Tuesday, November 30, 2010

Fannie Mae will no longer accept back a mortgage that was repurchased by a secondary market investor, government-sponsored enterprise or private institutional investor — even if the lender cured the defect in the loan.

Read more on Housing Wire.

query: what kind of experience leads to a job in mortgage underwriting

In my opinion, a good underwriter can be taught the mortgage rules IF they have the basic smarts and analytical talents.  It's not an entry level position and most often underwriters move up out of mortgage processing.  I have to say, however, that most of the underwriters I hired and trained when I was in mortgage banking did not.  Most were simply excellent performers in a related department.

I look for and test for the same qualities in my title insurance agency staff now.  I want a person who can read and comprehend instructions and guidelines, analyze and resolve problems, maintain quality of product and service, work efficiently and has a good attitude.

Any position in the mortgage or title insurance business requires long training at the side of an expert.  So my advice is to find a good underwriter under which to learn your craft and then demonstrate your abilities by doing an excellent job.  You will be noticed.  Once you have achieved credibility with management based upon your quality of work, let them know you'd like to move into underwriting.

In the meantime, read and study all available resources - there are lots of good web sites - to learn MORE than you are taught in your office.   You will be noticed.  ;)

Friday, November 19, 2010

A 'barn-find' Bugatti amounting to little more than a loose collection of bits has sold at auction for more than seven times its estimate.
Completely dismantled, incomplete and lacking its engine and body, the 1926 Bugatti Type 38 was expected to fetch only around £9,000 when it went under the hammer at a Bonhams sale in Australia.

Read more in the Daily Telegraph.
The firing prompted Mike Huckabee and Sarah Palin, among others, to call for NPR to be stripped of federal funding.

Ailes later semi-apologized for his comment in a letter to the Anti Defamation League.
"I was of course ad-libbing and should not have chosen that word, but I was angry at the time because of NPR's willingness to censor Juan Williams for not being liberal enough," he wrote, as TV Newser reports.

"I'm writing this just to let you know some background but also to apologize for using 'Nazi' when in my now considered opinion, 'nasty, inflexible bigot' would have worked better," he added.

Read more on CBSnews.

query: what if property taxes change after closing, does that impact prorations?

Hi Diane,

I didn't see on your blog where I could post my question, so hope you don't mind me writing to you.

I'm about to close (Nov 30) on a home for the first time, so I've been studying everything I can to try to be prepared at closing, and avoid any surprises, especially financial ones.  I'm wondering about the settlement of pre-payed property taxes.  The seller bought at the height of the market, so the current taxes are probably close to what they will be for me based on the recorded sale price.  If I have to reimburse the seller for three months of prop taxes at $700/month, but my property tax bill is only going to be $350/month for those same three months, does this get adjusted in the HUD-1?  Or do I lose out and should be thankful that my property taxes will be lower than the seller's were?



Hi, Dan:

Thanks for sending me the email and I'll post your question so it will be there to help others.

If what we are talking about is pre-paid taxes, meaning the taxes that the seller has already paid, then we're really just reimbursing the seller dollar for dollar for a lienable item that they paid beyond the date of their ownership of the real estate.  We call this proration and it will be listed on the first page of your HUD-1 settlement statement near the beginning, just after the sales price.

Most title agents will include in the papers you sign at closing, some sort of agreement that prorations will be based upon the best available figures at closing, meaning the current bills.  There may even be an exception in your title insurance commitment that refers to bills currently due and payable.  This is to avoid controversy in the event the tax assessment is altered after closing that creates an increase or decrease in the tax bills which is retroactive.

You should plan to reimburse the seller based upon the bills as they exist now unless you and the seller negotiate otherwise.

Does this help?  If I have misunderstood the question, just post a response on the blog or shoot me another email. Take care and may I applaud your careful research as a savvy buyer.  We need more consumers like you!   ;)


Tuesday, November 16, 2010

Thanks to new federal rules covering closing costs on mortgages, home buyers are experiencing a new type of surprise at closing.

Instead of being faced with higher-than-expected costs -- as homebuyers often were shocked to find prior to this year -- the amount needed to close on a mortgage loan is generally the same or lower than the original estimate, experts say.

That's because lenders and brokers, faced for the first time with new penalties if they lowball estimates of upfront mortgage costs, are giving borrowers more realistic cost estimates.

Read more in the Tribune Review.

Thursday, November 11, 2010

the day title insurance and Marilyn Monroe met in a Google Alert

"suggests that she not only cooked, but cooked confidently and with flair": Scrawled on stationery with a letterhead from a title insurance company, ...

Read all about it in the NYT.

Saturday, November 06, 2010

haven't had a taste of mortgage fraud for awhile.....

So, the exercise of yesterday afternoon was like time travel back to the days of sub-prime.

We received a frantic call from a listing real estate broker concerned that the HUD-1 did not accurately reflect the movement of the money.  Huh?

Turns out that after our closer left the table, the seller had confronted her and demanded that she pay him $800 to cover his loss.  He had been forced to pay $800 because the closing was delayed.  This real estate broker could not figure out what he was talking about and since he was too angry to be coherent, she left leaving hanging in the air his threat to complain to the real estate commission.

She had no idea what $800 fee he was referring to and pondered the HUD-1 for two days before calling the buyer's loan officer to see if he knew anything about it.  He did.  He gave her the complete story which I later heard from the buyer and seller when I called them yesterday.

There was a well issue which delayed the closing just enough to push it into the next month.  A buyer who had been planning on less than $100 to close now needed $800 because of interim interest.  Mind you, this was one of those cliff hanger HUD-1s.  Instructions and HUD approval all came the day of closing.  Here's what happened based on what I was able to piece together yesterday.

The buyer called the seller on his cell phone.  The seller, who was on his way to closing - it was a two hour drive - was faced with a threat from the buyer that the seller had caused the problem and he better pay up or the buyer was walking away from the deal.  The seller felt penned in and furious.  He could not reach the listing agent on the phone and so conferred with the selling agent and mortgage broker who both agreed that he should get a cashiers check payable to my office and give it to the buyer before closing.  The seller agreed to do this so he could move forward with his closing and expected to extract the money from his listing agent.

Now, let's pause for a moment in this story to discuss what honest real estate agents and mortgage brokers should do in this kind of a situation.  Professionals are trained.  Real estate agents, mortgage loan officers and brokers along with title insurance agents are trained to recognize and guard against illegal acts.  WHAT DOES A TRAINED PROFESSIONAL SAY


Well, in this case, these two professionals, now known as scofflaws, said great idea and colluded to defraud the mortgage lender.  They knew better than to tell my office, so they hid the act.  When asked for funds at closing, the buyer pulled a cashiers check from his pocket.   The closer reviewed it, found nothing out of order.  Though the check did not show a remitter - not all do - the buyer's name was printed on the check by the bank in the memo line.  The seller had taken the extra step to make it look good.

Once the full set of facts were known to us, you can imagine how disappointed we were.  It's hard to find out that people with whom you have had a working relationship are liars.  As the listing real estate agent explained yesterday when she called our office, the only people at the closing table who did not know what was going on were our closer and her. 

We wrote a letter to the mortgage lender which was delivered by fax along with a copy of the check and HUD.  Original sent to the address on the HUD.  All parties in the transaction were copied including our title underwriter.

JC had chatted with the selling agent and mortgage broker before I spoke with the buyer and seller.  They both insisted that knew nothing about it.  I spoke with the seller and buyer and explained that what happened was mortgage fraud and illegal.  The buyer insisted it was his idea and that he had not discussed it with anyone.  The seller inferred that he had discussed it with either the selling agent or the mortgage broker, he couldn't remember.  These conversations took place before the listing agent filled in the blanks and we knew that both the selling agent and mortgage broker were involved.

The letter prompted a call from the lender who asked plainly why folks didn't just do a work out and revise the HUD?  That's exactly what the listing agent had asked.  If the buyer didn't have or didn't want to pay the money, she would have liked the opportunity to consider a reduction in the commission.  In this case, the mortgage broker made thousands of dollars.  He could have knocked down his fee a bit.  The seller had a two hour drive.  We could have worked all this out with the lender and got an approved HUD without skipping a beat.  But no, they had to go under the table and take the illegal route -pulling their consumers in with them.

The lender pulled the loan from their pipeline - it hadn't been pooled yet - and will get back to us on Monday with a suggested fix.  They said they will contact the mortgage broker.  It will likely be a modified HUD - showing basically the fix that SHOULD have taken place on the day of closing.  I don't know that anything else will happen.  We're waiting to see.

This is a good example of what was so common during the sub-prime fiasco.  I am truly surprised that there are still players in the business acting out retro-mortgage foolishness.