Why Specialized Help for Clients?
During the housing crisis, I worked with many government and non-profit agencies and (past) U.S. Senator Bill Nelson (D-Fl) to get a fix for foreclosure credit code that was erroneously applied to the credit of past short sellers. During this time, I became aware of other credit error issues that affected clients in distress and became an advocate for “pushing the real story” to the forefront. This resulted in a website called “HousingCrisisStories.com” that assisted consumers, mortgage originators and realtors to be able to anticipate and visually see credit issues (many were hidden!) before a client purchased a home.
The erroneous foreclosure code that was applied to past short sale credit got fixed by applying a workaround in Fannie Mae but never got fixed in Freddie Mac. Still, so many affected clients were still falling through the cracks and another avenue to be able to check potentially affected clients had to be sought. In June 2016, I was appointed by (then) U.S. HUD Secretary Julian Castro to be on the HUD Housing Counseling Federal Advisory Committee (HCFAC). While on this committee, I realized that HUD approved housing counselors were the source to assist clients before a home purchase with credit, budgeting and other issues! Mortgage professionals can assist clients, but their primary focus is originating loans. Housing counselings are trained to assist clients with pre-purchase and post- purchase issues.
Pilot Program to Connect Loan Originators to Housing Counselors Started to Get Clients in Need of Assistance “Mortgage Ready”
Whether you are a client in need of assistance or a realtor or loan originator who needs help for your client, I can help you!
Housing counselors already work with bank loan originators and their services are often funded by Community Reinvestment Act (CRA) funds provided by banking institutions. But independent mortgage loan originators don’t have CRA funds. Therefore, a way that clients in need can get help from housing counselors and get a credit from a referring loan originator towards their mortgage closing costs was developed to encourage loan originators to utilize housing counselors for their clients. The client pays a set fee for specific housing counseling services upfront:
- indepth credit help or building credit
- down payment assistance assessment
The loan originator signs a Memorandum of Understanding (MOU) and is notified when the client is “mortgage ready”. If the client returns to the loan originator for a mortgage, the loan originator provides a credit towards mortgage closing costs for the services paid upfront to the housing counseling agency.
Negative Equity Refinance Help
During the housing crisis, homeowners who had negative equity on their first mortgage and had a non-Fannie Mae, non-Freddie Mac conventional mortgage had no option to refinance. A second problem was that many had a home equity line of credit or 2nd mortgage that, when combined with the first mortgage, had too high of a combined loan to value to be able to refinance.
I specialize in refinancing these loans and it is often with a restructured new 1st and 2nd mortgage…. an NO INTEREST ONLY so that equity can build! Call me for details!
Housing Crisis Credit Issues
Foreclosure code still affects the credit code of past short sale, modification and even deed in lieu credit. I can spot where the issue is and find if this will provide a problem for clients who’ve had these mortgage issues. The foreclosure code can stall a new conventional loan for 7 years and produce a conventional loan denial, specifically in Freddie Mac. Foreclosure code is not visible on the face of a credit report but is visible and noted in Fannie Mae and Freddie Mac automated underwriting systems (AUS) findings. Ensuring that a potential at risk client is clear of this issue by running the mortgage through both Fannie Mae and Freddie Mac systems is imperative so that the client doesn’t learn of the problem at the last minute and be forced to accept a higher interest rate non-QM loan.
Reviewing credit through another tool to make sure of an exact foreclosure date that is hidden by bankruptcy can also be done.Questions? Contact Pam Marron Today!