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mgraham224
776 Posts |
 Posted - 01/02/2008 : 10:19:00 PM
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This will not be as long or eloquent as Coopercash's unsolicited gems, but just a few thoughts in response to all of the scenario questions I see on here. Not intended for seasoned LO's as you probably already know all this stuff. This is what goes through my mind, maybe it will help you.
1. Know Agency (Fannie Mae and Freddie Mac) guidlines. There are a couple places to find matrices that let you know what Fannie and Freddie are capable of. I see lots of posts on here asking about scenarios that fit into agency regs.
2. Continually attempt to familiarize yourself with agency regs. I recommend doing this through a good boutique lender. They will often have synthesized a lot of complicated info in one location. Aegis had a great site before they imploded.
3. Realize that MOST lenders can do a loan if it falls into agency regs (some will have internal policies that prohibit it, but most will).
4. Stop and consider that different underwriters may consider a reg differently. If one lender says they can't use appraised value without 12 months of seasoning, DON'T ASSUME that no other lenders can't just because the lender you talked to was an agency lender. Again, look at the regs. Note that appraised value can almost always be used on conforming loans and call the next lender.
5. In relation to number 4, know your portfolio products. UsBank for example is not an agency lender and people that don't know about them are often surprised at what they can do. Just because you are getting an EA3 on that fannie flex 100, and an ineligible when you run it as a My Community, does not mean that Wells Fargo won't accept it as a manual UW on their Home Opportunities program. (it may take 3 weeks to underwrite and be the longest approval you've ever seen, but programs like these have saved my skin before and are VERY useful).
6. Know what will kill your deal, and realize some AE's won't see it right away. AE's cannot be held responsible for asking every little question that could harm your deal. This is important. Identify from the outset what presents a challenge to your deal. Don't try to hide it from the lender. Address it upfront so there are no surprises in the end. It's funny, I've called lenders on tough scenarios and they say no problem. I pause the conversation and reiterate the deal killing problem and ask them to send that to me in writing to confirm it will be ok. 10 minutes later, I get the call "uh, actually i talked to the UW and we can't do that."
7. Realize different lenders have different hits. Some lenders hit .75 for NOO, whereas some others hit 1.5 at the same LTV. Figure out which one's hit the least for your particular situation. Provident isn't always the best pricing, especially when LPMI gets thrown into the mix
8. realize the power of LPMI. Lender Paid Mortgage Insurance, for those that are unfamiliar, can be totally awesome. It almost always saves the borrower money.
9. learn about www.pfloans.com's pricing matrix calculator. When you are getting shopped and you can't figure out why you are getting whooped, go to that website and plug in your scenario. See? Those rates really do exist! Even wholesale AE's don't always realize they are getting beaten by .5-.875 bps by provident almost every day. There are exceptions and working with Provident is not without its drawbacks, but the pricing does exist. If you can tell the borrower that you know about them, but you'd rather go with TBW because of reliable customer service, they may appreciate that (probably not though).
10. Track Mortgage Backed Securities. This is your best way to keep your finger on the pulse of the mortgage market. It will allow you to make more intelligent lock decisions and you will impress your clients with your knowledge. www.mortgagenewsdaily.com has a rates blog with commentary on the mortgage backed security movement and relevant economic data for free. Some good paysites for the same information are www.ratelink.com and mortgage market guide (otherworldly amount of information, but not all can afford it). (yes I contribute for mortgage news daily, but there is no identifying information on the rate blog)
11. Recognize the power of boutique lenders over the big dogs. Is there a local lender in your town that everyone talks about that only lends in a couple states? Are they still around after the meltdown? I wonder what they are doing right? In Portland, OR, we have Hyperion who dominates the local market despite having somewhat higher rates than provident and others. These lenders are out there and by boutique I mean, they are like a broker to 5-10 different sources on the secondary market. These are usually the lenders that have the most aggressive hit adjustments and the broadest product offerings. They also are usually first to market with program changes. Selling to a diverse pool of investors forces them to stay on top of who is doing what and their sales staffs are often extremely helpful. It's like going to a car broker that carries ford, honda, chevy, toyota, etc... and can match you up with the best one for your needs.
12. Be humble about learning. Ask business partners and AE's to teach you. Don't be embarrassed or worried about losing a deal. You might lose the deal, but you'll lose less over time if you are humble and relentless about filling the gaps in your knowledge. For instance, I was on the phone with a fellow outposter recently. He mentioned JV (joint venture). I asked him what he meant. I had always used the term VC (venture capital). Now I know another abbreviation and the outposter also knows I won't BS him if I don't know what he's talking about.
13. Identify the subprime players who are still in business (equifirst, first franklin, wilmington, etc...). Have a contact at each lender. Then you really only have 5 or 6 (if that!) phone calls to make to shop any subprime deal.
14. FINALLY, familiarize yourself with the scotsman guide. A lot of the scenarios you guys post about like log homes, dome homes, over 10 financed properties etc... actually have their own line items in Scotsman. Run through their matrix first. You might find some lender you didn't even know about.
15. Ask your buddies, whether on this forum or elswhere. If you just post up on the forum without going through the above steps, you may be shortchanging your education in the long term (or you just need immediate gratification). When asking for assistance on a scenario, keep it simple, except when identifying the potential deal killers we talked about earlier. LTV, doc type, property type, occupancy, seasoning, purchase or refi, cash out?, loan amount, etc... all in bullet point format. Express your desired or currently quoted interest rate and what the associated YSP is.
Let me know if there should be some additions to this and I will update it. I'm sure I'm missing something, but maybe some LO's that are newer to wholesale, or some that relied heavily on lender support when times were better might find this useful.
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mgraham224
776 Posts |
Posted - 01/02/2008 : 10:21:04 PM
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ok, maybe it is longer than cooper's stuff. I'm new to this whole: "posting for the benefit of the community thing"
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racerx
10813 Posts |
Posted - 01/02/2008 : 10:27:03 PM
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Long, but good.
Now I wonder how many of those who can benefit from your suggestions know what an agency loan is. |
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mgraham224
776 Posts |
Posted - 01/02/2008 : 10:35:07 PM
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quote:
Originally posted by racerx
Long, but good.
Not a familiar phrase in the Graham household...
Sorry, Agency, for the purposes of this post = Fannie Mae and Freddie Mac loans.
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racerx
10813 Posts |
Posted - 01/02/2008 : 10:39:22 PM
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Do you understand my cynicism?
I can't tell you how many times someone has posted a scenario and when they are asked if they ran DU, they ask, "What's DU?" |
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mgraham224
776 Posts |
Posted - 01/02/2008 : 10:47:36 PM
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Oh yeah, your cynicism will always be met with solidarity from me.
I guess AUS's require a whole 'nother primer.
Which in and of itself requires a primer on GSE's
Which in turn requires a primer on "secondary market"
oh boy, it goes on an on.
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ML
1807 Posts |
Posted - 01/02/2008 : 10:57:18 PM
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Cut the crap and just tell me where I can get the rates for LMAO?  |
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ComLender
1194 Posts |
Posted - 01/02/2008 : 11:19:16 PM
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| Very nice. Number 6 is usually the most frustrating one for me. |
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mgraham224
776 Posts |
Posted - 01/03/2008 : 06:52:06 AM
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quote:
Originally posted by ComLender
Very nice. Number 6 is usually the most frustrating one for me.
Too common. Then we blame the lender for not asking us enough prequal questions!
Then once we have a fully underwriten file with the deal-killers identified and addressed, we are amazed at how fast it goes through lender B. No kidding! Because lender A already underwrote it for you! But now you say you never want to do business with lender A because they "screwed up your deal." It blows my mind that I CONTINUE to hear this same crap from seasoned LO's.
On another funny note, several more posts this morning asking for programs that fit into agency regs. Ha! I guess this list was too long to read.
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mgraham224
776 Posts |
Posted - 01/03/2008 : 06:53:36 AM
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quote:
Originally posted by ML
Cut the crap and just tell me where I can get the rates for LMAO?
I think they post their rates on the backside of the cardboard signs of that guy on the onramp where you get on the freeway. |
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swmsn
4181 Posts |
Posted - 01/04/2008 : 12:19:19 AM
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Good info none the less Matt. I think that several of us should once a week or something post something of value to really help. In 90% of my replies I look for the business yet also try and answer the posters question as well as give some good advice.
I don't know how many of us can write as well as the great Cooper. But value will go along way... :) |
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ML
1807 Posts |
Posted - 01/04/2008 : 05:39:11 AM
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quote:
Originally posted by mgraham224
quote:
Originally posted by ML
Cut the crap and just tell me where I can get the rates for LMAO?
I think they post their rates on the backside of the cardboard signs of that guy on the onramp where you get on the freeway.
Uh, THAT guy would be ME!  |
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darkstar
15073 Posts |
Posted - 01/04/2008 : 05:43:04 AM
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| If there was an order to this, I would move #12 way up there...Most people in this business don't learn until it's too late, look at the great rush to learn FHA all of the sudden...Great post! |
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U812
171 Posts |
Posted - 01/04/2008 : 05:50:30 AM
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Great post Matthew,
I would add 2 things:
A COMPLETE, accurate 1003 and a Good detailed Cover Letter laying it all on the line can save both you and the AE an immense amount of time when discussing a possible deal. It will also ensure that apples are being compared to apples. |
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ML
1807 Posts |
Posted - 01/04/2008 : 06:30:01 AM
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We have a tool right here on the BO that few if any LO's use, it's called the PreQual Dispatch. If the Corporate Suits at IB could see it within themselves to spend a couple of their IPO $Billions$; and create a link or form or drop down window in the Mortgage Brokers section that would allow a poster to fill it out before posting a scenario, then more posts would get INFORMED answers, rather than: what LTV? what state? Full Doc? Purch or Refi? etc. This might help make the BO a more EFFICIENT tool for all Outpostians? my $.02
Will someone kindly put this in the BO suggestion box for me?  |
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MisterVA
5309 Posts |
Posted - 01/04/2008 : 07:15:19 AM
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| Looking at the thread title, I thought it was someone looking for a big YSP. Not as many of THOSE threads recently. |
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ritabradley01
1250 Posts |
Posted - 01/04/2008 : 07:48:47 AM
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| Very helpful post. Thank you Matthew. |
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MisterVA
5309 Posts |
Posted - 01/04/2008 : 08:07:05 AM
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quote:
Originally posted by ML
quote:
Originally posted by mgraham224
quote:
Originally posted by ML
Cut the crap and just tell me where I can get the rates for LMAO?
I think they post their rates on the backside of the cardboard signs of that guy on the onramp where you get on the freeway.
Uh, THAT guy would be ME!
Welllllll? Are you going to tell him the rates or not? |
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KevLamb
494 Posts |
Posted - 01/04/2008 : 08:13:51 AM
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Matthew this was a quite a helpful post.
U812 is right.
A cover letter for the file is very helpful. When I first started as a broker I had a processor that did that on every file. I rarely see these now. A lot of times that cover letter would include the answers to any potential problems.
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