RATES HAVE NOT BEEN THIS HIGH SINCE 2021!
I thought I would put interest rates in perspective again, given that they have risen so much (1/4% to 3/8%) since last summer and that there is so much concern!
But – they are still slightly lower than where they were on April 1st of THIS YEAR!
In addition, they remain lower than where they have been for most of the last ten years, and far lower than where they were most of the last 45 years!
The below graph showing mortgage rates over the last 10 years clearly illustrates my point.
And below that you can see a graph of mortgage rates going back to 1971. Today’s rates remain a gift.
RATES – LAST 10 YEARS
RATES SINCE 1972
BORROWER ATTACKED – BY UNDERWRITER!
OK. No borrower was actually attacked, but borrowers often feel like they are “attacked” and they tell us as much (several times last week alone).
They feel “attacked” because underwriters are forced by guidelines and regulations to request tons of seemingly ridiculous documents and explanations.
And – every lender (not just JVM) needs the assistance of every agent to help calm borrowers down.
When most lenders pre-approve buyers, they do not request every document and every explanation because many will “expire” by the time buyers are in contract (doing so would be a huge waste of time for everyone).
When pre-approved buyers do get into contract, lenders request updated asset statements.
Underwriters then review them with a fine-toothed comb to look for every unusual withdrawal, deposit, withholding or anything else.
This can result in a surprisingly large number of requests that often invite additional requests – and borrowers, who thought they were 100% pre-approved, sometimes get very frustrated/angry and feel picked on.
This is because these borrowers can’t begin to understand how the requested info (that often seems very petty) may affect their ability to repay a loan.
And agents sometimes pile on after they hear from angry borrowers, but, ironically, THIS is where we lenders need the help of agents.
No underwriter anywhere can simply ignore unusual deposits, withdrawals or withholdings and every asset statement has to be up to the last available date and include every page (even page 27 of the boilerplate).
If these conditions are not met, lenders will not be able to sell loans, and a single unsalable loan can cost six figures (easily).
So, once again, it is not the lender being “ornery;” it is simply guidelines and regulations.
Most lenders of course explain this to frustrated borrowers, but they often think we are just sugar-coating our own ineptitude. 😊
So – this is my request to agents everywhere to help explain, as an unbiased 3rd party, the nature of the mortgage business to borrowers.
It will make transactions much smoother for everyone.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167
