A Day in the Life of a Mortgage Originator
So you wanna’ do loans, do ya?
What’s it like to write mortgage loans and take mortgage applications? If you love working with people, it isn’t hard. But it is interesting! Over the past nine years I have written all kinds of loans: equity loans, no-doc loans, refinances, purchases, and Reverse Mortgages. Reverse Mortgages are definitely my specialty, but I can write any type of mortgage. What is a day like when you are writing a loan? A day in the life of a mortgage originator is fun, but it can be fraught with frustration and irritating surprises. You also lose sleep because no matter how you slice it, things go wrong. Murphy’s law takes over, and you see three am all too often. As the saying goes, there is just never enough time in a day.
You’ve got to be sure that this is what you really want to do and that you see the rewards and NOT just the money. With my specialty in Reverse Mortgages, my time is taken up with speaking with seniors and finding out what they really want to do with the equity in their home. It all starts with that first contact, that first phone call. Many senior citizens find me on the web from my website, http://www.ReverseMortgageLI.com which I created. The information is helpful and can help anyone even if they don’t choose to work with me.
Information overload is not a phrase we need to worry about in the Reverse world because everyone is grabbing for information from any place they can. The more information you find the better. Naturally, if the information is bogus such as many of the erroneous comments made by some newscasters and some articles, it can cause problems. However, there are some great blogs with great information where you can garner details about the important Reverse Mortgage program.
As I talk with the person seeking info on Reverse Mortgages, I am looking to provoke some thoughts and ideas. So I ask some questions:
What is your goal in considering a Reverse Mortgage?
Does your current financial situation warrant considering a Reverse Mortgage?
Have you considered other alternatives?
How does your family feel about a Reverse Mortgage?
Would a Reverse Mortgage change your life for the better?
After speaking with a senior homeowner I refer them to a Reverse Mortgage counselor for HUD approved Reverse Mortgage counseling (Borrowers can choose which counselor they wish to speak with and can do in-person counseling or phone counseling). A Reverse Mortgage counselor is an unbiased individual who can help offer some alternatives to a Reverse Mortgage as well as review the program with them. Some charge fees, others do not.
Once the counseling is completed the client receives their Reverse Mortgage Certificate known as a HECM Counseling Certificate showing they have completed counseling and are ready to proceed. Here is where it gets interesting. All Reverse Mortgage specialists are required to print out the documents for the application. Years ago we had about 40-60 pages. We now have 270 page which includes: reverse docs, state docs, handouts, booklets, and the actual loan which is called the Security Instrument. It contains the Note, the Mortgage, and the Loan Agreement. I can tell you from experience, it’s a daunting task when you walk into someone’s home with something that looks like a book!
Now we sign the documents. Some loan officers race through these, and that’s where seniors can get confused later on. It is imperative to explain the documents so your client understands them completely, especially the Amortization Schedule which shows how the loan amortizes over time and which lists interest, balance owned, fees, and remaining equity.
Once the documents are completely signed the FHA Case Number can be ordered and the appraisal, title, and credit report can also be ordered. Here is where the fun begins. No loan goes perfectly smooth. Title companies make mistakes, attorneys make mistakes, loan officers make mistakes. But usually I’m catching other people’s errors and it becomes a bit tenuous. You see, I used to use a processor and now I process my own loans so I know every single aspect about my loan from start to finish. I like it better this way. I read all my appraisals, title reports, credit reports, and I take care of all the conditions the lender requires to close — and it can be a LONG list!!
I am sometimes up against appraisal mistakes, and the worst experience I had was when a client of mine had her appraisal done, and it was appraised TERRIBLY LOW even in this market! It came in $50,000 lower than the true value! If I didn’t get an ulcer over this one, I knew it would be a miracle. The borrower called the appraiser an “idiot” because he insisted on coming at eight o’clock in the morning as he claimed he was working with a “new” company. “I need to impress them”, he said. He commented to my borrower that he “hated front to back splits”, which offended my borrower and got things off to a rocky start.
At the outset and prior to the appraisal I tried to tell the management company (we cannot talk to appraisers anymore so we are forced to use a go-between called a management company) that this was a special area in a special part of town. Did they listen? This poor borrower got so upset with that “lousy appraisal” that she ended up with shingles! Her husband was so upset he was going to throw in the towel. And I had already worked so hard already re-doing documents, going to the house, taking the wife OFF the application documents which had to be re-done and all re-typed because their attorney suggested this to give the borrower more money. Worse than that, to see my clients aggravated and stressed when my goal was to help them made me wonder why the process isn’t easier.
We decided to appeal the appraisal. I worked on the appeal paperwork off and on for about 15 hours making calls, typing, and researching. I went to the borrower’s house and took photos of everything I thought would help change the appraised valuation. I had to download the photos which took time, resize them all in Photoshop, and I outlined everything in the appeal that the appraiser missed. I wrote a letter (which I redid several times!) and filled out the appeal form with COMPS (comparable sales in the area) which I found (after talking for hours with a consultant who is also an appraiser). After all the work that was done, I was sure it would all work out. Did the appraisal change? It didn’t. The appraisal was not changed despite what I did, in fact, they lowered it!
But all was not lost. Time had passed, so we got a new appraisal with new comps. Now the borrower’s house was beautiful, but it also needed a bit of touching up. So I decided to get a painter who was very cheap but good and he began painting the entire bath and door. Things went wrong, and he disappeared for a couple of weeks, and guess who got the blame? Yours truly! Lesson learned. We got him back on track, things in his life had gotten tough, but he and I worked on painting the house. From 10 am to 8 pm on weekends we painted doors, trim, sanded, etc,. and I actually did a pretty good job. The borrower felt guilty to see me working, but I informed her, “If the next appraiser likes the house, no, LOVES the house, then we did our job”. I was thrilled with how the paint job turned out and the great job the painter did so I took more pictures. We brought in a large area rug from a friend of mine for the den and everything looked perfect.
This time the new appraiser walked in the house, commented it was a “large” home, and said to the borrower, “Tell me about your house.” He actually sat down on the couch with my borrower and talked with her! Needless to say, the borrower was thrilled! Finally, she felt someone cared. And miracle of all miracles, the new appraisal came in for $50,000 more! We only needed $625,500 for the deal to work, but it came in $10,000 higher than that! Our prayers had been answered.
So now we had a CORRECT appraisal, and we’re ready to go. All of a sudden rates drop, a very good thing. Now I have to re-type the documents all over and put the wife back on the loan because there is enough money in the loan for the wife to be put back on the application. Prior to this, only the husband was on the application because he was older, and since the Reverse Mortgage is based on age it changes the cash out figure tremendously. We hoped after all the aggravation we’d been through that things would go smoothly.
Did I tell you there were two satisfied mortgage loans from years ago that were showing on title even though they were paid off? The title company omitted these and took responsibility in case these old mortgages showed up again after closing. The bank didn’t have to worry about them anymore. We get what is called Clear to Close which means we can set a closing date. Yeah! Finally this loan is going to be done. The borrower will be happy; I will be happy. Everyone will be happy. All of a sudden the closer at the lender sends me an email that the “omit” from the title company on those old mortgages is not good enough. “Why did they give me a clear to close?”, I thought. Now we are off and running with sheer aggravation between me, the title company, the bank, the borrower, and a day in the life of an originator becomes sheer hell. I am caught in the middle.
Then, to top it off I get a call from the title company who was annoyed at the lender, and I am now told, “There are taxes due.” I knew he was wrong! I had already checked with the clerk’s office who handles taxes, and there were no taxes due till months later. If he is right the documents have to be changed— again. I called the title company and told the title company I’d check it out. I get back home, I call the clerk in the county who handles taxes and she confirms the taxes ARE paid. This issue gets resolved.
The borrower is all ready to close and arrives at the closing table forty minutes away. Back to the lender. I am working with the closer for the lender from my office. We finally had fixed the mess on the outstanding mortgage liens so I thought all the roadblocks were out of our way. The borrower can begin signing the documents with the closing attorney (who will be receiving an email with the new documents), and I am ready to get out the door and drive to the closing location once I get the corrected documents in my email. They arrive in my email. But the documents are wrong!
(DON’T LET THIS SCARE YOU, these things are VERY rare and this is an isolated case!)
Here comes the NIGHTMARE CLOSING. I finally get the docs corrected by the closing dept which takes about an hour, but something is still incorrect. I examine the documents again, my eyes are killing me from eyestrain, and I find the error. Once I get the corrected documents I get in my car and drive 85 miles per hour to the closing, racing as fast as I can to get there . It’s a wonder I got there in one piece. I have not eaten anything; I’m starved. A call comes through my cell. “Can you get something for my husband to eat, he’s diabetic and didn’t bring his meds and needs to eat right away.” “Not a problem”, I answer. I figure I will get something quick to eat also. But I get lost finding the diner, then can’t find the front door because the diner looks like a huge box! I walk all around the diner, finally find the door, then order some food for my client.
At the closing I discover the attorney has printed the wrong documents as he didn’t see the new set come into his email. What a comedy of errors. I replace the wrong documents with the correct ones I brought with me and the signing continues. The borrower, unbeknowns to me, told the closing attorney, “If this doesn’t close today, I’m out of here for good.” The night ends pretty late, but things have gone better than expected.
One day after that closing fiasco I get a call from the title company. “I need to increase the title premium”. “What?!!”, I say. “The title premium is based on the appraised value. It’s correct. Besides, we already closed. I can’t go charging borrowers after a closing! That’s crazy!” We argue back and forth, he is adamant he’s right, and he finally makes a call and discovers I am right, he is wrong. This has now caused serious tension between me and the title company.
Over and out? Nope. As Gomer Pyle used to say, “Surprise, Surprise!” Next day I get an email from the funding department at the lender saying the HUD is missing!! The HUD is the final closing statement showing all the closing costs that all attorneys type and bring to a closing. Somehow the attorney was told by the bank’s closing department that he did not need to re-type his own HUD but could use theirs. That was a huge misunderstanding for which the bank later apologized. Wires got crossed and it was simply an error in communication.
The attorney calls me and says he’s working on his HUD, but there are some things he needs. “Should I come there?”, I ask. “Would you?” Now I am off and running again twenty minutes away, not far, but more time out of my day. It seems his secretary was out that day, of all days, and the HUD has some things on it that don’t make any sense. I arrive to find a sweet girl typing the HUD and then telling me, “I’ve never done one before.” This is when I got really scared.
We call the bank, they walk us through the HUD and any problems we encountered. After a couple of hours we finally get it done. The lender says the HUD is now perfect. We are HOME free!
Suffice to say, the loan funded, the borrower got what they wanted which was to zero out their mortgage payments; they will never again pay a mortgage payment on their home. Naturally, it took a couple of weeks to recover from the severe stress I experienced. My body felt like it had been through the war. I walked around feeling weak, but at least it was over, and everyone was again at peace. I felt terrible for my borrowers, but they understood that sometimes Murphy’s law parks itself at your doorstep,and you just have to get through it.
I hear so many people talk about wanting to do mortgage loans. Have you got what it takes? Maybe you do. It can be very stressful. You are not always appreciated. It’s a LOT of work. You have to be on top of your game. You need to get enough sleep. You will work long hours, reading documents will be tough on your eyes, and you may find yourself painting houses, doing things you didn’t think physically possible, driving far, re-printing documents over and over again, wasting ink and paper, shredding unused documents, staying up late, and wondering at those low times if it’s worth it.
Now, I am not special and I’m no exception. Every mortgage originator works hard. That is, if they’re serious about what they do. There are days that I’ve traveled to Staten Island in the morning, and by nighttime I am in East Hampton. I have gone from one end of Long Island to the other. I type lots of paperwork, make lots of phone calls, and I know I’ve got to do what it takes. And do I love it? You bet! So don’t feel sorry for me! I chose to work in the mortgage business, and no matter what the challenges or the aggravation, the joys far outweigh them all.
I have many satisfied, happy clients. And many do appreciate me. I’ve been given dolls, paintings, a display dog that’s almost as big as I (kidding!), and I’ve got memories of every borrower who has become my special friend. I hope things stay just as they are! And I wish good luck to anyone who takes on the task of getting licensed and being the best mortgage originator you can be!
I shared this information in the hopes that just one would-be loan officer will choose to care enough to give their very best.
Kathie Adler - Reverse Mortgage Blog 
Leave a comment