Michael Manfredi

The new SAFE ACT laws went into effect on July 1st 2010 in the state of Arizona and if you are in a position to talk to a consumer about loan products, interest rates and fees or negotiating financing on residential real estate transactions, you are required to be licensed by the state as a Loan Officer. This does not mean you can continue to operate as such just because you have completed part of the requirements and you are waiting for the state to process the backlog of applications. You must have a fully processed and approved license in your possession to originate loans and talk to customers.

What happens if you continue to illegally originate loans without the license? Its a $5000 per day, per file fine. The Arizona Department of Financial Institutions has done a great job at making all of the information available and having the proper educated staff to explain and handle assistance for all interested parties. If you still didn't get your license, it is no one else's fault and you won't be able to say, "I didn''t know!" anymore.

Licensed loan officers are no longer able to fall back stupidity as a reason for breaking the law. It's now their responsibility to know all of the laws and operate within them and can no longer throw their broker under the bus.

I obtained my license on July 2, 2010!

If your loan officer is not licensed, do not refer business to him/her or your transaction could be held up in court! here is a good way to see if loan officers are licensed. Go to NMLS Consumer Access and input the name of your loan officer to see if they have a license, or call me and I'll do it for you.

Michael Manfredi is the CEO of Mortgage Concepts, LLC and Arizona Licensed Loan Officer #150754

Reverse mortgages are a good idea for some but for others who have more of a "want" than a "need" to do a reverse mortgage, the costs have always been the culprit that have kept them from doing the loan. Until now, that is, because the costs are being whittled down, left and right, by every lender in the game. That's right, the lender's themselves are picking up the fees and making a lot less money doing so, for the benefit of the borrower. Wow, pinch me, is this a whole new way of doing business? Have mortgage lenders finally realized that they need to take care of their customers first, or they won't have any? Ok, fantastic, but what does it mean to the borrower? How much are these fees? What can I expect to pay and what will the lender pay on my behalf? You know I'm going to tell you....check out my post called "Reverse Mortgage Lenders Pitch In."

I have been recently challenged by some readers (originators) who feel they should not have to discount fees on reverse mortgages. They have questioned my knowledge of the program, accused me of non compliance and have been downright offended at my desire to give my customers a better deal. I can understand why, of course, these mortgage originators come from the old school and the forward mortgage world where they were used to making a killing on each and every loan. Not me, I started in this business in reverse mortgages only, in 2003 when the average origination fee was much lower than today and I made just a percentage of that fee after the split with my employer. Well, I am still 100%, a reverse originator and derive all of my income from reverse mortgages. Unlike the others, today I feel fortunate to make more per loan and usually discount my fees. Maybe I am just more generous but I remain curious. If you don't discount the fee, are you also recommending the borrower pay the higher servicing fee of $35? C'mon, tell the truth, your paper trail will always be there as evidence. Ok, so if you've said yes, then I expect you are of the thinking that your time, knowledge and advise is worth all of that money and you don't discount and probably sell the higher servicing fee as well to assure you will also receive a little yield spread or service premium bonus. While I don't think you are doing anything wrong, I do believe you could do better. After all, if you are giving your borrowers such good (expensive) advise, why not advise them to select the lower servicing fee of $30? That is what they are paying you for. The mortgage business has changed and we should no longer expect to make as much as possible on every loan. If you do business by charging the higher of both fees, you are what is wrong with the mortgage business and you are contributing to higher regulation and the collapse of the industry as we know it. FHA no longer allows originators of forward mortgages to make large origination fees or any yield spread whatsoever if the borrowers are buying the rate down. FHA also believes that yield spread premiums should be used to discount borrowers up front fees. It's just a matter of time before it becomes more than a suggestion. It's also just a matter of time before reverse mortgages come under the same scrutiny and we are forced to do some discounting or just take another pay cut. Why not come over to my side and just do it! Just give them a discount, they are good people and they deserve it. If you are planning to do a reverse mortgage, go ahead and ask for a discount. You'll end up with more money in your pocket if you can get one. Please also ask if the $30 servicing fee is available for the type of loan you have selected or have been advised to do. While not a guarantee, you should at least ask. If you don't receive any discount and are presented with the higher servicing fee, give me a call. I'll see what i can do to help out. Michael Manfredi Mortgage Concepts, LLC 480-306-4432

According to the National Reverse Mortgage Lenders Association (NRMLA) there is a new Bill containing a provision to raise the HECM (Reverse Mortgage) limit through the end of 2009 to $625,500 which has been introduced in the House of Representatives. The current nationwide limit is $417,000 with the exception of a few high price/value areas. This would give millions more access to the program due to a current lack of jumbo reverse mortgage in the marketplace which is due to the current credit crisis. The lending limit is the limit of value that would be considered in the reverse mortgage equation and not the loan amount. That is why the limit increase is crucial and if passed, senior borrowers with mortgage balances greater than $300,000 will qualify. In most cases, it has been my experience, that seniors with jumbo mortgages and high balances have been negatively affected by a decrease in net worth and losses in investment portfolios, creating a need for more options like a reverse mortgage. Unlike the traditional reverse mortgage borrower whom might have a life changing event that distrupts normal income these high balance mortgage holders are faced with a retirement, nest egg or legacy crisis. There are many sophisticated financial planning strategies that can be put into place with a reverse mortgage and higher limits would make the outcome of those strategies more worthwhile for potential reverse mortgage candidates with higher value homes. For maore information on these strategies, sign up for my newsletter at www.loan62.com.

Michael Manfredi

9915 East Bell Road Suite 114

Scottsdale, AZ 85260

480-306-4432

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All FNMA and Freddie Mac loans will be required to comply with the Home Valuation Code of Conduct (HVCC) effective May 1, 2009. The HVCC is anticipated to become an industry standard.

For the full story or to view the HVCC in PDF format please visit www.reversemortgageconcepts.com.

Michael Manfredi

Reverse Mortgage Concepts

9915 East Bell Road Suite 114
Scottsdale, AZ 85260

480-306-4432 phone
480-306-4839 fax