Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'practices'
New Consumer Article: The 2010 Good Faith Estimate (Page Three)
Today we have the final installment in the series on the new Good Faith Estimate formThe 2010 Good Faith Estimate (Page Three). Your government that should be protecting you from the worst sort of mortgage provider lies is now actively...
New Consumer Article: The 2010 Good Faith Estimate (Page Two)
The second installment in the series The 2010 Good Faith Estimate (Page Two) is now up. Read it and weep - for consumers nationwide who were hoping the government would provide the solution to their troubles. Didn't happen. Instead, it's...
New Consumer Article: The 2010 Good Faith Estimate (Page One)
It's been a while, but the most recent Transaction From Hell (seller's tenants didn't want to move out - or even let inspectors in) is finally over and I've had a little bit of chance to recover. Today's new consumer...
New Consumer Article: Automated Underwriting In Pre-Qualification or Pre-Approval Letters
The new consumer article for today is Automated Underwriting In Pre-Qualification or Pre-Approval Letters. Not to put too fine a point on it, automated underwriting is useless until all details of the transaction have been finalized. If you're selling a...
New Consumer Article: Asking Price Versus Sales Price
The new consumer article for today is Asking Price Versus Sales Price, a short discussion of what they are and the relationship between them. Many agents have forgotten this stuff, but it really is very basic stuff everyone should keep...
New Consumer Article: Assuming Seller Concessions On Loan Quotes
The new consumer article for today is Assuming Seller Concessions On Loan Quotes, which discusses why lenders do this: To make an expensive loan look not so expensive. But there is no way to get seller concessions (Seller Paid Closing...
New Consumer Article: The Loan Shopping Koan
The new consumer article for today is The Loan Shopping Koan, talking about the contradiction offered by dueling interests: The fact that while consumers want the best possible loan, against the opposing fact that it's very easy for loan providers...
New Consumer Article: How To Keep Listing Agents From Filtering Out Offers
The new consumer article for today is How To Keep Listing Agents From Filtering Out Offers. This is a real, major, and once again increasing problem within the real estate industry. You need to take steps to prevent it from...
New Consumer Article: Short Sale Negotiators and the Interests of Potential Buyers
The new consumer article for today is Short Sale Negotiators and the Interests of Potential Buyers. An awful lot of nonsense gets tried with short sales, most of it for the benefit of lazy listing agents who shouldn't have taken...
New Consumer Article: They Told Me Not To Make My Loan Payment
The new consumer article for today is They Told Me Not To Make My Loan Payment. Ladies and Gentlemen, that's one of the top ways to get yourself in trouble when you're refinancing. What if your new loan cannot be...
New Consumer Article: I'm Competing Against Multiple Offers. How Do I Proceed?
The new consumer article for today is I'm Competing Against Multiple Offers. How Do I Proceed?. It's an article directed at consumers, not real estate professionals, so it doesn't go over some things such as alternatives to money that are...
FHA Approves Using Tax Credit for Closing Costs
Very interesting. Unprecedented even FHA Ok with Up Front Tax Credit or, in other words, using the tax credit money at closing. We all want to enable FHA consumers to access the tax credit funds when they close on their...
New Consumer Article: Restricted Sale Property: Very Difficult to Find A Loan
The new consumer article for today is Restricted Sale Property: Very Difficult to Find A Loan. Before you make an offer on restricted sale property, know that your financing options are going to be very limited, and being able to...
New Consumer Article: You Want an Agency That Can Pay ENOUGH Attention to YOU
The new consumer article for today is You Want an Agency That Can Pay ENOUGH Attention to YOU. It really doesn't benefit you to list with an agency that is too busy to pay proper attention to your property, nor...
New Consumer Article: Shopping For The Best Loan In The New Lending Environment
The new consumer article for today is Shopping For The Best Loan In The New Lending Environment. There have been changes in the lending environment in the last few months, changes that are practically designed to make loan officers with...
New Consumer Article: Who Has A Legitimate Interest In A Real Estate Transaction?
The new consumer article for today is Who Has A Legitimate Interest In A Real Estate Transaction?. This article goes all the way back to first principles to determine who has an interest worth getting hot and bothered over, and...
New Consumer Article: Loan Fall-Out And The Effects Upon Consumers
The new consumer article for today is Loan Fall-Out And The Effects Upon Consumers. The days when loan officers are willing to lock loans with just a social and the identity of the property are ending, if not already over....
New Consumer Article: Online Real Estate Photographs
The new consumer article for today is Online Real Estate Photographs. I know why people want to see online photographs, but I don't understand why they obsess about them to the degree they do, even after they assure me that...
New Consumer Article: Selling the Property You Should Never Have Bought
The new consumer article for today is Lipstick on a Pig: Selling the Property You Should Never Have Bought. It talks about general techniques for selling properties with issues that make them less attractive to buyers....
New Consumer Article: Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10)
The new consumer article for today is Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10), talking about how you can be told your rate is locked when it isn't, what the benefits of playing this game are...
New Consumer Article: Finding a Good Buyer's Agent (And Eliminating Bad Ones)
The new consumer article for today is Finding a Good Buyer's Agent (And Eliminating Bad Ones). It really is easy to get yourself a good buyer's agent, but many people don't know how important it is, or won't make the...
New Consumer Article: Transaction Coordinator: For The Agent's Benefit, Not The Consumers
The new consumer article for today is Transaction Coordinator: For The Agent's Benefit, Not The Consumers. Transaction coordinators are mostly a good thing, helping agents ensure compliance and coordinating between various parties to the transaction. But asking consumers to pay...
New Consumer Article: Military Housing Allowance and Loan Qualification
The new consumer article for today is Military Housing Allowance and Loan Qualification. For all the nonsense the military puts up with, this is one instance where the government treats them better than just about any other employer....
New Consumer Article: Why You Don't Want A "Top Producer" Listing Your Property
The new consumer article for today is Why You Don't Want A "Top Producer" Listing Your Property. The agent makes money hand over fist, but they haven't got the attention to spare for getting the best price on your property,...
New Consumer Article: The Qualification Letter I Use for My Buyers and Require For My Listings
The new consumer article for today is The Qualification Letter I Use for My Buyers and Require For My Listings, which talks about how I communicate that my buyers really are qualified, and how I ascertain that potential buyers of...
New Consumer Article: It Is Illegal Under RESPA to Require Even Prequalification With a Particular Lender
The new consumer article for today is It Is Illegal Under RESPA to Require Even Prequalification With a Particular Lender, debunks the legality of a practice that listing agents are trying to bring back or institute with the increase in...
New Consumer Article: Buyer's Agents Presenting An Offer In Person
The new consumer article for today is Buyer's Agents Presenting An Offer In Person, where I cover the ins and outs of presenting an offer in person, why buyer's agents should do it, why listing agents should prefer it, and...
New Consumer Article: Cash to Close - A Basic Primer
The new consumer article for today is Cash to Close - A Basic Primer. The article discusses how much cash a buyer of real estate has to have in order to make the transaction happen. Proving that you have this...
New Consumer Article: Stop Short Sale Bait and Switch
The new consumer article for the day is Stop Short Sale Bait and Switch. I am sick and tired of the fraudulent way that lazy incompetent agents have taken to marketing short sale properties - and it's going to start...
New Consumer Article: New Good Faith Estimate and HUD 1 Form Approved
The new consumer article for the day is New Good Faith Estimate and HUD 1 Form Approved. The government has come up with new regulations on the Good Faith Estimate (Mortgage Loan Disclosure Statement in California) and HUD 1 Form....
New Consumer Article: Advertising a Sold Property As Available on MLS
Today's new consumer article is Advertising a Sold Property As Available on MLS, talking about the basics of what forms that these loans take, the Home Equity Loan and Home Equity Line of Credit. Had some kind of stomach flu...
New Consumer Article: The Return of Portfolio Lending
Today's new consumer article is The Return of Portfolio Lending, on the subject of what a portfolio loan is and the differences between portfolio and security based lending, and what the return of portfolio lending means, even to those who...
New Consumer Article September 10, 2008
Today's new consumer article is The Are No Schools That Teach What A Good Agent Needs to Know, which directly takes on the canard that since being an agent doesn't require a college degree, therefore there's nothing special about it...
New Consumer Article September 5, 2008
Today's new consumer article is The State of the Loan Market and How Much You Can Borrow September 2008 (Part II), which discusses the loan market and the state of lender paranoia that currently prevails, and the possible solutions to...
New Consumer Article September 4, 2008
Today's new consumer article is The State of the Loan Market and How Much You Can Borrow September 2008 (Part I), which discusses the loan market and the state of lender paranoia that currently prevails. If you are one of...
New Consumer Article August 21, 2008
Today's new consumer article is The Moment of Truth, Signing Bad Loan Documents and the Right of Rescission, which discusses the Moment of Truth that happens in every loan - when the loan documents are presented. Ideally, there should be...
New Consumer Article August 13, 2008
Today's new consumer article is Why Lenders Don't and Won't Tell Borrowers Their Loan Was Turned Down, which discusses why most lenders don't make this very simple disclosure. Basically, it's because they lose money by being honest....
New Consumer Article: August 6th, 2008
Today's new consumer article is How Do I Know If I've Been Lowballed on a Mortgage Quote?, which talks about how to nail down lenders on their quotes so that they actually deliver what you expect at loan sign up....
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...
Don't Let Cash Make You Stupid About Real Estate
There are many ways of suckering real estate consumers, and cash as an inducement to get people to swallow a raw deal is one of the most common. From sellers (usually developers), "free" upgrades are one of the most common....
Why You Want The Lender to Assume Pricing Risk
In the last couple of years a movement has arisen, led by certain well meaning academics, that says negotiating a loan broker's total revenue is sufficient to get consumers a better loan. As far as they go, they are...
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. When their client is making an offer, "No, your deposit could never possibly be at risk," while when their client...
Why Buyers and Refinancers Should Consider a 5/1 ARM Again
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 Total Cost 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...
Lenders Holding Your Money Hostage
My lender told me that there is an application fee? He said an application fee of $250 and then we'll need the appraisal fee and of course we'll need an inspection. Does all this sound legit, is there always...
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...
My Thirty Second Public Service Announcement On Mortgage Loans
I usually write 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...
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 2.5 percent to four percent by selling your loan...
Should Negative Amortization Loans Be Banned?
Having written several articles on Negative Amortization Loans, telling of the details of what is wrong with them, and even destroying the myth of Option ARM cash flow, I sometimes get asked if I would like to see them banned...
Non-Exclusive Buyer's Agency Contract - A Bet Consumers Can't Lose
There are two sorts of buyer's agency contracts, exclusive and non-exclusive. Note that this has nothing to do with Exclusive Buyer's Agents, who do not accept property for listing. I disagree with their reasoning on the virtues of doing...
When Should A Buyer's Agent Ask You To Sign a Contract?
The answer depends upon what they're doing for you. If you contact them because they're the listing agent for a property, they shouldn't ask you to sign an agreement at all. They have a fiduciary duty to that seller...
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...
Do Furnishings Convey With The Property?
If a home for sale has a refrigerator included on the listing report, and the buyer's agent does not write that it goes to the seller in a contract, is the buyer actually entitled to the refrigerator. I am...
FYI: FHA Loans, FHA Secure, and Down Payment Assistance Programs
FYI, I attended a class on FHA mortgages, FHA Secure and down payment assistance programs this morning. I'll probably have two or possibly three articles in the next week or so. In the meantime, if I can help with a...
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
With the market turndown, Liquidation auctions are becoming a big thing. 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...
What Pre-Approval Should Mean
People are understandably hazy on the difference between pre-qualification and pre-approval. Pre-qualification is a non-rigorous process whereby somebody says that based upon the information as presented to them, it appears you'll qualify for the loan. Pre-approval should be more rigorous....
Deadlines in Real Estate Transactions
Not too long ago on a property I was selling I called an agent up on the day a transaction was supposed to close. He asked me the question, "Well who says it has to close today?" "The contract that...
Greed Envy, or the Tale of Aesop's Dog
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...
When The Underwriter Makes A Mistake
"challenging underwriters mistakes in housing loan paperwork" was a search that I got. You can't challenge them. Butting heads with an underwriter is stupid and counterproductive. There's only one person who gets a vote, and it's not you, whether you...
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...
An Apparent Red Flag that Isn't
For all of the rants I post about bad business practices, there are a lot of things the mortgage industry gets right. One of these looks like a red flag not to do business with them, and may seem like...
How to Avoid A Repeat of the Housing Market Mess
HR 3915 is not the answer. 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 we expect it to work this time? Among many...
Investment Property and Sophisticated Users
The majority of the protections that folks have are aimed at helping non-professionals have a chance in the complex and nearly incomprehensible maze that is real estate. The legal presumption is basically that you are a babe in the woods,...
Facts Of Life On Buying and Selling "Without an Agent"
I saw your article on about exclusive buyers agents and I have a couple follow up questions pertaining to my own situation that I am hoping you could shed some light on. I don't have any buyers agent (currently)....
Games Lenders Play (Part IV)
I was approached by these folks a few weeks ago via email. I attempted to get them to write up the experience themselves (and I would still like you to if you're reading this), but I wanted to write something...
Regulators Toughen Negative Amortization Loans?
Ken Harney has a column I found in the local rag yesterday. It seems that there is (finally!) concern amongst the regulators for this risky loan which begs for trouble for consumer, lender, and the system as a whole when...
Wanting a More Expensive Property Than You Can Really Afford
This is one of the biggest issues with my local real estate market. Because the San Diego market has very high demand and limited supply of property, prices are high. A reasonable two bedroom condo runs around $300,000. A 1200...
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...
Fear and Greed, or How Did The Housing Bubble Get So Big?
One of the occasional questions I get from people has to do with why the housing bubble got so big (or if you're one of those still in denial about it, how prices jumped so far so fast). This has...
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...
What Drives Loan Rates?
Supply and Demand. Now that I've given the short answer, it's time to explain the macro factors behind interest rate variations. But I'm going to keep referring to those first three words. It is a tradeoff between the supply of...
Mortgages and RAMs in Later Life
"Should People in their sixties take out a mortgage?" The short answer is "Not if you don't have to." Now if I suddenly vanish, the explanation will be that the loan industry put a contract out on me. Success...
Fixing A Bad Mortgage Sale
i was sold a bad home mortage 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...
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...
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. In one of this months, was a letter from someone who was proud of the fact that he had never...
Should Lenders Be Permitted to Sell Real Estate?
My answer is yes. National Association of Realtors is very proud of their sponsorship of legislation to keep lenders out of the business of real estate. They quote the legislation keeping banks out of the real estate business as being...
Mortgages: General Concerns and Manufactured Housing
A mortgage is basically pledging an asset that you own as collateral for a debt. If you default on the debt, the lender takes your property. When you're talking about real estate in the state of California (and many others),...
Impound Accounts Facts and FAQs
I've seen a fair number of questions on impound accounts in the last several months. An impound account, also known by the confusing term escrow account because the lender is holding it in escrow, is money that you give the...
There's No Real Way to Take The Complexity Out of Real Estate
Every so often I get e-mail asking why real estate transactions are so complex. The answer is, "Because they're for a lot of money, and because there's a lot of money involved, con artists and other people will make a...
The Escrow Process and Reasons for Falling Out
There are all sorts of reasons why escrow falls through, but they fall into three main categories. They can best be described as failures of qualification, failures of the property itself, and failures of execution. Before I get into the...
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...
Signing Off Loan Conditions
what is a underwriter final "sign off" on the conditions First off, it needs to be mentioned that a good loan officer gathers information and puts a full package, with all of the information an underwriter should need, before...
Second Trust Deeds and Loan Subordination
When you have more than one loan on your property, there are some issues you should be aware of. Keep in mind the fact that some states still use the mortgage system, requiring court action to foreclose, as opposed to...
Don't Roll Mortgage Refinance Costs Into Your Balance If You Wouldn't Pay Them Cash
One thing that is very common in the mortgage industry is masking loan costs by rolling them into your loan balance. People are less sensitive to being asked to roll this money into their loan balance than they are about...
Reading Property Advertisements: Many Grains of Salt
The first thing you need to understand in reading any property advertisements is that agents write them to get people to call. They are trolling for clients. Except in the case of someone who doesn't accept dual agency advertising a...
Loan Pre-Approval Means Nothing
The only one I trust is one that I wrote. I got this search engine hit: pre-approved loan underwriter changes terms illegal I have gone over these issues in discussing the pre-qualification. Loan officers are salespersons. There is intense pressure...
Questions You Should Ask Every Prospective Loan Provider
Mortgage - Questions you must ask every provider about every loan when you are shopping. Permission is hereby granted to print this out and use it for non-commercial purposes so long as no alterations are made and copyright is preserved....
How Can A Temporary Buydown Help Realtors and Agents?
That was a question I got. The answer is that it shouldn't make a difference, but it does. You see, lenders who work in markets that are less than A paper perform qualification calculations based upon the initial payment, at...
My Promise To All My Clients
So you know how I do business, I hereby promise all my clients: I will always put your interests before my own, even if it means advising you that, were I in your situation, I would not buy, sell, or...
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