I was invited by Amtrust Mortgage to hear a presentation by Jackson Nafziger on "A State of the Industry Update". My biggest take away from yesterday's event in Seattle was the huge amount of buy backs (aka repurchasing) of loans that are taking place. A "buy back" is when a lender is forced to repurchase the loan from Fannie Mae or Freddie Mac typically because it's not performing. It's reported that in 2009, over $30 billion in troubled mortgages were repurchased. From 2008 to 2009, this is an increase of 320%! According to the seminar, Bank of America/Countrywide, led the buy-back pack in 2009 followed by Chase/Washington Mutual, Citigroup and Wells Fargo.
If you're considering a mortgage to purchase or refinance home, be aware that it's a different process than it was just a few years ago. I still help people obtain financing on their homes every day. My point is to be prepared for more paperwork (even the Good Faith Estimate has gone from 1 to 3 pages) and tougher underwriting guidelines.
What can you do to help improve your mortgage process?
- Select your mortgage professional and get preapproved early. This allows you to create a game plan, if needed, such as working on your credit or funds for closing.
- Be prompt in providing documentation or information that your mortgage professoinal requests.
- Be prepared for the process to take possibly take a little longer. Everything is being scrutinized from your bank statements to your appraisal.
The mortgage loans that are being originated today are of a much higher quality than recent years past.
If you have a question about today's mortgage process or are interested in a home loan for a property located in Washington, I'm happy to help.