New Proposed Tax On Commissions.

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut NMLS #65149

I spent Wednesday morning in Hartford for Realtor Day At the Capitol, where we were given details on issues that we should consider supporting, and issues that we need to come out enforce against. I plan on covering a couple of the issues that we need to strongly oppose, and one that should be supported.  I will start with the one that probably ticked me off the most House Bill HB 6349, and cover the other two in their own posts.

It was no surprise to learn that Connecticut like a lot of other States is hurting for money right now.  It was also no surprise that our State Legislators are trying to come up with creative of ways of coming up with the money to meet their budget, instead of making tough decisions to cut back on spending.  As a result the minds of of our State Legislators have been working over time on how to dig deeper into our pockets to make up their budget shortfall.

This year they might even be out doing themselves in their creativity.  It seems that taxing our income at both the Federal and State level is not enough, so they have figured out a third way to tax our income directly through a so called tax on "Professional Services".  In the Real Estate Industry this would include Realtors Commissions, Appraisals, Insurance, and Home Inspections, and it would work sort of like the State Sales Tax.

Connecticut currently has a 6% sales tax on almost all goods purchased.  Sales taxes as most of us know are paid at the point of sale, and are a result of us making a conscious voluntary decision to purchase an item that we desire, if we choose not to purchase we do not pay.  Now some genius at the State Capitol may make the argument that this new proposed tax is also a result of us making a voluntary conscious decision, but there would be one major problem with that.  This decision would be made out of a need to work, so that we can buy food, and pay our financial obligations.  This decision would result in a 6% tax on top of the income taxes that we are already paying. Also this tax unlike the sales tax which is paid by the person receiving the product, would be paid by the person providing the services.

If this tax is enacted, upon the sale of a house Realtors will be taxed a 6% sales tax on their commission on top of the Federal and State Income Taxes that they are already paying.  The same would hold true for the Appraiser, Home Inspector, and so on down the line.  I don't know about you, but this is triple taxation to me, and highly questionable.

Now this tax is not just restricted to the Real Estate Industry, but to all who will fall under the definition (which is not really known yet) of "Professional Services".  Anyone who feels that all those Realtors out there that make a boat load of money anyway should be taxed as much as possible, need to stop and think for a minute, what if the State decides to include what you do in their definition of "Professional Services"? Remember they have not fully define what "Professional Services" is.

This is a BAD tax for a whole host of reasons, and everyone in Connecticut needs to get on the phone with their State Legislators, and tell them what a bad idea this is.  House Bill HB 6349 needs to be voted down, but it will not be voted down unless we make those at the State Capitol know that we know what they are doing, and don't like it.

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Yvette & Dennis Gardner 04/02/2009 04:33 PM
  2. Jean Terry 04/02/2009 09:38 PM
  3. Kerry Jenkins 04/03/2009 02:12 PM
  4. Mike Hughes 04/03/2009 06:06 PM
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Rainer
5,092
Don Hawley
REIT Homes - Lindenhurst, IL
CDPE

Kevin Cornerford,

When responding to the posts on ActiveRain, I normally comment on the subject blog, however Kevin you made reference to something that many believe could essentially devastate the United States of America, a Constitutional Convention. Most people do not realize that a Constitutional Convention is made up of super-delegates.  These super-delegates are APPOINTED by the president, the speaker of the house and the senate majority leader. Kevin, by advocating a ConCon, you are giving unlimited power to forever alter the supreme laws of the land to President Obama, Harry Reid and Nancy Pelosi. The people have NO VOICE in regard to the appointees.

A Constitutional Convention, which has not been convened since 1787, composed of these super-delegates could re-write, or eliminate, the entire bill of rights. Have you considered the implications of such a measure? Can we the people gamble our founding principles, our future, and the very essence of what made America, the "shining beacon of light upon the hill" that Reagan so eloquently described.

Given the voting records of Obama, Pelosi and Reid the likely outcome of a ConCon would alter our first amendment rights, our right to own firearms, our right to due process, as well as a wide range of social issues such as the definition of marriage, abortion and the range of powers which effect the (free) market.

America must realize that not only have we handed power to socialists, but we have elected a Marxist to the highest office and I say this because his voting records (his actions) and the bills he has endorsed or introduced, are totalitarian in measure. Words mean nothing, actions speak volumes! Read the "Communist Manifesto" by Karl Marx, read Ayn Rand's "Atlus Shrugged", revisit "1984" by Orwell and Huxleys "Brave New World".

I encourage everyone to get involved with organizations such as the tea parties which advocate control of government spending but I implore you to reject any call for a Constitutional Convention. If you truly care about our country and our future generations you will rise in mass against this measure which would give unlimited power to the Federal Government and possibly eliminate the system of checks and balances provided by our founders.

We the people need to remind Washington that we can work together to IMPROVE America, not CHANGE a form of government that has yielded unimaginable opportunities, limited by one's own initiative, to her citizens.

Apr 05, 2009 08:36 AM #244
Rainmaker
166,511
Linda Davis
RE/MAX Realty Group - Gales Ferry, CT

Wow!  This post got a lot of attention.  I've only skimmed the comments and will stay out of the debate. We have a local tea party in Norwich coming up on the 15th and I plan to be there.

Apr 05, 2009 06:55 PM #245
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Linda, I have to check out the website tomorrow to see which one is the closest to me.

Apr 05, 2009 10:34 PM #246
Rainer
26,047
Gary Ward
Advantage Chatuge - Hayesville, NC

George Souto, Eugene and others. You are so right!

 If I had a dime for all the government waste I have seen... I'd be a rich rich man!  And to blame realtors for the Freddie and Fannie fiasco! Come on! Get your head out of the sand man!

Our country as we know it is fading fast and it really burns me that you won't see anything about it on the Network news! Do you know the treasury printed over 1 trillion dollars the other week? Over 1 trillion! Out of thin air! This spending and taxing is gonna ruin us and I mean this country not just real estate. Since this is not my post I won't create a link but please if you care about your country Google the (12 project and join.... It's time to take our country back.... as for the tea parties... I'm all for them but we need a true agenda... just yelling "no more spending" won't accomplish anything. I like the "Fair Tax" (Google that too) It's time to abolish the IRS!!!!!!!

 

Apr 06, 2009 10:19 AM #247
Rainmaker
581,880
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

NJ went through something similar a while back, but they never mentioned double hitting income. They went and started taxing things that flew under the radar for years. IE: club memberships etc...

This is truly double taxation on a commission, It is wrong in so many ways...  Hopefully it goes away and quickly.

Apr 06, 2009 10:58 AM #248
Rainer
96,277
Karen Villa Schweinfurth
RE/MAX Northwest Realtors, Inc. 425-308-3669 - Everett, WA
ABR, CRS, SRES, CyberStar

This is also rearing it's ugly head in Washington State, it's being talked about "just services, i.e., attorney's fees, etc." However we all know it means real estate commissions. We have a sales tax of 8.5% here, so guess what that means to our commissions. We are getting our "war gear" on to fight this here.

Apr 06, 2009 11:43 AM #249
Rainer
38,895
David Daniels
Owner of FlyersToYou, Inc. and former Top Realtor - Hemet, CA

George, Eugene and Gary,

Here's what I actually said:

What I DO realize is that our industry in general caused a lot of the mess we're in. The run-up of housing values at ridiculous levels, the mortgage instruments offered to buyers who didn't qualify, the volume of business over the last 5 years that lined a lot of our pocketbooks very nicely.

I'm not sure how it was construed that I was blaming Realtors for this mess. I used the term "our industry", NOT Realtors alone. Our industry means the real estate industry as a whole. Lenders who approved loans they shouldn't have. Realtors who took buyers from lender to lender to lender until they found one who would approve a 65% back-end ratio with poor credit, appraisers who came in at value even though there were no comps to justify it, Wall Street for creating mortgage instruments that were doomed from the beginning to fail (by the way....I don't recall anyone refusing to use those misconceived mortgage instruments while six deals a month were being closed.) It's easy to go back and point fingers now, but there was culpability on all sides if you ask me. And if it wasn't the real estate industry in general who caused the HOUSING crisis (note the word "housing"), then perhaps I ought to write to the Plumbers Union Local Chapter 877 and find out why they let it happen???? :::smirk:::

In a recent blog here on AR, a loan originator wrote:

The Buyers ratio's were 43/55, this was not good, and given my recent experience, there was NO WAY that this was getting an Approve/Eligible.  But I do not leave anything up to my opinion, so I prepared the Buyer for want I was expecting to get while I was running it through DU.  What I saw next was a shock, and I was speechless for several seconds (which for me is amazing ... LOL), on the screen it read Approved/Eligible.

A computer screen says "lend them the money"...even if their qualifying ratios are out of whack. So we do. The loan officer is a hero...and the transaction closes (much to the delight of the agents involved, or the title company, or the escrow office, or the homeowners insurance company...NONE of which would earn a dime if the deal fell through). My question is...do we sacrifice our own integrity because a computer screen says we can?? If a loan officer himself is shocked and speechless that the loan was approved, I'm guessing it's because he knows deep inside that that it's not the best situation for the buyer to get themselves into. They really can't afford it. But who cares?? It's a deal, and there are too few deals nowadays. Even though we know the loan is bad, approve it for fear of losing the deal, losing our referral base...or getting sued for discrimination???? There's not a court in the land who would rule in favor of the borrower who felt they were being discriminated against if the lender said "Your honor...even though the federal guidelines stated the loan was approvable, we couldn't bring ourselves to fund a loan where the borrower simply doesn't earn enough money to make the payments in our opinion." It's not discrimination...it's common sense.

And...it continues to be business as usual. We'll fund anything, close anything...if the government says we can, REGARDLESS of whether we personally think it's right.

YOU can blame Fannie and Freddie for that...but I can't.

Gary...my head is not in the sand, and Eugene, I wasn't blaming Realtors. BUT...NO ONE fought those mortgage instruments at all. There were no rallies by NAR, there were no protests by the Mortgage Banking Associations. If we could make a ton of money, we let our personal beliefs and morals fly out the window. My son worked at a mortgage company where 24-year old loan officers who had been in the business for 5 months wouldn't TOUCH a loan if they weren't going to make $12,000. And they had real estate agents all over the place sending them business. You can blame FNMA and FHLMC for that all you want. I'm just saying there's more to the housing crisis and resulting economic nightmare we're all facing than simply turning our cheeks the other way.

And now, for us to complain that states have to raise taxes to pay for the mess we created, well...that I find somewhat humorous, don't you??

Dave

Apr 06, 2009 12:08 PM #250
Anonymous
Anonymous
Don Weller

I think there are more "lower income" people in this country now than years prior. They're the ones that elect the socialist representatives that want to "spread the wealth" around. Now that Obama's been elected by his smooth talking, these reps feel even more encouraged to tax as much as they can to support their own agendas and not those of the people. Just look at the first expenditure Obama had for his inauguration celebration, $170,000,000.00. The most expensiive of any president. Do you think he really cares about government spending cuts?

In California the property transfer tax is even higher than Conneticut. Many cities are trying to tax or fine anything they can (such as mother-in-law units that were built without a permit 20-30 years ago)to generate more revenue. When you compare the so-called services we get in return, it doesn't add up. Look at the stimulus bill and what happened with AIG. Have you seen the millions of dollars our government gave away to foriegn countries? What about the needs here? Our government reps need to be replaced with competant representatives. Unfortunately, most Americans have become docile and/or educated (brainwashed) with a socialized mentality in our colleges. People believe they deserve something for doing little or nothing or that others owe them something.

I've worked hard since college and earned what I have, never asking for a hand-out. Now I see it being drained away, little by little, on all that is going on because of a lame governement. I say it's time everyone woke up and got involved.

Good article. But let's not let it stop with just talking about it.

Apr 06, 2009 02:33 PM #251
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Dave that Loan Officer who wrote that as you well know was me.  And once again you assumed wrong. What I meant by shocked was because FHA had tightened its qualifying ratio's to 38/52, at least I had not seen an Approved/Eligible beyond that in recent months, so I was shocked that I was seeing one beyond those ratio's again.

You seem to think that those that underwrite loans by Fannie, Freddie, and FHA guidelines can just pick and chose what they are going to approve and what they will not.  If a loan is run through the DU and it says Approved/Eligible the loan is approved if all the information that the Borrower gave is documented and verified.  The Loan Office, Underwriter, and everyone else involved in the Loan has to approve it.  You can't just deny a loan, you have to state why, and issue a formal denial letter.  Lenders are audited by the Banking Commission all the time, if a loan was to be denied, and the documentation shows that it should have been approved, that Lender has a problem with the Banking Commission, and could face law suits. So Yes you do have to follow what the computer puts out.

The Loan Officers responsibilty is to make sure the Borrower fully understands the monthly payment that they are getting themselves into, and not to make the decision for them if they personally feel it is too much.  See Dave that is what many in Government do, they feel they know better than we do where our money should go.  They treat it as their own, and feel they have the right to decide for us.  Well I don't and feel that we have the right to make those decisions for ourselves.

So Dave the next time that you want to know what I meant by what I wrote just ask me, I will be happy to tell you, in stead of assuming incorrectly.

Apr 06, 2009 07:17 PM #252
Ambassador
1,841,840
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Robert, flying under the radar is what they try to do with a lot of taxes.  By the time that most people know about them, they are already on the books.

Karen, keep on an eye on them, and let them know that they are in for a fight.

Don there are to many in Washington that have been there far longer than they should have been, time to change some of that.

Apr 06, 2009 08:24 PM #253
Rainer
38,895
David Daniels
Owner of FlyersToYou, Inc. and former Top Realtor - Hemet, CA

George,

I guess we all sometimes assume we know what each other is thinking, hmm?? Your comments that I'm in favor of higher taxes...everyone's conclusion that I was attacking Realtors when I said "real estate industry". We're finally beginning to agree on something!! Woohoo!!! I guess I'm guilty of making a presumption in this instance. I thought you were shocked that you could get their loan approved, even with low FICO's and an inflated debt ratio. I guess I was wrong.

But here's where I think we still disagree.

If you're not shocked or dismayed that a borrower with a low FICO score (one that was artificially inflated becuase you, as an experienced loan officer, knew that if you paid a few debts down, you could temporarily increase it by 20-40 points) winds up getting a loan they can't afford, that's your business. I personally think if you allow a borrower to spend more than half their income on total debt...especially in today's uncertain economy, you're putting them in a bad situation.

EVERYONE who manipulated loan applicant information (temporarily raising FICO scores, jotting down inflated stated incomes, or whatever they did) has just as much culpability as a borrower who supposedly understood what they were getting themselves into. Heck, those were the same borrowers who, two years ago, were told if they buy now, they can sell at a profit in two years. Those were the same borrowers who lost their homes because they weren't aware their loan was an adjustable rate mortgage.

Do I excuse the consumer's ignorance or failure to pay attention when signing docs?? Nope. They're responsible...even ultimately responsible. For our government to even consider bailing them out seems like a crime. MY taxes have to bail someone out who wanted to make a fast buck, or add to their list of toys?? Why do I have to pay for that?

And I guess I'd relieve the lenders of some responsibility if they EVER sat down with these borrowers and counseled them by stating that, although their loan is fully approvable according to the guidelines, their company strongly recommends against them taking the loan. Explain to the borrower that statistics indicate their loan is at great risk for default. Don't let your personal feelings get in the way. Show them the statistics of low FICO defaults. Of high ratio defaults. You already know those statistics! They can be found all over the internet!

If lenders did that, they could push the blame game somewhere else. But they won't. They'll let overzealous borrowers, underqualified borrowers, high credit risk borrowers decide for themselves. And even if they did counsel them, the Realtor would simply shop the loan somewhere else...so the "loss-of-business" risk isn't acceptable. Full disclosure needs to take on another look nowadays, that's for sure. By the way...this is precisely how our industry created the global financial crisis. Let people decide for themselves without regulation. AIG decided for themselves to pay huge bonuses. Borrowers decided to state their monthly income as $11,000 when they knew it was less than $4,000. And we let them, because "everyone should decide for themselves" what's right??? LOL...we're finally getting tired of that model, because all of us have to pay for it dearly now. But before that, we let it all slide. And you're suggesting no one tell these borrowers the truth?? That statistically, they're setting themselves up for a fall...and that if their FICO hadn't been manipulated, they wouldn't have been approved in the first place???

I spent 15 years managing large mortgage operations here in Southern California before making the switch to selling real estate. I'm very familiar with FHA audits, lawsuits for discrimination, lending laws, etc. But a lender never, ever HAS to approve the loan based on good conscience (regardless of what the computer says). That's why one underwriter will approve the loan...and one won't. In a discrimination lawsuit, the court will ask why the loan was denied. The lender is perfectly within their rights to state that, although the loan met Federal lending requirements, it was, in their estimation too high a risk. If the borrowers could prove that it was due to race, or gender, or sexual orientation, they'd have a case. But if the lender denied the loan based on perceived risk, they're perfectly within their rights. No lender has to make a loan (especially if it's been artificially manipulated to get approved). :::cough:::

What we'll begin seeing from the mortgage industry is a form signed by the borrowers indicating that they've been counseled regarding all risks, and that they understand the risk of losing their home to foreclosure, or values dropping, or lack of future potential for loan modification associated with the loan, and that they hereby hold the lender, Realtor, and anyone else involved in the transaction, harmless. If I were still in that industry, I'd have created that form and implemented by now anyway!

In closing, my apologies in misinterpreting the DU approval. Let's both agree with your last sentence above, ok?

The next time either of us wants to know what each other meant, let's just ask. I'm sure we'll be happy to tell each other instead of assuming incorrectly. :::smile:::

Dave

Apr 06, 2009 08:49 PM #254
Anonymous
Anonymous
Anonymous

the way I'm thinking is that possibly more taxation money would go into eliminating homeowners from losing homes and enabling them to refinance. I'm into loan document signing and that does help me but the national stimulus package does not seem fair. I know it hurts many and helps many others. What makes you think you would be completely out of work?

Apr 06, 2009 08:52 PM #255
Anonymous
Anonymous
eugene

Thanks Kevin for bringing up the VERY important point of the ConCon, that would utterly destroy our country and the last vestige of freedom that we have left! 

That would give "validity" to the Socialist Crooks,, aka the LIB DEMS ,, who are in office now.   That would make their raid on our rights literally irreversible!   As long as the ConCon can be staved off and delayed, we have hope that when the Socialist LIB DEM crooks are finally thrown out of office that our great country can be restored!

You are Right On George, that the responsibilty for our financial mess is the Gov't ,,Fannie mae/Freddie mac and their LIB DEM cronies barney, dodd and barry the Socialist,etc!   NOT realtors or mortgage companies!   We operate and are controlled by the law, they operate with impunity!

All of the contents of this blog are pertinent to outrageous taxation and government control that is antithetical to our freedom and Anti American   The Real cause and solution is to get the LIB DEMS out of office ASAP!!     Our future and our country's future absolutely demand it!

Apr 06, 2009 08:55 PM #256
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Dave, first of all in the days of manual underwriting that might have been the case but no more. And yes whether we like it or not the computer, has taken a lot of the decision making out of the lending process.

We follow the rules and guidlines, Dave, and don't make up as we go a long like you would like us to.

Second I did not inflate any thing, those are your words not mine, if the Borrower manitains what I showed him that he needed to do, then he will maintain those scores. OH does that sound like counciling on how to be responsible with his finances?  Also Dave there are certain loan programs, especially for first time homebuyers that they have to go to mandatory classes before receiving the loan.  Should we be telling them after they go to the class and qualify under the guidlines that we still don't like it and deny them too?

You are grasping at straws, and that is sad, I unfortunately gave you more credit then that.

Apr 06, 2009 09:48 PM #257
Ambassador
1,841,840
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Sandra, the higher the Real Estate Taxes the more costly the purchase, the less sales, the less income, the less people in the industry.

Eugene, Dave does not like the rules, so I guess we should pick and chose who we are going to apply the rules to and who we are not going to apply them to. I thought that we were suppose to treat everyone equally.  I have a hard time understanding his mind set.

Apr 06, 2009 09:56 PM #258
Rainer
38,895
David Daniels
Owner of FlyersToYou, Inc. and former Top Realtor - Hemet, CA

George,

Okay, well, this is getting out of hand...so this will be my last post.

But...before I address your last comments, have you checked out the validity of your original blog topic yet??? The one about being triple taxed on your commissions? Let's get those facts straight first, shall we?

Secondly, Eugene...wow...you need to relax a little. Lib Dems? Republicans were in office when this whole mess started. By the way, I am registered Republican, so I'm not biased when I state that the housing crisis BEGAN during Republican rule. Do I agree with how Obama is handling the situation?? No. My children are going to inherit this cash-cow and pay on it their entire lives. Would McCain/Palin have handled it any better?? I doubt it.

But for you to come spouting anti-American taunts, and ranting about government control and no freedom (blah, blah) seems blissfully ignorant to what got us here in the first place. And to deny the industry's role in perpetuating this mess seems like the worst case of denial I've ever seen. You show me the letters you wrote to the Republicans in office when this mess was happening....advising them against the mortgages that put us in this predicament, and asking them to render tighter control and regulations in our credit and banking industries...and I'll leave you alone.

But to march down Main St. waving a Union flag after the fact....and not take any responsibility is outrageous, and it's taking the easiest way out. I guess we're all free to move somewhere else if the need or urge arises.

And George,

Go ask the principals of your company whether they can deny a loan because they deem it an unacceptable risk, even though DU approves it. Their answer will be the same as mine. Here is a direct quote from Fannie Mae's DU selling guidelines:

General Lender Requirements

When underwriting loans with DU, the lender must:

  • employ prudent underwriting judgment in assessing whether a loan casefile should be approved and delivered to Fannie Mae,

  • confirm the accuracy of the data it submits, making sure that it did not fail to submit any data that might have affected the DU recommendation had it been known,

  • ensure that the loan complies with all of the verification messages and approval conditions specified in the DU Underwriting Findings report,

  • apply due diligence when reviewing the documentation in the loan file,

  • review the credit report to confirm that the data that DU evaluated with respect to the borrower's credit history was accurate and complete,

  • determine if there is any potentially derogatory or contradictory information that is not part of the data analyzed by DU, and take action when erroneous data in the credit report or contradictory or derogatory information in the loan file would justify additional investigation or would provide grounds for a decision that is different from the recommendation that DU delivered.

Item #1 is the item you need to pay attention to. If a lender feels it would NOT be prudent to make the loan, they have no legal or otherwise binding requirement to do so. FNMA doesn't require it, and nor does any Banking Commission or Federal Housing Authority. Do lenders exercise these "prudent" guidelines to deny loans??? Um....in a word, no. Of course not.

The chant we've been hearing 'round the world for the last decade is "If the loan can be made...make it. Let someone else worry about the consequences". We will never substitute prudence for profit as long as a software program tells us there's a paycheck right around the corner, REGARDLESS of risk!

So, you can continue blaming the LibDems, or Banking Commissions, or fear of being sued on grounds of discrimination all you want...or even call the manipulation of a FICO score "Buyer Counseling"....but in reality all you're doing is perpetuating this crisis for many, many years to come.

George, it's YOU who is making up the rules as you go, not me. You're the one spreading the cries of triple taxation when that's simply not the truth. You're the one quoting how underwriting MUST be done nowadays...versus simply familiarizing yourself with Fannie's actual selling guide. You're the one convinced that your "counseling" of low credit scores make a borrower more responsible, when history has proven that wrong time and time again. And you're the one who continues to "know" how I think: "Dave does not like the rules".

Here's what I DO like.

Someone who knows what they're talking about. Someone who uses common sense instead of greed in determining what's best...and someone who doesn't make excuses for how they got where they are...or how our country got where it is.

With that being said....I don't have the energy to post on this blog anymore. I don't like it. It's deceiving at worst...and woefully ignorant at best.

I wish you well though...and for your continued success. And that, IN LIGHT OF EVERYTHING HERE is very sincere.  

Dave

Apr 06, 2009 11:38 PM #259
Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

David, thank you for providing the information that proves my point.  Item #1 DOES NOT state that "If a lender feels it would NOT be prudent to make the loan, they have no legal or otherwise binding requirement to do so. FNMA doesn't require it, and nor does any Banking Commission or Federal Housing Authority."

Item #1 as you wrote it, "employ prudent underwriting judgment in assessing whether a loan casefile should be approved and delivered to Fannie Mae"  This is simply setting up what they go on to further say, and what they are saying goes completely to VERIFICATION as I stated in MY response to you "If a loan is run through the DU and it says Approved/Eligible the loan is approved if all the information that the Borrower gave is documented and verified"

With a DU or LP approval, the underwriter no longer determines whether the ratios are acceptable or not DU and LP does that.  What the Loan Officer and Underwriter still need to do is collect the documentation that supports the information given and verify it.  If income is correct, bank statements are correct, employment, tax returns if called for by DU or LP, as well as any other documentation that might be needed is correct then the loan has to be approved.  Automated Underwriting has already made that decision, IF the information is correct.  You want Lenders to deny loans that they have an Automated Underwriting approval for, even if all the documentation verifies the information that was provided to the computer.  Lenders CAN NOT do that, if they do they will be before the Banking Commission for discriminating.  That happens right now even when the Lender feels that the information does not check out, and they are taken to the Banking Commission, the Commission over rules them and finds them, and that my friend is fact.

As far as this Bill goes I have already given you my response, I guess you don't like it so you have just kept on asking it over and over again.  Well the response is the same, I was there and know what I heard, and others that where there that have also commented on this post, have not said otherwise.

Good Luck David I too wish you well, and lets see if you are a man of your word and that your comment above is your last comment on here.

Apr 07, 2009 07:54 AM #260
Anonymous
Anonymous
eugene

You don;t think that McCain/Palin would have handled things any better Dave?   A MONKEY would have handled things better than barry, by doing Nothing!   Barry has severly exacerbated the crisis by his ignorance and blatant adherence to his PC CRAP mindset!   He has made the problem 1000% worse than it was!   Not only for the present but Decades into the future!

Just check your MLS stats, the year before barry got in office there was less than 1% a month deterioration, in Jan after barry was put in office, prices dropped 27% in the month he got elected!  Feb saw another 15% Drop and we are still waiting for Mar stats.

I agree that I would have much rather had Keyes, Rice, Romney, etc to vote for rather than McCain who is too cozy with the lib dems, but even he is light years better than the Socialistic barry!  McCain is not a Communist, like barry!

The genesis of this financial  mess was Caused by the lib dems, carter, slick n hil, barney, dodd, kerry, schumer, barry and all of their lib dem cronies!   NOT by mortgage companies or realtors or Republicans!

Apr 07, 2009 09:04 AM #261
Rainer
15,459
Christine Emmick
Freelance Writer - Wall, PA

Mr. Obama knows exactly what he is doing, unfortunately.

George, not that you need another comment to this great post, but I felt obligated to share. All service industries, like freelance writing, may be subject to this kind of tax. As some have suggested, this is a tax we CAN pass on to our client, but many of us won't stay marketable in this climate by doing so.

Apr 07, 2009 02:27 PM #262
Rainer
26,594
Spencer Hill
Hill Asset Management - Kingstree, SC
#1 Financial Planner -- South Carolina

Maybe its time just to throw all of the parasites (oops i mean polticians) out of office and start over with a new batch

Apr 10, 2009 09:30 PM #263
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