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Shannon
California
360 Posts |
 Posted - 05/09/2008 : 07:23:25 AM
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Not with the mechanics...with the specifics
Unless of course you are a broker or an attorney...
Do you really know why a borrowers loan payment is what it is or every term and condition of the deal?
All we can hope to do is guide clients through the key information and let them decide if the deal is right for them.
At one point, I was signing an average of six deals a day...no way to know the details of each one and I sure didn't want to.
Knowing WHERE the details are and pointing them out is more to the point...not surmising why their broker did or didn't screw them.
"A Quick Note"
www.aquicknote.net
Now Providing "Service of Process" in Orange County, CA |
Edited by - Shannon on 05/09/2008 07:27:58 AM |
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Lee-AR
Arkansas
678 Posts |
Posted - 05/09/2008 : 05:32:16 AM
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Uh-oh...
unfamiliar with the specifics of any loan signing we conduct.
Then get familiar & point them out!  |
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Shannon
California
360 Posts |
Posted - 05/08/2008 : 11:29:45 PM
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With the mortgage lending industry in crisis, many more borrowers will claim they were duped...even though they weren't. We must continue to be a disinterested third party who is unfamiliar with the specifics of any loan signing we conduct. This lends credibility to our function of notarization as the details are not required to be understood by us...only the proper identification of the person(s) signing before us...
"A Quick Note"
www.aquicknote.net
Now Providing "Service of Process" in Orange County, CA |
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civey
North Carolina
76 Posts |
Posted - 04/29/2008 : 1:26:44 PM
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I have to agree with Carmen and I completely agree that telling a client one thing and it being another is the worst!
However, you did state that the rate seemed high for their "good credit" score and while credit is one of the determining factors for the rate it is not the only factor. DTI (DTI), cash-out, and the property value versus amount owed also come into play. It is not as cut and dry as it can sometimes appear.
I will try to explain how it works: LO enters in all pertinent information, income, debt, LTV (loan to value) along with credit scores, if they use Fannie Mae or Freddie Mac, you get an approval rating, which can vary from say a 0 - 3, based on this rating is how the loan is priced (interest rate), then there can be hits to rate by the lender based on credit score, LTV, the approval rating, and whether or not it is a cash out refi (example a cash-out can mean as much as a .25 to 1.0 hit on the rate depending on the lender). Some of these hits can be taken on the LO's side, but some are not optional and are added to the rate. My point is it varies from lender to lender and Fannie Mae nor Freddie Mac gives out the formula to my knowledge on how they come up with the approval rating, but it is based on all the above factors.
It sounds like you were right on the money on this one, but I know from experience that a lot of people think it is just the credit score. It's one thing if it wasn't what the borrower anticipated, but it could lose you business by crossing the line under the wrong circumstances. (Example: Borrower may have a 780 credit score, but they are borrowing 95% or their homes value and they are taking out more than 5000 in cash. Their rate will be higher than someone doing a 70% LTV with no cash out) It's risked based. Most attorney's I have encountered don't even realize that it isn't just the credit score. |
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crtowles
California
553 Posts |
Posted - 04/29/2008 : 11:15:52 AM
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Hi Diane,
This has happened to many of us throughout the years. All you can do is just what you did. Casually point out the key items to them and let them make their own decisions. Usually if the the numbers are not correct or outrageously high they will not sign anyway. The downside for you will be that you may not get paid depending on who you are working for or whether you have discussed the 'what if's' previously.
Personally however if I see a sub prime mortgage with outrageous numbers, I won't go to a signing until I speak with the borrowers and make sure that a loan officer has gone over the figures with the borrowers beforehand. I don't have time or paper to waste.
Carmen |
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sailing
Washington
59 Posts |
Posted - 04/26/2008 : 01:25:59 AM
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I was called for an emergency loan signing this evening. I said that I couldn't do it...they called back and pleaded. I printed out all 200 plus pages. As I was shuffling the pages, I noticed the interest rate was extremely high, almost 9%! I finished gathering the pages and headed off. Two very young brothers were the borrowers. Right away, one of the brothers indicated that the interest rate wasn't right. He had been told 5.75 fixed. I pulled out the ARM. I said let's get the LO on the phone. I pulled out the prepayment penalty doc and indicated that they might want it explained as well. I was given a blank look and asked what a prepayment penalty was. I pointed to the wording that stated they would be liable for 6 months worth of monthly payments if they paid the loan off early. In their case it would be over $12,000! They didn't seem to understand just what that meant. They didn't understand that they wouldn't be able to refinance. Their credit scores were in the "good" range. Fortunately the brothers refused to sign. I know that I can't answer questions, but I did point to several items that they might want to bring to the LO's attention. I casually asked how they found this particular lender and was told that the lender found them and that they had no urgency about refinancing.
I always have the borrower sign the right to cancel first. I explain that they have 3 days to review the documents. A few borrowers seem pretty overwhelmed by the volume of paper work and I often get the impression that they aren't going to review their copies during those 3 days and I could slip in a check made out to me for lots of money and they would sign it without the blink of an eye. They seem to believe whatever they were told by the LO.
Somebody please tell me, what is the right, ethical thing to do if I suspect that someone is being taken advantage of and they don't realize it.
This is the second time this week that something like this has happened. The borrowers are told one thing but the docs say something else.
Diane J. Elliott |
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Predatory Lending
