Posted by Ali/IL on 12/8/09 9:10pm
Msg #313577

This was odd first time for me

I got calls from two different title companies to do a signing for one borrower. He has two properties I will be closing at same day and time. Do they do this because maybe one is too busy? Or because they send request to whom ever?

Reply by Susan Fischer on 12/8/09 9:36pm
Msg #313580

Classic Redundancy. And who pays? Borrower. Tsk tsk tsk.

One can almost smell the stench of greed.

Reply by Shoshana/AZ on 12/8/09 11:04pm
Msg #313588

Re: Classic Redundancy. And who pays? Borrower. Tsk tsk tsk.

As a LO myself, I know that some lenders are more lenient than others as far as the DTI is concerned. In that case, the borrower might pay a higher interest rate because the second loan is a higher interest rate. However, for the loan on the second property, I would definitely have to qualify the buyer on the two payments plus whatever other debt shows up on the credit report. If it doesn't work and he goes down the street to another LO. That's fine with me. At least I can sleep tonight.

Reply by FAN_IL on 12/8/09 10:34pm
Msg #313586

I can't remember the details, so forgive me, but it goes something like this. When a mortgage broker is trying to satisfy the needs of a borrower, but also circumvent the requirements of a lender, they will use two different TC's and lenders.

Let's say a borrower wants to do a double loan financing, but the primary lender won't underwrite the second loan because they feel the borrower doesn't have the credit strength. A (perhaps unethical) broker might do the secondary financing through another lender & TC.

Since the right hand doesn't know what the left hand is doing, and since it can sometimes take up to a month for two separate liens to record, the title searches on behalf of each TC won't necessarily pick up on the other loan in the wings.

I'm not sure what to make of the "two separate properties" aspect of the equation other than by refinancing both properties, the borrower is overextended in such a way that a lender would refuse to finance both properties, so the broker had to go through two different lenders.

Personally, I'd consider backing away from it. There's something wrong w/ the picture.

Reply by Shoshana/AZ on 12/8/09 11:11pm
Msg #313589

As notaries we are not concerned with the ethics of the LO.
In the days of the subprime loans, how many notaries turned them down? We rant and rave today about loan mod apps from various companies. Some think it's unethical to participate in that. Yet, I venture to say that not many of us turned down the subprimes. Why didn't we turn them down? Weren't they unethical?

Reply by Susan Fischer on 12/9/09 1:19am
Msg #313591

As notaries we are not concerned with the ethics of the LO"

I am. I'm concerned with the ethics of everyone with whom I do business.

The "disinterested" partyship of the Notary Public is State Sanctioned, and nationally recognized. If you choose to participate in a transaction, take responsibility for your action. Do not suppose a validation of the sub-prime schemes by the disinterented Notairies Public, and do not suppose every Notary Public participated willingly in shady dealings. Rather, admit that there were many of we Mobile Notaries who drew lines in the sand of fair play. Sure, there were slimy deals. That's life. But to posit that every bad deal was somehow justified , in the end, by the Notarial Act, is well, ludicrous, isn't it ?

Your position that making money off of a current scam is justified by prior marketing "successes" does not hold water. One, we dont' control the market, and two, we do control our choices.

Reply by CaliNotary on 12/9/09 1:28am
Msg #313593

The ethical difference

People who got into subprime mortgages got exactly what they signed up for. Yeah, a lot of them didn't know it because they were too trusting/stupid/lazy to make sure they knew what they were getting themselves into, but that was the choice they made and it was none of our business as to why they made the choice. But they definitely had all the information in front of them to make an educated decision. And at the end of it all they got something tangible out of it, and they always had the opportunity to back out during the rescission period.

With loan mod applications, there's a very good chance that they're going to end up with nothing at the end of it all, and at the application stage of the process, they're really having to go on blind faith on what they're being told, and by the time they may get a more accurate idea of what's going on, it could be too late to do anything about the money they already put out.

No matter what spin the media has put on the subprime industry, the people always got exactly what they signed. Nothing unethical about us participating in it and nothing fraudulent about it. With mod apps, it's a total crapshoot, and we already know that the odds are against them getting anything at all out of it, and that there is a lot of outright fraud happening in the industry, so a lot of us consider it unethical to be a party to any of it.

Reply by JanetK_CA on 12/9/09 1:35am
Msg #313594

Well said, Cali! n/m

Reply by parkerc/ME on 12/9/09 10:08am
Msg #313633

Re: Well said, Cali! Ditto! n/m

Reply by Susan Fischer on 12/9/09 3:42am
Msg #313596

Cali, there were some lousy loans. Blame the victims all

you want, bottom line - those gullible people signed - and paid big bucks - to greedy "lenders" who took advantage of slack regulations and heavy-handed tactics.

Many of us refused to participate in some of the carnage. And, many of us today now recognize that some of the products just aren't worthy of our participation.

You support the greed of the industry, others support regulation of that greed taking advantage of the Average Consumer.

Reply by Lee/AR on 12/9/09 7:17am
Msg #313600

Re: Cali, there were some lousy loans. Blame the victims all

Horsefeathers! A lot of those supposed 'victims' knew they couldn't afford the payment, but got into it anyway--eyes wide open--because they fully intended to sell that house AT A PROFIT due to the ever-increasing 'value' before that loan adjusted. What happened to personal responsibility? Not saying the whole mess wasn't a decade of unprecedented greed... both by some of the lenders, but also the 'victims' who took out loans they knew they couldn't afford in the long term.

Reply by Shoshana/AZ on 12/9/09 7:58am
Msg #313603

Blame the Community Reinvestment Act of 1977.

Lest we forget, Carter signed it.

Reply by Lee/AR on 12/9/09 8:26am
Msg #313612

And Clinton helped...

And, oh, those Shareholders....
Wikipedia:
"In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the CRA of 1977.[ Because of the increased ratio requirements, institutions in the primary mortgage market pressed Fannie Mae to ease credit requirements on the mortgages it was willing to purchase, enabling them to make loans to subprime borrowers at interest rates higher than conventional loans. Shareholders also pressured Fannie Mae to maintain its record profits."

Reply by CaliNotary on 12/9/09 12:36pm
Msg #313658

Re: Cali, there were some lousy loans. Blame the victims all

I support a free market society, and yeah, that means some industries are going to be greedy. But it's the consumer's responsibility to make educated decisions about where they spend their money, not the responsibility of the mortgage industry. Just because they offered these people crappy loans didn't mean they had to take them. In fact, there was an article I read a few months ago (probably posted on this board) that said something like 1/3 or more (I don't remember the exact figure) of the people who got subprime loans didn't even need them, they would have qualified for conventional loans. So who's fault is it that those people didn't even investigate further?

I don't see the mortgage industry as being any different than the auto industry. When I go onto a car lot I am fully expecting that the salesperson is going to try to squeeze every last penny out of me that he can. I also know that there is an abundance of information available to me, so before I make a decision to buy a car I make sure I do some research so I have a good idea of what a fair deal will be. And because I make the effort to do that, I end up with a fair deal every single time. But if I left the responsibility in the hands of the car salesman, I'd end up paying full sticker price, plus an extended warranty, plus rustproofing, plus roadside protection, plus any other moneymaking ripoff they could throw in there. Are you really saying it wouldn't be my own damn fault if I let them do that to me?

I don't see a single difference between the two types of purchases other than that when you buy a car, you don't have the opportunity to back out. Once you drive that sucker off the lot, it's YOURS.

At least the subprime borrowers had 3 days to find all that tricky small print, such as the note with the title "ADJUSTABLE RATE NOTE" in a bigger font than the rest of the print on the page, or the TIL with the oh-so complicated math where the borrowers had to figure out that 36 payments meant 3 years before the payment changed to the next figure on the list, which was hidden right in the middle of the page where they'd never ever find it.

So yeah, if your definition of "greed" is "allowing consumers to make their own educated decisions on whether they're getting a fair deal or not", then I support it 110%.

Reply by parkerc/ME on 12/9/09 12:56pm
Msg #313668

Re: Agree. Goes back to "Buyer beware!" n/m

Reply by JanetK_CA on 12/9/09 5:22pm
Msg #313741

There'd plenty of blame to go 'round on both sides

You make some very good points, particularly the comparison with the used car salesman. However, I find it interesting that most people do have a different perception of loan officers than they do of car salesman. I've run into scads of people who seemed to completely trust their LO, many of whom have flat out lied to them. Sure, they should have known better, but I think most people think they understand a little bit, at least, about cars, but the complexities of a loan transaction can baffle even some of the more savvy in our communities. I don't know why they have (or maybe I should say HAD) a better reputation, but I think they did. (And of course, I don't mean all of them.)

I'll never forget the conversation I had with a seventy-ish widow waiting in line at a pharmacy. I don't know how we got on the subject, but she mentioned that she had had one of those really bad loans but figured that out a couple of years later and was able to get out of it before things got too bad. What she was describing sounded like a negative amortization loan, but she didn't know any "technical" terms. She came across to me like a reasonably intelligent person, but her late husband had always handled the financial stuff. What stunned me was that she didn't know anything BUT fixed rate loans een existed! It was just completely outside of her experience and any other possibility never even occurred to her - and clearly wasn't explained. So she trusted an "expert", who obviously took advantage of her.

While I find it very hard to just shrug my shoulders about situations like hers - and many others - I still don't think we should be the loan police. The ones where we're asked to collect money up front for a modification are a totally different story. With those, we have something clear-cut to tell us to cut out, and I've always turned those down. But in the vast majority of the cases, there is no way that we have all the facts to be able to determine what is right or wrong for someone, so we need to just do our jobs, imo. That doesn't mean that someone who feels differently doesn't have the right to say no, if they choose.

Reply by FAN_IL on 12/9/09 10:32am
Msg #313636

The critical factor to wh/ I'm alluding is the possibility

that one lender might not be willing to underwrite the loan if the borrower admitted to the fact that he was applying for a second loan w/ a different lender on a different property at the same time. To deceive a lender in that way is fraudulent, isn't it? Aren't there affidavits in loan packages where borrowers are asked to swear that they are not applying for any other kind of additional credit w/in 30 days of another loan funding?

The subprime lending debacle was the result of a more lenient regulatory enviroment where the underwriting criteria was relaxed nationwide.

But that's not the same thing as a borrower misrepresenting his intent during the application process.

I don't know if that's the case here. I was just trying to answer the initial question as to why there might be 2 TC's and 2 lenders for 2 properties. So I provided a possible scenario.

Reply by MW/VA on 12/9/09 9:24am
Msg #313627

I don't know where everyone got the spin on this. I'm reading that it's two different loans, two different tc's & two different properties. I don't have an answer for you Ali. At least you were lucky enough to get both signings, and can hopefully schedule them back to back.

Reply by Ali/IL on 12/9/09 1:53pm
Msg #313683

Yes, two different loans,two different title companies same lender.Now, borrower canceled because of bad weather. Hope they reschedule both with me. Since these were for same time and day.

Reply by ReneeK_MI on 12/10/09 4:51am
Msg #313810

Agree Marilynn, where'd the spin come from? n/m