Transcript Mortgage Brokering Rev 100201.ppt

A
Closer
Look
By Brian Hays
Lic Real Estate Broker
Lic Mortgage Broker
and
Kris Kesling -Hays
Lic Mortgage Broker
Talking points
Who are Brian & Kris Hays?
• Loan origination in Today’s Market
• What differentiates a Mortgage Broker from
other types of “lenders”?
• What training is required as a mortgage broker?
• What do Mortgage Brokers do?
• How do mortgage brokers earn their income?
• Different Loan Programs
• Scenario workshop
• www.Prefhomes.net
www.preferredpropertiesofsarasota.com
• FOR BUYERS·
• Our Listings ·
• MLS Search ·
• Dream Home
• Loan Application (en) ·
• Loan Application (sp) ·
CASH FLOW LOAN!
The Effective Rate is w hat the fixed interest
rate w ould have to be in order to give the
resulting Minimum Payment show n.
Minimum Monthly Payments Guaranteed
$1,200
$959
$892
$830
$718
$400
$668
$600
$772
$800
$622
Payment
$1,000
$578
MRV, 10/ 01
1
2
3
4
5
6
7
8
9
10
$538
Equity Builder Bi-weekly Payment
Option:
* Auto. Draft 1/2 the minimum monthly
payment every 2 weeks.
* Reduces the life of the loan by 7 to 11
years.
Year
Min. Pmt. - Effective
1st
Rate
$500
1.500%
$538
2.028%
$578
2.571%
$622
3.132%
$668
3.711%
$718
4.310%
$772
4.931%
$830
5.576%
$892
6.247%
$959
6.946%
$500
Purchase Price or Value
$220,000
Start Rate
1.500%
Margin
3.450%
Current Index
3.790%
Fully Indexed Rate
7.240%
FIRST
LTV
66%
Loan Amount
$145,000
Minimum Payment
$500
Fully Indexed Payment
$988
SECOND
LTV
Rate
Loan Amount
$0
Payment
$0
FIXED
Rate
6.250%
Payment
$893
4 Payment Options from Month to
Month:
* Minimum Payment
* Interest Only Payment
* 30 Year Payment
* 15 Year Payment
Fixed
Monthly
Pmt. - Total
Rate
Fixed
Cash
2nd
Pmt.
Pmt.
Rate
Flow
$0
$500
$893
6.250%
$392
$0
$538
$893
6.250%
$355
$0
$578
$893
6.250%
$314
$0
$622
$893
6.250%
$271
$0
$668
$893
6.250%
$224
$0
$718
$893
6.250%
$174
$0
$772
$893
6.250%
$0
$830
$893
6.250%
$0
$892
$893
6.250%
$0
$959
$893
6.250%
Total Cash Flow in the First 8 Years: $20,780
$200
$0
1
2
3
4
5
6
Year
7
8
9
10
CASH FLOW LOAN!
The Effective Rate is w hat the fixed interest
rate w ould have to be in order to give the
resulting Minimum Payment show n.
Minimum Monthly Payments Guaranteed
$1,200
$959
$892
$830
$718
$400
$668
$600
$772
$800
$622
Payment
$1,000
$578
MRV, 10/ 01
1
2
3
4
5
6
7
8
9
10
$538
Equity Builder Bi-weekly Payment
Option:
* Auto. Draft 1/2 the minimum monthly
payment every 2 weeks.
* Reduces the life of the loan by 7 to 11
years.
Year
Min. Pmt. - Effective
1st
Rate
$500
1.500%
$538
2.028%
$578
2.571%
$622
3.132%
$668
3.711%
$718
4.310%
$772
4.931%
$830
5.576%
$892
6.247%
$959
6.946%
$500
Purchase Price or Value
$220,000
Start Rate
1.500%
Margin
3.450%
Current Index
3.790%
Fully Indexed Rate
7.240%
FIRST
LTV
66%
Loan Amount
$145,000
Minimum Payment
$500
Fully Indexed Payment
$988
SECOND
LTV
Rate
Loan Amount
$0
Payment
$0
FIXED
Rate
6.250%
Payment
$893
4 Payment Options from Month to
Month:
* Minimum Payment
* Interest Only Payment
* 30 Year Payment
* 15 Year Payment
Fixed
Monthly
Pmt. - Total
Rate
Fixed
Cash
2nd
Pmt.
Pmt.
Rate
Flow
$0
$500
$893
6.250%
$392
$0
$538
$893
6.250%
$355
$0
$578
$893
6.250%
$314
$0
$622
$893
6.250%
$271
$0
$668
$893
6.250%
$224
$0
$718
$893
6.250%
$174
$0
$772
$893
6.250%
$0
$830
$893
6.250%
$0
$892
$893
6.250%
$0
$959
$893
6.250%
Total Cash Flow in the First 8 Years: $20,780
$200
$0
1
2
3
4
5
6
Year
7
8
9
10
FundemAll Bank NICHES
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Low rates on non-conforming products
No M.I…….Escrows Optional
100% Purchases, + 6% seller CCs (incl ppds)
100% C/O Refis
100% w/575 score
100% w/one active trade, OR, RENT
100% Limited doc
100% Stated Income
100% Condos (Hi Rise, too)
100% 2-4 units, O/O….STATED
100% 1st Time Home Buyer
100% 1 Day out of BK or FC
100% REHABBED FLIP Properties
100% 18 month S/E
CONFORMING FALLOUT
12 month personal or BUSINESS BANK STATEMENTS w/525
6 month STATEMENTS w/650 = Limited Doc
Mtg lates OK, if incl in score (or, will be graded)
No VOR programs
No payment shock, reserves or VODs (on most programs)
Debt ratios to 55%
Collections/Chg offs remain open (Child Supp must be in repymt)
Judgements < $1,000 remain open
Interest Only option, 90K min, 2,3 or 5 yr.
Reasonable closing costs…$620, 1st….$200, 2nd (Fla.)
Loan amounts to $750K, 1st
$900K, combos
Cash in hand to $150K, after debt consol & CCs
FundemAll Bank NICHES
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Low rates on non-conforming products
No M.I…….Escrows Optional
100% Purchases, + 6% seller CCs (incl ppds)
100% C/O Refis
100% w/575 score
100% w/one active trade, OR, RENT
100% Limited doc
100% Stated Income
100% Condos (Hi Rise, too)
100% 2-4 units, O/O….STATED
100% 1st Time Home Buyer
100% 1 Day out of BK or FC
100% REHABBED FLIP Properties
100% 18 month S/E
CONFORMING FALLOUT
12 month personal or BUSINESS BANK STATEMENTS w/525
6 month STATEMENTS w/650 = Limited Doc
Mtg lates OK, if incl in score (or, will be graded)
No VOR programs
No payment shock, reserves or VODs (on most programs)
Debt ratios to 55%
Collections/Chg offs remain open (Child Supp must be in repymt)
Judgements < $1,000 remain open
Interest Only option, 90K min, 2,3 or 5 yr.
Reasonable closing costs…$620, 1st….$200, 2nd (Fla.)
Loan amounts to $750K, 1st
$900K, combos
Cash in hand to $150K, after debt consol & CCs
A Brief Summary Of The New
Mortgage Relief Plan
• Jan. 6-- the American Securitization Forum
issued 'Streamlined Foreclosure and Loss
Avoidance Framework for Securitized Sub-prime
Adjustable Rate Mortgage Loans.' It has been
endorsed by The Treasury Department,
Department of Housing and Urban
Development, and federal bank regulators. It
sets forth a voluntary system for lenders
to streamline the evaluation of their securitized
sub-prime loan portfolios ...
• At the heart of HAMP is a net
present value model that
calculates whether a
modification is more valuable
to the mortgage holder than
proceeding to foreclosure.
Problem is, the model is not
publicly available, which limits
everyone’s ability to
determine and debate
whether certain choices and
assumptions built into the
model are appropriate.
• HAMP Design – "Pay for Success" Incentive Structure
• HAMP offers "pay for success" incentives to servicers,
investors and borrowers for successful modifications. This
aligns the incentives of market participants and ensures
efficient expenditure of taxpayer dollars.
• Servicers receive an up-front payment of $1,000 for each
successful modification after completion of the trial period, and
"pay for success" fees of up to $1,000 per year, provided
the borrower remains current. Homeowners may earn up to
$1,000 towards principal reduction each year for five years
if they remain current and pay on time.
• HAMP also matches reductions in monthly payments dollar-fordollar with the lender/investor from 38 percent to 31 percent
DTI. This requires the lender/investor to take the first loss
in reducing the borrower payment down to a 38 percent
DTI, holding lenders/investors accountable for unaffordable
loans they may have extended.
• To encourage the modification of current loans expected to
default, HAMP provides additional incentive to servicers
and lender/investors when current loans are modified.
• Mortgagee Incentives Under FHA-HAMP, the
Mortgagee may receive an incentive fee of up to
$1,250. This total includes $500 for the partial claim and
$750 for the loan modification. To receive the incentive
payments, the Partial Claim and Loan Modification must
meet the requirements of Mortgagee Letters 2008-21,
2003-19, 2002-17, 2000-05, and comply with instructions
and requirements in this Mortgagee Letter and
Attachment. Mortgagees may also claim up to $250 for
reimbursement of title search and/or recording fees.
• http://www.treas.gov/press/releases/tg217.htm
Mortgage Chief Resigns; Emergency Rules
Instituted
•
Aug 13, 2008 - McClatchy Tribune Business News Author(s): Catherine Dolinski
•
Aug. 13--TALLAHASSEE -- Florida's top regulator of mortgage brokers said
Tuesday that he will leave his post Sept. 30 amid continuing criticism for
allowing thousands of ex-convicts to obtain mortgage brokering licenses
and, in some cases, commit fraud.
Meanwhile, the state is taking new steps to make it harder for ex-felons to
get into the mortgage brokering business. But whether the new rules are
legal remains unclear, since the state has made restoration of civil rights for
felons nearly automatic - including the right to hold professional licenses.
Cabinet's vote to adopt emergency rules to make it tougher for felons to
work as mortgage brokers. Depending on their crime, some will be ineligible
for licenses; others will have to wait between five and 15 years after
completing their sentences.
They will last 90 days, giving the state time to initiate the time-consuming
process of setting permanent rules,
All states must eventually comply with tough new federal regulations
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Refinancing no longer a sure thing
By TARA SIEGEL BERNARD THE NEW YORK TIMES
Published: Saturday, January 24, 2009
• Refinancing is a very difficult proposition right now
• the number of homeowners seeking to refinance their
homes has spiked to its highest level in five years.
• many have been unable to win approval
• lenders have become more cautious about whom they
will lend to
• increasingly stringent credit requirements
• plunging property values have erased all or most of the
equity in their homes.
US mortgage insurers see claims still rising
By Kathy Shwiff Jan. 20, 2009
http://www.marketwatch.com/news/story/EARNINGS-PREVIEW-US-mortgage-insurers/story.aspx
• Mortgage insurers, which cover potential lender
losses on loans to borrowers who can't come up
with a 20% down payment, have seen claims
skyrocket in the past year as the credit crunch
made it difficult for borrowers to refinance and
for lenders to resell foreclosed properties at a
profit. Currently no MI Co. will insure
condominiums in Florida.
Appraisal Code Moves Ahead
•
Starting May 1,2009, lenders taking loan applications must comply
with the code that applies to all loans sold to Fannie Mae and Freddie
Mac
• The new code is designed to take loan officers and mortgage brokers
out of the process of selecting and influencing the appraisal process.
• Use appraisal management companies to comply with the GSEs'
appraisal standard
PRO
• Consumer Mortgage Coalition expects the transition to go smoothly. CMC
represents some of the largest banks and mortgage companies,
including First American that owns eAppraiseIT.
CON
• The National Association of Mortgage Brokers has tried to get the courts
and Congress to block the implementation of the GSE appraisal code
• Model is "flawed," NAMB says, it will produce "poor qualify" appraisals at
an increased cost to consumers.
• The Appraisal Institute and other appraiser trade groups warned
Congress that appraisal management companies keep "half the appraisal
fee in most cases" and they reply on less experienced and less competent
appraisers.
FHA Originations more common
now than GSEs
• Originations of Federal Housing Administration single-family loans
are catching up with Fannie Mae and Freddie Mac loans, according
to the chief executive of a cooperative of 125 regional mortgage
banking firms
• In January 2007, FHA lending made up only 1% of Lenders One
loan production, and 60% was Fannie/Freddie conventional loans. In
the second quarter of 2008, FHA product constituted 41.5% of
originations, while conventional originations totaled 53.1%
• FHA is getting a lot of good publicity and that the federal mortgage
insurance program has not raised its fees or tightened its
underwriting standards, as Fannie and Freddie and the private
mortgage insurance companies have
• investors will no longer buy FHA loans with credit scores below 580.
"Some won't do it below 600 or 620,"
Traditional Mortgage Brokerage
Business
Marketing:
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–
–
Realtors
Sphere of Influence
General Public (ADV)
Loan Placement:
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
Attend Closing:
What do Mortgage Brokers actually do at closings?
All lending Business’s are not
created equally
There is a difference between,
TITLE XXXVIII
BANKS AND BANKING
And,
TITLE XXXIII
REGULATION OF TRADE, COMMERCE,
INVESTMENTS, AND SOLICITATIONS
– CHAPTER 494
» MORTGAGE BROKERAGE AND MORTGAGE
LENDING
Education & License Requirements
• Compliance News Recap
• Mortgage Licensing Registry Launched
• The House recently passed a predatory-lending bill
(H.R. 3915) that requires the creation of a nationwide
mortgage licensing system and registry
Licensed Mortgage Originators need a Federal Id Number
Loan Pricing
Loan Pricing
Lock Period
Q
u
o
t
e
d
↔
→
Par
Pricing
R
a
T
e
Pricing
Adjustments
1 point
yield →
spread
Lets go
shopping @
5%?
NC Says "No" to Yield Spread
Premiums
• Wednesday, August 20, 2008 –
• Staff Writer, Originator Times
• RALEIGH, NC - North Carolina Governor
Mike Easley signed House Bill 2188 which eliminates rate or yield spread
premiums - into law. North Carolina is the
first state to ban yield spread premiums.
1 Month LIBOR Rate
9/8/08
8/8/08
2.49
2.46
9/8/07
5.80
Index + Margin = Actual Rate
→PAR→
S
t
a
r
t
R
a
t
e
1/25/09
Renovation Lending
• A Renovation Loan is a fully
disbursed mortgage that adds the
costs of repairs or improvements
into the mortgage to purchase or
refinance a property
Renovations to Consider
 Additions, alterations, improvements and structural
changes to a home
 Remodel kitchens and bathrooms
 Flooring, Carpet or Tile
 Repair or replacement of plumbing, heating, air
conditioning or electrical systems
 Exterior siding, Windows and Doors
 Roofing, Gutters and Downspouts
 Repair an existing pool
General Specifications
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
Purchase or No Cash-out Refinance
15, 20, 25 or 30yr Fixed Rate Mortgage
1-4 Family Owner Occupied Property;
Must be at least 1yr old & complete
An Appraisal based on the future value or
“as completed” value of the property is
required on all 203(k) loans
 On HUD Repo’s, the “as is” appraisal (the
original appraisal from HUD that comes
with the contract) will also need to be
provided
8/4/09 getting ready to close
• As soon as we receive the final approval
of the HUD, I am going to call and set up a
closing time with him and let him know
how much he needs to bring to
closing. The lender is pretty quick to
respond so I should have the revised HUD
approved shortly.
• And then…………………
• Taylor, Bean & Whitaker Mortgage Corp. is no longer
originating, underwriting, or processing loans in any
jurisdiction, effective Wednesday, August 5, 2009.
• Taylor, Bean and Whitaker Mortgage Corp. – one of the largest nonbank residential lenders in Florida – has been barred from issuing
mortgages in the state by the Florida Office of Financial
Regulation.
• The state agency released an emergency cease and desist order
Aug. 7 against Ocala-based Taylor Bean, which has 30 offices in
Florida. State residents in the middle of the application process
should be placed with viable alternate lenders.
• The Wall Street Journal called Taylor Bean the third-largest
underwriter of FHA loans in the country.
Hard Money
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* No Fico Requirement
* No Credit History Required
* No Seasoning
* Foreclosure Bailout- Ok
* BK buyout- Ok
* SISA
* Max LTV 65%
* Pre-pay buyout ok
* Rates from 11 to 12.5%
* Points range from 2 to 3.5%
* Loan modification
How much can be charged
legally?
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494.0042 Brokerage fees.-(1) A mortgage brokerage fee earned by a licensee, pursuant to ss.
494.003-494.0043, is not considered interest or a finance charge under
chapter 687.
(2) A person may not charge or exact, directly or indirectly, from the
mortgagor a fee or commission in excess of the maximum fee or
commission specified in this section. The maximum fees or commissions
that may be charged for mortgage loans are as follows:
(a) On a mortgage loan of $1,000 or less: $250.
(b) On a mortgage loan exceeding $1,000 and not exceeding $2,000: $250
for the first $1,000 of the mortgage loan, plus $10 for each additional $100
of the mortgage loan.
(c) On a mortgage loan exceeding $2,000 and not exceeding $5,000: $350
for the first $2,000 of the mortgage loan, plus $10 for each additional $100
of the mortgage loan.
(d) On a mortgage loan exceeding $5,000: $250 plus 10 percent of the
entire mortgage loan.
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13234141139141 2021 2093 9021 9022 2072
Loan Officers
2008
Real Estate Sales
2007
2006
Real Estate Brokers
2005
Title Examiners
2004
2003
Appraisers
2002
Property Managers
$0 $10,0 $20,0 $30,0 $40,0 $50,0 $60,0 $70,0 $80,0 $90,0
00 00 00 00 00 00 00 00 00
Employment by Occupation
400,000
350,000
2002
250,000
2003
2004
200,000
2005
150,000
2006
2007
100,000
50,000
Loan
Officers
Real
Estate
Sales
Real
Estate
Brokers
Title
Examiners
Appraisers
0
Property
Managers
Number employed
300,000
11 9141 13-2021 23-2093 41-9021 41-9022 13-2072
Lets lend out some $?$?$?$?$
Scenario Workshop
• Female age 25, 620 middle credit score - wants to
purchase first home. Currently works in a restaurant as a
server, a job she’s had for the past 6 mos. She says she
doesn’t claim all her tips so she won’t have to pay taxes on
the income. Current paystub shows $1,200 per mos. Prior
2 year history work history shows 3 jobs non continuous
and different lines of work. She currently lives with family
and has for the past year. She has $500 in the bank.
• How can we help this young lady?
Loan Placement???
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
• A forty five year old business man,725 middle
score - wants to refinance his purchase combo
loan from Aug 2005 into a single loan of 350K
(amount borrowed in 05) at a fixed rate – no
cash back. This man has a successful business,
tax returns show him paying tax on an adjusted
gross of $22,000.
• What can we do for this gentleman?
Loan Placement??
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
• 55 year old business man, 450 middle wants a $50000 first mortgage loan on his
primary residence worth about 475000
which he owns free and clear. His
business has been established for about
20 years and his debt to income is about
15%.
• What can we do for this man?
Loan Placement??
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
• Individual, 725 middle - wishing to buy primary
residence. 3 mos on the current job with
previous job in a different line of work, and a 2
mos job gap. Currently pays $800 per mos in
rent which will go to approximately $1500 if
approved. There is about $37,000 in liquid
reserves. Full doc ratio’s are 40/41.
• What can we do to help this person?
Loan Placement??
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
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•
681 middle, with solid credit history
90% LTV rate and term, owned home for 2.5 years
$200 in a checking,$6000 IRA
Laid off in 2006,worked temp jobs and collected
unemployment for the last 2 years, found new work
1mos ago, still in a temp position, although employer
letter said this position was likely to be permanent.
• What can we do to help this person?
Loan Placement??
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
• Man with 780 middle wishes to buy condo in
Sarasota as primary for 74K. In his line of work
he travels extensively on the US on a work visa.
He currently owns a home in the Northeast
worth 250K . He has sufficient assets to pay
cash for the property if he desired. Income is not
a problem for ratio’s
Loan Placement??
DU/LP (conforming)
FHA
Alternates (Jumbo, Niche, USDA)
Hard Money
Non- Institutional (private)
Bonus Bonus Bonus BonusBonus
• 63 year old woman,450 middle, in
foreclosure, house in poor condition, owes
115,000, house worth about 250,000
• Give away hint – We have not discussed
this type of loan
• “ You must have a plan and actually implement
and track for you to be successful. Wishing and
praying and hoping are not enough,.. You must
do something , You must have a plan and
system that produces loans for you everyday
regardless of rates , regardless of closed real
estate offices , regardless of any other real or
imagined excuse that pops up.”
• www.loanofficersuccess.com
• PS please feel free to forward this to anyone you
think will benefit from it.