has anyone had any negative experience with world savings or loanapp.com.? compared to other lenders, is the underwritting requirements of world savings easier for conforming/nonconforming loans? one other non related lender question. if a loan is for the purpose of paying off a federal tax lien; does the irs have access to my documentation package. i have an offer in compromise on the table. i would greatly appreciate the help.

thanks

analyst

I used to broker loans to World Savings and in the Bay Area they were quite popular with real estate people because they had some loans with rather lenient underwriting guidelines (portfolio products) they would NOT sell on the secondary market. World Savings was a last resort for difficult loans.

That was in the 90s, I really don't know what they're doing now. I also DID have some problems with World Savings, although I really can't remember details right now. World would definitely be one of the last lenders I'd consider -- but, they may be the only ones to do a certain loan.

"...does the irs have access to my documentation package."

I'm not quite sure what you're asking.

Often people look for a stated income loan, or any loan that doesn't verify the income (no doc/low doc/quick qual/no qual,) because they need a certain income to qualify and for whatever reason the tax returns don't show that income.

The IRS doesn't usually go and check the loan files, but I'm sure that they COULD if they wanted to, i.e. they accuse you of tax fraud. Then you're faced with the decision of either saying that you lied on the app under penalty of perjury or on the tax return. I have never heard of that happening, but it's something to keep in mind.

I wouldn't include any documentation for the loan for undeclared income. There's a lot one can do to make a loan app look better without "misrepresentation," especially when you're self employed.

The LENDERS verify that the tax returns you submit are authentic and all conventional loans require that you sign a form authorizing the lender to obtain your tax returns directly from the IRS.

Printing up a new version of the 1040 for the loan is NOT a good idea!

There ARE loans that don't require that IRS authorization and even "leave the income blank" loans. Of course you got to have the equity for those.

Since you say that the IRS has a tax lien, it's probably on your credit and your scores are most likely low.

I would go with a broker who specializes in difficult loans. There are a gazillion loan programs available to those brokers, including private money.

From all I've heard about the online loan sites, they're geared towards slam dunk loans, and it doesn't look like that's your case.

I don't know ANYTHING about loanapp.com, but I just looked at their site. This is NOT the way to go! Their FAQ didn't even MENTION credit reports and scores.

You're in a rather unique situation and you need PERSONAL assistance. You're a very likely candidate for bait and switch tactics, low quoting, and extreme profits to unscroupulous lenders/brokers.

If you post some more details about your scores, credit, LTV, current loan, etc. I can be more specific.

world savings has a nonconforming fmae/fmac without fico scores, 30 year fixed 6.6%. i obtained 3 merged credit reports. the blemishes
are state tax lien, paid and fed tax lien pending, chap 7 bk discharged in 93, extenuating circumstances, no derog for 24 monthes, three 30 day lates in 98 which iam disputing. i have 2 revolving accts, balances are 65% of credit limit.
no derogs, current. i have had these accts for 30 years. i don't have my fico scores yet. world savings underwritter said past two years they don't care what the credit was like. i also have amex current. don't know how they classify trade. if world is telling me the truth it appears that i would qualiefy for the 6.6% above. they also have a portfolio arm 7.2% available. i am 10% lower on the front end ratio and 13% lower on the backend ratio. this would indicate less risk. the property is free and clear. i own 1/3 interest. loan will pay tax lien and the other two parties. world tells me it is considered a cash out, ltv 75%. 75% ltv will cover everything including costs. concerning the offer, irs asked for income verification, i sent them w2, i actually earned more due to perdiem, 9.00 dollars of wage was not taxable. on loan app actual wage is stated. i have not filed taxes for that year, currently have extension. irs asked for w2, i gave it to them. i have not sent my app to world as yet.

thanks,

analyst

"if world is telling me the truth it appears that i would qualiefy for the 6.6% above. they also have a portfolio arm 7.2% available."

I think the "truth" part is the key issue. Get the terms in writing, but they probably won't until they have the application.

You didn't mention the costs, only that they'd be covered by the loan.

I expect a prepayment penalty.

It's odd to see the ARM higher than the fixed rate.

Looks like you're ok with the IRS - if it's not taxable income you got nothing to worry about.

Your balance/limit ratio is high, and with the liens I don't expect the scores to be up to conventional minimums. Although you never know,`I hope World gets them for you.

This is a rather labor extensive loan, with 3 parties to underwrite. Make sure you keep a copy of your application and documentation so you can easily move the loan. (Make a copy of the app BEFORE you sign it so you can add your original signature for the next lender.)

It would be nice if you had a conditional approval before you have to pay for the appraisal. If World uses an outside appraiser, you can usually have them rewrite the appraisal for another lender for $50. If it's a World staff appraiser, you have to get a NEW appraisal if World doesn't work out for you.

DO carefully review the terms offered - read the SMALL print.

There's nothing like finding out the REAL costs/terms when you're signing the papers at the title company and you already spent the money.

I'd like to know how that works out for you.

the point that you made about the fixed vs variable rate is an interesting one. the loan costs for the 6.6% loan are 1 point + 2,500/3000 depending on complexity. had i read your info on bal to limit ratio 3 months ago, i would have done something about it.
i have a problem accepting the lenders rational. if the limit was relative to the income and you were maxed out; this would make sense to me, but if you had a minimum income of 75,000 and a credit limit of 700.00 due to credit blemishes that happened over 8 years ago, it seems to me that they would put this in perspective. the total amount of debt for those 2 revolving accts is only 1,300. i would like to know your opinion on this. i am not sure that i understand your comment about underwritting 3 people; the other 2 people are being paid off. they are not part of getting the loan. to initiate the process there is no out of pocket for appraiser or anything. they want a check for 175 dollars not to be cashed until loan approval. this cost is part of the 2,500/3,000 total cost. the total cost is not dependent on the loan amount. they say no prepayment penalty. can you recommend an honest broker meeting your requirements in the los angeles area.

thanks,

analyst

Analyst, not only did I have a really busy day today, but I also don't know what to tell you.

I just went to look at http://www.mtgprofessor.com/C%20or%...20of%20UMBs.htm with the listings of upfront mortgage brokers, but here is my problem with them: They won't quote you a rate!

Catherine Coy is on the list and she used to post here a few times and specializes in difficult loans. Don Semler helped out a lot of people with loan questions in the old forum, but unfortunately he doesn't do loans in California.

I see Randy Johnson, I've had some correspondence with him and he's only interested in slam dunk loans. You go with someone like Randy Johnson and you're likely to get a rate several points higher than World Savings.

I'm going to send a copy of this posting to the "mortgage professor" because maybe I'm just too damned stupid to figure out how you can decide on a broker without getting a quote!

It does you NO good to get a broker who'll only charge you $500 and then gets you a 10% loan because he isn't an expert with difficult loans.

However, finding an honest and competent broker is MUCH more important for those difficult loans, you're not just talking a few hundred dollars in fees.

I fully support the upfront mortgage broker concept WITH a quote.

If you go with a broker, you should find one who is approved with World Savings (provided they still wholesale.)

I had misunderstood your original posting, that you are basically buying out the other owners makes it easier. It's part purchase part cash out refi, and definitely not a slam dunk loan, especially with the credit issues.

I'd say if the World loan is for real, go with World. The best would be an "upfront broker" who also works with World. He could tell you the scoop on that program, which really sounds too good to be true to me.

I actually looked into brokering loans myself again just a couple of weeks ago, but realized real fast that it just involves too much time, getting to know your lenders and loan programs, I can't do everything.

i have a problem accepting the lenders rational. if the limit was relative to the income and you were maxed out; this would make sense to me, but if you had a minimum income of 75,000 and a credit limit of 700.00 due to credit blemishes that happened over 8 years ago, it seems to me that they would put this in perspective.

Well, that's credit scoring for you. Of course it makes no sense, but it's a great way to slam people with higher rates than they deserve.

My form submission to "mortgage professor" Guttentag:

"Well, I was going to send you an e-mail, but I couldn't find your e-mail address.

My question is: HOW can a borrower choose a broker without a QUOTE??????

It makes no sense to me, and basically causes LAZY brokering. Why would a broker work hard to find a good program? There is NO incentive!

I'd greatly appreciate it if you could explain how "Analyst" should select a broker at http://www.bayhouse.com/credit-foru...&t=7334#post409

Lately someone asks me for a broker recommendation just about every day, I'd like to be able to send them to your site without lengthy reservations and explanations of the pitfalls.

Christine Baker"

As always, I HATE those forms because I don't get a copy.

Chistine,

Though it doesn't say it on the mtg professor website, I do do about 35 states including CA.

I don't generally advertise this as the farther away and more time zones, the harder things can get.

In answer to your questin to Jack G. " Why can't a borrower get a quote...", it's pretty simple and I'm sure you can respect this answer, "borrower's don't always tell the truth!!".

Ever heard this, How's your credit? It'OK .... pull credit and find the 1/2 dozen charge offs .... ask borrower about these accounts ... "well I didn't count those, but I've been paying my capital one on time since the last month, see."

Many people in the industry have no intention on ripping off the borrower, Catherine, Randy, Etc. We are here to make money and get paid for our services.

I am more than happy to tell somebody what I make or will make if I get ALL of the facts. I have more than once had somebody from this boad fax me a recent credit report that they obtained to ask me what they should do. I don't mind doing that as it cuts through alot of clutter. However, I will also require a COMPLETE application with the credit. Gotta look at the whole picture to give a real answer(excluding SSN's if they desire).

This text is right from my website. It pretty much lays everything out. Cost to run it through LP $20 in OH, KY, IN and $21.65. OH, KY, IN this can be paid via a Credit card. Other state we require a check.
-----------
With the advances in automated underwriting and our commitment to provide you with the best service at competitive rates we have implemented the following policy for REFINANCES ONLY.

If you are not familiar with the concept of an Upfront Mortgage Broker please see the link below.

All loans* run through Freddie MAC LP engine that rate as an "Accept Plus", our compensation will be .875%

All loans* that rate "Streamlined Accept", our compensation will be 1.25%

All loans* that rate "Standard Documentation", our compensation will be 1.5%

Any loan that receives a "Caution", price will be quoted to borrower.

Many companies quote "false or misleading" rates to get you in the door. We will not subscribe to these games. If you would like to know something about a program, we would be glad to tell you. Please see our section on Upfront Mortgage Brokers

* Minimum Loan amount of $150,000. Smaller loans amounts will be priced slightly higher with an overriding minimum of $1,125. Does not apply to Purchase Money Loans, Government Loans, 2nds, or Credit lines. Call for specific details. These loans are price differently as they require either much more work or very little in the case of an Equity Line.

------

Sorry this is so long but having been away for a while things can get legthy.

Don, I had no idea you broker in California. Of course, as you mentioned, it gets more difficult as you get further away.

You are certainly right about not being able to give an accurate quote without having all the info on the borrower and property.

That's why I posted the Quote Request.

I want the borrower to be able to get a realistic quote and I want the broker to have the info to do so.

I have found that especially A- to D loans have a TREMENDOUS spread. Someone like Analyst could get 7% or 10%. If he doesn't shop, he'll probably get a high rate.

How could I advise him to go with the broker who makes the least commission? The commission is rather irrelevant, what counts it the rate he gets.

A couple of weeks ago I considered becoming an agent for Carteret Mortgage, but realized real fast that I just can't do everything. It would take me so many hours to contact wholesalers and find RELIABLE lenders, I'd never have the volume to make it work.

Before I left California I offered a "loan shopping" service.

My clients would pay me to fill out the loan application with them, review the credit, dispute, and underwrite the loan so they'd know what they qualified for. Then I'd take the entire package including W-2s, rent checks, etc. to a local broker for a quote.

The broker was thrilled to get a COMPLETE loan package including the 1008 for qualified borrowers.

So he didn't charge the $300 processing fee, and my clients essentially got reimbursed for my fee. As you know, brokers can't pay referral fees and this was a very clean way to do business, the win-win situation.

Then the broker did a LOT of work for this nice young couple I referred to him. One pre-approval after the other, they were buying and really stretching the limits, self-employed, etc. and they still had a few credit dings, but he got the loan approved as A paper, SEVERAL times.

And then they got their loan from BofA. I have no idea why they did that, and I just quit and went camping. It was too depressing - why do people suck like that?

I don't want my clients OR the broker to get screwed.

Most of the people who hire me now want to get a mortgage sooner or later. Often they'll ask me for help getting the loan. But I can't help them unless I have their application, EXACT income, credit and I spent considerable time underwriting the loan and discussing their situation. If they didn't have problems they wouldn't contact me in the first place.

I don't know why you or anyone else would want to take several hours to help someone fill out an application correctly, explain why they qualify for a certain amount, and give them a quote, only to have them go on to the next broker.

So many people just don't understand that you can expect late closings and ugly surprises when somebody does a loan for $500.

Purchases and "difficult" loans take a lot of time and EXPERTISE, and giving a broker several thousand dollars to get a low rate is the best money one could spend.

I just can't tell someone who I KNOW has problems to go with the broker charging the lowest commission.

And it's too bad that Guttentag doesn't care to reply. This is definitely worth discussing.

christine,

this is what i have learned thus far in dealing with UMB'S; only christine answers all of my questions! i realize that this is what your forum is all about. i also realize that when one goes to a lawyer for a free consultation he also realizes that his time spent is part of doing business. the first UMB that i contacted was well recommended by
guttentag, her web site indicated that they were friendly and that they would be happy to answer questions, so i asked several questions most could be answered with yes/no or a simple statement. well the response that i got back was that i could only ask one question and she did not have time to be answering questions.

bob

christine,

the second UMB that i contacted by phone asked me the important questions like ratio's, ltv, income, type of loan, duration and purpose, and credit history. i told her that i had a 3 in i merged credit report, she said that my fico score would be on the first page, i told her that i did not see one and that i would fax it anyway. i also sent a letter along with it stating that after i gave her any additional info that she might want that i expected a quote according to the UMB guide lines. i called the next day to see if she got the credit report and to provide her with any additional information. she started out telling me that there is no fico scores on the report, like this was my fault. i said, can't you give me a general idea of what market nich i would be in, with the info and the credit report.the answer was no and i need a full application and fico scores, all the lenders require this, i mentioned portfolio lenders, she became angry and said they require the fico scores also. this was contrary to our first conversation. she then started to demean me about the tax lien which i explained about in our first conversation. this is what i have learned thus far; brokers should state from the beginning that they will not answer any questions or give quotes until they have a 3 in 1 credit report, fico scores and an application. the bottom line here is they want the game played their way and to their rules no matter if the consumer is paying them!

bob

Bob,

I'm sorry to hear about your experiences. Unforntuately with the amount of volume going on right now, many people, including UMB's do not want or need to work the "hard" loans.

I don't think this a fair statement:

"they want the game played their way and to their rules no matter if the consumer is paying them!"

You have to understand our position. You want me to give you an "accurate" quote. I guarentee you are going to expect me to deliver. (And on top of it you will probably shop me against 5-6 other companies.) In order to do that, I need ALL of the information, not just pieces. That includes a complete application, copy or our own credit with FICO's(all three). If you are Self employed, I want tax returns upfront. I am not trying to play games with people of hook them in, but from 10 years of doing this and I'm sure Christine will back me up, get all the issues up front and your loan goes through much faster. Also, you might not get your quote in one day. 2-3 day would be reasonable. There are very few True Potfolio lender that do not use Fico's in the B/C world.

I would be happy to answer questions in a general nature at anytime via email: dsemler@metloan.net Don't expect me to answer in five minutes. Sometimes I'm quick and sometime it might be a day. Very specific questions may require a phone call with more details so be sure to leav me a way to contact you.

Also, your comment, "i also realize that when one goes to a lawyer for a free consultation he also realizes that his time spent is part of doing business.."

A free consultation is very limited. And you are correct it is a cost of doing business, but the client is usually much more loyal and does not call 15 lawyers to find out their fee. Generally if there is a case the lawyer get the business. But it's not the same with loans. See Christine post about time and effort put into a transaction only to have the client stab her in the back.


I think the problem is that this business started our in the wrong direction. The concept of the UMB in my opinion is not to give you a quote on the "interest rate", but a quote on what the broker will charge. If you get the fee out of the equation then the broker becomes an agent for the borrwer with the fiduciary duty to work on the borrowers behalf. The way the normal system is set up now put broker and borrower on opposite sides.

To make it simple, look at this like a Real Estate Transaction. An agent comes in and looks at the property to detemine marketability and estimate how long it will take. Then the agent and seller come to terms on a "Fee" to be paid if the home sells and gets an exclusive agency. The agent then try's to solicit offers which the seller can accept or reject.

Apply the same priciple to loans. Broker has the opportunity to review borrowers situation. Borrower and Broker agree on a "fee or compensation" Borrower signs and exclusive agency with broker. Broker solictis loans from lenders and presents to borrower who cn accept or reject.

Maybe to simplistic? Problem is that it requires loyalty and trust. Most brokers don't trust borrowers and most borrowers don't trust brokers.

Christine,

Though I like the idea of the quote request, I am against re-creating the wheel. A good complete 1003 is better. I'm less likely to overlook things or miss things since it is the forms we deal with everyday. Plus it make me look for the trouble spots and identify those. May miss littel things that could be important.

I have found that especially A- to D loans have a TREMENDOUS spread. Someone like Analyst could get 7% or 10%. If he doesn't shop, he'll probably get a high rate.

There should not be such a wide spread. This is most likely cause by somebody calling ABC bank and asking what your rate is and a rate geared toward a specific credit issue. A "B" rate is usally pretty close as long a the product is the same. Some companies may quote a 2yr ARM, others a 30/15 fix.

How could I advise him to go with the broker who makes the least commission? The commission is rather irrelevant, what counts it the rate he gets.

All i can say is you get what you pay for. Want lousy service? Nickle and dime a fair fee. Rate is not always the right answer. You're looking at only half the picture. A "B" rate at 9% on a 2yr ARM with a 5 yr pre-pay and and 8 margin over LIbor may not be better than an 11% 5/1 ARM with no Prepay. Gotta look at the big picture.

A couple of weeks ago I considered becoming an agent for Carteret Mortgage

If you're interested in getting back in the business in a limited way let me know, we may be able to figure something out? You probably know this already though, most of your clients will NOT appreciate the effort that you go through and most certainly will not want to pay a "fair" price.

As i mentioned on the old board, I am a big fan of using FHA. Being quite frank I make more money and get the customer a much better deal. I do not care for "True" subprime. Most "a- to b" stuff i can get through FHA, provide the income is there. An clients are much happier with a 7-7.25% rate than 9-11%

I think I have probably closed 4-5 loans from people that were looking for answers on this board. As far as i know, All have been very happy. Hopefully some are out their to back up my statements. I have also work with a couple of others who after picking my brains and making me jump through hoops, decided to use somebody else after i told them what they needed to do and how to do it. Win some loose some! However, it's the positive ones and desire to help people that keeps me comming back for more abuse.

Analyst, or Bob, I was just about ready to post when I got a long call and then I had to take my chubby puppy for a run before it got dark. So that's why much of this posting sounds like Don's. But then again, it can't be said often enough. And I'll respond to Don's postings separately.

Well, that first broker was really rude, and I guess the second one doesn't specialize in difficult loans or was having a bad or real busy day. I heard that sales in San Diego were off by 40% last month, looks like they're busy refinancing.

"... she then started to demean me about the tax lien which I explained about in our first conversation."

That's exactly what ALWAYS happens when someone with even a small credit problem doesn't get what they were promised. It's a good thing you found that out NOW and not at closing in response to "why is my rate 3% higher that your quote?"

Also, notice the word CONVERSATION.

You have to realize that brokers have MANY different loans pending. You can't expect anyone to remember everything that was said in a phone call. I MUCH prefer my clients e-mailing their problems because it saves me a TON of time. And, even when I spend 20 minutes taking notes after a 10 minute call, chances are I'm missing something.

If you take the time to write things down, not only can't they say later that you didn't tell them, but YOU also save a lot of time because I'm sure you know how to copy and paste, and off it goes to the next broker. There are certainly times when phone calls are appropriate, but the basic scenario should always be e-mailed or faxed.

It is true that just about all wholesale rates are quoted according to FICO scores.

Even when you have perfect credit the scores are still important because some lenders give discounts for scores over 720 or 740 and nobody can accurately guess the score since the scores aren't accurate to begin with.

It really is just about impossible to quote without a score, and you do have a somewhat unusual scenario.

I really recommend that you use the Refi Quote Requst and DO fax it to a broker with your completed application and credit report.

Now, you COULD get your Beacon score or get a broker to run your tri-merged with all three scores and then use it to shop, BUT your scores will change every time they get the scores.

So, if you get a quote based on your current scores, and then you decide to go with that broker, they have to run a NEW report and your rates will be based on THOSE NEW scores.

Shopping for a loan, ESPECIALLY with credit or property problems, is extremely time consuming. Not only for you, but for the broker. As I mentioned previously, I had just about forgotten HOW time consuming brokering is until I considered it again.

Aside from the obvious problems due to credit scoring, you need to understand that EVERY question on the application is there for a reason.

If something is just a little off, there will be a problem for SOME lenders. That means you either fix the problem or find a lender that doesn't object.

I don't even know whether you have a contract with the other owners (required for the loan,) what type of property it is, what the loan amount will be, etc. Many loan programs are NOT for condos, and if you're talking rural property, land or mobiles, your really have a problem.

A broker needs to know the loan amount because they get paid a percentage of the loan amount. A $5,000 mortgage is just as much work as a $5 million mortgage. If you don't know how rates work, have a look at the scanned wholesale rate sheet

Notice the MANY conditions and restrictions? Lenders give brokers entire BOOKS full of guidelines.

Unless a broker does a lot of loans like yours, he'll have to spend considerable time shopping your loan with wholesalers. They process your loan, then ask their wholesale reps to review the package and decide which one of their countless programs will work.

A good wholesale rep might make suggestions on making it a BETTER loan package, some will even take a copy package back to their office to discuss it with the underwriter. Or the broker sends copy packages to several lenders (for really difficult loans) for their review and suggestions.

You also need to understand that there is that risk to the broker that they work on your loan for 50 hours and then you get the loan from World Savings. Or one of the co-owners no longer wants to sell. That's one of the reasons why I quit.

Summary:

You really cannot get an ACCURATE quote unless the lender/broker has your completed mortgage application, the credit, the scores, and the purchase agreement. For self-employed or commissioned people and investors they'll need the previous two years tax returns, and for divorcees, the divorce decree. And keep in mind that the appraisal can ALSO cause problems if water stains or other deferred maintenance are noted, and of course if it doesn't appraise at the value you assumed.

If someone quotes you WITHOUT knowing all the facts, it's not a quote, it's just a lure to get you to fill out their application.

Shopping for a REAL quote IS a lot of work. I think that World Savings quote sounds so good (considering the credit problems,) I'd go for it.

in respose to your statement "UMB's do not want or need to work the hard loans" i am glad to see that you can catagorize my loan as "hard" without the aid of the 1003 or a 3 in 1 credit report with fico scores. this is exactly what i have been asking from the brokers in the first place, including you. now maybe you can quantitfy it in terms of A thru D paper or FICO numbers. obviously " hard" loans have a meaning and a basis for catagorizing it as such; this is not rocket science, i am doing rocket science! i do not remember asking you for a quote yet, accurate or not. i believe my questions were all credit questions and the consequences they would have on my fico score and what niche market i would be placed in to the best of your ability and experience. if brokers do not want or need to work the "hard" loans; all they have to do is say so upfront. you also take issue with my statement about free legal consultations. you state " a free consultation is very limited"; not as limited and vague as the UMB's that i have contacted thus far. you also state that "and on top of it you will probably shop me against 5-6 other companies. i want you to tell me that you wouldn't if you were me. tell me this would not be prudent. now let me tell you where you and the other brokers are missing the point. in a free consultation, the client is trying to establish by asking questions, the expertise and integrity of the person who is going to work for them. this is the most important part, this is what provides the confidence in signing an exclusive. the rate and terms are secondary, providing they are competitive and affordable. the client deserves respect, after all he/she is paying the bill. in my own case i had no intentions of shopping due to time constraints. i agree with christine on the quote request. "there is no incentive; why would a broker work hard to find a good program" it makes good sense to me also christine, its just human nature.

bob

Don,

I want to make it VERY clear that the Quote Request works ONLY with the completed 1003 and the credit report. The Quote Request is mostly for the borrower to note what they're looking for and their contact info -- the stuff that's NOT on the 1003 and for the broker/lender to put the quotes and comments.

Most people just don't want to go through all that work (it IS work) or they can't, because they don't know how to fill out the application and they don't understand the terminology.

That's a real good example, because just like most borrowers go for the broker with the lowest quote, most sellers list with the agent with the highest PROJECTED sales price.

And, just like most borrowers don't get that low quote, most sellers don't get that high sales price.

Analyst compared brokering to lawyers' free consultation.

I found that you get about 15 to 20 minutes free from a lawyer, 30 minutes max, and you have to show up at his office. That's why it's so important that people have their listing of assets and debts nicely organized when they go to see a bankruptcy attorney. That time is up real fast, and if you waste the lawyer's time looking through your shoe box with your bills for the last year it won't be a very productive meeting.

Getting a real quote for a loan that's not a slam dunk takes a lot longer, often many hours.

On the other hand, I know that there are an awful lot of scummy brokers and lenders.

When I was a CAMB member, I often attended their meetings and there was nothing like being in the same room with a hundred mortgage brokers who are bragging about their commissions.

One time Long Beach Bank sponsored a meeting, it was enlightening to hear their statistics. I think the average commission for a B-D loan was about 4 times higher than for A paper.

But I have also seen the loan disclosures with a $12,000 broker commission for a slam dunk $400K SFR refi. That was only possible because the dimwits at the California DRE said it's perfectly ok to give those disclosures to the borrower at CLOSING. My clients DID notice that commission when they signed at the title company, but they didn't know what to do about it.

I think that agreeing to a fixed broker fee goes a long way, but not all the way, especially when it comes to difficult loans.

When the broker supplies the wholesale rate sheet used to quote, along with his fee, the borrower at least knows that the quote wasn't a lure and that a program he qualifies for exists.

If that quoted program later runs out of funds (one of the question on the Quote Request) or the circumstances of the borrower change and the quoted rate no longer applies, that's all explainable.

I totally agree that the loan terms are much more important than the initial rate - the big picture is most important.

I also agree that the rates don't vary that much, BUT sometimes with a little and often with a A LOT of effort a D or C loan can be turned into B or A-, just by improving whatever makes it a difficult loan.

And, sometimes biz is slow, a lender has a very special program, limited funds type deals, or they'll simply do the broker a personal favor because he just gave them a lot of biz, or they want the future biz. I found B-D lenders SOMETIMES willing to bend over backwards to get a loan.

If a broker specializes in B paper he may have some sources for better rates just like I could get purchase loans approved that other brokers put in the "dead" pile.

I specialized in working with first-time buyers with HIGH ratios and LOW down payments and not so perfect credit, often in combination with the MCC, CFHA or other local programs. I have NEVER done an FHA loan - the limits were way to low for the Bay Area.

I tried not to quote until I had the completed 1003 and the credit, then I gave my clients a wholesale ratesheet with the program(s) that would best fit their needs and I explained it to them. And I told them that I was looking to make about $2,000 + the $350 processing fee.

At the same time, I couldn't quote B - D paper at all.

All I could do was put the package together and start shopping it. Back then we still counted the number of late payments to determine the rates - that was PRE credit scoring.

And I only took those loans because I like doing different things and learning new stuff. I remember spending many hours trying to get private money for a vineyard scheduled for an IRS sale -- it was interesting.

My point is that nobody knows everything.

A broker can WORK a difficult loan or just let it sit. It's not bad money when you quote a 1% broker fee on a $200K loan and all you do is enter it in the computer and then put the loan package in the stack for wholesale reps to look through when biz is slow. Actively working a difficult loan takes many hours, especially when it's not the type of loan you do every day.

Recently I've had clients buy a 1/2 hour phone consultation and they wanted to know how to shop for rates. The problem was that they already had a pre-approval letter from a broker, but they had NO quote. They THOUGHT the quote was the 7.5% MAXIMUM specified in the pre-approval. I explained to them that they needed to get a quote from their broker, but I'm pretty sure they were not comfortable with the lending lingo and probably didn't do it.

It's just like my mechanic telling me to take my Scout to a spring place to do *something* with the one bushing and even though he explained the whole thing to me and showed me what was wrong, I still don't have a clue. I'd like to get a quote over the phone since that shop is a couple hundred miles away, but I know they'll have questions I can't answer. So I'm going to get my mechanic to call the spring place and get me a quote before I do anything.

And that's what I can do for people who aren't comfortable with the lending lingo and filling out applications. I can make their loan application look as good as it gets, but I don't do miracles. I can explain ratios and underwriting guidelines, or for those who don't care, I can just look for a lender/broker with a good rate who'll promise to work the loan. I added this type of service to my Services page

People who have the time and the desire to shop their own loans can find a LOT of information at the Loan Shopping Page

Don answered a lot of postings in the old forum. I purposely didn't make a real estate/mortgage forum here because I found that you just can't give good SPECIFIC advice unless you got that loan application and the credit reports.

One time I spent HOURS answering a real estate question, only to find out later that the buyers weren't really buying but using a land contract. It's just plain dangerous to give advice based on assumptions. AND it took a tremendous amount of my time away from the credit questions - my day has only 24 hours.

I did however appreciate Analyst's postings, they were so timely and apply to everybody who's looking for a mortgage. This got so long again, but it really is a very complex subject and I've thought about it a lot lately.

So, if you want an FHA loan you should contact Don directly. But please don't just pick his brain, to then take your loan elsewhere for a $100 EXPECTED savings. Treat Don like you want to be treated by your broker, be honest and upfront. Give him some time to get back to you.

Don, where is your list of all the States you lend in?

Bob,

i am glad to see that you can catagorize my loan as "hard" without the aid of the 1003 or a 3 in 1 credit report with fico scores

I have no idea if you loan is "hard" or not. I can tell that it has some extra issues. However, your loan may fly right through FNMA or FHLMC automated U/W as either "A" or "A-". These systems are very Fico driven. The fact that you have other people involved add other issues but those are not related to the credit file. Those risk are associated with the your ability to obtain clear title. What if the other people don't want to sell? What if they have liens or judgements attached to the property?

"Hard" Loans may have nothing to do with credit. I have one right now that involves a person with 8 different jobs in the last 2 years, very little money down and no rental history. This loan has been difficult trying to verify when the person worked for the companies since 2 of them are now non-existant.

Your loan offers several others challenges. You mention that your BK was "Extenuating circumstance". I would need to know exactly what happened. You may feel that it was "Extenuating" but an u/w may not. An example would be divorce. Divorce is not extenuating. Generally items that are not considered to be the borrowers fault is 1) Loss or servere drop in income of the primary wage earning, 2)death of the primary wage earner, 2)Medical condition or incompasitation of the primary wage earner. Other than that is its "case by case".

You've had lates post BK. You list 3x30 which you are disputing. Are they all with the same creditor? Are they consecutive? This alone may not put your in the b/c catagory but then your also list some tax liens. Now your stating to look like somebody that has either a cash flow problems or financial missmanagement issues. If the lates are with different creditors or different time frames you're going to have problems trying to justify them. The fact that you have Tax Liens, leads me to assume that you may be Self employed or previously Self employed? What's causing the post bk issues? Though maybe the credit report does have some errors, some of this may be your own doing. I have no way to know at this point.

What is your current housing payment? How does it differ from that payment you would have with a new loan? Is the ?Condo? Owner occ or Non owner? Though you state your ratios, I never believe them unless I do them and have the supporting documents as I have had people try and tell me their ratios on ly to find that they were way off.


I'm not so sure about your Wold savings Quote. As far as i know, Wolrd does not have a 30 year fixed, non conforming no credit score, 6.6% rate. Yesa they are a portfolio lender, but almost ALL port. Lenders (WAMU, WORLD, ETC) sell their Conforming Fixed rate stuff to FHLMC or FNMA and simply just service it. WAMU an World do like to keep their ARM products as these have little market risk.

you also state that "and on top of it you will probably shop me against 5-6 other companies. i want you to tell me that you wouldn't if you were me. tell me this would not be prudent.

This is where you and I probably differ. I don't have the time to shop around because I know half of the peopel will "bait and switch". When i buy a car I go back to the same guy. I picked him initially because I liked him and felt he was offering a "fair deal". I did a little research, no alot. I could care less ho much he made off me as long as it did not take a whole day. When I built a house I found the builder from a referral. Before we even agreed on price I decided we would use him. We interview 4 Builders. We axed the first one because he started talking about price way to early. I know I paid more than I could have had I shopped around. But price wasn't the issue, it was the service.

So would I shop, nope. I learned along time ago, you get what you pay for. Do I overpay sometimes, Absolutely. But I get the service I need. Do I pay a fair price of commission. Yep. However, give me lousy service and i'm all over the price. By hiring a Mortgage Broker, you are not shopping for rate and terms. You are hiring a professional to do that for you. You are paying for a service. It is the brokers job, once hired, to shop for rates and products that suit your needs. Pitting one person against the other only creates disloyalty and mistrust.

the client is trying to establish by asking questions, the expertise and integrity of the person who is going to work for them. this is the most important part, this is what provides the confidence in signing an exclusive. the rate and terms are secondary, providing they are competitive and affordable. the client deserves respect, after all he/she is paying the bill.

I am not missing the point on this. This is exacty what i am saying. However, and Christine will back me up on this, the first words out of the client mouth is allways, "What's your rate?" having no idea of the facts, most people want a number and if it is higher than the last quote, its goodbuy. Some people even get offended by us trying to ask probing question. You have no idea how many times a day I try and ask questions to understand the clients needs and just get back, "Why do you need to know that? I just want to know what your rate is for x."

i agree with christine on the quote request. "there is no incentive; why would a broker work hard to find a good program"

This is so easy to answer i had to laugh first. If I don't find an acceptable program, I don't get paid!! On top of that if you a re a broker just looking for the one deal with the customer, you will be out of business. Each client is worth about $15-20,000. Yes this number is correct. It's not about the one deal. Chance are if you do a good job and follow up reguarly with clients you will do 2-3 transaction in their lifetime. One top of that you will probably do 4-8 transactiosn with people the client knows or relatives of the clients. It's not about the one deal. The one deal means nothing. The one deal is small change compared to the real prize of continuous business.Funny thing is though, a bad deal witht a customer cost about $40,000. Wored of mouth on a bad deal move much farther and quicker than a good deal.