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Yes, I have had locks twice on attractive rates that are now gone. And once I rearranged my finances to fit into the boxes I was told I don't have a long enough 'history' of taxable income. Now I find they won't take 2012 tax returns (not even done yet because brokerage firms don't have to give numbers until later) because the IRS is delayed in making tax transcripts available.
Pretty much describes me except for retirement.
The latest is they require 2012 tax return and I'm still waiting for my year end statements... received a letter from one stating it is delayed because of congress.
Great, an act of Congress is now responsible for delaying my refi
They also pulled 4 years of tax returns... no problem, everything is as stated... now they need a fifth year being 2012.
...
Or, a person with 8 years with the same lender responding to a refi advertisement in the monthly mortgage envelope... they already know the property, intimate with the borrower and have already committed the funds.
...
Every situation is different but in my case the current mortgage company stated that regulations have changed their business plan and they no longer are licenced to initiate new loans in my state.
Let the government start backing car loans or credit cards and see what happens. And I'm not talking about government's intervention, which has since ended, I mean FHA-like integration. This is what happens when lawyers conduct finance.
I have to send 80+ page doc packages to borrowers, and, in going over every page, there are many, many instances of "now, this one is pretty much identical to one you already signed, but we're into redundancy....."
Hippa is costly and leaves many with bad feelings...
Most organizations now have a HIPPA compliance officer and this adds to overhead.
Hospitals can be sued if they give out information to the wrong loved one or a neighbor.
I know the computer age was supposed to streamline things... it has also expanded exponentially what is required... in some cases simply because computers make it possible.
I was told I should hear something back from the underwriter in a week...
When I went through a refi (at the same bank as my current mortgage), they did not complete the paperwork blizzard within the lock timeframe, but they did extend the lock no questions asked. My bank couldn't find its way out of a room with one door, however... the loan originator never sent all the paperwork (along with correct contact information) to the processor - which held up the appraisal, and then on to the underwriter. I ended up emailing ALL MY INFORMATION separately to each person in the chain... Once one stage was done and it moved along, I'd call the bank to get the name of the next cog in the wheel, ask if they had "xyz", which they typically did not... and I'd send the complete background package on to them. If I had waited for any of them to actually do their job, it would never have happened. I also just added extra information to their requests... you want two years' taxes? take three, please... two months' pay stubs? Oh, look, take three... and by all means, here are six months of bank statements for you to peruse... they had a hard time coming back to ask for more. Now that it is a done deal, however, it was well worth dropping to a 10-year 2.95% rate, and I can kick back and relax.
I agree with one of the earlier poster's comments, however... I actually had cash in liquid accounts that I could have used to just pay off the original loan instead of doing a refi, but opted not to. The fact that this did not smooth the way at all was ridiculous. That being said, since one of the bigger issues with the former real estate market was lack of true documentation that people could afford what they were buying, I have to agree the system needed to be tightened up a bit... but as always, when things first start out, the pendulum always swings too far in one direction... over time, I am hopeful it becomes a sane process once again. (It won't help me since I have NO PLANS to ever have to buy or refinance a property again - barring some major unforseen circumstances!)
Lending, as described by my Grandfather is based on risk...
If the collateral is good, the ability to repay becomes a moot point.
My opinion on why the melt down occurred is because the collateral was not worth anywhere near book values... there was no equity and I know folks the bought duplicate homes in the same neighborhood at significant savings and walked from their no equity home.
Plenty of people that could easily afford the payments also walked... one was a lawyer that unabashedly said it was simply a strategic decision.
Last edited by Ultrarunner; 02-23-2013 at 03:05 PM..
The meltdown happened because of default, which is predicated on repayment. 2/28 ARMs expired, and a loan's rate popped up 2-5 points in a year, making a former 50% debt ratio loan 70%+. Neg-am loans, by definition, were an instrument of negative equity creation.
Also, running the price up and rolling in closing costs, with a wink-wink to the appraiser. Additionally, higher risk mortgages were not priced as such due to bottom-dollar, and bottom-dwelling, brokers and realtors, who undercut banks to the point that a borrower who deserved a 9% rate got 6%.
With the initial defaults, the valuation of the remaining collateral for other mortgages took a nose dive, thus further spurring the "walkaway" component.
The problem with W2 income is it could stop at anytime... employment for most is at will.
What I don't understand is a person that has enough cash to easily pay off the balance and is looking to switch from a adjustable to a fixed should be a no-brain er in a sane world...
Or, a person with 8 years with the same lender responding to a refi advertisement in the monthly mortgage envelope... they already know the property, intimate with the borrower and have already committed the funds.
Another thing I have learned is there are private bankers that have none of these requirements... some of the Docs I work with use them... they are adjustable or tied to a line of credit... these accounts are never sold on the secondary market... so I'm been told.
For the typical Fannie/Freddie loan it has to be in the box to be sellable to them. What you are describing is asset based lending which was done in the past. The problem now is a portion of these people decided not to pay their mortgage because of the collapse- strategic default. So even if you have the funds doesn't mean you will pay your mortgage. I get that it used to but that is no longer the case. Now private banking is on a whole other level and nothing like traditional mortgages. You are getting a personal line of credit based on the big picture of your finances and yes it will stay with the bank it was taken out with.
Another version of the golden rule: He who has the gold makes the rules. You want fannie/ Freddie money and low rates play by their rules. You want a portfolio lenders money play by their rules- they hold the mortgage so a little different than Fannie/ Freddie. You have a private banking relationship established- yet another set of rules.
I just wish the heck they would stop soliciting my business and wasting my appraisal $480 when they cannot deliver...
Every time I'm at the credit union I'm told not to let this great opportunity to refi get away.
I even told the loan officer I doubt she could do anything for me... she checked my credit score and asked me a few questions and said as long as the appraisal is OK... you are good to go.
Well, everything is exactly as represented and appraisal came back fine...
I'm not questioning what you are saying... more, just blowing off steam.
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