Loan Think

It seems clear that changes made to the HARP program late last year have spurred a strong wave of usage that the industry didn’t anticipate. It doesn’t matter, of course: mortgage bankers are now writing new HARP loans left and right and competition is picking up thanks to Fannie Mae and Freddie Mac upgrading their AU systems.

Documenting and verifying a borrower’s income is one of the most basic tasks for an underwriter. While this appears to be relatively simple, validating income has become increasingly complex and susceptible to borrower fraud.

You remember the HARP program, don’t you? Originally, the idea was to refinance current but high LTV Fannie Mae/Freddie Mac borrowers into new, lower-rate loans—provided they were current. Home values (and lack of equity) reeked havoc on the concept so Uncle Sam took the LTV girdle off.

Mortgage interest rates may be at historically low levels, but the housing industry is not helping the overall economic recovery in the U.S. With the secondary market all but dried up except for Freddie and Fannie, who together purchased over three-quarters of originations in 2011, getting a mortgage these days is near impossible—perfect borrowers need only apply.

Given today’s rancorous partisan atmosphere, which has almost shut the Congress down, what measure do you think you could get a 400-0 vote on?

Dodd Frank could be interpreted to prohibit payments to originators of upfront points and fees. Eliminating compensation on such loans would create a certain amount of havoc and disarray for lenders.

Like any other discipline, selling should be learned and practiced in order to achieve effective results. Seminars, sales coaches, tapes, books, blogs and articles are some resources that might prove informative.

Loan officers and brokers are none too thrilled with the Consumer Financial Protection Bureau’s 37-page proposal on altering the way loan officers, brokers, and lenders are compensated on all mortgage transactions.

More from a contributor who wishes to remain anonymous but wanted to spread the word that taking care of your personal well being is the way to outperform the competition.

The Consumer Financial Protection Board stated that it will continue to use the doctrine of disparate impact in its supervisory and enforcement activities.