Danell Merren

I have become increasingly frustrated when Realtors expect us to "eat" delays. I will go into detail. It's understandable for Realtors to be frustrated if no one is communicating with them and they simply don't know what is going on, but in my small shop, we are a three woman team, and between myself as the loan originator, my processor who has been in the business sixteen years, and our Assistant, we work super hard to communicate with everyone during the transaction. We communicate with buyers, the selling agent, the listing agent, title companies, etc. all to keep the transaction going as smoothly as possible.

First, let's talk about closing dates. If you call me on Thursday, the 3rd, and ask me if we can close by the 30th, and I say it's possible, but then you don't get me a PA until the following Tuesday on the 8th, don't expect us to "eat" those five days.I had a transaction recently where the Realtor was upset because we closed 30 days from the date we got the PA. If all the parties are hming and hawing for days, please realize this is time that if everyone is trying to expedite, we could have been using to order appraisal, title, VOEs, VODs, VORs, gift letters, the buyer could have been liquidating assets, etc. We can't order appraisal and title work until we know the end negotiation. We can't order those things with verbal agreements.

Next, let's talk about inspection delays. If you want to close in 30 days but dicker back and forth between the buyer and seller over inspections for 15 days, don't allow us to order appraisal until inspections are done, don't expect us to "eat" those 15 days.Once we order the appraisal, if it's Conventional, due to the new HVCC laws, please remember, we've lost control! We go online, order through some company that doesn't know us, has NO incentive to return the appraisal to us in a timely manner, and then we wait! The typical time to get the appraisal back to us is now at least one business week or more! We can't order before if the client doesn't want to risk the cost and if you don't know the final price due to repair negotiations. We can't deliver the loan to underwriters until the appraisal, title, and all verifications are in. With the banks being backed up due to the mad dash to the finish line for the 8K tax credit as well as all the refi's going on, the UW lineup is typically at least one business week right now. So, in this example, we've waited 15 days for inspections to get dickered out, the appraisal takes another five-seven calendar days minimum, the file sits in the UW traffic jam for five business days- wow! We're already at 29 days in to the 30 days. And please don't expect us to "eat" borrower caused delays. If borrowers are getting gifts, and the gift giver drags their feet on getting us the appropriate required documentation, please understand this, too, causes delays. Once it comes out of underwriting, they typically issue a "conditional" approval. We go back to the borrowers, title folks, Realtors, or whichever party we need to address and get additional minor items needed by the UW. Let's say we submit this to the bank the same day or soon as we have the info. Then it goes back in the traffic jam for two more days. Then GOD WILLING it comes back out of UW with a "clear to close", then we have to give the closing department time to prepare closing docs., and we can close two business days later. When you take a serious look at all the parties in the transaction, it's pretty easy to understand why your closing date got pushed back for reasons outside the control of the broker or lender.

I saw a tidbit on the Today Show Recently that I thought I'd share because I tried it to get my toddler and school aged kids to eat better. My hubby and I have a weakness for a local Thai food place. We love their noodles. We've gotten this quite regularly recently, and my middle daughter noticed that we get "take out" more than they do. She thought, rightfully so, that it was a little unfair. So, in an effort to stick to a budget and to waste less food, last night when I was ordering take out on the way home, I suggested to my hubby that he make up something quick for the girls and serve it in individual take out containers that we had left from previous orders. It was a win/win. We've thrown less plastic containers away or in the recycle bin- instead we reuse them, and the girls each got individual containers of chicken and white rice- a perfectly bland meal for picky little kids. They were ALL SMILES! They ate most of their meals and even tried ours. The show made a good point- everyone likes presentation. Next up- we're going to try this with lunches we send to school!

It never ceases to amaze me that every once in a while, maybe every two years or so, a customer who is paying off collections in an effort to become mortgage ready, stops paying other bills on time in order to have the funds to pay off old collections. I can't quite understand how this makes sense to the customers. At that point, I've explained that collections have had an adverse impact on credit score, so one would think that new collections, late payments on installment loans, or past due amounts on other debts, would, too, have an adverse impact on credit. But without fail, every once in a while someone says, "I did as you instructed- you told me to pay off collections, so I did". Then they proceed to tell me, "I made payment arrangements on my car loan to have the money to pay off the collections." Well, this would be fine in theory if the lender reported you on time to the credit bureau, but I've never seen this happen.

NEVER STOP PAYING CURRENT BILLS TO PAY OFF PAST DUE BILLS. ALWAYS PAY YOUR CURRENT DEBTS ON TIME!

NEW PAST DUE AMOUNTS ARE JUST LIKE A COLLECTION!

ROLLING LATES ON CREDIT CARDS, STUDENT LOANS, AUTO LOANS, ETC. WILL HAVE AN ADVERSE/BAD IMPACT ON YOUR CREDIT.

DO NOT PUT STUDENT LOANS IN DEFERRMENT AND STOP PAYING THEM B/C A CUSTOMER SERVICE REP. GAVE YOU A VERBAL THAT YOU CAN NOW STOP PAYING. WAIT UNTIL YOU HAVE THE DEFERRMENT IN WRITING.

Listen folks, these are all RED FLAGS to underwriters that you are walking too thin a line with your current obligations to be able to afford a debt that is going to have unexpecteds- i.e.- some day as a home owner, things will come up that you didn't expect- like property maintenance, increase in taxes, increases in insurance, etc. BUYING A HOME COSTS MORE THAN JUST YOUR HOUSE PAYMENT. Other unexpecteds could happen like job loss. An underwriter wants to know that you are resourceful. They don't want to ever think that when times get tough you'll just stop paying your debts on time.

I am so excited to report that MSHDA has rolled out a new program called the MSHDA/NSP 80/20 loan. Features of the program include:

• 80% first mortgage, no PMI
• 2nd mortgage up to $25,000 with repairs, 10K if no repairs
• Only 1% down requirement from buyer!
• Property type must be bank owned/foreclosure.
• Repairs allowed- repairs can be minor or more significant- examples of repairs that will work include but are not limited to- Appliances (except washers and dryers), roofs, furnaces, kitchen or bath remodel, carpet, deferred maintenance, air conditioning, siding, handicapped accessible ramps, alternative energy
• Max CLTV is 103%
• Seller contribution up to 6% allowed
• A HQS Quality Inspection is required- i.e.- an inspector must determine what must be repaired and estimate the cost
• Repair funds are held in escrow at MSHDA
• Lenient income guidelines- up to 120% of Area Median Income- i.e.- family of 4 can typically make up to $73,700 in outer county areas in Kent County or higher in targeted areas (like GR)
• Manual underwrite, no requirement of computer approval
• No minimum credit score technically, however, 620 is preferred. Lower than 620 requires good compensating factors.
• 30/41 debt to income ratio guidelines, 45 max on exception basis
• Two months reserves required

The target areas are broad, but the federal government requirements state that the area must have a foreclosure risk of 6 or higher. The target area maps are a bit confusing. I am happy to look up an address to determine if it qualifies. Many townships, cities, and entire counties qualify. Please call me at (616) 719-4513 directly for more information or to walk through a scenario!

I met last night with a newly married couple. They were really neat and quite entertaining. I thought the gentleman said it best when he said, "Your credit report is like your permanent record". I'd never heard it referred to that way, but I think he put it best! I have had the following happen to clients:

• They had collections that were almost seven years old. Rather than fall off, the creditor sold the debt to a new collection company, and the seven years started all over again!
• A client had a judgment that was almost ten years old. She thought it would "fall" off her credit report. Because she was of means and able to pay, she got re-sued, and the debt started all over again- she agreed to a Consent Judgment in order to get reasonable terms.

The moral of the story- don't assume a bad debt will ever go away unless you truly pay it off or settle it!