George's Blog

This past week there were at least two blogs written “Another one bits the dust!!!” and “Miami Real Estate Dilemma”, about Closings falling apart at the last minute.  These Closings fell apart because things that should have been addressed on the forth page of the 1003 (Loan Application) in the “Declaration Section” were not addressed, or maybe not even asked by the Loan Officer/Broker at the time of application.  The forth page is a page of the 1003 that might not be given as much attention by some Loan Officers or Brokers, as is given to the other three pages of the Loan Application.  But as we saw this past week in the two Posts I that mentioned above, the questions that are asked on this page are extremely important.  If these questions are not asked and explained to the Borrower vital information will be omitted, and last minute nightmares can occur.

The first Post that brought to light just how important this section is, was “Another one bits the dust!!!” by Broker Bryant.  This Post was about a Closing that blew up because it was revealed at the last minute that the Buyer had three properties foreclosed in the last ten years.  If question  “c.  Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” and question “e.  Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” were asked and answered honestly by the Buyer, than this situation should not have happened.  So in this case either the Buyer lied or the Loan Officer did not do his job and asked these questions.

The second Post by Ines Garcia  “Miami Real Estate Dilemma” was even more obvious that the Loan Officer did not ask the questions on the “Declaration Section” of the forth page of the 1003.  This was obvious because if questions  “j. Are you a U.S. citizen?” and question “k.  Are you a permanent resident alien?”  were asked, steps to correct that situation could have started right at the time of applications, and that whole nightmare could have been avoided.

As you can see page four of the 1003 is not a minor or unimportant page.  These questions are there because most of the information on this page is not provided anywhere else on the 1003, and can have a great impact on whether or not the Loan will be approved.  Besides the questions already discussed, there are other questions in this section that can have a huge impact on the approval of a loan.  Questions such as “a” and “b” which deal with judgments and bankruptcies. Questions “g”, “h”, and “i” which deal with area’s that will affect the Buyers “Debt To Income Ratios” are a must to ask.  Even question “l” which asks “Do you intend to occupy the property as your primary residence?”  is a must ask.  What a surprise this one can create if at the last minute it is discovered that the property is not going to be the Buyer’s primary residence, and instead is an investment property, talk about a major nightmare.

These questions are a part of every 1003 for very good reasons, and HAVE to be asked each and every time, because if they are not, you end up with situations like Broker Bryant and Ines had.  This is just one more reason why Realtors have to insist on working with Loan Officers and Brokers that are professionals.  Most Realtors these days would not think of having a Buyer purchase a house without doing a “Home Inspection” so why not insist on a “Loan Inspection” by a Loan Officer/Broker that you trust.  Then you can be confident in knowing that not only these questions were asked, but that all aspects of the Loan Application process were closely examined.  In doing this the Buyer is not committing to taking out the Loan with the Loan Officer/Broker of your choice, but it will help to eliminate many disasters and sleepless nights for Realtors and Buyers.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

This Post is the last in a three part series of Posts on how Credit Scores are used and developed.  The first two were “Credit Scores Where Did They Come From & What Are They???” and “Why Are Credit Scores Different Between Credit Reports & Reporting Agencies”.

VantageScore is a cooperative effort by the three major Credit Reporting Agencies Equifax, Experian and TransUnion.  This development began in 2005 as a result of public demand for a more consistent, and objective way of producing Credit Scores, as well as an easier way to understand and apply them.

The hope is that VantageScore will accomplish those objectives by developing a scoring formula that will be used by all three Credit Reporting Agencies, since this is a combined effort by all three.  Right now all three Credit Reporting Agencies use a formula that they each developed independently of each other, so we have three different ways of arriving at a Credit Score, and as a result three different scores per individual.

VantageScore will use a different scale for reporting credit scores.  In stead of using a numeric value between 350 to 850, VantageScore will use letter values much like an academic grading scale  A, B, C, D, and F.  Each of the grade levels will represent a numeric range, for example:

However, VantageScore will still use the same criterion that is used now to develop Credit Scores as is now, but they will give different weights to these categories then is given to them under the present scoring system.  Payment  History will continue to be the category with the highest value, but Available Credit which now represents 30% of the value of a Credit Score, will only represent 7% of the Credit Score under the new system. 

When VantageScore will replace the present Credit Scoring System is still unknown, but hopefully the change will accrue in the not to distant future.  I hope these three Posts have given those that have read them a better understanding of Credit Scores as well as a better understanding of how to maintain and improve them.

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com