Things have quieted down over the last week in our world of Mortgage lending, with more companies quietly discontinuing programs. New restrictions have come out on verifications of employment by the lenders themselves. This is in addition to the verification of employment the processor does in the beginning of the loan process. This is now done multiple times before closing, at closing and at funding. This can be a big problem if the employer is working from home on a cell number.
Have your borrower talk to their Employer, so they can answer the phone prior to funding. Your loans won’t fund until someone tells the lender your buyer is still employed. Buyers are also being asked to fill out attestation forms, swearing they are still employed and have not had any reduction in hours or pay prior to funding. In my opinion this is nuts, considering someone can be laid off the day after closing.
When your buyer has a reduction in hours or is laid off, it could be considered a deal killer. And, unless they can qualify with the lower income the file will be denied. Sometimes the fact that income was reduced at all may get the file denied. Bottom line… It is at Underwriters discretion.
After monitoring every Mortgage and financial site I can find, I still believe; as does most of the industry we will be back like gangbusters. At least throughout the summer and early fall. These flus are known to have an encore, whereas they come back less deadly months after the first infection. This is predicted to be around December. So stash your cash! This situation may hurt our snow bird business, but the new year will be strong again.
Now is the time to contact your book of potential customers, to get scores up and issues resolved, along with answers for those who are looking to purchase this year. The medical collection agencies are removing delinquent accounts like I have never witnessed before. There has never been a better time placing a call to the bureaus requesting debt be forgiven and removed from reports. That is a sure way to boost those credit scores.
In addition, great credit and higher scores can save anyone thousands of dollars over the life of a 30-year mortgage. One quarter of a point can be 60.00 a month, which is 720.00 a year. Over 30 years that is $21,600.00 in savings. This savings could be cost of a small pool or a garage. Don’t let anyone tell you that a 710-credit score has the same rate and fees of a 775-credit score. Keep in mind your score determines your Private mortgage insurance cost as well.
In the end, as dire as things look right now, there is a light at the end of the tunnel. This is a fantastic opportunity for those in our industry to help our customers guarantee future purchases, by improving credit and defining processes needed at a later date. Just think about how many customers you could have lined up at the end of this challenging period, by shoring up just a few items to help them have a clean path to the purchase their dream home. We have a choice to get bogged down in the negative environment we are in right now; or take this time to build a foundation for future prosperity. I choose the latter.
That’s it for now. Call me if you have any questions or customers that need Mortgage guidance. I will be here with the hubby and the dogs. Take care of you too!!
Next blog: A scoop on credit for Mortgages
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