In the real estate world BASIC means it’s a part of every transaction and as such
the Basics are the most important elements of the transaction.

Psychologists tell us people’s greatest fear is the fear of the unknown.  Which is why many people approach a real estate transaction with trepidation.  Real Estate is complicated enough & there is so much more than just money is riding on it that you want to be sure you don’t make a misteak.  Ooops, I mean mistake.

These “Basics” will be helpful to you even if you’ve been a part of numerous real estate transactions before.  Even if you’ve bought & sold dozens of homes you’ve probably slept since the last transaction plus they’ve massively changed regulations & procedures. (Read Me !)  This means that every time you buy or sell it’s just different enough that you can never really feel comfortable.  As the old saying goes, you know just enough to get into trouble! 

This is especially true if you haven’t bought since October 3, 2015
because all the rules & laws changed then! 

To get the best mortgage and buy the best house you need to have some idea of what happened to the regulations and why, so that you can understand the rules & laws you’ll be working under.

In 2010 the Dodd-Frank Act was passed by the Super Majority when they could pass any laws they wanted to.  It was a purely political move with zero study or insight into determining what was good and what needed to be changed and they did it just to be able to say “See, we did something now Vote for ME!!”  The law began to be phased into effect in 2014 and October 2015 is when they rolled out the TRID portion of that Act.  Fortunately the present administration has been doing the studies that shoud have been done in the first place and has been stopping the madness and rolling back some of the more onerous provisions so it’s getting easier to buy a home.

TRID is the biggest change in mortgages since the introduction of FHA back in 1934 and the introduction of the Secondary Market - Fannie Mae & Freddie Mac (colloquially known as Frannie) in the 70’s. 

Let me give you a very short history lesson so you can understand what I mean and at the same time it will also help you understand how the mortgage system works.  A very good reference point is the movie “It’s a Wonderful Life” with Jimmy Stewart & Donna Reed.  That is how mortgages worked prior to Frannie, all the way up until the late 60’s or early 70’s.  Think of Jimmy Stewart as Frannie and their common sense rules.

Frannie is what gave lenders everywhere access to mortgage money all the time (not just until they ran out of their own money) & allows you to get a mortgage no matter where the property is located. 

Up until Frannie, loans weren’t available in many PLACES such as outside of the Big Cities and many time it wasn’t even available in all parts of the city.  Many times money wasn’t available WHEN you wanted to buy because the Lenders had run out of money. 

I remember selling homes in the 70’s and having to shop 4-5 lenders to find one who had the money to lend on that day & who would lend in the area the property was located. This meant you had to take whatever kind of loan or interest rate that was being offered.  It wasn’t easy buying a home back then. 

Frannie gave us the standards & the simplicity we take for granted nowadays.  And it seems Congress, at the urging of the Big Banks, wants to put us back into the 70’s as the Big Banks want to get rid of Fannie & Freddie and take their place.  That would definitely not be a good thing!  Any news you see that is bad for Frannie is bad for the consumer.

The Secondary Market (Frannie) was a huge change in that it meant lenders were no longer limited to just the funds they had on hand and that is why you have access to reasonably priced mortgage money no matter where or when you want to buy a home and you now have a common set of common sense rules for underwriting.  So regardless of what you read, YOU need Frannie!

What makes these new Dodd-Frank changes so big, problematic and different
than many other rule changes in the past?  I’m glad you asked.

In the past we’ve worked under rules & regulations that changed over time to mirror the conditions, but now ALL mortgage lenders are working under inflexible LAWS that cannot change without an act of Congress.  Fortunately that is happening right now, but it’s slow!

Rules & regs are like a line drawn in the sand with some margin for variance depending upon the situation, but Laws are more like walls along a very crooked road and many times they aren’t logical.  Either a borrower fits on that path or they don’t get a mortgage.

You simply will not believe the harsh penalties to a lender should they try to show a little compassion, initiative or even try to use some common sense.

This means that it is more critical than ever before that you work with a Multi-Source lender. Single source lenders are at an extreme disadvantage in todays market because they can’t give you any options.  Banks were the big losers under the new laws.  Plus the Banks & Credit Unions also have to follow banking regulations in addition to mortgage regulations so they tend to be more expensive, slower & more complicated. Also they have profit margins that are twice as high as smaller lenders and that translates directly into higher rates for you.  We’ve found that we are almost always .25%-.375% less expensive than a Banker - even a smaller Banker.

You also need to work with Loan Officers who are very conversant with the new laws and are willing to do the tweaking, tuning & documenting to be able to present your information to the Underwriter in the most positive manner possible as well as shopping multiple secondary market sources to see which source is the best for your situation.  Banker’s Loan Officers do not have to be licensed and trained to the same degree as do Brokers, which is scary.

Yes, things have changed dramatically, but we’ll try to keep you out of trouble and help demystify the process for you.

F$ is a different kind of mortgage company.  We’re big enough to be able to offer most of the many different loan types, but we’re small enough to care.

We’ve been around since 1984 and our principals, David & Debbie Bennett, have been in real estate since 1974 which means they have over 40 years apiece of solid grounding & understanding of the laws & procedures.  We understand a lot of the WHYs behind the rules that people who’ve only been in the business 10-15 years won’t understand. This helps us do a much better job for you.

We pride ourselves on giving old timey service & many of our customers have become life-long friends.  We aren’t kidding when we say we’d like to be your “Lender for Life”. We’ve worked with some people for over 30 years.

But back to the fear factor.  We’ve found if we can educate you well enough on all the rules and laws, you can help us gather your data & present your case in the best possible manner to the Underwriter.

In other words if we tell you the WHYs, you can help us with the HOWs.

Think of the Underwriter as that big, slobbering, growling, evil monster you’ve seen in the movies guarding the door between you and the home you want.

But if you know the care & feeding of an Underwriter (and NO! it’s not a quart of your first born’s blood) they aren’t all that scary.

We know what underwriters want to see & how to treat them so that you end up with an underwriter that looks & acts a whole lot more like this.

If you’ll help us gather the proper data we know the best ways to present that data to satisfy the voracious appetite of the Underwriter.

As an added plus, once we make you comfortable with the process, you’ll find you will begin to relax. Which makes it more fun for us too. 

It’s also self preservation!

We give you our personal cell phone numbers & encourage you to call us whenever you have questions even if it is after hours, on weekends or holidays.

So if you stay terrified of the loan process, we never get to eat a complete meal, go to the movies, take a nap on Saturday afternoon . . .  We feel the financing shouldn’t get in the way of the fun of buying or building a home & we work hard to that end.

In The Basics sections you will find plenty of facts & figures, procedures, insider info, background info & a bit of Comforting.  We’ve found people appreciate being treated like adults & being given the information they need to make informed decisions.

I’ve used Videos wherever I can, but there will still be a lot of text pages too because sometimes that’s the best way to impart knowledge.  Text works especially well if you need a checklist or something you’ll need to reread often.  Occasionally you might think me long winded, but when I am, it’s always because there’s a really good reason.  Usually it’s something that’s very important, but you just don’t know it yet.

For instance, it will take you longer to watch the video on Loan Applications - The Road Map to Success than it would take you to fill out a loan application,

BUT . . .

if you watch the video first you will do a much better job of completing the application properly & helping us gather the data we need to present your situation in the best possible manner.  You see, the video is more about how to document all the many aspects of your situation to Federal guidelines & an underwriter’s satisfaction rather than just how to fill in the blanks on the application itself.

In other words, the video will help make all things that happen after the loan application go much smoother.  You’ll have fewer surprises & greatly increase your odds of a loan approval, plus you’ll have a better understand of what’s going on and what’s important so that you’ll be able to relax. Which means you’ll get to sleep at night and eat meals in peace & so will we.   ;-)

When you play a game, the better you understand the rules the better you can play, the more fun you’ll have and the more likely you are to win.  Just like a game, real estate, especially real estate financing, has it’s own set of rules. We’re here to help you learn those rules and help you play that game.

Now click over to Mortgage Loan Applications to find your Road Map to Success.