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Home loan producers get high marks from debtors

Silver lining undoubtedly when it comes to borrower complete satisfaction with their mortgage producers amid the COVID-19 pandemic.

Mortgage rates came crashing down. Squashing varieties of borrowers ran to the home mortgage ticket line to capture the low home mortgage rate wave. A record-breaking $4.3 trillion in home loans were originated in 2020, according to Black Knight. Of those, $2.8 trillion were refinances and $1.5 trillion were for purchase loans.

Customers were extremely satisfied with their mortgage loan producers in-spite-of the kerfuffle of longer timelines and stricter COVID-driven underwriting requirements, according to a nationwide study.

The Stratmor Group crunched in 2015’s numbers on more than 256,000 owner-occupied, financed purchase and refinance residential mortgage survey respondents in its annual Home mortgage SAT findings. We’re talking banks, cooperative credit union, non-bank lending institutions and home loan brokers.

Loan officers scored 95% satisfaction in the eyes of consumers.

Okay for an ever-changing disorderly presence of lockdowns, working from home, fear, panic and stress that death could be knocking at your door.

Home loan originators did average 95 out of 100 in 3 of the previous 4 years.

” To put it another method, the fish weren’t simply jumping into the boat, they were threatening to sink it,” wrote survey director Mike Seminari.

Even at 95% satisfaction, the Stratmor SAT study had some take-aways for stakeholders to think about. The first advises me of the lyrics from “The Things We Do for Love,” which states, “Communication is the problem to the answer.”

” Communications should be at a consistent time every week and in the design the borrower desires, phone, e-mail, text,” said Seminari. “Wholesale (home loan broker channels) constantly performed much better than retail in white-glove service.”

I surveyed some industry peers about the kinks they see in the system and how we can make things much better. To a person, all said to highlight the additional COVID-19 income requirements.

For instance, reveal evidence of business activity– like an invoice within the past 20 days or an earnings and loss declaration within the past 60 days prior to moneying a self-employed debtor.

Getting rejected in 2020 could pivot to a 2021 loan approval for you.

Over the past year, I got a myriad of reader grievances about getting the cold shoulder from lenders. Numerous said they were simply informed “no” due to the intricacy of their file, small loan quantity or being self-employed.

New home mortgage application volume appears to be plunging today as a direct consequence of rising home mortgage rates. Lenders now concentrate on much thinner profit margins to keep substantially greater rates at bay, stay competitive and feed the monster.

In addition, efforts are being made to debug, resolve uploading obstacles and get utilized to a brand-new loan application template mandated for March 1. The new loan application is 9 pages long with a separate four-page addendum for each additional borrower.

The previous five-page “1003” application was last upgraded in June 2009.

If your qualifying situation is made complex, now simply might be your time.

Rates are greater, however they are still excellent from a historical point of view. Lenders have an abundance of personnel with time to dig in.

” Difficult loans can work simply fine,” stated one market executive. “The key is excellent interaction.”

Customers and their loan officers should clearly and succinctly present the truths and the problems for the underwriter to consider.

When it comes to small loan amounts, plenty of stores avoid small-balance home loans since there is little or no profit in them. Can you state loss leader?

Another concern: Federal regulations called HOEPA (property owners equity protection act) and the QM (certified home loan) Guideline limit loan origination fees, according to lawyer Roger Fendelman of Garris Horn.

” Loan origination points and fees are capped at somewhere listed below $2,500 on a $50,000 loan, $3,308 for $100,000 and $4,500 for a $150,000 loan,” Fendelman stated. “It is critically essential that lenders who discriminate against customers asking for smaller sized loan sizes comprehend the dangers of doing that, and work to guarantee they are offering credit to all who qualify.”

Enforcement likely will be stepped up under the Biden administration, he said,

One lending institution likewise is offering self-employed borrowers a break. After raising its most affordable middle FICO rating for all debtors to 780 in 2015, it decreased that requirement to 700 recently.

Freddie Mac rate news: The 30-year fixed-rate averaged 3.05%, up 3 basis points from recently. The 15-year fixed-rate averaged 2.38%, 4 basis points higher than recently.

The Home mortgage Bankers Association reported a 1.3% decrease in home mortgage application volume from the previous week.

Bottom line: Presuming a debtor gets the average 30-year fixed rate on a conforming $548,250 loan, in 2015’s payment was $93 more than today’s payment of $2,326.

What I see: Locally, well-qualified debtors can get the following fixed-rate mortgages with a 1-point cost: A 30-year FHA at 2.25%, a 15-year conventional at 2%, a 30-year conventional at 2.75%, a 15-year conventional high-balance ($ 548,251 to $822,375) at 2.25%, a 30-year conventional high-balance at 3% and a jumbo 30-year repaired at 3.125%.

Eye catcher loan of the week: A 30-year fixed rate at 2.875% without points.

Jeff Lazerson is a home loan broker. He can be reached at 949-334-2424 or His website is www.mortgagegrader.com.

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