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Author: CCinOC Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 126961  
Subject: Re: Hitting a wall Date: 12/22/2012 12:26 PM
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From a [non-copyrighted] mortgage industry newsletter:

"I bought a really cool shovel. It was ground breaking." What isn't so clever is the "borrower brutalization," as one veteran called it, that we see. He wrote, "I've been through two purchase transactions in the last twelve months, both with an extremely competent originator. She did a great job specifically of guiding me through the paper trail process, and explaining the SAR [suspicious activity report] issues she faces. It was really crazy. I, like many others, believe that the fear of making a mistake at all levels of the credit process is really crippling to the industry and to the housing recovery. Whoever is making the rules is far away from the actual process and I am certain that well qualified borrowers are not able to participate in the intended QE3 stimulus of low mortgage rates. Someone should get the Keynesian stimulus guys at the Fed together with those in Congress who are pushing for more documentation. They appear at cross purposes." [...]

And now, briefly, back to the broker and banker discussion. "I have seen a lot of back and forth between bankers and brokers in your blogs. Among other things, I assist the scenario help desk for our company, so I work with our salespeople on both brokered and banked loans. One thing I can honestly say is that the service level provided to the client is entirely based on the individual salesperson and is not contingent on the company they work for, outside of whether they have received the proper training at some point in their career. I think the SAFE Act [Secure and Fair Enforcement for Mortgage Licensing Act] has ensured that all salespeople, brokered or banked, now receive an adequate base of training in order to get licensed, which wasn't the case before. Those who are trained beyond this base (or seek it out themselves) are usually the top salespeople. I'd bet that most who read your blog (or any industry blog) probably value knowledge enough to seek out professional education when needed. It turns out that knowing your salesperson, or having a reference to someone who is trustworthy is probably the best way to go as a consumer.

Regardless of who employs the originator, as the commentary pointed out a week or two ago, education is key. I received this note from Justin L. out in California. "The reason why I am e-mailing you is because I agree 100% about how 'A successful LO [loan originator] is educating their clients on what to expect with today's current situation in the lending industry.' I created a binder with pictures, examples, explanations, definitions, and bullet points on how a loan works, what is the secondary mortgage market, and what to expect while going through the loan process about four months ago. (I am new to this industry having only been licensed in NMLS [Nationwide Mortgage Licensing System] for six months.) The reason I agree with this position is simple. I accept the responsibility that I think is inherent to this profession and I refuse to hide behind the old mantra, 'Well, the consumer should have known what they were getting themselves into.' My responsibility to my clients is to educate, the end result is they secure a loan to buy a part of the American Dream. (I feel a better educated borrower is a more responsible borrower.) If I did my job, then my client and their family will have a home that not only they can call their own, but they will be able to afford their monthly mortgage payment and stop living paycheck to paycheck.

And, "I especially liked the comments on setting expectations with borrowers and realtors in today lending environment. Unfortunately borrowers and most Realtors don't remember anything you tell them at the beginning of the transaction and are STILL surprised when you become their proctologist. I always follow up my conversation with an email reiterating the conversation and freely forward it back to them later in the transaction as a 'friendly' reminder."

***

To the OP, your LO should have had you sign a "Borrower's Authorization" before s/he pulled your credit report. I don't pull one without it. Let's see, do I invest the time to analyze the scenario, inquire with lenders, discuss with the borrower, etc. before I determine if he has crap credit, or after? Hmmm...I can't decide.
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