JVM Has Never Funded A Mortgage Loan! Here’s Why.

In 13 years of business, JVM Lending has never funded a single mortgage loan. This is b/c there are actually no mortgages in CA and Texas, and JVM is really a “Deed of Trust” lender (as CA and Texas are “Deed of Trust” states). Everyone uses the term “mortgage” generically to refer to any loan […]Read More

Equity Lines and Mortgage Funds = Seasoned Funds

This is a quick reminder that “cash out” from equity lines, second mortgages and first mortgages is considered to be “seasoned funds” no matter how recently the cash was obtained. Lenders want to make sure all funds are “sourced” and “seasoned.” “Sourced” simply means that we know exactly where the funds came from – which […]Read More

Lenders Often Don’t Need Tax Returns

It is a common misconception that lenders always need two years of tax returns for income verification. They don’t. If borrowers are “W2 Wage Earners” only, with no self-employment or side income of any kind, lenders often only need two years of W2s and a month’s worth of paystubs for income verification. These “W2 only” […]Read More

Are Low Rates The “New Normal?” The Fed Is Irrelevant

For years I have been repeating the predictions of various market experts about how interest rates have to go up at some point. And for years, I have been dead wrong! My wrongness was only illuminated again with the recent dramatic drop in rates. All this only makes me think that low rates may now […]Read More

Unexplained Deposits, Seasoned Funds, Sources For Seasoned Funds

I mentioned yesterday how “unexplained deposits” on bank and investment accounts often create problems when transactions are in escrow. This is b/c lenders want to make sure all funds going toward a down payment are “seasoned.” “Seasoned” means that the funds have been in a borrower’s bank account for over two months and/or that the […]Read More

I Caught My Dog Issuing Pre-Approvals (True Story)

I made the horrible mistake of teaching my dog Kevin how to run Fannie Mae’s automated loan approval software, known as Desktop Underwriter or “DU.” It was easy to teach him b/c all he has to do is gather info from borrowers and input data. BUT, THIS is why it was a huge mistake! Without […]Read More

Godzilla vs. Bambi; Zillow vs. JVM

In the classic 1969 film, Godzilla vs. Bambi, the action only lasts for 90 seconds as Godzilla stomps Bambi into oblivion with a single step. But, that was in 1969. In 2019, the much smarter Bambi would be empowered and waiting for Godzilla with superior technology and nimbleness. He would most certainly take Godzilla out […]Read More

Low Rates & Early Pay Off Penalties; Six Months Is All We Ask

Rates have fallen about 1/4 percent over the last few weeks and they are almost 1% lower than their peak only a few months back. As a result, everyone is rushing to refinance again, as I mentioned in yesterday’s blog. Mortgage lenders love the onslaught of business even though it fosters some major risks. One […]Read More

The Fed Halts Rate Increases; Good Or Bad?

Yesterday, the Fed announced that there will be no more rate hikes in 2019. And many people in the mortgage and real estate industries cheered. But a lot of economists and Fed-watchers are more worried than ever. Here is just one of many articles (from the WSJ) I read today illuminating serious concerns. The Fed […]Read More

Inflation: The One Reason No Buyer Should Get Cold Feet

Everyone knows there are many reasons to buy a home, including: (1) enjoying the pride of ownership; (2) locking in a low interest rate; (3) fixing your housing payment; (4) taking advantage of tax savings; and (5) building equity, among other things. But, most people do not appreciate how important real estate can be as […]Read More

Only One In Five Willing To Apply for a Mortgage Online

We recently spent $26,000 on a new “point of sale” platform (Blend) to make it even easier for our borrowers to apply online. This was a lot for us as a small business, but it is nothing compared to the $80 million that Loan Depot spent to develop their online application and related technology. But, […]Read More

States With Lowest Mortgage Rates; CA Wins! Why? Bringing Low Rates To Texas!

Lending Tree recently did a study to see which states offered the lowest mortgage rates. And surprisingly, California (the land of all-things-expensive) won! The next best states for low mortgage rates were New Jersey, Washington, Massachusetts, Utah, and Colorado. The worst five states for rates were New York, Iowa, Arkansas, Oklahoma, and Maine. WHAT INFLUENCES […]Read More

Rate Locks – How They Work; Who Pays; Wells Fargo

Wells Fargo was sued in 2017 for charging borrowers for “lock extensions” even though the delays that fostered the need for the lock extensions were clearly Wells Fargo’s fault. It was blatantly dishonest on the part of Wells and they deserved the resulting bad press; you can read more about it here. At JVM, we […]Read More

Impound or Escrow Accounts & Why We Do Not Recommend Them

Impound or escrow accounts are maintained by lenders or servicers and are set up to allow buyers to pay their property taxes and hazard insurance on a pro-rata monthly basis instead of on a semi-annual or annual basis. For example, if property taxes are $6,000 per year, and hazard insurance is $1,000 per year, a […]Read More

JD Power’s Mortgage Lender Survey – What Borrowers Want

The lender you refer your clients to is a reflection on you. I repeat that often b/c it is true and b/c we meet so many agents who are having issues with their lenders. In light of this, JD Power’s recent survey of borrowers should be of particular interest, as it illuminates what borrowers look […]Read More

Bankruptcy Seasoning Requirements – 0 to 7 Years

Here are the seasoning periods necessary after a borrower files for bankruptcy protection. FHA Financing with 3.5% Down Chapter 7 (Debt Liquidation) BK: 2 years from discharge Chapter 13 (Debt Payoff Plan) BK: 0 years with court approval if borrower is still in the BK. Conventional Financing All Bankruptcies: 4 years from discharge Jumbo Financing […]Read More

Divorce Season; Things to Know About Mortgages and Divorces

As a friend in the industry reminds me every year, “divorce season” is now upon us. People don’t like to file for divorce around the holidays or during hectic summers, so March turns out to be the peak filing month. With that said, I am repeating key information that everyone should know about mortgages and […]Read More

When Buyers Need to File Taxes Early?

In Monday’s Blog, I explained why buyers often do not need to file 2018 tax returns until October. But there is one case when buyers should file taxes as soon as possible. Self-employed buyers should definitely file ASAP if their 2018 income was higher than 2017’s (if they want to qualify for a larger loan […]Read More

When Do Buyers Need to File 2018 Tax Returns?

Lenders don’t actually need 2018 tax returns until October in most cases, as October 15th is the final deadline for filing. After April 15th, lenders will require 2018 tax returns OR a copy of the request for an extension that was sent to the IRS. If buyers provide a copy of their extension request, they […]Read More

Call Center Horror Story :) The Need for Training & Skill

CALL CENTER FAIL Last week a borrower came to us to discuss her refi b/c she had lost trust with the lender she was working with (America’s largest non-bank lender). In any case, she was trying to refinance the house she lived in but it was owned by her Dad and she was not on […]Read More

Another Gov’t Shutdown Update; Must Be On Title If On Loan; Title Only

GOVERNMENT SHUTDOWN NOT AN ISSUE FOR MOST BORROWERS I read recently that there are buyers waiting on the sidelines b/c of concerns about the government shutdown. They shouldn’t be b/c the shutdown is not affecting that many buyers. There are some issues causing delays such as furloughed employees not being able to close until they […]Read More

Max Number of Financed Properties

We often see borrowers with multiple financed properties nowadays b/c so many of them have been on buying sprees since 2008. Having more than four financed properties used to be an issue b/c so many lenders and investors were excessively restrictive after the 2008 meltdown. But, guidelines have definitely softened and there are now multiple […]Read More

The Beverly Hillbillies Recession Prediction – A Recession Is Coming For Sure!

CURING THE COMMON COLD When I was a kid I loved a TV show called The Beverly Hillbillies. It was about a family of hillbillies who struck oil, got rich and moved to Beverly Hills. The family matriarch was Granny and she had a cure for the common cold that made the family’s banker (the […]Read More

How The Government Shutdown Will Affect Mortgages

Many people are wondering how the government shutdown will affect the funding of mortgages. The last time we endured a protracted gov’t shutdown was in 2013 when it lasted for 16 days. PRIMARY CONCERNS: TAX TRANSCRIPT (4506t) VERIFICATIONS AND FLOOD INSURANCE At that time, the only major holdup had to do with Tax Transcript Verifications […]Read More

Wartime & Economics in The Mortgage Industry

A few random mortgage industry stories. TOP AGENT WON’T REFER CLIENTS TO CLOSE FRIEND: This week, Heejin (my wife & co-founder) was visiting a top producing Realtor in Texas who refused to refer clients to her close friend who was a loan officer. The reason? Her friend’s rates were too high and her clients complained. […]Read More

Why Hard Money Is Dead; “Healthy” Sub-Prime Lending Is Back

WHAT IS HARD MONEY “Hard Money” or “Private Money” refers to mortgages made by private (non-institutional or non-bank) investors or funds that focus almost exclusively on collateral (the property) and not on a borrower’s credit-worthiness. In other words, hard money lenders will give almost anyone a mortgage as long as they have 30% of the […]Read More

ARMs; Asset Depletion Loans; Debt Service Coverage Loans; Mixed Use Properties

Here are a few quick mortgage reminders/updates: I. JUMBO ARMs REMAIN VERY LOW.  I mentioned yesterday that our Jumbo 30-Year rates are as low as ever, but our JUMBO ARMs are even lower.  Our 7/1 ARMs, for example, remain in mid-3%range for no-points loans for qualified borrowers. II.ASSET DEPLETION LOANS.   These are the perfect option […]Read More

2019 Conforming Loan Limit Increases – Good and Bad

PEOPLE WALKED AWAY FROM MORTGAGE OBLIGATIONS B/C THEY WERE UPSIDE DOWN In 2006, a relative of mine asked me to help her qualify for a condo purchase. Wanting to help, I loaned her enough money to clean up her credit, to pay off her consumer debt and to make a down payment. I then cosigned […]Read More

When Experts Are Very Wrong – Market Timing

Pierre Andurand is a highly educated French businessman, billionaire and hedge fund manager who is an expert in oil, as oil is the primary focus of his giant hedge fund. As recently as June, Mr. Andurand predicted that the price of oil would hit $100 per barrel in 2018, and that it could rise as […]Read More

Buyers Can’t “Roll Closing Costs” Into Their Loan; Options?

Total closing costs for a purchase transaction can vary from $5,000 to $30,000, depending on purchase price, loan amount, type of loan, month of the transaction and location of the transaction. This is b/c closing costs include not only the standard title, escrow, appraisal, underwriting fees, etc.; closing costs also include prepaid interest and property […]Read More

Illegal In-Law Units and Credits For Closing Costs Always OK If…

We blogged yesterday about “Clean Contracts” and received a couple of great questions. Illegal in-law units and/or kitchens:  Appraisers cannot attribute value to illegal units in most cases, unless they are typical for the area and there are comparable sales with similar units to support the value. Also, stoves from non-permitted kitchen areas must be […]Read More

Helping Lender Close On Time: Complete/Clean Contracts & Addenda a Must

We often remind Realtors, Escrow Officers and Borrowers that “everyone has to be on board” if we are going to close on time, especially if we’re closing in 15 days. Realtors are often unaware, however, that they are sometimes the biggest impediment to closing on time. For starters, we need escrow information, basic contract terms […]Read More

Early Pay Off Penalties – Six Months Is All We Ask :)

Shockingly, rates have fallen about 1/4% over the last month. We say shockingly b/c we were told that this time they were going up for sure (after about twenty false alarms over the last eight years). And… once again the Fed seems powerless and the experts were wrong. BUT – that is not the point of this blog. […]Read More

Income Taxes Owed Must Be Paid; Or Payment Plan Set Up

We have to review every borrower’s tax return. And, every time we see a tax liability owed on a tax return, we need proof (a canceled check, a receipt from the IRS, or a bank statement reflecting the withdrawal of the payment) that it has been paid. If it has not been paid, the borrower […]Read More

Consumer Credit Scores NOT The Same as Mortgage Credit Scores

As we explain from time to time, most mortgage lenders pull credit scores from the three major bureaus (Transunion, Equifax and Experian) and they correlate to the middle of the three scores. If there are two borrowers, lenders usually correlate to whichever borrower has the lower middle score, often frustrating borrowers with especially good credit. […]Read More

What the Heck Is Going On With Rates? They’re Rising, Right? Wrong

Interest rates fell again, surprising everyone (again) b/c rates are supposed to be going up, right? Wrong. Rates are supposed to being going up b/c the Federal Reserve has been increasing the short term Fed Funds Rate; b/c the economy is heating up; b/c Mr. Trump’s policies are potentially inflationary; and b/c the Fed is […]Read More

Warehouse Store Mortgage Screw Ups; Warning for Borrowers and Agents

One of our borrowers didn’t like the news we gave him so he went to a major warehouse store to get his mortgage. And – the entire situation is a great lesson on why Bay Area buyers should not go to a warehouse store to get a mortgage. 🙂 Appraisal Issues: They used a national […]Read More

Condition Issues Disclosed Must Be Fixed; Escrow Needs to Be Careful Too

We recently had a transaction come to a screeching halt b/c the escrow officer told our “funder” that there was a plumbing leak so she was crediting $1,000 to the buyer to cover the cost of the repair. Escrow officers and Realtors can discuss things with the JVM Team (or their loan officers) off the […]Read More

“Top 20 Companies Transforming Industries;” JVM’s #10, and Proud!

The Muse is a major online job search and career website with hundreds of major clients across the country. And recently, they published an article titled 20 Companies Transforming Industries. We were delighted and very proud to see that JVM Lending ranked #10, among some very strong competition. This is what The Muse had to […]Read More

Technology’s Not Replacing Realtors or Loan Officers; Warren Buffet & Fintech

We have all heard time and again over the last ten years how technology will totally disrupt real estate and mortgages, and replace Realtors and Loan Officers outright. Technology is changing the way we all do business, but it is far from replacing us. One huge vote of confidence for Realtors remaining a major part […]Read More

Why We Have to Pull Credit For Every Pre-Approval

We frequently have borrowers request pre-approvals without pulling their credit. This is impossible for several reasons. The below is from the FAQ section of our website. Along with your income, employment, and assets, your credit profile is crucial during the evaluation process for any lender’s pre-approval or pre-qualification. JVM’s full pre-approval process requires that we […]Read More

Rent Backs; Gift of Equity; Appraisal Seasoning; 3% Down vs FHA

Here are a few “Mortgage Minders.” Rent Backs. Most lenders allow sellers to “rent back” the home they just sold for as long as 60 days. If the term exceeds 60 days, however, “owner occupancy” comes into question for the buyers. Gift of Equity. Down payments can be a “gift of equity” alone (with no […]Read More

Rates Up Again; Is Good News Bad News or Good News? (It’s Both); Historic Rates

“When the trough gets smaller, the pigs get meaner.”  This is a Dan Sullivan quote Heejin and I both love, and it is a great reminder for us all when markets contract. We’re not getting “meaner” at JVM, but we’re certainly getting more competitive. And we love the competition. Rates shot up again today in […]Read More

The Case for Private Mortgage Insurance; PMI Is a Great Option Now

Private Mortgage Insurance (PMI) for buyers with less than 20% down has been much maligned for all too long. PMI is now, however, so much more competitive that it is often a far better option than the two highly touted alternatives: Lender Paid Mortgage Insurance (LPMI), and 80/10/10 (1st and 2nd mortgage) financing. PMI is […]Read More

Beating Up Borrowers (Even Pro Ball Players) For Inane Conditions; Why?

We financed a purchase for a professional baseball player last year, and it was a mortifying experience for one of our Processors. This is why… The borrower made close to $4 million per year and could have paid cash for the house several times over. He was only seeking financing at the behest of his […]Read More

Can Trump’s Deregulation Bring Back Sub-Prime Craziness? Heck No

Refinance volume is at its lowest level since June of 2009. With lenders desperate to increase volume and President Trump showing a strong desire to deregulate financial markets, people are wondering if we could return to the wild sub-prime lending days of pre-2008. The answer is: No way. Would you buy a bond that was […]Read More

What Moves Interest Rates? Will Rates Fall?

We get asked time and again if we think rates could fall again, and our answer is “maybe.” The Fed has indicated that they plan on raising short term rates a few more times in 2017. But, the Fed is not the only influence on rates. Other factors that influence rates include the following: 1. […]Read More

How Mortgage Banks/Loan Officers Get Paid?

We are often asked by borrowers and Realtors how we, as a lender, get paid? The answer is that JVM gets paid if and only if a buyer’s loan closes. We typically quote interest rate options with “no discount points.” The no discount points or “no points” option will usually be associated with a slightly […]Read More

Changing Close of Escrow Date – Easier Said Than Done

When we have long close of escrows, we often get loan documents to title days or even weeks before the close of escrow. Sometimes realtors then want to move up the slated close of escrow date. This, however, is much easier said than done. All of our loan documents and approvals are based on a […]Read More

Can Rates Fall Again? Heck Yeah! New Conforming Loan Limits

One of the primary reasons behind the recent rate increases is the expectation that Mr. Trump will deregulate the economy and bring about more economic growth. B/c of this expectation, investors have moved into stocks and out of bonds, pushing rates up 5/8% since the election. But, while the stock market loves “Trump the Deregulator,” […]Read More