Posted September 21, 2015

Better SAFE than Sorry

Earlier this month, the Community Home Lenders Association posted on their website a side-by-side comparison of consumer regulation required of non-bank mortgage lenders (like Priority Lending) versus banks. The details are chilling.

Every individual Loan Originator at a non-bank lender must:

•Be licensed

•Complete SAFE Act Mortgage Competency Test

•Complete 20 hours SAFE Act pre-licensing courses

•Pass an independent criminal background check

•Do 8 hours/year of SAFE Act continuing education

Banks are completely EXEMPT from ALL of the above. Further, all non-bank mortgage lenders are subject to CFPB exams covering:

•Compliance with RESPA

•Other statutory requirements

All banks with under $10 Billion in assets are exempt – that’s 99% of all banks. These facts do not imply that all banks play fast and loose with borrowers and their dreams of buying a home. However, they do lay out a solid and persuasive argument to encourage buyers to go with a non-bank mortgage lender, without a doubt!

Shiny Objects Can Be Pretty . . . Expensive

Back in May, Trulia determined that new homes cost roughly 20% more than similar existing homes. Here are some other things to share with buyers:

Disadvantages to Buying a New Home

•More expensive than buying used

•Location probably isn’t ideal

•Despite being new, workmanship might be questionable

•Could be subject to costly HOAs, even if it’s a house

•Neighborhood dynamic is unknown

•Property values might be more volatile

•Construction nearby (eyesore and noisy)

•More cookie-cutter, less unique

Advantages to Buying an Existing Home

•Possibly cheaper

•Better, more central location

•Can buy in an established school district

•Can own in a more reputable and recognized neighborhood

•Old house might have new upgrades

•You can always renovate if need be

•Older houses tend to have more character, custom design

•Could actually be built better than a new home

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The Definition of Insanity (in Real Estate)

More than a couple of years ago, I witnessed something that makes me laugh and cringe at the same time. Having lunch at a local restaurant, I spied a real estate agent and a loan originator having what I would characterize as a “first date”. I couldn’t help but overhear little snippets of their conversation, and as far as I could tell, things were going relatively well . . . at least until the agent asked the LO this question: “So, do you like to sit at open houses with agents?” I immediately looked to the LO’s face awaiting the response. I didn’t need to hear another single word coming out of the LO’s mouth because his face said everything: you would have thought the agent had asked him if he enjoyed bobbing for apples in a pool of acid judging by the look on his face. While his face was communicating complete revulsion, his lips said, “Yes, of course.” And that’s when I looked over at the agent’s face to see, ...

Time for a New York-Style Housing Fix

Previously, I’ve written about a man who works in our office who lived in New York City back in the late ‘80s and early ‘90s – let me assure you that while that does seem like a very long time ago, it’s not nearly as far bac k as when the wheel was invented and humankind learned to harness the power of fire. If you’ve been to New York City recently and blissfully walked around Harlem to get chicken and waffles at Sylvia’s on Malcolm X Boulevard between 126 th and 127 th Streets or stopped in at Keybar on 13 th Street between First Avenue and Avenue A to wedge yourself into a cozy corner next to their notable fireplace, you wouldn’t get a sense that these areas were once . . . not as welcoming and glitzy as you now see them. Our office mate has told some fairly interesting stories of living in those and other areas of New York City that give a much different sense. In the late ‘80s/early ‘90s, no matter how many great things you heard about Sylvia’s food, 127 th Str...

Change: the Only Sure Thing

Which headline is better for grabbing your attention and prompting you to read the article to which it’s attached: “Credit Reports to Exclude Certain Negative Information, But Read on to See if This Even Applies to You” or “ Credit Reports to Exclude Certain Negative Information, Boosting FICO Scores”? Obviously, the former is less than tantalizing while the latter makes you say, “Tell me more!” I was in the “tell me more” camp, and the folks at The Wall Street Journal sucked me into their vortex. The development, set to go into practice on July 1 st , is certainly a departure from how the Big Three (Experian, TransUnion , and Equifax) have done things in the past, but it’s not going to wave a magic wand and make bankruptcies, foreclosures, short sales, etc., go away. It’s sort of a bittersweet development. Let me explain: Many tax liens and civil judgments will be removed from people’s credit reports if they don’t include a complete list of a...

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