home loanTag Archive

Fannie Mae and The Wild West

So because Fannie Mae is now hurting for money, they’re increasing their costs. So the borrowers who are on higher ground now probably need to pony up a 25% down payment to compensate for the fees and the shame of an 800 FICO.

And in addition to this travesty, the instrument our Fannie Friends are using to perpetuate this latest infraction of civility is yours truly and other mortgage lenders by making us put on the black hats and knock the townspeople around with these inflated costs.

Florida Mortgages: We Need to Be Weather-Proofed

But putting shock absorbers into place that can move when the market fluctuates gives us the infrastructure that will get us the farthest. In the mid 2000’s, we travelled to an insanely crazy place in this mortgage industry where the contest at that time seemed to be that the Florida mortgage lender who could ask for the least documentation and the smallest shred of evidence that a borrower was a low risk candidate would win the day. But we all know who lost on those deals; the unassuming buyers who were blinded by the American Dream and smarmy sales talk.

Mortgages in Florida and Running with Scissors

The thing that held up the whole show was an undisclosed liability discovered when the credit report was pulled right before closing. Always in the Top Ten Things Not to Do Before You Close on Your Home, whatever happens in that time period between loan pre-approval and the subsequent underwriting process is not only fair game, it could kill your deal.

At the end of the day, don’t run with scissors and don’t ignore the mortgage professional. We managed to get this loan closed, but you’re not going to dodge the Fannie Mae’s of the world by thinking you can hide stuff because you know more than I do. Not when it comes to mortgages anyway…

Appraisers vs. Underwriters

So…while the lender is responsible to ensure that the appraisal gets conducted, if the lender, according to FMNA: “has concerns with any aspect of the appraisal that result in questions about the reliability of the opinion of market value” then they get to do one of three things before rendering their decision:

Contact the original appraiser to deal with the perceived deficiencies
Acquire a field or desk review of the original appraisal
Get a new appraisal

Credit Reports and More Credit Reports

New reports do get pulled prior to closing and do impact when and if you close. And even small changes in those new credit reports could wreak havoc on closings. Fannie Mae has yet another updated policy notification about what is done if the lender obtains a new credit report and discovers additional debt.