FHA Tricks I’ve learned over the years

To most originators now day’s FHA loans are something that can pertain to half a Loan Originators pipeline or more. I have compiled some of the coolest FHA tricks, debugged myths’ and special things done on FHA loans in a list to create the top 20 FHA tricks. Here they are;

1. FHA Streamlines have no income and no appraisal. Most companies require some form of a credit report. At Motive Lending we require a full tri-merge report but underwrite (look at) only the mortgage rating on the credit.

2. FHA allows transferred appraisals, most originators know this. The case number follows the property not the client. So if the case number is transferred to another lender the loan potentially can still be closed. **I say potentially because if you didn’t know most companies place a MCR on files (mortgage credit reject) if they have an overlay. At the new Lender they may review this MCR and not accept the loan if the MCR is marked for things like fraud.

3. FHA allows clients to have disputes on their credit report that do not need to be removed. If the cumulative balance of all disputed accounts is less than $1000, the disputes do not need to be removed.

4. 1×30 for a mortgage rating is allowed with Approved/Eligible findings. The client must be current at the time of funding.

5. Student loans can NOT be omitted on FHA any longer. Use 2% of the balance as a payment or gain a payment letter and we will use that.

6. FHA Allows collection accounts to be omitted if collectively less than $2000.

7. FHA Streamlines can be on investment properties.

8. FHA now requires a well cert to verify the purity of the water if the property has a private septic and well system.  **FYI newest guideline.

9. FHA allows different types of pay to be used and calculated in the income when you have at least 1 year of receiving that income type. Such as shift differential pay, or over time, or bonus income.. **Provided that the underwriter feels that it’s likely to continue you can use that income. Commission income you must be receiving for 2 years to use.

10. FHA allows you to be a buyers agent as a Realtor, and do the home mortgage for the same client. You just can not be a selling agent Realtor and do the loan. This rule only applies to any LO on a broker side of things, if any Lender is also fully endorsed with FHA they can not have an employed Agent do this.

11. FHA allows a client to combine a 1st and 2nd loan (even if not purchase money) and consider the transaction a rate and term transaction. Up to 97.75% LTV on refi’s.

12. FHA allows a client who had a modification to do a loan if they have been paying on time for 12 months proceeding the modification. They also have to be current on all installment debt. If they are late a 3 year waiting period is imposed.

13. FHA allows a manual underwrite with max ratios of 31/43 if you receive findings that are refer/eligible. With 1 compensating factor you can do 37/47 with ratios and with 2 compensating factors go to 40/50 with ratios.

14. FHA allows a client to do a loan 2 years after a Bankruptcy or 3 years after a foreclosure. If the client included a mortgage in the BK they have to wait 3 years.You can now even do a loan when someone just discharged a CHP 13 BK.

15. FHA allows non-occupied co-borrowers to help with the approval on loans.

16. FHA mortgage insurance will never fall off the loan now days, they once did have a time where MIP could be removed off a loan. The client would have to have 78% LTV and had the MIP for a minimum of 5 years.

17. FHA will insure loans with DTI’s up to 57% with approved/eligible findings.

18. FHA has announced they no longer will be charging client’s 30 days of interest if the loan is not paid off at the first of the month. FHA will only be allowed to charge interest until the day paid off. Just like conventional. Great news for Streamlines.  Now this was on case numbers originated at the beginning of FEB last year (2015).  When the change to monthly MI happened.  So we will start to see these loans coming soon.

19. With the MI amount dropping from 1.15 to .85 last year, if you find a FHA loan originated prior to 2015, you can do the streamline refi and achieve 5% payment reduction at the same rate.  That’s right, you read that right.  SAME rate on the loan amounts of about 115k or more will save 5% alone in the MI reduction to .85.  This was and is GOLD for those that work the right campaign..

20.  I got a guy questions come flowing in all the time to me about FHA manual underwriting guidelines.  Motive goes down to 580 FICO and we allow for manually underwritten guidelines.  – JUICEMAN

TOP VA Tricks and guides I’ve learned

VA loans are awesome.  As an AE I wish when I was originating I knew what I know now about VA loans and would’ve marketed these like crazy.  A brokers 100% successful product market campaign that will drive results.  VA loan marketing.  Sometimes when a broker markets a specific target marketing they can get an array of qualified and unqualified individuals.  VA loan marketing will drive results as a result of product guidelines. VA’s guidelines are such a breath of fresh air to see the openness and leniency of guidelines.  I’ve taken the time to list a few guideline tricks to help add value to my network on VA loans.

Guidelines and overlays to look out for. Some lenders don’t allow all of these, ML does.

  • No AVM on VA IRRRL or 2055 required. -ML goes off the original loan amount for the LTV
  • Up to 135% of the original loan amount is allowed on VA loans
  • VA loans with ML go down to 580 and we can do 100% CASH OUT.  Up to 1 Million loan amount.
  • VA allows up to 100% cash out with a 700 FICO up to 1.5 Million (1-1.5 million a 700 FICO is needed)
  • VA IRRRL’s can be done with a Mortgage Only credit report that shows the ficos. “Non-credit qualify” is an option with ML.
  • VA allows any DTI on any “accept” finding.  VA can be run on DU or LP.  Some companies only allow for one or the other.  ML allows both.
  • VA allows manual underwriting up to 50% DTI if the client has 3 months reserves and with ML you also need 150% residual income.
  • Collection accounts do NOT need to be paid off
  • Disputed accounts don’t disqualify the client (and you don’t need to remove them)
  • On VA loans you can ignore charge off accounts.
  • Judgements do need to be paid off.
  • FLIPS are allowed on VA loans.
  • Foreclosure and BK 7 wait is only 2 years

VA loan guidelines are more interesting than that of FHA in my opinion.  They are more advantageous to potential clients (Vet’s) with somewhat challenging circumstances.  Hence why a target marketing campaign for VA type loans is so successful in almost any area.  (helpful in area of Military Bases) I love helping serve others that helped serve us.  Motive Lending (ML) offer’s the “real VA IRRRL” and goes by findings.  We also manually underwrite and have great pricing.  And if you are sending in a 100 dollar check right now to some lender to sponsor you to do VA loans this year, LOOK NO FURTHER.  The JUICEMAN and his MOTIVE-ATING team can help. Please call me with all “I got a guy” questions on VA loans.  – JUICEMAN

3rd Party Contributions and LARGE deposits

Close more loans with Motive Lending! I keep a pile of inbound questions that come up over time and then I typically inform my network of these most recently asked guideline questions.

Sellers concessions or “Third party contributions” and the subject of “LARGE DEPOSITS” comes to the surface in the past month. Below is a cheat sheet on both;

Seller Concession Limits; FHA loans the max is 6% Seller Contributions. Conventional is a different story, and it depends on LTV. So Owner Occupied LTV > 90% the max is 3% Contributions. Owner Occupied or Second Home at 90 LTV or less the max is 6% Contributions. Owner Occupied or Second Home at 75% LTV or less the max is 9% Contributions. Now any occupancy type on anything for sale by owner the max is 2%. The max Contributions for any investment home transaction is 2%.

Large Deposit Clarification; FHA loan guidelines say that the large deposit would be considered a percentage of the purchase price. 1% of the purchase price or more is considered a large deposit an would need to be verified and sourced. Conventional loan guidelines define large deposits based on what the qualifying income is on the deal. On a refinance it is 20% or more of the qualifying income needs to be sourced as a large deposit. On a purchase it is 50% of the qualifying income or more as a deposit on bank statements that would need to be sourced and verified.

As we roll right into purchase season these are great guidelines to know! Happy Originations, and look forward to helping you. – JUICEMAN

Mortgage Originators CALL TO ACTION

Want to gain some business on a Saturday?

Have a turn down file from 6-12 months ago?  Call those clients back, 99% of the time, if the denial was credit related, there is a chance that the client took your advice to improve their credit.  I see this all the time, LO’s forget to call them back down the road.  Go through all those files from last year on one Saturday afternoon and make a list of people to call.   Bet you find a deal you were waiting on the client to fix their credit any how.

Want to gain some business on a Sunday?

Got a lot of Brokers that are like the “good ole Boys” and many in my network are Church bound on Sunday morning.  Or most have a routine at least that may include a social setting.  What I suggest is to get out of your comfort zone, the best part of what we do is helping people you know in your community.  How much did it cost to “advertise” on the church program they hand out at the end?  Or when was the last time your pastor mentioned more about a member of the church and what they do in efforts to give back?  Most Churches even have one of those “pin up” boards right when you walk in.  Or even your local ACE Hardware store, they have pin up boards for homeowners to check out as they buy things they need to improve their homes.

Call to Action

**Think demographics, where can you leave your card to have the most impact to homeowners, a place where they all go on Sunday (coffee shops are popular, I don’t know many renters that go to church)?

Or Think how can I “advertise” for cheap regardless of my ROI…. Bowling Alleys are great, ask a local bar if they have any advertisements over the stalls, GOLF COURSES are actually a good place to do pin up flyer type thing for free, or how about a laundry spot in the local chain of Apartment complexes or the common area (They always have one of those pin up boards basically empty)…. Pin up some cards or a flyer somewhere Free.  The more acts like this that help plant seeds for you now the more leads you “could” have in months to come.. Who knows someone that calls you or you call back may have a 580+ FICO now that can help them become Home owners!

*Who knows you won’t win the lottery if you don’t play. – JUICEMAN

People don’t plan to fail, they fail to plan

What’s your MO?  Most companies or sales organizations have an inherent feeling of helping other people or satisfying a need or want somehow.  And the fuel of the sales force is from offering the world class customer service or added value with their product.  In the mortgage industry most of the top Loan Originators have an inherent feeling of success in helping people buy a home or save money for example.  In my role as an AE, I really strive and stem from the same inherent feeling of success in helping others achieve the dream of home ownership but do it in bulk.  And as I do, I help LO’s across the Nation learn how to get loans done.  Part of my MO, is that I actually help my Broker network create a business plan to drum up business to send me.  I just don’t ask what’s on the corner of your desk?  By doing so I get the inherent feeling of helping other’s grow a BUSINESS in the mortgage industry.  This year more than ever before I’ve helped LO’s go from 2-3 loans a month to doing 6-8 a month.  I’ve done this by helping “create business plans” for LO’s to succeed in any RATE ENVIRONMENT.  Now’s the time to get on board and plant the seeds with pillars that help the mortgage industry, rates are going up, and the “low low rate” sale is going out the door.  I can help any mortgage company create campaign’s for a successful ROI in any area.  Call me let’s partner together.  Below is an example of how during the year you could do different campaigns to help plant those seeds for future business.  (without buying leads)

The goal would be to diversify your Pillar relationships with small “activities” that can drum up business for you.  Pillar relationships can be for mortgage professionals; Real Estate Agents / CPA’s / Financial Advisors / Business Groups / Chamber of commerce membership / Divorce Attorney’s / Home Builders / Insurance Agents to name a few.  I have detailed a generic version that may help; call me we can custom tailor one for your mortgage shop. 🙂

Jan – Feb 2016.  This is great time to start networking with a new business marketing group.  LBN (Local Business Networking) is an example, more than likely there is a one near you.  Get involved, you can’t expect leads when you go 1 or 2 times.  You have to go for a while get involved, and provide leads to others too.

March- June 2016.  This is a great time to start networking with builders as the ground becomes soft, RE agent networking for purchase season, and title/escrow companies to prepare for the upcoming purchase season.

July – August 2016.  Great time to be networking with literally all pillars including insurance agents and financial advisors.  Remember escrow/title relationships can service you with info on whom bought houses cash too.  (Delayed Financing exemption loan campaign is great).  Remember consistency is key to be going and showing face at the networking groups you signed up with at the beginning of the year.  Stay active.

Sept- October 2016.  This is the time to market to CPA’s, they are past tax season, back from their summer vacation and in the office to round up by OCT 15th all those that file extensions.  Also a great time of year to hit up past cleints from the year before.  (most successful past client campaign marketing results happens at the last quarter)

Nov – December 2016.  This is a great time to touch base with Divorce Attorney’s as a result of the end of the year being their “busy” time.  Every state has different guidelines on the wait for Divorce to be finalized after being filed, but it is historic info that shows during the holiday’s is when more people file for divorce.  Get in front of them now, then in mid purchase season next year they are done with the (6 month wait) and the divorce is final.  Somebody is needing to split assets, and it’s always great to have a pipeline full of purchases supported by a few cash-outs’ or refi’s in the pipeline.  So in July the work with networking can pay off.  Campaign’s thanking past clients and following up for referrals is most effective in the last quarter of the year.

Marketing 101, some of these things every LO was taught or heard someone say to them at one point.  Now let’s create a plan of attack to do marketing activities on these target Pillars, or create a campaign directed to a particular target market.  People don’t plan to fail they fail to plan.  Let’s build something together, 2016 is going to be just as “fruitful” as 2015 was EVEN IN A RAISING RATE ENVIRONMENT.  You just have to plant the right seeds for success.  The difference between who you are and who you want to be, all comes down to WHAT YOU DO!  Here to help add value to you and help you sustain in the mortgage industry for years to come.  Partner with Motive, Partner with Me.  Make it Easy, Make it Motive.

In the office helping other’s get loans done all day; If you want any type of a Free Strategy session let me know.  If you are closing 3 Million a month and are not afraid to spend money to make money, call me.  I have something for those warriors.  – JUICEMAN

Motive-ating Relationships

The one thing that is prevalent in our “mortgage” industry, that’s “CHANGE”.  Change is not scary stagnation is.  My purpose is to “add value” to those whom originate loans and then hope in turn they will partner with me to get some done.  As an Account Executive my training and experience has come in handy being a top originator at one time.  In all my roles, what’s made me succeed?  I embraced change, always look to learn more, and build relationships.

TODAY, I wish to add value to everyone whom originates mortgages.  I used to do little things and teach other originators to do the same.  Some of these key tricks is what “got me” the numbers to earn the revenue coins, and recognition that I’ve gained through out sales.

SKILLS CHALLENGE:  On every pitch, I challenge you to ask every person, pre-approval or refi, “WHAT IS IT GOING TO TAKE TO EARN YOUR BUSINESS TODAY” or “WHAT IS IT THAT IS PREVENTING US FROM MOVING FORWARD TODAY” or “HOW CAN I TAKE THIS OFF YOUR LIST OF THINGS TO DO NOW”!

If you ask, they will answer.  Yes or no.  The cool thing is, in my LAW OF AVERAGES, I know the more “NO’s” I get, will get me closer to my next “YES”!

ASK AND YOU SHALL PREVAIL, continue dialing and you will get their faster.  EFFORT!

4 Things to mention on every call;

  1. About 1/3rd of the companies a client will talk to will PROMISE them a better deal than I present.  Only about 5% of those companies will DELIVER on that promise.  We do things differently, WHICH IS WHY I NEED YOU TO SEND ME YOUR INCOME UPFRONT> SO I CAN QUALIFY THIS CORRECTLY!
  2. The Average American does 8-10 mortgages in their lifetime with 8 different companies.  More than likely if they did those loans with the same person over time, they would have gotten better loans, and cheaper costs.  I want to be your Loan Officer FOR LIFE.  I want to help your KIDS Buy their first home.
  3. The Number ONE complaint in the mortgage industry is that things are different at the closing table than what was promised upfront.  With the new laws of closing cost disclosures it binds the companies that put things in writing so it can only change to a certain threshold.  The very fact that you will rate me on a customer satisfaction survey at the end of this is why I am asking for 5% of your trust up front and will earn the other 95% through the process.
  4. I am the only Loan Officer that you’ll talk to that will tell you up front I don’t have the “best rates and fees”, I have the most competitive rates and fees.  The fact is that most lenders are within an 1/8th of a percentage of each other or 500 dollars per costs difference.  It really is all the same anywhere you go.  More important now than ever before is to know whom your doing business with.

CLOSE CLOSE CLOSE CLOSE CLOSE>  It’s a numbers game.  Weather on the AE wholesale side teaching LO’s and Broker’s across the Nation, or directly on the phone, you ask for business you will get business.  Happy taking 1003’s today mortgage world! – JUICEMAN

JUMBO IS BACK IN A BIG WAY

Have you PRICED OUT MOTIVE on a big one yet?  Heard just yesterday our pricing from Friday was over 7 eighths better than competition from a Broker in FL..

MOTIVE-ATED about a BRAND NEW 30 YEAR FIX JUMBO that was just added to the mix.

JUMBO GUIDELINE TIPS OF THE DAY!

*Combine a 1st and 2nd loan together as a RATE AND TERM transaction not cash-out.  Any loan above 417,001 you can do a JUMBO product to accomplish this.  The junior lien must be seasoned for 12 months with no draw greater than 2k.

*DID you know you can do a NON OCCUPIED CO BORROWER ON A JUMBO?

*Over 500k cash in allowed (LTV restriction to 65% LTV)

*TWO APPRAISALS NEEDED ONLY ON LOANS OVER 1.5 MILLION

*GIFTS ARE ACCEPTED up to 1 MILLION

*Reserves of only 6 months needed on JUMBO less than 1 Million.  12 months needed with all 1 Million + loan amounts and goes up incrementally to max loan amounts.

*FIRST TIME HOME BUYERS ARE ALLOWED ON JUMBO

*JUMBO allows FORECLOSURES/BK’s/Modifications if exceeding 7 years.  Additional conditions apply.  See matrix.

*DELAYED FINANCING RULE IS ALLOWED for those that wish to take cash out on a jumbo loan within the first 6 months of owning free and clear. (bought outright)

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THE MORTGAGE JUICEMAN HERE TO GIVE YOU ANGLES TO GET LOANS DONE!

Who is this Shawn, “I got a guy” guy?

Who is this “I got a guy” guy?  Who is http://www.themortgagejuiceman.com?

WHO is this Shawn “Juiceman” Devlin? A top producer at some mortgage company?

Nope. I once was, I did “been there done that”, but did retail and did it subprime. So I learned the hard way.  I learned actually how to read a title report and appraisal or inspection. Took a 1003 the long hand way without all the software we have now days.  I hit the cowbell 7 times in one day on multiple occasions. We would ding a bell when a “book” came back with all the TILA/RESPA disclosures with supporting income & assets for a mortgage application to be submitted.  The most mortgages I wrote in one day seemed to never go past 7… I just stayed consistent. And I have got boxes full of awards collecting dust. lol

So, where do I come from. Well in 1997, I walked into a car dealership a week from graduating high school from my small hick town. Went to a main street big city dealership with a smile, a suit, a great attitude and shit load of enthusiasm. Dressed in a suit with a clip board in hand holding my resume. I was there to report to the parts department regarding some clerical position I found in a Sunday news classified section. No shit. I can’t make this up. What happens next CHANGED MY DESTINY. And as I stood there in the middle of the showroom floor waiting holding a clip board in a suit, all the sales guys were smurking at me. I walked over the purple Plymouth Prowler in the middle of the show room floor and picked up the window sticker that wasn’t on the window but the front seat.  I placed it on clip board and started reading and going through in my mind what and where each thing noted was.  18′ Rims yada yada… All the sudden in deep reading a guy walks over with jeans with a hole in the knee and a white stained t-shirt.  The T-shirt had red stains on it that I just ignored and offered a warm enthusiastic hello.. Thinking I was waiting for him, not he was waiting for me…

In the proceeding next 4 or 5 minutes every sales person, parts person, clerical person watched me walk this guy around the car and do a formal 5 point touch.  (walking through each aspect of the car) With exception of actually sitting in it, starting it and driving it… I painted this guy the picture of the PURPLE Prowler going down his drive way.  When he asked me “how much does it cost?”, all I could do is smile and say actually, “I don’t work here!”.  KID YOU NOT.  I will never forget the next moments as the hand that touched my shoulder says “sure you do” why don’t you come in my office to the customer and I.  We walked into his office and the owner of 6 different chains of Marco’s Pizza buys it cash, and I get the “job”.

So that’s how I entered the world of sales.  And bought my first motorcycle.  lol. Key here; Enthusiasm is the key to persuasion without pressure.  Now I help others take 1003’s (Mortgage applications) and close home loans with my Motive-ating team.  Today I offer free consultations to LO’s to know how to drum up business.  I do free strategy sessions almost every day.  I do this all the time and coach broker owners to individual LO’s and help them add value to their clients and help them find more clients to help.  And as a result I have a ton of LO’s across the Nation that call me when ever they have a question that starts with “I got a guy…”  I’ve become a go to JUICEMAN for guidelines and tips to generate mortgage referral business and ways to put together mortgage loans.

My call to action today, is to like;

http://www.facebook.com/accountmanagersalespro

My call to action today, is to join;

http://www.facebook.com/groups/MortgageJuiceman

I will share what I see as PROBLEMS all the time in the mortgage origination world and provide solutions to these common problems.  I will share best practices, origination tips, networking, ways to handle objections, and ways to actually DRUM UP BUSINESS.  Hit me up with your next “I got a guy” question. I can’t wait to help to be your Juiceman.  – Shawn “Juiceman” Devlin

 

 

 

Mortgage sales expert. Helping mortgages close everyday.

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