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We offer a complete line of Texas mortgage loans, Texas
home equity loans and Texas mortgage refinance loans for all types of borrowers
with low Texas mortgage rates.
The Approval Process
The approval process has many players and the entire
process isn’t limited to one loan
officer or the
lender only. The following is a list of participants that have a hand in
the decision to grant credit to you or anyone. They are as follows:
The loan
officer or
loan
representative
The processor
The underwriter
The MI
(mortgage insurance) company
The reseller
GSE Government sponsored enterprise
In a nutshell, the
loan officer
or loan representative takes your application via
telephone, through the mail, over the internet or in person. The
loan officer
collects
all your personal data and combines that with factual information you provide
along with
disclosures signed by you and transmits all of it to a potential
lender in the
form of a
loan file.
The lender
passes the loan to an
underwriter
that carefully scrutinizes all the details
of the loan file, for example employment and income information. Soon after, the
underwriter gives the loan file a “conditional” approval whereby the file can be
fully
approved if it meets certain conditions.
The loan processor meets those conditions with more information provided by you
to your
loan officer
and submits it back to underwriting for a final approval. The
underwriter
reviews all the conditions and the loan is cleared of conditions and sent to the
closing
department for final consideration and the processing of loan documents to be
signed by
you.
Loan documents are drawn for signatures, a closing date is set and the loan
closes
hopefully without a hitch. You get the keys and the home is now yours.
Sounds fairly easy don’t it? Many who have been through the entire process from
start to
finish know different. The steps are fairly standard, but there is more to the
entire
process that’s behind the scenes from the
borrower and
the general public at large.
For starters,
underwriters actually follow
mortgage insurance guidelines set forth by
MI
companies to secure the interests of
GSE’s interests.
GSEs are basically government sponsored agencies to facilitate the funding
of mortgage
loans
by offering bonds on the open market to provide the needed money for these
mortgage
loans.
GSEs like
Fannie Mae. Issue bonds in increments of 1000.00 and in large blocks of
1 million dollars at one time for the sole purpose of providing money for
mortgage
loans.
GSEs solicit resellers like Chase Bank to bring loans to the process.
Resellers bring
loans to the process through
mortgage
brokers and their
loan officers.
Mortgage
brokers
and loan officers solicit the general public to get their business.
MI
companies make
sure all the guidelines, procedures and rules are maintained by everyone. From
the
mortgage
brokers and loan officers up to the
GSE, everyone makes money. But the rules and
guidelines are strict and legal and must be adhered to or there will be no
loans.
Often times a loan officer will tell you he needs a bank statement or something
like a
tax return. This is mainly because an
underwriter
has asked for those things. It’s
nothing personal and everyone plays by the same rules.
Some loans are difficult due to a
borrowers
credit circumstances or a self employment
issue that involves further documentation. Or perhaps there is a question of who
owns a
property after someone is deceased. Or maybe the property itself has some issues
like
being partly over an adjoining property line.
A good many things come into play because this loan is an investment and must be
secure.
The question of repayment is paramount to all other considerations and the
security
interest is in all cases the underlying property.
Mortgage Backed Securities (MBSs)
MBSs or
Mortgage Back Securities are sold in the
secondary market much like stocks and
bonds and other investments sold on Wall Street.
MBSs are considered investment grade and
are purchased by individuals and institutions all over the world. Without the
resale of
these securities, there wouldn’t be any mortgages to be obtained by
borrowers
and the
entire real
estate market would be on a cash basis only. Imagine how bad that could be
in
this day and age of quantum spending and almost nil participation in savings.
Almost any
real estate
transaction would be impossible.
Like bonds issued by
GSEs,
MBSs are loan portfolios packaged in increments of 1 million
dollars or more. In each portfolio are investment grade mortgages pledged by
resellers as
“good loans” that will be paid back in good faith or “generally performing”
meaning
borrowers are faithfully making their monthly payments. The main difference
between the
bonds that
GSEs offer and these
MBS portfolios are bonds are created to fund new loans,
where MBSs are loans already in place. Investors buy these instruments in either
for the
benefit of investment gains.
The
importance on both these elements produces providence in results that lead to a
healthy mortgage lending economy. If either were to default or fail at any
degree, this
could lead to catastrophic economic events that can and will hurt our economy as
a whole.
Borrowing
money, by virtue, is a privilege and
should not be taken for granted. However, it shouldn't be an undertaking that will
give you grief either. Call me or e-mail me and I will do my best to get you on
the best path to achieve your needs. I promise!
Vince Gutierrez 281-597-9234
Vinni100@netzero.net
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