Let me preface this post with there is absolutely no talk about loan programs, interest rates, or market trends. This is a flat out rant about something that is all too common in my daily work life and I’m getting sick and tired of it…Big Bank Business. Here’s what happened…
Brenda Borrower called me asking what exactly banks look for when trying to qualify a person for a loan. She sounded super flustered on the phone and she told me that she had recently applied for a home loan at Big Bank in America as well as a Big Bank Far from Wells, and they had both simply run her credit.
I asked her about the application and to clarify what she meant by “simply run”. Brenda told me that was it. There was no application form, just a credit check. They ran her credit and never called, emailed, or asked her to come in to discuss her options after that.
I sat there and scratched my head and said to myself ”Self, maybe she has bad credit. Why else would they turn her away?” I bit the bullet and asked Brenda about her credit. She listed her scores for me “I have a 670, 655, and a 580″.
Believe it or not, that’s not bad credit (For More On Credit Read “Bad Credit…Is It Really That Bad?“), I explained to her that all she needed to apply for a loan was a middle credit score greater than 620 (in her case it was a 655).
I still couldn’t put my finger on why those Big Banks didn’t qualify this lady for a loan. Brenda had a healthy financial portfolio, good credit, and a steady job. The mystery continued…
The next day I had another borrower call me, and the day after that, and the day after that…all from the same Big Banks, all with the same complaints. I finally put two and two together! It wasn’t that Big Bank could not qualify these people, it’s that Big Bank just didn’t care. After all, they’re Big Bank and they’re too big to fail.
So to you dear Fat Cats at Big Bank, continue to ignore your customers because it’s bringing them to me. Just keep on pretending that it’s “high times” and that the little guy doesn’t matter. Your day will come Goliath, and know that your day is coming very soon because this David loves it when people underestimate him.
Do you think this is a fair representation of Home Loan Service at a Big Bank? Do you agree or disagree? If you have a similar story to share please post it here by entering a comment below.
Barron’s has six times (2004–2009) ranked Ric Edelman among America’s 100 top financial advisors. In 2009, Ric was ranked the #1independent financial advisor in the nation by Barron’s. In 2004, Ric was inducted into the Financial Advisor Hall of Fame, ranked the #1 advisor in the nation by Research Magazine for his focus on the individual client and ranked #42 on Registered Rep magazine’s list of “America’s Top 50 Advisors.” Inc. magazine three times named the firm the fastest-growing privately-held financial planning firm in the country. Ric received an honorary doctorate from Rowan University in 1999, and in 2007 was inducted into the Rowan University Public Relations Student Society of America Hall of Fame.
The Ric Edelman Show, broadcast on the ABC Radio Networks, can be heard on radio stations throughout the country. The live call-in advice program has been on the air for more than 15 years and earned Ric the A.I.R. Award for Best Talk Show Host in Washington D.C. (1993). He also publishes a monthly newsletter, has built one of the most comprehensive and free online educational resources about personal finance at RicEdelman.com, and is the author of video and audio educational systems that help people achieve their financial goals.
Philanthropic Activities
Ric and Jean have donated $1 million to Rowan University, which named its new planetarium in their honor. They also funded the Edelman Nursing Career Development Center at Inova Health System Foundation.
Ric served six years on the Board of the United Way of the National Capital Area and in 2007 completed his two-year term as Chairman of the Board. He also serves on the boards of The Boys & Girls Clubs of Greater Washington, D.C., and its foundation. Ric also is a full partner of the American Savings Education Council and the Jump$tart Coalition for Personal Financial Literacy. He is a former board member of Junior Achievement of the National Capital Area and served for three years on the Grants Committee of the Foundation for Financial Planning, where he remains a major donor. They also actively support HEROES Inc., Make-a-Wish Foundation, The Leukemia & Lymphoma Society, and many other charities.
Here’s more about Ric from his Facebook Fan Page
Financial Advice – Because Money Doesn’t Come with Instructions
Ric has many sources of information to help answer your financial questions. Ric turns a boring subject — financial planning — into a lively, fun experience. And most important of all, he makes his advice easy to understand and implement! Ric has a unique ability to convert complex financial matters into plain English, adding his breezy, conversational style to thought-provoking statistics. Ric’s common-sense perspective, anecdotes and humor make finances fun.
The Ric Edelman Radio Show Every week, Ric gives you comprehensive, educational advice that is both entertaining and useful — on investments, IRAs, retirement planning, mortgages, insurance, college planning and much more!
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TV Shows In Ric’s latest TV Show for PBS — Rescue Your Retirement — learn the mistakes some investors make and discover fascinating insight into the science of financial decision-making. Check local listings for airtimes, or visit the PBS TV Schedule at http://www.pbs.org/tvschedules/.
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Ask Ric Send your financial questions to Ric and listen for his answer in his weekly radio show. Or call in to Ric during his live broadcast at 888-PLAN-RIC.
Ric Edelman is Chairman and CEO of Edelman Financial Services LLC. He is also President and Director of Sanders Morris Harris Group. Ric is an Investment Advisor Representative and offers advisory services through EFS an SEC-registered investment advisor. He is also a Registered Representative of and offers securities through Sanders Morris Harris Inc., an affiliated broker/dealer, member FINRA/SIPC.
Barron’s ranking “Top 100 Independent Financial Advisors” (Aug. 31, 2009) based on assets under management, revenues the advisors generate for their firms, and the quality of their practices.
Broadview Mortagage Katella is pleased to announce that we are participating in a NEW first time homebuyer program available in Orange and Los Angeles Counties beginning February 2nd, 2010
ABOUT SCHFA
Southern California Home Financing Authority (SCHFA) is a joint powers authority between Los Angeles and Orange Counties formed in June 1988 to issue tax-exempt mortgage revenue bonds for low- and moderate-income First-Time Homebuyers. To date, SCHFA has helped thousands of individuals and families fulfill their dreams of owning their own home through its First-Time Homebuyer Program. This program makes purchasing a home more affordable for qualifying homebuyers by offering below-market interest 30-year fixed rate loans.
The program is administered by the Los Angeles County Community Development Commission (CDC) and the Public Finance Division of the County of Orange. SCHFA does not lend money directly to homebuyers. Homebuyers must work directly with a participating lender.
PROGRAM DETAILS
First-Time Homebuyer Requirement A first-time homebuyer is defined as a person(s) who has not had an ownership interest in their primary residence during the previous three years unless you are buying a home in an IRS Designated Targeted Area Census Tract.
Eligible Areas in Los Angeles County All unincorporated areas and incorporated cities in Los Angeles County except the City of Los Angeles areas.
Eligible Areas in Orange County All unincorporated areas and incorporated cities in the County of Orange.
Property Types Single-Family Residences, Condominiums, Townhomes and Planned Unit Developments.
INTEREST RATES/LOAN TERMS
INTEREST RATES (Subject to Change Without Notice)
Effective 02/02/2010
Terms
Interest
Rate
Origination
Fee
Discount
Points
30-Year Fixed Rate (Purchase only)
(Without down payment and closing cost assistance)
4.70%
1.0%
None
30-Year Fixed Rate (Purchase only)
(With down payment and closing cost assistance)*
5.125%
1.0%
None
30-Year Fixed Rate (Refinance only)
(Without down payment and closing cost assistance)
4.70%
1.0%
None
LOAN TYPES FHA,VA
DOWN PAYMENT AND CLOSING COST ASSISTANCE* The program provides down payment and closing cost assistance in the form of a gift equal to 3.0% of the first loan amount.
REFINANCE OF EXISTING ADJUSTABLE RATE MORTGAGE LOANS Homeowners with an existing adjustable rate first mortgage loan made between 2002 through 2007 may be eligible to refinance their loan to a 30-year fixed rate loan at 4.70%. Some restrictions apply.
INCOME AND PURCHASE PRICE LIMITS
Maximum Income Limits Los Angeles County
Type of Construction
One or Two Person Households
Three or More Person Households
New and Existing
Up to $84,480
Up to $84,480
Maximum Income Limits Orange County
Type of Construction
One or Two Person Households
Three or More Person Households
New and Existing
Up to $103,320
Up to $103,320
Maximum Purchase Price Limits Los Angeles and Orange County
Non-Targeted Areas Existing Homes
Non-Targeted Areas New Homes
Targeted Areas Existing Homes
Targeted Area New Homes
$708,495
$708,495
$708,495
$708,495
IRS DESIGNATED TARGETED AREA CENSUS TRACTS
What is an IRS Designated Targeted Area?
Areas that are “targeted” by the Federal Government were identified in the 2000 Census as areas in California where 70 percent of the families who live there earn an income that is 80 percent or less than the statewide median income. You do not have to be a First-Time Homebuyer if you purchase a home in an IRS Designated Target Area Census Tract.
Click on this link below if you have an address and would like to find out if the subject property is located in a Targeted Area. http://www.ffiec.gov/Geocode/default.aspx
Los Angeles County IRS Designated Targeted Area Census Tract List
If you are ready to purchase a home and think you are qualified for the program, please contact Broadview Mortgage by completing the Quick Apply form below.
The lender will determine your eligibility based on program criteria.
After you have been pre-qualified you may begin to shop for a home.
Funds may be reserved for you if you have been pre-qualified and have a properly executed purchase contract (subject to available funds).
Ric Edelman is a no nonsense often controversial financial planner that is not afraid to tell people what they don’t want to hear. Great guy, good advice – it’s worth the read
What is “House Flipping” anyway?
House “flipping” is when someone buys a home at, ideally a below market price, fixes it up, then resells it as soon as it’s been rehabilitated for a healthy profit.
In the past, there has been many instances of collusion and conspiracy to turn huge profits at the expense of those who [...]
BREAKING NEWS: Upfront Mortgage Insurance Increase beginning April 5th, 2010
The increased up front mortgage insurance premium will appear on all FHA mortgages that receive a case number after April 5th, 2010.
PRESS RELEASE: January 20th, 2010 – Deciphered into (highly biased and subjective) English by me on January 21st, 2010.
I basically cut out a lot [...]
Governor Schwarzenegger spoke about his Jobs initiative at a SJ Silicon Valley Chamber of Commerce Lunch on Thursday, January 28th, 2010.
In an almost 44 minute speech, the Gov snuck in one quick reference about the tax credit….and here it is:
And I urge the legislature also to come up with their own job creation package or [...]
I know this is off topic from what I usually talk about but I get many questions about refinancing that I would like to answer.
With the drastic decline in property values in the State of California, fewer loan options, and tighter qualifying guidelines refinancing your home has become increasingly more difficult.
There are still refinancing options [...]
Fresno, CA January 14th, 2009 – Making the Case for Stimulating California’s Housing Market
If you’re like me and don’t want to sit through 20 minutes of political hyperbole, here’s a summary of the above speech. Plus, I can’t stop thinking he’s going to say “Come with me if you want to live”….I dunno, too much [...]
Governor Schwarzenegger announced on January 7th that he would like to extend the $10,000 homebuyer tax credit to Californians as part of a job stimulation strategy.
Unlike the last $10,000 California Tax Credit, this time around it will be available for the purchase of new construction or existing homes. This is GREAT news for California Homebuyers.
The [...]
Let me preface this post with there is absolutely no talk about loan programs, interest rates, or market trends. This is a flat out rant about something that is all too common in my daily work life and I’m getting sick and tired of it…Big Bank Business. Here’s what happened…
Chris "Doc" Apodaca
Jeff Brown – BawldGuy
Scott Schang
