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July 9th, 2010

GUEST POST: “All Right! The Deadline Has Been Extended!”

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Over the last few weeks or so, we (the blog) have been encouraging readers to elaborate on their comments by offering them the opportunity to write a guest post. Recently, many readers have been leaving great comments — some with unique situations, others with interesting perspectives — that we felt would translate nicely into guest blog post.

We received a blitz of comments from readers who complained that loan servicers were “dragging their feet” and would not close their deal in time to take advantage of the homebuyer tax credit (this was before we knew the president would extend it until September 30). The hundreds of comments we’ve received and the votes on our poll have made it clear that borrowers were really depending on the credit’s closing extension and would be outraged if factors beyond their control would not allow them to close in time.

Just as we’ve done in the past, we wanted to let mortgage professionals tell their side of the story. Reader “Morticia” works in the mortgage banking industry and has been working “nights and weekends” to close loans in time for the tax credit. The pressure on the mortgage industry to close these loans in time was tremendous:

All right! The deadline has been extended to September 30! I work in mortgage banking and have been working nights and weekends since early April to try and get the loans done so customers can get the tax credit. We have been slap-dashing through the files and are exhausted. There is pressure from customers and realtors to approve loans that we shouldn’t, and that makes things harder. What makes things more complicated is that after the mortgage loan crisis that followed the bubble of 2003-2008, a lot of regulations have been placed on mortgage bankers to protect the customers. While the protection certainly was needed, most of the real estate agents and mortgage brokers don’t understand how to do the paperwork, and so that has slowed things down even more.

The calls from mortgage brokers can be very original as to why their customer’s loan must be approved immediately. After sending a list of corrections to a loan file to a particular mortgage loan officer, I received a phone call imploring us to waive the requirements because ”My customer is in the ER on a heart monitor because she is so afraid she won’t get the $8000 tax credit, and they won’t let me in (because they only let in family members) to have her sign the papers that I forgot to have her sign earlier!”

I would like to be able to spend more time on the mortgage loans and make sure that only people who can really afford a house are getting a loan. I sympathize with homebuyers whose loan approvals are delayed due to bottlenecks on the part of the mortgage bankers. These are not instances of us being overly particular, we do not keep the loans, we sell them off to investors who have their own requirements. Plus, we are doing FHA loans so we are always subject to audits by HUD (which is a serious matter).

I still have loan files on my desk that include sales contracts signed prior to April 30 that haven’t closed yet. Now I can take my time and make sure that everything is done correctly so that everyone, the homebuyer, the real estate agents, the mortgage loan officer and the investor is happy.

Readers: We encourage everyone to leave a comment in reaction to Morticia’s guest post!

(this article was first published on 07/03/10)

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10 Responses to “GUEST POST: “All Right! The Deadline Has Been Extended!””

  1. Dave Says: July 3rd, 2010 at 8:22 am

    Thanks for posting this Tim. It is easy to get so tied up in waiting for settlement that we forget those people on the other end scrambling to get these loans approved. I can say we are quite lucky that the people doing ours have been extremely helpful and informative, trying their best to keep us apprised of the status and what needs to be done. There has been a certain amount of handholding and listening to concerns about the credit extension, etc., and they have been absolutely great throughout.

  2. Tim Manni Says: July 6th, 2010 at 11:54 am

    Dave,

    You’re welcome. I agree, sometimes “we forget those people on the other end scrambling to get these loans approved.” That’s exactly why I wanted to publish this.

    Glad your process is going so smoothly. Keep in touch,
    Tim

  3. Steve Says: July 6th, 2010 at 4:14 pm

    Morticia’s comments are well stated, and absolutely on target.

    There is another aspect to this extension. Congress had–for the third time this year–allowed the authorization for the flood insurance program to expire. That meant that people who were in a flood zone, and hadn’t obtained flood insurance in time, were not able to close by June 30. So, in a way, Congress had to extend the tax credit deadline to cover their failure to extend the flood insurance program.

    As a taxpayer, I am fed up with Congress’s profligacy. As a banker, I am fed up with Congress’s incompetence. As a friend of mine in the business said, if we operated our banks the way that Congress operates, we’d have MOUs (Memorandum of Understanding) up the kazoo.

  4. Tim Manni Says: July 6th, 2010 at 4:22 pm

    Steve,

    I was hoping you got a chance to read this! Thanks for commenting and adding your insight, always appreciated,
    Tim

  5. Visionary Realty News » A Week Full of Tax Credit Information for Buyers Says: July 6th, 2010 at 8:08 pm

    [...] best to deliver the latest news as it happened. Let’s review last week’s posts: Saturday: “GUEST POST: ‘All Right! The Deadline Has Been Extended!‘”: All right! The deadline has been extended to September 30! I work in mortgage banking and [...]

  6. 500+ Places to Syndicate Your Content  Says: September 24th, 2010 at 11:35 am
  7. Alex Brown Says: October 10th, 2011 at 5:57 pm

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  8. Iza Says: January 28th, 2013 at 1:27 am

    Hey,

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    Can you mail me back once you get this. :)

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  9. Kelly@letting agent Kilburn Says: May 16th, 2013 at 4:14 am

    Nice post Tim, although now i’m involved in Property myself through a number of channels, i have previously been on the sore end of an experience, its not easy for everyone to get loan approval especially quickly, good post.

    Kelly Beaton

  10. Sonia Allen Says: August 29th, 2013 at 4:09 am

    Hi http://blog.hsh.com,

    I was browsing the other day and I was very happy to see what you have instored for us / me bloggers, you see I am a freelance writer and I love to write for you as a Guest Post , and I know it will captivate your viewers .. so here I am begging you to accept me and hopefully I can contribute to your site ..

    Let me know if you have preferred topics for me , and I would be very happy to do it for you ..

    Regards,

    Sonia Allen

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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