Confessions of a Contract Processor: Get around HVCC with DU Refi Plus!
Mary’s True Confessions: Under Estimate and Over Deliver!
Would you like to get paid quicker?
Increase your pull-through knowing you’ve sold a deal that is going to close?
Structure your deals once and not have to make changes to loan amount once appraisal comes in?
You already know that the government has committed tons of money this year to lower mortgage rates. Furthermore, through HARP the government has put together special lending programs to help more people qualify. So have you figured out how to use the system to help you?
If this sounds interesting, get out your pencil and start taking notes! Here is one way to make it work for you. When you run a credit report, take note if it is a Fannie Mae loan and if so, have your processor run the file thru DU to see if you can get an Appraisal Waiver with DU Refi Plus findings.
Since the middle part of the summer we are hearing that processors have been getting appraisal waivers for their brokers thus eliminating the fingernail pulling pain HVCC imparted back in May. My customers each have their own processor or at least a lead processor that they work with daily. When taking applications, we are now encouraging them to run findings up front in order to see if we can gain waivers eliminating the need for an appraisal altogether!
Here are some of the tricks of the trade: Under estimate the value BELOW the original purchase price…..lower it to the minimum possible LTV without obtaining a price hit. Here are two actual examples:
Borrower A bought a house in 2008 for $380K putting down 76K or 20% down. The loan officer told the processor that the loan was going to a particular lender that had no pricing hit for 95%LTV on their DU Refi Plus program. The processor ran the file with an expected value of $321K, slightly under the 95%LTV. Bam! Findings came back with an appraisal waiver! That is the way to get a file going!! No HERA disclosures were needed! No HVCC appraisal to wait on! Full file was processed the next day and sent to the lender… the loan closed two weeks later and everyone got paid…quicker! Again, under estimate and over deliver on quick turn times!
Feeling skeptical?? Check out borrower B:
Borrower bought house on the coast of South Carolina for 88OK six years ago. He told the LO his house was worth a million plus. The homeowner had a busy schedule traveling out of town routinely and didn’t know when he could accommodate the appraisal process. The purpose of the loan was to pull cash out! Seriously, his loan amount was $298,000 and he was pulling cash out to $365,000 and subordinating a $190,000 HELOC. The processor ran the estimated value at $610,000 (just slightly under 60% LTV giving the broker extra compensation) and got an appraisal waiver! If you’re not reading closely here are the variables: Cash out; subordinating a 2nd of $190K. Oh, and by the way, the 2nd lender gave no grief on not having an appraisal for the subordination. File closed quickly with no expensive, slow appraisal needed!
So work closely with your processor up front and have more success. Keep your fingers crossed and try it! You could get paid quicker and move solid deals forward!
Processor Clue of the Week:
This is not going to work for every deal and who knows what the “secret” criteria are, but it saves lot’s of time for everyone if it comes back with a waiver…..Worth a Shot! processor/atlanta, ga.
Penny for Your Thoughts (Send us your question and we’ll give you our two cents!):
Chris in Norcross asks: when do originators in Georgia have to have completed their 20 hour licensing hours and pass the Federal and State test?
This is a very common question and here are the facts: To become or remain an originator in the state of Georgia, you must register with and provide to NMLS your proof of completion of the required 20 hour pre-licensing course as well as pass both the state and federal test by March 31st. It is important to note that this is the drop dead date. If you submit on time as an existing MLO, the state of Georgia will allow you to continue originating until approval is either issued or denied. If you DO NOT submit by the March 31st deadline, you cannot originate during the wait period. If you are a new MLO entering the industry, you may not originate until approval is issued.
Got any success stories or processing tips?? Send them my way, I would love to share with our readers!!