Lending changing…for the good?
Here are the latest lending changes that make you really scratch your head:
The Good:
Beginning July 1st, Credit report will no longer have liens and judgements on them. This means if a borrower has an Idaho Tax Lien, it will not show up on the credit report. Or if a borrower has a child support lien out of California, it will no longer show up on the credit report.
Now for the borrowers, this is GREAT news, because not only will their credit scores go up, but if they don’t tell the loan officer they have these liens and or judgements, we have no clue.
Now the bad:
If the borrower fails to tell us about liens and judgement, or the sneaky loan officer is told but decides to “overlook it” (yes there are still slime ball loan officers in the industry, some right here in Idaho!), then the lender will not know about these, thus approving a loan, which shouldn’t be.
I do want to add, it is required, on the 1003 Federal Loan Application to answer Yes or No to these questions:
- Are there any outstanding judgements against you?
- Are you presently delinquent or in default on any Federal debt or any other loan, mortgage, financial obligation, bond or loan guarantee?
These questions are Federal Question, and falsely answering them is JAIL TIME, not a fine (well that too), but JAIL TIME.
So what are we to do, well we will be looking at title to fill some of that gap, asking them to do lien and judgement searches, but that is only going to work if the lien or judgement is in Idaho.
I do suspect we will see some additional closing documents, maybe an “Affidavit of No Lien/Judgement” form, to be signed at closing. I just foresee some real issues, and since it is not on the credit report, it won’t be found during prequalification, thus Loan Officers could be issuing Approval letters, but have to retract them during the transaction.
No Appraisal on purchases?
Fannie and Freddie has come out in the last week, indicating that they will be loosening up the guidelines on getting appraisal on home purchases. Now this isn’t anything really new. For over 6+ months we have been getting Appraisal Waivers on home purchases.
And you have some lenders, locally, touting that they don’t require appraisals. But here is the truth of the matter.
Currently, in order to get an appraisal waiver, a borrower needs to put 20% down, have GREAT FICO scores, and the data for that home needs to be in Fannie/Freddie’s data bank.
But for a lender to say “ALL” of their loans won’t require an appraisal, well that is just flat out lying.
Over the last 6 months, I have actually received 5+ homes with appraisal waivers, High down payments, and High FICO scores, and are pretty much in the core areas, Boise, Meridian, Nampa, Caldwell. But as you go further and further out, waivers are less and less, due to not enough data being stored by Fannie/Freddie.
So, moral of this story is, when you are doing a purchase, ask if the home received an appraisal waiver, with F&F loosening guidelines, I think we should be seeing more and more of these. And why do you have to ask…
Well some lenders are deciding NOT to accept the appraisal waivers, especially Big Banks and Credit Unions. And still order the appraisal and charge the client that $550.
State of Idaho lowers Fees?
What??? Yes you heard me right, beginning July 1st, title charges for recording the mortgage/deed of trust is going to a flat fee.
Typically recording charges were running around $90, depending upon # of documents.
But now, there is just going to be 1 flat rate of $45.00, as long as the document is less than 30 pages. Which most loan packages are. So pretty GREAT news, thus saving you money.
Just think, lending is actually getting cheaper!?!?!
-No appraisals, thus saving $550+
-Reduced Recording Fees. Thus Saving roughly $45.00
-No origination Fees, junk fee, thus saving atleast 1%.
And rates LOW, what a GREAT time to buy!
Who is #1
And finally, a little personal pat on the back. We were voted #1, yes #1 Mortgage Company in the Treasure Valley for 2017. THIS IS AWESOME, people are recognizing us for our GREAT service, no Junk Fees, and low, wholesale rates.
THANK YOU!!!!