Entries from Searchlight Crusade tagged with 'practices'
Advertising a Sold Property As Available on MLS
This really ticks me off. I just got done going around about this with a clueless Realtor. According to them, it's not available. It's simply pending contract signatures. But it's showing as "Active" in MLS. This is not a minor...
The Return of Portfolio Lending
Fannie and Freddie long had a policy that they would not fund investment property (non-owner occupied) beyond 10 loans. Although it did impact a certain number of investors, for most folks that rule just never came into play. They have...
The Are No Schools That Teach What A Good Agent Needs to Know
I find it fascinating the number of people who will claim that because no college degree is required to become a real estate agent, that agents can't possibly be worth any significant amount of money. The reason no college...
What Does Escrow Do?
This is a question that gets asked a lot. Escrow is nothing more or less than a neutral third party that stands in the middle of a real estate transaction and makes certain all of the i's are dotted and...
Pocket Listings: Out of Sight, Out of Mind
Every so often, you will see references to a "pocket" listing. These are usually bad for owners, and usually bad for buyers, but good for agents. A "pocket listing" is one where there agent keeps the listing "in his pocket"...
Can They Force You To Pay Off Your Car or Other Debts In Order To Get A Loan?
The short answer is not only "yes" but "damned straight" I refinanced my house, and the lender put as one of my payoffs my Acura lease that I have 3 years left, whick equals about $19,000. I told him that...
Conforming and Jumbo Only Apply to "A Paper" Conventional Financing
This is something that many folks don't understand about the loan market. The labels "conforming", "jumbo" or, more accurately, "non-conforming" and "temporary conforming" only apply to so-called "A paper" loans, largely underwritten through Fannie Mae and Freddie Mac standards....
Real Estate Purchase Negotiability
What's negotiable on a purchase? The short answer is everything. There may be standards and traditions in your area, whether they're the same in your area as there are in mine or quite different. That doesn't mean they are...
What Happens To Equity During and After Foreclosure?
"what happens to your equity when the bank forecloses" was a question I got. The answer is that most, if not all, will be dissipated by the foreclosure. Let's say you own a home currently valued at $500,000, that you...
Real Estate "Pig In a Poke"
Over five hundred years ago in Europe, there was a con game that was more practiced than any other con game in the history of the world. It was simply the thing to try on the new rube in...
Fixing The Real Estate Mess - Proposing Some Small Changes That Would Make A Huge Difference Over Time
Yesterday, I published the first half of this article, describing the issues currently preventing a return to a more normal real estate market, and the facts that any proposed solution needs to be built upon. At a quick recap, the...
Fixing The Real Estate Mess - Describing the Situation
Lots of folks have offered lots of different proposals for fixing the real estate markets and the mess we're in. All of the ones I have seen have suffered from one or more of about three problems. First, the...
Is The Good Faith Deposit At Risk?
Many agents seem to answer this question differently depending upon whether their client is the prospective buyer or seller, according to what they think will make the client most comfortable. When their client is making an offer, "No, your...
Why Buyers and Refinancers Should Think About a 5/1 ARM
Right now, due to the problems we had with unsustainable loans, nobody wants to consider anything but a thirty year fixed rate loan. I understand why, especially as I've been preaching the dangers of things like short term adjustable...
Shop Loans By The Bottom Line To You, Not By What the Provider Makes
When it comes to mortgage loans, people get distracted by the darnedest things. Let's look at Wal-Mart. You think they got to be the largest retailer in the world by making less money than their competition? I assure you...
Why Buyers Should Avoid Short Sales
I've been saying this for a long time: Short sales are poison for buyers. I don't know why people encourage buyers to look at short sales, because there is no advantage for buyers that I am aware of. In...
Real Estate: Giving Someone a Monopoly Does Not Encourage Top Performance
From an e-mail I've been talking to agents lately and I ask them about the things I've learned about from your site. I thought I would say things like "I want to apply for a backup loan" and they would...
The 2010 Good Faith Estimate (Page Three)
This is the conclusion of the series begun in The 2010 Good Faith Estimate (Page One) and continued in The 2010 Good Faith Estimate (Page Two) Page Three is where the most blatant lies of this whole piece take...
The 2010 Good Faith Estimate (Page Two)
Continued from The 2010 Good Faith Estimate (Page One) The next section is on origination charges. Indeed it is titled "Your adjusted origination charges" It starts with "Our origination charges" saying this is the charge for doing the loan....
The 2010 Good Faith Estimate (Page One)
I had a great rant about the limitations of the Good Faith Estimate all planned out in my head when I when I was in the very first stages of planning this website in my head. It was the first...
My Thirty Second Public Service Announcement On Mortgage Loans (UPDATED)
I usually write medium-long articles, Part of that is because I've done all of the easy subjects, part because sound bites facilitate sloganeering, not serious thought that's likely to result in a better answer - or the realization that you've...
Racial Gap In Home Loans
Racial Gap in Loans Is High in California. I can give a variety of reasons for this. First off, especially in Los Angeles but to a lesser extent throughout the state, there is a huge "Spanish speaking only" community. When...
Real Estate and the Four Levels of Competence
People who talk about learning skills tend to discuss a model for learning called the conscious competence learning model. It starts with unconscious incompetence. You not only don't know how to do something, you don't realize that it is...
Can a Lender Legally Stop Loan Funding After Signing?
That question brought someone to the site. The answer is "Yes, they can". As a matter of fact, just because they have you sign those documents does not in any way obligate that lender to actually fund your loan. There...
The Best Way To Solve Problems in Real Estate
The same as in every other area of life: Get out in front and stop it from becoming a problem. I do not understand why many people approach real estate transactions like a casual outing. Go window shopping, decide...
Real Estate Liquidation Auctions
Liquidation auctions were a big thing for a while there. They were just advertising one on all the stations around here. The other agents in my office asked if I was going, and I told them, "There will be...
Fixing A Bad Mortgage Sale
i was sold a bad home mortgage who do you talk to That was a search I got the other day. The answer depends upon where you are in the process. If you've just applied, not yet signed the...
Can You Get A Mortgage On a Condemned House?
The answer is a modified no. The same answer applies to property that is only structurally damaged, but not condemned. That condemnation is a matter of public record. I've seen any number of them while perusing title records. It shows...
Lenders Adding A Prepayment Penalty After Funding
I recently closed a mortgage loan. The loan officer told me there would be no prepayment penalty. When the documents came there was none and the loan funded and closed. Two weeks later I got an e-mail stating some...
Conditions After Loan Closing
I love your site and you are very knowledgeable. I have one quick question for you. I bought a home, I made it through closing, I moved my family into the home. During the process I used some closing...
How Loan Providers Make Money
In an attempt to debunk some of the slanders that are floating around out there, this article is an itemization of how lenders and brokers make money on loans. The first method is obvious: Origination or discount points charged to...
Translation: Salesgoodspeakian to English
It may not come as a shock to you, but loan officers, along with many other salesfolk, speak a different language than the rest of the population. What will probably annoy you, however, is the number of times they'll say...
Why Do Lenders Sell Mortgages?
When and Why does a Mortgage Company Sell your Current Loan to another Mortgage Company? Lenders sell their loans because the lender can make an immediate premium of anywhere from 1.5 percent to four percent by selling your loan...
Real Estate and the Tale of Aesop's Dog (Greed Envy)
At a very young age, my parents bought me a book of Aesop's Tales. Aesop has gone out of style, probably because these are stories with a moral lesson, and it seems the modern society is actively averse to moral...
Automated Underwriting In Pre-Qualification or Pre-Approval Letters
It has become a trend for real estate agents who think they're being "smart" to require an automated underwriting approval. These are automated underwriting programs from Fannie Mae and Freddie Mac saying that Fannie or Freddie will buy the...
Buying Without An Agent - My Own Experience
I had the idea for this article some time ago. It took me a long time to decide to share it publicly, because quite frankly, knowing what I know now, I was an idiot. I was still young enough to...
Asking Price Versus Sales Price
Hard as it may be to believe, I've never done an article comparing asking price to sales price. It's way past time. Asking price is quite simply, a written representation of an offer the seller would be willing to...
The Doctrine of Delaying The Moment Of Truth
One of the worst things about the loan process, and indeed, found throughout the whole real estate industry, is the idea that if you can just delay telling the client about something they won't like, it's more likely they'll continue...
Assuming Seller Concessions On Loan Quotes
I recently received an email asking about a Good Faith Estimate on a $200k loan. The person asking my opinion attached the actual "estimate" to the email. In addition to a point of origination and a point of discount...
How to Avoid A Repeat of the Housing Market Mess
Scapegoating mortgage brokers or anyone else is not the answer, nor is prohibiting yield spread. We've been here before (in the early 1990s), congress did something remarkably similar except a little bit more sane. It didn't work then. Why would...
Working with Multiple Agents While Searching for a Purchase
If you have three real estate companies sending you emails with multi-listings, if you want to see one of the properties, who gets the commission? There five properties that I want to see the inside of the houses. Company A,...
The Loan Shopping Koan
It's very easy for loan providers to talk about a much better loan when you're shopping than they have any intention of delivering. Then you give them thirty days after you sign up, and you're put into a situation where...
How To Keep Listing Agents From Filtering Out Offers
This is a real, major and pervasive problem in the industry. For a while, it mostly went away as listing agents were desperate for any offer, but it has come back. At least two properties my buyer clients have...
Short Sale Negotiators and the Interests of Potential Buyers
I am seeing a very disturbing trend these past few months. Rather than do the work they should be doing, listing agents are treating the entire short sale process as a kind of "Black Box", delegating the negotiations with the...
They Told Me Not To Make My Loan Payment
I've heard this story, in all of its variations, at least hundreds of times. Someone will send me an email and say "They told me not to make my loan payment because I was going to skip one. So...
Don't Rely On Reputation - There Are No Silver Bullets
On a regular basis, I get emails that ask me what I think of a particular company. When I check out public forums, I see questions about particular companies every time. "What do you think of X Realty, or Y...
I'm Competing Against Multiple Offers. How Do I Proceed?
The first thing to consider is that maybe you shouldn't. You never want to get involved in a bidding war. There's a classic riddle I ask every single one of my buyer clients at least once. "How often does...
Restricted Sale Property: Very Difficult to Find A Loan
This is a warning to those who purchase restricted sale property. I've gotten a couple of calls for refinancing these in the past couple months, and I've never covered this subject. A restricted sale property is one where the...
You Want an Agency That Can Pay ENOUGH Attention to YOU
A lot of advice gets given to choose a "top producing" agent. These highly corporate offices may have the name of an individual agent attached to them, but they are in fact transaction mills. They have done pretty well for...
Inducements to Use A Builder's Lender for a Purchase
One of the things I'm seeing more of in MLS listings and developer advertising, among other places, is the phrase "$X in closing cost credit (or "$X in free builder upgrades") given for using preferred lender" Sounds like a bargain,...
Realtor and Loan Officer Responsibility: Can the Client Afford The Property?
Every so often, I write about professional responsibility. Every month I get a couple of magazines because I'm a Realtor. There was a letter from someone who was proud of the fact that he had never asked someone if they...
Shopping For The Best Loan In The Changed Lending Environment
It shouldn't be any surprise to anyone with the headlines of the last few years that shopping for a mortgage loan has radically changed. Indeed, a lot of the regulatory changes seem directly aimed at what were the best...
Who Has An Interest That Should Be Protected In A Real Estate Transaction?
I've been answering this question for a long time. Whose interests do we need to be concerned about, in a "If they are harmed, we've got a problem" sort of way? Who has a primary stake in a real...
Loan Providers Offering to Pay For The Appraisal
This is one of those commercial gambits I keep seeing that has nothing intrinsically wrong with it, and yet it is most often a tactic employed by the more costly loan providers. In short, sharks and scam artists. The basic...
My Loan was Denied - What Fees Can I Recover?
"What mortgage fees can i recover after loan denial" was a search I got. The answer is basically, "None." The only thing that should be charged up front is a credit check, which costs about $20, and you should be...
Loan Fall-Out And The Effects Upon Consumers
This is going to be a long article and somewhat technical in places, but it needs to be covered and everyone who is thinking about getting a real estate loan needs to read it. "Fall-Out" is very simple: The...
Online Real Estate Photographs - You Have Heard of Photoshop?
When Israel invaded southern Lebanon a few years ago, this picture from Reuters ran worldwide The problem was that it was heavily photoshopped by a Palestinian stringer trying to make it appear like the Israelis were setting the entire...
Lipstick on a Pig: Selling the Property You Should Never Have Bought
Lots of properties have some kind of problem with them. Maybe you bought in full recognizance because of something else about the property, but probably not. Mostly it's directly a result of not spending the effort to find a good...
Finding a Good Buyer's Agent (And Eliminating Bad Ones)
I hear people complain that they've never had a good buyer's agent, that they can't find one, or that they one they had hosed them (Sometimes, they're wrong about that, by the way). I also regularly get email from people...
Transaction Coordinator: For The Agent's Benefit, Not The Consumers
The last few years, real estate agents and brokerages have begun charging a transaction coordination fee in addition to whatever their share of the sales commission was. The purpose of this is to pay a transaction coordinator, so your...
Military Housing Allowance and Loan Qualification
One of the things that is really helping military families afford good properties is the military housing allowance and the way that lenders treat it, making it much easier for them to qualify with regards to debt to income...
Agents Refusing to Make an Offer on Real Estate
"buyers agent refuses to make offer" was a search hit I got recently. This is yet another reason not to sign exclusive buyer's agent agreements. My hypothesis - and based upon experience it's pretty strong - is that the CBB...
Find An Agent With Enough Time To Devote To Selling YOUR Property
Not very long ago, the purchase market in many areas of San Diego went through a phase that could only be described as "piranha feeding frenzy". This sort of market reinforces several pieces of advice I have given here....
The Qualification Letter I Use for My Buyers and Require For My Listings
I have never had someone tell me they wanted more information than this letter provides. I also require the prospective loan officer to fill if out for prospective purchasers of my occasional listings. DELETED (Mortgage Corporation) Address DELETED City...
RESPA Forbids Steering - Even "Just For Prequalification"
Agents rationalize this in all sorts of interesting ways, so let's just start by quoting the cold hard federal law. It's pretty damned clear: RESPA no person shall give and no person shall accept any fee, kickback, or thing of...
Buyer's Agents Presenting An Offer In Person
This is a right given to buyers agents by my local MLS, and it's a good one, that I like to take advantage of whenever it is practical. The actual property owner - not the listing agent - does have...
Cash to Close - A Basic Primer
Cash to close has always been an underwriting standard, but more people are running into it as a reason why they cannot buy that property, why their buyers cannot perform, and why they can't get that refinance approved. With...
If You Need A Loan To Buy A Home, You Need A 60 Day Escrow
Minimum Time was, a few short years ago, when I could reliably do a purchase money loan in two and a half weeks. That has now changed. There are three separate delays of one to 2 weeks that have been...
Beware Agendas in Your Financial Reading
Figures don't lie, but liars sure to figure - and filter, and slant, and just about anything else you can think of. someone sent me a link to this article in the Wall Street Journal of all places. It...
President Obama's Mortgage Relief Program October 2011
Irony abounds. Obama hyping a program formulated by the Bush Administration (that didn't see actual implementation until April 2009 due to legal delays) as a centerpiece of his reasons for re-election - long after the program has helped most of...
Pocket Listings: Out of Sight, Out of Mind
Every so often, you will see references to a "pocket" listing. These are usually bad for owners, and usually bad for buyers, but good for agents. A "pocket listing" is one where there agent keeps the listing "in his pocket"...
Fixing The Real Estate Mess - My Grunt's Eye View - Proposing Some Small Changes That Would Make A Huge Difference Over Time
Yesterday, I published the first half of this article, describing the issues currently preventing a return to a more normal real estate market, and the facts that any proposed solution needs to be built upon. At a quick recap, the...
Fixing The Real Estate Mess - My Grunt's Eye View - Describing the Situation
Lots of folks have offered lots of different proposals for fixing the real estate markets and the mess we're in. All of the ones I have seen have suffered from one or more of about three problems. First, the...
The 2010 Good Faith Estimate (Page Three)
This is the conclusion of the series begun in The 2010 Good Faith Estimate (Page One) and continued in The 2010 Good Faith Estimate (Page Two) Page Three is where the most blatant lies of this whole piece take...
The 2010 Good Faith Estimate (Page Two)
Continued from The 2010 Good Faith Estimate (Page One) The next section is on origination charges. Indeed it is titled "Your adjusted origination charges" It starts with "Our origination charges" saying this is the charge for doing the loan....
The 2010 Good Faith Estimate (Page One)
I had a great rant about the limitations of the Good Faith Estimate all planned out in my head when I when I was in the very first stages of planning this website in my head. It was the first...
Automated Underwriting In Pre-Qualification or Pre-Approval Letters
It has become a trend for real estate agents who think they're being "smart" to require an automated underwriting approval. These are automated underwriting programs from Fannie Mae and Freddie Mac saying that Fannie or Freddie will buy the...
Asking Price Versus Sales Price
Hard as it may be to believe, I've never done an article comparing asking price to sales price. It's way past time. Asking price is quite simply, a written representation of an offer the seller would be willing to...
Assuming Seller Concessions On Loan Quotes
I recently received an email asking about a Good Faith Estimate on a $200k loan. The person asking my opinion attached the actual "estimate" to the email. In addition to a point of origination and a point of discount...
The Loan Shopping Koan
It's very easy for loan providers to talk about a much better loan when you're shopping than they have any intention of delivering. Then you give them thirty days after you sign up, and you're put into a situation where...
How To Keep Listing Agents From Filtering Out Offers
This is a real, major and pervasive problem in the industry. For a while, it mostly went away as listing agents were desperate for any offer, but it has come back in recent months. At least two properties my...
Short Sale Negotiators and the Interests of Potential Buyers
I am seeing a very disturbing trend these past few months. Rather than do the work they should be doing, listing agents are treating the entire short sale process as a kind of "Black Box", delegating the negotiations with the...
They Told Me Not To Make My Loan Payment
I've heard this story, in all of its variations, at least hundreds of times. Someone will send me an email and say "They told me not to make my loan payment because I was going to skip one. So...
I'm Competing Against Multiple Offers. How Do I Proceed?
The first thing to consider is that maybe you shouldn't. You never want to get involved in a bidding war. There's a classic riddle I ask every single one of my buyer clients at least once. "How often does...
Restricted Sale Property: Very Difficult to Find A Loan
This is a warning to those who purchase restricted sale property. I've gotten a couple of calls for refinancing these in the past couple months, and I've never covered this subject. A restricted sale property is one where the...
HR 1728: Proof That This Congress Is In the Pockets of Big Banks
I said a few days ago that Banks hate the concept of mortgage brokers, because without brokers, they could jack up their margin per loan. Here's what they're doing about it: Introducing a bill into Congress making it impossible...
You Want an Agency That Can Pay ENOUGH Attention to YOU
A lot of advice gets given to choose a "top producing" agent. These highly corporate offices may have the name of an individual agent attached to them, but they are in fact transaction mills. They have done pretty well for...
Shopping For The Best Loan In The New Lending Environment
It shouldn't be any surprise to anyone with the headlines of the last two years that shopping for a mortgage loan has radically changed just in the last couple of months. Indeed, a lot of the changes seem directly...
Who Has A Legitimate Interest In A Real Estate Transaction?
I've been answering this question for a long time. Whose interests do we need to be concerned about, in a "If they are harmed, we've got a problem" sort of way? Who has a primary stake in a real...
Loan Fall-Out And The Effects Upon Consumers
This is going to be a long article and somewhat technical in places, but it needs to be covered and everyone who is thinking about getting a real estate loan needs to read it. "Fall-Out" is very simple: The...
Online Real Estate Photographs
When Israel invaded southern Lebanon a couple years ago, this picture from Reuters ran worldwide The problem was that it was heavily photoshopped by a Palestinian stringer trying to make it appear like the Israelis were setting the entire...
Lipstick on a Pig: Selling the Property You Should Never Have Bought
Lots of properties have some kind of problem with them. Maybe you bought in full recognizance because of something else about the property, but probably not. Mostly it's directly a result of not spending the effort to find a good...
Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10)
From an email: Our rate was locked (on our mortgage broker's recommendation) on December 4 at 5.375% for 30 days. On December 18 we finally received the rate lock form, which was dated December 17 (the prevailing rate was...
Finding a Good Buyer's Agent (And Eliminating Bad Ones)
I hear people complain that they've never had a good buyer's agent, that they can't find one, or that they one they had hosed them (Sometimes, they're wrong about that, by the way). I also regularly get email from people...
Transaction Coordinator: For The Agent's Benefit, Not The Consumers
The last few years, real estate agents and brokerages have begun charging a transaction coordination fee in addition to whatever their share of the sales commission was. The purpose of this is to pay a transaction coordinator, so your...
Military Housing Allowance and Loan Qualification
One of the things that is really helping military families afford good properties is the military housing allowance and the way that lenders treat it, making it much easier for them to qualify with regards to debt to income...
Loan Quote Guarantees
Because most loan providers will not guarantee their Federal Good Faith Estimates or California MLDS forms, I've been telling folks that the best suggestion (other than doing their loans myself, of course!) that I can give them is apply for...
Why You Don't Want A "Top Producer" Listing Your Property
The completely frenzied micro-market currently manifesting in the Eastlake area of San Diego is a wonderful illustration of several pieces of advice I consistently give. First, What Happens When You Over-Price Real Estate?: properties priced correctly are getting multiple...
The Qualification Letter I Use for My Buyers and Require For My Listings
I have never had someone tell me they wanted more information than this letter provides. I also require the prospective loan officer to fill if out for prospective purchasers of my occasional listings. DELETED (Mortgage Corporation) Address DELETED City...
It Is Illegal Under RESPA to Require Even Prequalification With a Particular Lender
RESPA no person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service...
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