Mortgage Professional

Having worked many years in the Industry and worked within many departments and positions I am going to give you the standards for a Mortgage Professional and "some" of what they should know and the answers that they should be able to give a customer. I have Managed, Originated loan, Underwritten and processed loans and worked in other areas as well. So my definition of a Professional is based upon what the requirements are for a person who holds the title of Loan Officer, Account Executive, or anyone who takes your mortgage loan application.

The Loan Officer or Account Executive or other name that is used usually will take your loan application and ask you questions about your current financial position. They should complete the application or have you fill it out. The will require documentation concerning you income and they may ask you some questions concerning your previous job, if you have worked on your current job less than 2 years. They will gather information about your assets, liabilities, real estated owned (if applicable). They will ask you to provide your most current bank statement to cover at least 2 months, to show your liquid funds for closing. If you have investment accounts or stocks they will as for statements on these. They will require you to list a schedule of real estate owned with balances and payments. They tell you that they will have to pull your credit report, document your income and they should then be able to give you a quick analysis of your debt to income ratio once they have your income and have pulled your credit for your debts.

After they have reviewed your credit, income and assets, they can give you a preliminary evaluation and let you know if you can or cannot qualify for the mortgage. They should be able to give you advise about the term and program/product of the mortgage that best suites your financial status and what is best for your current situation.

The Mortgage Professional must give you these disclosures within (3) days of application:

(1) GFE- Good Faith Estimate: this form gives you the cost of the loan. It should include all fees including the Attorney/Closing Agent fees and all filing fees. This form has just been revised by RESPA and new guidelines exist and the fees should be well within close proximity to the final HUD1 Settlement Statement at closing.

(2) TIL (Initial Truth-In-Lending form): this form will provide an estimate of the cost of the mortgage loan over the life of the loan with an estimated interest rate and an APR, (Annual Percentage Rate). It will include the amount financed, the financing charges and the total amount to be paid over the term of the loan. The APR will usually be different than the interest rate as it may includes the allowable closing that can be added if the borrower pays this cost.**This form also will let you know if you have or may have a prepayment penalty.

(3) Servicing Disclosure: This is a form that will tell you if the Lender will service your loan or if they will sell the servicing to another Lender.

The Loan Officer will collect certain fees from you and should be capable of explaining any terms of any type of mortgage loan he/she is offering you. He/she should be able to explain an ARM (Adjustable Rate Mortgage), the loan parameters of the ARM, how the rate and payments will adjust with the % of adjustments at each period. They should give you an ARM disclosure to sign and a copy to keep.

The Loan Officer should be able to explain all the fees which are on the GFE and why they are charged. He/she should be capable of explaining any amortization term. The interest rate, the discount points etc. Actually a discount is normally paid to lower an interest rate by the borrower. Some Brokers use that space on the GFE to charge an additional fee, but you should know to ask what each fee is for and it should be explained to you.

Most Mortgage Professional have access to the investor Underwriting Systems which has information input into them and it will spit out the terms of which the loan can be approved. Any documentation which is request from you should be explained by the Professional and why it is being requested. For instance, if you have child support or alimony, they may ask for a divorce decree.

A Mortgage Professional has a duty to you, the customer and is held accountable to give you the best possible deal and one that meets your need and financial position. Not the one that pays them the most commission. It is imperative that they have creditability and they are bound by a code of ethics which designates they provide professional integrity in all facets of mortgage lending and give advise that is not for profit but for sound lending practices.

Please do not get me wrong. There is no way for anyone to remember every detail of Mortgage Lending. These Professionals are very busy people, there are many, many guidelines and regulations which have to be followed and they should have a certain amount of knowledge so that you know they know what they are talking about. They should be able to answer your questions or get back to you if it is something they are uncertain about. If you ask 5 questions and they cannot answer any of them, you may need to reconsider.

The reason I have written this article is because during the time before the Mortgage Meltdown, there were a lot of Broker offices and Companies that hired inexperienced people. Some did not know how to take an application but the income was good and they might have had sales experience. To me Sales Experience in selling cars (example only) is far different than having the Sales Experience and the knowledge that come with making mortgage loans. The Mortgage Professional has to know what it takes to qualify for a mortgage loan:

1. what the credit requirement are
2. how to figure income, view paystubs, tax returns and business returns
3. how to review credit
4. how to review an appraisal report
5. what documentation is need, plus many other aspects of the loan transaction and
6. he/she must be able to express that to you the customer

Good luck in finding the right Mortgage Professional for your next mortgage loan.