IamA Mortgage Loan Processor for a large lender in the US AMAA!

Wow the timing of this.

I am in the process of buying my first house. My close date is at the end of the month. Why, in the ever loving blue fuck do I not find out if I'm getting my loan until like, a week before that?

I mean, they have my pre-approval, the signed P&S, the appraisal was done (I've received no word on how it went). What is there left to further scrutinize? And if they decide they're not giving me the loan, I just lose my house a week before I'm supposed to get the keys?

I feel like I'm taking crazy pills.

First, I work specifically on refi's so my information may not be as exact.

There are many third party items completed with any loan, a good lender keeps you aware of everything from tax verification both personal and property, insurance, title, everything that goes on with the appraisal and sellers, local, state, federal commitments and laws etc.

If the appraisal came in way off that can be an issue too. I know with a refinance we cannot close until at least 3-7 (depending on delivery and state) after you have had a chance to review it. This may apply for purchase as well, if the inspection was done and it has been more than 5-7 business days, call your lender and request a copy.

Some lenders are doing something different now where they get you completely approved before you look for a house to try and curb the panic that's invovled, you get everything done and verified then all you're waiting on is the perfect home and appraisal.

Pre-approval and conditional approval mean that with everything a lender has so far, you are approved, pending additional conditions.

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A raise shouldn't have any negative effect on the loan or require additional documents, only if you suddenly had more debt and we needed to verify more income to offset it should a lender as for the documents to back the raise up. It's a balancing act

Why dont you people understand that if I can afford a $1500 a month rent for an apartment that I have been paying for over the pas 3 years (and can show proof) that I can easily afford the $1200 mortgage to own the place?

There's more to it than that, lenders want clients, but they are a risk. If you have access to credit cards you might not have debt now but you have the potential for it. Plus, loans used to be far easier, a few paystubs and bam here's a mortgage. The market fell apart in 2008 for a lot of reasons, part of that was lenders not digging deep and making a lot of assumptions. Now there are both lender and federal requirements to verify funds.

The biggest part is, while there are some responsible people how there who properly manage their funds and have little risk associated with them, their in weeds of people juggling books or barely making each payment on time and it can no longer be a pick and choose situation when it comes to verifying assets or income.

Plus, loans used to be far easier, a few paystubs and bam here's a mortgage. The market fell apart in 2008 for a lot of reasons, part of that was lenders not digging deep and making a lot of assumptions.

In 2008, I was pre-approved for a $225,000 loan with zero down.

My entire income was $25,000+ commission.

I didn't buy anything close to that expensive, but it didn't work out well in the end. I had no business buying that house, and they had no business pre-approving that size loan.

2008 is a hard year to determine, since it all depends on what stage the fall apart was in when that was tried. Some lenders and loan programs allow commission under certain circumstances, others don't since it's not a promised amount.

Pre approval is hard to pin, mostly a gimmick similar to care commercials saying you can get a mustang lease for $150 a month...then showing you all the optional features.

That is not true. There were two causes. The first and biggest is that they appraised houses for way more than they were worth.

If the bank appraises houses correctly, then with the down payment, they actually cannot lose money.

The second thing that happened only because banks over lended on houses, is they threw out lending standards for how much debt you can have per your income. They let people without the income to buy houses they could not really afford. Coupled into that are the variable rate loans they used to get the down payments down for those type of people.

In the end, the only thing that needs to be pointed out is that banks fucked up their own appraisals. That is it. The entire 2008 housing collapse is because banks didn't make the appraisers they hire be conservative and ignore unsubstantiated inflationary value.

The bank should have only loaned 150k on a 200k house, not 190k. Banks should have made buyers give larger downpayments to compensate for the inflationary value that was not really backed by the property. They purposely did not because they wanted to make money on volume and then dump the loans on the secondary market, so they don't have to actually deal with the risk.

Can't speak for what happened prior to my time in the mortgage world. I do knot that following the 2008 collapse the HVCC was put in place to eliminate any back room dealings between appraisers and lenders. In today's process lenders cannot contact the appraiser directly nor vice versa.

I agree with your following point, the rules were far more lax, the documentation was far less in depth. People were expected to be adults and know their own limitations and failed miserably, agreeing to mortgages and loan amounts they never should have just because someone offered it out.

Blame rests on both sides. I know people who lost their homes due to the whole situation (before my time in the mortgage world), but I also know lots of people who didn't lose their homes because they weren't stupid and didn't agree to something they couldn't repay. There were lots of other factors of course.

The market fell apart because the banks were greedy.

Because people were greedy too. Dont pass all the blame on the banks. People knew they could not afford these loans, or they were too dumb. Either way it was peoples fault in many cases.

Yup, fault was on both sides. Don't sign something you don't understand or if you know it's a bad idea.

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The more you can put down up front the less you pay in interest in the long run, it's no longer a huge requirement. It varies program to program and based on everything from your debt to income, credit score, etc. I've seen as little as 3-5% down in special programs but I work more on the refi side so I haven't seen much.

To add to this, if you put as little down as possible, you are going to have to pay for mortgage insurance (basically add another percentage point onto that interest rate).

Very true.

Do you jerk off to crushing peoples' dreams or to beautiful white women like everyone else?

Well I'm a straight woman so no to the second one.

As for the first, I'm assuming you mean foreclosures? Not at all in a lender's best interest, at all, we want the cash cow to keep paying, we do not want a house that we have to try and pawn off and sell, lenders generally lose money on foreclosures, at least in the experience I have, however I do not work in that area.

Regarding foreclosures:

1. Your lender does NOT want your house.

2. Your lender DOES NOT want your house.

Just maintaining and insuring the house costs a fortune, let alone more lost P&I and tax payments. Which is why the loss mitigation dept. considers this a last resort. So if you get into money trouble, talk to loss mitigation and not collections.

Source: 25 years in mortgage technology with 5 of those working on loss mitigation systems.

This. This completely.

I'm a 10year career firefighter with a salary of 46k a year. I've owned my home for 8 years and have never missed a payment or been late for a payment. Due to the crash I'm about 5-10k negative equity and was recently divorced. Why is it that I can't refinance my home? I'm on the brink of losing my home due to the necessity of refinancing. Wells Fargo is my bank and they refuse to refinance it or help with any sort of program because of the negative equity, and everyone else I've spoken with reuses as well. Any advice or answers would be appreciated.

There are a lot of reasons out there, that could be the source of the trouble, home condition, value verses loan amount, type of home, for example a manufactured home is not financed by many lenders so it could be no other factor than that.

I always say shop around, most lenders will not offer you a better deal until you're 2 days away from losing everything, there are good lenders out there who try to put clients in better positions early on to avoid problems. It's all a matter of company outlook on a situation.

You might want to ask about Harp loan programs. This shows state listings http://www.freddiemac.com/mortgage_help/participating_lender_list.html

Not sure if you tried other national lenders like Bank of America or Quicken Loans? If a lender refuses, ask them specifically why they are denying you.

What is needed to get a home loan out of state? I am looking into tele-commuting for my job from another state and wondered if there is a different criteria to getting approved to by a home in a different state than my employer.

Pricing is better on primary residences. If you commute a great distance to work or cross state lines you may just need to prove that you live in the home, cable bills, or letters explaining that you plan on residing in the home and not at a separate residence.

Why would the lender selling your loan immediately be a bad thing? I financed though PPH and they sold my loan. Also, the lender took a deposit for extra year of insurance and for some repairs I promised to make. Is that legal? What is the best way to retrieve that money?

Selling the loan may not necessarily be a bad thing, some times it's a matter of, you like Company A and their service, so when they sell your loan to Company B you have the same loan however the service goes down the drain, it is not a reflection of you or your credit if your loan is sold.

If you are escrowing your insurance your lender will often set aside enough to pay the annual premium in full plus 2 months cushion. so if you're closing now, and your insurance renews in say, November, we would collect 11 months (since you'll make one mortgage payment in OCT) plus the two months cushion in case your HOI goes up.

Lenders must refund excess to you or apply it to you rloan, you'd have to call your lender to see which route they take.

As for the repairs, my company does not allow the promise of repairs, they must be completed prior to closing so I would suggest contacting them once the repairs are completed and have proof, pictures, receipts, etc. to submit.

Why is there an unreasonable amount of information necessary when documenting funds transferring from one account to another? And by unreasonable I mean this:

Going from investment account to checking account for a down payment I had to:

• Provide screenshots of beginning balance showing securities and balances prior to liquidation of stocks

• Provide screenshots of trade confirmations showing amounts

• Provide screenshots post trade showing available cash balance

• Provide screenshots of balance transfer

• Provide screenshot of checking account prior to receiving transfer

• Provide screenshot of checking post transfer showing transferred funds

And after all that I still have to provide a statement that shows everything that had just transpired.

If I have $1000 in my checking account and $40000 in my investment account none of the in between stuff is necessary if the ending & beginning balances are known. I understand they are following the money but injection of additional funds would be immediately caught knowing nothing but the start/end balances and the transfers, which appear on the statement or printouts of account activity.

Why has this process become so convoluted and unnecessary?

edit: for some words

First, the last thing a processor likes to do is call and ask for more documentation, we know we're going to be told off, shouted at, whined at, cursed at, the list goes on.

In no way do lenders do this for the joy of it.

The concern for sourcing funds is to verify beyond a shadow of a doubt that the movement of funds we are seeing does not result from new debt, a new loan, advance, etc anything that might have to be repaid. This can have a huge effect on your debt to income ratio which in part qualifies you for your loan.

Normally if we were sourcing deposits as the one you described we would ask for the bank statements where the deposits were transferred into (I assume you provided this first), then the matching statements showing where the source funds came from. Each lender varies, I would say 80% of the time there are multiple requests for the same or similar items because we cannot use things like screenshots not showing names/account info. Lenders can't make assumptions so often times clients will provide what they think we need in an effort to avoid work and often end up doing more work in the long run verses just sending what we asked for, the complete statement.

Often time account histories or activity or screenshots don't verify the account holder for us to ensure that we're looking at your account rather than someone else's information.

Every lender is different though and some require more or less for this sort of verification.

The biggest shock for me when my wife and I applied for a mortgage is that some lenders won't count the salary of a woman who is out on maternity leave toward her income, even if she is covered by a maternity leave policy that guarantees her job when she returns. And the kicker--those same lenders will count the salary of a man who is out on paternity leave, apparently because they assume men are going to go back to work but women will want to stay home with the kids.

I honestly can't believe that in the 21st century it isn't regarded as illegal sex discrimination to do this. So my question is: have you worked with lenders who make this sexist distinction, and if so, are they remotely conscious of how regressive it makes them look?

Hmm...can't say for sure but I know we would generally ask for a letter from the wife's employer that verifies she will be able to return to the same pay and position once maternity is up.Also a letter from the wife indicating her return to work.....I've had friends personally who end up going on 'permanent maternity'.

With the loans I've personally worked on in this regard it's often a situation where the length of time is the commanding factor not the reason for being off work.

The other part is most companies have shorter paternity leave so it's not as much of a risk. You're right of course, there is a lot that could happen, either spouse could decide to stay home full time, heck employees can be fired or quite, it's all about minimizing the risk, if you're off for an extended period of time it needs to be questioned before we can use the income.

Any time clients are off for an extended period of time (generally more than a month) We would require additional information before we would use their income, this includes disability as well, if you are injured on the job or off we need something in writing that indicates you'll be returning to work otherwise we can't use that income you technically aren't receiving. There's never anything that can be 100% and lenders understand that, clients just often need to realize that we need that 90% assurance.

I have a good credit score, a loan that I can afford 30 year fixed, and a desire to drop my payments by $100's a month. Is there any reason for my bank to refinance me? My neighbor didn't pay his mortgage for almost a year, then they restructured down to about half if what I'm paying (similar terms). What can I do?

Threats, threats that are backed up. Just calling and saying "I'm going to another lender" doesn't do much, actually call another lender, get some estimates of better deals, if you're dead set on staying with your current lender provide that to them, if they want to keep you, they'll offer something then. Sadly some lenders are the 'we want it all and not some' where other lenders would rather get some than nothing.

NEVER intentially miss payments to get a restructure, it'll help your mortgage but ruin your credit for years

As I understand it, during a refinance the lender will get their own people to do the appraisal.. if the lender finds have no equity, a refinance will likely not happen. At that point a lot of paper work and back and forth has taken place already. Can you recommend a way to assess equity in one's home before initiating contact with a lender?

First: Lenders and appraisers can have no communication. This is federally regulated. Lenders work with a third party company, submit a request for an appraisal, this company hires out the appropriate appraiser and acts as a middle man.

Lenders want an honest appraisal, there is no benefit to an unreasonably low appraisal (loan wont go through) or an inflated high one (would add risk).

The best thing to do is to consult with a real estate agent, they use similar factors to judge the value of a home and in my experience give the best or most accurate information. Sites like Zillow or others can be used but it's hit or miss, sometimes spot on, other times way off.

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Lets say the money you dump comes from a source we are worried about, like a new debt or loan. After 60 days we'll either see the new debt on your credit report, or see an indication that other lenders have looked at your credit- in that case we normally have you sign a disclosure stating you have not opened up any new accounts in the last 4-6 months. That way if you have, it's fraud on your part and we've done or due diligence.

Biggest thing is so many documents cross over and are used in conjunction with other information, good lenders will explain this as best possible but most clients don't care to listen or want to know.

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And that's the honest truth. :)

Please excuse my idiot question as I am completely naive when it comes to house purchases. In any case, would I see a significantly low monthly mortgage payment if I were to put half of what a house would cost (eg...I throw down $150,000 towards a $300,000 house)?

Yes because your monthly payment would only be financing 150k instead of the total amount.

The more you put down at closing the lower the payment.

Are there different price breaks for PMI based on LTV at the time of loan origination? For example, will I pay a lower PMI rate if I start a loan with an 85% LTV than with a 95% LTV ratio? We are going through a refi now and I see conflicting information online.

Thanks for doing this!

This is something your loan officer would be best able to address, I believe so, the PMI also is in relation to your loan amount so each person will pay something differently. Be careful. Some loan programs now the PMI is on for 7 years or the life of the loan even if you get under 80% LTV, the only way to remove it is to refi, be sure to find out if this is the case.

why does it take 2 weeks to get a fax? (in my office it takes 2 minutes)

Hm.. I'm guessing it doesn't take that long to get a fax, but to get an UW to review it.

I know our fax system can take as much as 24 hours for a document to show up this is because it goes to a central server and at least for our company which is paperless, the document is uploaded into our system so it can take a little time to show up.

Depending on how many documents the team who does the scanning receives there can be a little delay but nowhere near 2 weeks, it might be that long for an UW to review, also if we run into a speed bump we might try an alternative solution before calling you.

I recently had a loan that met the Banks Underwriting approval, but was rejected by the USDA (The first time they have had that happen I was told).

The reason for my rejection was some medical collections that I have on my account.

I have been in process of paying them off over the last year, but now just want to clear it all out, so that I can re-apply for the loan before my appraisal times out (November 25).

Is there any advice you can give on how to get a collection cleared from a credit report? Is paying it off enough, or is there something else that I will need to do?

I know for clients we have if we need their credit cleaned up in that they have paid something off but the credit report isn't showing it we can have a company like CREDCO call and obtain the information without waiting for things to take their natural course.

I'm not sure if you can do this privately btu it's worth a shot, or just let your lender know it's been taken care of and you'd be willing to complete a credit supplement call to verify.

I just recently got a mortgage for the first time. Some things threw me off such as: having a statement directly faxed from my bank to the lender rejected because it didn't have the bank logo on it; and they wanted a screenshot of my online account instead.

Why would they reject something coming directly from the bank? Is the logo really that important? Also I can make my screen appear to be anything I want it to be, why is a screenshot a verifiable source? They also rejected my first screenshot because it didn't have the URL in the screenshot. This is something super easy for someone to change, and anyone with a little web coding experience can change the webpage to say whatever they want without photoshop.

It's all a matter of risk weight, you and I know a skilled 12 year old could fudge fake bank statements, requiring things like the bank logo is one way lenders minimize risk.

The URL is the important part of the online statements, while the same rules apply about tech smart people, a URL verifies the source webpage which will be the bank.

There is no way to completely eliminate the 'what if' or risk, Lenders are just tasked with doing everything reasonably possible to minimize it.

Are we in the middle of another real estate bubble or is this just the new normal?

From what I've seen? New normal. My company doesn't do balloons or HELOCs though so I don't have the full picture.

No question, just wanted to commiserate with you.

I work for a small mortgage broker and was originally hired to be our processor's assistant. Now I'm the LO's assistant as well as hers!

We're doing a foreign national stated income cash out refi right now and UW keeps coming back with ridiculous conditions. Like, this is the simplest thing ever. We have the appraisal, why the heck do you want an AVM from the same AMC?

Thanks for doing this AMA :) We don't try to be dream crushers, guys, honest! Just, you know, get us documentationwe need when we ask for it. It makes things so much easier for everyone...

high five You got it, I don't wake up in the morning and go "Yay! The underwriter kicked back a document because it doesn't have a signature on it, just what I want to do, call the client back for the 3rd time and tell them to sign the damn thing!"

ack foreign loans get crazy!

I had a client once from India, with US citizenship, living in New Zealand...It was a WHOLE bucket of fun tracking down all those documents plus the time zone difference!

Oh my gosh, what a freaking nightmare!! Props to you, ma'am.

Haha, thankfully he was really big on email so while it was a pain to type everything I knew that if I did within 48 hrs he'd have everything emailed back to me since everything he had was digital from all over the planet. XD

Is getting a loan from a lender the same for all purchases (200k house vs 200k RV)? Does the lender see one as a higher risk? I'm assuming the same paperwork is required to get the loan.

Hm great question! My company only does home loans, from experience I would say there is different risk, a car or RV carries a higher risk in that the resale value diminish most quick than homes (on average). Most of the documentation would remain the same though.

So I I interned as a loan processor when I got out of high school and was let go when the bubble burst. I'd love to get back into the profession, do you have any tips for me?

A processor speak with clients all day each company looks for different things when it comes to employees of course but for mine it was your ability to communicate. I had 3 phone interviews before a physical once since the specific position I had would be an over the phone processor not an in location one.

In either position your ability to be detailed, and effective is a must. You need to know when the to give a client the wolf and when to give them the puppy.

During my interview process it was important to demonstrate the ability and knowledge of something every company calls different 'defuse and educate' is one term used, if you have an irate client you need to be able to explain how you would first defuse the situation, apologize for their issue or complain, calm them down then educate or fix the situation even if that's just by giving them the hard truth of look, I know you don't want to send your bank statements but we want to close your loan and to do that, you're going to need to work with me and send your statement in. etc.

Never hurts to know someone with the company already, I'll be honest that was my foot in the door to my first interview.

How would someone who works for themselves, has lots of cash but limited documentation, go about getting a loan? What kind of documentation could that person provide? What about with bad credit?

I feel like unless you are a mr white collar salary sheep you can't get a mortgage and doomed to pay rent the rest of your life.

I would like to not pay my landloards mortgage anymore but perhaps my own.

I'll be honest. It is harder to get a loan when you are self employed, it's not impossible.

For cash, if your cash is in business accounts or it's something like mattress money, movie it now. Put in in a personal account you already have. Now sit on those funds for a few months. My employer needs to verify 2 months worth of bank statements, some need three. If the big deposit predates this time your lender isn't going to see it as red flag movement of funds, the trick is moving the funds now, then waiting a bit before applying.

For self employment-there are a dozen ways that if done correctly we can verify your employment status. What sort of work do you do? I can tell you what items would be the easiest to provide that most lenders will accept.

I work on these sorts of loans that take some out of the box thinking sometimes. I was able to get my father a loan for two different houses even though his income is crazy! firefighter payroll,plus he runs a tree service that he owns and on the side he does crabbing for a bit of extra income. It's all about having a good processor who is experienced. and can set you up for the right documents. Credit depends on how low, just shoot me a message if you'd like to talk particulars

Did you process/underwrite your own loan for your own home purchase?

No. I did go through my company though, I just had the inside knowledge of what documents to have ready to provide.

Could you have? And by going through your company (or your managing broker's company), did you receive a commission for that loan or have a lender credit applied to your closing costs?

With my company no, I could not be my own underwriter. Since Underwriters make risk based decisions to ensure an applicant is qualified it would not but appropriate to have someone try to honestly evaluate their own risk.

I can't speak for all companies although I'm pretty sure the majority of them would not allow someone to underwrite their own loan. If they do my guess would be that it would be a smaller lender like a standalone bank or credit union that might not have a lot of underwriters.

That being said, I do know what documents would be requested since I know what documents I'd request, I basically had stuff ready to go before being officially asked for it.

I can say that I received credits to completely cover the cost of the loan through lender and promotional credits.

In the process of renovation and want to try and refinance but there is still unfinished rooms. What is the minimum repairs that have to be done in order to get refinanced, for example we don't have anything but sheetrock and subfloor in 2 rooms would this be acceptable or would we have to put floor down and paint? Also the outside is unfinished siding would that have to be painted? Would we be better off going with a refinance or a home equity loan or are there any other options thAt would be better?

Depends on the loan type. FHA or VA? Pretty much everything needs to be done. Conventional has a little more wiggle room but it all depends on how the appraiser rights up the report, if they say your home is worth 100k assuming the rennovation is complete, a lender will require it to be completed prior to closing to get that value. No one has control over the appraiser, safe bet is to hold off, finish the work and then refi. Keep in mind the work needs to be done, it doesn't have to be pretty, so yeah, floors and some sort of paint, no missing fixtures. Outside it's tough, siding or paint, doesn't have to eb the final work just completed while you refi.

What's the deal with banks, at least my major bank, requiring a huge rainy day fund for the escrow account?

where I work we keep only a 2 month cushion for taxes and insurance. so over and above what is required. Anything additional is refunded to the client or applied to the principle of the loan (client choice).

Your escrow account is tricky since it includes taxes and insurance that may be due multiple times a year and at different times.

Think of it as a savings account so that you're building up to the payment. If your HOI is due 1 year from now your escrow account from now to then is adding up so that in 1 year we have enough to pay the bill.

Right before bills are paid out the account can look super inflated because all that money is set aside.

What exactly is the malfunction in underwriting? I had to push back my close date several weeks and the sellers almost walked away because every time I supplied requested documents, and even asked "Is this ABSOLUTELY EVERYTHING you need?" they said yes, only to be presented with a new list of demands every couple of days. They lost multiple documents, and asked for inconsequential things (You were reimbursed $25 by your employer for expenses? We need a dissertation on why.)

Only when I drove to their building, armloads of financial records in hand, and threatened to go with another lender unless I was approved that day, did they play ball.

So, what's the problem? I was treated more like a criminal than a customer.

I know with my lender we are told to always warn clients that additional documents may be needed.

We can't know for sure and it's sorta like following the evidence.

On top of all the information you provide we get documents from: Title company IRS County assessor insurance agent appraiser

and those are just standard, there could be dozens of others depending on your home type and location.

Sometimes we don't know we need something until the IRS sends us information then, hey, question mark, we need an explanation.

For example, we need your bank statements to verify funds to close right? At the time that's all we need, then when you send them, we see you have unusual/unsourced deposits, we need to make sure there was no new debt or loans opened up anywhere so we need additional information.

I agree that 25 refund is crazy though, with our company it needs to be more than a quarter of your monthly income to be questioned.

How much do you know about mortgage loans abroad?

As in, in other countries? Next to zero. I can tell you the why behind documents being requested but not what the requirements or guidelines are

What the easiest/quickest way to get out of the escrow game? I'm perfectly capable of paying my taxes and insurance like the big-boy-pants wearer that I am.

If you're in an FHA or VA loan you are stuck, they are program requirements. If you are conventional call your lender, they should be able to cancel the escrow but be prepared it can take MONTHS for them to refund you your current escrow.

What are your thoughts on Quicken Loans?

Over all good. I know from looking that they respond to each and every BBB complaint which is more than most lenders out there.

Looks like from reading through them the problems people have end up being issues any lender would have or because people don't read.

Looks like mostly, and some lenders do others dont, Quicken Loans takes a depo up front, its normally called a good faith deposit. Basically lenders incur hundreds, to thousands of dollars in costs during a refi or purchase, your tiny depositn ranging anywhere from 100-500 depending on the lender, goes to offset a small portion of it.

I think people posting things like "Quicken Loans just wanted my deposit" are stupid. I'm sure like the loans I work on, Quicken Loans loses money even with the depo if a loan falls through.

They seem to have really great customer response and I understand that they take service very high, they'll terminate an employee for failing to follow up with a client. like if you say you'll call at 4pm, you better damn well call. Just high standards.

What was the worst experience you've had with a mortgage?

I had a very pleasant experience with Wells Fargo using my VA Loan on a foreclosure. The team I worked with was very helpful and made the process for me (an idiot) very easy. I like to think they still remember me as fondly as I do them. I also got a bangin interest rate (3.25%).

Me personally? None. I rented after college then moved back when my mom almost lost her house (all prior to me working in the industry), she was told she qualified for a special govt modification that she ended up getting but it was after threatening legal action because she was told to do some bad stuff like stop making her full payment and start making the reduced payment before closing.

As far as loan's I've processed?

I get escalated clients, those who have lodged complaints, some have legitimate concerns, most are just crazy with unrealistic demands or expectations.

There have been several heart breakers, one client I became so close to while we did the refinance only to find out her home was registered as an invalid property type so we couldn't complete the loan. I personally helped her find another lender who did refinance her property type- none of us knew before the appraisal came in.

Another was a VA client who ended up not having the prior length of service and missed it by just a few days and after trying to get the VA to approve it after 90 days we couldn't, he went conventional but it just hurts when it's that little red tape.

I would say the worst time I have with a loan is when the client is pulling in the other direction. It's one thing to be skeptical, it's another thing to fight tooth and nail about everything. Or getting the blame for something not at all our fault.

Had a client file a major complaint because we asked her to send in documents, she took them to her bank, her bank dropped the file so all her documents got mixed up so they didn't send us the fax. So naturally, that was our fault. I just reason people into a corner where they have to cool off or admit they are stupid. Solution? We covered the cost for her to UPS everything to me, I put it all in order for her, scanned copies of what we needed and sent her back a nice neat pile.

I can't speak for every lender, or even every processor but if you're willing to work with us we'll do anything, I think that goes for most customer service situations.

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To you and I as people paying mortgages it's money down the drain.

Here is what PMI does, it protects the lender. PMI is a policy that says hey, they are higher risk because there is less equity in the home, in the event of client's walking away or foreclosing, the lender is paid back-essentially an insurance policy that protects lenders from clients. At the same time, PMI is a way for clients who may not otherwise be able to purchase or refi the opportunity to do so. In certain cases and situations lenders may even pay the PMI depending on how badly they want to fight for your loan/how much the risk is.

I have a friend who wants to become a processor. Any advice I can pass along to them?

Processors are on the phone all day. It is a high communication job and you need to be very skilled at guiding conversations. You have to know when to give someone the wolf, and when to give them the puppy.

Communication skills are the most important thing and I can't stress this enough. Everything else, mortgage knowledge, is trainable. I had 0 mortgage history when I was hired in, but I know how to hold a conversation and control it too.

If your friend gets an interview make sure they don't stumble, you don't have to have the perfect or right answer, just have an answer, be honest.

If a company asks you why you want to work for them do a little research in advance, is it the culture? Reputation? etc.

Hello, I am your counter-part on the servicing side. I would like to break into the front-end of underwriting, but do not want to start out as a processor (document collector).

How would you recommend I get into underwriting as a loan officer directly, without first climbing the ladder?

P.S. I have been on the servicing side 4+ years now.

I think it all depends on your company. For us we have internal transfers, when spots opening on on everything from relations, to servicing, to processing, UW, collateral review etc. it goes internal first.

I know there are certs you need however I do not have all of them. Basically, ask your boss :) for us it is good risk assessment and attention to detail, everything else is trainable.

Well, im in secondary markets right now. Not a traditional lender / servicing shop. We buy your pools.

Id be looking to get into underwriting though as thats where the real money is. Is there more required than just the state license?

State licensing, plus loan program qualifications if you are going to work on FHA or VA.

Lenders will always have the additional testing or training for company guidelines too in my experience.

I have a rent vs buy situation.

Me and my fiancee are subsisting well enough, but with all of our different savings goals (retirement, wedding, etc) we're really not left with anything appreciable to put away for a down payment on a house. We're in an area with really high rents compared to home values- when I calculate a 30 year fixed rate mortgage, utilities, a maintenance fund, taxes (etc), insurance, the cost of replicating our current apartment plus another bedroom, bathroom, and dedicated parking in a house would actually save us around $600/mn. Assuming we project staying here for a while, is there a downside that would lead you to conclude I'd be worse off to purchase a modest home with 100% financing? Her credit is great, mine's ok. Little non-educational debt.

Hm...I would say it's all a matter of trade off, with renting you aren't tied down if you want to move in a few years, however with a home you get the sale value plus the chance of equity if values go you, I know the credit isn't much of a concern but it will also show all lenders responsibility and can help for future loans from auto to home and more.

I know that as a generality, my area is in a strong seller's market. I know someone who purchased a $300k home (granted, it was a small home in a really nice area) and recently resold it... her realtor came back after 9 months to let them know that if they wanted, she could sell their house in a month a net them around a $50k profit. Granted, this isn't where I would be living- I'm looking at what's basically the original suburb. Lots of 1-story homes, 2-3 bed, 1.5-2 baths, 1/4 acre lots for around $135k. My neighborhood isn't doing what hers is, but in general the housing market here is no worse than stable.

My biggest complaint is that right now, we're throwing a lot of money at rent and parking. I'd much rather be putting that money into an asset which will hold its value.

I'm with you, I'm the buy not rent/lease sort myself, same thing with my car a lease has benefits but I look at the long term.

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depending on your situation you can refi the first and second into one loan, or pay off additional debts like credit cards too if you have enough equity. Or you can refi the second separately, fewer lenders do but it's certainly possible

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Call a lender. If the property in question was sold and you are looking ot purchase a separate property the main thing to keep in mind is that you may not get the best deal out there. The hard truth is you'd be considered higher risk which m ight come with a higher interest rate or closing costs.

I know for refinance you can have no mortgage lates in the last 12 months. I am not 100% how that works on refi

Possibly dumb question: Is perpetually renting clearly worse than buying?

I suppose it depends on in what way?

To a lender? No, everyone has to start somewhere so showing you rent responsibly does not count against you.

In the long run? It's a trade off, when you retire do you want to (hopefully) own a home or be renting well into your twilight years, or what plan for the future do you have?

Does being in your 60s have any impact on what types or lengths of home loans you will qualify for?

Not at all! lenders cannot discriminate due to age. I had an 89 year old client who refinanced for a 30 year loan. Any lender that says you cannot get a loan because of age should be reported.

Would a VA loan help if you have bad credit?

redit reports don't go into specifics about what loan program you have, VA, conventional, FHA.

VA loans have a lot of benefit in lower rates generally however there are a few things to keep in mind. If you are doing a refi you will most likely be required to pay for a pest inspection out of pocket, this is around $100 on average. If you have a well a water test is required.

VA like FHA has stricter guidelines for the condition of the home because if you walk away from it the VA pays the lender for the loan and takes control of the house so any repairs or chipped paint need to be fixed.

If your home is in good condition though, VA is the way to go.

Just make sure you have the benefits for this by going to http://benefits.va.gov/benefits/

I can't tell you how many people swear to me that they have the right amount of service to get qualified and they do not, then you've paid for a pest inspection and appraisal and we have to start all over with another loan type or cancel the process.

You can actually apply for your COE (Cerficiate of Eligibility) from the VA right on the site, I suggest obtaining this before contacting a lender.

Sorry, VA loans are what I specialize in by choice so I get a little in depth. Thank you for your service!

Hey there!

The wife and I are looking to buy our first house mid-next year. A couple of questions...

• How much does it matter that you've been at your current job? She's looking to leave her job - she's been there for four years - but has been holding out because we've heard that it's an automatic disqualifier if you haven't been at your job for at least six months to a year.

• Credit - what if your score isn't perfect? I'm hovering around 680-700. Just paid off a few credit cards (completely down to zero!) after they've been almost maxed out (had a wedding earlier this year - shit's expensive).

• Down payments - how much is recommended? It's super fucking hard to save money when you have to pay $1k a month in rent. We'll probably have around.. 12, maybe 14k to put down on a ~200 - 250k house. Is that not enough?

It's all a balancing act, for FHA we need two years work history however it does not need to be the same employer. I get loans from loan officers all the time that tell me the client just switched jobs etc.

The main thing is we need to see consistent history, if your wife changes jobs every few months? Problem, a career change or better opportunity as you're describing? Not such a big deal.

Right now there are loan programs that my company has as through FHA allowing scores as low as 620 and slightly below...you literally have to write a letter about why your credit score is low. 680-700 is not a perfect score but that would be the majority of the client's I see.

Congrats on paying off credit cards! Just did that myself recently it's really a freeing experience, especially after a wedding this year!

There are different loan programs requiring anywhere from as high as 20% to as low as 3.5% (that I know of for sure). It's all about trade off, high down payment usually scores lowest rate and closing costs (all other factors considered), lower down payment usually means higher rate plus PMI.

The thing is to research lenders, there are lenders out there that will follow up with you. Do what you can, put less cash down, handle it for 6 months to a year then see about refinancing to a lower rate were less or no cash is required at closing.

Refi-ing isn't fun, I know, but people willing to do the work for it reap the rewards.

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I'm a processor, not a loan officer. So I are not licensed to write loans, only to obtain the documentation needed by working with the underwriter.

I have a question, but first you should provide proof either in a link or by messaging the mods. See the AutoModerator's comment. Thanks.

Yup that's been submitted, I thought my badge and reddit user name would work, they asked for a little more so I just submitted it.

Yea, we're going to need screenshots proving the transfer of those documents. In triplicate. With a wet signature.

And it's done. No big deal. :) Making mountains out of mole hills is one thing that slows a loan down.