Mortgage ramblings brought to you by Beth

You're now on your way to a mortgage loan approval! Just a few things you need before a final decision can be made.

Lets start with the appraisal of the property. This is a crucial part of any mortgage loan. This must be completed by a State Licensed/Certified Real Estate appraiser. The appraisal must be ordered by the lender to be acceptable in most cases. If you have an appraiser you know and trust, certainly give that information to either your loan officer or your mortgage processor but let them be the ones to place the order. If you don't know of anyone specifically that you would like to use, it's probably best to go with whomever your lender recommends. Most lenders have an approved appraiser list and will use someone from that list.

The appraiser will visually inspect the property, measure it and take photographs of the property inside and out. Please don't confuse the appraiser with a home inspector even if the appraiser may make comments about the condition of the property. They are there to determine the market value of the property not the structural soundness. Typically an appraiser will only note obvious defects as they relate to the marketability of the property.

After the inspection is completed the appraiser will research comparable sales. These are often call "comps". Some of the guidelines for this depend on the lender, property type and location but here are a few basics. The appraiser looks for recent (within the last 3-6 months) sales of similar properties that sold near the subject property. In urban areas they could be looking within blocks, suburban areas 1-2 miles and rural areas 5-10 miles. Once the appraiser finds several sales, usually 3-5, they will make adjustments for differences between those "comps" and the subject property and arrive at a fair market value for the home.

 **See my next post about the title report**

Congratulations! You have found a loan officer and have qualified for a mortgage loan. You have found the home you would like to purchase or have decided to refinance the home you already own.

What happens now?

Your loan officer gives your file to a mortgage processor. The mortgage processor takes all of the documentation and information that you have given to your loan officer and puts the file in ordered for underwriting. The mortgage processor will order the appraisal on the property, coordinate with the title/escrow company and compile any other documentation that may be needed for underwriting. They may need to contact your employer for a Verification of Employment or your landlord for a Verification of Rent. Don't be surprised if the mortgage processor contacts you directly if they need more current asset statements, further explanation of anything that you have already provided or anything else that might arise when they review your file. Once they have sufficient information, they will transfer your file to an underwriter.

Every mortgage company defines "sufficient information to underwrite" differently. Your loan officer or mortgage processor can let you know what their company requires. Many mortgage companies require the appraisal and preliminary title report to be included when your loan file goes to an underwriter.

Lets assume that you will need these items before an underwriter reviews your file.

Who will appraise the property and compile the preliminary title report?

**See my next posts for an explanation**

The mortgage process can be confusing and it seems to be getting more complicated as we go along. There are so many people involved in a mortgage transaction and I think it might be beneficial to you, the consumer, to understand who all these people are and what functions they perform. This will start a series of posts on the different stages of the mortgage transaction, who does what and when.

Loan officer- This is usually the person that you have the most, if not all, contact with during the mortgage process. Your loan officer's first job is to interview you. The interview part of the process is where you and your loan officer determine what you are looking to accomplish with the loan you are applying for. Once you have established your goals, they will ask you a number of questions regarding your income and job history, your personal assets, your residence history and your credit history. Be prepared to supply your loan officer with proof of your income, your assets, your housing payment history and explanation letters if you have had any credit problems, gaps in employment or drops or increases in income. Your loan officer will review the information you have given and assess that against your goals. This is the qualification part of the mortgage process. Be prepared for this to take several hours or as much as several days. Your loan officer will present you with a proposal of what you qualify for and what costs and fees are to be expected.  

Congratulations! You and your loan officer have found a mortgage product that will accomplish your goals! If you are purchasing a property your loan officer will provide you with an approval letter that will need to accompany any offer you may make on a property. This letter will tell your Realtor the price range of homes that you are qualified to buy and will assure the seller of the property that you wish to purchase that you can obtain the necessary financing. HAPPY HOUSE HUNTING!

Now you have found the perfect house or you are refinancing the perfect home you already own.

What happens now?

Your loan officer will deliver your file to the MORTGAGE PROCESSOR.

 **See my next post about what a mortgage processor does for you**

Laissez les bon temps rouler! I am so glad that the good old days are finally back. I'm not minimizing the economic turmoil that many of us find ourselves in, I'm just glad it is finally business as usual.

I'm not a Realtor. I'm a mortgage guy (gal). Thankfully, I do not deal with negotiating short sales or REOs. Thankfully, I do not have to deal with sellers who think their homes are worth thousands more than they are. I might be writing a different post if I was a Realtor. I got into this business when the highest LTV available was 90% unless you qualified for a government loan, when 7.875% with 2 discount points was a great rate, when (gulp) you had to document all your income.

The longer I stayed in the mortgage business the less sense it made. It was like working on the midway at a carnival. Hucksters and rubes running the show. The lights were bright, the noise overwhelming, the lure irresistible. It gave me a headache. I always loved the mortgage business. Every loan is like a puzzle. You're given the pieces and have to put it together. It takes superior knowledge, a clear head, excellent communication skills and creativity to be a good mortgage guy. No fun house mirrors required. It stopped being fun for me several years ago. Honesty didn't matter, common sense didn't matter, knowledge didn't matter. I actually talked with other mortgages guys who told me they made all of their loans through stated income products because they didn't know how to calculate income. Lie down with dogs, wake up with fleas.

I had more respect when I sold used cars than I did the last few years as a mortgage guy. "Step on up young man. Try your hand at the real estate game. You don't know how to play?? Well never you mind, step on up and win that pretty lady you're with a prize!" No wonder no one trusted us. No wonder I felt beaten and down trodden.

What has changed? It was so gradual I almost didn't notice it. I was sitting at my desk, figuring out the income for a self employed borrower. Adding depletion, subtracting business paid expenses, recalculating depreciation. This is laissez les bon temps rouler??? YES! I finally feel like a true professional again. My expertise matters again, my hard work will be appreciated by my clients and my investors.

I am thrilled to be a mortgage professional in a time when true professionals are greatly needed. I am thrilled that the lights have dimmed, the cotton candy is gone and the bearded lady is buying up investment properties in Florida for pennies on the dollar rather than selling mortgage loans. I am thrilled that you all are here with me. Let the good times roll my friends!

I don't think it's nice to throw things at people but some times it happens. I was basking in the pathetic glory of my first featured blog yesterday when *pow* I got hit with a ball. It was called a friendship ball. I live in dread of these things (go away meme go away). I am not at all literate when it comes to the technical part of blogging. No cute photos or helpful links in my blog. I have not expanded my network on AR the way I plan to in the future so no large group of associates to tap into when *thwack* you get hit with a request like this.

I tried to ignore it but she won't let me. So I got to thinking about this whole friendship thing. Who are my friends? I realized I am very blessed. Here on AR I am surrounded by friends. There may not be great quantity but the quality can't be beat.

I have several old friends here on the Rain.

Jason Sardi (I'd add a link but I don't know how). I don't even know where to begin, or where to end come to think of it. I have known Jason, affectionately known to many as Sardipants, for a ridiculous amount of time like 10 years. He has always been a strange and twisted individual. No wonder he's so close to my heart. I have watched him grow as a person, a business man and now as a writer. Jason opens his heart easily and closes it regretfully and only under severe provocation. If you don't know him, go read his blog and you will. He's about as real as they come.

Scott Geary (still can't figure that link thing out).  Aka Scooter, Long Stroke, The whale. My best friend, my lover, my brother in arms.  I haven't know Scott quite as long as I've known Sardi but since I live with him I know a lot about him that I don't about Sardi. This is a good thing. Scott is one of the most caring people I know. Although he's been in the mortgage industry forever and a day, a little known fact is that he holds a degree in Social Work. Scott is passionate about everything he does whether it's helping someone buy a house, his golf game or getting to the bottom of that Dewars bottle. My life is better for him and would be very bleak indeed without him.

Then I have some new friends that I have made through the Rain.

Sandra Cummings (how the hell do I add a link???) Since I haven't known her that long I don't have a nickname for her. I will say *ouch* she's the one who threw the damn ball at me. Through some convoluted emailing I think I have to post this or go clean her house. Here I am. At a time in my life when I thought I didn't need new friends, along came Sandra. She is opinionated, funny and brave enough to spend the night at my house. I am so pleased that I know her, even if her husband is nuts.

Dan Cummings (will someone please freaking help me get this link thing?) Another old friend, Bill Engleman, has a saying "crazier than a sh*t house rat" . I think that sums Dano up. 4am lawn mowing for heaven's sake! He does have excellent taste in women (see above) though and his wry, dry sense of humor is not to be missed. Also, when I grow up I want to run as well as Dan. He totally kicks my ass.

I'd write about Jennifer Bukaty but Sandra already hit her with a ball and Jen posted a beautiful blog that I'd link to if I could only figure out how to!!!!!!!!!

Wait. That's not it. No discussion of sex, politics or religion with strangers. At least that's what my mother always told me.

I have been a member of AR for some time now. I have never seen so many posts about politics before. This is not to say that there haven't been many relevant and important political issues since I have been a member. I just haven't seen the volume of posts that have popped up in the last few weeks. Nothing like an election season to get the armchair politicos going.

My distress with this is twofold. First, the issues that are facing us are serious but why jump on the band wagon when it's too late, when all that's left is mud slinging, name calling and assignment of blame. Point the finger at the conservatives, the leftists, the bunny huggers and the power brokers but look in the mirror first. The blame rests with us, the apathetic voters. The blame, my friends, rests with those who say "I don't vote because (fill in the blank)". Blame the guy at the end of the bar (or on their computer keyboard) spouting opinions on issues they haven't bothered to research. When was the last time you voted in a non presidential election? Do you know who your state representative is? Your Congressman? Your Senator? Do you know how to contact them? Shame on anyone who is dissatisfied with the direction this country is going in and hasn't made their voices heard by the people entrusted to speak for them. Shame on anyone who voiced an opinion here on a social networking site but hasn't shared that opinion with their elected officials. The issues are serious but this is not the correct place to get your voice heard.

The second thing that bothers me about all of these political blogs is that AR is a REAL ESTATE networking site. I assume that most of us are here for BUSINESS purposes. There has been a lot of nastiness posted, photos of one candidate shining another's shoes, video clips of interviews with scathing commentary about villages and their idiots. Okay, I admit it. Some of this does make me laugh, heck I'm human and as opinionated as they come but this election season will only last another few weeks. What you post on here can last for a very long time. You may be a wonderful Realtor, loan officer, inspector, stagger etc. but you may be alienating potential clients and referral sources by so voraciously expounding on your political views. Even if someone agrees with your view point they may be turned off by the lack of professionalism.

If you are a truly committed advocate of your political beliefs I commend you. If you walk the walk and talk the talk you have already delt with the consequences, positive and negative and are prepared for the backlash that can come from strongly voicing beliefs that may not be shared with others. If you have posted about a bill or issue that you have researched and effects our business, good for you. However, if you are an armchair politico who only comes out every four years, I suggest you take my mother's advice.

No sex, drugs and rock 'n' roll. No, that's not it. No discussions of sex, politics or religion with strangers, especially ones you want to do business with.

This is it. The tradition for my girlfriends. We're old enough to be MILF's but not quite old enough to be cougars. Friday night has always been girls night. That's not derogatory, quite frankly we'll always be "girls" to each other.

Friday nights are to relax, let down our guard and to tell war stories about our week. When we were much younger, we made battle plans for the weekend and talked about boys. We married those boys and weekends usually consist of housework but we still value our time together.

I am the only one who works in the real estate/ mortgage business. Not too long ago I held the envy of all the five martini girls. I had a career I loved, a man I loved and was making money hand over fist. I usually picked up the tab.

I no longer hold bragging rights to the best career or the most money. My Volvo has been trumped by the Audi 6. It has taken the better part of one year to realize that I still have a career I love, a man I love AND THE MONEY WILL BE BACK so I still have bragging rights.

In the best of times it is so easy to take for granted all the things you love. It takes the hard times and the challenges to really appreciate what is real and worthwhile.

So I'm off to have # 4 and give that man of mine a kiss. The girls understand. I'll catch y'all after # 5.

I had a conversation the other day with a friend who used to work for a rival wholesale lender. Unfortunately he didn't survive the blood bath of the mortgage industry melt down but he still loves to tell war stories.

We discussed the fact that the playing field has pretty much evened out in the past year. No lender has a product that sets them apart from the rest. You have your conventional lenders, your commercial lenders, your hard money lenders. You might happen upon a lender like me who offers several of those options but in each option set, the difference between me and my competitors is not great in terms of the products we offer.

If product from lender to lender is relatively the same, what do we have to offer to set ourselves apart from one another? That's easy. Price or service. I talk to mortgage brokers all day, every day. I even go home to one at night. They would all like the best possible service and the lowest possible price. Let's have cake and eat it too!

Seriously, as a business person, you have to individually decide which is more important to you. The best possible price may come with a 3-4 week turn time in underwriting. The fastest underwriting times may come with a price that is 100 bps higher than your best priced lender. You may find a middle of the road lender with so-so turn times and a decent price but they may consistently approve your loans with conditions you cannot meet.

Why, oh why can't we have it all? To put it in a nut shell, service costs money. To have super fast turn times, you need more operational staff. To have fair underwriting decisions you need to have funding flexibility. To offer the best price you may need to cut back on key operational items. Knowledgeable account executives who can guide you and your loans through the complicated guidelines that are the norm in today's market are paid more than telemarketers.

What is the most important thing? Closings. It's up to you to decide the most effective way for you to achieve them. Just keep in mind that the lender who most suits your needs on one transaction may not be the best one for another, especially if you are dealing with a purchase transaction that has a drop dead date.

There have always been turning points and defining moments in my journey through life. Sometimes these are major events like a graduation or divorce. Some of these defining moments have been less easy to define, more ambiguous as to their meaning, like the time my baby brother asked for a loan and I turned him down or the time I stayed up all night to watch a foal come into the world.

I had one of those more ambiguous turning points a few weeks ago. I'm just now understanding the impact. Sometimes you meet someone and it changes everything. You might fall in love or you may meet someone who is so abhorrent that you swear you will do everything to make sure you are nothing like them. Sometimes that person becomes very important to you. A lover, an enemy, a hero, a friend. Sometimes you meet someone with a message that you hear. Really hear. They aren't so important as what they had to tell you.

I was at a, gosh what do you call it? A business networking cocktail hour? A social meeting of business people? Wait, I've got it. I'll call it an AR happy hour. That sounds less awkward, I think. I dreaded going. I'm good at that sort of thing, idle chit chat with complete strangers, banal discussions about the "market", keeping the white wine intake at socially acceptable levels (ooh, maybe not that but I digress). I am good at it, I just don't like it. (this gathering turned out to be great fun. I had an absolute blast and really enjoyed all of the people I met. That is a whole different post. Oh wait, Dan beat me to it)

It started out as expected. Stilted conversation amongst strangers, nervous glancing around for the waitress, jaded real estate industry professionals dancing around the fact that the "market" is terrible without admitting that we personally are feeling the pinch. Ugh. There was someone in attendance who didn't quite fit in with all the rest. Maybe it was because she was the youngest. Maybe it was because she wasn't wearing a suit. Maybe it was because her discomfort was apparent. I'm not sure what it was but I am eternally drawn to the outsider. I struck up a conversation with this young lady. She was bright and enthusiastic. Absolutely thrilled with her career in real estate. Ahh, the naive and inexperienced I thought. She hasn't realized yet how tough this field is. She doesn't know the attrition rate of new people in this business. She told me that she had sold a house last year. One house. She was very proud of this accomplishment. She then told me she had already closed 4 deals this year and was going to sign her fifth contract the next day. Hey, not bad I thought. I know a lot of seasoned Realtors and Loan Officers who have not had 5 closings yet this year. Maybe the kid knows something I don't.

As it turns out she did. She knew how hard her chosen profession was going to be, it was going to be tough. She welcomed the challenge and glowed with her accomplishments. She wasn't discouraged, downtrodden or bitter. She knew she was going to succeed and she was working her rear end off to make sure she kept getting better! Easy for her you may say. She hasn't been around long enough to feel the pain the rest of us have. Easy to be bright eyed and bushy tailed when you're too young and new to know better. I don't think this young lady is overly optimistic. I think she is enthusiastically pragmatic. She seemed like a fighter. I mean that in the nicest possible way.

How did this chance meeting change everything? Not in any dramatic way. It's just that over the last week or two, I remember this girl. Every time I'm frustrated with my job, the minutia of my daily existence I remember her enthusiasm. It reminds me that I too am a fighter. Not just that I don't give up but that I enjoy the challenge. The frustrations are challenges to be met head on and remembering this girl reminds me how lucky I am to have such a career. It puts a slight smile on my face, an extra bounce in my step.

Sometimes it's not who the person is but what they have to tell you.

I thought Meme was the gal on the Drew Carey Show with the scary blue eye shadow but apparently I was, as usual mistaken. Thanks Sandra.

Who is your favorite musical artist? I do so hate to be unoriginal but Fleetwood Mac with Stevie Nicks is right up there. I saw them a number of years ago, lawn seats, perfect summer night, slight breeze, Stevie belting out Landslide. One of those perfect moments. Prince is right up there at the top as well, he is incredibly talented and has helped so many artists. No conversation about my favorite music would be complete without a mention of Metalica. I could go on about the talent they have as musicians, the longevity of their careers but I won't. They rock. I like that.

Who is your favorite artist? I grew up in some tough neighborhoods so I know several artists who can make amazing art with cans of spray paint but I will protect them by not mentioning names. I also know a few tattoo artists who create art from the human canvas. Very cool, but creepy to hang in a museum. My favorite "regular" artist is Marc Chagall.

If you could meet anyone (alive or dead), who would it be and what is the most interesting thing about them? Ayn Rand. Elizabeth I. My biological mother.

What did you want to be when you grow up? That's easy. The President.

Who is your favorite blogger? Bukaty, Sardi and Lenza. Also some dude named JL. Funny stuff.

What is the most interesting piece of trivia you know? The childhood song/game Ring around the Rosie is about the plague. Okay, morbid, but I do think about that every time I hear kids singing that. Oh, and Pop goes the Weasel is an old English drinking song. Maybe this is why I don't have kids.

If you could live in any point in history when would it be and why? Like the Van Halen song "Right Now, Right here and now"

What was the most interesting job you've ever held? Sales training for car dealerships. I got to travel all around the country teaching used car guys how to sell. You want to talk about interesting???

Now lets see. For the next 8.

Bill Engelman.

Yup, that's it. he's the only one I know who hasn't already been tagged.