No. of Recommendations: 7
I refinanced from a 4.25% 30 year loan to a 2.625% 15 year loan. It finally funded yesterday. I say "finally" because it was a pain in the butt refinance that started way back on May 3. The mortgage process got off on the wrong foot when the loan officer sent me documents with my middle initial in my name wrong on all of them. I contacted him and told him that I would not sign any documents with an error in them. The mortgage company uses a team approach to collect documents. Over the next two weeks, I'm contact six different mortgage company employees, not including the original loan officer. Each time I tell them the documents they're requesting is wrong. Each time they are clueless there is a problem. It took over two weeks for the paperwork to be corrected.

Next I get an email on May 17 that the initial stage of underwriting is complete and it would move to final underwriting in 3 days. It was interesting that the initial stage was complete without an appraisal. They didn't receive that until May 27. On June 7, I get a status update that my mortgage was with the underwriting group and would take 10-15 business day to reach the final underwriting and scheduling of closing. I contact the mortgage company on July 8 to ask for the status of the loan since 21 business days have passed. I get no response to email. I call the loan officer's voicemail. No response. Finally on July 12, I call the toll-free number to the mortgage company and tell the woman that answers that the loan officer is being unresponsive. She looks up my file and tells me I received underwriting approval on July 9. She said I should have already received a call to schedule closing.

On July 16, I am finally contacted by my loan officer. He said he only got my email that day due to computers being down the day before. He gives me the name and contact for the final loan processor. The final loan processor contacts me on July 20 to say the loan is approved and someone will contact me to schedule the closing. Nice to see someone working on a Saturday. The scheduling coordinator contacts me on Monday, July 22 which is probably the only person in the process who promptly contacts me.

On the evening of July 25, the notary that is doing the closing arrives with the paperwork to sign. Throughout the whole process, they kept getting my middle initial wrong. Well, they got mine right but my wife's middle initial is wrong. He was to contact the lender to see if the documents can be signed or new documents will need to be printed and delay the closing. He tells us some will allow you to cross out the wrong middle initial, print the right one, initial the change and then sign your signature while others want new paperwork. Fortunately, we could sign that evening.

I hesitated to write this post until I saw my old loan was paid off. I was worried about a last minute snafu with the wrong middle initial. Now I'm waiting to see if the old mortgage company processes one last direct draft. When I called to cancel the direct drafts, the Wells Fargo representative says it may take up to 10 days to process the request. When I asked if the loan balance is zero, would they not draft my account? She said it may still happen. Or in other words, I expect it to happen on August 5th when it normally would occur.

Almost 90 days and several lock extensions for a slam-dunk* refinance.

PSU

* written just for Catherine
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Hi PSUE,

Congrats on finding the finish line.

FYI, and for any & all others preparing to endure the process... there is a simple solution to this problem;
The mortgage process got off on the wrong foot when the loan officer sent me documents with my middle initial in my name wrong on all of them. I contacted him and told him that I would not sign any documents with an error in them.

When a loan officer prepares the application, its legally merely the attempt to simplify/assist the applicant, who is 'legally' assumed to have manually filled & completed the application form themselves... originally in ink, by hand (back in the day.) The fact that today it arrives to the applicant's first sight in a pre-completed, computer-generated format creates the artificial sense that it is a 'unilateral contract' (which it is not, in any way, shape nor form.)

It is simply the same, old-fashioned, hand-written form to be filled & completed by the applicant, with "advance assistance" from whoever the loan officer or clerk is... and it remains the borrower/applicants responsibility to manually, in ink, complete/correct all fields that the pre-assistance left incomplete, or inaccurate.

IN OTHER WORDS;
1. Don't be intimidated that the application & disclosures arrive pre-formatted & completed... they are nothing but the advance attempt at eliminating/shortcutting the work you are still held responsible for completing/correcting,

2. Don't waste time sending it back into the machine for corrections... just grab your pen (the same pen you'll be signing the brazillion signature blocks with,) and ink over the correct spellings, initials, addresses, phone numbers, et. ad nauseum. Your signatures certify that your annotated corrections make the whole form accurate and complete.

OTHERWISE... I wish there were a univerally applicable process I could layout for everyone to follow to streamline the process... but there's not, because standardization in the industry is virtually nil.

Dave Donhoff
Leverage Planner
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I agree, Dave. Demanding that corrections be made before signing an application, instead of just crossing through the incorrect information, created an unnecessary delay. If I was the lender, I would not have comped any rate lock extensions beyond 7 days.

But, PSUE, you (meaning everybody else) ain't seen nothing yet.

Dodd-Frank Regulatory Onslaught Shows Mortgage Industry Still on Probation
http://www.nationalmortgagenews.com/features/Mortgage-Indust...

As Dodd-Frank ends its third year of seemingly never-ending implementation, it’s a good time to tote up its hits and misses.

Our sister publication, American Banker, has compiled a report card of sorts, showing that this many-armed creature is well started, but nowhere near finished, total implementation.

Of 398 rulemaking requirements, here’s how Dodd-Frank is doing to date:

• 155 finalized rules.

• 64 missed deadlines, no proposals released.

• 111 missed deadlines, with proposals released.

• 63 future deadlines, no proposals released.

• 5 future deadlines, with proposals released.
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2. Don't waste time sending it back into the machine for corrections... just grab your pen (the same pen you'll be signing the brazillion signature blocks with,) and ink over the correct spellings, initials, addresses, phone numbers, et. ad nauseum. Your signatures certify that your annotated corrections make the whole form accurate and complete.

Although the forms could be printed out and signed with ink, the lender preferred to use esigned documents. I was saving a tree by not printing out the documents.

PSU
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eSignatures is another area of inconsistency. Some lenders allow them; many don't. This is a relatively recent development.

Freddie Mac Announces Its Acceptance of Electronic Transactions [including electronic signatures]
http://nationalmortgageprofessional.com/news30489/freddie-ma...
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I agree, Dave. Demanding that corrections be made before signing an application, instead of just crossing through the incorrect information, created an unnecessary delay. If I was the lender, I would not have comped any rate lock extensions beyond 7 days.

I had a 45 day lock. Every form was complete and in their possession 14 days after initial application. I did not receive any additional document request after that. The appraisal was in their possession 24 days after application. For a guide to dates:
May 3 - application
May 17 - all documents complete
May 27 - loan officer receives appraisal
July 9 - told underwriting is complete
July 17 - they're still waiting on IRS for tax returns
July 22 - schedule closing
July 25 - closing

You will note that I did not have to furnish any new documents, update any submitted documents or provide any explanation for information in documents that I provided after May 17. They had everything on my end on May 27. You will note it took them 43 days from the last document received to when they said underwriting was complete. It was 53 days if you don't count the delay with the appraisal that was out of my hands. You may want to blame the applicant but it was the mortgage broker, that made up the bulk of the time delay.

Now if I wasn't a slam-dunk applicant, I could expect delays during the underwriting stage.

PSU
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2. Don't waste time sending it back into the machine for corrections... just grab your pen (the same pen you'll be signing the brazillion signature blocks with,) and ink over the correct spellings, initials, addresses, phone numbers, et. ad nauseum. Your signatures certify that your annotated corrections make the whole form accurate and complete.

Meh. I did just this on a loan app, and chased my tail for weeks trying to get things corrected. You are an optimist, Dave.

IP
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Now if I wasn't a slam-dunk applicant, I could expect delays during the underwriting stage.

Sometimes I think it is the "slam dunk" applicant that gets ignored in the expectation that they will be a piece of cake and will take care of themselves. Kind of like the good kid at school...ignored until they start shoving other kids around in their frustration.

IP
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I did just this on a loan app, and chased my tail for weeks trying to get things corrected. You are an optimist, Dave.

The funny thing about the process was my wife's middle initial on the application, Form 1003, was never wrong during the process. In the whole stack of papers at closing, this form had the right middle initial. The notary couldn't understand how all the other documents were wrong since this form feeds those other documents.
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Every form was complete and in their possession 14 days after initial application.

Why did it take two weeks to complete the forms? Two days I oould see, but two weeks?
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Why did it take two weeks to complete the forms? Two days I oould see, but two weeks?

It didn't. What I said in my OP is that it took him two weeks to get me the corrected forms. You will also see that I said he had all completed forms in his possession in 14 days. Two weeks is 14 days. Or in other words, I completed the forms and he received them on the same day I received the forms from him. I'm sorry it took me an hour to complete and return.

PSU
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What I said in my OP is that it took him two weeks to get me the corrected forms.

But it took two weeks because you insisted on not signing an application wherein your middle initial was incorrect. I as loan originator would have said to you, "We prefer electronic signatures, but so as not to slow things down, please print off the application package, correct your initial wherever it occurs and fax it all back to me."

Two weeks of a 45 day lock is a lot of time wasted.
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But it took two weeks because you insisted on not signing an application wherein your middle initial was incorrect. I as loan originator would have said to you, "We prefer electronic signatures, but so as not to slow things down, please print off the application package, correct your initial wherever it occurs and fax it all back to me."

He actually said he would mail the application to me. He never sent it.

Two weeks of a 45 day lock is a lot of time wasted.

They could have used the time to confirm all the financial documents such as pay stub and bank statements I sent. He had those items on May 4. He could also have just taken 5 minutes and corrected the paperwork. How hard is it to change something in the computer system? You seem to want to blame me for a 14 day delay when I didn't make the mistake and he didn't bother to fix it for 14 days when he could do it as we were on the phone.

PSU
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You seem to want to blame me for a 14 day delay when I didn't make the mistake and he didn't bother to fix it for 14 days when he could do it as we were on the phone.

No, you seem to have placed monumental importance on a middle initial, which ate through two weeks of processing time.

Then again, what do you, the consumer, know about the process? Nothing. You're not to blame.
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No, you seem to have placed monumental importance on a middle initial, which ate through two weeks of processing time.

I'm not the OP, but for legal paperwork, I will admit that I am really particular that my name actually be the one that's on there, and having a different middle initial or a misspelled last name or a different first name is someone other than me.

I can see lots of problems that having the wrong initial or name on the paperwork can cause. Just imagine that someone with PSU's name and the incorrect middle initial has a horrible credit rating or an outstanding arrest warrant, and they suddenly decide that since he executed that incorrect mortgage paperwork, then they must be the same person.

People spend inordinate amounts of time getting credit reports corrected when records get commingled, so I cannot imagine signing something that is knowingly incorrect and possibly contributing to such problems.
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No, you seem to have placed monumental importance on a middle initial, which ate through two weeks of processing time.

Then again, what do you, the consumer, know about the process? Nothing. You're not to blame.


This consumer knows enough not to sign documents that are filled out incorrectly. It is inconceivable to me that that isn't part of doing business 101. If the process is all that is important, why even bother getting the consumer to sign it?
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I'm not the OP, but for legal paperwork, I will admit that I am really particular that my name actually be the one that's on there, and having a different middle initial or a misspelled last name or a different first name is someone other than me.

I am right there with you and PSU. I know none of us are named Smith or something even remotely common but my husband's middle initial was that same as his father's but his middle name was not so that added to all of it. I had businesses assign me an incorrect last name based on the fact I was married.

People spend inordinate amounts of time getting credit reports corrected when records get commingled, so I cannot imagine signing something that is knowingly incorrect and possibly contributing to such problems.

Amen. On that form that lists all the possible aliases, I usually add a statement saying I have never used any listed that I initial.

And I read every word of every page before signing and initialing - no matter how long it takes.
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No, you seem to have placed monumental importance on a middle initial, which ate through two weeks of processing time.

Accuracy is important.

Then again, what do you, the consumer, know about the process? Nothing. You're not to blame.

Okay, fill me in. You just typed one letter wrong on a document on a client. You retain the original digital file. He contacts you with the hour after you email it to him. If you do the correction instead of the client, how long will it take you to complete the task?

My guess is you can complete it faster than it takes you to respond to this post.

PSU
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This consumer knows enough not to sign documents that are filled out incorrectly. It is inconceivable to me that that isn't part of doing business 101. If the process is all that is important, why even bother getting the consumer to sign it?

It's kind of drilled into me by a family member who is a Superior Court judge.
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I'm not the OP, but for legal paperwork, I will admit that I am really particular that my name actually be the one that's on there, and having a different middle initial or a misspelled last name or a different first name is someone other than me.

Mr. Engineer could have printed off the loan application, crossed through the incorrect middle initial and faxed the paperwork back to the loan originator.

I'm surprised Mr. Engineer didn't think of that--he being so smart 'n all that.
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This consumer knows enough not to sign documents that are filled out incorrectly.

But he's not smart enough to print off the documents, cross out the incorrect middle initial and get the damb documents back to the loan originator--thereby burning through two weeks of a 45-day lock.

Go figure.
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Okay, fill me in. You just typed one letter wrong on a document on a client. You retain the original digital file. He contacts you with the hour after you email it to him. If you do the correction instead of the client, how long will it take you to complete the task? My guess is you can complete it faster than it takes you to respond to this post.

I don't know how many times I have to say it. You. Are. Not. To. Blame.

You did everything perfectly. You waited TWO WEEKS for the correct documents to be returned to you. Two weeks!

The solution was simple, but you wanted to be ACCURATE. So two weeks of a 45 day lock were burned through. No biggie. Whatever.

You're an engineer--probably a highly paid one--so why would anyone expect you to come up with a quick solution? Well, I sure wouldn't.
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It's kind of drilled into me by a family member who is a Superior Court judge.

Well, there you go! You apparently come from a long line of smarties. Hence, two weeks of burning through a 45-day lock is no big deal.
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Mr. Engineer could have printed off the loan application, crossed through the incorrect middle initial and faxed the paperwork back to the loan originator.

Sure, but isn't the person he's dealing with at the mortgage company getting paid to do the work, and not the applicant? And if the mortgage broker I'm working with is too busy/lazy/uninterested/etc. to bother to get the initial paperwork correct which it seems they filled out, why should I think they'd be any better at ensuring that all the paperwork is done properly throughout the process? Isn't this service part of the service that the mortgage company is being paid to do?

Why should the customer have to do the work for the person they are paying?

To me, it's not a matter of if the customer thought of and did the work-around. As the customer, I'm paying for a service, and maybe you think I'm crazy, but I then expect to receive that service. I don't expect to pay for it and then have to do it all myself.

I cannot imagine you would do this to your clients and think it was fine.
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Mr. Engineer could have printed off the loan application, crossed through the incorrect middle initial and faxed the paperwork back to the loan originator.

I'm surprised Mr. Engineer didn't think of that--he being so smart 'n all that.


And as I stated earlier in this thread, I did just that, but to no avail. They still continued to get the info wrong, as though they never bothered to look at the docs I signed...even though I told them of the changes I had made when sending the docs back.

Whether it is the industry efforts or the gov't regulations that have done their best to make getting a mortgage a thoughtless process, unfortunately the end result has been an industry inundated with people who just refuse to think. This should not be rocket science, but it still requires more than a fogging of the mirror and a pulse.

IP
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Why should the customer have to do the work for the person they are paying? To me, it's not a matter of if the customer thought of and did the work-around. As the customer, I'm paying for a service, and maybe you think I'm crazy, but I then expect to receive that service. I don't expect to pay for it and then have to do it all myself. I cannot imagine you would do this to your clients and think it was fine.

I as a loan originator would not do this in the same situation. I'd do just as Mr. Smarty Pants Engineer said: I would immediately correct the paperwork and send it back to the customer via email attachment.

But as a consumer, I would remedy the situation just as immediately. I'm equally smart in both roles.
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Whether it is the industry efforts or the gov't regulations that have done their best to make getting a mortgage a thoughtless process, unfortunately the end result has been an industry inundated with people who just refuse to think. This should not be rocket science, but it still requires more than a fogging of the mirror and a pulse.

Apparently, no one's reading the insightful links I have provided. It's not that industry people "refuse" to think. It's that people--smart people; as smart as Mr. Smarty Pants Engineer--don't know what to think anymore.

Lending Tree CEO on Loan Buy Back Fears
http://video.cnbc.com/gallery/?video=3000122813

Lenders say putback threat intensifying
http://www.housingwire.com/news/2012/07/03/growing-threat-le...

Lenders Remain Skittish about Credit Due to Buybacks, Changes
http://www.nationalmortgagenews.com/origination/Lenders-Skit...

Lenders Put Borrowers Through the Wringer
http://online.wsj.com/article/SB1000142405270230420360457739...
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I respect the poster whose quote is below, my reply is in general, as someone who originates mortgage loans, and not direceted specifically to the poster.

To me, it's not a matter of if the customer thought of and did the work-around. As the customer, I'm paying for a service, and maybe you think I'm crazy, but I then expect to receive that service. I don't expect to pay for it and then have to do it all myself.

Many on this board have repeatedly stated that mortgages are a commodity, you're buying money. Price is the only criteria in making a selection of where to buy.

I agree that purchasing mortgage money is a commodity. Yet I've continued to state that the experience of the buyer of that money; from first consultation and review of loan options, to processing and delivery, to loan closing and funding, and concluding with the ongoing servicing of that commodity (literally for years) is a value added service. Hence, obtaining a mortgage is not really buying a commodity.
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Mr. Engineer could have printed off the loan application, crossed through the incorrect middle initial and faxed the paperwork back to the loan originator.

Ms. Broker could have changed the digital file and resent it to Mr. Engineer, saving Mr. Engineer paper, toner and time.

Of course, Ms. Broker doesn't want to put any extra effort into doing her job for which she is being compensated.

It's a shame pride in doing good work has disappeared in the mortgage industry. It must be the burdensome regulations that beat it out of them.
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I don't know how many times I have to say it. You. Are. Not. To. Blame.

Thanks. I knew you would understand.

You did everything perfectly. You waited TWO WEEKS for the correct documents to be returned to you. Two weeks!

Again, thanks for saying so. It is a darn shame that the loan originator procrastinated.

The solution was simple, but you wanted to be ACCURATE. So two weeks of a 45 day lock were burned through. No biggie. Whatever.

Yes, the solution was simple. Resend an accurate document. It's a shame that the loan originator may have cost the company money due to rates shooting up while guaranteeing all lock extensions.

You're an engineer--probably a highly paid one--so why would anyone expect you to come up with a quick solution? Well, I sure wouldn't.

Highly paid is debatable but I would be willing to provide a different solution as long as they paid me for materials as a result of their mistake.
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And as I stated earlier in this thread, I did just that, but to no avail. They still continued to get the info wrong, as though they never bothered to look at the docs I signed...even though I told them of the changes I had made when sending the docs back.

You hit on a problem. If they don't correct their digital files after receiving printed out copies with the changes made, the problem is perpetuated on future forms.

PSU
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It's a shame pride in doing good work has become difficult to find in the mortgage industry. But when you do experience an excellent Loan Officer it's a delight to return to them for the next loan, or refer friends and family to them.*

Fixed that for you, and do not feel insulted by your original comment.

*By no means a solicitation for business. In ten + years of originating loans and posting on the fool boards I have never tried to solicit one loan. In private email exchanges with board posters I have provided a 2nd opinion on loan guidelines or current rates and have stated upfront I would not originate their loan.

** In the office at 7:15PM following up on a request for setting up loan servicing bi-weekly auto payments for someone who closed on their home purchase at 4PM today.
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It's a shame pride in doing good work has become difficult to find in the mortgage industry. But when you do experience an excellent Loan Officer it's a delight to return to them for the next loan, or refer friends and family to them.*

The absolute worst mortgage broker I have ever worked with was highly recommended to my client by someone she considered a friend. He had her set up for a high interest ARM, the changes in time/interest/payments which she could not begin to explain to me and thus obviously could not understand. It took him all of 15 minutes to find the no down payment 5% 30 year FRM with zero points and 6% cash back, (vs the 80/20 ARM at 7.5/11.75% and 3 points,) after I called him and let him know I would be introducing her to my contacts if he didn't find something significantly better and fast.

A high referral is no guarantee.

IP
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In the office at 7:15PM following up on a request for setting up loan servicing bi-weekly auto payments for someone who closed on their home purchase at 4PM today.

Let me immediately correct that. I'm used to the bi-monthly payment request, this home buyer actually wants his payments auto debited from his checking account weekly. We reviewed, it's what he wants, he's paid weekly. So at the closing table table he handed me a voided check and ask that I set up his automatic payments to come out of his checking account weekly.

Perhaps I should have told him to call customer service. I'm paid when a loan funds, the loan funded at 4PM. What the hell was I thinking, offering to do that?
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Highly paid is debatable but I would be willing to provide a different solution as long as they paid me for materials as a result of their mistake.

Yes, about a penny per page for paper, toner and, of course, your valuable time.

The check's in the mail.
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Of course, Ms. Broker doesn't want to put any extra effort into doing her job for which she is being compensated.

It's a shame pride in doing good work has disappeared in the mortgage industry. It must be the burdensome regulations that beat it out of them.


While I was reading this thread I was thinking that if the mortgage industry doesn't like burdensome regulations as an industry they might want to start upping their game. Otherwise the public might come to the conclusion that they have trouble managing themselves.
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If they don't correct their digital files after receiving printed out copies with the changes made, the problem is perpetuated on future forms.

*sigh* Yeah, that must've been it. They couldn't be/didn't bother to look at your corrections. Uh huh.

There are two components of a loan application package. The "initial [or draft] 1003" and the "final 1003." The intake person at the lender would take the initial 1003 and make sure that the final 1003 comports with the initial 1003 before the file was sent to docs.

About a thousand eyes look over the documents to make sure that the very things you've described are corrected. To waste two weeks of a 45-day rate lock in order to correct the initial 1003 was, well, wasteful.

But have it your way. The customer is ALWAYS right--even when they're wrong.
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after I called him and let him know I would be introducing her to my contacts if he didn't find something significantly better and fast.

Good thing your client was working with you then. If his original quote was that bad to the home buyer, I'm surprised you even let your client go back to him for a better deal. Better to have introduced your client to your contacts for a second option. Hopefully this woman would then go back to her friend and say that referral wasn't so good.

There are checks and balances (and universal karma) invovled in everything.
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It took him all of 15 minutes to find the no down payment 5% 30 year FRM with zero points and 6% cash back, (vs the 80/20 ARM at 7.5/11.75% and 3 points,) after I called him and let him know I would be introducing her to my contacts if he didn't find something significantly better and fast.

6% cash back. Yeah, riiiight.
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While I was reading this thread I was thinking that if the mortgage industry doesn't like burdensome regulations as an industry they might want to start upping their game.

Please elaborate. What do you mean by "upping their game?"
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Re-phrased so as not to hurt any widdle feewings.

Ms. Broker could have changed the digital file and resent it to Mr. Engineer, saving Mr. Engineer paper, toner and time. Of course, Ms. Broker doesn't want to put any extra effort into doing her job for which she is being compensated. It's a shame pride in doing good work has disappeared in the mortgage industry. It must be the burdensome regulations that beat it out of them.

You don't read so well, do you, Mr. Engineer? I specifically said that HAD THE BROKER BEEN MYSELF, I would have quickly and easily made the change and immediately returned the documents to Mr. Engineer.

OBVIOUSLY, you used a cut-rate lending source AND you didn't use the good brain God gave you to correct the mistake, thereby burning through not two days but two weeks of a 45-day lock.
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Many on this board have repeatedly stated that mortgages are a commodity, you're buying money. Price is the only criteria in making a selection of where to buy. I agree that purchasing mortgage money is a commodity. Yet I've continued to state that the experience of the buyer of that money; from first consultation and review of loan options, to processing and delivery, to loan closing and funding, and concluding with the ongoing servicing of that commodity (literally for years) is a value added service. Hence, obtaining a mortgage is not really buying a commodity.

I wish I could recc this post several times. Alas, I have only one recc to give to this astute commentary.
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By no means a solicitation for business. In ten + years of originating loans and posting on the fool boards I have never tried to solicit one loan. In private email exchanges with board posters I have provided a 2nd opinion on loan guidelines or current rates and have stated upfront I would not originate their loan. In the office at 7:15PM following up on a request for setting up loan servicing bi-weekly auto payments for someone who closed on their home purchase at 4PM today.

You forgot to mention that the consumer is always right--a huge meme on this board. ;-)
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If his original quote was that bad to the home buyer, I'm surprised you even let your client go back to him for a better deal.

And how would that be my choice? I was her Realtor, not her mother, though it certainly seemed often enough that those lines got blurred.

IP
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6% cash back. Yeah, riiiight.

Are you trying to tell me those were never done? I didn't say this was a recent deal, as the 11.75% rate should have clued you to.

IP
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You forgot to mention that the consumer is always right--a huge meme on this board. ;-)

Your comment is in jest from the smiley face at the end. But no, the customer is not always right. I will decline to work with a client I believe is a commodity shopper. Yes, I understand and agree that price is an important component in determining value, but price alone never reflects value. Too many people know the price of everything, but the value of nothing. For the consumer who clearly wants to know rate and nothing else, I give them the 800 number.

There are some consumers who want rate info only, don't care about corresponding bank fees. When I try to educate them that rate is only part of the equation and amount of total bank fees also plays a role in the cost of a mortgage; then they still only want to know "what is your rate", you're certain to have a commodity shopper and you bail. These are the borrowers who have no interest in learning about the process or taking the time to understand and listen to what to expect during the process. Often, they're the "I'm a slam dunk, I should have the best rate". They really don't want to hear that even the most vanilla loan is not a slam dunk. Why work with them?

Sometimes after twice trying to explain the relationship between rates and bank fees, I'll have just a bit of fun. If market rate is currently 4.375, I'll say our 30YR is at 3.875. After they get all excited then I'll let them know what the bank fees are, which I state as a dollar amount that I've quickly calculated out as 2 points on their loan amount. They still don't get it, and want to know if they can lock in their rate right then, and is there a cost to lock the rate. That's when they get the 800 number. Those are walk ins or call ins, never really a direct referral. The customer may think they're always right, and I'll politely never disagree with their belief, but I certainly wouldn't do business with them.
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I was her Realtor, not her mother, though it certainly seemed often enough that those lines got blurred.

I've also thought the money being earned is from doing a lot of mothering. Overseeing and supervising the entire process, start to finish. Heck, I'm one of the best hand holders out there.
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Are you trying to tell me those were never done? I didn't say this was a recent deal, as the 11.75% rate should have clued you to.

Do you mean a 6% CREDIT toward closing costs? That's possible, but no lender gives cash back to the borrower.
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Too many people know the price of everything, but the value of nothing.

Good point. I'll remember this, as it's soooo true.

And, no, I wasn't kidding about "the customer is always right" being a dominant meme on this board. I remember a lonnnng thread about this with reccs going heavily to those (consumers) who supported the meme that the customer is always right.
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Heck, I'm one of the best hand holders out there.

Believe it or not, so am I. Here's a recent email that touched me deeply. On being told his new trust deed recorded, he wrote:

!!! HALLELUJAH !!!

I cannot express enough my gratitude toward you for getting me out of this mess by giving me the exact instructions/steps to do so.

You've been the best professional broker I've ever known and I'm blessed to have you for solving my problems.

No wonder your name is mentioned in The Mortgage Professor web page:
http://www.mtgprofessor.com/A%20-%20Mortgage%20Brokers/what_...

Of course, if I know someone shopping for a mortgage, you will be the one I'd refer them to.

I also want to thank Janie for referring me to you.

To celebrate the end of this long endeavor that we all went through, I would like to invite you, Phyllis and Janie, along with your significant other, to a casual lunch/dinner somewhere in Orange County.

Please, do not refuse. We will arrange a date, time and location that is convenient to us all.


Makes putting up with all the crap in the mortgage industry worthwhile.
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Hi IP,

It took him all of 15 minutes to find the no down payment 5% 30 year FRM with zero points and 6% cash back, (vs the 80/20 ARM at 7.5/11.75% and 3 points,)

I get the gist of the story... but, in all market realities, there has *never* been a single 100% loan, on a 30 FRM chassis, at 5%, paying a 6% rebate (let alone the 'cash back' comment, which I trust was just a mistatement from someone unfamiliar with purchase mortgage financing.)

In fact, I'd venture to say during the period when it was even possible to get a single-loan at 100%, on a 30 FRM... interest rates on those loans *INCLUDING* down payments were never as low as 5% (though that's a calculated guess... if the era of 0% down loans *and* 5% loans comingled, they were never available on the same deal.)

Dave Donhoff
Leverage Planner
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Do you mean a 6% CREDIT toward closing costs? That's possible, but no lender gives cash back to the borrower.

When a lender is paying soft closing costs after all hard costs.... that's cash back in my book.

--
whyohwhyoh
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When a lender is paying soft closing costs after all hard costs.... that's cash back in my book.

That's nice, but Fannie Mae is so persnickety about what constitutes "cash back," that they have two distinct definitions.

Limited cash out refinance transactions
https://www.fanniemae.com/content/guide/sel111312.pdf#page=1...

Cash out refinance transactions
https://www.fanniemae.com/content/guide/sel111312.pdf#page=1...
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Hi Whyo...

When a lender is paying soft closing costs after all hard costs.... that's cash back in my book.

Please 'splain that... what's a 'soft' closing cost?

Dave
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Let me immediately correct that. I'm used to the bi-monthly payment request, this home buyer actually wants his payments auto debited from his checking account weekly. We reviewed, it's what he wants, he's paid weekly. So at the closing table table he handed me a voided check and ask that I set up his automatic payments to come out of his checking account weekly.

No more auto-debits for me. When I called Wells Fargo this week to stop auto-debits, the woman on the phone said it would take 10 days to process the request. When I asked her if they would still take one since the mortgage was paid off through a refinance, she couldn't guarantee that they still wouldn't withdraw another payment.

PSU
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Yes, about a penny per page for paper, toner and, of course, your valuable time.

The check's in the mail.


If time was critical to them, they would have corrected the problem quickly online since mailing forms back to them would take a few days for the post office to deliver. I know - you want to stick more costs on the customer. You probably want me to pay FedEx to send them back. FYI, I don't have a fax machine and I'm not visiting some business to pay to fax on a per page basis.

PSU
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About a thousand eyes look over the documents to make sure that the very things you've described are corrected. To waste two weeks of a 45-day rate lock in order to correct the initial 1003 was, well, wasteful.

If there are a thousand eyes looking over the documents, why were the final closing papers wrong? The eyes must have been blind.

PSU
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I agree that purchasing mortgage money is a commodity. Yet I've continued to state that the experience of the buyer of that money; from first consultation and review of loan options, to processing and delivery, to loan closing and funding, and concluding with the ongoing servicing of that commodity (literally for years) is a value added service. Hence, obtaining a mortgage is not really buying a commodity.

Yes and no. It depends on the situation. If you need a mortgage broker to provide loan options, help a client with some negatives in their credit history, help a self-employed client or one with a short credit history or one that just needs hand-hold, then the broker with valued added service may be needed. Now if someone knows what loan they want, have stellar work and credit history and don't need consultation services, then it's just sack of money you are buying.

As for ongoing servicing, I bet Catherine doesn't service one of her loan on an ongoing basis. I know my loan will be sold and I can't control who buys it.

PSU
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I will decline to work with a client I believe is a commodity shopper.

I guess I won't be a client.

"I'm a slam dunk, I should have the best rate". They really don't want to hear that even the most vanilla loan is not a slam dunk. Why work with them?

I'm a slam dunk.

PSU
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No more auto-debits for me. When I called Wells Fargo this week to stop auto-debits, the woman on the phone said it would take 10 days to process the request. When I asked her if they would still take one since the mortgage was paid off through a refinance, she couldn't guarantee that they still wouldn't withdraw another payment.

At one time auto-debits were good.

But in this day and age, with automatic bill pay from your checking account, there is no reason to use auto-debit. With bill pay, YOU have control. You push the money to them on your schedule and you can stop it in an instant.
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But in this day and age, with automatic bill pay from your checking account, there is no reason to use auto-debit.

Some lenders offer .25 better to fee at the time of origination for ACH [automated clearing house].
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The customer may think they're always right, and I'll politely never disagree with their belief, but I certainly wouldn't do business with them.

And no matter what happens, it will ALWAYS be your fault. Dealing with such people is proof of the adage: no good deed goes unpunished.
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Do you mean a 6% CREDIT toward closing costs? That's possible, but no lender gives cash back to the borrower.

Perhaps not in your neck of the woods, but this was a county special for first time homebuyers. The money came from the seller, not the lender, but was allowed by the lender for this loan.

IP
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When a lender is paying soft closing costs after all hard costs.... that's cash back in my book.

Most of it went towards costs, but some of it went to her pocket. This was not unusual around here when housing was insane. It was often cheaper to buy than rent because you were allowed to get the seller to kick back up to 6% on a sale, and could go into a purchase with absolutely no money on the table, and even leave with some in your pocket. A rental required first, last and deposit. It's one of the reasons we wound up selling our rentals.

IP
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The 6% may have come from the seller, but not in the form of cash in hand. It was to be applied toward closing costs. It could not have been cash back to the borrower because that would have been an unallowable incentive to purchase.

BTW, a 6% seller concession isn't a "county special." It's allowed by most lenders but only in the manner described above.
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Here's an example of the "county special" described by IP. They were/are called "My Community Mortgage" programs.

https://www.usbank.com/cgi_w/cfm/personal/products_and_servi...

Property must be a 1 unit : single-family primary residence. Up to 100% LTV // 2 Units: up to 97% LTV // 3-4 Units: up to 95% LTV and (all) 105% CLTV with a Fannie Mae approved Community Second, Borrowers with nontraditional credit histories allowed, 30% of income from a co-borrower without a credit history. Section 8 homeownership vouchers can be grossed up 25%. Boarder income and income from co-borrowers without traditional credit scores are allowed, Recommendations Approve/Eligible, Expanded Approval Levels I and II/Eligible (No LLPAs) (Refer with Caution: Follow standard DU Refer policies). 6% seller contributions allowed (limited to closing costs and prepaid items). Boarder Income from a non-related third party may be included. Cash on Hand is an acceptable source of funds.

Acceptable sources of funds to close:
- Gift from a relative - provide acceptable gift letter standard documentation to evidence withdrawal
from donor and transfer to borrower.
- Borrower's own funds.
- No minimum borrower investment required.
- Borrowers cannot receive any cash back.

If borrower received any cash in her pocket at the close, it was due to a fraudulent transfer of funds.
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The 6% may have come from the seller, but not in the form of cash in hand. It was to be applied toward closing costs. It could not have been cash back to the borrower because that would have been an unallowable incentive to purchase.

Cath, you have theory but I was there at closing. She walked with a bit of cash, or rather a check was cut for her. The County was OK with that. Perhaps they held the loan themselves, rather than sell it off. This particular county loan was 100% financing 30 year FRM at 5%, allowing 6% "cash back" via seller's funds, whether that exceeded costs or not.

Believe me, this client is impossible to forget, even if I didn't still have my copy of the file in my file drawer. CYA is the name of the game for Realtors in this part of the country. Sellers remorse tends to result in lawsuits. This is one client I strongly urged to continue renting rather than buy, but since she insisted on buying, I figured at least if I represented her she would be better off.

I know it is a tough concept, but there are some things that you don't know.

IP,
done discussing it with you
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I know it is a tough concept, but there are some things that you don't know.

What a riot! I could say the same thing about you.
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Now if someone knows what loan they want, have stellar work and credit history and don't need consultation services, then it's just sack of money you are buying.

As you said at the beginning, Yes and no.

Couple of weeks ago at a cookout one of the guests I conversed with asked about my employment and I told him. He wanted my thoughts on a refi he just went through.

He is a salaried attorney, not a Partner, so income is W2. High FICO scores, a rate and term refi, with an LTV of < 60%. Basically a "slam dunk". Two tricky aspects, he owned a condo and he was paying down the loan balance to be under $417k.

He mentioned that the process was a nightmare and lasted 75 days. Dealing with multiple people, requests for documents previously submitted. His asset statements to source the funds for paying down current loan showed deposits that were not direct payroll. He had to source those deposits and show the travel expense reports for work where he was reimbursed. Of course the condo also had to be approved and while the appraisal showed an LTV < 60%, he had to increase his coverage on his HO6 "walls-in" insurance. When the loan was finally Clear to Close, he had to schedule within a tight window, which impacted personal travel he had planned.

He concluded by saying, "the process cost me many billable hours at work and negatively impacted by personal life".

I agree, the mortgage industry should provide a higher level of service. Which is why I will state for the last time and then leave it alone, mortgages are a commodity but obtaining a mortgage is not.
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He is a salaried attorney, not a Partner, so income is W2. High FICO scores, a rate and term refi, with an LTV of < 60%. Basically a "slam dunk". Two tricky aspects, he owned a condo and he was paying down the loan balance to be under $417k.

If there is something tricky, I'd say he wasn't a slam dunk.

PSU
nothing tricky in my loan
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I know it is a tough concept, but there are some things that you don't know.


Careful there, IP. She'll claim that she has a definitive proof that she is right, which she will post in a couple of days. And then she'll get in a huff and declare that she's going to withhold that proof because you are being rude.
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I just can't help myself.

nothing tricky in my loan

And yet, this was your experience as described in the intital post.

I say "finally" because it was a pain in the butt refinance

Over the next two weeks, I'm contact six different mortgage company employees, not including the original loan officer.

I get no response to email. I call the loan officer's voicemail. No response.

the notary that is doing the closing arrives with the paperwork to sign. Throughout the whole process, they kept getting my middle initial wrong. Well, they got mine right but my wife's middle initial is wrong.

Almost 90 days and several lock extensions

it was a pain in the butt refinance

Here's where we agree, you received poor service on the delivery of a commodity.

I hope your home is heated by gas or electric. Home heating oil is also a commodity, yet you should see two different homes I'm familiar with who receive delivery from two different companies. One truck consistently drives off the driveway, doesn't measure the amount of oil in the tank and risks overflowing and a spill. Their drivers look like they are on work release from a prison and casing the home and garage for valuables to come back and grab. The other has clean modern trucks, uniformed drivers, doesn't drive on the grass as they approach the home. They charge a couple of pennies more per gallon than the other heating oil company. But hey, heating oil is a commodity.
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She'll claim that she has a definitive proof that she is right, which she will post in a couple of days. And then she'll get in a huff and declare that she's going to withhold that proof because you are being rude.

I already posted the proof, and I did it quite cheerfully.

I can't stand rude people such as yourself.
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I hope your home is heated by gas or electric. Home heating oil is also a commodity, yet you should see two different homes I'm familiar with who receive delivery from two different companies. One truck consistently drives off the driveway, doesn't measure the amount of oil in the tank and risks overflowing and a spill. Their drivers look like they are on work release from a prison and casing the home and garage for valuables to come back and grab. The other has clean modern trucks, uniformed drivers, doesn't drive on the grass as they approach the home. They charge a couple of pennies more per gallon than the other heating oil company. But hey, heating oil is a commodity.

Sign in a dry cleaning establishment.

http://www.google.com/imgres?q=price+quality+speed+pick+two&...
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What have we here? The ENGINEER'S Project Triangle.

http://www.engineeringexpert.net/Engineering-Expert-Witness-...
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That's possible, but no lender gives cash back to the borrower.

Gee, Casey Serin (of the I am facing foreclosure blog fame) was pretty famous for getting cash back in hand at closing.

AJ
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I haven't yet seen a certified HUD-1 posted; only claims of gobs of money in borrower hands at closing.
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And yet, this was your experience as described in the intital post.

Straightforward loan. Poor service.

PSU
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Well, I'll take cheap and good. I don't care about speed.
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Please 'splain that... what's a 'soft' closing cost?


To me soft closing costs are costs I have to pay regardless of the refi... like property taxes, hazard insurance, interest on the previous loan... these things show up in escrow and if the rebate is fat enough to pay for a portion of these after all hard costs then it's net cash...

--
whyohwhyoh
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Well, I'll take cheap and good. I don't care about speed.

Then you should've paid for a 60-day lock.
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i Whyoh,

To me soft closing costs are costs I have to pay regardless of the refi... like property taxes, hazard insurance, interest on the previous loan... these things show up in escrow and if the rebate is fat enough to pay for a portion of these after all hard costs then it's net cash...

Ahhh, gotcha... OK. FYI, for future awareness, the industry term for those is 'prepaids' (for deposits to pay future taxes, insurance, etc.) and 'per diems' (for past daily incremental costs.)

Cheers,
Dave Donhoff
Leverage Planner
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Then you should've paid for a 60-day lock.

Why when the lender would extend the 45 day lock at no cost?
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