Before you get too excited, I am not talking about a dark, scandalous secret but my profession as a mortgage lender. And before “so what?” rolls off your tongue, let me explain.

Without solid networking skills in today’s business world, you will fail miserably.

Networking is defined as the exchange of information or services among individuals, groups or institutions to cultivate productive relationships.

But it means more than going to stuffy business mixers with a stack of your own business cards, only to come home with a stack from others. It involves leveraging your resources and taking advantage of virtually every opportunity to let people know what you do for a living. It’s not a hard sell or an “in-your-face” sales presentation at your kid’s soccer game – it’s just simple conversation.

Let’s face it; we’re all a little “nosey” by nature. How often do we scan through people’s profiles on Facebook? Take that same mindset and translate it into real life. If you take every opportunity to learn about others, they will do the same for you.

Of course, there’s a limit. If you want to be a chaperone on your child’s school field trip, do it for the sheer pleasure of the experience (?!) instead of the opportunity to hand out business cards to the other parents. Of course, it wouldn’t hurt to strike up a conversation and work in a subtle plug.

You can find structured, intentional networking opportunities all around: chamber of commerce events, referral exchange groups and young professional organizations, to name a few. Remember, everyone attending expects to network. And you probably won’t be the only mortgage lender, real estate agent or CPA in the room.

Successful networking also occurs during unintentional encounters in our daily lives, at church, school and even the convenience store where we grab our morning coffee.

Short from wearing a bumper sticker on your forehead, just about everyone you meet should know what you do. You never know where you will find your next client.

Posted by Dan Ranck

1. The 30-Year Mortgage May Disappear.

There has been much debate regarding government’s role in providing support for home ownership and talk of eliminating Fannie Mae and Freddie Mac. Several experts believe if these agencies are closed, or even limited, it may mean the end of the 30-year mortgage. This concern is addressed in MSN Real Estate’s, Is it curtains for the 30-year mortgage?

2. QRM Requirements Could Become Much More Stringent.

Here are proposed changes to the requirements for a ‘qualified residential mortgage’:

• Certain mortgage types would be eliminated.
• You would need to put a minimum of 20% down.
• You would need a minimum 690 FICO score.
• The ratios of income to both the mortgage payment and overall debt would become much more conservative (28% and 36% respectively).

Loans would be available for purchasers who fail to qualify under the new rules. However, these loans will likely be more expensive for the buyer both in rate and overall cost.

Bottom Line

You may be waiting on the sidelines to see if prices will continue to depreciate before you purchase a home. However, if either of these two scenarios occurs WHILE YOU ARE WAITING TO BUY, you would regret it for years to come.

Posted by Carey Hollander

In today’s economy, prospective homebuyers can find a wide variety of residences to choose from. In addition to market availability, home ownership offers a distinctive set of advantages compared to renting.

Making mortgage payments helps you to accumulate equity over time while rent only covers a single month. In fact, sometimes the monthly mortgage payment may cost less than renting.

Purchasing a home can also serve as a long-term investment, and interest payments on a mortgage are tax deductive. If interest rates drop, you can also arrange to refinance.

Of course, home ownership helps the buyer in many intangible ways as well. I still remember having a catch with my Dad in the back yard, and my parents didn’t have to worry quite so much about my encounters with the neighbors.

Owning a home also reflects favorably on the buyers because the long-term commitment typically requires stability in several aspects of your life: work, savings, family and responsibility to the community.

So, if you’re thinking of buying a house, I suggest you take the plunge. You won’t regret it.

“WHEN did this start?” many of my associates asked. These programs were rolled out in the late 1990’s as a way to reduce operating costs, expand markets, and provide borrowers with faster, fairer lending decisions. Human underwriters simply verify the accuracy of the information and that all income and asset calculations were performed properly. The human underwriter will also clear any outstanding items needed prior to closing. On rare occasions, an FHA loan can be manually underwritten, but this method is considered much riskier since humans are more prone to error in the decision making process.

WHAT is Automated Underwriting? Automated underwriting is a technology-based tool (DU and LP) that combines historical loan performance, statistical models and mortgage lending factors to determine whether a loan can be sold into the secondary market. Mortgage originators use automated underwriting to help them determine the terms under which the loan can be sold into the secondary market; to evaluate the credit, collateral and capacity of borrowers to make their monthly mortgage payments; and to identify the appropriate type of loan for the borrower.

Overall, this automated approval process has helped more people qualify for mortgages by avoiding human biases. It also takes the pressure off of underwriters by eliminating the fear of making a poor decision. So, the next time you apply for a mortgage and get an approval or a denial, you will know who to thank or to blame.

Posted by Carey Hollander

“My personal identity was questioned because I have a very common name.”

“I had to explain the $500 Christmas gift from my aunt and uncle.”

“My father had a business 10 years ago with unpaid federal taxes – I had to prove that I was not responsible because we have the same name.”

Are these quotes from someone applying for a job? An individual wanting to become a secret service agent? Someone charged with a crime being interrogated by the FBI?

Actually, none of the above.

They are all quotes from mortgage applicants referring to legitimate questions from a loan originator.

The mortgage application and approval process has become much more complex during the past year or so, primarily due to government regulation and strict accountability demanded by loan originators, mortgage banks and mortgage brokers.

While the objective may seem to just make the process more difficult, they are really trying to determine whether borrowers will repay a debt over an amortization period of up to 30 years.

A mortgage application may feel intrusive to borrowers because it requires full disclosure of past residency, employment, income, finances and credit history. However, mortgage lenders and underwriters are required by regulation to show due diligence to ensure the mortgage debt will be repaid.

Even the most insignificant detail, such as that part-time job you held for three days last year, still needs to be disclosed in your mortgage application if you have earned wages.

Loan originators request a great deal of information to complete your application, and you should provide as many details as possible to avoid any surprises down the road. Any applicable item will eventually be uncovered through the process. So if they don’t ask, DO tell.

Posted by Dan Ranck

It’s usually the same things that end up disqualifying the borrower: purchased “big ticket items” that added to credit card balances and increased minimum payment, changed jobs or became self-employed, was late in making a payment on a credit account or became a co-signer on a loan that added to the overall debt obligation.

Do you want avoid the landmines that can “kill” a loan?  Here are five “Do’s” and five “Don’ts” borrowers should heed.

MAKE SURE YOU DO…

• Keep paying your bills on time including any mortgage, car, credit cards, etc.

• Inform us in advance of any employment or income change.

• Send in copies of updated paychecks and bank statements as they come in.

• Continue to save money wherever possible.

• Call us anytime if you are unclear or have a question about your loan.

MAKE SURE YOU DON’T…

• Change your employment status without notifying us first.

• Apply for new credit or access credit lines.

• Start significant improvements on your home (if refinancing)

• Co-sign any loans until finished with this transaction.

• Make large purchases such as real estate, cars or furniture.

During the processing of the application, it is advisable to follow these suggestions until all loan proceeds have been disbursed by the lender. The loan is officially completed once all monies have been disbursed.

Posted by Carey Hollander

“I’m waiting for the Obama mortgage program before I refinance.”

“The President is gonna pay my mortgage.”

“I want an interest rate under two percent.”

Press releases, Presidential addresses and media hype have created a stir about homeowner assistance programs. The specific facts and details of eligibility are often left out, causing great confusion for homeowners and mortgage lenders alike.

To clear a few things up: there is no Obama mortgage program, and the President won’t be pulling out his personal checkbook anytime soon to pay your mortgage.

Looking beyond the smoke and mirrors, however, some programs do help homeowners in a variety of ways.

The Home Affordable Refinance Program (HARP) helps homeowners in lower equity situations refinance their mortgage. Requirements include verification of employment history, a minimum credit score and a record of timely mortgage payments. Additionally, the mortgage must be owned or guaranteed by either Freddie Mac or Fannie Mae.

The Making Home Affordable Program (MHA) offers a broader strategy to help homeowners avoid foreclosure with loan modifications, lower monthly payments and more. This program can also provide relief for unemployed homeowners. However, even if you meet a variety of criteria for qualification, the program does not guarantee you will avoid foreclosure.

As of June 11, the new Federal Housing Administration (FHA) Streamline Refinance Program lets homeowners with FHA mortgages reduce their current interest rate with minimal underwriting requirements. The program does not require an appraisal of the property or verification of income, employment or credit score. Mortgage payment history must be current, and the FHA mortgage must have originated prior to May 31, 2009. Unfortunately, if your FHA loan was originated June 1, 2009 or later, you’re out of luck.

Unfortunately, only a small percentage of individuals qualify for these programs, even though their launch generates a lot of headlines, especially during an election year. Still, with the housing industry encountering struggles before a significant rebound, additional opportunities could be in store from the government’s bag of tricks.

Posted by Dan Ranck

We know that obtaining a mortgage can seem like a scary undertaking, partly due to the size and long-term nature of the commitment, and, on top of that, it often occurs during a major transitional period in your life.

At Guaranteed Home Mortgage Company, we understand your feelings and take every opportunity to demystify the mortgage process and inform you every step of the way. We provide ample time to review your options from the first meeting to the closing, and our staff is trained to respond to your concerns in a personal and supportive manner.

Everything we do is designed to help you close on your loan. After an expert consultation by one of our originators, we guide your mortgage application through the required approvals and help you to track its progress through our automated proprietary program. We will assign a personal representative to learn your concerns and guide you smoothly through the entire process.

Our branch managers are able to leverage our national loan volume to ensure you get the best rates possible, and we carefully monitor your application to ensure full compliance with the latest government regulations.

Guaranteed Home Mortgage Company offers a wide variety of products to meet almost any need. We founded dedicated reverse mortgage, USDA and 203K departments to handle the special goals for these types of loans. We also provide FHA and VA loans as well as refinancing, a popular option in today’s economy.

No matter how rare or popular the product, Guaranteed has developed an expertise to ensure you understand and benefit from its provisions.

Take this example: The Appraiser Independence Requirements (AIR) were developed by Fannie Mae, the Federal Housing Finance Agency (FHFA), Freddie Mac and key industry participants to replace the Home Valuation Code of Conduct (HVCC). They went into effect October 15, 2010. Basically, this regulation prohibits banks from ordering appraisals directly from an appraisal company and prohibits loan production staff or any other person who is compensated on a commission basis from engaging in communications with the appraiser. AIR was intended to prevent any party from coercing, suggesting or influencing appraisers in any way to produce a specific or desired value for a residential property.

The effects of AIR regarding loan procedure:
• Appraisals on Fannie Mae and Freddie Mac loans must be ordered through an Appraisal Management Company (AMC) who then places the order directly with an appraiser.
• AMC picks the appraiser indiscriminately with no regard for experience, expertise and local real estate knowledge.
• The AMC receives the appraisal and forwards it to the lender after it has been reviewed and scrutinized.

The effects of AIR on borrowers:
• Delays the process since a 3rd party is involved in the appraisal order and appraisal review.

The effects of AIR on lenders:
• Increased appraisal challenges and disputes caused by inexperience or unfamiliarity with the area.
• More work for loan processors and underwriters due to insufficient, incomplete or incorrect information on the appraisal.

The effect of AIR on our system of free enterprise:
• It shreds our American concept of free enterprise by taking away the freedom to market one’s business and services as well as taking away the freedom of choice from the lenders.
• It has severely damaged the appraisal industry: Appraisers who have built up a good reputation and built their business honestly, now rely on “taking their turn” from the AMCs; their freedom to market their services to lenders has been taken away. As a result, many good professionals have left the industry.

AIR takes a page from Communism by categorizing all appraisal companies as equals. What would happen if our government did the same thing regarding doctors where they mandate that individuals can no longer choose their doctor; that it will be picked for them indiscriminately and would be different each time a doctor was needed? We would have a second American Revolution.

Posted by Carey Hollander

“Dot your I’s and cross your T’s.”

These common idioms can be used to describe the mortgage underwriting process in today’s market, often full of anxiety and frustration for borrowers; however, an experienced and knowledgeable loan originator can help to “soften the blow.”

In most cases, a mortgage file will be viewed and reviewed by “a second set of eyes,” including the loan originator, processor, underwriter and quality control analyst. Every detail will be looked at, and all information must match along the way, or explanations will be needed.

Very few borrowers in today’s society have a “vanilla”i history. Job changes, financial changes and life changes will “come to surface” when a file is reviewed.

The thorough and detailed process to review and uncover information with a mortgage application protects both the lender and borrower by ensuring all issues have been considered to help determine the borrower’s ability to re-pay the loan.

Each bit of information is “put under the microscope,” and, in many cases, additional details will be required.

Details that a borrower may think are insignificant will often “come to light” at some point in time before a final approval is issued.

An example of this may be a part-time job a borrower had 18 months ago that only lasted for two weeks. They may no longer have that job, and the income is not being considered for their loan application; however, the information will be uncovered with transcripts of tax returns for that year.

Parents, grandparents, aunts or uncles will often co-sign for student loans for their children or family members. Although their actions are generous and thoughtful, the liability for these loans is shared by the co-signer as well as the student.

Higher standards and greater accountability have been imposed by new laws and government-mandated guidelines, so now, more than ever, mortgage lenders are “on the hook” for accuracy and full disclosure for every loan provided.

Posted by Dan Ranck