are targets of brokers and because these products are not offered by banks or credit unions that is unfortunate, that we prey on the less fortunate, it’s awful, but it is no different than a Consumer Lender, Title Pawn business etc… Your not going to wash out all the brokers overnight these parana’s are going to be around for a long time just with less popularity due to a weak maket.
It is finally going back to the good ole days.. once the market levels out, there will be plenty of work for HONEST mortgage professionals, and to be honest, you will need more than 10 years in this business to get a job. They want the ones that knew it like it used to be.
Finally some justice. I spent more time justifying my declines than my approvals. And naturally massive time to fight the commissioned A holes… on their nasty slimey submissions.
Thank goodness things are changing….
Moe,
Looking at your NACA list, I’m not covinced that there won’t be massive problems. When the assembly line starts who answers the assortment of questions that will be asked from the consumer? If this is how its going to go, whats happening to the rest of the industry’s vendors? Appraisers, Insurance Agents, Title Company’s Inspectors, etc? When moving to window 3 what happens if the client picks the wrong option and loses their home. Who’s to blame then? Who will do the loan for the 615 fico client? As easy as your list is, it’s not practical. Lenders, brokers and bankers are a necessary.
Underwriter is definitely pissed. I don’t know why. If he/she keeps that attitude up he will be unemployed underwriter. Underwriters have guidelines to follow, not personal opinions to interject. If the guidelines match up, then you must go with it. You are a facilitator. Ironically, you don’t blame the lender who made the crazy products you sign off on and you don’t blame the borrower who wants the deal they know they shouldn’t be getting, but you blame the broker who is delivering the same instrument you need to keep your job. Doesn’t make sense, however, if it bothers you that much, then quit.
Also NACA charges 50-$100 fee per month depending on loan size. Also what happens if a NACA client gets a loan and sells his house in 2 years for a profit of 30k… do the homeowners get to keep the money????? Most NACA areas are , well not the nicest areas. With that said they do help people with there heart in the right place…and make people lives better, which is fine by me!! We can both survive…NACA -Brokers!
Paul,
So someone is making some money off of these loans. What is the $50-$100 monthly fee called? And how long do the client pay that fee?
I am (soon not to be at the end of this month) a Realtor and an appraiser in the Northern VA area. I got into the appraisal side in 2001 and agency side in 2003. I love appraising and hate agency. When I first started as a Realtor, I was so excited….we had to take so many ethics classes and than had give a pledge which included the Golden Rule. I was in the middle of a very nasty divorce with lots of lies and I was feeling so blessed to be going into a business that I could be honest, know others were honest and still make money! This was just the answer I was looking for…right? Well, 2 years later I left my broker and came close to sending back my license because the rose colored glasses had been yanked off me too many times. I interviewed with a broker that was different and went with them instead. I also started my own appraisal company in 2005 so that I would have no pressure from a boss to “bend” the rules. Since appraising is what I like and excell at, my bread and butter is there. Agency was done just to help friends not get taken advantage of. Everytime I get into conversations with folks over the past few years, I would very hestitantly tell them I was also a Realtor. I specifically said that I have found most Real Estate agents to be lower then used car salesmen…and I still take that view. I believe that if you made your living in Real Estate over the past 7 years and did well, you are in that catagory guaranteed. Even the NAR condones the actions by themselves giving a rosey picture when they know the reality of the downhill slide we are in. So YEAH!!! As of January 1 I will no longer be in the catagory of “worse than a used car salesman.” 2008…what a year! PS- I will mention that I turned in appraisers and Realtors to the boards during my “reality check” time to no avail…all the actions were condoned. The practice in this industry is corrupt from the top down.
Chris,
I am not a expert on NACA but the fee last 5-10 years and depends on loan size. 0-99k $50 100k-199k $50 and over 200k $100…but they do not pay MI…They pay this fee .
NACA forgot to show the APR after the note rate in their ad according to federal truth-in-lending advertising rules.
LOL.
Paul- the 10% you are speaking of is a special deal they have with Countrywide for loan modifications of loans that have a reset or starting rate of 10% or higher. I reported on that deal last month.
Of course the homeowner gets to keep any profits on the sale of their home.
They are a mortgage broker and these lenders have committed $10 billion to fund these mortgages on NACA’s terms and NACA’a way. Below market rates.
Chris- They will still have title rep and appraisers, but it is the mortgage broker/LO who needs to worry about this new breed of mortagage company. The non-profits have arrived and they are now backed BIG TIME by our government.
Like I said, good for consumers, BAAAAAAD for brokers.
Here is their mortgage program;
PURPOSE: Purchase
Purchase & Rehab
PROPERTY TYPES: One to Four Family, condos, and co-ops.
Existing, New Construction, and Renovations
DOWN PAYMENT: None
CLOSING COSTS: None (paid by lender)
INTEREST RATE: One percent below the prime market rate
Current Interest rate: 5.375% 30 year fixed (as of 12/28/2007)
BUY-DOWN: Additional funds can reduce the interest rate
Paying one percent of the mortgage amount up front reduces the interest rate by one quarter of a percent (.25%)– a tremendous added benefit.
APPLICATION FEE: None (paid by lender)
POINTS & FEES: None (paid by lender)
CREDIT HISTORY: Perfect credit not required
P.M.I.:
(Private Mortgage Insurance) None
NSF/Membership:
(Neighborhood Stabilization Fund) $50 per month for five to ten years
This payment occurs once you purchase through NACA and is part of your mortgage payment. This is a required payment as a NACA Homeowner Member, and as a Member you can receive assistance to NACA’s membership assistance program if you are ever at risk of losing your home. You would also receive the other benefits of NACA Membership.
OTHER TERMS: No yield spread premium; No pre-payment penalty; No balloon payment; No required credit life, or other unnecessary or overpriced insurance.
Let me ask you this. Can you beat this rate and terms? 5.375% on a 30 year fixed with no fees.
Paul,
That is the point the supporters of eliminating brokers don’t get. The consumer will pay someone and something. 60 months/120 months at $3000 or 6000 and $6000 or $12000 respectively. Some of these figures are the amounts paid at closing. Some are higher and keep in mind, closing costs will still be there when they sign their final closing docs in addition to the fee that is not call MI. Don’t get it twisted. Non-profit organizations don’t mean what they offer is free. And as crazy as that sounds, free does come with stipulations. Clients don’t pay mi but they pay. You can call fees whatever you want.
Lucille gave us a list of fees not to accept and some are really BS fees, but some are real costs that must be paid by someone. Just like passing the savings on to the borrower when applicable, there are some debits the consumer is going to pay. Lenders are a for-profit organization. If the consumer is thinking that in the end of this mess, getting a loan will be free of charge then they are in for a helluva suprise. I agree NACA is a good program but it comes with guidelines a borrower must adhere to or they don’t get the loan or suffer a “penalty.” You are correct Paul on the locations. The loans are attached to less desirable areas to sitmulate neighborhood revitalization and that is a good thing for a community. But is the consumer really concerned about the community? Remember, it’s a loan and when the consumer is ready to updgrade to a popular community then what? There are their penalties for moving on. Penalties=fees. It may not be attached to the interest rate but its still called a penalty and the consumer will pay them.
No I can beat the rate but they only serve 5 towns in NJ.
NACA does scare me. Lets see no money down, less than perfect credit. other income source( this means cash on the side) I know they help many people but isn’t this program wide open for fraud???
No money down means homeowner can walk away at anytime!!
they serve many more town then that Paul.
Their main office is in MA. and they have over 30 offices in 16 states.
Moe,
Sorry I STAND CORRECTED!!!
aNY INCOME LIMITS?
I think they do it the right way and commit homeowners to ownership not just of their home, but of their communities. Like it should be. I would say that it’s a safe bet that many of these people do not walk away. Especially when NACA teaches consumer activism and community involvement.
https://www.naca.com/members/eligibilityIntro.jsp
General Requirements
The following are the general eligibility requirements to participate in the NACA Program. There are no income limits, but there are maximum purchase price limits and you must purchase within a NACA service area.
Be a Member in good standing
NACA provides the NACA Workshop to everyone without becoming a NACA Member. After attending the workshop, should you decide to begin the NACA Program and the initial counseling, you need to be a NACA Member in good standing. This requires that the Membership Agreement and Authorization be signed by all household members. At your first individual meeting with a Mortgage Consultant, you will need to pay the Membership Fee, (for 2007 is $20 for the year). Once you purchase your home, you will need to pay the Membership Fee, which includes the Neighborhood Stabilization Fund Fee,of $50 a month for a period of between five and ten years, depending on the amount of the mortgage. The Membership fee entitles you to not only NACA’s comprehensive counseling to assist you throughout the home buying and mortgage process, but also to NACA’s membership assistance for NACA homeowners that provides comprehensive foreclosure prevention assistance.
No member of the household can have an ownership interest in any other property
NACA focuses on people who have not been able to purchase a home. The program, however, is not limited to first-time homebuyers; you may participate as long as you do not own another home at the time of purchase. Current NACA homeowners must have lived in their home for at least three years and have been active participants in the NACA program to be eligible to purchase through the program again.
Occupy the home for as long as you have the mortgage through NACA
NACA believes that owner-occupants stabilize neighborhoods. Therefore, NACA requires that you live in your home for as long as you have a mortgage through NACA. Being an owner-occupant involves you in all aspects of the community because you own a piece of the community, not just real estate. NACA is very serious about Members adhering to the occupancy requirement. Therefore, NACA takes out a lien on the property—in addition to other enforcement mechanisms—to ensure that homeowners live in the home.
This does not prevent you from selling your house for a profit, refinancing your house, or purchasing other property while continuing to live in the house purchased through NACA. These serious actions and remedies are in place to prevent the abuse of the NACA Program. Lenders participating in the NACA Program also require owner-occupancy and may have their own enforcement mechanisms beyond NACA’s. Obtaining a second mortgage requires that NACA subordinate its lien to the second mortgage, which NACA may or may not, in its sole discretion, agree to provide; therefore, your ability to obtain a second mortgage may be limited.
Participate in at least five actions and activities a year in support of NACA’s mission
Every Member is encouraged to contribute their unique skills to NACA and its mission. Many people say the NACA program sounds too good to be true. It is real because of the active participation of NACA’s huge Membership. Participation and direct action have made NACA successful and will continue to strengthen our neighborhoods and organization. There are numerous ways for you to participate:
Join advocacy campaigns that may include protests, demonstrations, actions and/or engaging in litigation against persons or companies that discriminate against or victimize others;
volunteer in the NACA office;
participate on the peer lending committee; and
assist other Members with the home buying process.
Good bye for now, It has been fun and I hope we all learned something!
um….5.375????? How? From Where? How does one keep the door open? expenses to do loan? All for low cost loans, but lets be real here. Someone seems too low…. not feasable for the long term! Same level of costs that banks face. Dollars and cents… Do the MATH!!! Short Termer…
Moe,
I hear you but let me ask you this. With all of the vendors minus the broker still in play, who is watching the employees who are getting paid to push these deals through. Some deals will be unscrupolously put together and suffer the same fate as what we are witnessing now. What regulation is in place for that? Are the employees licensed or fall under the umbrella of the organization?
Is NACA for investors or people with multiple properties?
100%financing: great but that’s one of the current industry problems. No personal investment from the consumer when contemplation comes up on rather to pay for the home or walk away. No loss. As the buyer I can negoiate the property below value and buy with no money or cost to me and turn around and sell it for a profit? Really. There is a no recapture clause on these free deal?
Interest rate: Wonderful. That just proves to everyone that brokers are not the only one getting YSP. The money is loaned to these institution at discounted rates anyway and they inturn loan it out to the consumer slightly higher. Prime + 1. Just eliminate the 1 and there it still is. YSP.
Discount the rate. That’s nothing new
Application fee: Looks like it has a new name. Membership fee
Perfect credit: Are they doing sub 500’s or mid 500’s What is their cut off? Are BK’s allowed. How about previous foreclosure and other loan defaults? FHA does shaking credit situation already
PMI: Is the NSF($50-$100 monthly fee) a bailout mechanism if the loan goes into default or do they send literature and give some verbal support to what is about to happen next when they have to get out of the property? Do they hold these loans or sell them?
No, no one can beat this seemingly perfect situation. Not even the banks, so they need to be scared too. I can match most of these terms and get very close to the rate. But what are the cons to this program. You gave me all the good stuff, what are the negatives because NACA has been in my state for years and its not that popular. It’s a one stop shop where I’m at and that’s never been a good thing. Monoply.
What does the pay structure look like for a Non-profit LO? Sounds interesting to be in a non-greed driven market, but I still need to make a living. I would love to continue helping people in to homes with good mortgage, but I also have big bills to pay. So how much does the average Non-profit Loan Officer make per year?
chuck3d b33f..I love how you say loans cannot be closed by min wage earners..HELLO..every bartender and McDonalds person has a mortgage broker license..what do you think was in your industry…rocket scientist??
Also, for all those who think that the mortgage broker industry is going to rocking and rolling in the near future..open up your email…chances are there is some change from at least 1 lender regarding thier loan requirements…
Wall Street has to make the foreign investor happy..they are not happy with our so called rating system that gave junk the A status..so bye bye broker with your six figure salary and welcome to the real world where you will have to work harder, with less products and less of a YSP.. just to earn 50K..you wont be phased out totally, but like a bad dog you will be re-trained to think totallly differently about your clients and your job…
Oh by the way..where is your precious NAMB?? They were too busy enjoying the boost in membership fees to care about its members..to busy enjoying the bigger budget for their expense accounts than caring about the destruction of their industry…funny how so many of your higher ups have already jumped ship!
Give them a call and ask them what are they doing about your future??
Ann,
You hit the nail on the head…every bartender and fastfood worker was license because there were no standards!!! They bring the loans in and there boss would find a home for them, no regard to the well being of the client! But lets not forget, the lenders knew it, Wall Street knew as lond as they made a profit and now we all pay!
Mortgage brokers have never had a good reputation. I don’t know what planet you are living on. They have never been respectable and have always been thought of as used car salesman. Wake Up!!!
Moe,
What is the income expectation for a Non-Profit Loan Officer? Just curious.
Hey folks, using words like “always” and “never” do not support your “facts.” Those words just show how pissed off everyone is.
10 trillion dollars will be the payout of the US taxpayer for this mess. We are the new subprime company………non profit is tax money………once the government cleans up the mess they will make sure that they CONTROL all the future mortgage origination. They will have to save a few banks in this mess, with CITI and MERRILL having 13 billion plus losses quarter after quarter, well say goodbye.
Banks like Washington Mutual, CW and Suntrust and Wachoivia have huge problems and may not make it.
The builders start going bust next month. This will not be gone until the over supply is sold off, we are at about 3 year supply right now.
“A” paper mortgage holders are starting to give their homes back, no shylock there but they will find another excuse for the problem, no one seems to see the supply and demand side of it, they all want to blame someone, what a shame. But guys this just started in November with CITI’s losses and the adjustments to the loans really don’t start until February. Oh yeah that is the month that the first of the baby boomers start getting their checks…………oooops………….
If all of some of these banks fold, us brokers might be the only ones left???
Paul,
I hope not. We need banks, just as much as they need us
Chris,
Yeah, I know we need them. Just being silly.
As somebody said many years ago “This too shall pass”
Mark- my knowledge is that non-profit employess recieve prevailing industry standard. If you are the marketing director, then that salary should be in line with a for profit and within reason. With that said, I am not sure what they would use as the standard for an LO. I am guessing, not much but decent.
My guess is they are going to need a few good men and woman to assist them.
Ann – I am definitely a fan
Mortgageman – I am assuming you have suit like the used car guy pictured and wear a pinky ring?
, kidding
Catherine – apparantly your head is not stuck in the sand and you have a grasp of reality.
Paul and Chris – Non profits are the new mortgage players in 08-09, maybe you all should look into it. Just a tip from your friendly and always real blogger, Moe.
Moe
Non profits may be a new player but with loan limits in Burlington County at 270k is very limited. Bergen county loan limits of 370k does not buy you a garage. A 370k loan limit is lets say in not a good area!
I am not trying to blow smoke up anybodies ass, but most of my loans are 500k- 2 million. The average price for a starter home in North Jersey,Bergen, Morris and Monmouth County is 600k range, even after a price corrections. Remember this part of Jersey is were all the Wall Street players and CEO LIVE.
I do not see any nonprofits here…just Newark!
Why does Countrywide get to refi people at NACA???? Didn’t Countrywide approve these people the first time???? Or did approve bullshit option arms or fast and easy???? How is there rate now over 10%???? Must have put them in a great loan to begin with!
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The below criteria is for a NACA Refinance. Even if you do not meet the below qualifications it is likely that we can assist you with your mortgage as long as you live on the property and do not own other properties.
You cannot own other property, and the property to be refinanced must be owner-occupied.
You must have a predatory interest rate or unaffordable loan terms. The interest rate for the current mortgage(s) must be 10% or greater or considered to be predatory, or the home must be in need of substantial repairs. NACA considers loans predatory that have a teaser rate, but become high rate once they reset.
The property to be refinanced must be within a NACA region where the NACA Program is available.
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If your situation does not meet all of these criteria, we will not be able to refinance you. However, we may be able to assist you in other ways. You need to complete the Mortgage Questionaire, attend a NACA Workshop and meet with a NACA Mortgage Consultant. If you believe the lender or broker engaged in illegal or unethical activities, you should contact the Federal Trade Commission and state and federal banking regulators.
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criteria is for a NACA Refinance. Even if you do not meet the below qualifications it is likely that we can assist you with your mortgage as long as you live on the property and do not own other properties.
You cannot own other property, and the property to be refinanced must be owner-occupied.
You must have a predatory interest rate or unaffordable loan terms. The interest rate for the current mortgage(s) must be 10% or greater or considered to be predatory, or the home must be in need of substantial repairs. NACA considers loans predatory that have a teaser rate, but become high rate once they reset.
The property to be refinanced must be within a NACA region where the NACA Program is available.
The property to be refinanced and all requested money for improvements cannot exceed NACA’s maximum purchase price limits set for that region.
You cannot have multiple refinances where you are continually taking money out to pay for your living expenses. This does not include refinances to obtain lower rates or to pay for one-time expenses such as home repairs, medical expenses, or education.
You must have had your current mortgage for at least 24 months.
All properties to be refinanced must have thorough home inspections—a complete house inspection and termite inspection. If applicable, a septic inspection will also be required.
Moe,
It’s always a pleasure to visit your site and share comments with you. NACA has its place and it works for a facet of situations. It’s been here for years; long before this meltdown happen. It won’t replace brokers, bankers or lenders. It will however, create another avenue for clients to obtain a piece of the American Dream. If you take aother look at its structure, that’s all its designed to do. The people that should be afraid aren’t on this site. It’s the ones who are doing idiots deals and jamming people into impossible situations. But let us not forget we are here because we actual care about our industry.
Paul
Pats 3/ Gaints 7
Chris
Well said!
Moss just got lit up by Giants safety!
Paul,
Did you just see that?
Great play, The Giants are making a game of it!!!
Buy the way NYC, Bronx, Queens NACA loan limits 36S,750!! GOOD LUCK!! Parking spots sell for 60-125k in NYC!!
NACA does great work, I am not here to beat them up. There program is almost like WAMU Affordable gold program. WAMU gives the broker a much better rate .5 below normal and pays the broker a much bigger YSP. the underwritting guidelines are very felxible!!! Boarder income, second job that pays cash…lets say you are a teacher you could say you tutored on the side and use that income to quailfy!!! You must be in the medium income level for the county you live in, just like NACA. DO you know why they do this???? because the goverment requires them to!!! because they are federal chartered bank!! They have no choice and if the money is not loaned out they (WAMU) must find ways to approve borrowers!!! No wonder we have problems!!!
So my point is NACA is nothing new but is does have its place!
Citi and other lenders have the same programs or CRA YSP bonus in certain zip codes!!!
Moe – I am a mortgage broker and I would be happy to work for $50 per month for 5 – 10 years. As for the rate, don’t blame me, I am only taking the rate the lenders give me, JUST like NACA. So, give me 5.375% and I will do the loan and all the parework for $50 per month for the next 5 years. What you are REALLY bragging about is NACA’s ability to blackmail a bunch of lenders into providing below market financing so they will not level charges of discrimination (and the discrimination was often performed by the large lenders, not brokers). When that money dries up, I will put my measly 1.5 pts of YSP up against your $50-100 per month anytime. I am gald to see some of the crooks and bad apples get out of my business, but I guarantee there are a bunch of bad apples in the non-profit sector. Your reasoning sounds just a tad off – NACA is squeezing the lenders for discrimination, which they will blame on the brokers as you put them out of business, thereby guaranteeing the survivability of the big lenders and increasing their margins. I see where this is going.
Moe – I have been a mortgage professional since 1994. I am currently in mourning, realizing that my career is pretty much over. The impending boundaries that will be put in place, as a result of the scum that has operated and prospered for the past 5 years has ruined this industry. I will emphasize here that “I” have never, EVER put my interests before my clients interests in structuring or pricing a loan transaction. I played the game by the “golden rule” and it pisses me off that I am now trying to figure out “what next?”. Because I know that I will never work for a bank.
I hope that what you believe to be true about the “non-profits” comes to fruition in some shape or form. This is the ONLY way to finally get the preditors out of our industry, except for the BIG banks cause they are preditors too. It really is time for some radical reform. The entire industry is corrupt and the compensation structure is corrupt – whether you work at a bank, correspondent, or a broker – it is ALL CORRUPT.
Yes. Every state has some entity that caters directly to reinvigorating forgotten areas. But look at the financial contributors. Instead of loaning the money directly, they use NACA to loan their money out. Sounds like brokering to me. And these instituition don’t want to be directly attached to helping sub par credit clients but they understand there is profit in doing so. So when and if the program is a bust, the real lenders name aren’t on anything. Hmm. Forget about the loan limits. Its about getting that available money out into the world. Lender don’t make money if they hold on to it. If the borrower is not going to be responsible, you can give the loan away at cost and you will still get a disaster
Paul Pats 16/Giant 20 Pats need to tighten up
While we are it how about we make every industry disclose there profit margin. When I buy a car I want to know how much the dealer made! When I drive the car off the lot it is worth 25% less, we all know it but we still buy one!!! Lets see a 30k car minus 25% after the first mile is….7500…now thats profit baby!!!When I pick up blood pressure( just an example) meds I want to know how much Merck is grossing!! 200%????
All I ask is that I can make 1.5-1.75%… Pretty fair if you ask me!!! What business works on a 1.5% margin??? Fraud is the problem, bullshit programs and people who really beleive there rate is 1.95%!!!
How many people really understand this!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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This is a broad statement but “you pay for what you want.” If you don’t have the 500k for the house you want, you then you have to borrower the money to get it. Borrowering money cost. The product is the money, not the house. The house is what is lost when you don’t pay back the product(money). Don’t pay for your car and see what happens. Don’t pay that credit card and see what happens. Don’t pay your rent and see what happens. When you don’t have the 500k for the house you can’t phase out the process. The process cost.
The NACA process cost. To eliminate and have someone totally take responsiblity for initiating your finance, you have to perform acts and pay “membership” fees for a long time. You have to take classes and attest to others that the program is ok. You have no choice in the matter. You are going to have liens on your house if you try to be slick. The rules can be compared to lender guidelines. And that’s ok.
Question. When the borrower has completed the program, do they get the $50×5 years or 100×10 years back? What’s the twenty dollars at the initial application for?
When you have 750 credit and 20% and verifiable income, you’ve already paid for a the option to get the best loan and that cost. When you haven’t done any of that and the sh**ty loan is the only thing availlabe, whose fault is that? And that cost. This crisis isn’t about people who had what they needed before they went house buying. Its about the ones who said “i deserve this just because.”
By the way, car dealerships are given the cars on consignment and split the profit after the sale. When you trade in your car, you are sure getting in the ass and the down payment they get out you goes to the car gods. Yeah Paul, everyone bitches but they buy the car anyway and if you have the balls to tell the sales man any of that, you might get a worse deal. No disclosures and you know you are getting the business. But there are no laws on this and in two years your car is garbage and you are usually forced to buy a new one. Almost like the 2/28.
Pats 16/ Giants 28 Don Shula is losing his mind right now
What a great game…..Don Shula and the 72 fins are on CPR watch!
Beeeeeeep………Beeeeeep Don’t be suprise if Don or his boys come out on the field and shoot Brady in the head
Don’t forget about the rust proofing the car salesman is trying to sell you… do you mean my new car is going to rust????? sign me up!! How about the Golden Gate bridge with that????
People take responsibility for your actions!!!!!!!!
Yes. Plastic does rust. But if you take the 5year or 50k mile warranty for $2000, it won’t rust……Really it won’t rust. Or the priceless, limited and ancient floor mats for an extra $800 and the $750 destination fee for getting the car from the back of the lot. Though its free is you take the upgraded LX model for an extra $1550.
Doctor we have a pulse…. Mr. Shula can you here me????????
sorry……… hear me????
boy I really need to get a life.
Is that you Larry Csonca? Where Bob G at.
Starting CPR again… I don’t know how much he can take!!!
WOW What a play!!!!
Pull out the defibulator. Put it on extra high
Extra high
Underwriter wrote-Whipping boys? You brokers are a bunch of goddamn babies. Fuck your crying. I’ve spent the last 8 months trying to stop the fraudulent loans sent my way, but as long as sales commanded the ship the Titanic sailed on. Now I see this and it makes me want to puke. I don’t blame lenders or borrowers….I blame you! Be a man and quit acting like you were a part of the cure for cancer…you were the cancer.
I am a mortgage loan officer in a broker environment. I began my career in mortgage banking in 1983 as a junior underwriter. I have worked my way up through every facet of mortgage operations to SVP Operations Manager. I received my real estate license in 1999 and went into sales. As an underwriter, NO ONE ON EARTH COULD MAKE ME SIGN OFF ON A LOAN I DIDN’T BELIEVE IN OR THOUGHT DIDN’T QUALIFY! If a superior asked me to sign off, I said “no”. If they told me to sign off, I said no. If they insisted I sign off, I quit. And let me tell you, I did have to quit a few times. As an underwriting manager, operations manager, I NEVER FORCED AN UNDERWRITER TO SIGN OFF ON A LOAN. If they didn’t feel comfortable, they brought it to me. If I didn’t feel comfortable IT WAS DECLINED. How long have you been an underwriter? I would guess not before 2002. I resent yours and everyone’s generalizations THAT ALL MORTGAGE BROKERS ARE LIARS, CHEATS AND THE CANCER. I am not afraid of full doc because I was trained extensively in analyzing all types of borrowers and their financial statements. I have analyzed self-employed borrowers with huge conglomerates, 52 properties with three feet of tax returns. It took me two weeks to complete but my analyzation went to the lender, not the underwriter’s. Hindsight is 20/20 isn’t it underwriter? If you let the loans go through that you knew were fraudulent…..SHAME ON YOU! You are the one that was part of the cancer. Your reputation is all you have in this business…..you should guard it with your life.
Mr. Shula do not go into the light!!!!!!!!!!!!!!
Ladys and Gentlemen we have lost him. T.O.D. 4:30 Dr Paul we done all we can do.
Virginia
Good for you for standing up for yourself!!!!!!!! Your repuatation is everything, your soul is not for sale at any cost!!!
Virginia,
He has 8 months of experience. If he gets back on here and says he has more, then my question is why wasn’t he declining them “fradulant” loans then. 8 months is nothing. He just got out of the 90 day probation period. It takes time to build reputation. You have to know the good and the bad. He’s foolish
Who is underwritter???
Boy I must be tired I cannot even spell anymore……
Its been a rough 4 quarters. Its o.k.
His post is at the top of this forum #6
Underwritter you sold yourself to the devil…do not sign off on shit loans. Document your employers thearts to push loans to close, call a good wrongful termination attorney!
WOW Pats 16-0 what a great achivement!! We can all learn something from the Pats work hard, never settle on past performance, and never give up!!!!! To all honest brokers and all related mortgage personal NEVER GIVE UP!!!!!!!!!!!
Moe~
I wouldn’t give any credence to any underwriter that signed off on any loan that he/she knew was fraudulent. All mortgage bankers have a system: If an underwriter suspected fraud, it went to quality control for a complete audit . If the underwriter was still uncomfortable, they could take it to their UW or Ops Mgr. NO UNDERWRITER IS REQUIRED TO SIGN OFF ON A LOAN THEY DON’T BELIEVE IN. There are rules and regulations regarding that position. Any underwriter that knowingly pushed fraudenlent loans through the system is part of the problem and should be prosecuted. If he/she was coerced, I agree with Paul….get a good wrongful termination attorney!
OK
So we are now all considered scum sucking car salesmen.
The same type of person that slams you into the overpriced over retail car because it is “in demand and a new hot model”, they give you 1/3 the value on your car for trade in, sell you a warranty, credit life, accidental death, Scotchgard treatment, clear coat, under coat, and over coat. They make an overage on the interest rate that they place for you. This process has gone on for decades and continues today and will tomorrow. The public is outraged that they get the shaft whenever they shop for cars.
How many non-profit car lots are out there?
Lucille,
Do you know anything about the mortgage business?? All loans, every single loan originated in America costs money to originate. The advertisements themselves offering a “no cost” loan are nothing but smoke and mirrors and border on fraud. Every loan requires a credit report, some sort of valuation determination, title work and insurance, etc. These loans are only called no-cost due to the fact that the interest rates charged are higher than the current market rate thus enabling the lender to receive a premium on the secondary market (which banks do not have to disclose) that covers the costs associated with the origination of said loan. Get a grip, there is no free lunch…
All I have to say is that a great majority of this is bullshit. I’m so sick and tired of hearing the same old rhetoric regarding all these poor victims who were duped into a loan that they could not afford. Take a hard look at the statistics and you will see that the numbers tell a different tale. An astounding percentage of these homeowners falling behind on their mortgages have done so PRIOR to an adjustable rate reset. Whose fault is this? Does personal responsibility not play a factor in all of this? The masses all thought they were Donald Trump’s in the making and rushed out to get their tickets to ride on the real estate train and the consequences be damned. Every 2/28 I sold (as a mortgage professional with over 15 years in the business) to a borrower was due to one simple fact – they could not qualify for anything else – plain and simple. I clearly spelled out the terms of their loans on numerous occasions throughout the process. Those with less then perfect credit all knew that they had less than perfect credit and were perfectly fine with a 2/28. They simply didn’t care as they all had dreams of selling for a huge profit before the rate re-set. Something that is not being discussed is the role of the Realtors in all of this. I can’t count the times when a borrower came to me with a house already picked out (and emotionally committed) prior to the application process. You would then run their application and discuss their financing options with them. Countless times I urged clients to reconsider their purchase as too expensive for them only to be countered with such responses as how can you get my payment lower? What about an ARM, what about an interest only payment, what about a 40 or even 50 year amortization? How much can the seller contribute to my closing costs as I have no money to put down? I would ask where they learned of these various options and the response was almost always the same – from our realtor. You had a situation where realtors were showing borrowers houses that they could never afford while at the same time feeding them inaccurate information regarding the mortgage process. In North Carolina, if you work for a mortgage broker as a loan officer, you must be licensed by the state which involves a strenuous examination and background check conducted by the SBI. Sadly, this only applies to brokers and not bank loan officers or realtors. Realtors were specifically exempted from this legislation (due to their powerful lobby) and are therefore free to discuss mortgage financing with their customers. What’s the problem with this you ask? They don’t know what the hell they are talking about! They poison the minds of their customers with loan scenarios and payment options that are not realistic. This takes place before the customer has come to see me. Now imagine this scenario: The borrower has been shown a variety of houses without regard to their ability to qualify by their “trusted” Realtor. Now they sit down with me after they are emotionally attached to a particular property and wonder why they don’t qualify for what the realtor had presented to them. They beg and plead for any option available that will get them into this house. So who’s fault is this now? As their mortgage consultant I am required to present them with all of their available options regardless of suitability. Ultimately, it is the client who must decide what is best for them…
Case and point: A few years ago we were solicited by a previous client’s sister to perform a refinance. She had a really good fixed rate first mortgage in combination with a “silent” second held by the city. She was not required to make any payments on the second mortgage. She was adamant in her request to receive a lower mortgage payment while also getting cask back if possible. Unfortunately, her credit situation only afforded her the option of a 2/28 interest only ARM in order to meet her desires. She closed on the mortgage as requested and we hadn’t heard from her for a couple of years until we were served with a lawsuit accusing us of predatory lending practices. She claimed that we should have never “put” her into her current loan and that she couldn’t afford to make her payments. As it turns out she was about a week away from foreclosure and the judge granted a stay of the proceedings until the suit was worked out. She not only sued us but the original lender, the attorney, the trustee for the lender, a previous owner of the mortgage and the current owner, Wells Fargo. Long story short, her claims were bogus. Wells Fargo produced documented evidence that she fell behind on her payments a year before the rate reset. They had recorded transcripts of all of her hardship stories regarding her financial position at the time period of her late payments. None of which had to due with her interest rate adjustment. She has successfully stayed off foreclosure and cost all of us involved thousands of dollars in legal fees for no reason at all. I know for a fact that this is happening all over the country each and every day. Consumer advocate attorney’s smell blood and are suing everyone in sight. Unfortunately, unlike a criminal case, the state does not provide free legal assistance for a civil defense. How is this fair???
All this being said, I must agree with the original thread’s premise. With all of this legal wrangling going on and everyone pointing the finger at mortgage brokers, while the Realtors and the borrowers fail to accept personal responsibility for their own actions, we may very well be doomed…It says a lot about where we are as a society. We seem to have adopted a secular view where every wrong is always someone else’s fault. I am deeply troubled about my child’s future as our society is certainly sending the wrong message
Simply put, there is no question when looking at historical data that people who pay their bills, debts, etc. have good credit. These people therefore qualify for a loan with the best rate at the time. People who do not pay their bills, debts, etc. do not have good credit. Therefore these people do not qualify for the best rate at the time.
Why is it so hard to understand this concept?
Someone mentioned earlier borrowers and Realtors pushed the mortgage community to get the financing for the house the buyers wanted. I own a real estate company as well. Our Realtors know borrowers/buyers have to be prequalified before looking for a home. It’s kinda like a house – basement, walls, roof. It doesn’t get done the other way around. So why is prequalification and getting the correct information from a mortgage professional so hard to accept? Prequalification today only takes 15 minutes or so. Not much time spent to know where we’re going. Fill in the blanks with accurate information and the answer will be there – qualify or no qualify. When the borrowers/buyers come in I have all of the documentation, disclosures signed, I have signed, credit has been reviewed and so on. My files go to underwriting that day or the next morning. Amazing how this happens when all has been upfront, all has been disclosed and all is complete.
There are mortgage professionals and there are some “bad apples”. This is true today, has been true, will always be true and applies to most every profession. It’s unfortunate, but this is reality.
It really gets down to responsibility, accountability, facing reality and work ethic.
Example of helping people who have marginal credit. Got the loan done. Proved the income. Proved the assets. Got a valid appraisal. Closed the loan on a new construction. These borrowers did not qualify for a conventional, fha or va loan. They qualified for a 2/28. I told them to pay everything, not just the mortgage, on time and with your income you will be able to refi into an fha loan within a year or so. Just before the loan was to reset, I get a phone call from them. “We need to refinance right away becuase the payment will be adjusting upwards”. I got permission to run the credit. Guess what? It was worse than when we did the loan. I mean really bad. What they did was run up the credit cards to fill up this new house with new furniture, etc and purchase a new car. They just had to have it all right now. Well guess what? I can not help them. They did exactly what I told them not to do. They did not do what I told them to do.
There is only so much mortgage professionals can do. Momma bird pushes the baby birds out of the nest. They better fly or else – not good. The baby birds take responsibility and learn how to fly. This is the way it is, this is reality and there are consequences.
The second biggest issue I see is we have legislation all over the place. We do not have enforcement of the legislation. So who’s fault is that? Why is it the small business person is the scapegoat? Government representatives are insulated from the realities of business.
A professor of econonics from the Milton Friedman School of Business, Chicago, stated this week the following:
People have tapped their home equity. Now prices have leveled and there is little or no equity. So this is done. Next people have used their credit cards. They’re now tapped. So this is done. Next people’s wages/incomes really haven’t kept pace with inflation. And particularly with energy costs and real estate taxes. Case in point: Energy costs and real estate taxes vs. adjustable mortgages – up $425 vs. $200 respectively for a $150,000 home. Hmmmmmmmmmm. So now people have little or no equity, tapped our credit cards, income not keeping pace, energy and real estate costs up and adjustable mortgages up.
Sorry, folks, but all of this is not the fault of the professional mortgage banker or broker.
Did you know that real estate taxes have gone up 50% since 2002? Check it out.
Realtors and mortgage people seem to have been at odds with each other forever. For years I have contributed above and beyond to the real estate board in our area. I have made mortgage presentations in their offices with lunch provided. I have brought, spread sheets, etc to their open houses. And guess, what? No loans or maybe 4 over the past 14 years.
Sad to say all they wanted was the food. I was told one by a Realtor, “The best way to get a Realtor’s business is through the stomach”. I can tell you that for the most part this doesn’t work. And I can tell you that for the most part many real estate transactions have fallen apart because the Realtor that wanted my support and food gave the business to the local brick and mortar bank. So that’s why I opened up my own real estaste company. And we’re doing just fine. Thank you!
Joe~ post #83 is spot on.
By the way, I had a real estate license in California and Michigan. I do not practice real estate now. However, when I was a Realtor, I didn’t play mortgage professional. I sold real estate. I am in the mortgage business now because of two things: 1) I am more of a numbers person; and 2) I know Realtors really do need good mortgage professionals to help. Note that my comments about Realtors is no all inclusive. There are good Realtors out there. And, unforntunately, the real estate world has similar issues. People get into that business because it looks easy, etc. They sell one home a year. When it is all added up these parttimers simply take away income from the serious, hard working Realtor. So goes it.
Virginia:
Sorry, what is “spot on”?
Joe~your post #83 below:
There are mortgage professionals and there are some “bad apples”. This is true today, has been true, will always be true and applies to most every profession. It’s unfortunate, but this is reality.
It really gets down to responsibility, accountability, facing reality and work ethic.
Example of helping people who have marginal credit. Got the loan done. Proved the income. Proved the assets. Got a valid appraisal. Closed the loan on a new construction. These borrowers did not qualify for a conventional, fha or va loan. They qualified for a 2/28. I told them to pay everything, not just the mortgage, on time and with your income you will be able to refi into an fha loan within a year or so. Just before the loan was to reset, I get a phone call from them. “We need to refinance right away becuase the payment will be adjusting upwards”. I got permission to run the credit. Guess what? It was worse than when we did the loan. I mean really bad. What they did was run up the credit cards to fill up this new house with new furniture, etc and purchase a new car. They just had to have it all right now. Well guess what? I can not help them. They did exactly what I told them not to do. They did not do what I told them to do.
There is only so much mortgage professionals can do. Momma bird pushes the baby birds out of the nest. They better fly or else – not good. The baby birds take responsibility and learn how to fly. This is the way it is, this is reality and there are consequences.
Paul and Chris – I do see NACA expanding big time as the awareness and also massive funding of these non-profits is coming to fuitation as we comment back and forth.
I see other “smart” brokers that have a sense of reality and a pulse on the street that will apply for their 501 (c) 3’s and change their tunes and start being community leaders where they can exist, thrive and keep their doors open.
You see, that’s where I see the business going.
Anyone can open a non-profit mortgage brokerage and offer every product available in wholesale. All they would have to do is charge low fees that cover costs and expenses. Just because they are non-profit does not mean they do not charge fees and they can be more than NACA. So, when a non-profit mortagge brokerage opens down the street in your community, good luck marketing against that.
Andrew – I am glad you see the light.
Cynthia – My heart goes out to all the ethical and honest mortagge professionasl that are suffering and being black balled as a result of all the scum and scammers that entered and most likely exited the business. It’s is a travesty that everyone has to suffer for and be black balled.
Virginia – underwriters have a holier than thou approach as if they were some kind of guardian angel to the gold with no faults. you and I both know that they were the last line of defense for fraud and guess what, the angels were a sleep at the job the last 5 years, based on a money and greed induced coma.
rcf – Great view form the table with clients and Realtors. I know real estate agents have a huge part in this, but they have NAR and years and years of community involvement. If anything NAMB needs to get off their a$$e$ and so do brokers and get involved in their communities instead of counting how many loans they are closing.
Joe – there is only so much you can do when advising a client on what they should do to protect themselves. I know that a lot of professionals fully explained the terms of a mortagage how it works. But at the same time, there were just as many loan officers that did not do that and placed borrowers in predatory mortgages with predatory fees where that LO and broker made the most cash. Same can be said for Realtors.
All I know, that way of business is gone and no one will make the money they were making.
Oh and one more thing, watch out for the non-profits because they will be opening these types of shops everywhere and most likely in your town too.
Moe
Maybe I am thick headed but most of my clients would never go to NACA. First off there loans sizes are to large, second they make plenty of money, and third there time is so valuable that they would never meet the 5 requirements year after year!!!
Moe answer this…why do private banking groups from big banks call me every week for loans. These are the same banks with wholesale channels that no longer exsist???? I will tell you why!!!!!!!!! Big ticket loans!!!! Good credit, great assets and they hope to move that client to there bank, although it is not a requirmrnt of the loan!!! High quality loans with little risk!!!!!
Here you go: 2.7 million purchase, 20% down, 690 credit, stated ( Vice president of big company) 4.2 million in assets!!!!!!!! 2.5 million in stock options!!! The private banking group terms ……10/20 IO 7.125% NO PREPAY 1 YSP and I charged him .625.
That commimsion will pay my mortgage for all of 2008!!!!!!!
This is a loan for any smart common sense bank to approve!!! But the BEST part is clients like this have friends that need help too!!!!! and guess who gets the refferal……me!!! I service the hell out of them and charge and deliver a great product. I do not see them going to NACA!!!!!
Maybe I going to make less in 2008 buy proable not!! I am a mortgage banker because I love my job, not for the money….the money is nice but there is a difference!!!
Moe
You have to admit NACA IS WIDE OPEN for FRAUD!!!! 100 LTV, LESS THAN GREAT CREDIT!!! Is this why we are in this mess!!!!!
I still the think the 20% down, 680 credit, full doc conforming loans are not going to NACA. I can get to 5.625% and make 1.25-1.5 ysp. You seem to missing the fact that peoples time is worth a quater point in rate….no 5 requirements for the next 10 years!!!!!!! Two income households with 2.4 kids running around like crazy do noy have the time over the next 10 years just to save a quater point!! Just my opinion!!!
Moe:
If you charge costs and cover fess etc, how does the non-profit pay the employees? How does anyone there make any money at $50 per month or whatever?
I went to the website last night. I don’t totally understand this non-profit mortgage lending. I do understand there are parameters. I get the impression this is for certain zip codes or type of borrowers.
By the way if this is true then how can I get a 5.375% mortgage fixed for 30 years with no costs, etc? I have a mid 700 score, equity, assets and can prove income.
Point:
First off I know according to what I read and what you are saying I will not qualify for this type of loan. So isn’t this discriminating?
Moe:
Why would I get the 501(c)3 if I all I can do is cover costs and not make any money?
Again, I probably shouldn’t be asking this since I don’t know enough about it. But if it is a way to expand my existing business, I will have to look into it.
Thats right Joe, you do not quailfy…you make to much, do not live the proper zip code unless I am missing something!!! Sounds like reverse discrimination!!
NACA does help many people , there is room for both broker and NACA.
By the way there(NACA) loan officers get 45k-65k benifits, bonus and 401k, good for them any hard working person earns it!
Paul – You are not being thick headed, just failing to see that NACA can do what you can do. Not now, but soon. You see these companies will soon have the pick of the litter on who they can hire. I am sure we will see people such as yourself, with experience and integrity working for these non-profits.
You can still operate a non-profit mortgage company and a for profit side by side. Th enon-profit would be for low income borrowers who qualify and the for profit would be for people who can afford to pay for mortgage service fees.
If brokers survive, then yes, the upper class and jumbo loans may very well go to you and you can pay your mortgage for a year.
BUT – if a non-profit opens down the street and they offer jumbo loans etc and charge minimum fees to do the same thing you did, well, bud, you soon will be out of business because those referalls will be going to them.
Paul:
I agree. I said it in the beginning of #83 above. It really gets right down to responsibility, accountability, commitment and work ethic.
It was too easy over the past few years to get a mortgage for the home that people wanted!! Note wanted!! Here in lies some of the problem. Again, they found what they wanted. Then they looked for a mortgage.
When the borrowers signed the papers at application and when they received the papers in the mail from the lender and they signed the papers at closing, how did they not know or think about actually making the mortgage payment (PiTI)? And really how on earth did underwriters approve these loans?
Even when doing a stated income loan salary.com gives guidelines for jobs, positions, etc. I understand that many of these stated income loans were given to people who’s income was stated double of the real income. How in the world could this get through the system?
Oh, and then there is fraud – bogus W2’s, pay stubs, bank statements and retirement accounts. I am not an underwriter. But I can tell after many years in the mortgage business whether these documents are real or not.
In our area recently 8 people were sentenced after a 4 year investigation to prison, revoked licenses, etc. It was because of fraud. Period. I remember asking someoe several years ago how is so and so closing so many loans and making 30m per month. Well, here we are. And there they are.
Moe
You didnot answer my question about private banking groups, also jumbo mortgage clientS ARE NOT GOING TO MEET THE 5 REQUIREMENTS FOR THE NEXT 10 YEARS…..THERE TIME IS MONEY
Joe -charge costs and cover fess etc, how does the non-profit pay the employees? How does anyone there make any money at $50 per month or whatever?
Moe – they get additiinal funding from the government and lenders in the millions that pay for all of this. All employees and the CEO must be paid within reason for the industry. What’s a broker CEO make on average. You could pay yourself a salary of what a comprable for profit would make within reason for your area. I am in So Cal and a broker here (not during the subprime market) income on avearge would be $80k-$120k. Processor $12-15 an hour, LO $35-$50k a year with beni’s.
Joe – I went to the website last night. I don’t totally understand this non-profit mortgage lending. I do understand there are parameters. I get the impression this is for certain zip codes or type of borrowers.
Moe – NACA has their own deal with lenders and their own mortgage model. It’s for low income borrowers and you can still have your for profit.
Joe -By the way if this is true then how can I get a 5.375% mortgage fixed for 30 years with no costs, etc? I have a mid 700 score, equity, assets and can prove income.
Moe – Yes, it is true and you can even get a mortgage with them.
Joe -First off I know according to what I read and what you are saying I will not qualify for this type of loan. So isn’t this discriminating?
Moe – No, it’s underwriting
Joe – But if it is a way to expand my existing business, I will have to look into it.
Moe – probally the smartest thing you can do in 08. By the way what state are you in? Is this the Joe I know from San Diego?
Paul – I understand that these private bankers and jumbo mortgage clients come to you now and you do them a great service and you may get to keep doing this and my predictions will be rubbish. But, if these non-profits open in your same town and they are charging considerably less to do the same thing you do because they will have professionals such as yourself on staff, then I am almost certain that these same banker will be calling them. I know I would.
I just see more regs coming down and a lot more controversy that will be hitting you ALL in the next 2 years. It has just begun and if Clinton gets the oval office, brokers are done.
http://www.guidestar.org/FinDocuments/2005/043/244/2005-043244616-02bcb251-9O.pdf
Moe:
Thank you for your response. I am in Illinois west of Chicago near Rockford, Illinois.
Can I have this type of operation and have my existing mortgage broker (business) at the same time at the same location?
Above is al link to NACA IRS form 990 Looks like NACA runs a tight ship, CEO salary is very resonable.
Just 1 item of note, in there mission statement they lend to low to moderate income in certain economic areas/ zip codes. Unless they raise the income level or open up zip codes I feel there is a place for both of us..
I am not affraid of NACA , they seem to help many people which is always a good thing. Competition is a good thing and it should always remain in a business model.
Where does the money come from for the mortgages?
Moe
I am not sure if more regulation is the answer, no one observes the regs now!! Lenders approving 100LTV stated 550 credit, NIV, NINA, NO JOB LOANS, was the problem but most of greed fromthe broker making to much all the way to the borrower who PUT HIMSELF IN A BAD POSITION TRYING TO GET RICH QUICK OR A HOME THAT WAS TO EXPENSIVE!
You did not answer if you think the high end buyer, 680 credit, 2 headed household with 2.4 kids would meet the 5 requirements to save a quarter point in rate????? May answer is no!!!
If buyers were dumb enough to try 100% financing, took neg am loans, prepayments, crazy credit card debt, high home equity loans why would they care if they paid quater point higher in rate if they did not have meet the 5 requirements!
Moe:
The funds. So a non-profit organization is formed. I can see that from the website when googled. Now where does the money come from to give to the borrowers? Do we, then, solicit donations from the public to fund the non-profit organization and the donors, then, get the tax benefit?
I would like to find out how this works after the non-profit organization has been formed.
Any suggestions?
Moe,
Again, NACA is a facet of this industry. Its designed to do a specific thing in a certain area with certain binding criterias, for a certain period of time, geared towards certain clients. NACA has been in my state and is in my town for years and its not that popular. I have financed several people over the past three years who left NACA because of their unusual conditions. A 5.375% is not that great when you have to commit a part of your daily routine for 5 years, having liens and “membership” fees as opposed to a 5.75% and you can do what you want when you want and your house is not tied up.
In regards to jumbo financing, that is a different breed. Paul is right. Time is money to these type of clients. They want it done quickly, discretely and with a sense of sophistication. And they have no problem paying for that. Going through an assembly line and having that kind of exposure isn’t going to work for them. It may sound crazy buy my jumbo and luxury clients would never touch a NACA loan. They’d invest in it, but never use it for themselves. That’s the realty of this world. Its backwards. And as long as its backwards, by design, NACA can take all 50 states by land air and sea and it will still be only a facet to the industry. But a facet only to a borrower in a certain area, with certain unsual requirements. But continue to do what you do Moe. You are giving NACA good press. The CEO would be proud of you. Some indivisual will never own a house without this type of assitance. Its a needed vehicle. Its a good thing.
You never told me if they entertain BK/FC clients? And what are their minimum fico scores?
Wall Street is here to make money, they are not going to let NACA take there business!!! Wall Street will find a way to put money out on the street!! END OF STORY!!!!!!!
The mortgage mess will straighten itself out sooner or later. When the next national problem hits the mortgage mess will be moved to the back burner just like every other problem the gov. has to deal with……Enron, yes you can still put all your 401K savings in company stock even after thousands of people lost everything being in Enron stock…remember the law makers were going to correct this problem….I am still waiting!!!!! People still have all of there 401K…some will never learn!!!! 9/11 security meassures……still a mess even after billions of dollars thrown at it!!!!!!!!!!!!!!National health care …………….still waiting!!!!! Social Security reform………..still waiting!!!!! Tighten boards…..still waiting………passport for everyone………still waiting, keeps getting pushed back!!!
I understand that NACA has been around since 1988 per a quote from someone earlier. If this is true and if it is true that the mortgage business will disappear because of a 501(c)3, then so be it. But it hasn’t happened in 19 years. So why would it happen now.
It’s similar to where I am doing loans now. The loan amounts are larger than west of here yet smaller than Chicago. It is not a low income area. Yet the housing is very reasonable. Our everyday living costs are reasonable. And we are in a vortex of a growth area. Note: just reported yesterday that the real estate values in the Chicago and immedate continguous communities went up 4% in 2007. So we can continue to live well with reasonable costs and income that leaves us with more disposable/discretionary income than in the megapolis’ such as Chicago.
I do believe that the real estate market will settle over the next few months. I believe real estate market activity will pick up in the late Spring for two reasons: 1) It’s Spring as usual; and 2) People will finally realize “Chicken Little” is not here. So they will say “What are we waiting for”?
Again, the marketing/distribution system of the mortgage banking and mortgage broker industries will be a big help to borrowers. Again, there are many mortgages such as fha and va the big banks can do but prefer not to. And that’s ok. I will do them. We have been doing them. We get them closed with real proven income, real assets, real down payment albeit smaller than conventional and pretty good credit.
Joe,
Exactly
Paul:
You are right. Unfortunately it is what it is. And those of us in the mortgage business who have and are surviving the turmoil and aftermath of 2007 will still be here. The best part is that 35% of the mortgage people are gone. It will tougher for people to enter or get back into this business. Therefore competition is reduced. The “bad guys”, not all of them, are gone because of the obvious – can’t steal large amounts of money from people. Fha will have higher loan limits. Fha will have smaller down payment requirements. And if they don’t change the rules, it’s ok with me. I live in an area where the limits and down payment are just fine. And, again, we already meet the new proposed Federal predatory mortgage legislation. So let’s go.
Joe
I too have no problem with the new predatory lending legislation, but someone has to address the BIG ELEPHANT IN THE ROOM!!!!!!!!!!!!!
When we have all of these new regulations………………..
WHO IS GOING TO ENFORCE THE REGULATIONS??????????? No one does it now and state gov. has so many problems they cannot commit the resources to the problem!!!!!
Joe,
WallStreet is figuring out how to make some long term money and who the players are going to be. There will be some minor legislative changes. H.R.3915 will pass but not as we see it now. Some licensure requirements will be insitituted and the state will make some more money off of that. The effect of these modifications will weed out the newbees. The market has rid us of most of the bad apples already. The rest will be on there P’s and Q’s for awhile until they discover the ever present loophold.
Defunct lenders will be replaced by new ones who promise good ethical behavior.
Appraisers will be scared to go over value even by one dollar.
L.O.s will act like they truely care because for some strange reason, we won’t them too.
Realtors will be artificially realtors and then it begins.
The borrower who is not held liable for any of this will want something they can’t have and the industry will give it to them. They are the ones who have truely not learned anything from this mess. Why? Because we haven’t made them.
Watch the down payments requirements go from 20% to 0%. LTVs 80% to 90% to 100%. Fico requirements 750 to 650 to 600 and you know. Gradual and new guideline changes from those ethical lenders who promised. Them damn lenders. Always wanting m$ney.
Watch the crazy real estate contracts start popping up. Watch the Appraiser start stretching. Watch the Title Attorneries begin to forget their legal obligation.
Watch how the L.O. will advise against certain deals in the begining, but will give in when, the word gets out that everyone is doing it. Property values will rise again and before we know it, its five years from now and ten years from that it blows again.
Crime/fraud has paid a great deal of money to some brokers. Until crime does not get paid and people go to jail, surrender there license , pay big fines, and be exposed to the public…like there name being printed in there hometown newspaper and local cable channel this will continue!!!!
No three strikes and your out, your are gone on your first case of convicted fraud…minor or major!!!!
Chris:
You are right. I don’t know. I think Paul is right also. And so goes it. It the meantime I do believe the mortgage banking and mortgage brokerage business will survive just as it has in the past after similar problems/issues.
Also this gives us who are staying the course, if you will, an opportunity to build strong business relationships with builders, Realtors, other affinity groups such as attorneys and investment advisors. And with borrowers purchasing and refinancing homes.
Those who left for the commercial world will discover the same issues evenetually. And they will have a very difficult time getting back into our business for quite some time.
The honest bankers, brokers, title agent, laywer must take the lead…..report fraud, refuse to do the deal, refuse to close a bad loan, bring a fraud case straight to your banking dept/congreessman office, bring proof to your local newspaper or TV station AND DEMAND ACTION!!! If we will not protect our industry,,,,who will!
right again
I know I am rambling…but I give a shit!!!!!!!
I hope I can get through this for all of my staff and loan officers and myself. It is a shame we have do a lot of extra work to find lenders and programs and marketing for borrowers. But we have to go the extra mile to survive.
I compare this with when I was a loan officer for other companies. Unfortunately I had to move again and again because the owners took my commission or went out of business. I make less now but I know I will get my pay check and I know that my staff and loan officers will get their pay checks.
I am skeptical now about hiring experienced loan officers. Even with a lot of background investigation I can not be sure there are no issues. I can not afford to hire someone and get blindsided by a news article that so and so from my company has been indicted by the FBI. So I will stay small for a while.
Here is a idea…….Take advantage of a opportunity. Call the NACA, go visit one of there offices……see if you can help them help people who they cannot get loan for……income to high, zip code issue, loan size. Work for a lower payout!!! I am sure if I can help people with there mortgage problem and it makes sense for all concerned…It could be a great income source.. How would you like to get refferals from the NACA because you do the right thing! All you have to do is ask!!!
rambling is ok – at least you give a damn. Most don’t and won’t take the time to discuss issues, present views and opinions. They’re probably out looking for some other way to take advantage of people. Ya know.
Well, I am back to underwriting again – and I have to say – WTF, you have not stopped with the Mis-Rep and Crap that you are submitting. Damn, you are more creative than ever folks. Here’s the deal, I get real cranky having to decline over 60% of what I am looking at, real cranky. I am at a point where my patience is really, really worn thin and about to let some of you know personally when I call out the decline what I really, really think in no uncertain terms.
Would you all stop co-opting the Appraisers, hell, when I call them and dig for information, they admit it, I with great glee and gusto put them on a list of “naughty boys/girls” for future reference. The Broker that submits the file is informed that I am calling for a Field Review, and yes, upon receipt of the Field Review, I was right, the damn property is 20,000.00 to 30,000.00 under the original appraisal valuation. Just how stupid do you really think I am.
I am so tired of having my intelligence insulted by all of this funky documentation. Now that you have to do full documentation the rash of “creative paycheck stubs”, “innovative tax returns”, etc…. is exceptionally annoying. Yes, I can figure out what is real and what is not real. Yes I call the employer, yes I pull a 4506T. Again just how stupid do you really think I am.
Oh, for your information, that explanation letter that went on for 4 pages of hand written legal paper regarding the borrower’s woes over the last 10 years of absolutely hideous credit reflected on their credit report, actually sank the deal. After 10 relatives died, 100 trips to the hospital, and 14 jobs lost……I see a pattern, and it ain’t going to stop. The 5 “R’s” were not met, go look that up with an old timer. They still have 8 pages of unpaid collections, charge offs, judgments and nothing re-established that is actively being reported for the last 12 months as paid as agreed. Oh that 4 month car payment history (did not redeem them) shot them in the foot. Now they have some serious payment shock with the proposed house payment in conjunction with that new car payment – never mind their rent was 350.00 per month – the new house payment is 1560.00 per month. They never paid anything else on time, what makes you think I am so gullible to think that they will pay this house payment, if frankly ever.
Now for what really pisses me off, I look at the GFE and Details of Transaction and see what you are charging to close this loan. Damn, are you trying to live off this pathetic thing for the next 6 months….. Are you that hard up? Then get the F*&% out of the business and leave it to competent professionals, we do not want you.
I could go on and on, but why bother – I see no end in sight to this, after the last 5 years of my 30+ years career in mortgage banking, of fighting the “New Age” lending, quiting and losing so many jobs I am on the fast track to the State Ho-Ho House thanks to you my fans.
I declined this crap 5 years ago, no matter what it was labeled, fought with management, and am still doing so. I am mad, you have screwed with my dinner table and the food on it for far too many years. You know who you are, yes I am sure of that, GO BACK TO THE USED CAR LOT, MCDONALDS, WHERE EVER and do not muck with those of us who take this seriously with an honest, prudent and fiduciary attitude.
To the honest and prudent Brokers out there, yes, there are some really good ones out there, I talk with you daily. Please get the scum out of the business, all of our livelihoods depend on rehabilitation of the industry through the industry. We are still a community service, the best service we could give our community is shut these SOB’s down.Well, I am back to underwriting again – and I have to say – WTF, you have not stopped with the Mis-Rep and Crap that you are submitting. Damn, you are more creative than ever folks. Here’s the deal, I get real cranky having to decline over 60% of what I am looking at, real cranky. I am at a point where my patience is really, really worn thin and about to let some of you know personally when I call out the decline what I really, really think in no uncertain terms.
Would you all stop co-opting the Appraisers, hell, when I call them and dig for information, they admit it, I with great glee and gusto put them on a list of “naughty boys/girls” for future reference. The Broker that submits the file is informed that I am calling for a Field Review, and yes, upon receipt of the Field Review, I was right, the damn property is 20,000.00 to 30,000.00 under the original appraisal valuation. Just how stupid do you really think I am.
I am so tired of having my intelligence insulted by all of this funky documentation. Now that you have to do full documentation the rash of “creative paycheck stubs”, “innovative tax returns”, etc…. is exceptionally annoying. Yes, I can figure out what is real and what is not real. Yes I call the employer, yes I pull a 4506T. Again just how stupid do you really think I am.
Oh, for your information, that explanation letter that went on for 4 pages of hand written legal paper regarding the borrower’s woes over the last 10 years of absolutely hideous credit reflected on their credit report, actually sank the deal. After 10 relatives died, 100 trips to the hospital, and 14 jobs lost……I see a pattern, and it ain’t going to stop. The 5 “R’s” were not met, go look that up with an old timer. They still have 8 pages of unpaid collections, charge offs, judgments and nothing re-established that is actively being reported for the last 12 months as paid as agreed. Oh that 4 month car payment history (did not redeem them) shot them in the foot. Now they have some serious payment shock with the proposed house payment in conjunction with that new car payment – never mind their rent was 350.00 per month – the new house payment is 1560.00 per month. They never paid anything else on time, what makes you think I am so gullible to think that they will pay this house payment, if frankly ever.
Now for what really pisses me off, I look at the GFE and Details of Transaction and see what you are charging to close this loan. Damn, are you trying to live off this pathetic thing for the next 6 months….. Are you that hard up? Then get the F*&% out of the business and leave it to competent professionals, we do not want you.
I could go on and on, but why bother – I see no end in sight to this, after the last 5 years of my 30+ years career in mortgage banking, of fighting the “New Age” lending, quiting and losing so many jobs I am on the fast track to the State Ho-Ho House thanks to you my fans.
I declined this crap 5 years ago, no matter what it was labeled, fought with management, and am still doing so. I am mad, you have screwed with my dinner table and the food on it for far too many years. You know who you are, yes I am sure of that, GO BACK TO THE USED CAR LOT, MCDONALDS, WHERE EVER and do not muck with those of us who take this seriously with an honest, prudent and fiduciary attitude.
To the honest and prudent Brokers out there, yes, there are some really good ones out there a lot of you, I talk with you daily. Please get the scum out of the business, all of our livelihoods depend on rehabilitation of the industry by the industry. We are after all a Community Service Industry, let us all Serve our Community as an Industry by shutting these SOB’s down.
Some how the system garbled that one – well read on McDuff – It repeated my computer is old and cranky too.
Poppy:
Not to mention how this clogs up the pipeline and underwriting time. And particularly when you have to a lot of extra work as an underwriter to decline an government loan. Loan officers that did nonprime loans are now trying to do government loans – fha primarily. And they don’t know how to do it. It’s the same ol same ol through it against the wall and see if it sticks.
I think lenders should have a person preview the fha file before it hits underwriting. That way if it isn’t complete the lender can send it back and it won’t hit underwriting until it is correct, complete and documented.
Lenders have cut back on underwriting staff and more fha loans are being submitted. Therefore underwriting time has been extended from 48 hours to 7-10 business day. This slows down the mortgage for the good government borrower and the good government loan officer.
So now we have to set different realistic expectations for approval and closing.
I also think it would be a good idea if lenders did a thorough investigation of the brokers before approving them to submit fha or any other loan for that matter. I just went thru this with a large national lender and was approved with flying colors. It’s not that hard when it’s done correctly. And this lender will turn down brokers. The lender doesn’t want crap in the pipeline.
What do ya think????
Here you go boys….SISA Alive and well…….and if do not know Vertice is part of Wachovia….. which stop lending via wholesale. Go figure!!! HEY MOE A BIG LENDER WHO HAS A SUB COMPANY-WHOLESALE!!!
Attached you will find your complimentary rate link newsletter as well as an important announcement regarding changes to our Vertice Advantage SISA program. The proposed changes are effective on 1/2/08 and pertain to maximum dti ratios on owner occupied, second homes, and investment properties. (max 45,45, and 40% respectively regardless of du approvals). Please take whatever actions are necessary to protect your existing loans.
The good news is, at least for the present, is that there have been no changes in max dtis under either of the programs. This is great news for our brokers!
You have my best wishes for a happy, healthy, and prosp
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MOE….. I am not trying to be a jerk, just letting everyone know that there is still money at there!!!! They have good underwritting standards and use every safe guard to protect themselves…one of the good guys!!
Bullshit loans will not fly here….good comon sense underwritting!!!! The type of lender who has everyones best interest in mind!
To all posters …keep the comments coming, we can help each other by keeping everyone informed and share new ideas…Remember we are here help each other….and improve our industry!
Yep you got it right, this is FHA all the way – I proposed to our Broker division that does the approval of the Brokers that we have a test…..you know a Mortgage 101 test for the prospective Broker/Client. Nothing to difficult, mind you, just a simple test. Those that pass, well then on to the next level – an ethics test. Pass both, then you get through the gates.
I am thinking about something along the lines of: If the borrower is not in title, can he/she obtain a cash out refinance? a. Sure why not b. Not on your life c. When the moon is full twice a month. Do not laugh – I have one of those in the pipe presently, approved it contingent to some rather unique conditions, just to see how far they would go…….idiots think they have a fully approved loan (yes I am getting rather sneaky). On the ethics side hummm…: What do you call a cut and paste Credit Report? a. Creative Lending b. Art c. Fraud. Just had one of those, was so irate I declined it by pulling an new credit report through DU….guess what Refer W/CautionIV/Ineligible. Oh, the Appraisal on that one was really pathetic as well, Appraiser ought to be ashamed, so transparent.
We can not just decline a loan without an underwriter reviewing the file, I have seen some good borrowers get shortchanged by that process, they should not have to pay for an Originator whose experience or lack thereof penalizes them. I am doing a lot of “get the borrower out of the ghastly 2/28 or 3/27 product they are in”, and would like to give every borrower a fair and unbiased chance. When it makes sense, even if the credit is blemished, I am doing it, net tangible benefit has to be there, borrower capacity, collateral, willingness, etc…..all play a part. Mainly just good old common sensed lending with the guidelines, mitigating and compensating factors to support. Also am trying to rid the world of these toxic Option Arms as well, every little bit helps.
Speaking of borrowers that should be approved – this one with the borrower not in title, if they are truly making the payments, they actually should be enabled to get out of the ugly garbage they are paying on, but no cash out. This one is a twist I have not seen yet, so I am letting it play out to see where it really goes. I have not seen everything, and would love some further education in the inane and comic. If they do meet the conditions, I will counter offer and get it done. As it stands, it is not eligible for any product I have ever seen, excepting some of the old WAMU and few other propriatory guidelines that I have underwritten to.
On the purchase side, it is still the same old, same old – absolutely from the sublime to the ridiculous. I still ask myself – where did it become a rule that every citizen and non-citizen (legal or otherwise) became entitled to own a house in the US, let alone every originator makes 10,000.00 plus on each transaction whether it be 90,000.00 or 500,000.00. A little exaggerated, but not to far from the truth.
Meanwhile my patience is tried by the ones that fight my decision based on the “squeaky wheel get the grease” maxim. Wear the underwriter down, threaten the underwriter, whatever……none of it works anymore (let alone ever) with me. They have no idea where I have been over the last 5 years, and how many of the idiots that I worked for briefly, and that are now out of business for just the reasons that I quit. As a friend of mine once said – “And the Bank Closed” after the gal told her that it had been approved at MLN. That aggravated the Broker so much they reported her to her superiors……needless to say she is not there any longer, on her own terms mind you, and they are closed as well.
Yes you are right we too are at 7-10 days underwriting time, frustrating, but inevitable, so many of the wholesale houses are down for the count. The prudent ones are left to carry the burden, we will get through it, slowly and surely. By the end, my hope is that the “crap” is weeded out of the pipeline by those who have been submitting it (the crap) being OUT OF BUSINESS (maybe in jail too). Could not happen to a better bunch of folks.
Be patient with us – we are trying real hard to give every borrower an honest chance, the conditions may be lengthly, but they make the file work, especially the ugly ones that really need this loan to get out of that toxic loan they are in. Give us the chance to help the borrower and we will get there together. Put everything including the kitchen sink in the file at submission, do a cover letter to the underwriter on every file, make it a road map, it helps, we do read them. Do not think for a moment we do not care, we are tired, cranky and over whelmed, but we do care.
Welcome back poppy
. Nice to see you around these parts and I it’s nice to see that your the same but working and taking care of yourself.
I may have a job for you, if you’d like?(not in u/w) Would like to chat with you after the new years.
Thanks for the comments that have turned into a post. I just can’t help myself, they are too darn good.
Ok, Wait a minute ! I am a used car salesman – please don’t disrespect me and compare me to a morgage broker !! Our industry is cleaned up considerably !! and your is getting worse ! I’ve seen and heard more crooked stuff in the morgage business than I have ever seen on a used car lot !!
Poppy:
Thanks for your follow up. I understand and we give borrowers realistic expectations with regard to underwriting, approvals and closings.
I can’t imagine making 8-10 points on a loan. In Illinois we have had a 5% rule for all loans which includes the normal closing costs, ie appraisal, title, flood, tax service, processing and underwriting. That works out to be around 1% on a $150,000 mortgage. So then there is room for up to 4% for commissions. However, I have to say most of the time to ysp and points probably total 1.5 – 3.0%. So an average of 2% let’s say. Our average loan amount is approximately $145,000. But then again our cost of living is quite low compared to the larger cities such as Chicago. Also lender doc prep and closing check for high cost. So it is virtually impossible for someone in Illinois to close exceeding this high cost percentage.
Marc – sorry to denigrate – I am an old horse trader – no joke – sold ‘em and bred ‘em for years.
So from here on out I will use that industry as the whipping boy for the jerks submitting loans that I have to deal with day in and day out. Problem is they aren’t creative enough to make a living trading horses, utterly unable to compete with the finer art of smoke and mirrors.
As for which/whose industry is worse, who these days in the “entitled era” knows, some how or another it looks to me that everywhere you look no industry is immune to criminal behavior. Our society as a whole appears to have slide down the slippery slope and have a very muddy collective $@@.
Sorry, Illinois is not immune either – as it goes, there is a telephone and the internet and a whole bunch of bottom feeders trolling those venues. Some boiler room in California or Internet Lender in New Jersey gets and inquiry and off to the races they go. Yep – I send them a real clear message. ****Please note – Illinois/New Mexico property max financing fees limited to 5% please confirm prior to docs/funding. Now since when was I supposed to be a processor, underwriter, compliance officer, mortgage cop…..?????
Use to be…..now I date myself….you could not lend outside of a 50 mile radius of your institution. Not a bad idea, worked, well, kinda – we did red line in those days. However, digression aside, it did keep one more honest, if you screwed your neighbor, he could visit you some night for a real frank discussion. All joking aside, we were vested in our neighbors, our neighborhoods and our community – they were us. About time we all got back to that simple equation.
Great idea. Unfortunately those who represent us won’t help us get there.
Marc, that was hillarious. I think some brokers were used car dealers turned mortagage brokers.
“if you screwed your neighbor, he could visit you some night for a real frank discussion.”
Ha, ha, Poppy, that’s a thought!!! Mozillo in a small room with a hundred homeowners with options ARMs. I’m thinking of a scene from Night of the Living Dead.
Joe – then we get ourselves there. We as an Industry demand that the old rules go back into place, believe me there have been so many that have shunted off. I am spending Sunday night underwriting, so do not have a lot of time to go into them, but they were on the books at one time, they need to go back on the books along with a few new ones that have arisen out of this debacle. We will rid ourselves of a lot of creeps in the lending channels, Brokers, Lenders, Investors, Scammers, Flippers, Equity Skimmers, Realtors, Appraisers, etc…… Barney and his Chums have not begun to scratch the surface, and I fear that they never will, unless we as an industry demand that they do.
JacMac – Please get me the Video on that event when it happens, it would be just deserts to see Mozilla meet his worst nightmare. However let’s not stop with him, the markets he sold to have leading men/women that also could use some sobering “visitations”, if Wall Street had not made the market, CWide, Ameriquest, Aames, WMC, RESMAE, Accredited, Impac, New Century, Fremont, ad nauseum and their toxic products would not have existed. I think a few SEC, Secret Service and Treasury Agents could cause some real consternation in the hearts and stomachs of these leading citizens.
One problem I have with the current system is allowing real estate companies to have their own mortgage companies or have an affiliated business arrangement with a mortgage company. The real estate companies pay a referral fee or some kind of compensation when the agent “drives” the consumer to their “in house” mortgage company and or escrow. What ever happened to an ARMS LENGTH transaction? Back in the day, all entities involved in the transaction could not be affiliated in any way i.e. no in house escrows and no in house mortgage companies. If we found a relationship during a pre-closing audit, the loan was declined. If we found out about it during a post-closing audit, the people involved were prosecuted. Now we have all of the big realty firms with both. Someone in a previous post said go back 10 or 15 years and that is the structure that worked best. I say that is mostly true. Some of the loan products today are still very useful to people who are trained and educated as to how they work (i.e. Option ARM for real estate investors/interest only products for short-term occupancy). Not every type of loan is designed for every type of borrower. That is what the professional loan officer is for.
I hate to say it but the mortgage broker has always had the image of a used car salesman, its just that most mortgage brokers have finally figured it out.
As a former wholesale rep, most brokers didn’t even know what they were selling (although they thought they did) and as such, sold the product that made them the most $$ from the lender with the best rate at the desired YSP.
Selling on price, not correctly informing your customers, and maxing out YSP on most every deal does not win in the long run. Now you will be regulated to the point where it wont make sense to be in the business.
YSP was not the problem, yes it was abused!!!!!!!! When investor allows a buyer to put no money down with good or bad credit is just plan stupid. Then lenders allow the same programs stated, NIV, NINA, NO DOC. IF A BORROWER HAS NO FINANCIAL RISK TO THERE OWN MONEY IT IS VERY EASY TO WALK AWAY FROM A PROPERTY!!!!!! (LOSS OF A DOWN PAYMENT..SAY 10-20%) A buyer might think twice if it is his money at risk. Yes some LO DRILLED THERE CLIENTS AND THEY SHOULD BE PUNISHED!!!! WE HAVE TONS OF REGULATIONS NOW AND NO ONE IS WATCHING/ENFORCING IT!!! I am all for DISCLOSURE, FULL DISCLOSURE BY EVERYONE, EVEN THE BANKS HIDING BEHIND THE FEDERAL CHARTER RULES….LIKE WELLS,COUNTRYWIDE….THEY DO NOT DISCLOSE YSP AND DO NOT HAVE TO. THEY WERE AND ARE THE BIGGEST SMOKE AND MIRROR OPERATION,I SHOULD SAY CAR SALESMAN.make new regs IT APPLIES TO EVERYONE, NOW THAT WOULD BE IN EVERYBODIES BEST INTERST EXCEPT THE BANKS LIKE WELLS,CW………….
I think that your concept is correct but not accurate. Buyers will always need brokers because if the broker in knowledgeable they will get the client the best deal. Banks might eventually lower or eliminate YSP, but I don’t know about you but if a broker was getting me a loan at a lower rate and better terms I would gladly pay them a fee.
Mortgage Bankers have been known as having the credibility of used car salesman…. since the time that the mortgage markets started expanded the credit spectrum they would do business in outside of Prime. Where ya been?
Mr underwriter, I am a loan officer for a broker, in our office we charge 1 % of the sale amount only, stop blaming Brokers..
Did you ever go to a meeting for your own AEs…..
I bet you my house you didnt.
Your own AEs were trained to “teach the LOs on How to submmit the loans so YOU can approve the loan…uhmmmm
Tell me if Am lying. I can almost see you at those luncheon meetings getting YOUR BONUS check…didnt you?
HEY MIKE, WAS YOUR JOB TO TEACH THE BROKERS AND LOs ON HOW TO STRUCTURE THE LOAN SO YOUR OWN UNDERWRINTING “LADY” DIDNT CATCH THAT MINOR DETAIL WHERE THE BORROWER FOR THAT OWNER OC WAS ACTUALLY LIVING IN DUBAI?
I was just reading about Bruce Marks and the NACA. My honest reaction? I’m pissed off. Why do these people deserve better rates and terms than me when I’ve never missed a payment in my life, have high 700 scores and put money down and paid my own closing costs? I saved money to make the down and the closing costs and these people are getting 100 percent financing, no closing costs and 1 percent less market rate on a FIXED loan. Sorry folks, that’s bullshit no matter where you live.
Most brokers I know ARE used car salemen. Maybe that’s the root of the problem?
I read the NACA website. They have job openings in my area. I was interested to see how their compensation is paid. It seems fair, but it’s still production-based. You have to hit 5-10 loans per month. However, the additional requirements seemed a little much. Then there’s the participation issue; I have one question they do not address. It says:
“When you join NACA, you agree to the Participation Pledge which requires you to participate in at least five activities a year. This applies immediately and extends for as long as you have a mortgage through NACA. Thus, you will not be able to access the NACA program if you do not participate”
What happens if I miss an activity or do not complete my 5 activities in a year? Does the rate adjust to some higher rate? Do I have to pay back the closing costs? I’d be interested to see the contractual obligations on this matter? Besides, isn’t this some sort of forced labor? Whether the customer pays through money or time isn’t it the same? (from the old addage “Time is Money”)
Additionally, the website suggests being arrested during a NACA civil disobedience action as participation. Regardless what I think or believe, I’m not sure encouraging my customers be arrested is really right or smart. (read future law suits)
I can see how this product offering could significantly hurt a portion of my brokerage/banking business. However, making low-income, questionable-credit borrowers 100%LTV loans with a second lien in place puts them in much the same prediciment the current defaultees are facing: No equity or upside down in a declining market with too many consumer unsecured debts obtained from credit-driven bankers determined to outrun their losses with cooked books and irresponsible lending practices.
Sure is a good thing Mr Community-Action Customer got a great low rate so he could fill up his new house with Rooms-that-Blow furniture and get that new car at 15%APR. Hmmmmm. I wonder what goes back first? the car ($1000 down) or house ($0 down) Hey, experienced brokers…….you know the answer to this one.
I repeat:
Mortgage brokers have never had a good reputation. I don’t know what planet you are living on. They have never been respectable and have always been thought of as used car salesman. Wake Up!!!
This is a dead on statement, Aaron: “If a broker was getting me a loan at a lower rate and better terms I would gladly pay them a fee.” — that’s why I feel so many Mortgage Brokers have shot themselves in the foot by being so dishonest and greedy.
I understand the way the business world works and that you get what you pay for, et cetera.
What I’ve been bitchin’ and moaning about since I started posting here is being lied to, decieved, having information withheld from me and being mislead.
Let me shop my loan and make the best decision for MYSELF about MY HOME with all the information that I need, not just what some slimy Broker thinks I need to know.
I never agreed to be on a need to know basis about money that’s ultimately going to be coming out of my pocket — that’s the point, but it seems to fly by the heads of most of the brokers out there, especially when their ego jumps up.
I’m in danger of getting a cornea injury with all the finger pointing that happens when Moe (or anyone else for that matter) even says a word about the fraud of the dishonest Mortgage Broker. Unbelievable.
Rudy – you have no idea – I confronted the AE’s daily, and I do not take a bonus for underwriting, never, ever will. Will not work for anyone that offers one either, how fast does that degrade the process???? Real fast. The AE’s that I work with today are professionals, their sales managers are professionals and that kind of crap does not fly in this office.
As for living off commission, well buddy – I was an originator for over 20 years, Branch Manager, Territory/Area Manger and VP on the Production side.
If I ever, and I mean ever saw anyone of my people take the fee income that I see represented on these files – they would have been fired on the spot. End of that discussion. It is immoral, unethical and down right criminal. As for my commissions, not every transaction was my last. I had an over 97% pull through rate and closed well over 200 transactions a year, I never cold called after the first 5 years, everything was referral and for that matter, the Realtors that I worked with for over 18 years, still call me for assistance. I can not render it now, conflict of interest…..yep ethics. Now for the mind blower – in the last 15 years of originating I had not one turn down from an underwriter, not ONE. I never, ever fudged on a file, it was straight up and honest, if the borrower was not viable, then we either worked to get them viable (some it took a year or more) or they rented.
I still see my old borrowers in the grocery, drug, hardware, you name it stores and other venues, they actually like me and ask me if I can help them, family members, neighbors, etc… I hear about the jerks they have dealt with since I left production and oh my, they actually remember what I told them when they bought their first house. “If it sounds to good to be true, it AIN’T true, doubt everything and when in doubt get the hell out.”
Now can you say the same….seriously doubt it. OH, damn I forgot, when I screwed up a lock – god…..I paid for it out of my own pocket, not the borrower. Yes I bellied up to the Bar and paid the price out of my own pocket, did not happen often, but when it did, it was my financial responsibility.
Now if you can run your business this way, do it, if not get the hell out of the business.
I as a former AE can say that a MAJORITY of loan officers and brokers in the business are in it for the money..not because it is their passion or because they want to help people..
they are in it for the money
how can I tell? easily!
1. they dont’t know how to price a loan off a rate sheet but can figure how to get a large rebate.
2. they don’t understand anything. they do not know how an arm adjusts..why it adjusts..can’t calculate a arm scenario adjustment..dont know simple definitions for margin, caps, floor rate, lifetime cap, etc.
3. They been in the business for years but can’t even complete a good faith correctly.
4. they take 5 days to get their borrowers a final answer (mean while..the one really doing the work they should be doing is the poor and irritated processor)
5. They tell their customers their loan has a prepay just to make another .50 on the back.
6. They provide an original good faith with closing costs and at last minute they raise the costs when they learn that the seller is actually contributing more to borrowers closing costs..so they play with the figures to soak up the sellers contribution..and the rate stays the same plus the borrower still has to bring money.
The business will change and be good for the borrower
once we get rid of all these unethical and trashy people. That would be by maxing closing costs and cutting rebates out. Then only the ones that truly enjoy this job as a passion and want to help people will be there.
and Have you seen how these loan officers talk and act?
i see females dressed like tramps..
i seen dudes walking around like they are god
bragging about how much money they made..how they took a “stupid” borrower for all they had..
they ask for pricing and used foul language around me
when they did not like the product or bank..they would shout an f word
Just plain tacky personalities. Coming to work in sandals? Come on.
I mean no professionalism what so ever.
They would ask me to commit fraud. I mean really..these people are not sales people..they are order takers. These people can not succeed in any sales job outside this industry. That is why they are all scrambling and paranoid..because they don’t really know how to sell.
These people were not really loyal either..
they would make me run up and down all day trying to get a loan approved..then they would take the loan somewhere else because the lender had shady practices that made the loan close faster or had better incentives for the broker..even though it was costing the borrower more.
Some processors too..they would show up all nappy looking and just learned how to send every borrower subprime and how to cut and paste
and are know complaining because all banks are mainly A paper..and they do not have the knowledge needed to submit a complete file.
I remember a processor frined of mine would do mostly alt a and subprime
he would send a deal to my A paper bank and complain because the file would not move…of course it would’t it was DU approved and file was missing conditions. so I told him..”im sorry if you are upset but we are A paper..that means you need to send in all conditions that are asked by your DU approval..we dont work files that are incomplete…he then stated, ‘well Aurora Lending does that..why can’t you” I said..”well we are not Aurora” we are old school underwriting…you need to learn how to truly process now. Train your loan officers and your idiot broker to get their conditions as soon as you have the DU approval. Don’t waste your time. really.
how Aurora treating you now!
yes we need to get rid of the greedy crap.
we can start by requiring COLLEGE DEGREES. That would eliminate ALOT of trash..yes trash.. you know who you are!
“It’s going to be great in 2008″
FormerAE – Love the post. It reminds me a lot of my old office, lots of LOs there that match your description. The dress, attitude and business practices.
They could not understand why I was closing far more volume… because I wasnt trying to make 4-5% on every loan while treating the customer like garbage. I was hustling trying to advise them and find them a loan that fit their needs and budget… even if on some loans I made $500 total. You win some, you lose some… but in the end you get loyal customers and a stable business.
All they new was selling the low payment on an Option ARM, no clue how it worked and no desire to explain the risks. It made me sick to see them cursing and threatening AEs and UWs to try to push garbage through becuase it was the only loan they had going. I never once asked for pricing exceptions or to get “creative” on a loan, because we properly QUALIFIED borrowers.
The minimum standards for licensing in NC are a start, but not enough. Luckily I have plenty of education and background, but I wish it was required of everyone. Oh well, I guess time will tell who will make it through this.
As for NACA…. it has its good and bad points. As was mentioned the buyers are required to do “community service” every year. So while the interest rate (what happened to APR, they never advertise that…. FTC anyone?) may be great, it comes with strings. All good things do, so before you post how they are the second coming read into NACA further.
They have several restrictions on area they can buy, Realtors they can use (and they get a $100 bonus for referring them to in house agents… again, that looks shady to me), repairs that need to be made and how they are made, etc. For a refinance their current rate needs to be >10% which they consider predatory. I know as I sent a few clients that were screwed by their LOs to them last year… as they had 8.5-9% rates NACA said nope.
The process is budget driven, not credit or income. So if a borrower can show they are saving money over time in a bank that works (nice approach I think) They need to attend seminars, counseling sessions, etc that can take months however.
As for their loan officers, pros and cons as well. They get a draw, not salary, and if they do not keep up volume (5-10/mo) they are out. They get about $200-800/loan from what I read depending on loan amount and the borrower. The WORSE the borrower (low income or credit) the HIGHER their compensation… so they want those tough cases.
So there is motivation for them to close loans…. if they do not write loans, they lose their commission and possibly their job. They are monitored by computer and required to work long hours and attend the weekend meetings, so its a tough gig for a small commission.
I guess thats wht this beautiful non-profit window 1-5 system you describe gets though… a socialist utopia of bureaucrats. You make $8/hour while big brother watches you and tells you what community service you must do to keep your job. Those that qualify and stay in line can buy house model A or B with loan 1 or 2 and chose from a menu of demonstrations or other indentured labor to thank the non-profit for granting them a loan.
Sorry if I prefer capitalism, even with its ugly downsides. I think we need to fix the system and enforce the laws. Increase education standards for loan officers AND homebuyers (home buyer counseling requirement?) and make sure all terms are disclosed in a way that the customer understands.
Thank you for the intelligent post and information re: NACA. I knew nothing about that entity until Moe brought it to light here. It sounds like a great option for certain people who meet the requirements and are willing to contribute to their communities in order to get a better rate. Nothing wrong with giving back.
Highering education standards is great!
However..there are ALOT ALOT ALOT of brokers out there that mainitain unlicensed loan officers who sit there and do loan work or who are paid a large split under the table.
I have seen many processors who are commission based only and help steer people into high comission loans running around figuring how to rip off people and then having a licensed LO sign the initial and final 1003..and at closing recieve a check from the loan officer.
Then at the end of the year..the loan officers gives the unlicensed LO a 1099 and claims the deduction as a “marketer” or “lead generator”
which is all bull.
i think
maybe there should be a law where a broker or a loan officer who provides a 1099 at end of year to a contracted worker who must be licensed by the state. Period. That way, many of these people would be eliminated.
I think that would help.
FormerAE – Again, you hit a great point.
I know that 4-5 of my competitors are unlicensed. It is these people more than any that seem to do “Stated Income” FHA loans or other transactions that we can not compete with. They give GFE that are about $2-3000 off of reality and quote rates that can only be gotten by fraud.
They can not get licensing for various reasons, a few I know becuase of past financial “issues” in the insurance or other industries. Some I guess just can not pass the “rigorous” course and test requirements, which I think should be AT LEAST 2-3x tougher.
They just get another LO to sign the 1003, but they advertise in the paper and by direct mail, take applications, run credit and perform all the activities that the law says they can not do. I guess most get cash or 1099 as a “contractor” at the end of the year. My old branch interviewed a few and said no to them, but sure enough they found jobs at other shops that did not seem to care.
I have worked in processing, marketing, originating and as a manager now… amazes me what passes as a “qualified loan officer” in this business.
You Can Stop Foreclosure Yourself! Learn how at: http://www.preforeclosuresolutions.info
The judge says, “Because of a glut in foreclosures, houses aren\’e2\’80\’99t bringing their full value at sheriff\’e2\’80\’99s sales”.
Hey Your Honor – maybe they ARE bringing their full value You’re just ignorant of how far their full value has dropped.
I hear that logic all the time: “I can’t sell my house for what’s it’s worth.” You can always sell a house for what it’s worth. It’s only worth what someone will pay you for it.
Hey former AE,
I read this in comment 153:
“6. They provide an original good faith with closing costs and at last minute they raise the costs when they learn that the seller is actually contributing more to borrowers closing costs..so they play with the figures to soak up the sellers contribution..and the rate stays the same plus the borrower still has to bring money.”
Yikes!
This could constitue a violation of state consumer protection laws in many states.
In response to JacMac
What saddens me is the lack of personal responsibility in the whole equation. Parents that are looking to purchase a home or refinance a home should take the time to actually read the documents that they are signing. If things are different then originally disclosed by a mortgage broker or banker then they should not sign the paperwork. Losing a home to foreclosure is painful, but it can not all be blamed on a mortgage broker or banker.
Because owning a home is such an important part of american life people need to educate themselves about the mortgage process. Too many people, it seems to me, just want to call up their local bank or broker and order whatever they want. This is not ordering a pizza, this is not buying a car, this is a HOME. Take some time and READ, educate yourself about it and then make an informed decision.
Ignorance is no excuse!
The blame for this entire “Mortgage Meltdown” can be laid upon the shoulders of all the greedy mortgage loan industry executives and the investment bankers who designed a scheme calculated to make themselves rich. Under the guise of “helping people” to realize the American dream of owning a home, these white collar fraudsters were really only concerned with creating feigned profits by quickly churning mortgage loans into securitized investments which they in turn sold to investors.
Based upon these feigned profits these executives and their cronies were able to extract large bonuses and convert stock options into personal profts. While the investors got stuck holding the proverbial empty bag. Many investors were large national banks. Ironically these same banks would have never loan money to the borrowers who’s notes they were now holding indirectly through their investments in these “mortgage backed securities”. It is now estimated that the losses incurred by these banks may well surpass three hundred billion dollars.
There can be no argument these losses were the result of fraud from top to bottom of the mortgage industry. From mortgage lenders suchs as Countrywide, Washington Mutual, Fieldstone and Option One to secondary mortgage market makers, such as Fannie Mae, Freddie Mac, Bear Stearns, Citicorp, Goldman Sachs, Lehman Brothers etc.
This mortgage fraud created a false demand for housing in the U.S. This false demand caused an increase in home building. Now with the Mortgage Meltdown the U.S. has an over supply of new and existing homes. This over supply of homes has caused serious economic effects through every facet of the U.S. economy. Recovery will take years. The U.S. dollar has also suffered against other currencies. In April of 2003 a Euro could be purchased for $.85. Five years later in April of 2008 it takes $1.60 to purchase a Euro.
Rather than throwing themselves out of their executive office windows when their financial scandal was discovered and the billions in losses started to mount, these white collar crooks simply took early retirmenet or quietly resigned, taking with them the hundreds of millions they had EARNED for their part in the Largest financial scandal in U.S. history.
Americans should be outraged at how this went on unchecked by state or federal authorities.
I have been in the real estate investing business for the longest. As in every business there will always be unscrupulous people, but I dont believe that you can just bundle everyone up in the same box and say everyones a crook. There are many crooks in this business as in every business and in the world. I am here defending anyone working honestly and with integrity. I feel the people that are ripping people off should be punnished for sure, but not saying the mortgage and real estate people are like car salesman. Whats wrong with car salespeople anyway??? Your blogg makes no sense to the common worker. I am a common worker and consider myself to be honest and work with integrity. The people that run our government are the ripoffs and you should be blogging about them. But Im sure you wont, cause you are afraid of being audited. Our politicians just gave themselves raises. Must be nice, while the world around them is collapsing, they are living high on the hog. I hope people are dumb enough to listen to your stupidity and try and do things themselves without enough knowledge and know how to save their homes. I dont know how more people would have lost their homes if attorneys, mortgage brokers and their employees wouldnt have jumped in and modified some of these loans for some of these people. Also, if you narrow the competition, guaranteed, the prices of modifications will go up and more people will lose their homes because you arent able to gain any money or you have some hidden agenda. Less competition means higher prices!!!! duh…
OK, used car salesman for the most part are liars and will do just about anything to sell a car. Now, mortgage brokers are a close second because they will do just about anything to sell a loan. Including but not limited to lying, cheating, stealing and committing fraud. Don’t believe me? Maybe you should ask the millions of borrowers who were scammed by fast talking loan officers who sold them a loan that they should have never received!!!!
I’ve been trying to contact naca for weeks on my loan modification,my id is 620387. My phone no. is 314-704-1014, you cannot contact me by e-mail because i have no computer. I’m in big trouble , please could you get this message to someone to help me. Thank you……Deborah Partridge