NJ Mortgage Brokers - rules get tougher

The Bergen Record's Richard Newman reports on new rules for mortgage brokers in the state of New Jersey. The new rules were enacted pursuant to Federal requirements passed in the aftermath of the sub-prime meltdown.

As Congress debates sweeping financial reforms to prevent a repeat of the 2008 housing meltdown, mortgage lenders who do not work for banks are already quietly adapting to stricter oversight.

"In New Jersey, loan originators must do the following by May 15 to get licensed by July 31:

* Complete 20 hours of education;

* Pass a test;

* Submit fingerprints for a criminal background check by the FBI;

* Complete a criminal background check by the New Jersey State Police.

* Give a national mortgage lender licensing database operator permission to obtain a credit report."

Sound tough? Maybe, but experience shows that licensing alone does not eliminate the troublemakers in any industry.

What do you think about the new rules?

Read the full article here.

For your next title order or
if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue,
P.O. Box 6453,
Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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Payments outside of settlement? Not in a short sale!

We have been warning our customers and anyone who asks that fooling around with a short sale payoff letter can be hazardous. Bob Hunt, a director of the National Association of Realtors, weighs in on the problem in Realty Times in a posting, "Undisclosed Short Sale Payments May Lead to Trouble."

He points to

"A recent memorandum from the legal department of the California Association of Realtors® (CAR) warns CAR members as follows: "'Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws.'"

For instance? The senior mortgagee authorizes a small payment to the junior mortgagee and the latter demands money be paid outside of the closing to obtain a release of the mortgage.

Why is the first mortgagee opposed to this? Because, if there's money to be had, the first mortgagee wants it. Let's face it, the lender has given its approval because of the money available at closing.

Remember, the lender must approve the proposed HUD-1 before closing. Once that's done, you are asking for trouble if it's not accurate when you get to closing. It may even constitute loan fraud on a Federal level if the lender is federally-related. So, our advice has been and will always be--- when dealing with a short sale, disclose, disclose and disclose again, in writing, and get approval to all changes to the HUD-1 before closing.

For your next title order or

if you have questions about what you see here,

contact Stephen M. Flatow

Vested Title Inc.

648 Newark Avenue,

P.O. Box 6453,

Jersey City, NJ 07306

Tel 201-656-9220 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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New guidelines to speed short sales?

New guidelines for lender approval of short sales kicked in this week under Home Affordable Foreclosure Alternatives enacted by the Federal government.

As reported in The Star-Ledger,

The new federal push provides lenders with financial incentives to accelerate the process — $1,500 for servicers to cover administrative costs and up to $2,000 for investors, according to the National Association of Realtors.

If experience is an indicator, homeowners may not have a lot to be excited about as the guidelines are voluntary.

More about the new guidelines can be found here.

For your next title order
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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Good news about jumbo loans

The New York Times reports "Lenders Loosen Reins on Jumbos." Writes Bob Tedeschi,

IT may be too early to announce a thaw of the mortgage market, but some early signs have emerged, at least in one important category: jumbo loans.

Mortgage industry executives say conditions are improving for those borrowing more than $729,750, the threshold for jumbo mortgages in the tristate region. Not only is it starting to get easier to qualify for these loans, they say, but rates are also coming down.

What does that mean for the market?

David Adamo, the chief executive of the Luxury Mortgage Corporation, a broker and banker in Stamford, Conn., said his company was offering jumbo loans on behalf of more lenders now than late last year. “It’s an indicator that the high end of the market is beginning to recover,” he said.

Too optimistic an approach? Perhaps, because "one element of the mortgage equation has not changed as sharply: borrowers must still have excellent credit to qualify for the loans."

I think it's too early to tell what the impact will be in New Jersey. What do you think?

Read the Times article here.

For your next title order
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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The ubiquitous Form 4506-T, not a plain piece of paper

Folks who borrow mortgage money have a lot of documents to sign at closing. One of the so-called standard forms found in use today is IRS Form 4506-T that allows the lender to obtain a transcript of your personal income tax returns.

As pointed out in the LA Times, the Form 4506-T is not just another piece of paper.

The form authorizes a loan officer or mortgage investor to get electronic transcripts from the Internal Revenue Service covering multiple years of your federal income tax filings. The IRS has supplied private tax return information to lenders for years, but the data typically were requested only at the close of escrow, and mainly for self-employed applicants or those with unusual income patterns.

While we have seen the form used at the closing table, now it seems the form is being requested twice, the first at application and the second at closing.

As the story says,

Take Form 4506-T seriously. It's a powerful tool, and potentially exposes otherwise confidential personal financial information to unknown and uncontrollable numbers of people. It is not just another part of the paper blizzard.

For the full article, go here.

For your next title order
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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