Mortgage Info for Homes and Small Business Financing

Notes from the Mortgage Trenches September 22 2010

•  Lenders are taking forever in their quest to underwrite and be compliant with new guidelines.  A loan we submitted on August 3 was underwritten and approved on August 26.  Time frames have not really improved since then.  Purchases are being underwritten in a more timely manner.  Even though most of the current volume are borrowers seeking a lower rate, our industry has not forgotten the time constraints require for purchase transactions.  Purchases are given priority as they should.

•  It seems like every week (and sometimes more often) a new form is thrown at us to have the borrower sign and acknowledge.  Earlier this year it was the Federal Bureau of Investigation’s (FBI) Occupancy Certificate with the ominous subtitle in a bigger font “MORTGAGE FRAUD IS INVESTIGATED BY THE FBI”.  It goes on to note that it is punishable by up to 30 years in a federal prison or $1 Million or BOTH!  I wonder how Angelo Mozillo is feeling now?

Interestingly enough, if you are refinancing it also asks for the date of property acquisition.  That’s become problematic because most borrowers can’t recall the exact date and with the previous threat…  let’s just say there is some trepidation even though it’s highly out of place.

•  A word about the new Good Faith Estimate – what a joke!  There were no mortgage professionals and certainly no originators in the room when that form was redesigned.  As we remarked here there is currently no place for the borrower to sign and acknowledge the GFE form.  Why produce a form with important number disclosures to the borrower that doesn’t require their acknowledgment.  That’s just a recipe for disaster: the potential for more mortgage shenanigans.


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