Questions That Loan Officers/Brokers Have To Ask!!!

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

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

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Comments 57 New Comment

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Rainmaker
294,842
Ray Saenz
Homes for Sale in Aurora, Colorado - Aurora, CO
United Property Brokers, Inc

George, great tips to have on mind :) We always learn something new, I will not forget this one :)

 

May 15, 2007 04:02 AM
Anonymous #39
Anonymous
Anonymous
Great post.  You are right.. You miss anyone of those questions it can hold up a closing. 
May 15, 2007 07:18 AM
Rainer
49,084
Dianne Barody
Pensacola Florida Real Estate
Century 21 AmeriSouth Realty
George, what an awesome post.  Lets hope we all do our job to the fullest
May 15, 2007 10:26 AM
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George Souto
Your Connecticut Mortgage Expert
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Ines, it is OK to take me to church, just make sure that you hide the song books from me.......LOL

Kausihik, happy to hear that.

Ray, your memory must be better than mine.......LOL

Matthew, it will not only hold up the Closing but it could kill it as well.

Dianne, I will say an Amen to that. 

May 15, 2007 03:47 PM
Rainmaker
325,145
Esko Kiuru

George,

I like that Loan Inspection proposal. Anyway, the Declarations page is as important as the others even though it doesn't have any numbers on it. Borrowers tend to play down its relevance, either on purpose or just out of unawareness, which should make loan officers even more attentive. Professionals close loans on time.

May 15, 2007 07:07 PM
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George Souto
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George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut
Esko, well said.  Even if I am looking at 800 credit scores I still ask all the questions.
May 15, 2007 07:33 PM
Rainmaker
156,900
Sandra Cummings
Real Estate Agent, Guilford Connecticut
William Raveis Real Estate

George

What a great post - now if we could only get all the loan officers to read this.

Sandra 

 

May 15, 2007 07:44 PM
Rainmaker
222,571
Rick & Ines - Miami Beach Real Estate
Majestic Properties
George - that really made me smile!!  You are pretty slick!
May 15, 2007 07:51 PM
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George Souto
Your Connecticut Mortgage Expert
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Sandra, thank you, I appreciate you saying that.

Ines, that comment might have made you smile, but rest assured my singing would make you cry....or at least want to :) 

May 15, 2007 08:02 PM
Rainmaker
222,571
Rick & Ines - Miami Beach Real Estate
Majestic Properties
George - you would NEVER make me cry - well....maybe of laughter.
May 15, 2007 08:55 PM
Rainer
31,718
Eli Magen
New World Mortgages,(Mortgage Company)
Hello George, And we would think that section VIII is basic...thats pitty to lose a deal because one is not paying attention to the basics of a 1003. Thanks for the post.
May 15, 2007 09:52 PM
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George Souto
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George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Ines, :)

Eli, where have you been???

Yep, basic but some mess it up big time. 

May 15, 2007 10:09 PM
Rainer
31,718
Eli Magen
New World Mortgages,(Mortgage Company)

George...I'm Hiding in Orlando...lol.

Nah, Just busy and didn't visit AR as I used to be...

May 16, 2007 07:02 AM
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George Souto
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George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut
Eli, I am glad that you able to stopped by in the few minutes that you did have.
May 16, 2007 08:54 AM
Rainer
3,230
Ebony Griffin
Higher Heights Real Estate Services LLC
George, Thank you for this post, as it makes me glad that I take that extra few minutes to make sure that EVERY space on that 1003 is FILLED out!
May 16, 2007 09:23 AM
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George Souto
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George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut
Ebony, taking the extra time to do it right avoids a lot of probems later on.
May 16, 2007 10:19 AM
Rainer
62,269
Nick M.
Realtor-Appraiser in West Palm-South Florida Real Estate Appraiser
Certified Residential Appraiser- West Palm Beach Real Estate

hey George, true, very true. nice of you to put this form out there. most folks dont see it and this helps.

how could they not have asked every question everytime. hhmm i wonder where to start the reforms. ha!

just kidding. great stuff Sir. high 5 on the links.  where you shooting for an "info-tainment" style?! :)

May 24, 2007 11:22 PM
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George Souto
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Eloise, sorry I just now saw your comment.  Thank you for your very kind words.

Nick, we all learn when we share with each other, I have picked up a lot of tips from you and I just hope that I can add a little to this site by providing info like this.

"Info-tainment" my tongue gets all tied up just reading that, much less trying to say it.........LOL 

May 25, 2007 05:32 PM
Rainmaker
263,238
Jay Beckingham
Premier Nationwide Lending

i'm in southwest florida so the questions about being a citizen are vital. first to see if i can do the deal and second to determine what type of additional documentation may be necessary.

maybe you could add the verbiage above the clients signature where they are subject to fine and/or imprisonment for making false statements.  

July 27, 2007 07:31 PM
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George Souto
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George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut

Cheryl, if they are not asking this, then they are setting themselves up for some big problems, jut like Jay and the comment after you stated. 

Jay, that is a very good point about the signature line that you bring up.  Yes if you don't tell the truth you could quickly become the best friend of some big guy named Bubba in the big house :)

July 27, 2007 07:48 PM
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