The Vegetarian Butcher; Advice from a Mortgage Loan Processor

by 28 Jan 2012
[caption id="attachment_5841" align="alignleft" width="225" caption="Idea, mortgage, agent, processor, mortgage processors,"]Idea, mortgage, agent, processor, mortgage processors, [/caption] I have long joked that being a mortgage loan processor who does not own a home makes me the real estate equivalent of a vegetarian butcher.  My problem, like many of our clients, had always been that I did not have a sufficient down payment nor did I have a family member who could gift it to me, until recently.  I had taken out a personal loan for a use that fell through.  Instead of immediately paying back the loan, I decided to keep those funds available in case the right opportunity presented itself.   Not two weeks after I had deposited the personal loan funds into my checking account I found myself in a situation that I did not expect – the price on that cute, perfect home Ihave been driving by for months on my way to work had been lowered and was now in my price range.  I knew I had to act quickly.  I also knew that none of the lenders with whom I work  would allow these funds since they were from a personal loan.  Surely someone would, right?  I asked myself what I would suggest to a client who was in a similar situation. Suggestion 1: Call your credit union. I called my credit union, the same one who had lent me the funds for the down payment.  My call was answered by a very kind woman who tried to answer my questions, but was not really equipped to do so.  When I explained my situation to her, she put me on hold to consult with someone else, and then let me know they had no problem with the source of my down payment.  Hooray!  However, when I asked her more questions, she regretted that she could not answer them and I would need to talk to a mortgage specialist.  After leaving a voicemail, I waited… and waited… and waited… and I am still waiting It was a frustrating dilemma.  Though I loved that someone answered the phone immediately, I hated the feeling that my time was being wasted by someone who didn’t know the answers to my questions.  While I waited for a call back, I thought I would try again.   Suggestion 2: Call one of the big guys. Using the internet and the 800-number I found on their website, I called one of the big lenders.  After following several different prompts I made it to a person who, very similarly to the credit union, was polite but could not answer my questions and put me on hold.  After confirming that they too could do this loan, I was surveyed for my basic information (name, phone number, sales price, occupancy) and then was transferred to a loan officer.   The LO answered the phone, “Hello, my name is JJ, and my NMLS # is…!”  A verbal disclosure?  At least I don’t have to do that yet, I thought to myself.  Upon explaining my situation to him,                                                                                                                                                                                                                                                                                                                       he explained that they could not accept these funds as a down payment since it would be sold to Fannie Mae and that they only portfolio jumbo loans.  “Maybe try HomePath,” he suggested, then adding, “But I guess it would have to be a HomePath home.” I really appreciated his efforts to steer me in the right direction, but how is it helpful to suggest a loan product that he clearly knew nothing about?  Fortunately, I knew it was not what I needed and proceeded to my next plan.   Suggestion 3: Use your network of connections. I put out a cry for help on one of the social media websites.  Knowing that I had more LO connections than the average buyer, I thought surely I would receive a good response.  Not only did I not receive a good response, I got no response.  Not even one person uttered a “Sorry, I can’t do it either.”  Not one person? So I wondered how many other LOs are on these sites to “network”, adding connections like they are a precious commodity and then not actually doing anything with those connections once they are made.  A connection in and of itself will not get you new business.  For example, as of today, I have 473 connections on LinkedIn.  I make very few requests, so most of these are people who sought me out - I’m not bragging here, just follow my thought process for a moment.  Let’s say that 85 percent of these connections, or 400 people, requested a connection.  I assume the connection was made because these people are looking to expand their business and feel they may be of service to me.  Of these 400 people, only about a dozen have called, emailed, or added me to a mailer outside of LinkedIn.  If my numbers are an indicator of current trends, only about 3 percentage of the general population is using this tool beyond the most basic of usage.   Suggestion 4: Try another one of the big guys. Having already struck out with one of big lenders, I took a slightly different approach.  I called a friend of a friend, an LO who works for a retail office of one of the big guys.  She too quickly confirmed that they could not allow these funds, but promised to double check guidelines and get back to me.   She never called. There are clearly flaws in our system.  First of all, I am a good buyer; I have high credit scores with no late payments ever, a long employment history with DTIs that fall well within guidelines, and no skeletons in my closet.  However, I also happen to be a mother with two young children who chooses to pay high rent so that my sons can attend a good school – for this reason and no other, I have not been able to save up the sizeable down payment required to purchase in my area.  Who decided that this made me an unacceptable buyer?   Secondly, as those who are left in the real estate lending profession, our actions directly affect the reputation of our industry and more importantly the lives of those we serve.  There is business out there, go get it.   For now I remain the vegetarian butcher.   By Amie Wills                                                                                                                            [caption id="attachment_5304" align="alignleft" width="150" caption="Amie is and independent loan processor, working with both wholesale brokers & retail branches."][/caption]

COMMENTS

  • by Wes Moore | 2/16/2012 9:41:55 PM

    Amie, simply get the CU to attach the mortgage to an asset like your vehicle. FHA allows you to borrow the $ for your down as long as it is secured against an asset. That should fix the problem.

  • by Robby Williamson | 2/16/2012 9:47:24 PM

    You can use the funds, you just have to make sure the payment for the down payment is calculated in your DTI

  • by DeDe Stoner | 2/16/2012 10:09:58 PM

    Ifyou leave the finds in your account so they are seasoned over 2 months you can use them. They won't show up in the 2nd or 3rd month of bank statement, so you won't have to explain where the funds came from. Even if you count the payment in the ratios the funds are not allowed if the money isn't seasoned in your account.

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