Category Archives: Investing

Loan Home Inc. Lead Generation Scam

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Loan Home Inc. is a lead generation company telling consumers that they can be paid for the referral of their own transaction, or the transaction of friends and families.

Before we tease apart why consumers should avoid this obvious scam, let’s briefly review what mortgage lead generation companies do.  Loan originators obtain clients from many sources.  Some have built up a strong client base over the years, others make sales calls on Realtors asking for client referrals, others work at a bank and possible customers walk into their branch on a regular basis.  Not all LOs like working with Realtors because they demand high quality service, and not all LOs have a client base. Some LOs work for companies that advertise on the radio.  TILA Mortgage, Paramount Equity, American Equity, and Best Mortgage are some of the companies that advertise on  KIRO 97.3 FM in the greater Seattle area.  Radio advertising is expensive but it works. The phones ring at specific times and the LOs are there to pick up the phone but since the firm is paying for the radio ads, the LOs will typically split the fee income with their firm as they should. 

Lead generation companies troll the Internet for consumer leads, use banner ad campaigns, and/or send out mortgage email spam and then sell these possible homebuyer or refinancing homeowner leads to loan originators who pay a fee to receive that person’s contact information.

I receive all kinds of emails from lead gen companies every week trying to sell me leads (I do not originate loans.) Recently I’ve been responding to the emails and asking if the salesperson can send me samples of the advertising material used to procure the leads.  I’ll bet you’re not surprised to hear that NOT ONE COMPANY has replied to my request.  Why? Because lead generation firms blatantly violate state and federal  lending laws in their advertising.  Loan originators typically won’t talk about lead gen tactics because they might already be addicted to the crack that is also known as mortgage leads and they don’t want to turn in their crack dealer.

Clamping down on lead generation firm advertising is not my personal top priority but it should be a priority of any loan originator who wants to advertise legally.  The more the industry continues to buy leads procured by using deceptive advertising, the more the industry is unable to get their own phones to ring by advertising legally. 

This new scam is quite clever:  Loan Home Inc.  says anyone can “sign up” their own self(!) for this program and when they decide to buy or refinance, Loan Home Inc., will connect them with a “reputable, ethical” mortgage broker or mortgage loan originator and the consumer will be able to get money back (sounds awesome!) after closing. Whoo hoo! Sign me up! The consumer can also sign up friends and family and get money back when they buy or refinance, too!  What could possibly be wrong with this cool-sounding idea?

Well consumers, what’s going to happen is that your name and your friends/family names will be SOLD to mortgage brokers and loan originators who have no clients or who are willing to pay money to Loan Home Inc., for the ability to earn money off your deal. That’s right, you are an object to be bought and sold to the highest bidder. 

Realize that whoever Loan Home Inc., sells your contact information to, is going to have to pay Loan Home Inc. a fee and that fee will be much higher than the money you are going to “get back” from Loan Home Inc. because LHI is going to keep a percentage of that fee to cover its costs as well as to make itself a nice profit.  Next, whoever has purchased your lead is going to increase the fee you pay BY THAT AMOUNT OF MONEY IF NOT MORE. 

In the LHI example, on a $250,000 home loan, consumers are paid $800 for their own home loan lead. If so, then the person who purchased your lead will simply increase the fees consumers pay by……$800.  Since the majority of people do not come in with cash at closing on a refinance, consumers will be financing that same $800 over the term of the loan; not necessarily a good financial decision.  Another way for the lender funding the loan to earn back the money they have to pay LHI and you is to sell you a loan with a higher interest rate. Worst case, the consumer will pay higher fees as well as a higher rate just for the ability to get back $800 on a $250,000 loan.

LHI also sets up a nice-sounding multi-level marketing plan in their powerpoint slideshow. 

I wonder if they hired an attorney who understands Section 8 of RESPA to review their business plan?

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or anything of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.

Violations of Section 8’s anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.

It doesn’t sound like the company owners have a background in mortgage lending.

From their FAQ page:
Q: Will there be additional fees added to my loan?
A: No. The lead generation compensation that Loan Home pays does not constitute an added cost to the loan or the loan process. By paying you, we are taking profits from the mortgage companies and returning them to you!

Oh boy! Let’s stick it to the mortgage companies.  What a great sales tactic. I’m sure the mortgage companies love reading that.  Please do not fall for this, consumers.  There is no way in hell that any mortgage company is going to just give you back its profit.  You ARE paying for the money Loan Home Inc., is giving back to you.  It will be in the form of a higher interest rate or in the form of higher fees or likely both.  There is no such thing as free money.

Please, please do not fall for this scam. Instead find a local loan originator who lives in your community. If you want to shop, then ask for a Good Faith Estimate from three or four sources on the same day:  Your retail bank (where you do your checking and savings), a mortgage banker (a lender that does not offer checking and savings and specializes in mortgage lending), a mortgage broker (who can shop the market for you), or a credit union.

LHI says they are ready to do business in several states (including WA) yet I can find no business license issued to “Loan Home Inc.,” or a license under the name of either of their founders in Washington State. 

Interestingly, when I read the biographies of each of their founders, the name of the web page (look up at the very, very top of the web browser) says “Linda Torres.”  That’s just sloppy webmaster work but it did entice me to bing her name.  Looks like there’s a Linda Torres who’s a loan originator in the Chicago area and the two other founders are from Chicago.  I wonder if the leads are being funneled over to their friend Linda who appears to be one of the other founders of Loan Home Inc.

Buying a Bank-Owned Home? Ball’s in YOUR Court!

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Interestingly, the very same day that Craig wrote his post on assisting a buyer with a bank-owned purchase, I was closing on a very similar transaction.

One difference…mine closed. 🙂

It was even the same servicing company (so possibly and even probably the same bank-owner-seller), and also an FHA loan like Craig’s transaction. Two hurdles that Craig’s transaction may or may not have had was there were multiple offers (hard to win multiple offers if you are the only FHA buyer in the room) and the buyer’s lender at the last minute required that a new roof be put on the house, prior to closing, on a house that was only 14 years old.

I have to agree with Craig, it was absolutely grueling. It’s like being Ray Allen playing against the Lakers, but there is no one else on the Court except Ray!There were too many cooks in the kitchen on the seller side, and it was almost as if they wanted you to be late and wanted the transaction to fail. At the point where the buyer’s lender wanted a new roof on the house prior to closing, I honestly think the seller wanted to move to the back up buyer AND keep my client’s Earnest Money AND collect a $100 per day per diem for as many days as possible running through the Memorial Day weekend and beyond. This is why the SELLER should NEVER be ALLOWED to choose escrow! Somebody wise up and make a law about that!

Think about it. If escrow doesn’t close on time on a bank-owned…who suffers? Buyer can lose their Earnest Money. Buyer can pay $100 per day for every day that it is late (to the seller). So how can the seller be the one who chooses escrow, when the buyer is the one with so much at stake, and the seller with everything to gain if the buyer is late?

Of course my buyer clients did close. My buyer did not close on time BUT he also paid ZERO in per diem costs because I forced the seller’s hand to the point that they were in breach. This is not the first time I have done this with a bank owned, but it takes every ounce of my time and energy for days on end. You have to have your wits about you, stay on your toes, and play every single second, day after day, with the devotion of a Ray Allen or Rondo watching every single move and being always on top of your game. One false move…one split second of incorrect decision, is the difference between the client’s success and failure.

In this corner…the seller side…we have:

Agent for seller…Assistant for agent for seller…off-site transaction coordinator for agent for seller – Escrow Company chosen by seller with TWO closing agents, one working only on the seller side and one working only for the buyer side. FIVE layers before you even get near who the seller is, and the seller has at least a few people in between all those people and the actual selling entity/bank.

…and in this corner we have…ARDELL LOL! Kim and Amy helped do a few end runs on what the buyer was doing AT the house, like choosing new hardwood and getting estimates from painters, etc. I handled the contractual and escrow problems and the buyer’s lender issues…including lender wanting a roof ON the house prior to closing. Trust me, it is no easy feat to put a quality roof on quickly on someone else’s house without their permission. …and of course…then the rain came… If we were not ready to close the buyer would have lost his $10,000 Earnest Money and/or all those many days over the very long holiday weekend in per diem fees.

Like Craig, I can’t give a true blow by blow…but it closed and my buyer clients got the house at roughly $50,000 less than the house around the corner in the same neighborhood, that closed at roughly the same time. It was imperative that THIS be the house, as they maxed out at a price just short of what it would cost for all the things they wanted in a home, school and neighborhood. So a bank-owned was likely the ONLY way for them to get all of those things because of the bank-owned discount.

So yes…for many clients, buying a bank-owned is not only best…but sometimes the ONLY way for them to achieve their goal. The number one thing to remember to be successful in a bank owned transaction is The Ball Is ALWAYS In YOUR Court! You cannot wait ONE SECOND for the other side to do what they are supposed to do. You must do their work…yes they were the ones who needed an extension, but if I did not keep writing the addendums, because it was “their job” and not mine, it never would have closed! I had to do that three times. Banks NEVER answer…they never signed the extensions until it closed…pretty much at the same time.

You cannot ask…you cannot wait for them to answer…you cannot expect them to do what they are supposed to do. You have to run that ball across the Court like you are the only one in the room with the power to make it happen! You can’t worry about what’s fair and not fair…you just have to get it done and do everyone’s work , and figure out who has the authority to move it forward and who does not.

In my case the buyer also had all kinds of things besides dealing with the seller side that made it many times harder, even if it were not a bank-owned transaction. That was a bit distracting. But at the end of the day…it was all worth it, because I truly believe I could not easily find a replacement property for those clients in their price range. THAT is why you do a bank owned…because the discounted price makes it the BEST house for that client…and possibly the only one they can afford that fits their parameters. …and, of course, they also got the $8,000 tax credit on top of that. A grueling work load and struggle…but well worth it.

You don’t do it ONLY for the “bargain” of it…you do it because it is the very BEST house for them.

Similar story: Truliaboy gets his house and a puppy.

Fannie Mae adds Speed Bump Prior to Funding Your Mortgage

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photo compliments of veggiefrog via Flickr

photo compliments of veggiefrog via Flickr

Effective on loan applications taken on June 1, 2010 or later, Fannie Mae is requiring lenders to confirm that undisclosed liabilities are not present prior to funding a transaction as part of their Loan Quality Initiative (LQI).   Currently a credit report is pulled and is valid for a specific amount of time–as long as the transaction closes prior to the expiration of the credit report, it typically is not repulled.   Fannie Mae is now requiring the lender to make sure that there is no new or undisclosed credit at closing.   Relying on the original credit report pulled at application is no longer good enough.

Fannie Mae’s FAQs suggest these tips for lenders to help confirm there are no undisclosed liabilities:

  • Retrieving a refreshed credit report just prior to the closing date and reviewing it for additional credit lines.
  • Utilizing new vendor services to provide borrower credit report monitoring services between the time of loan application and closing.
  • Direct verification with a creditor that is listed on the credit report under recent inquiries to determine whether a prospective borrower did in fact obtain credit or enter into a financial arrangement that is not disclosed on the loan application.
  • Running a Mortgage Electronic Registration System (MERS) report to determine if the borrower has another mortgage that is being established simultaneously.

This means days before funding a Fannie Mae loan, the transactions are subject to being re-underwritten and if the borrower is “borderline” (which is a 620 mid-credit score in today’s climate and/or higher debt-to-income ratio) or decides to purchase their appliances for their new home before closing…they could potentially “kill” their deal and find themselves being “unapproved”.

Fannie Mae states that loans should be resubmitted to underwriting if:

  • additional debts have been incurred which would increase the debt-to-income ratios
  • if new derogatory information is detected
  • if the credit score has materially changed

Borrowers should understand that the loan application is intended to represent their financial scenario and whenever (even before LQI) changes are made to their application, their mortgage originator needs to know.   This is not new.   When changes occur and a borrower is aware (such as taking on more debt or changing their employment) and they hope they “won’t get caught” before closing, they’re committing fraud.   This is what Fannie Mae is trying to prevent with LQI.

Borrowers with conventional financing need to be extra mindful of LQI.   Using a credit card to fill your SUV full of gas could potentially ding your score if you’ve carry a balance of 30% or more of the available credit limit.   Even closing a credit card during or just before a transaction could drop your score low enough to where the lender may have to reconsider your loan approval AT CLOSING.

For mortgage companies and banks (anyone who sells loans to Fannie Mae)  it boils down to having to refresh, repull or face re-purchasing the loan if changes to the credit report are found between application and funding.    Fannie Mae is not specifically requiring credit reports be repulled prior to funding–they are holding the lender responsible for changes if they don’t.

Borrowers, real estate agents and originators need to be prepared for potential delays in closing, repricing of their mortgage loan (which would trigger another delay due to MDIA) or the loan potentially being denied.   It’s more important than ever that borrowers work closely with a qualified mortgage professional who can help guide them through the process.

Are you ready for BuzzRE???

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Next week, I’m helping to organize an internet marketing educational event and I encourage everyone interested to set aside next Thursday to join us!  For the BuzzRE event, we’ve lined up some of my favorite educators in real estate marketing including:

edgefieldIn addition to the great lineup of speakers, there’s going to be ample opportunities to learn from and network with hundreds of agents from the Pacific Northwest, many of whom are leaders in internet marketing.

It doesn’t matter if you’re want to learn about SEO, SEM, blogging, conversations, tools, or any other online marketing topic, the experts will be there and you just need to join us to take part!

Details for location and much more are on the BuzzRE website, but here’s a few key stats:

Cost: $25

When: June 2nd: 6pm – kickoff party
June 3rd: 9am – 5pm (with after party till 11pm)

Where: McMenamin’s Edgefield
2126 S.W. Halsey St.  Troutdale, OR 97060
(Just 10 minutes east of PDX)

More info: http://buzzre.com/

Registration: http://ticketsoregon.com/event.php?event_id=537/

We ran another BuzzRE event in Orange County a few weeks ago and it was so much fun. So many great people and so much great feedback, which has really helped guide this event in Portland!

Are you going to be there???  Let us know!

Let us know if you’re going to be there!  Either here or on Twitter!  (The hashtag to connect on twitter is: #BuzzRE).  And just a few of the Seattle folks I’ve noticed mention they’re going to be there include: Linda Aaron, Galen Ward, Darin Persinger and Scott Thomas…

So much fun and let me know if I can add your twitter handle to the list!

[For those interested in a trip down memory lane… I had conversations with another real estate old-timer not too long ago, and we look back at the Las Vegas NAR event in ’07 as the kick-off point for real estate conversations on Twitter…  Back then, we were all trying to figure out if there was anything behind the hype of Twitter, and it seemed to me that the best place to figure out if it made sense was at a conference where we could use the tool to better connect.  With that in mind, I posted a list of real estate folks with Twitter accounts who would be attending NAR so others could follow along and connect with us. While the list started off small (I published the list with only 5 twitter profiles: Jeff, Joel, Jessica, Keith and Myself), I remember that by the end of the week, I was connected to over 50 people on Twitter who I’d met at the conference…  and I like to think that the background real estate conversation on Twitter that was sparked at NAR ’07 has never really died down!

Anyway, I was reminded of this story as I posted this list of a few folks from Seattle joining us at BuzzRE and realizing how these small lists of people sometimes blossom into unpredictable and amazing conversations!]

I hope to see you in Portland next week!

The Good Old Days Weren’t Always Good…

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“Cause the good ole days weren’t always good…and tomorrow ain’t as bad as it seems.” Billy Joel Keeping the Faith

Believe it or not…this is a post about Title Companies and Escrow Services and…my ever favorite topic: Homebuyer’s Rights. It’s a plea, really. A humble request for help from someone, or many someone’s, in authority.

In “The Good Old Days”, an agent ordered “Preliminary Title” AND “pre-opened” escrow, when they listed a property for sale. To encourage this practice, Title Companies offered the seller a discount for pre-ordering escrow so that the Title Company was guaranteed not only the Title Insurance business and money, but the right to be the Escrow Closing agent and earn that money in addition to the Title Insurance premium. A good business practice, I guess, and reasonably appropriate back when every agent represented sellers of homes and never buyers of homes.

You know…”the Good Old Days…(that) weren’t always so good”, when buyers were represented by no one, had no rights, and the Rule of the Day was Caveat Emptor.

In the present day in the here and now, meaning “The Seattle Area”, our basic Real Estate Contract has a provision for choosing Title Insurance Company that does not refer to anyone’s choice. Just a blank place for the writer of the contract (usually the agent for the Buyer – since buyers write and make the offer on this contract) to enter the name of the “Title Insurance Company”.

Then there is another line after it that says “a qualified closing agent of buyer’s choice:”

There are still some real estate agents, with the encouragements of added benefits to do so from Title Companies, who are PRE-ORDERING ESCROW before the buyer of the home is a known entity. Who CHOOSE the “qualified closing agent of buyer’s choice” in advance of the buyer being a known entity. Please stop that. And Title Companies…please, please stop offering seller’s agents and sellers “bribes” to encourage this practice of “pre-ordering” escrow in advance of the buyer being a known entity.

I agree that the owner/seller should choose Title Insurance Company, because the seller has to procure and pay for an Owner’s Title Insurance Policy and give it to the buyer in this area, as part of the means of conveying clear title to the buyer of their home/property.

And…it’s quite OK to “suggest” that escrow be X in the Agent remarks section. But to OUTRIGHT DEMAND THAT ESCROW MUST BE SELLER’S CHOICE instead of the obvious contract intent of “buyer’s choice of escrow”…well, frankly, it’s an antiquated and totally inappropriate activity in this day and age.

I know that Rome wasn’t built in a day and change takes time…but I urge you to at least move in the right direction so that tomorrow can, and will, be a better time.

Until then…I’m gonna Keep the Faith.

Don’t blame the Agent…if you are impatient.

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There are a million articles written on the Top 10 Mistakes that Home Buyers make. Today…the biggest mistake one can make is to set a rigid time frame as to WHEN you WANT to buy. Let me re-phrase that in light of the email I just received below from someone who is not my client.

“Ardell, I am seeing many sellers hanging on to those 2007 prices. I mean wouldn’t being 12% below a 2007 purchase price be considered a little high? Properties are closer than ever now to late 2004 pricing aren’t they? Many houses we look at have asking prices higher than what sellers purchased them for in 2005 or later. I’m really getting tired of this.”

First let’s review the data again.
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King County median home price is/was at $375,000 a week or so ago, up from $362,700 as of the end of March 2009, and WELL above “late 2004 pricing” of $337,500.

I’m not saying prices won’t get to late 2004 levels. In fact I think they will get there or pretty darned close in some, though not all, areas. But to go out EVERY weekend…looking at homes and hoping they would now be at 2004 pricing when they are not, will result in your “getting tired of this”. It would be like my getting tired of my diet for not having lost 20 lbs this week. I know that’s going to take some time, and getting “tired of this” is NOT an option if I am to achieve my goal by my daughter Tina’s wedding date in October 🙂

Now let’s see how the numbers fall in different areas vs. “King County” median prices:

98052
Late 2004 median home price = $409,995 – April 2010 = $610,000

98006
Late 2004 median home price = $507,000 – April 2010 = $591,500

98033
Late 2004 median home price = $469,000 – April 2010 = $479,000

98103
Late 2004 median home price = $400,500 – April 2010 = $435,000

98038
Late 2004 median home price = $281,950 – April 2010 = $299,950

98023
Late 2004 median home price = $244,975 – April 2010 = $249,225

98109
Late 2004 median home price = $598,500 – April 2010 = $460,500

98125
Late 2004 median home price = $319,750 – April 2010 = $360,000

Some surprising results there, and in many cases those numbers come up VERY differently than what I have been seeing touted in recent news articles as to which neighborhoods are “stronger” than others these days.

There are different reasons for these results in the different zip codes. For example, if you are hoping for 2004 pricing, but are buying a house that did not EXIST in 2004…well, in some areas new construction is not likely to fall into the level of a home built prior to 2004.

One thing “the comps” don’t tell you, is how FAR the MAJORITY of home buyers has shifted from 2004 to present. How many are buying more reasonably priced homes where they can afford to put 20% down and get a 30 year fixed mortgage based on conservation ratios, as example.

It’s not ALL about “the market”…nor is it ALL about “this house”. First step is to know exactly where the area you are looking in falls…and if NO SELLER “wants” to price there…you may just have to stop looking for awhile. Looking for “best price” in May of any year, is not particularly realistic. It is what I call “The Season of Hope” and “Hope Springs Eternal”. Best prices often don’t happen until around October 15th in any given year.

Start with a realistic objective and DO NOT WEAR YOURSELF OUT looking and looking. Take your time. Pace yourself. If lowest possible price is your objective…”Spring Bump” period may not be the time you want to choose for being in your new home. Buying in August – September – October may be a better bet if you want “better pricing”, especially if no new housing stimulus packages are forthcoming.

Remember…”Patience is a Virtue” and one often has to fight their initial gut instincts, in order to become “virtuous”.

(required disclosure – Stats in this Post are not compiled, posted or verified by The Northwest Multiple Listing Service) They are hand calculated by me, and April medians may include the first few days of May before we switched to a new mls system. I used 4/1/10 as the start point…but no end date, since the system stopped updating data around May 4th and converted to the new system that does not provide similar statistic gathering capabilities.

The End of The World…as I know it.

Washington State Flower – Rhododendron

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The Rhodies are in bloom! A great time to visit The Arboretum in Seattle or the Rhododendron Gardens in Federal Way.

Many people from out of the area buy homes here with rhododendron plants and ask me questions about their care. The Seattle Rhododendron Society is a great source of info on the topic.

Here are some pics I just took of a variety of sizes shapes and colors in the front and back yard. Rhododendron are just one of the reasons Seattle “feels like home to me”.
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Question from RCG Reader: My LO Won’t Issue a Good Faith Estimate

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I recently received this question from a Rain City Guide reader:

I wanted a GFE from my lender… but am told I can only get one if I lock in the rate.   Is this legal? 
Effective January 1, 2010, a Good Faith Estimate is required to be issued no later than 3  business days once a mortgage originator has received all of the following:
  • borrower’s full names
  • monthly income
  • social security numbers to obtain a credit report
  • property address*
  • estimated value of the property
  • loan amount
  • any other information deemed necessary by the loan originator to complete an application

The above items are how HUD defines a loan application.   One item that can be a bit tricky for consumers and loan originators alike is the property address.  Yes, a mortgage origiantor can issue a Good Faith Estimate without a property address, however IF they do, it’s at a substantial risk.  

From HUD’s RESPA FAQs (April 4, 2010 edition) 33: 

…a GFE issued without a property address, the future receipt of the property address is not a changed circumstance that would allow the loan originator to issue a revised good faith estimate.

This means that the Mortgage Loan Originator would be on the hook for fees that are outside the specific tolerances set forth in the HUD’s Good Faith Estimate if a MLO issued the GFE without a specific property address.   I think this is something that HUD needs to take a serious look at this if they truly want the Good Faith Estimate to be a shopping tool for consumers–otherwise, the “shopping” process can only take place after the borrower has identified their next home. 

 

From HUD’s RESPA FAQ 23: 

An application includes information the loan originator requires the borrower to submit in anticipation of a credit decision. If a loan originator issues a GFE, the loan originator is presumed to have received all six pieces of information.

 
A mortgage loan originator CAN issue a good faith estimate without the rate being locked.   Going from a “float” (unlocked) to a locked rate constitutes a “changed circumstance” which allows the MLO to re-issue a good faith estimate.  In fact, the GFE must be reissued withing 3 business days of the locked loan and any interest rate dependent changes may be reflected on the revised GFE.

HUD’s RESPA FAQ 31:
 

…a loan originator may not require a borrower to sign consents to verify employment, income or deposits as a condition of issuing a GFE as such a requirement may inhibit borrowers from shopping for the best loan by leading borrowers to believe that they are committed to obtaining a loan from that loan originator.

If you have provided all the information stated above to complete an application, including a property address, your mortgage originator must either issue a good faith estimate within three business days or deny your application.   If they do not, they are violating RESPA.

Merkley Amendment Will Transform LO Compensation

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The Senate has passed an amendment to the Wall Street Reform bill that would ban loan originators from accepting compensation based on placing a consumer in a higher interest rate loan or a loan with less favorable terms.  The amendment also requires lenders to underwrite loans to assure a homeowner’s ability to repay the loan.

As you can imagine, loan originators everywhere are outraged.

Imagine not being able to earn extra compensation for selling a higher rate loan! Imagine making sure that homeowners can repay their loans! 

Wait a minute. Isn’t that the world we currently live in right now?

The horror we’re leaving behind if this amendment becomes law was the predatory lending frat parties of 2006.  From what I can tell, most (not all) of that is behind us. What are we really losing with the passage of the Merkley-Klobuchar Amendment?

Mortgage brokers have to disclose all yield spread premium earned as fee income on line 1 of the new Good Faith Estimate.  They will not be losing anything new.  It can be argued that mortgage brokers should have lost the ability to earn yield spread premium because it was horribly misused not by “an unsavory few

The Pass Rate of the New National Loan Originator Exam is 67%. Who is/isn’t passing?

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I’ve had a chance to meet many loan originators during the past 5 months while teaching the required 20 Hour SAFE Comprehensive Pre-licensing and Exam Prep Course.

Currently, loan originators in WA State who have not been previously licensed are going through the licensing and testing phase which includes the required 20 Hour Course, mandated by the Federal SAFE Act (Secure and Fair Enforcement) Act of 2008.

I have some feedback for folks who are looking at the pass rates of the new national exam (currently 67%)  and wondering who is passing and who is not passing the exam. But first some background.

Prior to 2010, loan originators working under a mortgage broker in some states had to become licensed and pass state exams by scoring at least 70%.  State exam included state law, federal law, mortgage-related mathematical computations and a few questions on ethics.  At the end of 2007 WA State had roughly 14,000 licensed LOs.  In 2008 there was a WA state law change in which the definition of the word “lender