TAX CREDIT EXTENSION MEANS NOTHING…

If you were not already under contract. The Homebuyer Assistance and Improvement Act of 2010, HR 5623, is really a copout for all the big banks and slow mortgage brokers (who sell their loan to the big banks) who couldn’t close a loan in 60 days. They lobbied hard to the lawmakers to grant an extension for all their back logged clients. Why are the media and the law makers making a big deal about this credit extension? If you were not under contract by April 30th, it means absolutely nothing for you. I am glad they passed the bill, as I feel sorry for those clients who have been waiting to close on their homes for months and haven’t been able to. I am sure these people have been paying penalties on the contract for every day over. So I am glad that they have extended it. For most good mortgage loan officers (like myself), we have closed all of our loans from April. I know my clients wouldn’t have accepted taking over 60 days to close on their houses. So I puzzled on why I see the report everywhere that the tax credit has been extended. If anything, I get calls from clients excited about the opportunity to cash in on the tax credit through Sept. Of course I have to tell them that for new buyers this means nothing.

BIG BANKS CONTROL WASHINGTON. BE CAREFUL WHEN USING THEM TO GET A MORTGAGE.

This is a clear reminder that the big banks and lobbyists are controlling the lawmakers. Be careful when you call your big bank to close your mortgage loan. Here are a few points to be aware of.

#1 Big banks, like BofA, Wells and Chase have downsized their operations since the downturn in the economy and would rather have exacerbated turn times than offer quick loan processing and closings.

#2 Mortgage loan officers the banks employ don’t have to be licensed. Loan officer licensing went into effect July 1st in Arizona. All the loan officers who couldn’t pass the mortgage licensing test or didn’t have the money to take the test are now working at banks that are exempt from the rules.

#3 Banks spend a lot of money on lobbying law makers to make laws that only favor their ability to make more money. They in turn offer higher cost mortgage loans at higher rates. They have to, in order to cover their large overhead.

#4 Customer service at these banks is a thing of the past. I have worked with client after client who tells me that no one returns calls, and the person they were speaking to sends them off to someone else, and they can never get answers.

What does this all mean? Be careful when choosing a mortgage loan originator. Pick one that is licensed, and preferably a mortgage banker. A mortgage banker is different from a broker. Mortgage bankers close loans in their companies’ names, they control the processing, underwriting and funding of the loans. Brokers are subject to big banks’ horrible customer service and lackluster turn times. You want your mortgage originator to be with you throughout the process, especially if you are a first time homebuyer. You want a licensed expert to walk you through the processes that have taken all the necessary education to be able to educate you the client on the ever-changing mortgage landscape.