Posted by John_NorCal on 12/21/06 10:08am
Msg #167092

Rev Mortgage Applications- why do them???

I see that some people do reverse mortgage applications. I have a couple of problems with that. In California, unless you are working for a bank or a lender licensed under the Dept of Corporations (CFL), you must be licensed to initiate real estate loan applications.
Reverse mortages are essentially FHA loans. FHA says that the maximum fee charged is 2% of the loan amount. If the loan amount is $175,000 the fee charged is $3500. In taking that application there are bound to be questions asked by the applicants, questions that should be answered right then and there. Tell me now, are you going to answer their questions for you are being paid, should you even try to answer if you're not licensed? I see some people are getting $50.00 to $150.00 for taking applications, this to me is wrong unless you are licensed. As a licensee, I can refer that person to a lender and receive 25% of the fee charged. My point is, you are taking on a responsibility that belongs to the loan officer. Once they have taken and processed the loan application, then I will be more than happy to do their signing.

Reply by Susan Fischer on 12/21/06 11:00am
Msg #167104

Holiday greetings, John-

It's a sticky wicket, isn't it? I've done a few (in the high-end range,) and have wondered. One outfit 'hired' me - as an employee, W-2, took out taxes. They said that because I took their 'class' I was legit. I didn't feel comfortable, and now I'm worried about the license requirement. Think I'll just decline apps from now on. Thanks for the great post.

Reply by PAW on 12/21/06 11:54am
Msg #167137

As an "employee", you are probably considered a Loan Officer, and as such, typically would not be required to have a broker's license. Independent Contractors, on the other hand, such as myself, would be required to have a mortgage broker's license (in some states, such as FL) to "solicit" a mortgage. An "associate" of a broker's or lender's business may or may not need a license to simply take the application and shouldn't be in a position to sell or solicit the mortgage.

Reply by Cassandra Andrews on 12/21/06 12:22pm
Msg #167153

i agree. in fact we're supposed to identify ourself as an 'associate' of the LO.

Reply by John_NorCal on 12/21/06 12:36pm
Msg #167156

Re: Rev Mortgage Applications- why do them??? Cassandra

In CA if you are working for a lender who is licensed as a CFL under the Dept of Corporations, then you would be an employee working under their license. Probably subject to W-2 withholding, etc, unless you are an independent contractor working with under a written agreement with that lender. Identifying yourself as a "associate" of the LO does not in itself make you exempt from licensing laws. I would venture to say that the LO's that you reference are probably licensed by the Dept of Real Estate not the Dept of Corporations. Then, in my opinion, you need a real estate license to initiate a loan application.

Reply by BrendaTx on 12/21/06 11:04am
Msg #167107

Re: Rev Mortgage Applications- don't do them! I agree

John. I think this stinks. You are correct. Correct!!!

Thank you for saying what I could not articulate. I did not know all the ins/outs.

Shall we report this practice to our fave RM LO today?

It's just so wrong. IMHO, naturally.

Reply by Thalia Ray on 12/21/06 11:11am
Msg #167109

I do RM apps. I have no problem doing them. The company I work with is a CFL licensed company so I am covered there.
I do not have to answer any questions because the counselor calls the day of the appt, usually a hr or so before and goes over the application with the potential borrower. If for some reason the person still has a question we call the counselor back and they answer the question.
IMHO I personally love doing the applications... the elderly are a sweet section of our society

Reply by Cassandra Andrews on 12/21/06 11:16am
Msg #167115

John,

that's an interesting post. i never thought about it and have been asked to take loan apps for the borrower to fill out, give me documentation and mail it back. it's always referrred to as an application 'pick up.' they fill it out, i pick it up and mail it back. i've done a few of these but never for reverse mortgages. are these the type things you're referring to?

thx

Reply by TRG_wy on 12/21/06 11:42am
Msg #167131

....you must be licensed to initiate real estate loan applications.
You are NOT iniating the loan. I think you are reading too much into this and making is complicated. The process is very similar to RESPA.

Reply by John_NorCal on 12/21/06 11:46am
Msg #167135

**You are NOT iniating the loan. **
Taking a loan application is not initiating the loan process??? By what stretch of the imagination is it not? You have to start someplace with the loan process, the loan application is the first place to start.

Reply by Cassandra Andrews on 12/21/06 12:21pm
Msg #167152

i'm not sure i understand. didn't the LO initiate the process when he told the borrower he'd send someone out with papers for them to fill out? in the cases i've done, the borrower has already spoken to the LO and will often call if he/she needs help filling out something. all the required info/signature lines are highlighted in yellow so technically he (LO) could have asked a 10 yr old to give the borrower the papers and mail them back right? we're just the courier.

it's kind of like a secretary who 'writes/types' a ltr but the boss signs it. the ltr/idea (or in this case the loan process) was started by the boss (LO).

Reply by Ndwa on 12/21/06 12:28pm
Msg #167154

OR & WA required LO license 2007.

That's the new requirement for 2007. I think you are exempt from taking the test if you have 4+ years experience. The terms are like RE license where continue eds are needed for renewal.

Reply by John_NorCal on 12/21/06 12:30pm
Msg #167155

My point is that it is the LO who normally fills out the application based on what the applicant has told them. Probably by my speaking as a loan agent, I would not want to push off filling an application to someone other than my client. I want to be sure that they are completely understanding of what I have laid out to them and it is not subject to misinterpretation by someone else. If someone wants to pay an SA for courier services, not a problem. Where I draw the line is a SA filling out the application for the client.

Reply by BrendaTx on 12/21/06 12:39pm
Msg #167157

The LO is playing us for a bunch of monkeys IMHO. They are getting 2% of the loan. What are they paying? $50, $100?

RM LOs need to be trained well...not just pretend training. I totally agree with John.

Reply by Cassandra Andrews on 12/21/06 1:22pm
Msg #167180

i think we may be talking about 2 diff things. initially i wanted to know if u were talking about ALL applications or just RMs. i just want to clarify. i've never done a RM application. i'm talking about RF apps.

all of the app pick ups i've done are pretty self explanatory. the borrower just fills out his name, address, etc. the other docs (disclosures) just require a signature. this takes about 15/20 min. yes, maybe others get more $$$ but when accepting a job you have to decide how much you can afford to work for and charge accordingly based on such factors as how much profit you want to make, how much you will expend (expenses + time/energy).

but . . .hey since we are independent, should we find out that someone else is making a killing doing the same thing, we have the option of renegotiating our fees right?

Reply by TRG_wy on 12/21/06 1:18pm
Msg #167177

By what stretch of the imigination are you initiating the loan?
I'm not calling to talk someone into purchasing a RM, I'm not collecting credit information, tax papers, calling for an appraisal, contacting a viable lender to fund the loan or anything else.
All I am doing is presenting the documents prepared by the LO to the hopeful customer, watching the proposed BO sign the paperwork and shipping the package back.
As noted earlier, I am acting only as glorified currier, my staus as a notary pets a little above any Joe Blow off the street that could the same thing - hence the 10 year old noted above.

Reply by TRG_wy on 12/21/06 1:23pm
Msg #167181

My keyboard hasn't learn how to type w/o errors yet
I'm wondering if those making comments against this have ever done one. By the logic they are putting forth, we initiate standard loans as well; the only difference is that we actually sign/notarize those. With the RM pre-package we don't do anything except warm the chair.