Getting the correct income is more than just math Posted on August 4, 2019 We have upgraded UberWriter with some new functionality. Read on in the blog as we weave some underwriting knowledge with some product update news. One of the lessons I learned during my underwriting career is that the most likely reason a borrower defaults is due to their DTI. The DTI either starts off to excessive or becomes too excessive after the loan closes and they can no […]
Profit and Loss Statements 101 for the Mortgage Business Posted on July 30, 2019 I have been writing blogs for UberWriter since 2013 on many different underwriting topics. While putting together some training information I realized that I have zero blogs about P/L’s in all six years! I was pretty surprised by that statistic since the question of P/L’s comes up quite a bit between April and October mainly for self-employed borrowers who have extended their tax filings. What I wanted […]
Can you use K-1 income with less than 25% ownership? Posted on July 18, 2019 I just read an interesting article on the Freddie Mac site from MBO Partners, it was called “The State of Independence In America”. The findings of this article show that Americans who are independent contractors have grown 4.4% in 2018 total a total of 42 Million adult workers. With that much of the work force involved in this new economy I think we need to sharpen our […]
Rental income and Form 8825 Posted on June 8, 2019 A popular asset to own as part of your retirement plan is real estate. With all the “fix it and flip it shows” that have been around for years, this pushes more and more people to try out real estate as an income source. Heck when I watch Chip and JoAnna tear up a house in Waco Texas and make it spectacular, I think “hey I can do […]
Can I Use Future Income To Qualify The Borrower? Posted on May 9, 2019 Most loan officers reading this blog have run across a loan that made them think… If only the borrower could wait an extra 30 days to close we could use their new pay raise to qualify! Sadly, I have had to decline loans that missed the DTI buy one or two percent because we were not allowed to use future income based on the loan program […]
FHLMC updates appraisal re-use rules Posted on May 1, 2019 A few years back I wrote a blog explaining the rules that allow a lender to re-use the borrower’s appraisal for an additional transaction. (See the blog here: Recycle Rules For Appraisals). Looking over that blog I found some interesting comments in 2016 ranging from “you are crazy, that is not possible and a few appraisers stating this was just another way to cut out their profession”. I was surprised by the feedback […]
PUD, Condo, or Co-op? Posted on April 5, 2019 As subject matter experts on Project Reviews, we have often been invited as guest speakers to discuss the topic of project types and how they differ. Being outside the scope of their usual credit review, this subject is always of interest to curious underwriters of all experience levels. PUDs, condos, and especially co-ops, are exotic and slightly mysterious. Even underwriters who review loans in these project types […]
#1 question about distributions for 1065 / 1120S K-1 borrowers Posted on March 14, 2019 Over the years we have done a few articles on how to determine the proper income for 1065 and 1120S borrowers. Some people nickname these borrowers “K-1” borrowers. As an industry we are getting used to the change from Fannie Mae and Freddie Mac that require us to now consider the distribution amount to support the K-1 income. I can remember that rule in place for a […]
Condo Review… Step by Step Posted on February 28, 2019 For those of us who have worked in the mortgage industry long enough to become comfortable and familiar with all the jargon and acronyms, it can be hard to remember what it was like to feel overwhelmed and uncertain about the mortgage process. We are modern-day alchemists who can turn a 1003 and some pay stubs into a new home for a family. The knowledge and processes […]
