Author Archive: askcarolynwarren

Thinking of Becoming a Mortgage Loan Officer?

Are you considering a career in mortgage lending? Would you like to become a licensed mortgage broker?
If so, this is my suggested path to follow.

STEPS TO BECOMING A LICENSED MORTGAGE BROKER

There is not a college degree in mortgage lending, nor is a college degree required. However, to be a licensed mortgage broker, the National Mortgage Lending System requires that you take a 20-hour class by an approved provider. Depending on your state(s) for originating business in, there may be additional hours pertaining to that state. Then you must pass the NMLS exam with a score of 75% or higher.

The 20-hour class, however, will not train you to do your job. The exam is about ethics and lending law, so the classes are aimed toward people who already know how to originate and process loans.

How, then, does a person learn how to do the job of a mortgage loan officer?

This is the way most of us have done it, and the way most of us recommend.

1) Get hired at a bank, credit union, or other direct lender first.
Why? Because you don’t need to be licensed with that type of lender and because many provide on-the-job training. They will teach you how to read a mortgage credit report, how to complete an application, what documents are required, how to input into the system, and all the other basic steps.
Also, this type of lender requires much less knowledge on your part, because you only need to learn their loan programs. (As opposed to being a broker who works with 30+ wholesale lenders!)

2) Learn everything you can about the mortgage business and become a stellar employee so that you earn a top recommendation when you are ready to move up in your career.

3) In two years, you should be ready to move your career up. You don’t want to stay stagnant for too long. But believe me, literally every day in that first year, you will learn something new. Every loan is different and has its own unique challenges.

4) Take the NMLS 20-hour class and state class, and pass your exam.

5) Apply with a good mortgage broker so that you can get your clients the BEST loans at the BEST pricing. You will want this ability if you do loans for family and friends, and to grow your career.

Being a mortgage broker takes ambition, drive, determination, tenacity, knowledge, creative thinking, communication skills, intelligence, and persistence. It’s not for people who can’t handle stress. It’s not for people who are looking for an easy income.

But once you become a mortgage broker, it gets in your blood, and it is hard to think of ever doing anything else. The reward of helping people with their financing to achieve The American Dream of homeownership is truly a blessing in itself.

Beware of Student Loan Forbearance (what you don’t know could cost you)

If you are a college graduate with student loans, but you are unemployed or cannot afford your student loan payments, you can request forbearance.

Forbearance is permission from the student loan provider to temporarily suspend your payments. That sounds good, and it can be; but did anyone tell you this comes at a price?

Your loan continues to accrue interest while it’s in forbearance, which means the balance continues to go up every month.

Navient, the largest student loan servicer, is currently being sued by the U.S. Consumer Finance Protection Bureau (CFPB) for pushing students to forbear when they could have received lower monthly payments instead — among other offenses. There is a public memo from the top brass at Navient that fairly shouts at employees to “FORBEAR THEM!”

Forbearance is better than non-payment or default, which severely hurts your credit score. But before you request it, ask if you can get a payment plan based on your income. That way, you might be able to get affordable payments and avoid extra interest charges.

The main take-away here is that forbearance can be expensive. So only use it when you have no other option.

You can read more about the Navient lawsuits here.

Read This Before You Sign Up For the New Ultra FICO Score

You may have seen the ad on TV or the Internet, the new credit score model called Ultra FICO. Supposedly, if you allow Experian to have access to your banking information, you can get a higher credit score. But wait! It’s not what you think.

The higher credit score FICO will give you for having a good banking history is nothing more than a vanity score. I call it a fake score, because no lenders will ever see it, use it, or accept it.

You might feel better by seeing your score go up, but you will be the only one.

It’s a useless score.

So what’s the point? Hmmm, why does Experian want access to your banking information? They already have a list of all your credit accounts and payment history. What little privacy you have left, they want you to give that up as well.

Don’t be seduced by the hope of an instant higher score via the Ultra FICO score. It won’t help you get a better home loan.

Are You Getting Bad Service? Your Credit Score Might Be to Blame

The shocking results of a customer service survey showed that people with low credit scores receive more disrespect and bad service than people with high scores.

It’s not enough that people pay higher rates and higher premiums for having bad credit! Now they get treated like second class citizens, too.

I’m not making this up.

Cable One, an Internet company that services almost a million customers, fully admitted that they spend less time and resources helping their customers who have low credit scores. Here’s what CEO Thomas Might said:

We don’t turn people away,” Might said, but he added that the cable company’s support staff isn’t going to “spend 15 minutes setting up an iPhone app” for a lower-value customer.

Did you get that? If you have a poor FICO score, you are considered a “lower-value” customer.

They flag a person’s file so that the customer service reps know not to spend too much time on you.

This is just one example. Who knows how many other companies provide inferior service to people with subpar credit?

Listen, friends: You don’t have to take this garbage! Take control of your credit, starting today.

Request your free annual credit report so you can check for errors and unverifiable derogatory information. Check your balance-to-limit ratios and pay down those high balances that are docking your score. Pay all your accounts on time. Don’t ignore those statements that come in the mail, because there might be something important inside the envelope. Keep your good credit open, even if you don’t use the credit card (assuming you’re not wasting money on an annual fee).

If you’re not sure where to start, pick up a copy of Repair Your Credit Like the Pros here. Make sure you get the Expanded Edition, not a used copy of an old version of the book. That way, you’ll get all the newest info and all the letters that accompany it.

Refuse to be a victim of a low credit score! Take charge of your life and earn the respect from the financial community that you deserve.

If you’d like to read more about Cable One’s credit discrimination, see here.

Road to a Smooth Loan Closing: Avoid These Mistakes!

 

Be smart! Pay attention to the roadblocks and avoid them. That way, you will have a smooth and stress-free closing. I am state-licensed in California and Washington. I shop wholesale lenders for you. I am your mortgage advocate. ApplyHere

 

 

“To Do” List for People Who Want to Buy a House (or Condo)

Tired of throwing away money on rent? Would you like to own your own home?

Use this short list to get ready:

TO DO LIST FOR HOMEBUYERS

  1.  Review your free annual credit report for errors that negatively impact your score.
  2.  Keep all credit accounts open — do not close any accounts.
  3. Pay down all credit card balances to below 50%. (Below 30% is even better.)

    A low balance-to-limit ratio on credit cards = a higher credit score

  4.  If you have cash at home, deposit it into a bank immediately. Cash is not allowed when getting a mortgage loan. The money must be seasoned and sourced in a bank.
  5.  Save for a down payment. You will need 3% to 3.5% of the purchase price, depending on loan type. Exceptions: The zero down VA loan for U.S. Veterans and the zero down USDA loan for properties in rural and semi-rural areas/non-metropolitan areas.
  6.  If you do not have sufficient funds for a down payment, explore the possibility of gift money from family.
  7.  Do not, under any circumstances, purchase a vehicle!

    Buy the house first; get the car afterward.

  8.  Do not quit your job; but if you are offered a better job or promotion opportunity, that is totally acceptable, because you are not cutting off your income source.
  9.  Seek out a mortgage broker for your financing. A mortgage broker can shop 30 wholesale lenders with only one credit pull.

    A mortgage broker has more loan options to choose from.

  10.  Get your pre-approval letter that shows what price you can purchase.

    Get pre-approved first; then go house shopping.

Home ownership represents security and stability. With some work and planning, the American Dream can be yours!

ApplyHere for a home loan in California or Washington state.
Carolyn Warren, Sr. Loan Officer/Mortgage Broker NMLS #1284134

Collection and Charge-offs: Are They Accurate?

Today, I show you how a gentleman got a $1,290.63 collection deleted. But first, to explain…

An unpaid bill might be charged-off by the original creditor and then sold to a collection company. If enough time passes without collecting money, the account might be sold again and again. There is no limit to how many times it may be sold.

A collection can even be sold after the legal date for reporting to the credit bureaus. When that happens, these “bottom-feeding” collectors purchase a bundle of outdated accounts for a penny or two on the dollar. They know they won’t get money on the vast majority, but on the few they do, it makes their effort profitable.

When you have a collector requesting money, how do you know if they have the legal right to collect?

How do you know if the amount they purport you owe is accurate?

Come to think of it, how do you even know it’s really yours? Do a Google search and see how many people have your same name.

The Law Gives You the Right to Receive Validation of the Debt

You have the legal right to request documentation showing the debt is yours, that the collector has the legal right to collect on it, a payment history, documentation that the balance is accurate, original documentation with a signature, and more.

If they can’t provide proper validation, they don’t get to report it to the credit bureaus and they can’t force you to pay.

As you can see from the letter below, a collection agency completely cancelled a $1,290.63 account, because the gentleman who purchased and read this book took proper steps according to his legal rights.

This is proof that Repair Your Credit Like the Pros works. Thank you for reading my post. I work hard to provide good information to folks who need to improve their credit.

 

Equifax $700M Lawsuit: Get Your Personal Settlement Money Now

Remember the scandalous data breach with Equifax in 2017 where millions of consumers’ personal data was stolen? Equifax has now settled for $700,000,000.

American consumers can now file to receive restitution. How much you are entitled to receive depends on the extent of personal damage you suffered. The maximum cash payout per person is $20,000.
File your claim today.

New Bill Says Negative Credit Should Be Removed After Four Years

Last Thursday, a new Bill (H.R. 3622) was introduced to the Financial Services

House Representative Rashida Tlaib, Michigan

Committee. This bill would shorten the time period that negative information can report on a person’s credit report.

Currently, late payments, collections, charge-offs, and other adverse credit can remain in your credit file for seven years. This bill, if passed, would reduce that to four years.

Is four years long enough for consumers to have their credit scores docked for a mistake or hardship of the past?

Is four years long enough for creditors to have leverage in collecting past due funds?

The bill was sponsored by House Representative Rashida Tlaib, Michigan on July 5, 2019.

Thank you to Credit Repair Services, LLC for bringing this to my attention.

“With your help and the ease of understanding your book, I was able to get a $2,500 deletion off my credit, among others. This book is a life saver, well, credit saver! (smile) 
Thank you,
T.C.

 

How to Avoid Title and Escrow Junk Fees

Susie asked me to write an update about junk fees imposed by settlement agents (title/escrow companies in the West). She has a good point. Fees have changed since I last posted on this topic in 2015.

Here is a snippet from an actual Closing Statement showing what I call “clean” fees, meaning no unnecessary bogus fees added to pad the profits of the settlement agent.

GOOD FEES!

 

The Lender’s Title Insurance is $827.14
The Escrow/Settlement/Closing fee is a flat $1,186.80

Notice that the Owner’s Title Insurance is blank, because the Seller pays that.
No doc prep fee, no email fee, no FedEx fee, no courier fee, no archive fee.

Fair and customary fees for the purchase price in Washington state. I like it!

This same company, First American, adds two fees that they do not charge in Washington for California. In CA, First American has a “new loan fee,” previously called a “loan tie-in fee.” They also like to add a notary fee, which can be waived if you go into their office to sign loan documents rather than have a notary drive out to your location after business hours–if you ask. I’ve seen them charge a notary fee even when the buyer drove into their office but also waive it when asked.

Why does the same company charge a notary fee in CA but not in WA? Because competing escrow companies in WA don’t charge extra for a notary.

BAD FEES!

Here is another snippet, this time from a purchase in California:

You see that this unfortunate buyer paid:

Escrow Fee: $1,225
Lender’s Title Insurance: $1,004
Loan Service Fee: $340
Recording Service Fee: $14
Signing Fee: $225
Special Courier Fees: $75
Owner’s Title Insurance: $1,929

My Comments on these Fees

Notice that the Buyer is paying both the Owner’s Title (typically paid by the current owner, the seller) and the Lender’s Title Insurance. Poor buyer paid $1,929 extra!

Loan Service Fee: $340  Added junk fee. What service are they providing that is not included in the title insurance and escrow closing? They are not the loan servicing company.

Recording Service Fee: $14  This is not the recording fee charged by the county, which was $375. It is an added nonsense fee to the escrow company. It’s like buying a hamburger and paying extra for the pickle.

Signing Fee: $225 to sign, even if they didn’t need to hire a notary outside of business hours.

Special Courier Fee: $75  Isn’t that special of them to charge $75 when FedEx overnight is $17.50! And why isn’t their $1,225 escrow fee enough to cover that in the first place?

The $50 Environment Fee at the top of the list is a county requirement, so all escrow companies are required to charge it. It’s not junk and it can’t be waived.

There is a lot more to say about this topic, but I hope by seeing these two examples, you can shop for a good title/escrow company, and then ask your Buyer’s Real Estate Agent to request your preferred company on the purchase offer.

To shop fees, you can use the online fee calculators. Locate them through Google, like this:
First American Title fees + zip code
Chicago Title fees + zip code
Fidelity Title fees + zip code
Old Republic Title fees + zip code

WARNING: If you sign a Purchase Contract that stipulates using a high-priced, fee-laden escrow/settlement company, then you have agreed to their fees. Once signed, you will not be able to get it changed.

Thank you for reading this post. I work hard to help good folks get good pricing on their mortgage loans.

 

 

%d bloggers like this: