How to Choose a Better Mortgage Lender

When you go to McDonald’s and order a hamburger, you know exactly what you’re going to get. All McDonald’s burgers have a certain sameness, no matter if you order the single, the double, or the one with cheese. McDonald’s has one beef burger with certain variations. If you want more gourmet choices, you need to go to a more upscale restaurant. Which usually costs more.

True enough, but what if you could get that better burger at the same price as McDonald’s? Would you choose to go there instead?

When you walk into a bank or credit union, it’s a lot like walking into McDonald’s: they have their own loan products to offer and nothing more.

It’s “one flavor fits all.”

If you don’t fit into their mold, you’re out of luck.

On the other hand, if you choose to do business with a full service mortgage company or a mortgage broker, that loan officer has a whole smorgasbord of loan products to offer. This is because he or she can shop a variety of wholesale mortgage lenders to find the best (and least expensive) one to fit your situation.

Do You Know About Wholesale Lenders?

Many people don’t know there are wholesale lenders. When you walk into your local bank, that is retail. Did you know that your bank might also have a wholesale division? Those offices are often located in a high rise building or tucked inside a sprawling business park.

They don’t advertise on radio or TV, and they do business with the public. You have to be a broker representing a client to get a loan from them.

They may have different or more generous underwriting guidelines. Sometimes they offer better interest rates, too.

Having a “Plan B” Option is Better!

Not long ago, a home owner came to me asking for an FHA Streamline Refinance. I sent the loan application through our own in-house lending, but unfortunately, it didn’t work out. If I’d been working at a bank, that would have been the end of the story for the home owner. But because I can also shop wholesale lenders and broker out loans, I was able to find the perfect match. The home owner is lowering her interest rate by a full 1% and saving a significant chunk of money as a result.

The Best Mortgage Lenders

Call me biased if you like, but I favor having more loan choices.

Sure, the job is easier when you’ve got only one menu to choose from, one set of loan products. But that’s not always best for the consumer.

When I first started working in the mortgage business in 1999, I worked for a direct lender that had only one set of loan products. It was a good way to learn the basics and get started. But after a year and a half, I had to move on and up. I needed to be able to offer more choices in order to serve more people. Now I work at Cherry Creek Mortgage Company, a full service mortgage lender. I like having more choices to offer.

Thank you for stopping by my blog. I appreciate each and every reader.

Just in case you’d like to know, I am state licensed in California and Washington. (NMLS License 1284134)  You can learn more about me here. There’s a “Meet Carolyn Warren” section at the bottom of that page.


Should You Disclose Your Bankruptcy, Judgment, or Tax Lien to Your Loan Officer?

Now that the credit bureaus have removed some people’s tax liens and civil judgments from credit reports, people are asking, “Should I tell my mortgage lender about the item that no longer shows up on my credit?”

The same question applies to a bankruptcy that has been deleted early from a credit report.

First, let me say that even though you had this negative credit event, the fact that it is not on your credit report gives you a higher credit score. This is to your advantage. You will qualify for a better interest rate with your higher score.

Are You Like Person One or Person Two?

It sounds crazy, but let’s look at how the almighty credit score affects two people who had a bankruptcy (BK) two years ago.

Person One’s BK shows up on his credit report. His score is 580.

Person Two’s BK does not show up on his credit report. His score is 620.

Both people qualify for a FHA loan, but Person One gets an interest rate of 4.5% while  Person Two gets an interest rate of 4%.

On a $200,000 loan, Person One pays $59 more per month and $708 more per year — all due to the difference in credit score — even though their bankruptcies are the same!

So not having the BK show up on your credit report is a big advantage, even though you will have to disclose it.

Should You Tell Your Loan Officer About the Negative Credit Event?

The answer is a big YES. You must answer all questions truthfully. Lying on a mortgage application is fraud, and carries a possible felony charge.

Besides, you won’t get away with the lie. The lien/judgment/BK will be revealed when the underwriter pulls a different type of report tied to your social security number. Then your loan in progress will change and could possibly even be denied. For example, if Person Two started with a conventional loan, then it was discovered he had the BK, the loan would have to start all over again with an FHA loan. Even the appraisal report would need to change to match the loan program. This will cause grief and a lot of extra work, and likely delay closing.

Honesty is the Best Policy

The adage is true: honesty is best. Your loan officer is your advocate. Your loan officer wants to give you a loan and close the deal so he/she earns a commission. Tell all your credit secrets to the loan officer right up front so there are no bad surprises later and then you’ll have a better loan processing experience, too.

I have closed plenty of loans for people who had a negative event on their credit report, so please, don’t let that stop you from applying for a home loan if you also have some positive credit and a score of at least 580. Naturally, your income and other criteria will need to qualify. But you might be surprised — perfect credit is not required to get a home of your own.

Available in paperback and Kindle. Rated best DIY credit repair resource.

Credit Freeze or Fraud Alert: Which is Better?

If you were one of the 143 million Americans affected by the Equifax security breach and fear what damage hackers or other criminals might do to your credit, then this information is for you.

You may choose to place a credit freeze or fraud alert on your credit report. Here is the difference between the two and how to do it.

Credit Freeze

Available in paperback and Kindle. Rated best DIY credit repair resource.

A credit freeze locks your credit down like a vault. No new credit can be established while a freeze is in place. In order to initiate a credit freeze, you will need to contact each of the individual credit reporting agencies. Below are their phone numbers. You will be required to prove your identity.

You ‘ll need to supply your name, address, date of birth, Social Security number and other personal information. Fees vary depending on the state you live in, but commonly range from $5 to $10.

After you place the freeze, each bureau will send you an individual PIN number. Keep this safe as you will need it in order to unfreeze your credit. You can lift the freeze temporarily or permanently. The bureaus have three days to lift the freeze. Again depending where you live, the cost to lift will vary.

It’s important to know that a credit freeze will not prevent your existing accounts to be accessed. You should check your statements regularly and continue to monitor your accounts for suspicious activity. You can still apply for credit but you’ll have to temporarily lift the freeze in order to do so. Also, a freeze will not affect your credit scores and you can still access your free annual credit report.

Fraud Alert

A fraud alert allows creditors to get a copy of your credit report as long as they take steps to verify your identity. For example, if you give the bureaus a phone number, the lender must call you to verify the application for credit is legitimate.

Fraud alert may prevent someone from opening new credit in your name, but again, it will not prevent someone from accessing your existing accounts. You will still want to monitor all of your accounts.

Fraud alerts are free, and if you notify one of the credit reporting agencies, they will inform the others of the Fraud alert and in turn will apply the alert on your credit. No need to call all three. Below are the three different types of fraud alerts available.

  • Initial Fraud Alert: This is for when you are temporarily worried about your identity, like if your wallet was stolen.
  • Extended Fraud Alert: These alerts are for identity theft victims and puts a Fraud alert on the file for 7 years.
  • Active Duty Military Alert: For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.

If you are considering whether or not to put a freeze or fraud alert on your credit, I suggest you consider how often you need access to credit when making your decision. If you plan to get pre-approved for a home loan or purchase a car in the near future, then a fraud alert will allow you to do so without taking extra steps. If your credit is set the way you want it, then a freeze could work to keep it that way.

Here are the phone numbers for the credit reporting agencies (also called credit bureaus):

Equifax — 1-800-349-996

Experian — 1‑888‑397‑3742

TransUnion — 1-888-909-8872

Many thanks to Chad Kusner, President, Credit Repair Resources, LLC, for this valuable information.

Please help others by sharing on social media. Thank you.

How to Protect Yourself From Equifax Hackers

Equifax, one of the three big credit bureaus, announced that hackers have illegally accessed 143 million Americans’ private information. This security breach occurred between May and July and was discovered on July 29th. Equifax has said it will notify all victims, but if you’d like to be proactive, here are steps you can take (with caveats).

Protecting Your Online Security: Actions to Consider

  1. Send a letter through the good, old-fashioned USPS mail requesting a copy of your free annual credit report. Look for anything that should not belong there, such as a new account you did not open or a hard inquiry you did not authorize.
    Caveat: Do not order your credit report through the Internet, because in doing so, you would give up important legal rights.
  2. Enroll in Equifax’s one year free monitoring service.
    Caveat: They will not help you repair your credit, only monitor it.
    Second Caveat: By signing up, you have to agree not to file a lawsuit against them. (That’s in the fine print under terms and conditions.)
  3. Place a fraud alert on your credit reports for one year warning creditors that you might have been a victim of identity fraud. A link is here.
  4. Put a security freeze on your credit report, restricting access.
    Caveat: If you want to apply for a mortgage, auto loan, or other financing, you will need to remove the freeze so the lender can access your credit report. A link is here.
  5. Use a free service such as CreditKarma or CreditSesame to watch for new inquiries and/or new accounts.
    Caveat: The credit scores from these sites are not your real credit scores from FICO.

Here is the link to Equifax’s page with more information for consumers about cybersecurity.

Stay safe and thank you for reading this post.

Scammers Stealing Money Intended for Hurricane Victims

Photograph by David J. Phillip / AP

Heads-up! Bad guys are exploiting the Hurricane Harvey disaster. They are setting up fake Facebook pages, tweeting links to fake charity websites, and sending out phishing emails asking for donations to #HurricaneHarvey – relief funds they plan to keep for themselves. Don’t fall for any scams. If you want to make a donation, go to the website of the charity of your choice and make a donation. Type the address in your browser or use a bookmark. Do not click on any links in emails or texts you might get about this event.
Whatever you see in the coming weeks about Hurricane Harvey disaster relief, THINK BEFORE YOU CLICK.

Please help get this information out to others by sharing on social media.

Thanks to Cherry Creek Mortgage Company IT Dept. for this alert. I am a senior loan officer at Cherry Creek Mortgage.


Tax Liens, Judgments Removed from Credit Reports: Update

July 10th, Equifax, Experian, and TransUnion started removing judgments and tax liens from people’s credit reports if the item did not include their correct name, address, social security number and/or date of birth.

Disarmingly, lenders have the option to obtain this data from other information-providers such as LexisNexis (a research and information providing company). However, this does not give the lender the authority to add it back to your credit report; thus, your higher credit score remains. Since lenders base the interest rate and other terms on the almighty credit score, this is a WIN for you.

If a lender discovers a “hidden” tax lien or judgment, the lender has the option to deny your loan if they choose, because lenders have the right to protect themselves from a perceived financial risk.

The good news is that Fannie Mae has stated that they are not requiring lenders to obtain the data independently in order to approve a loan. Fannie is still studying the information and looking for feedback from lenders.

Meanwhile, the Fair Isaac Co. has released a study of millions of credit files to determine what affect this change will have on credit scores. So far, it looks like people’s credit scores are going up by 20 to 60 points!

Of course, it is impossible to predict what change will occur for you personally, because FICO scores are based on your entire credit report, not on just removing one item.

And remember, just because a tax lien is removed from your credit report, it doesn’t mean that you no longer owe the IRS money. Unpaid taxes can result in a wage garnishment or other legal action. Therefore, I recommend following the instructions in Chapter 19, Repair Your Credit Like the Pros, which is available here.

Many thanks to credit pro Chad Kusner, board member of the National Association of Credit Services Organizations — which advocates consumer protection and ethical business practices for the credit repair industry — and CEO of Credit Repair Resources for the updated information.

And a big thank you to all my readers for sharing this information via social media.

Buying a Home After a Foreclosure: how long is the waiting period?

Many people ask how long they have to wait after having a foreclosure until they can be approved for a home loan. I have some good news for many of you!

VA loan: 2 years

FHA loan: 3 years

USDA loan: 3 years

Conventional loan: 7 years

The “gotcha” is that the date starts when the home is sold. It is NOT the date you received notice of default nor when the foreclosure started. If the bank took one year to sell the house, then that would push out the waiting period by one year, going by “date of sale” or when the lender got the property off their books.

I hope this information helps some renters to realize they don’t have to wait seven long years to buy a home after their foreclosure. Three years is a lot better, and VA, FHA, and USDA are all good loan options with good interest rates.




A Place to Call HOME

HOME. There’s just something about a place that you can call your own. It may not be big or super fancy. It might not have granite countertops and hardwoods throughout. The kitchen might be a little dated, and maybe the front door could use a facelift. But darn it — it’s HOME and it’s YOURS!

Because it’s  yours, you have time to make improvements as funds become available. In the meantime, you are acquiring equity, growing your personal wealth in real estate.

So go ahead, pick out some paint and make it uniquely yours. According to decorating magazines, gray is the new “in” color. Some people mix it with beige for what they’re calling “griege.” Not your thing? How about an accent wall in a color called garbanzo? Heck, if 1950s turquoise is more to your liking, have at it, because the house is YOURS and you can color it any way you like.

When you pull weeds or mow the lawn, it’s not a chore anymore. It’s pride of ownership. Come to think of it, you might even plant some azaleas or roses or a row of delphinium to attract the butterflies.

If you’re in a condo and don’t have much space, you might steal an idea from Good Housekeeping and install an herb garden on an old pallet you picked up for free. It might not be the Butchart Gardens, but it’s YOURS and it’s fun, and it brings you joy.

Sometimes, the simplest things can bring pizazz to a home. Like one time I found these unique light switch covers that I thought were so pretty, so I bought a bunch of them and installed them in my house. In the months and years that followed, you would not believe how many compliments I got on those little pieces of art. It wasn’t a big thing, but it made me happy.

Now, there are more creative light switches than ever. How much fun is this geeky home accessory made by a company called “Power-Up”? It’s a mini classic arcade joystick, complete with sound effects. When you own the home, it’s worth the effort to make it special.

Maybe what you can afford right now is no bigger than a small cottage. That’s okay. No one ever said your house has to be a mansion. Besides it’s less space to clean and the heating bill is more reasonable.

Do you work in the city? Consider a condominium where you can walk to practically anyplace you want to go. It’s not a bad lifestyle for the busy professional who doesn’t have the time or inclination to take care of a yard.

Over the years, I’ve rented and I’ve lived in various style homes that were mine. And I  have to tell you, there is something about knowing that the place where you brew your coffee in the morning and sit down to relax at the end of a long work day is YOURS.

It may not be perfect, but hey, it’s YOUR HOME. And that’s what’s most important.

Most people say they want to own their own home someday. You might be surprised to know that “someday” is now. Perfect credit not required. Only 3% down for first-time buyers. If you’re in California or Washington, you can connect with me here. I’d love to help you.

Thank you for stopping by. And thank you for sharing this on social media to inspire more renters to become home owners, because pride of ownership is good for America.


Two Big Reasons to Stop Using a Debit Card

As a mortgage loan officer, I wish no one used debit cards. A debit card is the enemy of a home buyer. I’ll give you two good reasons why.

Debit Cards Expose Your Private Life

  1. Do you value your privacy? If you’ve been using a debit card, you have just shot your privacy all to pieces.

When you apply for a home loan, lenders require two months’ bank statements to verify assets. People who use a credit card for their purchases have short bank statements: one page, maybe two. There are the deposits and only a few withdrawals. All their purchases for the month are covered by one payment (or two) to a Visa or MasterCard. What did they purchase? No one knows and no one cares. No one is passing personal judgment.

Reviewing the statements is quick and easy. They are living within their means. Their balance is stable or growing. No overdrafts, no bounced checks. Everyone is happy.

On the other hand, people who use debit display every single purchase. We see how many times they bought a Netflix movie, how many lattes they drank, when they gambled at the casino, how often they did the fast food drive-through, where they shop for clothes, where they buy their underwear, on and on and on for eight, nine, ten pages. There is no privacy whatsoever. Reviewing all that is tedious and time-consuming. If they had used one Visa card, they would have retained their privacy and saved me and the underwriter some good time.

Debit Cards Don’t Help Your Credit Score

When your use your credit card responsibly (keep a low balance and pay in full each month), your credit score gains points. With a debit card, you get zero points, zero influence on your credit score.

If you’re a young person or recent immigrant and you’ve used only debit, you will have a blank credit report and no score. How will you qualify for a mortgage to buy a house with no history of using money responsibly? If a lender is going to give you several hundred thousand dollars, they first want to see that you can handle credit properly.

Too Many People Using Debit when they should be using credit. Please help get the word out by sharing this on social media, because most young adults do not realize these facts. Thank you!



Tax Liens and Judgments Getting Deleted This Month: More Information

If you have a tax lien or civil judgment that does not contain the proper and correct identifiers, then Equifax, Experian, and TransUnion will remove it from your credit report this month, beginning July 10th. The identifiers are name, address, and either social security number or date of birth.

There is no need to send a letter requesting the deletions. If your lien or judgment does not include the identifiers, the account will be removed. It doesn’t matter if it is paid or has a balance. This is about proper identification, not about money owed. The expectation is that about 50% to 60% of tax liens will be deleted, and about 95% of civil judgments will be deleted.

If you are fortunate to have one of these derogatory accounts removed, you should see your credit score go up. This, in turn, could qualify you for a better interest rate or a better loan program when borrowing money or getting a mortgage.

How Much Will Your Credit Score Increase?

How many credit points you might gain depends on the rest of your credit report. If you have a clean report with one lien that gets removed, you could see an improvement of 40 to 50 points, which would make a significant difference. On the other hand, if your report is scattered with late payments and collections, your score will probably increase by only 10 points or so.

Getting the Credit Deletion Does Not Mean You Don’t Still Owe Money

Let’s say you hired a contractor to replace your roof, then due to hardship, you did not pay. The contractor then filed a civil judgment that went on your credit report. This judgment contains your name and address, but is missing your social security number and date of birth. This judgment will be removed from your credit report, but that doesn’t mean you don’t still owe the contractor for the work he performed. This is not a license to steal from the contractor. What’s more, the next time a title report is pulled, this lien is going to show up, so when you sell the home or refinance, this lien must be paid.

If you owe on back taxes, you can expect that to stick like glue to your social security number, even if it gets removed from your report for not having your address.

Checking On Your Credit

To find out if your lien or judgment was removed, order your free annual credit report by mail from Don’t be lazy and order online for the many, important reasons stated in Repair Your Credit Like the Pros. Or, you can call 877-322-8228.

Please share this information via social media, because it affects a lot of people. Thank you.




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