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Advantages and Disadvantages
By Staff Reporters
A physician or other medical professional may consider using the services of a home mortgage broker when s/he does not want to spend much personal time searching for the best loan. Other reasons include poor credit history, low credit ratings level; or similar. Of course, this will cost the doctor-client money, but the expense may be worth it; or not.
Duties and Responsibilities
A mortgage broker’s main responsibility is to represent a physician-borrower to different lenders and to take the borrower through the process of acquiring a loan. These brokers are usually aware of the best lending institutions and where to get the best deals.
Disadvantages
However, using a broker has three disadvantages. First, a fee will be charged. Second, some lenders will not work with some brokers. Third, some lenders will add extra fees to their loans to pay the broker’s commission.
Assessment
During the current financial crisis, the use of this intermediary may be a necessity in some cases.
Conclusion
And so, your thoughts and comments on this Medical Executive-Post are appreciated. What has been your experience using the services of a mortgage broker; if any?
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The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
With today’s low interest rates some physicians may decide to refinance or purchase. Shopping for a home loan can be confusing, even if you have applied with your credit union, bank or local mortgage broker; your fees and rates can vary. However, if you follow some simple basic guidelines you may be able to shop-around more effectively.
Once you decided on the type of program, fixed or adjustable, and assuming you receive the same interest rate from the various sources, you should bypass the often offered “good-faith” estimate and request a preliminary HUD-1 settlement statement. The broker or loan officer should be able to accommodate. This document is standard and used by all lenders to document fees and will be provided when you close on your loan. This will allow you to compare by line item any questioned fees and charges.
Here is a five minute review of the HUD-1 Settlement Statement:
Go to Page 2 of the HUD-1:
Section 800 (Items payable in connection with loan): these charges should be you first priority to review. Here many brokers and lenders hide fees. Negotiate or eliminate as many fees as possible.
Section 900 (Items required by lender to be paid in advance): this section is standard. You’re insurance, if not paid before closing, should be reflected here.
Section 1000: (Escrow account deposit): if escrowing – this is standard for all lenders. (bypass)
Section 1100: (Title charges): the fees can be negotiated – even if you or your lender selected the attorney or closing agent. Ask for discounts.
Section 1200: (Government recording and transfer charges): these fees are typically standard (bypass).
Sections 1300: (Additional settlement charges): review for any unusual charges, items like surveys, pest controal etc; all fees here can be negotiated.
Go to Page 1 of the HUD-1; this should summarize the costs.
Once you finalize your preliminary HUD-1 statement, don’t forget to ask for another one prior to closing. Bring it to the closing so you can compare the charges and avoid last minute surprises.
Amaury Cifuentes; CFP®
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Nice comment above.
Here is the government link: http://www.hud.gov/offices/hsg/sfh/res/rsphud1inst.pdf
But, do most doctors use HUD loans?
In my experience they use “jumbo” private loans, at least during stable times.
Faith
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Faith, agreed most doctors are probably not applying for HUD (FHA) loans, the HUD-1 Settlement Statement is a uniform form that is used on all types of loans not just HUD loans.
Amaury
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Faith and Amaury
So now we learn that Fannie Mae needs another $15 billion in federal assistance, bringing its total to more than $75 billion?
http://www.msnbc.msn.com/id/35609531/ns/business-stocks_and_economy
And, doctors may soon be applying for these “smaller” loans if Obama gets his way.
Linda
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Two months ago, representatives of banks and other mortgage servicers participating in the administration’s mortgage modification program [1] visited the Treasury Department and made a commitment: they would drastically reduce the number of homeowners stuck in trial modifications by the end of June.
That hasn’t happened. New data released today shows that about 166,000 homeowners have waited six or more months in plans that only temporarily reduce payments. That’s about one-third of the current trials, but the trial period is supposed to last only three months.
For those homeowners who finally do get an answer, it’s usually a denial. The number of homeowners being dropped from the program has continued to rise. While about 398,000 homeowners have received a final modification through the program, far more, 521,000, have been dropped.
See our interactive breakdown of the data [2]. It shows which mortgage servicers are primarily responsible for the continued logjam.
JPMorgan Chase continues to have the biggest backlog, with about 46,000 homeowners in limbo. Chase’s problem is not new — we reported back in February [3] that Chase had the worst backlog. The prolonged trials hurt homeowners [4] by damaging their credit, increasing the balance of their mortgage, and preventing them from saving for the possibility of foreclosure. Chase declined to comment on the reason for its poor performance.
During a conference call with reporters Tuesday, Treasury official Phyllis Caldwell acknowledged the failure by servicers like Chase to live up to their pledge to clear their backlogs. When pressed whether the servicers would face penalties for breaking the program’s guidelines, Caldwell said Treasury was “looking at every remedy we have.”
Back in February, Treasury made the same vague reference to possible penalties [5]. Despite frequent threats, Treasury has yet to actually penalize a servicer. The Government Accountability Office reported last month [6] (PDF) that Treasury had not even established standards for how it might penalize servicers who break the program’s rules.
The GAO also reported that the servicers frequently make errors calculating homeowners’ income: it interviewed 10 servicers and found that at least half had discovered through internal reviews that their employees had miscalculated the income on at least 20 percent of the sampled modifications. As we’ve been reporting since the program launched, homeowners often encounter problems [7] with their servicer — lost documents, delays, and mistakes [8] that can lead to foreclosure.
With relatively few homeowners having received permanent modifications through the government’s program, administration officials have been stressing in recent months that many homeowners will still eventually receive a private offer of a modification from their servicer. But those offers will not necessarily comply with the program’s guidelines, which require that the payments be set at a certain low rate: 31 percent of the homeowner’s monthly gross income. Modifications outside the program have been outpacing modifications under the government plan by about two to one [9] (PDF) in recent months.
Alys Cohen of the National Consumer Law Center said she thought servicer errors meant that homeowners were being wrongly steered into servicers’ modification plans when they qualified for the government program. “We don’t believe it’s because more people qualify for the proprietary modifications than [the government program],” she said.
For homeowners who do receive a permanent modification under the government program, early results indicate the lower payment level may be sustainable. Treasury released data showing that only about 6 percent of borrowers who had been in a modification for six months or longer were more than two payments behind. The average homeowner in the program saves about $510 on monthly payments.
Link: http://www.propublica.org/article/loan-mod-backlogs-continue-despite-servicers-pledges-to-improve
Source: Paul Kiel ProPublica, Yesterday, 11:14 a.m
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