Jane Penttinen

After 30 years in mortgage lending I can still say First Time Home Buyers Make My Heart Sing! Yep! When I get to close a loan for a first time buyer I go home at night with a warm feeling of accomplishment and personal satisfaction. This is the feeling that truly keeps me going in this crazy market we are in. First Time Home Buyers are anxious, scared and excited! And there is nothing that even compares to the joy of purchasing your first home. They are not the biggest loans but they sure are the most fun.

This past week I was privileged enough to enjoy the singing three times!

Tuesday - I went to the first closing at 11:30 a.m. This was for a young lady that really impressed me. She is 25 years old, has a great credit score, 4 years on her job and managed to save $20,000 all on her own! She was adamant that her house payment could not be over a certain dollar amount. She and her agent found a great little house that needed just a little cosmetic updating. We did an FHA loan and she has the funds to do the updating with savings left over.

The second closing of the day was at 2:30 p.m. This was for a 29 year old young man - decent credit and anxious to have something of his own. He's an electrician (and a good one!) who started his own business four years ago. He and his agent found a property that was an estate sale - sold "as is". The property needed a few repairs before we could close and thankfully, the sellers allowed him to do what needed to be done himself. It was nothing expensive - just a lot of sweat and old fashioned elbow grease.

Thursday - found me at another closing at 5:30 p.m. This one was for a fairly new Border Patrol agent. Gosh! I LOVE these Border Patrol guys. He and his family were able to take advantage of the USDA program on a bank owned property. This one needs some repairs too and my underwriter was willing to allow the repairs to be done within 24 hours of closing. That doesn't happen at most mortgage companies.

Most days, I straddle the fence on the home buyer tax credit. Home prices are down and interest rates are great. Do we really need to be paying people to purchase homes? But when I look at these three transactions, I feel pretty good knowing that these buyers will benefit. All three of them worked hard and purchased homes well within their means. And I got to end my week knowing that I helped all three realize the joy of being a First Time Home Buyer.

It's time to call it a night. The fun and games of Halloween are done for this year. Tom had really BIG fun playing with all the kids who came trick or treating and now he will start thinking about next Halloween.

Halloween is Tom's FAVORITE holiday! Tom is my husband of 40+ years. He loves Halloween better than any other holiday! When our daughters were little, he would build a huge haunted house on our patio. It would take him days to set it all up. Our youngest daughter, Sarah, would go trick or treating for about 15 minutes and then come home because she "had a headache". The truth was, she had more fun at home in the haunted house than trick or treating.

Our daughters are all grown up now and the haunted house is a fun memory of the past but Halloween is still Tom's favorite holiday. This year, every night for the last couple of weeks when I got home, I would see a new decoration in the front yard. The trees are all strung with orange twinkle lights. There are two large ghosts hanging out and a large bat - all in anticipation of sitting outside this evening to hand out treats and thoroughly enjoy the neighborhood children as they make their way up and down the streets. There will even be some grown up friends who will trick or treat for beer. LOL

And yesterday Tom got to have quite a bit of fun. Tom works for a large international company that has facilities here in Tucson. They had a pumpkin carving contest with nice gift cards for the winners - and he won first place! My guess is he will use the gift cards to buy more Halloween stuff to use for next year because Halloween is Tom's FAVORITE holiday!

One of the best things I like about living in Tucson is the dramatic storms we get. From my patio I can watch the storm clouds building and moving up through the valley. Many times there is a lot of lightening dancing through the sky and ferocious winds. Usually, there will be torrential rain for a while and you may not be able to see more than a few feet in front of you - but then, after the storm, the rainbow comes.

The last two years in our business has been quite like a desert storm. All the guideline changes came with the speed of lightening and roared through like ferocious winds blowing apart what we had all gotten comfortable with. It has been hard to see ahead to the future, to know where home values would finally settle, when the foreclosures and short sales would slow down enough for us to catch our breath and what the rules would be to obtain a mortgage.

Today feels like the storm is coming to an end. The lightening has slowed. The winds have calmed. The torrential rains have diminished. And I know after the storm, the rainbow comes.

Once upon a time, in the land that banks forgot. . . . . .getting approved for a mortgage loan was quite a different and more human process.

• Your loan application was completed by hand and every box was filled out
• Your employment was documented with a written Verification of Employment - no pay stubs and W-2's. . . uh! uh!
• Your bank accounts were documented with a written Verification of Deposit. . . no bank statements. . .uh! uh!
• Your credit report took 3 weeks and then you had to write a letter of explanation for every little ding no matter how minor - there was no FICO score! . . .uh! uh!
• The appraisal took 3 weeks - (they had to wait for the roll of film to be developed!)
• Faxes were not allowed and e-mail did not exist . . .uh! uh!

BUT the Underwriter was an Underwriter! The job of the Underwriter was to evaluate risk. The Underwriter looked at every single piece of paper in the file. There was no computer model to approve/caution/decline the loan. Once the file was complete, the Underwriter would present the loan to "LOAN COMMITTEE" with a recommendation for approval or decline. "LOAN COMMITTEE" was typically a group of Vice Presidents within the bank and they made the ultimate decision on whether the loan was approved or not. At my bank, they met twice a week - Tuesday and Thursday.

Once upon a time, I was one of those Underwriters. I got a loan to underwrite one day that, on the surface, looked like a very bad risk. The credit report was AWFUL! Late payments everywhere - and lots of them. By today's standards, the FICO score would have probably been around 400. But after a review of every single piece of paper in the file I knew this borrower was NOT a bad risk. Her old credit history was good but the last few years was ugly. As I read her letter of explanation and reviewed the proof she provided I got a very good look at the character of this lady.

She had married a man who turned out to be a real turkey. He ran up credit all over town, spent a good deal of money that SHE had saved, got them in thousands of dollars of debt and then left town. Arizona is a community property state - his debt was her debt. This lady could have taken the easy way out and filed bankruptcy - and, at that time, would have been free and clear in two years and easily approvable by any lender. But instead, she worked two full time jobs for three years in order to pay every single debt. No one lost a dime on this lady! Her credit report was trash but she honored every one of her obligations.

When I took the loan to "LOAN COMMITTEE" they flat out rejected the loan. I took that loan back to "LOAN COMMITTEE" twice a week for 6 weeks. Finally, one of the Vice Presidents said "How many times are you going to bring this loan back here?". My answer - "Until you approve it". I won! "LOAN COMMITTEE" finally approved her loan with the stipulation that I, personally, monitor her payment history for one year. No problem. I knew my lady was good and I had evaluated the risk.

Ten months later, I had to take her back to "LOAN COMMITTEE" because she needed a small second mortgage to put a new roof on her home. So, I started out with "We can do this the easy way or we can do this the hard way - your call". Her payment history was perfect - every payment made 7 - 10 days early. The loan was approved in less than 5 minutes.

My lady never did let me down. Would she be approved today? Never. Are Underwriters allowed to evaluate risk today? No - a computer model tells us who is a good risk. Even the underwriters that know how to evaluate risk are required to make the loan fit the box. Unfortunately for us, mostly they are now Validators and the art of true, human underwriting has gone to. . . .the land that banks forgot.