1/24/2023
What is a Loan Officer?
Loan officers are financial professionals who work for banks, credit unions, and other financial institutions. They are also called mortgage officers, loan agents, and mortgage advisors. They are licensed by the NMLS in individual states. Licensing requires classes, testing, background checks and more. The loan officer's primary role is to evaluate loan applications, collect proper paperwork documentation from borrowers, make the borrower appear the best possible on paper for Underwriters, auditors, and servicers. The loan officer finds the box that the borrower can fit inside, with many mortgage products to choose from the borrower may actually only match with a few. Loan officers are responsible for assessing the creditworthiness of borrowers and determining the amount of money that can be safely loaned. They also provide guidance to borrowers on the various loan products available and help them to understand the terms and conditions of their loans.
Loan officers can play a critical role in helping individuals and businesses to access the credit they need to purchase a home, start a business, or invest in other opportunities. They can help borrowers to find the right loan product that meets their needs, and they are responsible for ensuring that the loan process is completed in a timely and efficient manner.
It is crucial to find a responsible and trustworthy loan officer, who will provide you with the best options, rates, and terms. A loan officer with years of experience can share their knowledge and caring with borrowers.
The loan officer should be able to answer every question a borrower asks, they should be available by telephone to clarify all the details, and one you can trust their answers. A loan officer will have a network of other professionals to help you: referrals for insurance, CPA, attorney, handyman, escrow, title, valuation, and Realtors are a few of contacts you may need during the purchase transaction and for the years that you own a property. Loan officers are considered the brains of the transaction.
Now Is The Time To Invest In Real Estate
Investing in real estate during an economic downturn, or when the "knife is falling," can be a challenging and risky proposition. During such times, property values and rental incomes may decrease, making it difficult to turn a profit or even to maintain the value of your investment. We cannot know if we are entering another Global Recession, but I feel we are in recession in America now, January 2023.
However, it's also possible to find good deals on properties during a downturn. Prices may be lower, which can make it possible to purchase properties at a discount. Additionally, rental properties may be in high demand if people are unable to afford to purchase a home. Perhaps this is the perfect moment to get preapproved for a home loan and be shopping for deals.
If you are considering investing in real estate during an economic downturn, it's important to do your research and to be aware of the risks involved. It's also important to have a clear strategy in place, such as focusing on long-term investments or looking for properties in areas that are less affected by the downturn. My best advice is to stay the course on you job. Show up early and become more valuable. Having that W-2 income will make it easier to close on your investment property with a conventional loan. Even though interest rates are high, you will find property that cash flows.
Additionally, it is important to have a good cash reserve, as the market can be more volatile during an economic downturn and it can take longer to find tenants or buyers. Save your nest egg my grandmother always said.
Be prepared to close and immediately fill the rental with an excellent tenant. What is an excellent tenant? One with no evictions, FICO of 680, four times the rent as income that you verify, and who "fits" your location.
Overall, investing in real estate during an economic downturn can be risky but with the right approach and due diligence it can also be an opportunity to find good deals on properties.
1/23/2023
$95 K trick
$95K
Trick Here’s
a simple trick that will
save you money on your mortgage.
On a 30-year $400,000 mortgage
with a 5.50% interest rate,
your principal and interest payment is $2,270
a month.
If you round that up to $2,500
and make that payment
over the course of
the loan,
you will pay off your
loan 5 years and 10 months early..
. You’ll save $95,000 in interest paid.
1/21/2023
Foreclosure Study
Customer notice of default filed on them early November.
House value about $1,200,000
Bought for $500000 thirty years ago
Loan amount in
default $110000 filed October 28, 2022
Options to foreclosure:
Here are a couple strategies:
1. Sell and take the money to pay cash for a home in lower price point and save some of the cash.
cons: she will have capital gains, has to move
2. Refinance with a reverse mortgage and only pay property taxes and insurance
cons: costly, need to know exactly what her social security income is if she can qualify
then do things to increase income (roomate, part time gig work). She is old enough. Unsure
what her income really is... around $2000
3. Get a hard money loan
cons: short term only good for 18 months, VERY expensive, then she needs a
plan how to exit from this which probably is to sell
4. File bankruptcy
cons: good for 18 months, ruins credit, she won't be able to get a loan. Only option to sell when
the bankruptcy is discharged. Stressful.
5. There are shared equity companies which are 10 years BUT she has to qualify
with her social security. They check to see she is maintaining house to their standards.
Eventually she sells and they get paid and take the gains.
Cons: need income to qualify, get less when sold, costs, lack of choice in managing home
6. Get the San Francisco HELP loan which is $50000 LOAN
This does not stop the foreclosure, it is not enough to pay off the exiting
$110000 approximate owed. This program takes 3 months to get approved.
She has to qualify with social security now for $160000 loan. Home counselors
have zero ability to negotiate with the servicer and lender.
cons: not enough time and not enough money in the $50000 loan to fix the
problem
7. Do nothing. Bank sells the house for $500000 to insider on the due date and
she might get nothing. The costs of legal and foreclosure are added daily to the
balance.
cons: stress and homeless
What we need to help her:
Social security award letter (it's pink and black and white and is mailed Feb 1 each year
mortgage bill
contact for fire insurance agent
Then we can help advise if she can qualify for a loan or what to do.
1/19/2023
USDA Rural Mortgages Rules
USDA loan updates for Rural Mortgages
Credit, income, appraisal, condominiums, new rules
USDA Updates
WEDNESDAY, JANUARY 18, 2023
USDA Updates to Credit Eligibility, Site Requirements, Condo Requirements,
Income, Tax Returns, and More
USDA release Fourth Quarter new ins and outs
SPECIAL Procedure Notice updating several chapters of the USDA Rural Development Handbook HB-1-3555.
Changes as outlined below (including the Handbook Chapter and Paragraph) and apply them to USDA originations as applicable. Unless otherwise indicated, all updates
are currently in effect/effective immediately.
Some changes are related to trends in real estate today such as the addition of an Accessory Dwelling Unit or Granny Flats, some are related to trends in bankruptcy procedures.
Manual Underwriting for credit scores under 680
10.2 – Credit Eligibility Requirements
• Clarified the list of adverse credit items that render an applicant ineligible for a USDA loan
• Updated the requirement for delinquent court-ordered child support payments subject to collection by administrative offset to implement requirements of the Lender Participation and Financial Requirements Final Rule
Attachment 10-A – Credit Matrix
• Clarification: When the lender becomes aware of potential derogatory or contradictory information that is erroneous or not included in data submitted to GUS, the loan must be manually downgraded
• Credit Score Validation: Clarified what credit history items are considered eligible tradelines when validating credit scores
• Credit Exceptions: Added, for clarification, that the lender may be required to submit credit exception documentation for Agency review along with applicant’s explanation and supporting documentation
• Chapter 11, 12, or 13 Bankruptcy: Added clarification for dismissed Ch. 11, 12, or 13 Bankruptcy (BK) plans to distinguish between completed plans and revised the section on “Plans in Progress” for specifics that apply to GUS Accept or Refer/Manually Underwritten loans
“Discharged” to completed plans to provide further distinction from “Dismissed” plans
o For GUS Refer and Manually Underwritten files, plans completed 12 months or more do not require a credit exception (completed < 12 months require a credit exception)
• Delinquent Court Ordered Child Support: Added “payments are to be brought current, the debt is paid in full, or otherwise satisfied by a documented release of liability” in order to implement requirements of the Lender Participation and Financial Requirements Rule
• Non-Federal Judgment: Added that the borrower may not repay scheduled payments in one lump sum to meet the three timely payments requirement (to be consistent with other repayment plans)
o Added the requirement that evidence of the repayment agreement and payment history must be retained in the loan file
12.4 – Site Requirements
• ADU: Updated Accessory Dwelling Unit (ADU) definition to reflect current HUD definition and added the ADU should not create potential rental income and that those that support household members are acceptable
• Multiple Parcels: Added an improvement that has been built across lot lines is acceptable” and included an example
12.5 – Residential Appraisal Reports
• Updated to state appraisals must be completed within 180 days of closing; and
• Appraisal updates are valid for no greater than one year from the effective date of the original appraisal
12.6 – Water and Wastewater Disposal Systems
• Water Analysis: Updated to state water analysis must be current and not greater than 150 days old at closing
12.9 – Existing and New Dwellings
• Added that lenders must retain evidence of plans and specifications, construction inspections, and thermal standards
• Referenced new “Repair Escrow and Rehabilitation and Repair with Purchase Comparison” (Attachment 12-E)
o Funds that remain in the escrow account after completion of all required repairs must be utilized for an eligible loan purpose or applied to the principal balance of the loan
12.11 – Condominiums and Planned Unit Developments
• Condominium Requirements: Updated Condominiums to General Condominium Requirements
o Project may be accepted if it can be or has been approved by HUD/FHA, VA, Fannie Mae or Freddie Mac
o Added condominium documentation requirements
o Removed ineligible condo requirements and stated condo projects with ineligible characteristics listed under HUD/FHA, VA, Fannie Mae or Freddie Mac are ineligible
o Removed site condo eligibility
New condo project insurance requirements
• Planned Unit Developments (PUDs):
PUD all homeowners must be a part of the HOA and pay lien supported assessments
o If a condo is within a PUD and has separate HOA dues, both must be included in the DTI
12.13 – Lender Requirements
• Updated Lender Requirements to state that lenders submitting a request for commitment are self-certifying they have staff experienced with construction loans or employ an experienced construction loan management company and the builder’s experience is relevant to the type of loan
• Removed requirement for lender to provide form RD 3555-16
12.14 – Construction Contractor-Builder Requirements
• Removed builder credit examination and criminal background check requirements and acceptable credit history paragraph
Repair Escrow and Rehabilitation Repair Chart
Procedure Notice PN 573
9.3 – Annual Income
• Clarified that lenders must verify the income of each adult household member for the previous two years
• Clarified under “full income documentation” that W-2s are required in addition to paystubs
• Clarified, for self-employed borrowers, if ownership interest is < 25% neither “business owner” nor “self-employed” options should be selected in GUS
• Restructured guidance on tax transcripts to emphasize a failure to timely file tax returns is not an eligible explanation to forgo obtaining tax transcripts
9.8 – Stable and Dependable Income
• Included additional guidance on gaps in employment, clarifying it is the lender’s responsibility to determine if the income is stable and dependable
• Clarified a business loss from a closed business may be removed from consideration under the same circumstances self-employment income from a closed business can be removed from consideration
Income and Documentation Matrix
• Automobile Allowance: Revised to allow full expense allowance to be included as income if full debt counted in DTI
• Boarder Income: Clarified that boarder income refers to rental income from an individual renting space inside the dwelling
• Bonus and Overtime: Revised bonus and overtime income to reflect a one-year history and must be in the same/similar line of work
• Employee Fringe Benefits: Clarified that employer-provided fringe benefits that are reported as taxable income may be included in repayment income
• Mortgage Credit Certificate: Removed requirement to obtain an IRS W-4 when using MCC income
• Secondary Employment: Clarified that an applicant must have a one-year history of working both jobs concurrently for secondary employment income to be considered for repayment income
• Variable Income: Added category for guidance on variable income
• Assets and Reserves
o Gift Funds:
Clarified that gift funds applied as earnest money should not be entered on the “Loan and Property Information” GUS application page
Clarified that gift funds need to be sourced via the donor’s bank statement when funds are sent directly to the settlement agent
o Retirement – 401k, IRA, etc.: Clarified that funds borrowed against retirement accounts are eligible for funds to close, but not reserves
Attachment 9-E – Information for Analyzing Tax Returns for Self-Employed Applicants
• Capital gain or loss (from Schedule D): Revised guidance to reflect a two year history to be consistent with the guidance in Attachment 9-A
15.1 – Introduction
• Updated to state the agency requires lenders to use GUS
15.3 – Loan Application Package
• B. Guaranteed Underwriting System - GUS Accept loans: Revised paragraph to refer to mandatory use of GUS
15.7 – Lender Response to Conditional Commitment
• C. Requesting Changes in Conditions: Clarified that change requests should be made via email
Attachment 15-A – Guaranteed Rural Housing Loan Origination Checklist
• Lender Instructions: Updated instructions to state electronic delivery is the preferred method for submission to Rural Development
• Evidence of qualified alien (Page 1): Removed for Underwriting Recommendation ACCEPT files
• Verification of Rent (Page 2): Clarified VOR is applicable to manually underwritten loans with credit scores below 680
• Underwriting Analysis (Page 3): Clarified documentation of income calculations
1/18/2023
Largest Active Real Estate Funds
Blackstone Real Estate Partners
Brookfield Strategic Real Estate Fund
Starwood Distressed Opportunity Fund
Digital Colony Partners
Oaktree Real Estate Opportunity Fund
Carlyle Realty Fund
Lone Star Real Estate Fund
KKR Real Estate Partners
Brookfield
Transaction halted in most cities. Where is the valuation today?
Mortgage Loan Servicing
- Loan Servicing Software
I'm working on rating the software apps out there for mortgage, credit card, and commercial loan processing. My survey is out to 100 Mortgage Loan Originators and CFO's.
Who am I missing?
List below:
Will the ICE and BKI merger go through?
BKI layoffs changing your ability to patch problems?
Loan Servicing Software Space
from a customer/evaluator perspective.
Mortgage Vendors of interest include:
ACES Audit Technology Armco a mortgage audit tool
Blacknight BKI
BLEND
Canopy: architecture, real-time processing and statements, retroactive processing, release cadence, highly agile engineering team, developer-first culture, faster & less expensive implementation
charge cards, neo banks, Saas platforms not for mortgage
Citco
Encino
Encino
FIS commercial lending
Finserv
FINFLUX
ICE Encompass
LENDING PAD
LoanPro
MERIDIAN LINK
MO Technologies
MOODY'S LENDING CLOUD
MORTGAGE HIPPO/ REVVIN
Chicago
Nortridge: Auto, consumer, some commercial
Foothill Ranch CA
Peach
SIMPLE NEXUS
Mortgage application does esigning, document organizing, and reading
Scratch
SHAPE
Shaw
TurnKey Lender
TSYS merchant card services, credit cards
TRAKKER
ZOOT Enterprises
OTHER APPLICATIONS--
EPISODE SIX
NYMBUS
