Great News for Seniors Considering a Reverse Mortgage 

Written by Clay S on . Posted in FHA, HECM, Loan Limits, reverse mortgage

Reverse Mortgage Loan Limits to Increase in 2017

The Federal Housing Administration (FHA) announced Reverse Mortgage Loan Limits will increase in 2017. This is significant news, since lending limits have remained stagnant for several years.

The maximum claim amount will now rise to $636,150, up from $625,500, for Home Equity Conversion Mortgages. This amount is 150 percent of the national conforming limit of $424,100.

Also increasing in some areas are loan limits for forward mortgages. In high-cost areas, the FHA national loan limit ceiling will increase to $636,150 from $625,500, and FHA will increase its floor to $275,665 from $271,050.

The Maximum Claim Amount is then offset by the reserve set aside for future interest and mortgage insurance amounts accrued to arrive at a Principal Limit which would be the maximum amount a homeowner can borrow. The reserve amount is based on Age and interest rates and loan amount.

The loan limit changes and the maximum claim amount change for reverse mortgages to take effect after January 1, 2017 and stay in effect through December 31, 2017.

This change was made as of the result of rising home prices, with 2,948 counties across the nation benefiting from these changes. Lots of good news for Reverse Mortgage recently.

This increase is a positive for a program that provides seniors more choices and flexibility as they consider a reverse mortgage that can help senior homeowners in many ways.  The most important would be to be able to live in their homes as long as they want or provide strategic options for taking social security and withdrawing investment funds.

To learn more about tips and strategies when applying for a reverse mortgage, I’m available to answer all of your questions.  Let’s talk about your goals and perhaps ways that you can take advantage of these loan limit increases, please give me a call or send me an email: clay@signetmortgage.com. I’d be happy to help!

Clay Selland, Signet Mortgage Corporationclay signature black

 

 

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Conforming Loan Limits

Conforming Loan Limits Increase for First Time Since 2007

Written by Clay S on . Posted in Fannie Mae, Freddie Mac, Homebuyers, Real Estate, Realtors, Renovation Loans, reverse mortgage, Uncategorized

Major Increase in Monterey; San Diego; Sonoma; San Luis Obispo; Ventura and Yolo Counties as well as King; Pierce and Snohomish Counties in Washington

Single family conforming loan limits increased to $424,100 across the nation and to $636,150 in certain high-cost areas. Several counties that previously were in between the base and high-cost limits saw significant increases based on rising property values in Signet Mortgage service areas. Monterey; San Diego; Sonoma; San Luis Obispo; Ventura and Yolo Counties in California as well as King; Pierce and Snohomish Counties in Washington will now have access to conforming loan limits reflecting the current market values.

The Federal Housing Finance Agency (FHFA) announced these changes in a press release  today.  The new conforming limits will be effective for loans closed after January 1, 2017.

The new limits are helpful as conforming rates generally are lower than jumbo rates and underwriting more consistent and flexible so a few more transactions will get done!   A purchase in the Bay Area up to $795,000 at 80% loan to value can be done with a conforming loan …

Particularly relevant with this news announcement is the average U.S. home prices have edged slightly above pre-decline levels from 2007.  Data published in the third quarter Housing Price Index (HPI), reveal that housing prices are approximately 1.7 percent above the value for third quarter 2007.

Here is a link to the loan limits by county for Signet Mortgage service area (CA, WA, OR, ID, UT) and for the entire country.  Included on the right of the chart are the changes from 2016.   The source document from FHFA is here.

Certain high-cost areas have the higher limits at 150% of the base at $636,150 (150 % of $424,100).  But many counties, such as Monterey, Orange, Sacramento, San Diego, San Luis Obispo, Summit (UT), Jefferson (WA), Pierce (WA) and Snohomish (WA) saw significant bumps to its loan limits.

Here are highlights of loan amounts and details for single family and up to 4 units and changes for those counties.

2016-11-23_1206

 

 

 

 

 

The changes do not impact FHA forward or reverse mortgages or VA loans for the moment. Those announcements should be forthcoming in the next couple of weeks.   With the 2008 economic stimulus plan FHA increased loan limits to $625,500 for reverse mortgages for one year and has extended this limit one year at a time since.  The $625k is due to expire this Dec 31. We should hear soon if it has been extended again or changed up or down.

As a mortgage professional in business for over thirty years, I am here to consult with you and answer any questions you have about the strategic use of your mortgage. Let’s talk about your goals and perhaps ways that you can take advantage of these changes.  Call or email me – I am happy to help!

 

 

Clay-Selland

Signet R3 280x120

Post Election Interest Rates Increase

Trump Thump: Mortgage Rates Jump 0.500% Post Election

Written by Clay S on . Posted in FHA, Freddie Mac, Homebuyers, Presidential Election, Rate Updates, reverse mortgage

“Trump Thump” – Mortgage Rates Jump 0.500% or More Post Election

The election is now over and the dust has settled. As painful as it might be to accept, a trend described by others as the “Trump Thump” means we may now have to get used to 30-year fixed conforming loan rates at or above 4.0%.    

 

Prior to the election, pundits had clearly agreed on the idea that the markets “built in” the prospect of a Clinton victory, and – in the unlikely event that Trump won – this surprise victory would mean an improvement in the bond market because of the uncertainty Trump would bring to the table. Well, so much for that idea. 

 

Economic experts maintain that Trump’s economic policies will boost spending and business, as well as bring inflation (all of which leads to lower bond prices and higher mortgage rates). Interesting to me how quickly everything turned in the direction. Was there not enough time spent analyzing the impact of a Trump victory? Did this catch the markets unprepared?  

 

Trump Election, Mortgage Interest Rates

Post Election Results on Mortgage Rates

According to a recent article by Money writer, Taylor Tepper, markets indicate there’s a 75% chance that the Fed raises short-term rates modestly when policy makers meet in mid-December. Here’s a more in-depth analysis on what President-elect Trump means for interest rates in Tepper’s article:  President Trump Interest Rates Federal Reserve.

CNBC’s Diana Olick weighs in on the mortgage rate crisis: watch video.

10-year treasury yields have also spiked in the days since Trump’s election, and something to keep in mind with that is: Don’t panic. This sudden rise isn’t likely to continue, at least, not because of the Trump presidency.

“Rates tend to move very sharply in short periods of time and very little in prolonged periods of time,” said Greg McBride, chief financial analyst for Bankrate. “It’s not something that I think continues.”

So, my advice to those who are anxious about mortgage rates, know that this is a cycle… and as far as rates are concerned, nothing is on the horizon that would suggest waiting for an improvement in rates. Either way, expect volatility and a continuing upward trend in rates.

Clay Selland CPA, President and CEO

Clay SellandClay founded Signet Mortgage Corporation in 2002. Clay holds a real estate broker’s license and is a Certified Public Accountant (California). Clay began his financial career as a CPA with Arthur Andersen, and he has held senior finance and strategy roles with Longs Drug Stores, Cost Plus: World Market, and several other start-up retailers.

Clay has three kids - is a Bay Area native and has lived in Alamo, CA for over 25 years. Clay and his wife are in the transition stage of having his kids go to college and get married, so the focus seems to be shifting to their border collies! Clay can often be found hiking, playing softball or on the golf course.

Clay Selland (NMLS#183492) is licensed in CA, OR, WA, UT and ID. He can be contacted at (925) 807-1500, Ext. 303, or at clay@signetmortgage.com.

Dave Woodland, Northwest Regional Manager

Dave is our Northwest Regional Manager located in the beautiful “City of Trees”, Boise, Idaho.

He and his wife Satu first left the Bay Area in 2006 and relocated to the Northwest resort town of Bend, Oregon. Prior to that, Dave worked as a CPA and financial executive in Silicon Valley with two semiconductor companies as well as 10 years in public accounting with one of the largest international CPA firms.

In 2014, Dave and Satu relocated to Boise, Idaho where they live and work near the Boise River Greenbelt. (We know they really just wanted to be near grandsons Jonah and Andy.) Our Signet Mortgage Boise Regional Office is now open in the Bown Crossing business area, conveniently located near Powell’s Sweet Shoppe.

Dave notes, "my financial services business background allows me to help people make dreams become reality". Dave has a significant number of relationships with investors, a variety of lenders, commercial and residential brokers and attorneys that help serve his clients' needs in order to get deals done.

When not financing deals, Dave can be found with his wife – walking or biking the Greenbelt, kayaking the Boise River, camping, skiing, or golfing. Come over to the house and they'll challenge you to a game of bocce ball!

Dave Woodland (NMLS#283206) is licensed in CA, OR, WA, UT and IDAHO. He can be contacted at (208) 409-2288 or (877) 877-8420, Ext. 307, or at dave@signetmortgage.com.

Mark Malin, Mortgage Loan Advisor

Mark is a Mortgage Loan Advisor for Signet Mortgage. Mark’s business background is in both the food and construction material industries. He owned his own wholesale food business for nearly 30 years and then worked in sales in the construction material supply business for eight years.
In these two endeavors he learned the value of customer service and establishing personal relationships with all those he deals with. Mark comments, “I now have the opportunity with Signet to take this knowledge and my educational background in finance to provide my clients with a pleasant learning experience when they pursue real estate financing”.

Mark and his wife Cali have been married for 36 years and have four married daughters. They spend most of their spare time trying to stay up with their eleven grandchildren who all live in the local area.

Mark Malin (NMLS#284319) can be contacted at (925) 807-1500, Ext. 304.

Tom MacDonald, Reverse Mortgage Consultant

Tom MacDonaldTom brings more than 20 years of financial industry experience including 10 plus years educating senior clients on how a reverse mortgage might be incorporated in their financial plan.

Tom is an expert at helping his clients find the right solution that exactly meets their needs.

Tom grew up on the Monterey Peninsula, receiving his undergraduate degree from the University of Washington and his MBA from Golden Gate University. He and his wife make their home in Napa Valley.

“I absolutely love what I do! I am fortunate to be able to work at something I love to do. I have the patience and understanding to help guide everyone involved through the loan process.

Toll Free 1-800-801-5727, Office Phone 1-707-265-6385, Fax 1-707-812-1971
email Tom@SignetMortgage.com

Condo Communities

Condo Communities Can Look to Reverse Mortgages and FHA Loans once again …

Written by Clay S on . Posted in Condo, Current Events, Fannie Mae, FHA, Freddie Mac, reverse mortgage

Condo Communities Can Look to Reverse Mortgages and FHA loans again Once Regulations are Adopted

The most relevant provision of the changes will emulate the FHFA’s rules regarding the transfer fees for FHA mortgages including reverse mortgages.  In July 2015 FHA began refusing to approve condominiums in higher cost communities such as Rossmoor in Walnut Creek, CA because of the Golden Rain Foundation Membership transfer fees.

For the moment reverse mortgages and FHA loans and Rossmoor are still not allowed.  Current homeowners and future homeowners in Rossmoor must await the close of the comment period November 30th and publication of a final rule.   There is no timeline for issuance of rules. HUD takes whatever time it needs to review comments, then when done publishes a final rule, generally for effect 0-30 days later.

Passed unanimously in both the U.S. House and Senate, and signed into law by President Obama on July 29, 2016, H.R. 3700 resolves a number of uncertainties regarding FHA’s condo provisions. The mortgage industry is still awaiting the close of the comment period and publication of the final rule, but here is a look at the provisions as they stand:

  • Reduces the FHA condo owner occupancy ratio to 35%
  • Gives FHA the ability to substantially reduce burdens and streamline the condo re-certification process
  • Provides more flexibility for mixed use buildings.
  • Emulates the Federal Housing Finance Agency’s (FHFA) rules regarding private transfer fees for FHA condo lending.
  • Allows for approved lenders to directly endorse Rural Housing Service (RHS) loans.
  • Will streamline programs for federally-assisted housing programs
Condo Communities

Condo Communities to get Relief After Passage of HR 3700 Bill

For comprehensive details of the HR 3700 bill, click here.

Condominium communities, like Rossmoor Senior Adult Community in Walnut Creek, CA are impacted. Soon, current homeowners and potential buyers of condos will once again have access to more flexible FHA financing opportunities including reverse mortgages.

The changes will benefit more than just Rossmoor.  Lowering the owner occupancy requirement to 35% will be a big benefit as well meaning communities with high rental ownership will now be open to home buyers with FHA financing.

“Condominiums often represent an affordable option that’s just right for first-time and low-to-moderate income home buyers. Unfortunately, overly-burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers,” said Tom Salomone, President of NAR and broker-owner of Real Estate II Inc. in Coral Springs, Florida.

I look forward to having this legislation signed into law so more options are opened up for all.  We will keep you updated on the progress as it happens.  Please contact us for a strategic look at your real estate financing needs.   I can be reached at www.signetmortgage.com.

Contruction Defect Claim Settlement

Pacific Terrace Condominium Litigation UPDATE

Written by Clay S. on . Posted in Case Studies, Condo, Homebuyers, Refinance

UPDATE!  Pacific Terrace Condominium Owners’ Association has resolved its litigation claim against KB Home South Bay, Inc.  Important to note:  The settlement agreement was signed by both parties, and the construction defect claims have been withdrawn. No lawsuit was or will be filed.

If you choose to refinance or sell your home, a copy of the Notice to the Members of Settlement from Fenton Grant Mayfield Kaneda & Litt, LLP Attorneys at Law should be provided to the lender or prospective purchaser as demonstrative proof there are no construction defect claims pending.

Signet Mortgage has helped several homeowners when it was difficult … and now look forward to helping when more options will be available.  Give us a call or email for your mortgage questions and we will reply with options.

 

Pacific Terrace Condo Litigation

 

 

 

 

 

 

Litigation issues regarding the Pacific Terrace Condominium Owners’ Association and the KB Home South Bay have been ongoing since 2014 and have prevented many owners from refinancing your home with conventional financing and limited financing options for buyers as well.

5x7_postcard

You are not applying for a loan, yet.

Before you make a formal application and we start the loan process I need some basic information so that I can give you an idea of what will be possible in a refinance for your situation.  Review the details on this page and then complete the information request.  Lets get started!


Frequently asked questions ..

How can Signet Mortgage offer options for a refinance and the other lenders I have contacted including banks cannot?

Simply said, I work harder. As a mortgage company I have access to 15 lenders and to be honest I worked with all of them before I found one that understood the situation correctly. It is much easier for a bank or lender to say NO once they hear there is litigation involved with the HOA at all.

The facts are the litigation involves common areas and not the specific units so meets Fannie Mae guidelines just fine.  Documenting the litigation properly means competitive conventional financing are available.  

The lender I work with is a direct seller to Fannie Mae and therefore does not have self imposed overlays like most banks and lenders that get in the way.

Are the loan options competitive?

Absolutely. In fact, the lender is one of my top lenders in both in price and service. There is no added cost to the loan simply because it’s a bit harder to do.

What is the process?

You will provide me some basic information that will allow me to respond with loan options reflecting current market conditions.

Once we agree that it makes sense to move forward I will ask for more detailed information in a formal application. We utilize dropbox for documents and electronic application to make the  process as efficient for you as possible.

Who is are you and who is Signet Mortgage?

Signet Mortgage is headquartered in Danville California license in five states. I am the president of the company.  I have been in the mortgage business for almost 15 years after a career as a CPA and as a senior financial officer for a couple of publicly traded retailers in the Bay Area. Please check out more details at www.SignetMortgage.com

How can you do a “no-cost loan”?


The easiest way to think of a no-cost loan is to think about points. You may be familiar with paying points to buy down to a lower interest rate. Using negative points means the lender contribute a point or two to the closing in exchange for a slightly higher rate – the negative points then can be used to cover the cost of your transaction.

Doing a no-cost transaction makes good sense in almost every situation.  If there are no costs it removes a barrier to doing a loan and if there is a significant enough savings – it’s an easy decision.

You will be provided options for the lowest rate as well a no cost option so you can make your own informed decision.

Would cash out option be available?

Absolutely. The rate will be slightly higher because Fannie Mae charges an additional fee for a transaction with cash out as it is viewed as more risky than a rate and term refinance.  Again, it would be worth looking at options so you can decide.

Will this lender do a purchase transaction?

Absolutely. There would not be any restrictions refinancing in this complex either purchase or refinance.

Is this only available for a limited time or number of loans?

No. Rates are close to historical all-time lows with interest rates. So, if it makes sense to refinance it would probably be a good idea to do this soon simply to take advantage of current favorable rates.  

If the nature of the litigation were to change and involve individual units or if a formal lawsuit was filed with the court that could change.

Also lenders generally do not like to do may not like to do too many loans in a specific complex just due to normal risk management. They have not given me any indication or hesitation to do as many loans as we can put together.


Why work with Clay Selland at Signet Mortgage?

Quite simply I work harder. Bank loan officers get paid based on applications working for the “Bib Bank” are subject to significant underwriting overlays so options they can offer can be more conservative than what is available directly from Fannie Mae.

In addition – I do not get paid anything if I don’t close your loan. That’s why I am careful upfront to be confident you will qualify for a loan before I even take an application.

The Signet Team and I will be in consistent communication throughout the entire process to make sure your loan goes as smooth as possible. The lending environment these days is very conservative and somewhat cumbersome but we know how to work through that and get you a loan that will benefit your family.

 

9 Ways to Use a Reverse Mortgage

Written by Clay on . Posted in reverse mortgage, Social Security, Tax

A good summary of 9 ways to use a reverse mortgage was published by Mary Beth Franklin – in Investment News June 2016.  Investment News is a leading reference source for Financial Planners.  Titled “9 surprising ways to use a reverse mortgage” is an excellent summary of how a reverse mortgage can compliment a solid financial plan.

 

  • Reverse Mortgage Money and HousePay off an existing mortgage
  • Replace a home equity line of credit
  • Protect your portfolio
  • Fund future long-term care or income needs
  • Create a Social Security bridge
  • Manage Taxes
  • Pay Roth conversion taxes
  • Buy a new home
  • Gray Divorce Strategy

 

 

Working with an experienced reverse mortgage loan officer is the key to make sure the guidance and education shared with a client is on point and considers the overall financial plan of the senior.

Clay Selland is a CPA and the owner broker of Signet Mortgage Corporation.  Clay is uniquely qualified to assist seniors as they consider financing of their home including conventional and reverse mortgage financing and how it fits with their financial plans now and going forward.

Contact me today to find out if a Reverse Mortgage is the best option for you!

clay signature black

 

 

 

 

Clay Selland, President

Signet Mortgage Corporation

925-807-1500 x303

Clay@SignetMortgage.com

NMLS#183492

 

Would Solar Work on YOUR House?

Written by Clay on . Posted in Current Events, Real Estate, Solar

solar panel lightbulb

Solar Panel Lightbulb

Recently, one of Google’s engineers, Carl Elkin, created a tool using Google Earth to determine whether or not solar panels on your roof are the best option economically.  ‘Project Sunroof’ was introduced, in which one can visit the Project Sunroof website, enter their address (given they live in the “project pilot cities of Boston, Fresno or the San Francisco Bay Area”), and figure out how much sunlight hits their roof. This information stems from available weather data and aerial imagery that factor in elements such as shade from buildings and trees as well as weather patterns.

I have looked at this site – it is a non-intrusive way to get an idea if solar might be something to look at without a salesman at your kitchen table.  Very interesting use of Google Earth!!

The main objective of this project is to determine your home’s solar generating potential and how much solar panels could potentially save you on bills. The site will then list various installation companies if solar panels are the correct choice for your home. Enter your address in the site below and see how solar panels can help you!

Project Sunroof

READ FORBES ARTICLE HERE

clay signature black

Clay Selland, President

Signet Mortgage Corporation

925-807-1500 x303

Clay@SignetMortgage.com

NMLS#183492

Relief for Homebuyers – Changes to FHA loans for Condominiums

Written by Clay on . Posted in Current Events, FHA

FHA UpdateCondo buyers will benefit from three changes in FHA Mortgage Insurance for Condominiums (HR 3700) passed by Congress July 12th, 2016 and awaiting President Obama’s signature.

Transfer Fees – which limited FHA approval for condos such as Rossmoor in Walnut Creek, CA will now be consistent with the standards set by Fannie Mae and Freddie Mac. Once implemented will open up these communities for FHA loans including the HECM – Reverse Mortgage.  

Owner Occupancy Requirement – could be reduced from 50% to 35% which would open up FHA financing for more condominium projects to more buyers.  

Project Recertification Requirements – will be “substantially less burdensome” than the original certification.  It may be that the length of time between certifications will be lengthened.  

Each of these changes will help the market for condominiums by making more projects available to more home buyers.  Condo’s can be a less expensive option for home buyers. Implementation of these changes are expected within 90 days of the President’s signature.

Call us today to find out if an FHA loan will work for you!

clay signature black

Clay Selland, President

Signet Mortgage Corporation

925-807-1500 x303

Clay@SignetMortgage.com

NMLS#183492

 

Interest Rates Make a Move

Written by Clay on . Posted in Homebuyers, Rate Updates

Interest rates make a move

Last week I wrote that there was little upward pressure on interest rates, and so rates would probably remain steady through the middle of the week, or fall slightly.  The ten-year bond (red line) did fall steadily until Friday, when it made a small move back up.

Rats moved down steadily this week; will they follow next week?

Rates moved down steadily this week; will they follow next week?

Mortgage-backed securities (blue line) held steady through Tuesday, and then started to follow the 10-year bond downward.  Retail interest rates (green line) are only measured once per week, but they too followed the Mortgage-Backed Securities down.  Retail rates are reported on Thursday, however, and the big move was on Friday, so barring unusual or unexpected news we should see rates continue to fall into the new week.

I’ve also been tracking the spread that lenders are demanding, which rose above the normal range of recent history at the beginning of the year and has held at an elevated range ever since.  In the chart below we can see a very slight movement downward this last week.  (The blue line is the daily margin, the red line represents a 30-day moving average to smooth it out.)  If this lasts, interest rates that you are offered could drop even if the yields on the Treasuries and Mortgage-Backed Securities do not fall.

Lenders' margins are starting to come down...maybe

Lenders’ margins are starting to come down…maybe

What’s on the calendar for this coming week?

There are no significant reports due on Monday.  Tuesday brings Job Openings and Wholesale Inventory Reports.  Both could be market-movers, but probably won’t be.  Wednesday is quiet again, Thursday the closely-watched Jobless Claims report is due.  Friday is chock-full of economic reports that could move the market.

While interest rates do not always move in unison with the stock market, this is a week where that could happen.  The market is obviously looking for direction.  If it finds footing and begins a rise this week, expect interest rates to rise.  If it remains weak or falls further, expect interest rates to fall.

Either way, look at the green line in the top chart.  This represents retail interest rates – the rates that are actually delivered to you.  Note that last week’s line is very close to the lowest point in the last 16 months.  How likely is it that it could go much lower?

Casey Fleming, 
Mortgage Advisor, C2 FINANCIAL CORPORATION

Mortgage Bankers: Proudly Selling Snake Oil Since 2008

Written by Clay S. on . Posted in Realtors

If you have ever asked a loan officer “are you a direct lender” or “do you have in-house underwriting” or made a decision for your sellers based on whether or not the lender was a “bank” … you need to read this. I wish I had written this!  By choice I am a wholesale mortgage broker and consistently outperform so-called mortgage bankers, direct lenders etc. 


The original blog post by Andy W. Harris was directed at residential mortgage loan originators … However,  it is much more important for every Realtor to understand to best serve your sellers and buyers.  The uncut original post in its entirety is HERE  with the most important part for Realtors and my added comments in [brackets] follow – a bit lengthy but worth your time.

Many mortgage originators that choose to work for a lender (what some refer to as “Bankers”) are experts at drinking the Kool-Aid served to them by their employer. They have perfected the art of drivel. The problem with [the mortgage] industry Kool-Aid is that it’s laced with snake oil when sold to the public. Many of these “bankers” drink it so heavily that they seem to now inject it to absorb faster, losing all sense of reality when selling services to real estate agents and consumers or when defending objections. Snake oil is an expression that refers to any product with questionable or unverifiable quality or benefit. So, what are common examples of the snake oil quotes or claims told by many lender-employed originators?

I’m a direct lender
No, actually you’re not. If you’re a direct lender, than I’m Gandalf. Listen, most loans are backed, guaranteed or insured by Fannie Mae, Freddie Mac or Ginnie Mae. All residential origination is third-party origination (TPO). I’m pretty sure these agencies don’t originate loans directly to the public and I’m pretty sure you don’t work for them. If you fund off warehouse lines, you’re an indirect lender. A line of credit does not make you a bank. It is surprising regulators still allow the term “lender” in these examples. Most mortgage brokers are more agency “direct” with their investors than lender-employed originators, but they don’t use this title. Even if closing in portfolio-held by an originator’s employer, wholesale lenders offer the same programs in nearly every case (commonly with less overlays).

House made of money

I feel important using the title “Mortgage Banker”
What exactly does that mean? If you’re employed by a correspondent lender, they are actually defined as a “non-bank.” You also cannot say you are a mortgage bank under advertising rules, but the “er” is okay for the originator to add on? Look, everyone knows this is to try and appear like you are somehow lending your own money, having control or making decisions. You don’t and you’re not. Have you ever heard of a buy-back? That’s not control and that’s not your money, no matter what channel you’re in regarding agency-backed loans. You’re not a bank and you must grasp this reality. If you think about correspondent filtering and overlays, a mortgage broker is more of a “banker” than an employee of the lender claiming to be in many cases. Again … non lender-employed originators (i.e. mortgage brokers) do not use these false titles to the public.

I have “in-house” underwriting
This one is one of my favorites. Most residential loans are primarily approved by a computer, not a human. So all channels and originators have “in-house” underwriting if they have an Internet connection. If someone needs a human to manually underwrite their file, than this may or may not have to do with originator competency. Either way, this claim exposes that the originator has few options or choices with underwriting and that the underwriter’s salary is built into their rate sheet more profoundly. Mortgage brokers not only have the ability to compare and choose, but can also speak directly with very experienced underwriters, comparing all details, personalities, overlays, location and styles. I’d choose the outhouse underwriting. [And, often we will “shop” a scenario to several lenders until we find one that can handle the individual complexities of a borrower situation]

I am a banker “and” a broker
Sorry … you’re not. You are either one or the other. Although you can “broker” loans as a lender-employed originator, please do not call yourself a broker. It is a misrepresentation to the consumer as you are not a “true” broker when sending your leftovers. Your employer will steer everything possible to your credit lines for higher margin and to not comply with anti-steering (which they should be either way). They will also increase the lender-paid margin between the wholesale lender and the company as much as possible to avoid their employees brokering more for better pricing. Many retail lenders also pay less to the originator when brokering loans which violates compensation laws. Brokering this way is “not” true brokering. You do not have the operations for true brokering with credit line influence and steering … period!

“Bankers” have more control
I read this beauty of a statement with some drivel to follow by someone that wrote in to Rob Chrisman. I replied to Rob and he shared my thoughts in his recent newsletter:

“I could not disagree more with comments about brokers ‘losing control’ over the loan or process when submitting to a wholesale lender. This is actually opposite of the truth providing our ability to choose. If I need something executed or an exception from a wholesale lender, it is a much different interaction than if this lender employed me. They want our business and then want us happy, so quality ‘good’ Mortgage Brokers have the advantage. If I have a bad experience with turn-times, communication, an underwriter, you name it … I have the ability to correct that mistake on any future files and we set expectations together as business partners.”

To protect the sanctity and the future of our industry, every originator in the country should stop selling this common snake oil. Here are a few clear benefits to mortgage brokers and their clients over “bankers:”

►Independence produces clarity. You see the entire industry and not just what your employer wants you to see. Multiple lenders, overlays, policies, pricing, the list goes on.

►Lenders compete in all areas for your business and they are your business partner. If you have an issue, you address it differently than if they employed you. NO corporate politics.

►You have a full underwriting, sales and operational team with each lender designated to your success and helping you execute every loan file, every day.

►Faster execution by comparing turn-times, operations and table-funding options.

►Fewer and lower requests for seller concessions due to larger lender credits. Clients are able to negotiate better prices and terms on their new home purchase.

►Wholesale lending is the most cost-effective and efficient way for a lender/investor to get their product to market. Lender comparison and analysis simply results in lower rates and fees to your clients.

►You have less overlays, more programs, agency-direct investors, and operational choice with what investor you choose for a specific client and situation (priceless I can assure you).

►The appetite for wholesale is strong based off the quality of originations. It will get better and better as the years progress along with new non-QM investors and programs entering the market.

►Separating and perfecting origination and processing from underwriting and funding (dual company audits perfecting their gifts), allows for the most compliant and organized loan file.

►You work with the most qualified and experienced people on the mortgage business (my opinion regarding wholesale lenders and their staff).

►With regulatory changes behind us, using a mortgage broker is the safest and most transparent and compliant way to get a new residential mortgage if operated properly.

Wholesale operations as a mortgage broker does require more qualified and experienced staff due to the number of investors and must be operated in a compliant and organized way, just as with any other channel.

At Signet Mortgage I am supported by a staff of five WONDERFUL and TALENTED folks dedicated to get a client’s loan done.  It is indeed the “chase” … Working hard to get a transaction completed even under the most difficult circumstances … That is what we get excited about!

Mortgage calculator. House, noney and document.

Andy concludes with a message to loan originators that would like to work in a platform that they can better serve their clients …

True mortgage brokering is available for those who are qualified and embrace the opportunity. The “era of retail recruiting” is coming to an end simply from awareness. I feel a sense of duty to share this with the industry from all the steering and over-charging most consumers have been positioned with providing the majority are now “bankers.” I also feel the need to share with the great originators out there. For whatever reason many are unaware of opportunities to better serve their clients or how to make wiser and more informed career decisions.  [As an originator] If you’ve caught yourself selling snake oil in the past, there is a different way. There is a better way … it has been around for decades and it’s called “wholesale lending.”

Please give me a call before you have to make a decision on where to refer your next client.  We can talk about examples where we got a deal done with a broker advantage!

Clay Selland

NMLS #183492 CalBRE #01398801

925-807-1500 x303  (fax 925-807-1505)

clay@signetmortgage.com