Jay Beckingham

I am a licensed "Loan Originator" working for a mortgage company...what does that mean.

as a "loan originator" I need to meet certain specific financial and educational requirements in order to qualify for licensing through the NMLS, the national licensing sytem established to regulate a "Loan Originator."

It would be easy just to say that the loan originator has replaced the mortgage broker, but actually it's more than that.

Here's why;

the "Loan Originator" must meet some fairly stringent standards established through the NMLS system, including but not limited to:

Financial:

in most cases no bankcruptcies, foreclosures, and or judgements. Other credit related issues considered to be significant could also prevent someone from obtaining a license.

Education;

you must meet upfront educational requirements, and pass a state test. You must also meet annual educational , legal/background, and credit requirements, to be eligible for renewal.

Your performance is evaluated on an annual basis. You must behave and conduct your business appropriately.

anything else;

I don't know, how do you feel about being fingerprinted and passing an FBI/criminal background check? Also, the state will pull and review a credit report, and they need to deem it to be satisfactory.

Oh yeah, you probably saw this coming;

get out your checkbook

So would you feel it might be safe to say that one must really want to be able to perform in this position in order to go through the licensing requirements. And I'll go a little further, and say that the individuals who meet these requirements and do become licensed are in all likelihood, in most cases, the industry leaders.

You may be wondering, and/or assuming that the mortgage lenders at the banks must meet the same requirements, but the answer is

Noooooo!!!

The legislation that requires this licensing was not imposed upon the federal banking institutions. And, before you go further and assume that the banks would not hire anyone who they know was unable to become licensed, let me help you out.

they would and they have.

So, if you think that I have a sense of pride in being a licensed "Loan Originator," you're right I do. Further, if you think I believe that anyone who participates in the mortgage industry should have to satisfy the same requirements, right again.

But here's how things are, the reality of it all.

If you can't satisfy the requirements of becoming a licensed "Loan Originator," and want to work in the mortgage industry, don't worry, you can always just try the bank.

I live in Southwest Florida where the concentration of Veterans is very high, one of the strongest in the country. We should be proud of that here, and yet as a lender I don't see many Veterans using their VA benefit to purchase a home, and for the life of me I just don't know why. I have some suspicions, but they're not conclusive. I certainly hope that it is not that people in our industry do not want to help a Veteran utilize his/her benefits because

I do

So how do we accomplish this goal of "helping Veterans become homeowners?"

Obviously the first thing we must do is to find a Veteran and their spouse, if there is one. Beware a Veterans benefit is only available to the Veteran and their spouse. There are others who may be eligible, but not significant others.

Then we must find industry experts who are experienced in dealing with Veterans who can help guide them through the process. That would be a good Realtor and Loan Officer. I do suggest that they should have previously closed transactions for Veterans, or have someone who has who is willing to help with the process.

As a Loan Officer who has done a plethora of VA transactions I would like to point out that we need to be familar with things like; DD214's, Certificates of Eligibility, residual qualifying, and the VA addendum.

Also, beware that the Veterans entitlement allows them to acquire 100% financing, and the Realtor must be able to present a contract asking the seller to contribute towards the Veterans prepaids and closing costs, as that is often the case, and is acceptable.

Here's a BIG plus when it comes to credit. In most cases the Veterans credit score needs to be at least 620. That's fairly liberal in today's market.

Let me stop here for a moment and interject a little piece of philosophy from the VA and a simple fact.

the Veterans Administration considers the VA benefit an "EARNED" benefit and if the Veteran is qualified they, being the Veteran, should not be prevented from using their entitlement.

However, they do not want the Veteran to be allowed to enter into a situation where they cannot perform.

the Veterans Administration does not make the loan, but rather insures the loan.

therefore in today's market a lender may place some overlays, being their own guidelines, upon the Veteran.

Back to the process;

Many individuals feel that the process of acquiring a VA loan is too difficult. Frankly, I do not believe that to be true, also, there appears to be some feelings that the appraisals are too tough.

Well, first I no longer believe that to be the case and second, it is important that a Veteran, or any buyer for that case, making a low/no downpayment not be purchasing a home in need of major and/or significant repairs.

Okay, collect all the data, stir, and submit to the underwriter.

If we have done everything properly the answer is

Approved

Now, collect any closing conditions, and proceed to closing.

Last, but not least, and this shouldn't need to be said but

the VA is right, the Veteran has earned their benefit by serving their country, OUR country, and we should be willing, no PROUD actually, to help them to use their VA benefit and to

Help A Veteran Become a Homeowner

ps; to all my Realtor friends, and Loan Officers; you know how, are you willing?

I can't believe that I still hear people stating that you need a 20% downpayment to buy a home today. I sometimes hear this from my Realtor friends.

Let me take a quick moment and address my Realtor friends. In Southwest Florida we have been swamped by $$$$$ buyers. I mean they're everywhere. Because of this many of the most active Realtors have lost touch with what is available for mortgage financing.

sad, but true

now, back to the little or no downpayment. We have these things called, sometimes appropriately, and some times questionably

Government Loans

to address the questionably part. Sometimes the government is not the lender but instead an insurer of the loan, but that's another subject entirely.

So, no downpayment right

YUP, that's right

VA

there's no downpayment required and the seller can contribute toward the buyers closing costs. The usual objection that I hear from my Realtor friends is that the appraisals are too difficult. I don't believe that that is the case any longer as "all" appraisals are receiving close scrutinization.

I live in Soutwest Florida where there is a high concentration of Veterans, and I am honored to be able to be of service to them.

USDA/rural housing

there is no downpayment required and the buyer can finance some costs if the appraisal will bear it. Seller assistance is also acceptable.

The misnomer for USDA/rural housing is that it is for "rural" homes. This is far from the case. These loans are available where ever the USDA says they are, including

all of collier county, naples included

so tell me, what's so rural about Naples?

FHA

this loan requires a 3.5% downpayment, and once again the seller can contribute to the buyers costs. This loan is also one of the old favorites for first time homebuyers

Where I work you can take an FHA loan and combine it with bond funds, income restrictions do apply, and create a loan with a loan to value up to 105%.

All of these loans are offering very competitive 30 year fixed rate mortgages

so,

some much for the belief that you need 20% down to buy a home

actually

No Downpayment is required...or very little

It seems that when the term "portfolio loan" is brought up that it conjures up different images in the minds of different people. Let me see if I can give a definition of what a portfolio loan is, at least in my mind, and later, what it isn't.

to me a portfolio loan, in its simplist sense, is a loan where a banking institution establishes its own guidelines. In essence they decide, who the loan will be made available to, and the criteria for acquiring the loan. These guidelines/criteria usually vary from common agency/traditional requirements.

For example in my marketplace it is difficult, at best, for a foreign national to acquire financing, but portfolio lenders are making some programs available. Also, another area where agency/traditional guidelines are extremely tough are with condos, and some portfolio lenders are currently accepting what would be considered non conforming condominiums, that would be not conforming to agency/traditional guidelines.

Not everyone will qualify for a portfolio loan as they usually require good/strong credit, ample downpayment and/or initial investments. What's ample? usually 20 to 25%. There is some room for some isolated credit issues. As an example, I would say possibly relaxed guidelines in regards to short sales, where they were an isolated incident, and the potential borrower has a good total financial picture.

so let's take a couple of minutes to address

what they are not

they are not "subprime loans"

Portfolio loans are just not compatible with low credit scores and/or low downpayments. Just flat out don't like them much. In most cases you can put that/those situations into the

it's not happening

category in regards to portfolio lending.

Also, in most cases they are not fixed rates. What you are looking at is a premium priced ARM, in most cases. By premium priced I mean possibly 1/2 to 1% above conventional market rates.

So, in conclusion, what's the benefit of portfolio lending.

portfolio loans are in fact opening the doors to many buyers who previously were just not going to qualify for a loan by agency/conventional standards. They're not new in that lending institutions have been doing portfolio loans longer than I've been involved in mortgage lending, which is over 30 years.

and

we need them, oh how we need them

but it is important for the market to have a clearing understanding of portfolio loans, especially in regards to

what they are...and what they're not

Many times it would be easy, living in Southwest Florida to just lay back by the pool, soak in the 80 degree weather, and sigh, "it just doesn't get any better than this!"

Wel,l considering the difficulties of the last 3-5 years I've just got to tell you

it is getting better...much better...and we're being

Chase(d)

What do I mean by that, well let me tell you.

When I first arrived in Southwest Florida I marveled at times on Publics ability to identify the new "hot" areas. Back 15-20 years ago they were the anchor for a commercial plaza on the corner of Santa Barabara and Pine Island Road. On the surface it seemed foolish as there was literally next to nothing there, but they must have had marketing studies to support the move. Now fast forward...this area is one of the most vibrant and active areas in Cape Coral. Publics has continued to be first into growth markets, where the growth had not yet occurred or was just beginning.

Now we're being

Chased

For years it seemed odd to me that Chase didn't have much of a banking presence in Southwest Florida (if any). Even during the go go years I didn't really see or feel Chase anywhere. Seemed odd, but now it seems like Chase branches are going up everywhere; Colonial, College, Winkler, and elsewhere. All at once, quickly, and everywhere.

What are their studies telling them?

I don't know, but their actions certainly support a belief that Southwest Florida is moving in the right direction.

there's more

here's the headline from the local rag yesterday morning;

Jobs, housing making strides

Lee's unemployment lowest it has been in three years

HOME SALES...prices for the year and month end soar

We're on the move, in an extemely postive way. Maybe you'd like to come join us.

Just for a little tease, let's go back to the beginning. You know kicking back at the pool. Here's what the weather will look like today, and for the next few days;

today 80 degrees Monday 81 Tuesday 80 Wednesday 82 Thursday 81

Right now are you screaming unfair! well

we're being chased by Chase

Come on down and join in!