30 yr mortgages in the 2s!

78,475 Views | 444 Replies | Last: 3 yr ago by chris1515
I bleed maroon
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In reply to SteveBott • 7:47p, 7/24/20
AG
SteveBott said:
Mortgage Originators do not in anyway whatsoever control which loans get appraisal waivers. Never have and never will. Even the lender has no control over this process. It is strictly a Fannie/Freddie decision. Period.

Those entities control them through built in algorithms in their systems. I assume they use the millions of data points they collect. We input the data of your file and they render a decision. That is it. We can manipulate the data input to a small degree and can influence the output and we all do. But there is only so much we can do.
?

I never said that the mortgage broker "got me a waiver". All I said is that he tried to find ways to reduce fees. I asked him about getting the appraisal requirement removed, and while he could have said "no, that's not the way this process works - I'm just a small cog in the machine", he instead said he'd check into it for me. If I hadn't asked, I am fairly certain the underwriter wouldn't have offered it up on their own. I have closed several dozen loans, and have yet to find an underwriter who removes a requirement without being asked - - they're belt and suspenders kind of people, generally, and they rarely get fired for being too cautious.

Now, mortgage brokers are free to run their business however they want, I'm just saying I appreciate one who will go a little bit out of their way to work for their customer's betterment, and not just say "there's not much that can be done" to avoid a little extra work.
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AgEng06
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In reply to I bleed maroon • 8:29p, 7/24/20
AG
What Steve is saying is he didn't really do anything special for you, it just seemed like it so you'd sing his praises.

I'm just meddling... a little.
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I bleed maroon
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In reply to AgEng06 • 8:40p, 7/24/20
AG
AgEng06 said:
What Steve is saying is he didn't really do anything special for you, it just seemed like it so you'd sing his praises.

I'm just meddling... a little.
Well, you're meddling with the wrong guy.

I know how the process works. I know it's much easier for a mortgage broker to tell a customer it can't be done. They're overloaded with dozens of customer files, and each annoying customer question takes time, and most of them are indeed silly. This one wasn't. It takes very little additional effort to tell a customer they'll check into it. I'm not trying to sing anyone's praises, but I do appreciate a vendor treating a customer well.

Or are you actually saying that the underwriter would have waived the appraisal anyway, on their own volition? Come on...
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SteveBott
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In reply to I bleed maroon • 8:43p, 7/24/20
AG
Dude I play with the value to get a waiver on every single loan since March. They are much harder now the two months ago. It is called customer service. Many posters could think From your post this guy has a magic wand.

I can save all the fees you want if you let me charge a rate higher then market. That's not a wand either.
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I bleed maroon
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In reply to SteveBott • 8:47p, 7/24/20
AG
SteveBott said:
Dude I play with the value to get a waiver on every single loan since March. They are much harder now the two months ago. It is called customer service. Many posters could think From your post this guy has a magic wand.

I can save all the fees you want if you let me charge a rate higher then market. That's not a wand either.
Man - quit digging.

Now you're suggesting I played with my value? It wasn't needed - it's a 40% LTV loan.

I never said anything about the broker waving any kind of a magic wand. Like you say, it's just basic customer service. Some brokers believe in it, some don't. It sounds like you do, too - congrats!

Can you beat 2.625% on a 30 year fixed? I don't think I'm getting charged a higher than market rate, by any stretch. You sound just a wee bit defensive.
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SteveBott
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8:56p, 7/24/20
AG
I just don't like misinformation.
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I bleed maroon
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In reply to SteveBott • 8:57p, 7/24/20
AG
SteveBott said:
I just don't like misinformation.
Then tell me what misinformation I stated, please?
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SteveBott
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9:00p, 7/24/20
AG
Nah I'll let the board decide. Have a great evening. And weekend. Hopefully you get some rain.
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I bleed maroon
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In reply to SteveBott • 9:03p, 7/24/20
AG
SteveBott said:
Nah I'll let the board decide. Have a great evening. And weekend. Hopefully you get some rain.
Nah - I don't think so. You call me out, fine. But be specific. Seriously, please share - I'm curious.

Hope you have a good weekend, too, and yes, we all need rain.
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hph6203
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In reply to I bleed maroon • 9:03p, 7/24/20
AG
There is not an underwriter making that determination, it's an automated system called Desktop Underwriter (FNMA) or Loan Prospector (FHLMC) he did not ask anyone for a waiver, he plugged in some numbers, clicked a button and it returned a confidence value for your property value relative to other properties in your area and determined that the stated value was with a reasonable range of the values of the area in which you reside. He basically tried a couple of values (or one) and it spit out a waiver.

Bott probably does that dozens of times a day, it's not hard and they're incentivized to do it because it reduces turn times, reduces manual underwriting and it costs them minutes to do. If he's not doing that on the majority of the loans he does he's doing it wrong.


I'm not even sure that your LTV calculates into it substantially, it's more about verifiable values near you, because appraisal values are reported to FHLMC/FNMA.
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I bleed maroon
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In reply to hph6203 • 9:05p, 7/24/20
AG
hph6203 said:
There is not an underwriter making that determination, it's an automated system called Desktop Underwriter (FNMA) or Loan Prospector (FHLMC) he did not ask anyone for a waiver, he plugged in some numbers, clicked a button and it returned a confidence value for your property value relative to other properties in your area and determined that the stated value was with a reasonable range of the values of the area in which you reside. He basically tried a couple of values (or one) and it spit out a waiver.

Bott probably does that dozens of times a day, it's not hard and they're incentivized to do it because it reduces turn times, reduces manual underwriting and it costs them minutes to do. If he's not doing that on the majority of the loans he does he's doing it wrong.
Now that's a better answer. Thanks!
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SteveBott
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9:12p, 7/24/20
AG
I cannot tell you how many DU (desktop underwriting) approvals/findings I've run. Thousands in 17 years.
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I bleed maroon
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In reply to hph6203 • 9:12p, 7/24/20
AG
hph6203 said:


I'm not even sure that your LTV calculates into it substantially, it's more about verifiable values near you, because appraisal values are reported to FHLMC/FNMA.

On second thought, this part isn't accurate. Value is a key component of the LTV calculation. Therefore, unless you believe I would get the same loan and rate for a 95% and a 40% LTV, it is quite important.
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hph6203
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In reply to I bleed maroon • 10:17p, 7/24/20
AG
That's not what that says.

I work in mortgage, I worked on 150 different loans today. I've been doing this 10 years now. I have a pretty good understanding of what I'm talking about and I can say confidently I know more than you do. You have little idea of what the behind the scenes process of qualifying for a loan is, you know income is important, debt is important, value is important and loan amount is important, but you don't know the ins and outs of it. I have a pretty damn good understanding of it, and I guarantee Bott knows more about qualifying for a loan than I do as I don't actually work directly with customers through that process. I work on loans after the underwriter has approved it and verify that they or the processor or loan officer didn't screw up.

Your LTV may play a roll in whether or not you get a PIW (property inspection waiver), but it is certainly not the biggest factor in whether or not you get one. The qualification of one may tighten as you approach 80% LTV, but once you get to 70% it's probably a wash between 70 and 50%.

The biggest factor is the number of available data points and the variability of the data points. In other words if you live in a rural area with one house that's 3500 sq ft and the one next door is 1500 sq ft and there's a variance of $100,000 in value between the two and that's typical of the area then you're highly unlikely to live in a community that would qualify for a PIW.

If you live in a cookie cutter gated community that has the same types of houses save for the walk in closet vs standard or granite counter tops vs silstone or whatever you're much more likely to get a PIW if there are enough recent verifiable data points near you to justify the valuation the loan officer put in for you.

It's a statistical analysis, the larger the number of data points and the less variability between those data points increases the likelihood that your property value is within a certain range. If the value input by your loan officer falls outside that range (too high or too low) you wouldn't get a waiver, even if you could qualify for one. If he puts in a value that does fall within that range you would. In other words your property is highly comparable to the neighborhood you live in.

For the record a value 60% higher than the proposed loan amount is actually 62.5% LTV not 40% LTV, 40% LTV has a value 2.5 time the proposed loan amount.

LTV is loan to value. Loan Amount/Value. 1/1.6=62.5%. 1/2.5=40%. Yes I'm being a *****, because you're talking to people who have more experience with home loans in a day than you'll have in a lifetime and you're acting like you're more knowledgeable. What he "did for you" is a standard part of his job, it gets him paid faster and more consistently. He may have done marginally more to get it done, but not significantly. If he's not doing that on the majority of his loans he's bad at his job. I'm not saying he's not good to work with, but that's not a stand out reason.


As an aside, low LTV can actually be a hindrance to the pricing you get on a loan. I'm at <40% LTV, but my value is ~400,000. Because my loan balance is <200,000 and my LTV is <40% I'm at risk for prepayment and they've locked money up on a person that may not hold the loan long enough to make it worth their while. I get offered rates in the mid 3's because of that. So it's not as simple as you're making it out to be.
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62strat
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10:34p, 7/24/20
AG
This is dead on with how my guy explained it. My house is Cooke cutter, so loads of data points. I told him it's likely worth 580-590 due to recent sales nearby of same house, but he said he put in 550 to be conservative. Loan is for 310, so no reason to put in 580 or more. It got waived.

I've worked with 3 people now on refis, And always got an appraisal waiver. It certainly doesn't seem like something you have to fight for as a customer of the numbers are there.
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I bleed maroon
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In reply to hph6203 • 10:36p, 7/24/20
AG
hph6203 said:
All this for a throwaway joke comment that the V in LTV stands for Value? That's OK - thanks for the input.

That's not what that says.

I work in mortgage, I worked on 150 different loans today. I've been doing this 10 years now. I have a pretty good understanding of what I'm talking about and I can say confidently I know more than you do. You have little idea of what the behind the scenes process of qualifying for a loan is, you know income is important, debt is important, value is important and loan amount is important, but you don't know the ins and outs of it. I have a pretty damn good understanding of it, and I guarantee Bott knows more about qualifying for a loan than I do as I don't actually work directly with customers through that process. I work on loans after the underwriter has approved it and verify that they or the processor or loan officer didn't screw up.

Great - your credentials are solid. OK so far...

Your LTV may play a roll in whether or not you get a PIW (property inspection waiver), but it is certainly not the biggest factor in whether or not you get one. The qualification of one may tighten as you approach 80% LTV, but once you get to 70% it's probably a wash between 70 and 50%.

So, it is a factor between 40% and 95% as I stated, you agree? By the way, it's "role".

The biggest factor is the number of available data points and the variability of the data points. In other words if you live in a rural area with one house that's 3500 sq ft and the one next door is 1500 sq ft and there's a variance of $100,000 in value between the two and that's typical of the area then you're highly unlikely to live in a community that would qualify for a PIW.

Understood, and this situation doesn't apply to me, therefore I asked for a waiver.

If you live in a cookie cutter gated community that has the same types of houses save for the walk in closet vs standard or granite counter tops vs silstone or whatever you're much more likely to get a PIW if there are enough recent verifiable data points near you to justify the valuation the loan officer put in for you.

So now you're insulting my house as cookie cutter? Just kidding.

It's a statistical analysis, the larger the number of data points and the less variability between those data points increases the likelihood that your property value is within a certain range. If the value input by your loan officer falls outside that range (too high or too low) you wouldn't get a waiver, even if you could qualify for one. If he puts in a value that does fall within that range you would. In other words your property is highly comparable to the neighborhood you live in.

Makes sense.

For the record a value 60% higher than the proposed loan amount is actually 62.5% LTV not 40% LTV, 40% LTV has a value 2.5 time the proposed loan amount.

Correct, that's why I said 40%, because that's what it is. Not quite sure why I'm getting a math lesson, here.

LTV is loan to value. Loan Amount/Value. 1/1.6=62.5%. 1/2.5=40%. Yes I'm being a *****, because you're talking to people who have more experience with home loans in a day than you'll have in a lifetime and you're acting like you're more knowledgeable.

Now you're just being a jerk. You have no idea of my credentials (they're a little more relevant than you might think). If you posted without the condescension, you'd be much more effective.

As an aside, low LTV can actually be a hindrance to the pricing you get on a loan. I'm at <40% LTV, but my value is ~400,000. Because my loan balance is <200,000 and my LTV is <40% I'm at risk for prepayment and they've locked money up on a person that may not hold the loan long enough to make it worth their while. I get offered rates in the mid 3's because of that. So it's not as simple as you're making it out to be.

I agree, and that's a good point.

See comments in bold above, and have a nice evening.
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hph6203
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In reply to I bleed maroon • 10:44p, 7/24/20
AG
I bleed maroon said:
Stive said:
I bleed maroon said:
Diggity said:
any points on that?
No points. Also, no appraisal required due to 50% equity in home. Tom looked for ways to reduce fees - not typical for a mortgage broker.
How would they know there was 50% equity without the appraisal?
Exactly. Current mortgage has the value at 60% higher than proposed loan amount, Travis County Appraisal District has the valuation at 58% higher than proposed loan amount. So it's a pretty safe bet. Of course, neither is a binding appraisal, but he got the underwriters to waive the requirement, saving me money in closing costs. I give him kudos for that.

This post is why you're getting a math lesson.

You certainly do not come across like you know what you're talking about, whatever your credentials are, and you've been arrogant throughout. You told someone with 17 years of experience and 10 years of experience that they're wrong about what they do for a living. Ruminate on that.
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I bleed maroon
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In reply to hph6203 • 11:14p, 7/24/20
AG
hph6203 said:
I bleed maroon said:
Stive said:
I bleed maroon said:
Diggity said:
any points on that?
No points. Also, no appraisal required due to 50% equity in home. Tom looked for ways to reduce fees - not typical for a mortgage broker.
How would they know there was 50% equity without the appraisal?
Exactly. Current mortgage has the value at 60% higher than proposed loan amount, Travis County Appraisal District has the valuation at 58% higher than proposed loan amount. So it's a pretty safe bet. Of course, neither is a binding appraisal, but he got the underwriters to waive the requirement, saving me money in closing costs. I give him kudos for that.

This post is why you're getting a math lesson.

You certainly do not come across like you know what you're talking about, whatever your credentials are, and you've been arrogant throughout. You told someone with 17 years of experience and 10 years of experience that they're wrong about what they do for a living. Ruminate on that.

Yep - 40% is correct. That's bad quick-and-dirty math by me above.

Yep - you're still arrogant, but I was a bit too. Sorry.

I would never claim either of you is bad at what you do for a living. I'm sure you're great!

I'm still happy I'm getting a good rate, with lower than expected fees and good customer service.
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Diggity
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11:20p, 7/24/20
AG
Jesus, shut up both of you
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hph6203
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In reply to I bleed maroon • 11:47p, 7/24/20
AG
You did very well, the point was that loan officers will use anything to convince you that you're getting a good deal so you stick with them. Whether or not you need an appraisal is a universal across lenders and shouldn't factor into who you get your loan from, that was Bott's point. When he says he plays with the value he doesn't mean you were being fraudulent, FNMA/FHLMC have an expected value for your property. The value will impact whether or not you need an appraisal and the LTV will impact your pricing, so sometimes it makes sense to get the appraisal done to get better pricing. That will be pretty consistent lender to lender.

So when a guy says he got you a loan with no appraisal it's not a feature of that shop, and if he used the value you gave him he really did no extra work. It's a feature of the automated underwriter system that's used across the industry. When you shop rates it's four (primarily three) things: rate, lender fees, turn around times and title fees. I would not trust a loan officer much on their turn times and would go based upon reputation from their customers (though there can be a lot of variability). Title fees can, usually, be shopped on your own (normally unnecessary unless you have an existing relationship with a title office). That leaves rate and lender fees as the primary thing you're looking for, because smaller shops are just going to sell your loan to a big servicer and big banks are going to charge you more (generally).

ETA: Most people don't shop rates effectively, they go to whoever has their checking account, whoever they saw on TV, or whoever currently holds their mortgage. I work at a spot that has generally higher rates and wouldn't suggest anyone I know to get a loan from us. The delta isn't outrageous, but it's definitely not the best deal, because we operate off a captive audience of loans we service rather than competing on the open market. 99% of the loans I do are loans my company currently services. The one benefit to our customers is that because we hold their current mortgage we can utilize their existing escrow account to reduce their beginning balance/out of pocket.
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SteveBott
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In reply to hph6203 • 12:04a, 7/25/20
AG
I'm guessing but you are a processor at a big lender. Every thing you posted is spot on. You just said it better then me.
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Ducks4brkfast
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In reply to SteveBott • 12:20a, 7/25/20
AG
* better than I
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hph6203
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In reply to SteveBott • 12:33a, 7/25/20
AG
I have been a processor before, but it's not something I enjoyed, mostly because I started and ended my experience with that during 2014 (?) during a rate spike where my company had been extending locks cost free and working loans that were 90-180 days old and sourced from a loan portfolio that led to a lot of messy title reports.

I work as a closer/funder (some places split the role, we used to, not anymore) even though I understand the business better than the vast majority of processors at my company (we do a lot of FHA Streamline/VA IRRRL business on top of conventional, so minimal knowledge needed). I make up for the pay gap by being extremely efficient and prefer it since I don't have to deal with customers and my month to month volume is extremely consistent.

1 year customer service/call center (20,000 separate calls over that year)
1 year loan setup (stacking paper into folders)
2 years as a closer
1 year as a processor
6 more years as a closer/funder mixed role

And yes, it's a big servicer/lender.

Edit: Definitely didn't mean the sunglass face hah.
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SteveBott
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In reply to hph6203 • 1:07p, 7/25/20
AG
I processed all my loans from 2002 to 2010. Contracted it out so I could focus on originating. My best decision ever!
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Comeby!
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In reply to hph6203 • 1:56p, 7/25/20
AG
hph6203 said:
As an aside, low LTV can actually be a hindrance to the pricing you get on a loan. I'm at <40% LTV, but my value is ~400,000. Because my loan balance is <200,000 and my LTV is <40% I'm at risk for prepayment and they've locked money up on a person that may not hold the loan long enough to make it worth their while. I get offered rates in the mid 3's because of that. So it's not as simple as you're making it out to be.


Ok that note, does refinancing too often yield the same results? Bott or hph?
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SteveBott
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In reply to Comeby! • 2:40p, 7/25/20
AG
LTV is not a problem. Paying off the loan in less then six months gives my lender a 'claw back' which means I give back my commission. A Texas cash out you can't refi for 12 months then you can do what you want. I'll send you an email.
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LeftyAg89
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6:24p, 7/26/20
AG
About to purchase a new home (new construction in Montgomery Co)....

Where are the best/most reliable places to begin checking for the best 20 and 30 year rates?
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Madmarttigan
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8:07p, 7/26/20
AG
FYI never use Better mortgage. They have been a tremendous pain in my ass.
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DonaldFDraper
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In reply to Madmarttigan • 8:45p, 7/26/20
AG
How so?
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94chem
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10:51p, 7/26/20
Closed today at 2.875 on a 30. They sent a notary to my house at 8 a.m. Sun morning. About as easy as it can get.
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one MEEN Ag
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10:12a, 7/27/20
AG
Anyone want to share what their closing costs are for refinancing? One guy I'm talking to is estimating closing costs to be 7k which includes them wanting 3.1k to be the loan originator. Rates are 2.0% on 15 year, 2.8% on 30 year.
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Stive
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11:38a, 7/30/20
AG
Quick mortgage/PMI question: I know the old rule was that once you got a house to 20% equity you could drop PMI but am I correct in saying that changed at some point? Did they put in some new rules about "if you have PMI you have to keep it 5 years" or something like that?

My brother in law is trying to refinance with someone while simultaneously putting in a pool and he's assuming he won't have PMI anymore (although no one has voiced that to him). I'd hate for him to get something out of the blue that bumps his payment up a couple hundred a month.

Any insight would be helpful. Thanks!
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SteveBott
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In reply to Stive • 11:52a, 7/30/20
AG
There is no way to answer your specific question without a lot more info. His loan guy should be since he/she has that information.

In general PMI is required by federal law to be removed when you show 22% equity in loan amount reduction or a combination on principal reduction and value increase via and Appraisel. Lenders will almost always remove at 20%. But it's a lender decision at 20. PMI can have a minimum term again depending on lender and the PMI company.
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fig96
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In reply to Stive • 2:19p, 7/30/20
AG
We just dropped PMI less than 5 years in so that's definitely not a thing.

As the previous poster who knows this far better than I do said, it's all about your LTV. If appraisal (or average value is enough, discussed quite contentiously earlier in this thread) then you'll have enough equity in your home and be able to get rid of PMI.
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hph6203
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3:10p, 7/30/20
AG
PMI is removed in one of three ways:

Automatic removal: You reach the loan payment that creates a balance equivalent to 78% LTV based upon the original amortization schedule. You cannot make additional principal payments or rely on increased valuation to reach this level faster, it's strictly based upon the original amortization and payment number.

Mid-point automatic removal: You reach the payment that is halfway through the term of the mortgage, whether you're at sub 80% LTV or not. (This is unlikely to come into play)

LTV based upon appraisal:
For FNMA you have to keep the PMI for 2 years regardless. After the first two years and up until the loan is 5 years old you actually have to meet an LTV of 75% and you have to get a new appraisal done to establish this LTV. After 5 years the requirement moves to 80% LTV based upon a new appraisal up until the automatic termination scenarios mentioned above. (this is the "new" regulation that was added)

For FHLMC you have to keep PMI for the first 2 years unless you can show significant value improvement based upon renovations. Market or pay down of principal will not qualify you for waivers of the 2 year seasoning requirement. If you do renovations the threshold for removal is 80% LTV based upon a new appraisal.

Absent significant renovations the terms for removal are the same as FNMA's.


If you request an appraisal and the value comes in too low to establish the appropriate LTV requirements for removal (75% or 80% depending upon seasoning) you can make a principal payment to reduce your LTV to meet the requirements within a certain timeframe (forget how long the appraisals are valid for PMI removal, it's been 10 years). Basically it means that if you think your house is worth 110k and have an 81k balance and the appraisal comes back at 100k and your loan is at least 5 years old you can make a 1k payment to principal to have the PMI removal accelerated.

https://new-content.mortgageinsurance.genworth.com/documents/5273286.BPMICancellationFannieFreddie.1018.pdf

The above applies to single family primary residences, nvestment properties and multi unit properties have different requirements that are outlined in that link.
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