Monday, December 29, 2014

Why some mortgages get suddenly canceled

You and the home seller put it to paper that you are buying your new palace. You put a big deposit down. You shell out $1,000 for an appraisal and home inspection. After all of the ridiculous mounds of documentation you supplied and seemingly endless questions answered, your loan officer finally calls to tell you that your loan is approved.

You are so excited! Proud as a peacock, you tell your relatives, friends and co-workers that this family is moving up in this world. Expectations are in place that this is a done deal. The movers are scheduled. Then, you get a phone call out of nowhere from your lender telling you the loan is not funding -- in other words, that you can't get the loan after all.

Isn't a deal a deal? How can this be that one minute you are good to go and the next minute it's a dead deal. Why wasn't I told about this before? Can we save this?

Although there are no documented statistics or lender reporting requirements, this 11th hour nightmare happens more often than you might think. This is usually both preventable and fixable.

The most common prior-to-funding fiasco is when a borrower takes out additional credit after the initial credit report is run by the loan originator. The income and debt calculations used to grant credit to borrowers is always based upon the initial credit report. Most lenders run a backup credit report or have credit monitoring systems that trigger an alert if the borrowers open any new accounts or add debt to their credit cards, for example. If a borrower applied for credit or added a significant amount of additional debt, the credit scores can worsen as well. A reduced middle credit score can separately trigger a higher cost to the loan or if it gets below the line, a denial.

It doesn't matter if you need to buy new furniture for your new digs, do not do anything excessive. Your normal patterns of purchasing groceries, gasoline, etc., are highly unlikely to affect your qualifying ratios or your credit scores.

Another gotcha is property-related funding conditions. Perhaps the lender requires proof of a permit for a room addition. If one does not exist, it's a scramble to get the local municipal authority to inspect, approve and issue a permit in a timely manner.

Lenders always call to verify your employment prior to funding. If you are planning on resigning and taking another position, wait until after the loan closes. And separately, hold your tongue at work even if your boss is a bozo. Don't get yourself fired, period, whether it's before or after funding.

Very recently I had a shocker. The lender approved the loan. Two separate mortgage insurance companies declined the loan. This is rare but this can happen as different underwriters may interpret credit and income differently. Luckily, the third mortgage insurance company approved the loan and the deal was done.


Friday, December 26, 2014

Mortgage rates edge up from this year's lows

Fixed mortgage rates ticked up this week but remain near lows for the year, according to Freddie Mac’s weekly survey of lenders.

The average rate for a 30-year loan hit 3.83%, up from its 2014 low of 3.8% last week, the mortgage finance giant said Wednesday. Lenders, on average, offered a 15-year fixed mortgage for 3.10%, compared to 3.09% a week earlier.

Experts expected mortgage rates to climb this year, but instead they're closing out below 2013 levels. A year ago, lenders offered a 30-year-fixed mortgage at 4.48%.

A variety of factors have pushed the cost of money down, including concerns over global economies.

Freddie Mac's survey asks lenders each week about the terms they offer low-risk borrowers on loans up to $417,000.

Actual rates are influenced by many factors, including a borrower's debt load and credit history.


Wednesday, December 17, 2014

About James Clooney

Possessing nearly 30 years of experience, James Clooney is a veteran investment professional. Jim Clooney began his career as a Junior Auditor at Arthur Young International, known today as Ernst & Young, one of the world’s Big Four international auditing firms. Within less than a year, James Clooney was recruited as a Senior Auditor at Touche Ross, which today is part of Deloitte Touche Tohmatsu Limited, another one of the Big Four.

Jim Clooney served in that capacity until he was brought on board at Prudential Securities as an Account Executive in 1983. As the number-two trainee in the company, James Clooney excelled in his capacity as an Account Executive at Prudential Securities. In 1984, Jim Clooney was recruited by Lehman Brothers Holdings, Inc. to serve as Assistant Vice President of Brokerage. As a result of James Clooney’s skill, he was recruited by UBS in 1984 to serve as Assistant Vice President of Brokerage, a position he held until 1986. During his tenure, James Clooney managed $7.5 million in equity and was the second-most productive salesperson in his office in 1986.

As a result of James Clooney’s success, he was recruited by Salomon Smith Barney in 1986 to function as Vice President. In this capacity, James Clooney managed $10 million in equity and was the top salesperson in his office in 1987. In 1989, Jim Clooney moved on to join Biltmore Mortgage as President of Brokerage, running all operations. It earned the distinction of being the fastest growing brokerage firm in Melville, New York, from 1989 to 1992.

Departing from Biltmore Mortgage, James Clooney joined the CVO/JEC Consulting Corporation as President, a position he held until 2009. During his tenure, James Clooney held responsibility for directing the successful company in delivering effective consulting financial services, marketing, and sales. Under James Clooney’s leadership, CVO/JEC Consulting was recognized as the fastest-growing online mortgage bank from 2002 to 2008.

James Clooney left CVO/JEC in 2008 to become Principal of Total Solutions Advisors, Inc. Since 2008, James Clooney has acted as Principal for Real Estate for Total Solutions Advisors, seeing to the marketing needs of real estate and consumer finance companies. Under James Clooney’s leadership, the company is currently rated Best ROI in Mortgage Marketing. A fan of the works of John Steinbeck, James Clooney is a supporter of the East Norwich Fire Department. James Clooney is also an avid tennis player who holds National Senior ranking.