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mb1321
43 Posts |
 Posted - 02/07/2005 : 10:47:40 PM
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I am interested in knowing if offering FHA and facing all the red tape really worth it. We do a good majority of VA loans due to being near a military base. However, I have yet to offer FHA for many different reasons: I have heard the red tape, reports, and audits are a nightmare. I have also been told you must maintain a seperate account with atleast $25k at all times in order to be an FHA lender. In the real estate world, most realtors think FHA is the best thing on the planet...atleast in these parts. I would like some input on what experiences other brokers have had in regards to FHA.
Thanks so much, and best "biz" to all. |
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lenderama
887 Posts |
Posted - 02/08/2005 : 12:26:17 AM
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Yes, it's worth it. I worked as a sales rep for several different wholesale lenders. One aspect you have not considered is how becoming FHA will improve your broker/lender relationship. First, as a general rule, FHA underwriters are more experienced, capable and flexible then non-FHA underwriters. You may not realize this, but many lenders have a mix of both FHA and non-FHA underwrites. The FHA underwriters are not limited just to FHA, but when they do conventional loans, many times they take on the files from the companies they regularly work with (FHA Approved). Long story short, being an FHA approved broker can mean that ALL of your files are more likely to be underwritten by the best underwriters at a given company.
Here's another reason, FHA loans are up to 30% more profitable for the lender then other A paper products. If your Account Exec is paid on profit (many are) he/she will be increasingly commited to serving you needs. It will be easier to get a lock extended or a fee waived. You'll also be able to make a better commission than you would with other A paper products.
The most important reason is that for some clients, FHA presents the best opportunity to get into their first home. Serving your clients while making more money will outweigh the downfalls of FHA approval.
No affiliation, but if you are signed up with Countrywide, you should contact your rep. They have a great reputation for helping brokers get FHA approved. After that, setting up with any FHA lender will be a cinch.
The liquid asset requirements are not quite that high. This company specializes in getting lenders FHA approved. Linked is a brief overview.
https://www.federalmortgagelicensing.com/FHA_HUD_License_Qualifications.asp |
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jeffg
1031 Posts |
Posted - 02/08/2005 : 09:18:30 AM
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Not to "get on" Todd, but this response so geared towards the BENEFIT of the broker, it is typical why I kick EVERYONE's ass when I originate loans! Not once did you discuss the benefit to the customer!
This industry needs a complete overhaul in it's attitude towards the customer! Remember, it ain't loan reps, wholesale cudos, escrow donuts, etc. that are paying your paychecks! It's the customer!
I've signed the loan docs myself 14 times, and getting ready to sign another in 2 months, making it 15. How about the rest of you? Still renting that apartment? Chevy dealership owners don't drive Fords if they plan on staying in business.
When I worked at Chase, I heard another LO talk about the "overage" on the customer's FHA loan, and that he was "guaranteed $3,000" at closing just for cashing in his FHA loan. The guy was lying!
I've had 2 FHA loans, myself. I'll never get another! The big benefit used to be from the CUSTOMER'S point of view, was that FHA had the lower downpayments. Now as low as 3%. The reason Realtors love FHA so much is because most I'v met (about 500 of them) are the LAZIEST, ****ing people on earth! Most are ex- ______________ go ahead, fill in the blank for ex-something else, engineer, accountant, lawyer, etc.
Real estate selling is the only profession in America that will take anyone! So, like any big profession, there are good ones and bad ones. Most Realtors "think" they know how to put a deal together, but I know, I used to be one of them twice at Century 21. They only know how to use their lockbox key and say, "Here's the kitchen, etc."
FHA's lower down payment used to be a big benefit, as the conventional market 10 years ago and before, only had loans requiring 5% or more. NOW with all the 80/20, 100%, 103%, etc. I can't see the benefit from the borrower's side to stick them or yourself in an FHA loan---other then for more money to you as the broker. Their rates are higher than conventional and the MIP is a complete waste of money that is NOT tax deductible.
If more loan officers would spend more time with the customer and stop trying to be a "underwriting matrix expert," the industry and the customer would be a whole lot better off! At IndyMac alone, there is 5,000 different ways a loan can be submitted. Anyone out there want tell me them all? If you can, then you ain't selling **** out there in the market!
I have over 500 escrows under my belt. I haven't sold an FHA loan ever! Why? Haven't had too! One of the big benefits I see of FHA is their "lenancy" on FICO scores, and tradelines. But, again, I've gotten the 500 FICO, no checking accounts, state income, rural property, no assets, no verifiable anything, bought in the conventional market.
If Todd is the expert in FHA, please lay out some more benefits to the guy who wrote, other than "broker benefits." Explain the difference between the two programs and explain why the customer, with all the available products in the conventional market, should pay a .50% higher rate on average over an FHA? I've had FHA loans, but back during a time where there was no 100% CLTV.
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mb1321
43 Posts |
Posted - 02/08/2005 : 09:52:53 AM
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Jeffg...Thanks for the input. I've been very successful so far and have never carried FHA loans. I too cannot understand what the fuss is all about since 80/20 and 103% loans are available. The main problem is many times I'm cut off at the pass before I have the opportunity to speak with the client. Clients call realtors, realtors say "we need to get you preapproved and FHA is the way to go". Therefore, many are led astray from the get go! Antoher big one is what realtors are calling the "first time home-buyer program". Just a fancy label they use to promote FHA. I need to find a lender and a program geared toward first time home-buyers, come up with a snazzy label and market the heck out of it :)
I am still researching FHA to see if I can find any real benefit of offering them. I appreciate your input Todd and Jeffg. Have a wonderful day! ~Cris |
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lenderama
887 Posts |
Posted - 02/08/2005 : 11:00:42 AM
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quote:
Originally posted by jeffg
Not to "get on" Todd, but this response so geared towards the BENEFIT of the broker, it is typical why I kick EVERYONE's ass when I originate loans! Not once did you discuss the benefit to the customer!
Actually I did.
"The most important reason is that for some clients, FHA presents the best opportunity to get into their first home. Serving your clients while making more money will outweigh the downfalls of FHA approval."
The rest of post was simply to present a different perspective.
I agree that there are plenty of alternatives. But FHA, in some cases can be the best deal. More importantly, if your FHA approved, you have the ability to offer FHA OR something better. It raises your credabilty to be able to offer both. |
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jeffg
1031 Posts |
Posted - 02/08/2005 : 11:24:58 AM
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Thanks, for responding Todd.
Customers can not make up their mind whether they want the Tuna Fish Sandwich or the Meatball one for lunch, and you think they can make a decision on a $250,000 loan?
What customers expect, I've spoken to about 3,000 of them, in the last 3 years alone, is for YOU, the "broker expert," to LISTEN to their needs, and then provide the best solution. I can gurantee anyone out there, give the customer 4 options to take and you know which one they'll take EVERY time? NONE!
Customer EXPECT us to know what's the difference and the best route.
You mention FHA, as the "best first time homebuyer loan program." I FLAT out disagree! I can take someone with no money down (most first timers have no money, because they don't have any equity gains in real estate, and let's face it, jobs ain't paying people what they need to save any real money)and stick them in a 80/20, roll all the closing costs into the deal, they need only a 620 FICO, and I can go Stated Income with them----because most people have been watching Extreme Makeover and want more house than they can afford!
Then all I need is 2 month's of PITI in reserves, normally only about $5,000 liquid. If they don't have it, I work with these people for 2 months, get mom to kick the money into their checking account to satisfy the lender's asset reserve requirements---when the deal funds---they pay mom back, and I got the 60 day seasoning done.
NOW----explain to me why the 3% FHA is the "best route" to first time homeownerhip?
It used to be, but like VA, there's no real benefit. I read this stuff on this post, and it seems like a lot of loan officers are ALWAYS wasting their time trying to "drag the cat" desperate, 350 FICO, no tradelines, no credit, no job, no nothing" people to the closing table. To all the loan officers out there struggling to make a buck this month, is THIS all you people can find in the market? Would you lend YOUR money to this deadbeat? NO! Either will FHA or anyone else. People, remember the three C's of lending-----this will satisfy conventional and FHA underwriting requirements. More people are begin to rent, than ever before here in California. 81% of first time homebuyers in my state can't qualify for a loan. I spoke to a guy last night----he can qualify for $440,000, but he only feels comfortable with $250,000. Around here, that won't buy a garage!
You all should be providing financial solutions to people. God gave us all two ears and one mouth---you think he was telling us something. Most LO's, unfortunately, use it in the reverse proportion!
FHA and VA were once good programs---still are, BUT the conventional market today smokes these two! Why do you think Congress is trying to get FHA to accept 100% now? Because, they've lost a lot of business!
Jeff
President/Broker
American Fidelity Mortgage
530-477-6095 |
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mikemillsap
1066 Posts |
Posted - 02/08/2005 : 11:53:28 AM
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| How about the fact that you can get a grant to cover the 3% down payment. Also you don't have to charge them anything in the front (as far as your closing costs), and you can still make a good living on it. Or if that isn't benefit, how about the fact that FHA loans are assumable if rates sky rocketed, and the homeowner HAD to sell the house. The rates are also better than any subprime 100% loan that you can get them. The 80/20 is the best option for the people with good credit. |
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jeffg
1031 Posts |
Posted - 02/08/2005 : 12:22:44 PM
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If you tell the borrower that the FHA is assumable--you are misleading them! There was the day when FHA's were assumable with NO qualifying, and a $45 fee. No more!
There is no release of liability, unless approved by the lender. And let's face it, this is really qualifying for a new loan.
As for people with good credit, the average person walking around with 3 tradelines, and pays his bills on time, is a 620+ FICO---doable anywhere!
I have to say, my clients usually have good credit. I'm a guy who would rather spend time with people who can do the deal, versus the entire industry chasing subprime people. I'm funding a $230,000, 33% LTV, 717 FICO, cash out refinance right now-----netting $8,200 on the deal to me, and the customer is happy!
You can all have the sub-prime folks! I'm done with the "get me done" deal people. By the time you spend your time financing this one, I will have made $10,000 on people who CAN do the deal with no hassles. Don't worry, I'm not one of those "rate boys" who's going to fail as the rates head up. My system works in a 15% rate environment!
I'm not ragging ANY particular loan program. If you want to deal with FHA stuff---go ahead. I fund deals in 25 days---make my customers happy--- and always having the lender call me up and ask, "Where'd you get this guy?" I deal with the "cream of crop" customers who don't mind me making a buck, because I'm making them more than they pay me!
Just remember, no fully assumable loans out there without liability to the seller. If you don't give a **** about this "it's the customer's problem," then you'll know why I get all the "A" borrowers because they DO care about liability, etc.
FHA---ok. You want to use it? Go ahead! I don't! That's what's great about this business----you can do whatever you'd like! Personally, I like dealing with the 720 FICO people. You? Probably going to tell me, like everyone else, "Man, these people are tough. They shop the crap out of me and waste my time. No money to be made." Really? Look at my above statement. In my loan portfolio, I fund 10 High Fico people, before I ever get a 500 FICO dude. Why? Because of the last loan I just picked up this week. Someone A hole Broker in Southern Cal was trying to burn a 650 guy, needing a high LTV loan with $18,000 in fees on the front end! Can you believe this? This was easy pickings for me---- I told the guy I'd do it for half! He said, "Ok." $418,000 loan. He needed an 80/20. FHA doesn't help this guy out. Again, I'm not a "product guy." I provide solutions!
Thanks, for your comments. I learn a lot from everyone on this site! I encourage MORE people to start commenting. It will really show how little any of us really know! The market changes all the time.
Jeff |
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mikemillsap
1066 Posts |
Posted - 02/08/2005 : 12:43:30 PM
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| Ya but my 1 FHA deal I have right now has a 617 mid score and virtually no money. I am getting them a grant to cover the 3% down, and hardly charging them anything. I can get them a 100%, but not at a good rate. I will have them in the home in 25 days, but they want to close at the end of March. I'm just saying its nice to have another option for the customers. I have a lady with a 789 with almost 37% down, I wouldn't ever think about putting her into an FHA. Where I'm from the subprime deals just fall out of the sky. People with the perfect credit are too busy rate shopping and I don't want to deal with the rate shoppers. I think in order to make it in this industry, you have to find a good mix of everything. Figure out the best program for each individual, and still find some room to make a decent living. |
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lenderama
887 Posts |
Posted - 02/08/2005 : 1:48:13 PM
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quote:
Originally posted by jeffg
You mention FHA, as the "best first time homebuyer loan program." I FLAT out disagree!
Sorry, but I didn't say that. I said it's the best in some cases. Every deal is different, their is no across the board "best first time homebuyer loan program.". Sometimes FHA is the best, many times something else works better. Assuming FHA is NEVER the best though, is selling your own clients short. If you only work with great credit customers, that's one thing, the average first time homebuyer is not in this position however. I have a story on my blog (link below) reported by Experion that the average credit score for someone without a current mortgage is nearly fifty points lower.
I agree about consulting your clients, telling them what the best deal is going to be instead of giving them a choice. However, in mb1321's case, his client (at least his client's advocate realtor) is predisposed to think FHA will be the best for him. Being able to tell that client, "Well, FHA is a valid path for you, I can offer you X in an FHA loan. I think you should consider this alternative though, as it will better fit your needs" puts you in a better position than just telling him that you don't do FHA because it's bad.
http://blog.mariah.com/2005/01/effects-of-mortgages-on-credit-scores.html |
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jeffg
1031 Posts |
Posted - 02/08/2005 : 2:25:17 PM
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I never said, I tell borrowers FHA is bad! This conversation, for me never comes up! It's like impounds. Do you suggest your client take them? If so, the only reason you're doing this is because it benefits you with not getting a .25% hit or more! Are impounds good for the customer? I've had 14 loans, and one more coming in 2 months. I, personally, HATE impounds! Why? Because of the servicing mortgage company legally able to raise the "shortfall" by 3%. But, most loan officers, who most have never even had a mortgage themselves, convince borrowers to take them. I've never had one client ever like them. They suck, every time the loan is sold, the payments go up.
If clients really want them, because they ain't disciplined to pay them, then I'll have the client make that decision.
I, agree with you, providing more information and products for someone is great. With the non-knowledgable Realtor----well, this is your job to train them, because if you think the Broker is-----you haven't sold real estate like I have, and most Brokers don't do **** for the money, let alone train!
This is my last post on this FHA vs. Conventional. I'm not just a 80/20 guy. Sometimes I'll structure the deal even with mortgage insurance, if it benefits the borrower.
I just read all these loan officers in this forum "chasing" all kinds of "get me done" deals, with "hard scenarios." The time they spend on this one deal, which usually ends up in a TD somewhere, they could have "developed a better pitch" with A borrowers, and get paid on something!
Too much focus on "product" in the industry, and not enough focus on solving a problem, therefore helping the customer. This is why I'm an originating machine----- I focus on the customer! I wish more LO's would stop looking at how much money they're going to make, and focus in on solving real estate financing problems! Do this, and you won't have time to even read this ****!
Thanks,
Jeff Gruhler
President/Broker
American Fidelity Mortgage
530-477-6095 |
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dnuex2
3019 Posts |
Posted - 02/08/2005 : 8:45:02 PM
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Wow this topic really hit a hot button! Great input and views on FHA loans. Im probably one of them who would rather not go FHA. Mostly due to the high cost area I work in (Long Beach CA).
Darrin |
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Darin Ferraro
7813 Posts |
Posted - 02/08/2005 : 9:20:05 PM
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| Oh my, I definately don't have time to read this thread.. lol! |
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mb1321
43 Posts |
Posted - 02/08/2005 : 9:58:05 PM
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I didn't mean to open such a can of worms with one small question. I can say though that everyone's input has been extremely helpful. I have learned many takes on FHA and information I didn't even know. Thanks so much for all the replies!
~Cris |
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jeffg
1031 Posts |
Posted - 02/08/2005 : 10:09:00 PM
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This WAS my intent with the comments! See how much information was shared. Some say, "Whew, ain't going to read all this." But, if we could put all of our heads together into one body, and then make a phone call----this would be perfect.
The collective conscienceness, helps new people and old ones who "think they know it all."
I liked the exchange of ideas----hope no one was offended. People in the "Internet World" tend to be too sensitive. One reason I don't like emails, because people interpret ideas in their own pre-conceived ideas.
Thanks to all---- I think we all know a little bit more about the pros and cons of FHA.
Jeff |
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tricks123
132 Posts |
Posted - 02/09/2005 : 07:29:16 AM
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Jeffg,
Great postings I just learned a hell of a lot.
Thanks,
Paul |
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Duncan
26 Posts |
Posted - 02/09/2005 : 11:04:26 AM
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| It was already said, but WOW. Most mortgage and real estate professional will often recomend loan products without any rhyme or reason. Just because it can be done doesn't mean that it should be done. Remember helping a person get a mortgage, is helping that person create the largest debt that they are going to have. Find out what and why they want. Then do the math and comparisons for them. If you do that you'll find what is best for them. |
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jandr
1543 Posts |
Posted - 02/09/2005 : 2:02:47 PM
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| I am going to WOW this post as one of the most informational and emotional posts this year. Man Darrin if you have more of these coming I think I can spend some of my days with Popcorn and coke sitting next to a window reading the blog. I just pulled an FHA out and into 80/20. This client has no closing cost and no reserves. I placed them easily into a new lender with a 1st 5.50 (I/O) and 2nd 8.25. First time working with this Lender but you can check them out and see if they are worth it www.ownitmortgage.com. Thanks everyone for making this a great website learning alot. |
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mikemillsap
1066 Posts |
Posted - 02/09/2005 : 4:51:11 PM
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| I got another pro for you Jeff, how about the fact that a pro-rated portion of the funding fee can be retrieved by the borrower when they refinance into a conventional loan, assuming they have good enough credit to do that. It acts as a savings account (bonus) for the homeowner. Most people in FHA loans don't know that is a possibility and probably wait to refi until it is too late. I see this as another pro for the FHA, and I see the FHA only getting stronger once they go to 100% in the near future. Not everyone has the 620 mid and a ton of assets, everyone is completely different, which is why its another good program that LOs should know (atleast the basics) |
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jeffg
1031 Posts |
Posted - 02/09/2005 : 5:35:14 PM
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What funding fee are you talking about? EXPLAIN thouroughly so we can either determine that you don't understand it fully, or that "newbies" will learn something. I find most good loan officers don't like sharing their "secrets," but let me all share with you, that the more loan officers that really know about the entire process, we are all better in the industry! Why? Because no one, including me, will relate to everyone. I'd rather go up against knowledgable people selling loans ANY DAY, then all those "Rate selling junkies" that can only sell their mom on a loan!
Are you talking about the MIP Premium refund? If so, this is NO guaranteed payout, like a lot of Broker's I met training/ill advised loan officers that it is a "guarantee" of the portion of FHA MIP. This only occurs when the borrower elects to "pre-fund" it at the time of signing the docs. Most, and I would have to almost say none, because I've never seen anyone do, including myself twice, the pre-paying of this MIP Premium. Again, anyone out there with the expertise in this area?
PLEASE don't tell me everyone is out there claiming to everyone of the borrower's out there that "If you refinance with me, you'll get a $3,000 refund." This **** I used to hear everyday at Chase from inexperienced loan officers. Then when I'd "call them on the carpet" on this issue, they responded, "I lie everyday and it feels good." Nice LO, huh?
FHA Experts out there, please shed some light on the above claims of refunds!
Thanks,
Jeff Gruhler
President/Broker
American Fidelity Mortgage |
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mikemillsap
1066 Posts |
Posted - 02/09/2005 : 5:43:48 PM
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| Yes the MIP, FF(1.5% of the loan amount)...after the 3% DP it is added onto the loan amount. If the homeowner refis into a conventional product they get a pro-rated portion of that back. It doesn't matter who they refi with as long as they fill out the proper paperwork, they get that refund. Some LOs don't know about it or don't inform their customers about it. AS long as they refi within the first 5 years, they get the refund. If they do it in the 1st year, the refund is larger than if they do it in the fifth. I have already had three customers receive the refund. Not trying to argue, please tell me if you think I'm wrong. |
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jeffg
1031 Posts |
Posted - 02/09/2005 : 11:07:06 PM
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The only comment I'm making, is MOST people do NOT "pre-fund" their MIP accounts.
So, if they don't do it this way, by pre=paying it, they won't have a FHA refund to get. When you refinance, a FHA borrower, if this is what is being paid off, will receive in the mail a postcard with a website to "check" their FHA account. In my own case, I never received a refund on 2 FHA loans, because I never pre=funded it. NO ONE just gets a refund on FHA just for paying MONTHLY on their MIP. This is the clarification I'm trying to get you to make! I've heard the pitch from unknowledgable LO's claiming to the potential new borrower that they'd automatically get this FHA MIP refund. It's not just automatic.
That 1.5% you mentioned----how many borrowers elect to do this? If they do, was that a wise use of the "FHA benefit?"
This clarification is all I'm trying to hammer down on this issue. One must pre=pay the MIP to get the potential refund.
Thanks,
Jeff Gruhler
President/Broker
American Fidelity Mortgage |
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lenderama
887 Posts |
Posted - 02/09/2005 : 11:34:46 PM
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quote:
Originally posted by jeffg
The only comment I'm making, is MOST people do NOT "pre-fund" their MIP accounts.
I've seen new construction builders package the purchase agreement to include this. I agree, it's pretty rare of late. Really, the only way to compare FHA to another product is to examine the down & monthly payments. Sometimes 80-20's work, FNMA's My Community can be good to. But sometimes FHA is the best. About one sixth of all mortgage loans are still FHA, that's not just because brokers are to lazy to find something better. (and I know you didn't say that :P ) |
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mikemillsap
1066 Posts |
Posted - 02/24/2005 : 1:34:46 PM
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| Hate to restart this topic again but I forgot about it and it is always a hot topic. Jeff we left off with pre-funding the MIP, FF..I believe. There os no pre funding needed, it is just added on to the base loan amount. I just refinanced a previous customer who was in an FHA loan, into a conventional. I gave her the proper paperwork that needed to be filled out, and she will be getting a check in the mail in 6 to 8 weeks. I have refinanced atleast 20 people out of FHA, and they have all gotten some sort of refund, some got more than others obviously (again no "prefunding" going on). FHA will only get better, when it goes from 3% down to 0% down too. |
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Duncan
26 Posts |
Posted - 02/24/2005 : 2:08:02 PM
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Adding the MIP to the base loan amount is pre-fundinding it. The premium is paid out of the loan proceeds when that loan is funded at closing, instead an extra monthly payment. The amount that that person is borrowing just went up. Well the upside of this is that the interest is know tax deductable. Mortgage insurance is to protect the lender. It has know direct benefit to the borrower. Trust me, I've sat down with reps who sold MI and they tried to tells how to sell it to the borrower. None which made any sense.
FHA is a niche product. It does have value in some cases, but it is not the only loan out there. Bottom line......do whats best for the customer. Learn the number of different types loans that a Broker can use. Then find out the good, the bad and the ugly about each. It's all in the math. |
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lenderama
887 Posts |
Posted - 02/24/2005 : 2:25:15 PM
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quote:
Originally posted by Duncan
Trust me, I've sat down with reps who sold MI and they tried to tells how to sell it to the borrower. None which made any sense.
It's easy, MI makes risky loans less risky for the lender. Without MI, conforming lenders would either have to charge higher interest rates or not offer the loan at all for many of today's "conforming" products. |
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Duncan
26 Posts |
Posted - 02/24/2005 : 2:44:37 PM
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Todd
I agree with you, but with the number of different non-conforming loan options available I can put a someone in a loan in which their payment is not much different than a conforming loan and all of their payment goes toward P&I. When you work the numbers you can find out which will build equity faster and which is best for any given situation.
I try to look at a mortgage as nothing more than a debt and then give them advice on how they can best manage that debt. |
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mikemillsap
1066 Posts |
Posted - 02/24/2005 : 2:57:26 PM
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| Hey Duncan did you get a rep from AIG come into your office and try to sell MI? It was probably the same one that came in my office. What a joke. He says it is best for the customers with the 700 credit scores, better than an 80-20. I ran the math and called him on it, and we haven't seen him since. FHA is a great program for the below 600 scores, who are rate shopping (unfortunately), and can't go subprime because they want lower payments. I don't sell rate but it is easy when someone is quoting a rate of 7.99% and I give them an FHA quote of 6.375%. Also, I don't consider anything prefunding unless money is coming out of my pocket and going somewhere directly. I must be the only one not calling that prefunding I guess. |
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Duncan
26 Posts |
Posted - 02/24/2005 : 3:17:47 PM
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Thanks Todd,
I will ammend my comment "None which made any sense." to "Most of which makes any sense." It truly is on a case by case basis. Thanks again. I stand corrected.
The fact remains that that MI doesn't go toward principal and interest. The non-conforming options are very competitive and in most cases put the borrower in a better position. A GRH loan for high LTV, in my opinion, is a better option than FHA or non-conforming.
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Duncan
26 Posts |
Posted - 02/24/2005 : 3:45:59 PM
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Mike,
You're right it was probably the same rep from AIG. He didn't even feed us like most of our AEs do. HA! HA!
Touching the topic of FHA is like opening a can of worms. There are many plusses that can be gained by it such as manual UW. That underwriter can even waive some of the stips for prior bankruptcies and forclousure if the circumstances warrant. You need a good LOX though.
I also don't sell rate, but I will sell payment and show them exactly where money is going, principal, interest or MI. The borrower needs to know where their money is going. There are many question that we need ask in order to find out which option is better for them. Once we ask the right questions and get the answers, then is the time explore which type of loan is best for them.
Nice to see a fellow Wisconsinite on the forum. |
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lenderama
887 Posts |
Posted - 02/24/2005 : 4:15:07 PM
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quote:
Originally posted by Duncan
When you work the numbers you can find out which will build equity faster and which is best for any given situation.
Sometimes building equity is not the most important factor. Most new home buyers are more interested in the smallest down & monthly payments. In many cases, FHA, or FNMA/FHLMC with MI is the best deal for this type of borrower. |
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mikemillsap
1066 Posts |
Posted - 02/24/2005 : 4:22:49 PM
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| I agree completely. I run the numbers for my customers, and let them choose. Each scenario is different. Our rep fed us, he knew if he didn't we wouldn't be there. It is nice to see another Wisconsinite as well, one of 4 I believe. I told everyone in my office about the site, but so far only one signed up. Duncan are you signed up with a lot of lenders? Maybe we can co-broke some deals? Or share ideas that are working in WI specifically? |
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midas
4409 Posts |
Posted - 02/24/2005 : 6:12:53 PM
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| this is crap, i spend all week trying to stir you guys up while jeff is on vacation and get nothing. fha dosnt exist in ca. but i do have to say jeff you are spoiled. the deals you work on are so easy i have my assistant handle them. i love a challenge, that is why i am in this industry. you say we should have our clients interest in mind yet you say not to spend anytime trying to work on the hard deals. what gives? i will go against you anytime for some friendly competition.the reason you see me post the drag the cat in deals is because the a paper deals are boring. i dont learn **** by posting a 820 borrower with 50% ltv full doc deal. what is the point?anyway how was your vacation? i missed your short posts! |
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Duncan
26 Posts |
Posted - 02/24/2005 : 7:48:25 PM
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I agree. Building equity ins't the only reason why a person gets a mortgae.
As I posted before -
"There are many question that we need ask in order to find out which option is better for them. Once we ask the right questions and get the answers, then is the time explore which type of loan is best for them."
As all of you know doing the loan is more than taking the app. We need to ask the right questions to find out what the borrower wants and needs. We're the experts, lets help them. They do not know the number of different loan options out there. Go to Countrywide's wholesale site and see the plethara of different loans types.
My experience has been that most LOs develope a niche. That is a niche for what type of lending they do and how thet originate. That's great, because we need to be experts in what we do. An expert doesn't do everything, they specialize. The one size fits all approach cost people money and doesn't develope a long term customer. So, I agree with you all.
Hey keep posting, This is good for everyone. Mike, I would be more than happy to share ideas. Paul "Midas", plan are you a prolific poster. I've been gone for about a week and I don't think I can read as fast as you post. I'll try. Welcome aboard. |
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jeffg
1031 Posts |
Posted - 02/24/2005 : 8:27:05 PM
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Hi, Guys, and specifically, hi to Paul. First of all, I have NOT been on vacation! Secondly, saying that ALL I do is easy deals, before one "puts someone down," one should find out the facts first.
"Taking me on," Bud, I can stand with the best in the nation! Ask Danny Bortolussi, or Cais, or Ryan, or most recently, my realtor friend, Norbert Kominsky, who just joined this post. They are the only ones, at least in this forum who have "heard me in action."
Me doing the "lay downs?" GIVE ME A BREAK! I fund the 500 FICO people too. I haven't been on vacation, although I make enough money to do what I want! I went skiing yesterday with my wife and 2 kids. Went up to Boreal, for the 15th time this season.
Some of you out there, make more than me----- I could care less! My measuring stick of a man, is not money, like the media loves to portray on the TV. Mine, is how much time did you spend with your kids of QUALITY time? How much do you really know about your kids and their education. I took off last year about 5 months just to enjoy my life and my family's!
When I need or want money, I originate like no other. But, please, go look over my posts. I've never put one of you down or would make an accusation of "easy deals." Just because I do have 750 FICO people in the pipe, doesn't mean I won't help or solve the 500 FICO person's problems! I AM a problem solution provider, not a program seller.
Any time you want on the phone, hook up a lead, let's do a conference call with them----- I'll do it! I'm not afraid to make calls to anyone. Can I guarantee success on that call? NO! Anyone that makes that claim is lying! This is a simple business, just not an easy one.
I haven't posted in awhile, because I've been "laying my foundation," of building my business properly. I'm leaving next week for a brand new house hunting trip.
Like I said, many of you might make more money, but NO ONE can tell me you're having more fun than I am! If you are, great, I wish more people spent time with their wives and kids, versus "Hey, just made 2 points on that one." In less than 50 years, many of us will be DEAD! Do any of you out there want your tombstone to read, "Hey, the greatest loan officer that ever lived. Funded 42 loans a month." If so, please do not reply to me! I want mine to say, and it WILL read, "The greatest husband and father that ever lived!" 19 years married, to the SAME wife, and 2 great kids.
Jeff Gruhler
Broker
American Fidelity Mortgage |
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dbortolussi@sbcg
63 Posts |
Posted - 02/24/2005 : 9:17:02 PM
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I have to agree with Jeff, not just because I'm going to work with him, but he's proven it to me day in and day out for over a year now. I understand how it feels to sign the documents at escrow, it's scary! My twin brother and I did it back in August. Without Jeff and his 80/20 program, we'd still be "renting", earning absolutely no equity at all.
We had a conference call with one of my borrowers last night for over an hour. He wanted to go 95% LTV with an interest only the program. The problem was, paying off all his debt etc...it was right around 97%. We put him in an 80/20, saved him over $200 a month, and put 15K back in his pocket. There was no sense in leaving 15K in equity with what his goals were. Like Jeff mentioned, we were providing solutions to his problems, not putting in him in a 95% interest only program that wasn't paying off all his debt and sticking him with PMI like all the other telemarketers were trying to do.
If you're going to go 97% on an FHA, you may as well do an 80/20 and keep that 3% down payment in the bank. It's nicer to have that chunk of change in the bank then empty it out and save a few hundred dollars on the mortgage. I later found out this was one of the best decisions my brother and I have made. We're happy every aspect of the loan, and most of all the service and attention he paid to our wants and needs.
Thanks Jeff! |
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rbortolussi
12 Posts |
Posted - 02/24/2005 : 10:00:47 PM
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| i'm pretty new to the industry, but one thing i've seen noticed from watching jeff work with my parents loan, my loan, and from hearing him on the phone is he "knows the customer and his underwriting requirements." both are important to know, but together it creates a stand out expert in the business. the ability to know the industry, know the customer, and relating real life experience sets him high above the bar. look at how much he writes in responses, that is because he knows what the hell he is doing. i wouldn't be in a home if he didn't know my needs and how to solve them. an fha wouldn't have helped my brother and i. i know some people are getting sick of my brother and i mentioning jeff in most of our posts, but if you were to be trained or mentored by somebody on this forum, who would choose anybody else. you should hear him on the phone. |
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midas
4409 Posts |
Posted - 02/24/2005 : 11:37:14 PM
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| hey jeff, i was not putting you down! i was just prompting you to dig a little deeper into your subject wich is exactly what you did. i thought you went to utah as per our conversation, that is why i asked about it. i was only being direct because i thought you could take it. you posted earlier today that internet people are so sensitive so i went with it. any way no offense intended. welcome back, it was getting pretty slow without you. i do agree with you about FHA i had 1 on my first home, in order to qualify i had to tear down a covered porch that was in fine shape replace the entire bathroom floor, and all of the eaves. it ended up costing me $12000 plus the $7000 that i had to put down. all of this for a $128000 home. i could have kept my porch, saved $19000 and avoided $64.00 a month in mortgage insurance. |
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mikemillsap
1066 Posts |
Posted - 02/25/2005 : 09:22:49 AM
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| Hey dbortolussi, you don't need to take the 3% down out of your bank account. In WI, not sure anywhere else, we have several grant programs. If the seller agrees, the grant can cover the 3%. And an FHA rate of 6%, will be better than any blended rate out there as well. I do agree that there can be several appraisal issues. I have not run into one that was as extensive as midas' though. If you do run into that, why not just switch it to an 80/20, and pay $300 for a new appraisal? I've actually went out to homes, and helped my customers do the work that FHA requires. A guy in my company re-roofed a house for a lady, to close a deal. FHA isn't the best for everyone, just saying its a nice tool for any LO to know. Can anyone explain why CA is so different and doesn't have FHA or several other programs from what I've heard? |
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midas
4409 Posts |
Posted - 02/25/2005 : 6:53:06 PM
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| the homes in ca. start at $300,000 for a garage and it dosnt even have a door on it. we have by far outgrown the fha guidelines. |
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dwolfe6770
1 Posts |
Posted - 02/26/2005 : 08:13:11 AM
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FHA is a great mainstay to any pipeline...the srp's are fat guidlines are leniant...downpayment assistance is allowed sellers can pay up to 6% in closing costs. Great rates and low MI help as well.
As refi's cool this type of purchase product is always going to seel |
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lenderama
887 Posts |
Posted - 02/27/2005 : 8:32:33 PM
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quote:
Originally posted by midas
the homes in ca. start at $300,000 for a garage and it dosnt even have a door on it. we have by far outgrown the fha guidelines.
That may change this year. Check out this new bill - H.R. 4110. There's a good chance it will pass in 2005. When it does, The FHA market in Cali is going to explode. Will you be ready? |
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midas
4409 Posts |
Posted - 02/27/2005 : 11:25:18 PM
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| yep! |
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