Most buyers will need a loan officer, but very few buyers realize how critical it is to chose the right loan officer.  There are a number of decisions in life that have major implications, and too often we don’t realize how important a decision is unless and until we experience a nightmare scenario.  I’ve heard so many horrendous stories from clients about how they got burned by hiring the wrong loan officer that I finally realized that buyers need to know how to find a great loan officer.

The Loan Officer Conundrum

If you spend any time reading my articles on this Sequim Real Estate Blog, you’ll know that one of my passions is protecting consumers, especially my clients.  What am I trying to protect my clients from?  The dishonest and the incompetent.  I realize I’m probably singing to the choir here, because by the time you get to retirement, you know all about the dishonest and the incompetent in the real world.  The challenge for buyers is not getting caught by one of these people when purchasing a home. 

“Ah,” you say, “what could possibly go wrong by just calling any loan officer?  Aren’t they all the same?”  So glad you ask. 

An elderly widow refinances her home, and unbeknownst to her, her loan officer charges a loan fee of $18,000, instead of the normal $2,000.  The loan officer is never held accountable.  A retired couple with nearly perfect credit apply for a loan to buy their dream home and because their loan officer made some mistakes due to lack of experience, the underwriter refuses to approve the loan at the 11th hour.  The home never closes as Fannie Mae refuses to extend closing.  What a disappointment!

The Wrong Loan Officer

A young couple are excited about buying their first home, and they receive a pre-approval letter from their loan officer.  They are told their loan is fine and they will be able to close.  My clients are happy.  I’m happy.  Everyone is happy.  Just before closing their loan officer tells their Realtor (that would be me) that their loan will not be funded, because some applications they submitted for additional credit cards in the last few days reduced their credit score, which made them ineligible for a loan.  They received poor advice from their loan officer.

A couple in their early 60′s are fulfilling a life long dream of retiring.  They don’t know there’s a difference between a bank mortgage department, a mortgage broker, and a mortgage banker, so they just hire a loan officer at a bank.  They assumed all loan officers are the same and that they all had access to the same loan programs.  Their loan officer gets them in a loan that costs them a lot more than the right loan would have.  They only learn later, like a year after closing.  There’s no remedy for them.  All they can do is look at each other and say, “Live and learn.” 

Do I have your attention now?  Or as the Verizon commercial says, “Can you hear me now?”  You don’t have to “live and learn” or attend the school of hard knocks yourself on the subject of finding a loan officer.  I will give you the experience of hundreds of clients and 37 years of being in the real estate business, and I’ll do it right here at absolutely no cost to you.  [You're welcome.]

Loan Officer Qualifications

Notice that I’m not talking here about outright mortgage fraud.  I’m talking about basic honesty and professional competency.  If everyone was both honest and competent, you and I would never have to worry, and lawyers would be out of business.  I’m not in the mortgage business, but I’ve been helping guide clients through the labyrinthian mortgage world by connecting them with the best in the mortgage business for decades, and I’ve spent time interviewing the best in the business for this series.

This subject is much bigger than one 743 word article, so this is the introduction, making you aware of the importance of finding and hiring the right loan officer.  I will follow up this article with a short series that will explain in plain language how you can differentiate loan officers, and what to look for to protect yourself and get the best loan at the best rates.  I will even provide a short list of questions you can ask a loan officer when you interview him or her, and I’ll provide you with a cheat sheet with good answers and poor answers.

Possibly Related Posts:

• What Happens When I Pay Off My Mortgage?
• Reverse Mortgages – Should I Get One?
• How to Get a Loan – Part 2 Loans on Manufactured Homes
• How to Get a Loan – Part 1 on Manufactured Homes
• Derogatory Credit Marks – How Long Will They Be On My Credit Report?

Now that so many retirees of this generation are paying off their mortgages, the question often comes up, what happens when I pay off my mortgage?  How does that work, and how fast is the property free and clear in the land records?

The Process When I Pay Off My Mortgage

In Washington what we call a mortgage is actually a note and deed of trust, and when the note is paid in full, a reconveyance is recorded by the beneficiary, and your property is free and clear.  (There is such a thing as a mortgage, but it’s not used much in residential real estate anymore.)

Pay Off My Mortgage and Requesting a Reconveyance

When you pay off your mortgage, the trustee (the Trustee named in your deed of trust, usually a title company) will send the beneficiary (the bank) a Request for Full Reconveyance, and when the Reconveyance is signed by a bank officer, it is recorded, and Voila! your real estate is free and clear.

I was asked today by a client, “When I pay off my mortgage, how soon does the reconveyance (or satisfaction for an old mortgage instrument) have to be recorded showing that my property is no longer subject to a loan?”  The answer is 60 days.  The reconveyance may actually be recorded in a matter of a couple of weeks, but there is a Washington statute that addresses this:

If the mortgagee fails to acknowledge satisfaction of the mortgage as provided in RCW 61.16.020 sixty days from the date of such request or demand, the mortgagee shall forfeit and pay to the mortgagor damages and a reasonable attorneys’ fee, to be recovered in any court having competent jurisdiction, and said court, when convinced that said mortgage has been fully satisfied, shall issue an order in writing, directing the auditor to immediately record the order.  This comes from RCW 61.16.030.

Pay Off my Mortgage on a Sale

If you refinance your home or sell your home to a buyer who finances the purchase (or pays in cash), the same process will have a reconveyance recorded on your loan.

Now you know the answer to the question, what happens when I pay off my mortgage?

Possibly Related Posts:

• How to Find a Loan Officer
• Reverse Mortgages – Should I Get One?
• How to Get a Loan – Part 2 Loans on Manufactured Homes
• How to Get a Loan – Part 1 on Manufactured Homes
• Derogatory Credit Marks – How Long Will They Be On My Credit Report?

Reverse Mortgages can be great for some retirees, and I’ve written about some of the dangers of reverse mortgages in an earlier article, but a reverse mortgage can also be a great financial planning tool for retirees, and Buck Gieseke explains how in this article.

Reverse mortgages are one of the most misunderstood home financing tools available today.  As a mortgage originator for almost two decades, I was adamantly opposed to writing this type of loan until mid 2006.  That is when I got the facts.

Reverse Mortgages – Myths

What if I outlive the benefit – You can not outlive a reverse mortgage.  If you live to be 120, you still will not have to make a mortgage payment.  Being upside down in value – Because the loan is insured by the FHA, you will never owe more than the sale of the home (even if it depreciates).  Losing title or control of the property – Title remains in the homeowner’s name.  Burden or responsibility is passed on to my heirs –Your reverse mortgage is secured by the equity in your home so your heirs are never personally liable.  Upon my death, my heirs do not inherit my home -Your heirs do inherit your home / property and have the option to sell it or refinance.

90% of the reverse mortgages originated today are FHA / HUD Home Equity Conversion Mortgages (HECM).  These are insured by the FHA and have been growing in popularity over the recent years.   

Reverse Mortgages – Qualification

To qualify for a Reverse Mortgage, you must be at least 62 years of age, have an equity position in your home and undergo free counseling from a HUD approved agency.      Income, employment and credit are not considered for qualification.  There are no medical tests or histories required.  It almost sounds too good to be true – and that is why it took me so long to offer this valuable tool to those that could benefit.  Dollar amount available is determined by borrower age and equity position.  

The cost of an FHA / HUD reverse mortgage (HECM) is similar to that of a refinance.  Interest rates are typically lower than the most competitive rates offered by traditional mortgages.  Also, similar to most refinances, all of the costs are packaged into the loan to eliminate out of pocket expenses.   You are still responsible for paying your property taxes and home owner’s insurance and for making property repairs but will not have a mortgage payment as long as you live in the home.

Upon closing, the proceeds from a Reverse Mortgage will first pay off any existing mortgage (if there is one).  The (remaining) proceeds are tax-free and can be spent at the homeowner’s discretion – and with no impact to other benefits such as Social Security or Medicare.

The funds can be accessed or used in a combination of ways.  Some will take a lump sum, pay off debt (if needed / desired) and keep the remainder as a reserve for living expenses.  Others choose to receive a monthly amount similar to receiving a paycheck – remember this is from home equity so it’s tax free.  Many like the security of knowing they can readily draw on the equity in their home should they need or want to – regardless of reason; It may be to cover increasing healthcare and day-to-day living expenses, to do the traveling that they have always dreamed of doing or helping grandchildren fund their college education.  More and more people are using the proceeds to purchase a vacation or second home.   The Reverse Mortgage allows the borrowers to pay cash for the home, have no mortgage payments and actually have two properties appreciating in value.

Reverse Mortgages – Financial Security

Whatever the reason, a properly planned Reverse Mortgage can, provide security, personal independence and an overall improved quality of life – allowing those who chose a Reverse Mortgage to live life on their terms.

Buck Gieseke
Integrity One Home Mortgage, Inc.
22 Lee Chatfield Avenue
Sequim, WA 98382
(877) 565-2070

Reverse Mortgages can be good financial tools for some retirees.

Possibly Related Posts:

• How to Find a Loan Officer
• What Happens When I Pay Off My Mortgage?
• How to Get a Loan – Part 2 Loans on Manufactured Homes
• How to Get a Loan – Part 1 on Manufactured Homes
• Derogatory Credit Marks – How Long Will They Be On My Credit Report?

Loans on manufactured homes are harder to get approved, and there are several logical reasons.  But this is a complex subject, because there is so much involved on qualifying a manufactured home as a loan asset, and there are strict conditions that underwriters want borrowers to satisfy, and to make matters more complicated, there are also some compensating tradoffs that are possible among the credit rating, the income/debt ratio, and the condition and construction of the manufactured home.

Loans on Manufactured Homes

Loans on manufactured homes are becoming harder to get.  I sat down with mortgage expert Buck Gieseke of Integrity One Home Mortgage and asked him a series of questions, including what it takes to qualify for a loan, what kinds of construction or conditions of a manufactured home would cause underwriters to reject them, and how this all plays out in this real estate market.

Many manufactured homes today are built very well, perhaps as well or better than some site built homes, but that doesn’t make getting loans on manufactured homes any easier.  In fact, they are harder than getting loans on site built homes.  Buck explains why that is true in this audio interview.  

Loans on Manufactured Homes – An Interview with Buck Gieseke

We jump right into this interview where we left on in Part 1.

How to Get a Loan Part 2

It may seem unfair that loans on manufactured homes are harder to get approved, but manufactured homes are treated differently than site built homes by the Department of Housing and Urban Development, by FHA, and by States where manufactured homes typically have a VIN number like a car.  Unfortunately, eliminating title does not solve the dilemma as Buck explains in the interview.

As Buck points out another reason it is hard to get loans on manufactured homes is that many banks have dropped manufactured homes from their approved list of lending assets.  Many banks in the past six years have been dropping manufactured homes, and this real estate recession with so many homes in foreclosure has made it worse.

How to Get a Loan Part 1
How to Get a Loan Part 3

For more on getting loans on manufactured homes, stay tuned for the Part 3.

Possibly Related Posts:

• How to Find a Loan Officer
• What Happens When I Pay Off My Mortgage?
• Reverse Mortgages – Should I Get One?
• How to Get a Loan – Part 1 on Manufactured Homes
• Derogatory Credit Marks – How Long Will They Be On My Credit Report?

How to get a loan in this market with all the changes in the mortgage business is a topic of conversation for buyers these days.  There are many difficult issues that buyers face, and getting a loan has gotten much harder, even for those with high credit scores.  I was pleased to have an opportunity to interview a mortgage broker who has been in the business for decades and who has an intimate knowledge of the history of lender and underwriter requirements.  Buck Gieseke of Integrity One Home Mortgage explains exactly what the requirements are for a loan and what a buyer must prove to get underwriter approval.

How to Get a Loan Part 1

This is the first in a series of interviews on how to get a loan.  This first segment covers one of the most difficult loans to obtain these days, a loan on a manufactured home.  Most people don’t know what the requirements are to get a loan on a manufactured home.  Of course, a buyer (borrower) must have sufficient income, must not exceed the debt to income ratio, must have a good credit score, and the asset (the manufactured home) must meet underwriter requirements, which is more than just saying it appraises for at least the purchase price.

In this audio of the interview, without boring you with a lot of fundamental loan qualifications that are obvious, we jump right into the discussion of what unique issues effect the qualification of a manufactured home.

How to Get a Loan Audio Interview with Buck Gieseke

How to Get a Loan Part 1

How to Get a Loan Part 2 Coming

How to Get  a Loan Part 2
How to Get a Loan Part 3

 In the next audio interview Buck will talk more about some of the reasons getting a loan on a manufactured home have gotten more difficult, and what buyers ought to know before making an offer on a manufactured home.

Next:  How to Get a Loan Part 2

Possibly Related Posts:

• How to Find a Loan Officer
• What Happens When I Pay Off My Mortgage?
• Reverse Mortgages – Should I Get One?
• How to Get a Loan – Part 2 Loans on Manufactured Homes
• Derogatory Credit Marks – How Long Will They Be On My Credit Report?

Derogatory credit marks can hurt your chances of getting a home loan approved, and in these times when buying a home and getting your loan approved is no small challenge even if you have great credit, I thought it might be helpful to see a detailed breakdown of what the waiting period is for various types of loans with derogatory credit marks.  Click on this image to enlarge it.

Derogatory Credit Marks

Derogatory Credit Marks – Detailed Waiting Periods

Enlarge this image and view the entire list of waiting periods for various types of loan.  If your browser opens it with small print that is hard to read, simply zoom in with your browser by holding the “Ctrl” button and hitting the “+” key several times.

Special thanks is owed to my friends for preparing this detailed list of derogatory credit marks for me:  Eric Gausepohl & Matt Gausepohl at www.SummitLendingServices.com.

If you do have some of these derogatory credit marks on your credit report, don’t give up hope.  Talk to a sharp loan representative who is knowledgeable, experienced, and professional.  Now more than ever, experience in your loan officer is critical to addressing complex issues that could kill your loan.  Underwriters seem to be looking for any reason to turn the loan down, so pre-qualifying is more important than ever.

If I can help you buy your home in Sequim, Washington, and get connected with a loan expert who can help you do some pre-qualification work, email or call me.  I’d be glad to help.  Derogatory credit marks can kill your chances of getting a loan.

Possibly Related Posts:

• How to Find a Loan Officer
• What Happens When I Pay Off My Mortgage?
• Reverse Mortgages – Should I Get One?
• How to Get a Loan – Part 2 Loans on Manufactured Homes
• How to Get a Loan – Part 1 on Manufactured Homes