Appraisal Management News

Archive for December 2011

Today’s Mortgage Process Requires More Patience

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by Peter Boutell, Santa Cruz Sentinel

A few weeks ago I wrote that today’s mortgage guidelines were more lenient and loan approvals were easier to come by than they were 25 years ago. However, today’s loan approvals are much more complicated. They are taking more time, requiring more documents, and require more explanations to borrowers.

Our government has taken over Fannie Mae and Freddie Mac and in an attempt to prevent another meltdown in the mortgage industry, has instituted a wave [as in tsunami] of regulations that we all must adhere to in order to remain in the mortgage business. These regulations have added an enormous amount of paperwork that must be provided by and produced by lenders and borrowers alike. The regulations were supposed to make it harder for unscrupulous lenders to take advantage of unsuspecting borrowers while at the same time make it harder for fraudulent borrowers to take advantage of lenders. These new rules were also designed to make comparison shopping easier so that borrowers could save money. Needless to say, the consequences of these strict guidelines have not produced the intended results.

Not surprisingly, one of the results of these guidelines is that mortgages are taking much longer to process than in the past because mortgage lenders are overwhelmed with meeting these requirements. The amount of paperwork now required to close a purchase or refinance loan is triple what we used to have to produce. The quality-control systems that we must have in place require  verifying and re-verifying information received, which takes countless employee hours.

While there are always exceptions, the paperwork that must go into a borrower’s file has grown exponentially over the years. With tax returns, bank statements, appraisal, preliminary title report, etc. it is not uncommon to have a file that is 375 pages thick. We recently had a file that grew to 784 pages! These files take time to put together, time to review and time to approve. Once we have all the pages that will be required for a file, the file goes in line to be underwritten [we have heard that some banks are taking 15 or more days just in the underwriting queue]. Once approved by the underwriter, the file goes in line to have the loan documents prepared. The documents are then sent to the title company, where the borrowers sign everything [some 50-60 signatures required just on the loan documents] and then the documents are returned to the lender’s funding department where they are reviewed again and the last minute quality-control checks for employment, credit and bank accounts are conducted.

It is a small miracle if the mortgage process can be completed within a 30-45 day period. Some banks are taking 60 or more days to close. In the days of old we were able to complete this process in as few as 5-10 business days. If we lenders, Realtors, title and escrow people, etc. can all stay calm and support each other by setting appropriate expectations, we will have smoother and more timely escrows.

 

 

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Written by appraisalmanagementnews

December 12, 2011 at 2:44 pm

MBA Announces Completion of MISMO Transition

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by MBA via Real EstateRama

The Mortgage Bankers Association (MBA) today announced it has completed the transition, announced in September, and will resume support for the Mortgage Industry Standards Maintenance Organization, Inc. (MISMO®). With the successful transition, MISMO will now focus efforts on regulatory implementation and advocating for broader adoption of data standards throughout the industry.

“MBA supports greater efficiency and lower costs throughout  the industry by advocating for broad adoption of industry consensus standards developed by MISMO.  We are actively engaging both regulators and industry in this effort,” said MBA President and CEO David H. Stevens. “MBA will also  provide educational opportunities aimed at helping industry and government better understand and implement MISMO standards. Standardization and transparency are critical to the return of investor confidence and liquidity in the mortgage marketplace, and MISMO has a crucial role to play.  I would recommend that MBA members become MISMO subscribers in order to help guide this effort.”

To assist with these efforts, MBA has hired Cindy Bojokles to be its Director of Industry Standards. In this role, Bojokles is responsible for supporting and advancing the activities of MISMO.  Bojokles will work closely with industry executives to increase the standards available to the industry.  Bojokles will also help government agencies understand the benefits of adopting the voluntary consensus standards developed by MISMO.

“Cindy has spent over 15 years working on data standards, data quality and business solutions for the mortgage industry.  Her detailed knowledge of technology and business processes will prove invaluable to MBA and the mortgage industry as it continues to advance MISMO and industry standards,” said Stevens.

 

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Written by appraisalmanagementnews

December 6, 2011 at 9:48 pm