Do they still exist? LOL.

Excuse my ignorance, but I'm still learning the mortgage business, and I'm making a big effort in learning. Anyways, all I see these days are interest only, neg ARM's, etc... Sometimes I wonder if these loan officers are looking out for themselves, instead of the borrower. For example, I have a borrower who has great credit, with a pretty good income, he wants the traditional 30 yr fix, yet the loan officer I refer them two wants to put them in a 2 yr interest only, just so they can refi after the 2 yrs?

Did guidelines for 30 yrs fixed changed? Is it still possible to obtain 100 percent finance?

Guidelines for everything are changing by the hour!

30 yr fixed rates are a bit more strict b/c these loans represent potential loss of profit to the lender if rates go up. The interest rate will generally be higher than an ARM start rate.

The reality is that most people don't stay in their homes longer than 5 yrs so it's a question of balancing the pros and cons of each type of loan.

I am definitely NOT a fan of the 2 yr ARMS (are people still doing those) esp I/O unless the borrower is very savvy, ie a sophisticated investor who can crunch the numbers and make sense of it all.

Can they qualify at a 30 yr fixed rate?

If that's what they really want, that is what they should have as long as they understand the product.

There are some 5-7 yr ARM products that can be really good as well b/c most people will move during that 5-7 yr period anyway.

But selling a loan just so the LO can sell them a refi in 2 yrs is unethical *churning*.

Altho if the borrowers have credit issues and plan to spend the next 24 mos cleaning that up then doing a refi to get a really good 30 yr fixed rate, that plan can make sense if the borrowers are disciplined enough to really clean up their act. Nothing will improve credit scores as much as paying a mortgatge on time for 12-24 mos. Are you sure the borrower has really *great* credit? Any LO will tell you that pretty much all borrowers claim to have *good* or *great* credit . . .



So it really depends on the situtation.

Great post, Loan Diva! You've basically covered it all

Hello,
30 year loans are definitely still available. As I understand it, a big part of the foreclosure problems in the subprime business is 2 year ARMs. Stick to your guns on 30 year due to all the changes. A refi in 2 years may be a lot more difficult even if the customers creditworthiness doesn't change due to all the changes. 100% financing is still available in the FDA (97% with gift funds of 3% - Ameridream program, etc.). In subprime and Alt A, there is still 100% (although a lot less lenders) but under a lot less programs. What is and I believe will continue to go away are the 100% stated and No Income Verification programs. Good Luck.

Cool guy,

Since you are not privy to all of the details of the borrower's financial situation and qualifications you are probably not in the best position to detirmine what type of financing is best for them.

However, what you can and should tell them is this. Choosing the right financing is almost or as important as choosing the right home. The mortgage business is very competetive and if they are not comfortable with what this loan officer is telling/offering them, then they should seek out other opinions. A big motivation for a LO to act in the borrower's best interest is that if he/she does not, they risk losing the deal to someone who comes along who does. Probably would not hurt to have your clients make the LO aware of this fact.

One thing to keep in mind is that when a lot of broker start in the business they cut their teeth on sub-prime loans which typically are presented as 2 year ARM's. The problem is they are never shown how to do an "A" paper loan.

Many "A" paper lenders will not even work with a small brokerage because they want to see volume.

EVERY loan "except maybe an option ARM" has a 30 year option. But as mentioned before the rates are higher especially in the sub-prime arena.

I think if you ask 10 loan originators fannie mae's 100% loan produc at least half of them would think your crazy thinking that Fannie Mae has no such animal..

The more experienced the loan officer the better chance they will have the right product.

Thanks
Danny

My .02. I try to put all of my clients into either a conforming loan or an FHA loan. That being said, the only clients that i have found that wouldn't qualify for one of the two of these are cleints who cannot disclose all their income, or someone who has had a bankruptcy or foreclosure with in the last 2 - 3 years. I had a client in February that i got approved through Desktop Underwriting for a conforming 30 year fixed 100% loan and he had a 537 score! So there is a chance that the loan officer is newer or doesn't know how to put sub prime clients into conforming programs.

I enjoy a lot reading and learning from the most experienced professionals. It's obvious that the knowledge need to be learned "hands on" in the every day work but please guys, could you let me know one or two GOOD printed materials to learn about loans and all the "know how" about it? Let's say: Classics in this matter.
Thank you in advance

You are in a great place to learn, as far as knowledge or questions that you have, start a new thread asking from start to finish. I know I would contribute what I know, and I would probably learn a thing or two from SD and a few others.

Roman2008,

This is the place to ask those questions and I hope that you will enjoy your stay here One of my favorite books, and I still refer back to this book sometimes is called, "The Loan Officer Guide, Vol. I" by Fredrick R. Williams. It is a unique, one-of-a-kind book, it covers the technical part of the loan process, reading rate sheets, credit report, step-by-step of 1003, 1008, GFE, TIL, compliance, finance, stacking the loan, etc. The materials covered in this book is close to hands-on!

http://www.amazon.com/Loan-Officer-Guide...80369927&sr=8-2