Laser Focus On Details To Get Clients Mortgage Ready

Laser Focus On Details To Get Clients Mortgage Ready

Credit help is still the greatest need

BY PAMELA M. MARRON | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

One month ago, a webinar that showed loan originators how to connect with HUD approved housing and credit counselors to get clients “mortgage ready” was presented on the NMP TV platform. I’ve been told often that loan originators have little interest in this type of business, but that wasn’t evident with the 711 people signed up.

Maybe it’s the time we are in, but I’ve heard from many colleagues in the mortgage business who are looking for a solution for clients who want a home but aren’t ready yet. Let’s discuss what is working for clients.

Credit help is still the greatest need, followed closely by down payment assistance and rounded out with home budgeting.

Calls and emails came in after the webinar offering defined services. Even an intake platform is being examined that could be used by loan originators to keep track of where clients are sent and their ongoing progress. The goal is to have options available that are simple to follow and that can be housed at my site: www. Clients2Homeowners.com.

WHO DOES WHAT?

There are some client issues where the loan originator can do the work to get the client ready for a mortgage. But most loan originators prefer to have the client get help elsewhere and come back when they are ready for a mortgage.

A prime objective of this pilot is to show mortgage loan originators how to refer challenged clients to the right housing and credit counselors. The value of HUD approved housing and credit counselors is that they can stay connected to the client until needed help is done.

LOAN ORIGINATORS CAN HELP

Short Term Credit Help (Maximum-one year):

Loan originators who want to help clients improve credit scores can use CreditXpert tools such as the Wayfinder and the What If Simulator. Knowledge of how to use these tools and attention to sensitive timeframes of steps to be done needs to be the focus. Contact your credit reporting agency to get training.

Long Term Credit Help:

There are clients who have credit that is so difficult to untangle that long-term help (1-5 years) is needed. This is where I’d suggest working with in-depth HUD certified credit counselors. Counselors may work on debt management (but not debt settlement, which hurts credit even further), debt consolidation, student loan refinancing even when delinquent, and bankruptcy, modification and foreclosure counseling.

This is not credit repair but help where the credit counselor works directly with the client and their creditors to correct and rebuild credit. Contacting a HUD approved agency under the National Foundation For Credit Counselling (www.nfcc. org) or Navicore Solutions (www. navicoresolutions.org) to help with long-term credit is a first suggestion.

COVID-19 Credit Issues:

We are experiencing an increase in clients who own a home and have been affected with job layoffs. Many of them have found other work or are working reduced hours and are looking to tap into existing equity in their homes to get through hard times. A national emergency proclamation was made on March 1, 2020 prior to the forbearance directives and seems to have suppressed negative credit normally seen with a forbearance.

I’ve already run and rerun two clients with forbearance applied to a mortgage even though they didn’t end up being delinquent. Results were approvals through both Fannie Mae Desktop Originator and Freddie Mac Loan Product Advisor automated underwriting systems. Don’t assume that forbearance credit affected clients must wait. Run these loans through both systems. For qualified clients who are up to date on payments, getting a refinance may be possible.

A DOWN PAYMENT RESOURCE

Help for down payment assistance has grown to be almost as important as the need for credit help. DownPaymentResource.com was introduced during the webinar. The site provides a comprehensive list of down payment assistance programs and recently added wholesaler down payment assistance was presented. This is an incredible tool for loan originators who struggle to match up guidelines of secondary down payment assistance financing and first mortgage financing correctly. Stay tuned.

Pamela M. Marron is a senior loan originator with Innovative Mortgage Services Inc.