Summer's almost over the kids Well the kids in many counties of california are not going back to school, but they're going on to school online. So Summer's almost over and this is a mortgage market update about what's been happening. Where are we at? Oh my goodness What's going on? Okay. So if you've been watching my updates, you know, it's been pretty volatile recently So we had covid hit and we saw the whole market in terms of options go like this And over the last few months. We've seen it open up a bit So like for instance with va we're now doing credit scores 600 and above yay Um, but not all lenders are doing that. Some lenders are still restricting it to 640 or 660 So if you're a va buyer, you definitely want to make sure if someone tells you wait No, you have to have this credit score that you do check around because different lenders are doing different things based on How much risk or how much fear they see in the market so that's important, um conventional mortgages.
I thought we were gonna see A lot of changes too, and it's really interesting because I haven't seen any big guideline changes however I have noticed that for instance if i'm running a person's file through what's called desktop underwriting That fannie mae definitely has gotten more sensitive So loans where I look at it and I go. Oh, yeah, this totally means guidelines debt to income credit score Um everything it needs guides We're not getting approved eligible sometimes so if you guys were pre-approved a couple months ago You definitely want to touch base with your lender and just say hey You know, I was pre-approved. If you didn't run desktop underwriting then please run it now Just to make sure because you know Sometimes with freddie mac because there's two There's fannie mae and there's freddie mac for conventional loans and we run it through desktop underwriting for each one So i've seen fannie tighten up a lot It feels like to me and that's because the ones where i'm like wait, why is this getting a refer? Um, it's because it's seeing more risk.
It's really more risk into the market whereas freddie mac I'm not seeing the same thing, but just assuming right now that if loans meet guidelines You're going to get an approved eligible through the system is a terrible assumption to make you know i'm getting calls from realtors where they're like Oh this we're two weeks from closing and the lender just told me that they don't qualify And it's because the lenders are not running these files through desktop underwriting upfront So if you guys are working with a lender and it I wouldn't feel bad about asking Hey Did you run this through desktop underwriting just cover your bases because you really want that to prove eligible That approve eligible is a golden star.
Okay, so very important to note, um jumbo Oh jumbo I miss you jumbo I miss you so much So there still are some investors doing jumbo. We're still doing jumbo. It's not dead. Okay but it is definitely Not for the faint of heart and if you're on the edge or you have cuspy qualifications to start Now is not the time to buy the house It's really not the jumbo lenders that i'm seeing they are looking for those a plus golden borrowers perfect situations No Hair on the file at all.
So if you're self-employed and right off all your income, I haven't seen any bank statement programs come back um, I look There's always brokers that watch my videos If you guys have any of those loans chime in right now Like put in the comments that you have them because people want to know about them. I am not seeing them. Okay, um, The one thing that's really brutal There's a couple brutal things about getting a loan during kogan and overall 30-day closes are still fine where we hit? bumps Is when we're trying to verify employment at the end of the transaction Or when we're trying to get a pay stub right before closing because you've got two things going on You've got the people who you're verifying the employment with going we already did this.
Why are we doing this again? And then you have the you know the borrower who's already provided bank state, uh pay stubs Excuse me, saying wait, I already gave you a pay stub. Why do I need to do it again? It's because of kovic guys we got to make sure you're still employed and look it's annoying for us as well We don't like asking for more documents We would love to close the loan and be done the veri the verbal verifications of employment at the end are Horrible, I have one person on my team their entire job is doing this because they are so difficult to get so Any help you can give your lender go for it if your lender's asking you for stuff guys Just give it to them.
None of us are asking for stuff right now because we want to torture you The one segment that is truly The most brutal is self-employed. Yeah, self-employed conventional Oh my goodness. And the reason is is that we're looking at tax returns. Of course, like we always would this is for a conventional You know fannie mae or freddie mac loan but at the same point we're also asking for a year-to-date profit and loss and what i'm seeing is You know, I can ask a borrower six times. Hey has your business suffered any losses from covet? No, are you sure? Yes, is everything gonna match the income that I have here based on your tax returns when I get your profit and loss. Yes And then I get the profit and loss and i'm like dude. You're like 40k in the hole. How does this work? And they're like, oh my bookkeeper did it.
I didn't know guys, if you're self-employed and you're buying a house in 2020 You're gonna need a profit and loss. I don't know lenders that are skipping that right now So for this year if your income is declining for this year We're gonna go with the decline and it's unfortunate and it sucks. But the problem is is that covets here It's real and it's affecting businesses in a very negative manner for the most part And lenders have to be able to show your ability to repay. So looking at 2019 And saying, oh they made two hundred thousand dollars in 2019.
No problem. No, they're going to look at 2020 And if they see that you made 40 000 in 2020 year to date and it's not Up to with with what you've been doing it will and can affect your ability to qualify So it's really important that if you guys are watching these videos going well I'm self-employed. I want to buy a house like I got my taxes done I finally did my taxes.
You're gonna need a profit and loss Okay And look you don't have to have it be accounted for a lot of um of the lenders Some of them you just have to put it together yourself, of course It needs to be accurate honest and truthful and then we verify it with three months of your transactions So if you say your business makes 20k, but we look at the bank statements and we're like there hasn't been a nickel deposited That's not going to work either So that's that's the area that I see that's that's really from my perspective as an originator It's really painful because there is nothing worse than telling a client Hey, you know we can't do this because of this and in a lot of cases people are just trying to get a lower rate and it's really really upsetting but We don't have any power here.
We have to follow the rules and these are the rules right now. So be aware, um rates Every time every time I think they can't fall anymore they fall so i've given up trying to play like the crystal ball of How low will they go? Because there's two really strong ways to argue this you could argue this as like Because I actually I have these arguments with my husband my co-workers multiple people in the industry like we're all Trying to figure out what's going to happen next so that we can prepare for it staff accordingly for it you know, we're all hiring like crazy right now because of the volume because we want to try to keep those service standards up but We don't know what's going to happen next so argument one Rates are going to go up next year There is an argument for that and the argument on that is that basically the risk of doing mortgages Coupled with inflation will make it impossible for rates not to go up.
Okay? And then there's the other argument of they're going to have to keep rates low They're going to go even lower because they're going to need to do that to stimulate the economy So you've got two really strong viewpoints there you could both of them Make great sense We just don't know what's going to happen next And what I see as an originator in the market and look i'm not an economic guru.
I'm sure that there's some economic Professional that's going to be like well wait if you take in factor And they're going to give us an analysis that none of us are going to understand But those are the two arguments boiled down into english, okay? And I and I I don't know I guess i'm being defensive today. Um, but i'm just ready for it. I'm ready for it So lots to consider okay as an originator when i'm looking at rates right now i'm like if you like it lock it because going well if it's at 2.875 on a conventional conventional 30-year fixed loan and you're like, oh it might go to 2.75 It might but it might not and you might lose 2.875 so I don't know about you But if I could lock my house at that, I would be locking it all day long because we're talking about historic lows And holding out for an eighth of a percent You know It depends on where you are If you're at three and a quarter fine, if you're four percent and you're holding out from 2.8 to 2.7 I don't know.
I don't know and look. These are just random rates that i'm throwing out there. This isn't based This is not a guarantee to lend i'm not promising you any rates i'm, just saying if you're looking at rates that are an eighth of a percent and you're a percent higher right now like If you like it lock it and don't mess around with it Okay, so I hope this video has been super helpful.
I know it's a little bit rambly But that is our mortgage update of the week. Thanks for watching.