One couple’s tale of refi rejection

[CA renter]

[quote=HLS]BANKS don’t make the rules for underwriting and servicing 15/30 YR fixed mortgages. Anybody who questions what “banks” do with mortgage applications hasn’t got a clue about reality today.

Banks don’t lend their money on 15/30 year mortgages. Banks have divisions that are nothing more than mortgage brokers, often with ignorant employees who unknowingly lie to borrowers about loans with no fees and no costs, with rates that are .50-.75pts higher than what is actually available.

30 YR fixed rates are as low as 4.375% at the moment, but “banks” don’t usually offer them.
They are too busy fooling those that go to banks for no cost loans that will cost tens of thousands of dollars in the long run.

Many people think that banks make the rules and make exceptions for current customers. It rarely happens..

Assets and equity don’t get you a mortgage today. It’s all based on verified income. Salaried wage earners have the best chance. Commission, bonus, overtime and self employed have it much more difficult today, REGARDLESS of credit score, equity, down payment, income, number of properties owned or how important of a customer they think they are.

It’s a humblimg experience for someone who earns $150K with 40% equity and an 800 credit score to get turned down for a $300K loan, but it happens every day with today’s guidelines.

It has never been more difficult for many to qualify for a loan….HLS[/quote]

Very interesting, HLS. Thanks for sharing your insight.

Might this be because lenders really don’t **want** to lend right now — especially FRMs when rates are at rock-bottom lows? Also, with all the talk of dollar devaluation, I’d be scared to death to lock in a 30-YR FRM at 4.X% as a lender. Could this be why things are tight?

[HLS]

Not at all.. do you understand who “LENDERS” are ?? The govt is about the only lender today.
Lenders don’t make their own rules…”Lenders” Don’t make up the guidelines for 15/30 YR mortgages. There are slightly different guidelines for FNMA/FHLMC(Freddie)/FHA but that is how 90%+ of loans are originated today.

BANKS ARE MORTGAGE BROKERS..Wolves in sheeps clothing. They don’t have free loans. They don’t have the best rates. Consumers are clueless.
Salespeople sitting at desks telling people what is on their computer screen. Many have crappy credit scores and have never gotten a loan themselves. They originate loans to sell off just like mortgage brokers. A good mortgage broker will make your life easy and get you a great loan, a bad one will screw you even when it’s your friend or relative.

When guidelines are met, there is an endless amount of money available. The guidelines are getting tighter and tighter however.

When mortgage insurance is involved on a loan over 80%, the mortgage insurance company guidelines step in added to basic guidelines..,,here is an example.. https://www.ugcorp.com/rates/EligibilityGuidelinesSummary.pdf

FNMA loans need a DU approval from an automated system. Freddie loans are an LP approval.

Many wholesale lenders, banks included, have additional overlays for risk.

Banks don’t lend long and borrow short.
They don’t loan out their money for 30 years at 4.50% and pay depositor 3% for a 5 YR CD. That is suicide.
Mortgage brokers AND banks originate loans that are sold to FNMA etc who then bundles them into MBS (Mortgage Backed Securities) and sells them off with an implied guarantee of safety to “investors”

Most people think of a bank as one big happy company. The biggest ones are the biggest problems.

BANKS are (at least) 3 separate entities:
1) The building that you walk into where you make deposits and get screwed on fees
2)A SEPARATE MORTGAGE BROKER division that originates loans to be sold off
3)A SEPARATE division that services the loans that were sold off.

All divisions want to make a profit.
Because you started your loan at #1 above which then led to dealing with #2 and now you make payments to #3 doesn’t mean that you are going to get “special” treatment because you have banked with #1 and keep $100K in a CD.

I spoke with an auto finance manager the other day with 25 years in his industry. His comment to me was “consumers are stupid”. Most people got screwed if they bought a car during Cash for Clunkers. Prices went up, incentives disappeared, and it now appears that the $4500 is going to be taxed as income.

This is a simple overview of the situation.
Many people just don’t qualify for loans today, period. No such thing as a slam dunk, no brainer loan.

Portfolio loans are loans that a bank will keep in their portfolio/on their books. This might be ARMS with short term rates. 5 YR CD deposits means they have some comfort in lending on a 3YR or 5YR ARM.
Banks may make their own decisions on short term funds, but they often use same tight guidelines.

The more people think they know, the more dangerous they are..can’t remember who said it first.
Lots more could be written….HLS

[HLS]

Not at all.. do you understand who “LENDERS” are ?? The govt is about the only lender today.
Lenders don’t make their own rules…”Lenders” Don’t make up the guidelines for 15/30 YR mortgages. There are slightly different guidelines for FNMA/FHLMC(Freddie)/FHA but that is how 90%+ of loans are originated today.

BANKS ARE MORTGAGE BROKERS..Wolves in sheeps clothing. They don’t have free loans. They don’t have the best rates. Consumers are clueless.
Salespeople sitting at desks telling people what is on their computer screen. Many have crappy credit scores and have never gotten a loan themselves. They originate loans to sell off just like mortgage brokers. A good mortgage broker will make your life easy and get you a great loan, a bad one will screw you even when it’s your friend or relative.

When guidelines are met, there is an endless amount of money available. The guidelines are getting tighter and tighter however.

When mortgage insurance is involved on a loan over 80%, the mortgage insurance company guidelines step in added to basic guidelines..,,here is an example.. https://www.ugcorp.com/rates/EligibilityGuidelinesSummary.pdf

FNMA loans need a DU approval from an automated system. Freddie loans are an LP approval.

Many wholesale lenders, banks included, have additional overlays for risk.

Banks don’t lend long and borrow short.
They don’t loan out their money for 30 years at 4.50% and pay depositor 3% for a 5 YR CD. That is suicide.
Mortgage brokers AND banks originate loans that are sold to FNMA etc who then bundles them into MBS (Mortgage Backed Securities) and sells them off with an implied guarantee of safety to “investors”

Most people think of a bank as one big happy company. The biggest ones are the biggest problems.

BANKS are (at least) 3 separate entities:
1) The building that you walk into where you make deposits and get screwed on fees
2)A SEPARATE MORTGAGE BROKER division that originates loans to be sold off
3)A SEPARATE division that services the loans that were sold off.

All divisions want to make a profit.
Because you started your loan at #1 above which then led to dealing with #2 and now you make payments to #3 doesn’t mean that you are going to get “special” treatment because you have banked with #1 and keep $100K in a CD.

I spoke with an auto finance manager the other day with 25 years in his industry. His comment to me was “consumers are stupid”. Most people got screwed if they bought a car during Cash for Clunkers. Prices went up, incentives disappeared, and it now appears that the $4500 is going to be taxed as income.

This is a simple overview of the situation.
Many people just don’t qualify for loans today, period. No such thing as a slam dunk, no brainer loan.

Portfolio loans are loans that a bank will keep in their portfolio/on their books. This might be ARMS with short term rates. 5 YR CD deposits means they have some comfort in lending on a 3YR or 5YR ARM.
Banks may make their own decisions on short term funds, but they often use same tight guidelines.

The more people think they know, the more dangerous they are..can’t remember who said it first.
Lots more could be written….HLS

[HLS]

Not at all.. do you understand who “LENDERS” are ?? The govt is about the only lender today.
Lenders don’t make their own rules…”Lenders” Don’t make up the guidelines for 15/30 YR mortgages. There are slightly different guidelines for FNMA/FHLMC(Freddie)/FHA but that is how 90%+ of loans are originated today.

BANKS ARE MORTGAGE BROKERS..Wolves in sheeps clothing. They don’t have free loans. They don’t have the best rates. Consumers are clueless.
Salespeople sitting at desks telling people what is on their computer screen. Many have crappy credit scores and have never gotten a loan themselves. They originate loans to sell off just like mortgage brokers. A good mortgage broker will make your life easy and get you a great loan, a bad one will screw you even when it’s your friend or relative.

When guidelines are met, there is an endless amount of money available. The guidelines are getting tighter and tighter however.

When mortgage insurance is involved on a loan over 80%, the mortgage insurance company guidelines step in added to basic guidelines..,,here is an example.. https://www.ugcorp.com/rates/EligibilityGuidelinesSummary.pdf

FNMA loans need a DU approval from an automated system. Freddie loans are an LP approval.

Many wholesale lenders, banks included, have additional overlays for risk.

Banks don’t lend long and borrow short.
They don’t loan out their money for 30 years at 4.50% and pay depositor 3% for a 5 YR CD. That is suicide.
Mortgage brokers AND banks originate loans that are sold to FNMA etc who then bundles them into MBS (Mortgage Backed Securities) and sells them off with an implied guarantee of safety to “investors”

Most people think of a bank as one big happy company. The biggest ones are the biggest problems.

BANKS are (at least) 3 separate entities:
1) The building that you walk into where you make deposits and get screwed on fees
2)A SEPARATE MORTGAGE BROKER division that originates loans to be sold off
3)A SEPARATE division that services the loans that were sold off.

All divisions want to make a profit.
Because you started your loan at #1 above which then led to dealing with #2 and now you make payments to #3 doesn’t mean that you are going to get “special” treatment because you have banked with #1 and keep $100K in a CD.

I spoke with an auto finance manager the other day with 25 years in his industry. His comment to me was “consumers are stupid”. Most people got screwed if they bought a car during Cash for Clunkers. Prices went up, incentives disappeared, and it now appears that the $4500 is going to be taxed as income.

This is a simple overview of the situation.
Many people just don’t qualify for loans today, period. No such thing as a slam dunk, no brainer loan.

Portfolio loans are loans that a bank will keep in their portfolio/on their books. This might be ARMS with short term rates. 5 YR CD deposits means they have some comfort in lending on a 3YR or 5YR ARM.
Banks may make their own decisions on short term funds, but they often use same tight guidelines.

The more people think they know, the more dangerous they are..can’t remember who said it first.
Lots more could be written….HLS

[HLS]

Not at all.. do you understand who “LENDERS” are ?? The govt is about the only lender today.
Lenders don’t make their own rules…”Lenders” Don’t make up the guidelines for 15/30 YR mortgages. There are slightly different guidelines for FNMA/FHLMC(Freddie)/FHA but that is how 90%+ of loans are originated today.

BANKS ARE MORTGAGE BROKERS..Wolves in sheeps clothing. They don’t have free loans. They don’t have the best rates. Consumers are clueless.
Salespeople sitting at desks telling people what is on their computer screen. Many have crappy credit scores and have never gotten a loan themselves. They originate loans to sell off just like mortgage brokers. A good mortgage broker will make your life easy and get you a great loan, a bad one will screw you even when it’s your friend or relative.

When guidelines are met, there is an endless amount of money available. The guidelines are getting tighter and tighter however.

When mortgage insurance is involved on a loan over 80%, the mortgage insurance company guidelines step in added to basic guidelines..,,here is an example.. https://www.ugcorp.com/rates/EligibilityGuidelinesSummary.pdf

FNMA loans need a DU approval from an automated system. Freddie loans are an LP approval.

Many wholesale lenders, banks included, have additional overlays for risk.

Banks don’t lend long and borrow short.
They don’t loan out their money for 30 years at 4.50% and pay depositor 3% for a 5 YR CD. That is suicide.
Mortgage brokers AND banks originate loans that are sold to FNMA etc who then bundles them into MBS (Mortgage Backed Securities) and sells them off with an implied guarantee of safety to “investors”

Most people think of a bank as one big happy company. The biggest ones are the biggest problems.

BANKS are (at least) 3 separate entities:
1) The building that you walk into where you make deposits and get screwed on fees
2)A SEPARATE MORTGAGE BROKER division that originates loans to be sold off
3)A SEPARATE division that services the loans that were sold off.

All divisions want to make a profit.
Because you started your loan at #1 above which then led to dealing with #2 and now you make payments to #3 doesn’t mean that you are going to get “special” treatment because you have banked with #1 and keep $100K in a CD.

I spoke with an auto finance manager the other day with 25 years in his industry. His comment to me was “consumers are stupid”. Most people got screwed if they bought a car during Cash for Clunkers. Prices went up, incentives disappeared, and it now appears that the $4500 is going to be taxed as income.

This is a simple overview of the situation.
Many people just don’t qualify for loans today, period. No such thing as a slam dunk, no brainer loan.

Portfolio loans are loans that a bank will keep in their portfolio/on their books. This might be ARMS with short term rates. 5 YR CD deposits means they have some comfort in lending on a 3YR or 5YR ARM.
Banks may make their own decisions on short term funds, but they often use same tight guidelines.

The more people think they know, the more dangerous they are..can’t remember who said it first.
Lots more could be written….HLS

[HLS]

Not at all.. do you understand who “LENDERS” are ?? The govt is about the only lender today.
Lenders don’t make their own rules…”Lenders” Don’t make up the guidelines for 15/30 YR mortgages. There are slightly different guidelines for FNMA/FHLMC(Freddie)/FHA but that is how 90%+ of loans are originated today.

BANKS ARE MORTGAGE BROKERS..Wolves in sheeps clothing. They don’t have free loans. They don’t have the best rates. Consumers are clueless.
Salespeople sitting at desks telling people what is on their computer screen. Many have crappy credit scores and have never gotten a loan themselves. They originate loans to sell off just like mortgage brokers. A good mortgage broker will make your life easy and get you a great loan, a bad one will screw you even when it’s your friend or relative.

When guidelines are met, there is an endless amount of money available. The guidelines are getting tighter and tighter however.

When mortgage insurance is involved on a loan over 80%, the mortgage insurance company guidelines step in added to basic guidelines..,,here is an example.. https://www.ugcorp.com/rates/EligibilityGuidelinesSummary.pdf

FNMA loans need a DU approval from an automated system. Freddie loans are an LP approval.

Many wholesale lenders, banks included, have additional overlays for risk.

Banks don’t lend long and borrow short.
They don’t loan out their money for 30 years at 4.50% and pay depositor 3% for a 5 YR CD. That is suicide.
Mortgage brokers AND banks originate loans that are sold to FNMA etc who then bundles them into MBS (Mortgage Backed Securities) and sells them off with an implied guarantee of safety to “investors”

Most people think of a bank as one big happy company. The biggest ones are the biggest problems.

BANKS are (at least) 3 separate entities:
1) The building that you walk into where you make deposits and get screwed on fees
2)A SEPARATE MORTGAGE BROKER division that originates loans to be sold off
3)A SEPARATE division that services the loans that were sold off.

All divisions want to make a profit.
Because you started your loan at #1 above which then led to dealing with #2 and now you make payments to #3 doesn’t mean that you are going to get “special” treatment because you have banked with #1 and keep $100K in a CD.

I spoke with an auto finance manager the other day with 25 years in his industry. His comment to me was “consumers are stupid”. Most people got screwed if they bought a car during Cash for Clunkers. Prices went up, incentives disappeared, and it now appears that the $4500 is going to be taxed as income.

This is a simple overview of the situation.
Many people just don’t qualify for loans today, period. No such thing as a slam dunk, no brainer loan.

Portfolio loans are loans that a bank will keep in their portfolio/on their books. This might be ARMS with short term rates. 5 YR CD deposits means they have some comfort in lending on a 3YR or 5YR ARM.
Banks may make their own decisions on short term funds, but they often use same tight guidelines.

The more people think they know, the more dangerous they are..can’t remember who said it first.
Lots more could be written….HLS

[DWCAP]

[quote=HLS]Lots more could be written….HLS[/quote]

If you keep writing, Ill keep reading.

The two books on my pigg reading (if they are ever written) list are:

1) ‘TG’s guide to anything/everything’.
2) HLS’s ‘Dont be a stupid consumer’.

On a side note, where would you get a auto loan? Bank? Credit Union? Dealer?

Oh, and what would happen if the governmemnt steped out of Lending? Just theoretically, would banks stepup and lend without being able to just offload to the GSE’s?

[DWCAP]

[quote=HLS]Lots more could be written….HLS[/quote]

If you keep writing, Ill keep reading.

The two books on my pigg reading (if they are ever written) list are:

1) ‘TG’s guide to anything/everything’.
2) HLS’s ‘Dont be a stupid consumer’.

On a side note, where would you get a auto loan? Bank? Credit Union? Dealer?

Oh, and what would happen if the governmemnt steped out of Lending? Just theoretically, would banks stepup and lend without being able to just offload to the GSE’s?

[DWCAP]

[quote=HLS]Lots more could be written….HLS[/quote]

If you keep writing, Ill keep reading.

The two books on my pigg reading (if they are ever written) list are:

1) ‘TG’s guide to anything/everything’.
2) HLS’s ‘Dont be a stupid consumer’.

On a side note, where would you get a auto loan? Bank? Credit Union? Dealer?

Oh, and what would happen if the governmemnt steped out of Lending? Just theoretically, would banks stepup and lend without being able to just offload to the GSE’s?

[DWCAP]

[quote=HLS]Lots more could be written….HLS[/quote]

If you keep writing, Ill keep reading.

The two books on my pigg reading (if they are ever written) list are:

1) ‘TG’s guide to anything/everything’.
2) HLS’s ‘Dont be a stupid consumer’.

On a side note, where would you get a auto loan? Bank? Credit Union? Dealer?

Oh, and what would happen if the governmemnt steped out of Lending? Just theoretically, would banks stepup and lend without being able to just offload to the GSE’s?

[DWCAP]

[quote=HLS]Lots more could be written….HLS[/quote]

If you keep writing, Ill keep reading.

The two books on my pigg reading (if they are ever written) list are:

1) ‘TG’s guide to anything/everything’.
2) HLS’s ‘Dont be a stupid consumer’.

On a side note, where would you get a auto loan? Bank? Credit Union? Dealer?

Oh, and what would happen if the governmemnt steped out of Lending? Just theoretically, would banks stepup and lend without being able to just offload to the GSE’s?

[Rt.66]

This has turned into a good thread with great posters.

What the people in the article need to do is the “short sale but keep the house” option that SDRealtor pointed out in the “Question for the bulls” thread. That way they get a lower loan balance too. Why go for just a refi when short sale, with retention of the home being shorted, gets you a lower rate and balance and the house?

[Rt.66]

This has turned into a good thread with great posters.

What the people in the article need to do is the “short sale but keep the house” option that SDRealtor pointed out in the “Question for the bulls” thread. That way they get a lower loan balance too. Why go for just a refi when short sale, with retention of the home being shorted, gets you a lower rate and balance and the house?

[Rt.66]

This has turned into a good thread with great posters.

What the people in the article need to do is the “short sale but keep the house” option that SDRealtor pointed out in the “Question for the bulls” thread. That way they get a lower loan balance too. Why go for just a refi when short sale, with retention of the home being shorted, gets you a lower rate and balance and the house?

[Rt.66]

This has turned into a good thread with great posters.

What the people in the article need to do is the “short sale but keep the house” option that SDRealtor pointed out in the “Question for the bulls” thread. That way they get a lower loan balance too. Why go for just a refi when short sale, with retention of the home being shorted, gets you a lower rate and balance and the house?

[Author]

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