Homestead mailing list

["Lisa K.V. Perry" <lisakvperry AT gmail.com>]

On 9/13/06, Gene GeRue <genegerue AT ruralize.com> wrote:
> One of my pet peeves is people who do not do their due diligence when
> selecting Realtors or loan officers and then, when something goes wrong,
> point to others as the fault. The world is becoming more complicated and it
> is vital to have solid information when making big decisions. My experience
> is that few take the time. They will buy a half-million-dollar house based
> on emotion, get any loan that will get them the deal, and then, when the
> interest rate rises, scream that they were taken. Most buyers don't take the
> time read the note and deed of trust they sign. Truth be told, they should
> read them before they make an offer on a house. I know of none who do.


I agree.  I'd read all the stories of people who were 'taken' and didn't
know what kind of loan they had.  I can't imagine not explaining the loan to
the customer, it's only one of the most importatn decisions they will ever
make.  If I had a $100 bill for every inquiry I had in the last five years
(specifically the last 3-4 years) from people who wanted an ARM loan...I
would have already paid my own mortgage in full.  I did one ARM for the
right reason.  That was it.  I didn't believe in them.  Why get a .5% better
rate when you could have a fixed rate for the life of your loan--or however
long you'd own your home.  My customers were refi'ing to stay in their home
or buying with intent to stay in their home for a number of years.

A large number of house sellers and buyers choose a Realtor because he/she
> is simply an acquaintance or a friend of a relative or acquaintance.


True.

The lending industry as a whole did a lot to make home ownership available
> to an increasing percentage of people. The flaw was people
> stretching too far, buying too much house. Mortgage brokers are in the
> business of making loans, not being brother advisers. Caveat emptor.


Yes.  The lending industry did some good tihngs; they designed self-employed
loans, or stated income loans, for those who can't fully prove thier income
but have good credit.  As long as it used ethically and sometimes it's not.
Scores for those loans have been increased in the last couple years.  It
used to take just a 660 to get a stated income loan, now the minimum is 680
and some lenders want 700.  That's a good example of the lending industry
improving for the better, but I can think of many examples that aren't good
i.e. 40-year amortization, interest only loans, pay option ARMs (which I
never even fully learned nor understood what they were--something like a
stairstep rate increase with negative amortization to begin with?).

....the Realtor's Code of Ethics has improved the business immensely since
> the days when even title insurance was not mentioned, let alone advised. I
> don't know if lenders have a similar code. Lisa?


To my knowledge, no.  The various national formal groups for mortgage
brokers have been trying to hammer out Respa disclosures that comply with
what the Fannie Mae/Freddie Mac desire to have and the like.  The 'ethics'
part is there but it's not an actual Code to my understanding.  I'm not the
best person to ask, I am, or more correctly have been, a small mom-and-pop
shop that's 98.5% the mom and I avoid conventions and formal gatherings of
fellow mortgage brokers like the plague.  Attending one of those functions
is my idea, or one of my ideas, of hell.  I always had ethics--still do.  I
have my own personal code, but I think mortgage brokers will end up having a
Code of their own patterned after Realtors.  I am just doing loans on a very
casual, part-time basis now and am thrilled to no end that I don't have to
do it for my living anymore.

Now ask me a question of Code and ethics for Foster Care Providers (my new
full-time 'career')--from the frying pan into the fire.  Still have my own
code, thank goodness.  And paperwork!

Lisa