Archive for April, 2009

Monthly Archive

Tue 21 Apr 2009

Is Wells Fargo Denying Veterans Their Right to Refinance? We Think So!

Posted by Tracey Rumsey under VA-Veterans Adminstraiton
[7] Comments

Wells Fargo Welches on the Veteran-Costs Money Needlessly!
  
Yesterday Wells Fargo announced that beginning May 18, 2009 it would require a conventional appraisal for all Interest Rate Reduction Refinance Loans.  (IRRRL)  So why am I and other mortgage professionals outraged?
 
Let’s start with the fact that this VA guaranteed loan product is an important refinance tool that allows a Veteran to refinance their current VA financed home and reduce their monthly payments without the restrictions of income and apraised value requirements.  In my opinion, it is one of the most important benefits EARNED by our Veterans for their military service, especially in today’s economy and housing market.  They can easily take advantage of  lower interest rates, reduced monthly mortgage payments and the monetary benefit it brings to them and their families. 
 
Wells Fargo has decided to override the VA underwriting guidelines and require an appraisal to “mitigate the risk of declining home values”. This in effect says, “since, through no fault of your own, you may be upside down in your home, we feel you no longer deserve the benefit awarded you by our government unless we can be sure that our interests are protected.” 
 
So what Wells?  Are you are still pissed that you had to cancel your big Las Vegas party?  Worried supporting our Veteran might interfere with the purchase of the new corporate jet?
 
As a mortgage professional and wife of an Iraq War Veteran I suggest that you use the $25 billion in bailout money you received to “mitigate your risk”.  
 
Your statement in a CBS news interview when asked about the use of the bailout funds was  “(we are) positioned well to continue lending across all sectors and satisfying customers’ financial needs, which is in the spirit of the Treasury’s plan.”

Explain to me how this change represents the “spirit” of anything other than covering your butt while leaving the Veteran to twist in the wind. 
 
I absolutely understand the need for tightened guidelines across the board on many mortgage products to bring the mortgage market back to a healthy place, but this benefits no one but Wells Fargo.  Not the economy, and certainly not the Veteran. Who by the way, has had to dodge enought bullets lately without you firing another.
 
Tracey Rumsey

Tags: , , , , , , , , , , , ,

 

Thu 2 Apr 2009

Right To Rescind - 5 Situations Where You DON’T Need It!

Posted by karen under Compliance
No Comments

The 3-day Right of Rescission Notice is probably the most misunderstood of all the rules when it comes to refinance transactions. Your clients wonder why they have to pay 4 extra days of interest when their current mortgage is being paid off? Do Saturday’s count? (Yes, they do!)

Other situations that LO’s need to know:

  • All fees must be refunded if the clients cancel – even if you have it in writing that it’s NOT refundable! This includes credit report and appraisal fees, even if paid directly to the appraiser.
  • Refi’s where title is “other than” a “natural person” are exempt—however, if the loan is in “a trust”, the documents are signed “personally” so it DOES apply!
  • If you have two or more people on the refi transaction, an one of them cancels, the refi is considered “cancelled”
  • If the client sends the Right to Rescind in the mail and it’s post marked on the 3rd day, the loan is considered CANCELLED—even if you receive it 30 days later!
  • There are 5 circumstances where you DO NOT need a Right to Rescind
    • Construction Loans to buy or build a new home
    • Vacation or 2nd home
    • Rental/Income Property
    • Land Refi
    • Commercial property Refi

Yes, construction loans are EXEMPT, yet many lenders and underwriters think the 3-day rule applies here as well.

NOTE: Sundays & 9 government holidays NEVER count when figuring disbursement days: New Years; Presidents day. Memorial day, Independence Day. Labor day, Columbus Day; Veterans Day, Thanksgiving and Christmas.

The “date counting” starts a midnight of the signing date…the loan closes at 2 pm, the time does not start ticking until midnight of that day which could turn into 4 or 5 days instead of 3.

Here’s the biggie: If for some reason the loan disburses WITHOUT all the signed waivers from all parties, the borrowers have 3 years to rescind—which means that they could essentially get the house free and clear. Right now, attorney’s are making a career out of checking to see if the R of R paperwork was properly filed!

p.s. There are a couple of other “rules” that are really obscure–but it’s better that your clients sign the waiver than risk the consequences!

Tags: , , , , , , ,