Whether buying or pursuing a mortgage for a home through my services in Naperville, IL ... Joliet, IL ... or any other place across America, the underwriting demand for more detailed documentation has grown immensely. Much of this demand has grown in direct response to the current economic and mortgage debacle.
HUD's recent release regarding a new guidelines revising the HUD-1 Settlement Statement for HECM closings, is of particular interest to me right now. I've presently got a buyer/borrower that just doesn't ...
A. See the Need to Comply B. Understand C. Refuses to Understand D. "Doesn't Wanna" Comply E. Is just plain obstinate F. Has a Grudge with Banks and Anyone Associated With Them and Thinks They are the Devil Incarnate
I'm not sure which of the above is the answer, but these clients are making my life, and everyone else's in the deal, miserable. We should have closed over a week ago. Their total disconcern for the requests made, and/or lack of understanding as to why they are being requested, totally befuddles me and is frustrating to me too.
The HUD-1 guidelines read ... Mortgagee Letter 2010-39 requires new certification language to be added to the HUD-1 certifying that the source of funds ... "used for the the monetary investment or closing costs was not provided by the seller, or any other person or entity that financially benefits from the transaction." It also states that ... the seller is required to certify that the borrower will not be paid or reimbursed for any part of their monetary investment prior to, during, or after the loan closing.
This portion of the changes made to HUD-1 (made in once again in reaction to the current mortgage crisis) ... and all the other changes made to HUD-1's ... is just further proof that "Documentation ... Documentation ... Documentation" is the new catch-phrase for mortgage processing and buying a home.
To my mind, this has been pretty well-covered in the media/news and on the streets. How could my clients possibly not know or understand some of what is the present reality of the real estate market and home buying process? Especially if the decision has been made to enter the home buying process? IMO, the homebuyer should bear some of the responsibility for educating themselves as best as possible ... before and during the process of home buying. It's only smart that they take those measures to protect their interests. 
But to clients that are reluctant to do so?
Simply stated folks ... if you don't want to be bothered with producing documents and proof of finances, employment, and more ... don't buy a home or go anywhere near a mortgage application.
These days, it will prove to be a waste of yours and everyone else's time. You won't get approved and past underwriting without the documentation requested and full compliance.
You'll be a modern day Don Quixote should you persist.
Listen, I do so understand the hassle of having to comply with the numerous and sometimes outrageous requests made for documentation while in processing. I'm not so happy with it either ... or the idea of having to (sometimes once again) ask a borrower for more info and paperwork. Regardless of what is thought, it's not an easy thing to do ... or something a lender wants to do TO you.
But the harsh reality is, you either comply ... or it's "Bye-Bye". You don't change underwriters' minds. And, many times that is rightfully so.
So, as they say in the movies and TV ... "GET OVER YOURSELF"! YOU the client, have much of the power as to how easily or painfully the processing will be when you choose how to address it and pursue it. And, you either want the home and the closing to take place in a relatively sane timeline badly enough ... and will do your best to facilitate that with the required documentation and info requested ... or you won't.
Make up your mind ... as these are now the present and new hardline playing rules. We ALL get the picture. We ALL understand your angst. We ALL see the out-and-out silliness of the process at times.
We also see the utter futility in the arguments and reluctance to comply and will grow weary of them.
So please ... understand these harsh realities PRIOR to going into any home purchase transaction. If you decide to proceed, please don't make life hard on yourself and everyone involved in the transaction. Provide the proof. Provide the Documentation requested. (And yes, in a timely fashion.) Get the mortgage proces
sing completed and closing set. Spare us the drama and quit dragging your feet ...
And ... "JUST DO IT"! (I acknowledge and bow to Nike)
Gene Mundt, Sr. Vice President
Personal NMLS #216987
The Federal Savings Bank
1823 Centre Point Circle, Naperville, IL 60563
Skype! 630-219-1316
Gene, Wow, my friend, you are on a holiday roll! Great post and suggested again! LOL! I remember a Boeing engineer who, years ago, gave a very novice loan officer (a vibrant red head, btw) an absolute horrible time about signing a Note on a HELOC with Security Pacific bank because he didn't like the verbiage in Paragraph 5. Wanting to provide the customer excellent service (and, certainly revealing that I was very new to banking), I contacted every department imagined in the bank to try to get an approval for him crossing out the offensive words and initially the change. In hindsight, it is pretty funny...NO? LOL!
At the end of my Herculean efforts the light came on that he (and me, for playing along) was out of his mind! Finally told him: "Okay, I understand your objections. I appreciate your business, but if you don't want to sign the Note as provided from the bank the loan will not be closing." ,,,,.He signed the loan.
From that day forward, I have reminded consumers of one very important fact: "Finance is all about the Golden Rule. Them who has the Gold RULES."
Deborah: Sounds like you have a blog in that story to me. It just points out exactly what I was trying to get across. Sometimes you just have to play nice, behave, and do as told ... or no candy! Sounds like we're talking in a very parental manner there, but it's true. Just as we tell our children, "just because", when they ask why ... we sometimes have to reach that point with our clients. It IS that black and white some times. I've about reached my limit on patience with this client of mine though. Whatever they decide, I hope they decide quickly and end the misery for all involved. I can plead and explain no more!
And you're so right ... Finance IS about the Golden Rule. The rules are what they are. Face it ... or leave. Don't feel too badly about the novice error made. We ALL have made them ... and plenty of them too. It's called learning ... and I'm well "learned"!
Thanks so much for the kind words you wrote. Your good opinion means alot. Kinda like getting a huge pat on the back or a "thumbs-up". Much appreciated ...
Gene
Gene - As a fellow MLO, I concur with everything in your post and second Deborah's account of the golden rule. While we can insist that an underwriter justify and explain their requests, especially if they are not in accordance to loan guidelines and lender overlays, however, in the end guidelines and overlays are subject to change without notice. We MLO's are not the rules makers, we just need to follow them. The better we educate our borrowers on this reality the better off everyone is.
On another note (and you can probably agree on this), difficult borrowers can usually be spotted pretty early in the process. If I start getting any flack or grief in the beginning when I'm pre-approving them, I make sure they understand that this is just the beginning and when we get into escrow, they are going to have to provide even more documentation. I let them know that I won't tolerate any grief about documentation requests because their closing escrow will depend on it. So I let them know if they can't adhere to these rules then they need to find another MLO.
I'm pretty strict about this part of the transaction and I let them know that my job is to get them to the closing table and I can't do that without their cooperation - at all times. This is usually when I can detect any problems or when their issues and concerns come out. It can be a good learning experience having this kind of communication with clients.
Sorry for the long comment but you just touched on a huge pet peeve of mine. I simply can't work with borrowers who are working against not only me but their own best interests too.
Gene and Donne, Sounds to me like we all know the situation all too well. I actually love the "FHA shouldn't need that" or "Fannie/Freddie are out of control"...gives me a good giggle for the day (I know I am sick! LOL!). At that time I get to remind consumers, agents and fellow loan officers that I am not a "lobbyist" to the financial markets! We all need to get in the row boat and roll in the same direction if they want to buy the house....or jump ship....it is their choice. However, I am not going to fight FOR their loan AND fight them at the same time. Nuts!! buh bye.....
Donne and Deborah: I can't wait for the time that we all can sit and shoot the breeze together. Oh what stories we could tell each other, share, and laugh about. But until then ... there's AR. Thank God!!
You sound like my wife, Donne ... she tells me I'm too nice. But I will say, I DID have that talk with these clients ... and they still hang around. That lets me know that they've probably been told the same things by other lenders ... and they're just mad at the whole situation in general.
I've given so much on this file already sanity wise ... I hate to give up what I have earned. Sure you know that feeling too! They ARE driving everyone to distraction. Just volatile, compative, distrustful people all around. I truly don't think it's me personally ... just everyone in our profession and industry. That includes the agents and attorneys involved in the deal ... tho none of them seem to be "manning up" (excuse the term ladies) on this one. Letting me take the heat. Well, that's okay. We're inching closer to the closing table and hopefully it will be through soon. If not ... I can sleep at night on this one for sure!
I am just totally blown away by the lack of knowledge ... true understanding ... and sensitivity to the changes within the mortgage processing that I see from clients at times. The fact is ... the situation is what it is. All the griping and anger they have won't change it. And if they wish to accomplish their end goal ... the WILL need to comply, whether they are happy with it or agree with it. They won't win this argument. With all the expertise I have ... I can't win the argument for them either. It's no use, most of the time. So, pony up and move along, right??
As Deborah says, I don't create or lobby for the rulings ... I just have to live by them. Just the same as the buyers really, only from another direction. I truly am on my client's side. I want and need them to understand that. If they don't close, there is no new home for them .. and no paycheck for me. Why would I place obstacles in the way of closing?? It doesn't make sense ...
Some just don't want to hear what you have to say ... or see what you offer them. No matter what! Seems like they are cropping up more and more too. And this is where I say (again!) that the media feeds into some of this. JMO ... but that's another discussion.
Stay well and sane ladies! Enjoy your holiday season .... and look forward to a more prosperous New Year!
Gene
Wow, wow, wow!!!!!
You really said it! And it definitely needed to be said. I hope theses and future buyers take heed.
Karen: I feared that maybe I was too honest and forthright with this one ... so your kind words definitely are appreciated. Sometimes I feel like clients just don't grasp these realities ... and it works against them while in processing. I appreciate that you and other agents reinforce this message and remind clients of these realities while in processing. Again, thank you so much for your comments ...
Gene