Dean's Blog

Taylor, Bean & Whitaker, the nation’s third largest wholesale mortgage lender, shut its doors today. Any loans currently in processing or ready to fund, will not do so. Any borrower with a loan with Taylor Bean that has not yet funded must now find another source.

NOTE: Our office only has one loan in process with TBW, and it's a FHA streamline refinance. All other loans, both purchases and refinances, are with other lenders.

In a press release issued today, TBW states they received a notification on August 4, 2009 from the U.S. Department of Housing and Urban Development, Freddie Mac and Ginnie Mae that it was being terminated and/or suspended as an approved seller and/or servicer for each of those respective federal agencies. The FHA press release goes into further detail.

If you have any questions about alternative lending options, feel free to contact our office at 360-755-1549.

The government sure has a funny way of trying to stimulate the economy.

On one hand, they want more home buyers, because they know that housing is the key to the economic recovery. So, they create an $8,000 tax credit for first time home buyers.

On the other hand, new rules and guidelines are being put in place that slows the whole process down – the most recent being HERC-MDIA. The purpose of the law is to make sure that all lending disclosures are provided to the borrower in a timely manner, and prevents the borrower from moving too fast through the purchasing process.

Really?

Does anybody who’s bought a house recently think the process has gone too fast?

And we already have laws in place that require certain disclosures within a particular time frame. Rather than adding more regulations, how about simply enforcing the rules already on the books? Studies have revealed that fewer than 25% of lenders send out the initial good faith estimate within three days of application, as the current law requires. Even when I recently worked with two different banks for my own construction loan and home equity line of credit, neither bank provided me an initial good faith estimate, and neither provided the GFE anywhere through the process.

So, we’ve got new rules to try to make things better. There are additional waiting periods that need to be addressed at four keys points throughout the financing process.

It’s possible to still close in 30 days, as long as:

• everything goes exactly according to plan
• everybody does what they are supposed to do on time
• there are no changes to the numbers, rate, costs, etc.

It’s more likely that minor changes will cause re-disclosures and added delays. Some industry experts are predicting that 45 day and even 60 days closings will become new norm.

Here is an example calendar of how everything must work in order to close in 30 days (click the image for a larger picture).

Here’s what can happen to cause delays:

• The borrower wants to change loan product
• The lender doesn’t get the appraisal sent out on time (thanks to the new HVCC rules – a different story)
• Title or escrow costs come back different than expected
• The borrower chose not to lock their rate up front

You might want to have this document on hand as a guideline of what to expect as you move forward.