Steve the Plumber...followup on PMI, Evil or not? Part 2 in Wisconsin

I havn't blogged in a while, so hopefully this followup will not be too far removed from the 1st part!

This PMI business is getting more and more confusing everyday! It is NO wonder that Realtors, customers, and lenders are getting more turned off by it and are doing everything they can to avoid it!

To be clear, I initially blogged on Radian Guaranty and their "free after 5 community mortgage insurance" that is ONLY available to small town banks, credit unions and such....In that blog, there was a question posed from a guy named "Steve" in the responses: See below

http://activerain.com/blogsview/833748/Mortgage-Insurance-Evil-or-not-Radian-picked-a-heck-of-a-time-to-be-naughty-PMI-or-piggy-back

I responded to his question within the comments of that blog. Then, I typed a completely new blog, as I thought that it deserved much more attention and time than just a simple comment.

http://activerain.com/blogsview/852981/Steve-the-Plumber-GREAT-QUESTION-Follow-up-PART-1-on-if-PMI-is-Evil-or-not-PMI-companies-are-driving-the-loan-industry-Great-rates-in-Wisconsin

Anyway, so NOW, I am on to a completely different product. It is called BPMI, or BORROWER PAID MORTGAGE INSURANCE. In some cases, this can be an outstanding product! It allows for the customer/borrower to BUYOUT their mortgage insurance up front! Why is this good? Well, obviously, the payment is much less without the PMI, but also it means the PMI is completely paid for right away. It isn't exactly FREE after 5 though, because if you pay off the loan or refinance it within 5 years, you will only received a pro-rated refund. Here is where it got tricky for me today! I sold this product to my customer after speaking at length with MGIC (the mortgage insurance company) about it , and they ASSURED ME that both Countrywide and JPMorgan CHASE offer this product. I then spoke to the realtor about it, and she wrote up an offer with a large closing cost credit on it. Inevitably, to help the customer PAY for the buyout! This happend to be a large purchase, so the cost is quite high. Anyway, I received the offer to purchase today, and was getting ready to send out the preliminary documents to the customer, when it all fell apart. I spoke to Countrywide, and to CHASE directly, and neither of them accept this program. EVEN THOUGH i was told by MGIC that they diid accept the program, it is a lender specific decision. Now, my deal is about to fall apart and I will lose it to a local lender that is physically closer to the borrower.

This makes me angry for several reasons, but moreover, does show "STEVE" the original questioner, that we as brokers and correspondents work HARDER and SMARTER than others do! We truly try hard to get the best deal for the customer, with THEIR LONG TERM GOALS at heart! All we ask is a level playing field! If our company, or any others like it, HAVE a level playing field, there is NO WAY for the banks and credit unions to compete! We have more programs, and in many cases much more experience and knowledge than the average originator at a bank! I am sorry if this offends in any way, but too often, we as brokers, correspondents, and mortgage bankers, have taken the brunt of abuse in the news media, and realestate sales fields! I officially no longer accept this!! Active Rain, and others like it, can be used as an outlet to let people know how much better off a customer will be going through a lender such as ourselves! In order to accomplish this, we must do it in a professional manner, and through a consistent postive message!

Either way, the mortgage insurance companies are a big problem! They are inconsistent with their products, play favorites, and in this case, due to misinformation, lost me a customer as well as a brand new realtor relationship!

I have been attempting to contact various lenders about this issue, but none of them were/are willing to go on the record! The most I could get out of anyone "off the record", was that they don't offer it because it is not within their "pre-sale" requirements between the lender and Fannie Mae, Freddie Mac, and the like! I would like to mention also though, that neither the Account Executives, nor the people in the underwriting departments even KNEW this product existed! I was told by one, that their website and/or software, was not set up for it! Arggghhhhh..

I ask you....what would you do for Steve the plumber! I fight! Our company doesnt make money unless we close the loan! Similarly, a Realtor doesn't make any money unless the house closes! Our job is to get in front of the trouble, handle as many of the concerns and issues UP FRONT, and FIND A WAY to make the loan work!

As I finish this, MGIC is working directly with the underwriters at two different companies just to see if there was a "mis-understanding" of the product! In fact, looking in one lenders guidelines, it says we can do it!

hmmmmmmmmmmmmm.....and everyone blames the lenders for this situation?? I disagree...I think it is a combination of not knowing your products, the Mortgage Insurance Companies tightening their belts too firmly, combined with a tablespoon of incompetence! I think Steve the Plumber is lucky to have people like us out there!

Yours VERY truly,

Darin @ One Source Mortgage,LLC

As always, I invite questions, comments and responses at any time! Specific questions can also be emailed to me at Darin@osmwi.com

Thanks!!