Tougher Business

One thing's for sure - the mortgage business is tougher than it used to be. You have a perfectly clean looking deal, and one of the many new rules comes in and blows it up. Our current one is a deal where the FHA anti-flipping rules (which prevents a home from being bought and re-sold quickly) are being applied by a lender on a non-FHA purchase. We didn't know the lender had this rule and had no reason to think that they did on this deal since it's not an FHA loan. They didn't tell us it was a problem until the day before we were supposed to get the documents to close the deal. The unfortunate victim here is a borrower who had nothing to do with the flipping the rule is supposed to be preventing. The seller won't have any trouble finding another buyer, but our borrower may not get the house now.

This is our new reality. What used to be a slam dunk 17 day close can take 30 days due to the mandatory days that have been added to the process for disclosures and appraisals. A 30 day lock on a refi? You're better off with a 45 day lock. And who pays for the longer time frame? Who do you think? The borrower of course.

It's true that some of the new rules are in place to get rid of the shady and in some cases illegal crap that mortgage pros have pulled over the years to their borrower's (and others') detriment. But the effect of many of the rules is to make the process more difficult and costly to borrowers where everything is on the up-and-up.

That's all for today, and let's hope we can save this one despite the setback.
Kyle Dane
kyle.dane@gmail.com