Example of the silliness

Here is an example of the udder ridiculous nature of the industry now. Working with a elderly borrower a Signing Agent fails to notice that the borrower during closing put down 2009 instead of 2010 on a 4506 government tax return request form. Now while admitting the error was with the Signing Agent who only has to review 40+ signatures on a package, this would seem like a silly error to hold up a funding. Not so! Lets ignore the fact that every closing package has a errors and omissions form (most have two, one for title and one for lender) that allows either the title or the lender to correct inconsequential errors. The title company required the Signing Agent to go back to the borrower to get it resigned. Then it needed to be resent by overnight at the Signing Agents expense so funding can occur 2 days late.

Now this form (4506) has been in closing packages for years and up until the season of "gotcha", has rotted in over 95% of files without anyone looking at it much less using it. Now with the season of "gotcha" upon us, every 4506 is being used in QC (Quality control) right away. This in spite of the fact that the borrowers have already signed one at application and it was used to qualify. So now we pull the borrowers tax returns twice! How is that helping prevent fraud? What is going to change between the first pull and the second? You are getting it directly from the IRS...what is going to change?

So this correction resulted in 8 phone calls to the borrower and Signing Agent, two faxes, three emails and a FedEx. When all a closer had to do was invoke the E&O form and make the correction themselves. The 4506 is NOT a legal notarized document. It is NOT date sensitive with the exception it usually expired in 90 days of closing. What is the sense of wasting all that time, resources and money on a redundant form? You waste the borrowers time, the Signing Agents, the closers and yes quality controls time. At least $100 in expenses went to ONE form correction! Before the time of "gotcha", before the lay offs of the competent, before the weaklings took over, this would have been taken care of by fax, regular mail or some closer would have just made the correction based upon the authority of the E&O form(s).

Nobody in the industry has the spine anymore to stand up and say "Enough is enough!" We have a new GFE (which, according to the morons at HUD, a "streamlined" form which went from 2 pages to 4) that the borrower does not see until close to closing, can't understand (nobody can) and does not even sign! We still have that useless TIL with a APR that has no basis in reality and you have quality control underwriting that serves no purpose but to slow down the system. Loan applications are up, approvals and closings are down...gee...yah think?

The real heros of the loan process

It is time to take up the cause of the Notary/Signing agent. These are the people who close your loan outside of the title company location. They often are driving many miles at all hours to get these loans (as few as there are now) closed. They are busting their butts off to make sure they make the Fed Ex on time, all the
motorization's are correct, and that all docs are signed . The mortgage industry has NEVER respected what these ethical, detailed and hard working people do. Along with all the other STUPIDITY of the mortgage industry going on, things have only gotten worse for the Notary/Signing Agent.
The first injustice is the absurd size of packages. They have gone from an average of 35 pages in the '90's to an average of 120 pages now. Has the compensation gone up for the Signing Agent? NO. It often costs over $15 in paper and toner costs and that does not include the time to print/collate. Yet most title companies and signing agent schedule services/title companies have not only not increased payment for packages printed by the Notary/Signing Agent, but some have even reduced the fee! In addition to the size increase is the ridiculous complexity of the closing packages. Every second rate lawyer employed by the lenders is adding disclosures that not only do NOT add to the understanding for borrower, but add redundancy and confusion. The idiot lawyers are killing this industry as much as the incompetent spineless underwriting!
Next is the overall payment to these Agents. Costs of gas have gone up over 33% in the past two years but the payment to these people has gone down about 20%. The blame lies with both the lenders and the hiring title companies. Neither one will admit that while their fees have gone up over 25% to the borrower, they have screwed over the very people who finish the job-the Signing Agent/Notary! Some title companies even now hire unqualified simple Notaries rather than certified Signing Agents (certified by the National Notary Association). Signing Agents have to past a comprehensive test, background check and carry errors/omissions insurance. They are just as qualified (and in many cases MORE qualified) than your typical closer at a title company location
Somebody has to say enough is enough. These qualified good people are being screwed over as are the borrowers in a process of asinine, corrupt, incompetent lenders. The quality of service is going town the toilet and every lender is to blame. I feel sorry for these dedicated people who are in the trenches daily making up for the incompetent lenders and helping borrowers finish a frustrating process.

Rates at all time low...so are approvals

We are having interest rates at less than 5% and yet there is no refi boom or surge in housing sales. NOBODY is getting approved and now others are finally starting to grumble. It is time drop the conforming scores back to 620+, it is time to bring back STATED for self employed and it is time to bring back compensating factors in guidelines....the strangulation of the borrower has to stop.
Check out this article.

It is NOT getting any better out there. Lenders are changing guidelines at whim, re verifying till they find a "gotcha", and making closing packages ever more difficult to close. They are adding new lame and unneeded disclosures and making demands of title companies and signing agents that go beyond reasonable!
When I read how the modification program had only closed 13% of the qualified applicants, I had to laugh. It has to be much lower from my observations. I have interviewed 15 Bank Of America borrowers who have gone through the process. All of them said the same thing; They kept getting collection calls and certified letters demanding payment, fees and back charges as if they were not even enrolled in the program. Everyone I talked to said that they made the payments and did what they were told in the initial phone call for enrolling in the program. But apparently B of A has no clue what it is doing and has made the program a joke with it's incompetence. Add that to the stupidity of B of A underwriting and you have what was arguably the best lender in the country (Countrywide), being trashed with by the most inept, clueless bank in the industry.
Like I have said before...go back to the underwriting we had 7 years ago and we can get out of this slump much faster. Tightening of guidelines, raising credit scores, pushing down appraisals and gutless underwriters are killing the real estate market and the entire economy!