David Neal's Mortgage Blog

I have to tell you about an FHA mortgage that we recently did. It really shows off the system that I have worked on for several years, to expedite the loan process.

This FHA loan was one that had to be done by the 11th of September,  because of the downpayment assistance programs going away and our ability to fund them after that date. The official date was supposed to be October 1st, but we like many others got surprised at the last minute. To make a long story or not so long, depending on how you look at it....we cleared the loan to close in 8 business days. That's right I said it... an FHA in 8 business days. We only had a week and a half, and not only did we get it done, but we had the settlement statement to the borrower 24 hours in advance. I know lenders that can't provide the HUD 24 hours in advance after working on the loan for 30 days.

Now most certainly, we can't do that on every deal, but when push comes to shove......I have to mention that the only reason that this was possible is because the loan was very clean, the Realtor and borrower were very organized. The Realtor Jennifer Goodspeed was very skeptical and even after my assurances, didn't feel real confident about our ability to pull this off. I'm quite sure, that's because we had never worked with her before and well let's face it...most are lucky to get them done in 30 days. Here is what the buyer's agent wrote to us in a thank you card, that I just received.

We are expanding. I know it's hard to believe that anybody would be expanding a mortgage company in this market but I am. I'm not quite sure if I'm doing well or just plain stupid, but I'd like to think it's the first one not the later.

Things over the past week have been kind of chaotic as the carpenter cut a door and a big section on the adjoining wall to the new office space we added. It's kind of hard to focus when there is hammering and sawing going on in the office, but we managed. Now we have the task of putting everything back together. The main thing left is the wiring for the phones and computers, which I hope to have done this weekend. Please bear with us if we seem a little slower at the moment or out of sorts. Things are returning to normal more everyday and by the first of next week, we will be back full strength. We are full functional now, so please don't misunderstand. It's business as usual, just a little bit slower until we get everything reorganized.

Of course the reason for leasing more office space is that I have hired several new loan officers. We are glad to have them as a part of the team. They all bring skills that will be beneficial to our team, to continue to provide the best mortgage experience possible. I should have their Bio's up soon, on the website. If you have some feed back, I welcome it.

As I said in the first paragraph, I like to think we are doing well. I believe that the reason we are expanding in a world that most are downsizing or going under, is our commitment to our core beliefs, which are Service, Communication and Relationships. Keeping with those belief's I am not expanding for the sake of it, but to add to the service we can provide our customers. I truly feel that no other mortgage company provides the service and experience we do. 99% of our customers say that they would recommend us to family and friends, in a survey they complete at closing. The important part is "at closing"...anybody can make their customers happy to start with. Sorry, it seems as though I'm on a mini rant....it's just that I'm so passionate about it.

Forbes Magazine recently named Hamilton County the Best place to raise a family in the U.S., which is pretty cool! I am proud to be a long time resident and also to have my office located here.

I don't have to read the article to find out why, it's just a nice place to live. Hamilton county is clean and well kept. We have low crime, thanks to our wonderful police departments. Here in Carmel, Indiana we have the best school system in the state, but Zionsville, Westfield and Noblesville are all very good school systems.

On this Fourth of July weekend we had family over from out of town and one of the things they pointed out, was that Carmel was a very walking friendly city. I spoke with the Mayor Jim Brainard about eight years ago on how we really needed to focus on making our city more accessible to pedestrians, which I have to give him credit....boy did he listen. We now have one of the most walking and biking friendly cities in the country. The Monon Trail is also great, it's like a pedestrian superhighway that runs all the way to Westfield.

Some people in Indiana think that Hamilton county residents are stuck up or think we're better than everybody else. For the most part, I do not think that's true. What I do think though, is we have a strong sense of pride in our communities here in Hamilton County. Not to make our communities better than others, but simple to make them the best place to live that they can be and evidently it shows.

I am proud to be a resident and businessman in Hamilton County. It makes me think my Great Grandfather and Grandfather who moved here in the early 1900's really knew what they were doing. So, if you're thinking about moving and care to live in the best place to raise a family...come on down and check us out!

This week has been a doosey! The market volitility on Wall Street and the huge stock market gains in a day and then drop the next has provided an enviroment ripe for traders. That hasn't been good for mortgage bonds. This combined with last weeks existing home sales report which was up, has served to devastate mortgage rates this week.

Don't panic just yet, even though it may be hard with this kind of rate volitility! The Consumer Price Index is due out today at 10:00am est. This is an index that can have a big impact on the market. I believe that it will be lower than expectations and should drive bonds to rally. We will have to wait and see how the market reacts.

Right now, more than ever....it's important to have a rate lock strategy on how we're going to plan your rate lock timing to a dip and therefore make this crazy market work to your advantage. an untimley lock could cost you thousands, so steer clear of loan officers that haven't developed a plan for the timing of your rate lock or that want you to lock as soon as you can without anything other than a minimal explanation.

Good Luck!

I had a situation last week where a customer communicated to me that do business with us made him nervous because we had some common acquaintances. Of course his main concern was that they would be somewhat privy to his personal business and it occurred to me that this would be a perfect topic to blog about.

The first thing I want to say is that under no circumstances, unless we have specific permission from you, is your info shared with anyone. By anyone, I mean not my wife, my best friend, neighbor...no one. I am even very apprehensive about disclosing who I am doing a mortgage for, regardless if the people I'm speaking with, knows the person or not. Consider us Switzerland! One of the things I have addressed with my team is that we have to be sensitive to the fact that in some cases, just allowing someone else to know we are doing a mortgage for our client, may cause problems. Like in a situation where one of the spouses doesn't know they are getting ready to be divorced and we are doing the mortgage for the house that our client is going to move to when they file. This is a very difficult situation and even an accidental slip on a phone message, could cause it to become explosive. So, when we leave messages, we only say we're from First Liberty and don't leave any info that would disclose to a potential listener, other than the client, to the fact that we are doing a loan for them.

I have done loans for a previous client's parents, siblings, friends, coworkers and so on. In order for them to trust me, they have to know that I'm not going to pass personal information even if by accident, to the other parties. Mum is the word.....for real!

Now on to the next part. I have gone to great lengths to make sure we're doing everything that is possible to keep your info safe. No paper leaves our office in a trash can, only non paper items are thrown in the trash. We do as much as we can through secure means of transfer, like through our secure login for customers here at my website instead of emailing them. You never know who's going to open an email! We don't leave open files laying around for somebody stopping by our office or the cleaning person to get into or casually see. All of the private info that we have on people is stored on a server in a bunker somewhere, so that even if my computer was stolen, the thief would not be able to access your info.

Please know that I'm not blogging about this, just because it sounds good. I am writing this because it is one of the most important issues in the world of finance and I want to make sure people know that we don't take it lightly

I have been doing mortgages for so long and have diligently worked on bringing the best mortgage experience possible, that I really do believe with every fiber of my being that, when somebody chooses to do business with another company....they will get inferior service. What adds to that are the people I have talked with after they have closed with another company and the people have come back to me after starting with somebody else.

I hope that doesn't sound arrogant, because I don't think I am. It's just that I really do care about people in general, which sounds hokey, I know....but it's true. I don't know why, but I feel badly when somebody I speak with, got screwed on their mortgage. I don't know how it sounds when I talk with potential new clients and hopefully people don't take it as I'm just trying to sell them something! I try to relay the conviction and the passion I have for trying to everything possible to make their home buying experience a great one.

So, if I come off like I'm trying hard to convince you, that you really have to watch these other companies. It's because I am, because I know the level of service I provide and for the most part I know the service other companies provide. No don't get me wrong, I'm not doing mortgages for charity and I am trying to get paid.....but I feel and treat everybody the same regardless of the amount of money I'm going to make. it's because everybody deserves the best possible service and advice when it comes to a purchase as large as buying a home is!

I just want to wrap it up with a tie in to what I think will be the topic of my next post....Why are people sceptical of almost everything, but when it comes to mortgage advertising they see an advertised rate or an estimate of fees and really treat it as that's what they will get? Even though there's half a screen of fine print on the TV screen for just a few seconds. I welcome feedback on what people think is in that fine print....Anyway, I don't want to rant

Time fles when you're having fun, right? It must because I sure didn't realize that it had been this long since my last post. Business has been good and home has been crazy, so I guess I haven't been as motivated to blog, but I'm back on it. 

I have been wondering some things about my blog and I think I'll try asking all of you and seeing what kind of feedback I get. Of course for this to work you'll have to participate and tell me what you think, so please help me with this.

First, which would be better to blog about specific topics and mortgage tips or guidence.......or........blog more like a journal of what's happening in my office from day to day or week to week (all the dirty laundry, so to speak)?

What kind of content would you prefer to see?

You can either make comments to this post or email me directly.

Right now we're still seeing quite a bit of changes in the mortgage industry. Two things have really changed the options for people who are looking for a mortgage now.

One of which, is the across the board price changes by Fannie Mae and Freddie Mac. This affects all lenders, since the prices have changed at the source of "conforming paper". What they have done is rates now have an automatic increase that's adjusted for credit score. The crazy thing is that for people with a 700 to 720 credit score, there's still a price increase of somewhere between .125% and .25% and you don't even want to know about the increase for people with a 620 credit score.....which is the minimum required now for a conforming mortgage. FHA on the other hand has no such policy, so there is a huge price advantage to going with an FHA loan....I don't think this is merely a coincidence. It just seems to perfect. In a time when lawmakers are trying to expand FHA, but you have to go through the long drawn out process to get anything done, it's seems far easier to make it so that FHA is the only logical choice for their financing. Am I making sense or am I starting to sound like a conspiracy theorist?

Second, is the fact that 100% financing is being restricted by the PMI companies. What I mean by this is that while Fannie Mae and Freddie Mac still have a program for 100% financing, they do require you to have PMI and if you can't get the PMI, well......you can't get the loan. So, since the PMI companies have stopped providing mortgage insurance on 100% loans, that pretty much means the only way to buy a home with no money down.....is, would you believe....FHA! Now, I know what you're thinking, FHA requires a 3% cash investment, let me explain. There are a number of different down payment assistance programs, in which the seller contributes 3% to the affiliated program and then miraculously you are approved for a down payment grant. Tricky, huh....So, this effectively provides 100% financing through FHA.

Combine those two factors and it makes it so that most people are going to choose and FHA loan, because it makes sense.

If there is one singe thing in the mortgage business that causes homebuyers the most distress and even sheer panic....it is a delayed closing date! Now,even though my team and I do everything we can to prevent this, on rare occasions it can't be prevented.

The process to get your mortgage is well defined and certain things have to happen at certain times to insure we are hitting the target closing date. One of those is getting the required documents from you the customer to provide to the underwriter as proof of information disclosed on the application. It's kind of like in a court room, where it only matters what you can prove. If we can't prove it them we can't count it. But, sometimes the proof that we provide actually raises more questions and then we have to provide documentation to prove and satisfy those questions. If that came up late in the process, I'm sure you can probably guess...now we have to scurry around trying to answer all the new questions and provide proof. Often times that can't be done in enough time to still close on our date, because it's very hard to hurry the last couple of days in the mortgage process.

If I can stress one thing, it would be try your best to gather all the necessary documents your mortgage company asks for as quickly as possible. Although the key phrase is "as quickly as possible", sometimes there isn't any way to get the documents sooner. The are certain documents or situations that make it impossible to get documentation quickly. In these situations, just be aware that those can delay your closing.

Another big reason that delays can happen is the information we were given it necessarily accurate or our customer left out a key piece of info, that could potentially have a huge impact on the loan. So please don't take the "I hope they don't find out about that" approach. If I know where the problems are upfront then I can navigate through the mine field, so to speak. But, if I don't know where the mines are....well you guess it, if we step on one we might be dead....or delayed while we figure out if there is a solution.

Keep these few in mind while applying for your mortgage and your chances of a delay in your closing go way down. One last thing...my rule of thumb is we don't move up a closing unless the loan is clear to close by an underwriter. No matter how much more convenient it may seem to be for you, moving up the date and then have it delayed only causes more problems than it solves. The only way to make sure that doesn't happen is to be clear to close, which means the loan is final approved...before we move it up.

Have a Happy Closing!