Is Your Loan Officer Licensed?

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This is a question that each and every person, be it Realtor, homeowner or new home buyer should be asking when entering the mortgage process.

Whether you are comparing a Loan Officer, A Mortgage Broker, A Mortgage Planner or a Mortgage Consultant you will see one thing that is the same with each and every one.  They carry a NMLS ID#. NMLS stand for Nationwide Mortgage licensing system.  Simply having this ID# DOES NOT mean that the Mortgage Professional you are dealing with had to pass a background check or test to obtain it.  In fact.  If they work for a Bank…like Wells Fargo, TCF, Stearns or others.  The governing body, the CFPB (Consumer Finance Protection Bureau) does not require each individual to be licensed as long as they are working for a licensed banking institution.

To answer your question, in theory, this means that an individual could fail the licensing exam or background check and still work for a bank in the same profession.

Quick flashback to 2008-2009 when these laws went into place.  At the time, Mortgage Brokers were placed in the news stories dealing with Mortgage Fraud fairly often, and for good reason, the stories being told were true and terrible acts by unscrupulous individuals. Because of these individuals as well as many Loan Officers and Bankers, the industry is much more regulated.  And it should be!

With this regulation, to be a Mortgage Broker or Mortgage Consultant, there are strict background checks and testing that has to occur to be licensed.  What does that mean?  Well, it means that if I had ever mismanaged my own finances, I wouldn’t be licensed.  If I had ever committed a felony, I wouldn’t be licensed and as far as the testing goes, I’m licensed in MN and WI and have been since the act was put in place in 2009.  5 years later, the NMLS is reporting that over 60% of people who take the exam FAIL.  I’ll let you be the judge on the difficulty of the exam when over half fail to pass the test with resource guides from the NMLS and 5 years of study guides and resources available for preparation. I wish this was more transparent to the consumer in many ways.

I am obviously biased as someone who has adhered and exceeded these guidelines but I believe the decision comes down to this: Do you want a licensed and qualified professional handling one of the biggest financial investments of your life or do you want to hope that the Loan Officer you choose to work wasn’t the individual who could meet the requirements?

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Moving Day: Buying and Selling a home the same day

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Some homeowners have the luxury of buying a home, moving in and then selling their current home or close on the sale of their home afterwards.  Wouldn’t that be nice?

The more common scenario is like the Johnson’s closing last month (note: I use generic names for privacy sake of my clients, I will never use their real names in this blog).  Jim and Julie Johnson planned to use the money received from the sale of their current home to help buy a new home for their growing family; Four children and counting!!

We now have two options.  First would have been to wait until they sell their house, find temporary housing and then buy a new home afterwards.  Even if you’re single, this is a pain in the butt to say the least, unless you are that rare species of person who enjoys moving and all the packing and coordinating to go with it.  For the rest of us, there really is only one good option.  To coordinate the sale of your home and the purchase of your new home so they close on the same day and that is exactly what the Johnson’s intended to do. 

To make sure that this process goes as seamlessly and stress free as possible, there is an added level of communication that needs to happen and simply put, you’re average loan officer does not take this as seriously as it needs to be taken.

This isn’t just about putting our purchase mortgage together for the Johnson’s now.  It’s also ensuring that Title companies for both the sellers of the new home, our loan AND the loan of the buyers of the current home are all in consistent communication.  The only way to ensure this is for me to make sure that everyone has the contact information for the other parties involved and to keep checking in for updates. This is simply step one, in addition we have buyers/sellers and Realtors that will need to be kept in the circle of communication so they can instruct their clients and keep everything moving on their end  as smoothly as possible.

This isn’t a science, it’s simply empathy.  When you care about someone, you think about what would be in their best interest and act accordingly.  Jim and Julie Johnson are pulling their hair out trying to pack boxes, make sure the children understand how the move will go and why it’s happening as well as making sure the moving trucks are ready and just the right time per day.

That’s all they should be worrying about because they have entrusted me to keep my word and make certain that their new mortgage will be ready to close BEFORE the day occurs.  Each of my clients is told from the very beginning how the loan will progress and the time frame I will need to ensure that moving day is the only thing to worry about.

When you’re out with your Realtor looking for homes, ask them about some of their closing ‘horror’ stories.  Once you hear these, you may come to realize that obtaining a mortgage is not a commodity based on the best rate and fees, it’s about finding an expert professional so you can avoid ever being mentioned in the list of horror stories.

Jim and Julie Johnson sold their home at 9 in the morning, then bought their new home at 11 with the moving trucks scheduled to be on the doorstep at 1.  With the babysitter (Grandma) coordinated for the kids, everything went as well as they could have hoped for….and that makes me smile.

-Matt

New Appraisal Regulations: here’s what you need to know.

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This industry is constantly in flux.  Regulation changes from the Government or Lenders are never far away.  Keeping on top of these changes can be a daunting task, making it tricky to determine what will pertain to you and your clients.

Appraisals: As of 2014 (old to some, new to others) there is a new policy in place that allows borrowers a fair chance to review their appraisal before closing.  Unfortunately, this can also cause quite a headache.  Here’s how it works and what to plan for.

How it works: The borrower (homeowner or homebuyer) is required to have 3 business days to review their appraisal before closing on the loan.  To account for mailing time, Lenders require 6 business days (3 for mailing and 3 for review).  You cannot close on your loan until this takes place.

Complications: Each of the Lenders we work with have determined this to be based on the final appraisal, so if the appraiser needs to correct a typo or a new construction needs a completion certificate, the wait time will START when the Bank receives this appraisal.  For Home Purchases, this can cause a delay in closing.

Shorten the wait time:  Borrowers can sign a form waiving their rights to the 3 day review period. This will cut the wait time in half as lenders still require the 3 day time to mail.

Bottom line: In most cases, this will not be an issue as long as your Lender has been given enough time to complete the loan and the order for the appraisal is placed immediately.

That being said, there will be times when this will be an issue, most often with new construction and the need for a completion certificate. Knowing this is a potential hurdle beforehand and communicating that to everyone involved in the transaction is a great way to help ease stress for all parties involved and allow everyone to plan for the worst while expecting the best.

-Matt

http://www.mattroyer.com

 

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