Make It All About You

Each day is full of noise about real estate and our economy. Trying to purchase a home has become a competitive sport. Some buyers will fall out of the market when the weather warms and their frustration from multiple out bit offers has worn them out… they will devote their few remaining weekends to summer living versus house hunting.
If this fall is like the past 3 or 4, prices will gently fall, bidding wars will wain with 2 or 3 competitors and sometimes just one bid… versus the double-digit competition in the early spring market. Inventory will continue to be the huge issue.
However, it is important to keep in mind the economic conditions are constantly changing and in our increasingly global economy events near and far can impact interest rates and financial markets for better or worse.
Perhaps the Millennials have it right, with all the hand wringing about “when will this generation start buying real estate?” They are taking their time and waiting until it is right for them. This is wise.
We should be making our major life moves when the time is right for us. Not because our family members, friends and the media are touting it’s now or never, this is the time, rates are low, do it now no matter what, get in at any price.
Buying a piece of real estate is a big and life changing commitment, you cannot move on a whim at the next romance or job offer, you may have to maintain, repair, pay up for improvements with your extra funds. When the time is right for you, go for it. When the time is right for you, the opportunity will be there. If rates are higher, it is likely that values will stabilize or slightly decline, if rates rise keep in mind that rates will likely fall again. Innovative but not risky programs will be developed to support first time buyers in a rising rate environment. There will be a way to make a home purchase happen when the time if right for you!
Home ownership creates stability and wealth, it makes sense. It makes sense when the time is right and the buyers are ready to take on the responsibility.
Don’t fall into the frenzied ‘get it at all cost’ attitude that is starting to rule the current environment. Make the decision that the time is right for you because you are ready to take it on, not because social pressures are mounting for you to make a huge lifestyle change.

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The New Trend in Credit Reporting

While “transactors” and “revolvers” may sound like the newest Sci-Fi movie, they are actually two new categories now measured by a new credit reporting approach called trending credit. This new approach goes back two years and looks not only at payment timeliness but also at credit trends. A “transactor” pays their credit on time and often in full or significantly over the minimum required payment. A “revolver” is more likely to pay the minimum required, move balances around, and shop for better credit card deals. Revolvers are considered riskier especially those who carry large unpaid balances.

Until recently credit reports told us if the applicant was late on a payment or had defaulted on a loan but they didn’t tell us how the consumer manages their debt.
Fannie Mae will begin evaluating how all applicants manage their credit with a two-year look back to determine payment and spending patterns. This is called ‘trended credit data’ and we have yet to learn how this new approach will impact consumers. However, the common belief is that utilizing this approach will help millions of consumers who have little to no credit history or do not generate a credit score, to build their credit profile. This may allow them to qualify for a mortgage today that they did not qualify for in the past.

This new trending data approach will not alter a consumers FICO credit score, but will change the way the consumer’s use of credit is evaluated. It will take some time to determine how this approach is working for the mortgage industry. Credit industry experts say this move by Fannie Mae is a huge step towards fairer credit.
Freddie Mac has not made a decision to adopt this approach as of this time.
There has been no national discussion addressing any potential negative impact this will have on lending qualification. We will have to wait and see but for now it is important to understand that consumers’ credit is now being evaluated at a deeper level.

For more information on this subject read this great article by national real estate reporter, Ken Harney


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Causing delays in the mortgage approval process.

Ahhh… Spring, the flowers are blooming and the kids are running in the yard and this year’s taxes are filed and behind us. This is a great feeling, but one that soon can go away when it comes to securing a home loan.
From first time buyers to seasoned borrowers, it is no secret that your lender will require you to provide income documentation in order to obtain a home loan approval, including W2 paystub’s, tax returns and the like. What you don’t know is that tax transcripts are required on most mortgage loans originated across the country. Tax transcripts are a validation that comes directly from the IRS to prove that the income used to qualify the borrower is actual income of the borrower and that the lender didn’t miss something or that the borrower is not potentially committing fraud.
Normally, getting copies of tax transcripts isn’t a big deal, but for borrowers who filed their 2015 returns late, or who mailed in their tax return versus filing electronically, tax transcripts may not be available or be delayed. Depending on the source of the borrower’s income, the overall strength of the loan file, and the loan program, the lender may be able to make an exception and close on a loan with missing transcripts, but not always.
Be aware that if asked for an extension on a closing or a commitment date due to an inability to obtain transcripts, don’t blame your lender. This situation is temporary and generally by the end of June transcripts are on track and on time. It’s always better to take the time to do it right. As I have always said, careful and steady always wins out over quick and sloppy.

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A Thought Provoking Week…

A Thought Provoking Week…
There are weeks where issues come up during the loan origination process that makes me think “I have to tell the community about that!” These can be just random speed bumps that can be avoided, or they can be serious potholes that can detour the entire process.
Last week was one of those weeks!
Appraisals, home improvements and permits:
If recent work had been done on a home, appraisers are expected to prove and document that the work had been properly permitted. If the appraiser notes that a bath had been added and does not determine if proper permits were issued, the underwriter will request documentation to determine that the bathroom was installed legally.
Be sure to ask your selling clients if they had executed permits prior to any recent work within the past 5 years. If they didn’t get permits, you may want to try to get an inspector from the city or town to provide permits prior to listing the property. Just last week, we had a situation where a bathroom was added in the basement of a home and now has to be removed prior to closing. Needless to say, a situation that could have been avoided caused stress and frustration for both the buyer and the seller.
Commitment dates and extended closings:
Mortgage Commitment letters have expiration dates. This can create some concerns when a closing is months later than the Mortgage Commitment date. The law states that the following documents expire after 90 days and must be updated:
• Income: Pay Stubs
• Assets: Checking, Savings, Investment, Retirement
• Credit: Must be re-pulled after 90 days but should not be re-pulled early
• Appraisal: Good for 120 days before a new appraisal is required
The timing on these documents can create issues. For example, an investment or retirement account may only send out statements quarterly. Also, borrowers who are paid monthly may have to wait 30 days before they can provide the documentation required to update the Commitment Letter and extend the expiration date.
ALL loan approvals are at risk if the borrower ruins their credit, loses or quits their job or if they spend their down payment money. This is true whether their Commitment Letter is issued 3 weeks prior to the closing or 3 months. It is important to work closely with your lender and your buyer so you fully understand what needs to be done to update the Commitment Letter.
Conversely, we have buyers with extended closing dates who are required to submit an application right away. This is fine as long as there is no requirement to order the appraisal as the buyer would be required to pay for a second appraisal if the first one has expired.
As always – if you have questions, thoughts or concerns about the timing of a transaction, give us a call and we will walk through the scenario with you to find a solution that is beneficial for everyone.

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Solar Panels Are Everywhere. How Do They Impact Mortgage Financing?

I was out and about last week and in just few blocks sighted 6 homes in our neighborhood with solar panels. As the daughter of an early environmentalist, seeing so many houses with solar power supplementation excited me. As a mortgage professional I wondered how having solar power might impact the mortgage qualification process.
While researching this topic, I found there are mortgage rules to keep in mind when investing in solar panels and alternative energy production.
The biggest question to remember when thinking about updating your home to a solar panel system: are the solar panels owned or is the equipment leased or being paid for under an agreement with the solar company?
If you own your solar equipment you will be able to sell your home at any time.Complications can arise when you do not own the equipment. I would suggest that if you consider installing solar power, have a lender review the contract to determine if there could be any issues with future financing.

Complications that can arise with leased solar equipment:

  • The solar panels may not be included in the appraised value of the property
  • The buyer may have to qualify with the solar lease payment included in their ratio
  • Traditional electrical services to the house must be maintained and functional
  • There are insurance requirements, and other issues to address that make financing a property with leased solar equipment more challenging

Agents, if you are listing a property with solar power, call me early on to determine any possible complications to a future buyer. Some solar providers have created contracts and lease agreements that are suitable to lending requirements, but it’s a good idea to know what you are dealing with out of the gate.

Amy Tierce
Regional Vice President
We’re here to help you and your buyers do more, learn more and grow more!amy-tierce-headshot-2012 (2)

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6 Tips For Realtors For Managing the Appraisal Process

In today’s active market it can take time for values to reflect all sales activity. Taking a proactive approach to the appraisal process will help the appraiser when it comes time to execute the report.

1. Schedule the appraisal as soon as possible. If you are going to be away, make sure you have coverage for the appraisal appointment. Keeping the process flowing helps avoid delays in the loan approval process.
2. Stage the home as though you are conducting an open house. Now that the property is under agreement, don’t let your seller get too relaxed. Make sure that the house looks as good as it did the day the buyer first saw the property. First impressions do matter, so keep the property showing well!
3. Make sure you get the fully executed Purchase and Sales agreement (P&S) to the lender right away. Appraisers are now charged with reviewing the purchase contract to determine that the property as appraised matches the property represented in the agreement. The appraiser is required to review the P&S before they can release the appraisal report. It is vital that the lender receives the agreement on time.
4. Always be prepared to support the sales price by bringing a folder that contains the comparable sold properties that you and the seller used to determine the list price of the property.
5. List any improvements made to the property since last sold. Especially those changes that are not so readily visible such as electrical, plumbing or roofing work. List all improvements made since the last recorded sale of the property.
6. If the appraisal on a purchase comes in low, keep an open mind and don’t panic. There can be ways to manage this situation that keeps both the buyer and seller in the transaction. It is important to work directly with your loan originator and together you may find solutions that work for all involved.
About Wintrust Mortgage: Wintrust Mortgage was created to assist in the realization of the American dream of home ownership. Our large volume and the ability to lend in all 50 states make us one of the largest mortgage bankers in the country. In 2015 alone, we originated $4.3 billion in loans. Wintrust Mortgage hosts over 190 retail, operations and bank locations across the country. Wintrust Mortgage is a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank, NMLS# 449042. Equal Housing Lender. For more information visit the company website at, “Like” us on Facebook by visiting and follow us on Twitter @WinMortgage.


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If It Sounds Too Good to be True…

I am constantly amazed at the various techniques created to target vulnerable people out of their money or identities.  Yet, we are all susceptible to these destructive activities.
In the world of big data, we can be easy targets.  Consider this, on Facebook you can purchase targeted ads called sponsored posts.  For example, you can target your post to homeowners, over 50, within a specific geographical area.  Targeting allows you to market directly to a specific audience.
Someone who I trust and respect recently shared a “sponsored” Facebook post about discounted sunglasses being offered by a famous eyewear designer for one day only, as a fundraiser.  The post claimed that this is the year-end clear out and that all glasses normally priced over $100.00 would be $25.00 for one day only, and all sales would go to charity.  I was fascinated and decided to dig in and see if this offer could possibly be true.
I clicked through to the web site and it all looked to be in order, the logo looked legitimate, the site functioned well, the designs and names of the sunglasses were familiar.  The web site looked genuine to me yet there was something about it all that just felt off to me.  So I decided to invest the $25.00 to get to the truth.
Three weeks later my husband asked me what I ordered from over-seas, confused I found the box and remembered my sunglasses.  They looked like the ones on the site but they were definitely a counterfeit product.  I know because I actually own the same pair that I ordered, you can tell simply by the weight, quality of the materials and the slightly blurry logo on the frame!
Mystery solved, yes it was fraudulent, I think just to sell fake sunglasses, but I am keeping an eye on the credit card statement as well to be sure that there isn’t anything more nefarious going on!
As part of the banking industry we are required to take multiple, annual training classes on many subjects and one of those is social engineering or the types of attacks that can hit you through email, fake phone calls or other communication that comes with a request for a password, or other identifiers.  I am pretty good at spotting a fake, it has become a bit of a game for me.
How do you know when you are looking at the real deal as opposed to a decoy designed to cheat you in some way?
In today’s world of constant non-verbal communication, we think that we are talking with our friends and family when we are posting on social media, and we are.  But when it comes to sourcing a reference for an important transaction, do not believe what you read, even if posted by a trusted friend.  Pick up the phone and have a conversation.  In the end human connection is fulfilling and you can cover more ground and gather more information when talking through a situation with your friends, rather than relying on a social media post for your solution.

We’re here to help you and your buyers do more, learn more and grow more!

About Wintrust Mortgage: Wintrust Mortgage was created to assist in the realization of the American dream of home ownership. Our large volume and the ability to lend in all 50 states make us one of the largest mortgage bankers in the country. In 2015 alone, we originated $4.3 billion in loans. Wintrust Mortgage hosts over 190 retail, operations and bank locations across the country. Wintrust Mortgage is a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank, NMLS# 449042. Equal Housing Lender. For more information visit the company website at, “Like” us on Facebook by visiting and follow us on Twitter @WinMortgage.

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An Offer Is a Contract – All Parties Have To Take It Seriously!

It’s silly season in real estate and that means spring!  Another year of low inventory with many motivated buyers who will seemingly do anything to get their offer accepted on the house of their dreams.  Buyers are signing all kinds of offers.  Some will waive their mortgage and other contingencies, while others may have escalation clauses built.  Such clauses dictate that the seller can accept a higher offer if one is presented.  Some buyers are simply jumping in to compete and then finding themselves in a regrettable situation later.
Recently, we saw all three of these scenarios come up.  This makes me wonder how buyers are being advised and counseled when they are making their offers.
For example, we have a loan approved with just a few final and minor conditions to be met by the buyer.  However, the buyer has gotten cold feet and no longer wants to buy the house.  They ask us if we could decline their loan so that they may get their deposit back.  This is not something we can do.  We have to report to our regulators our pre-qualification process, decline rates and any and all reasons for any decline.  We cannot simply decline a loan because the borrower changes their mind.  “What if I just don’t send in the documents you requested?” the buyer asks.  When you sign a contract with a mortgage contingency you agree to meet all conditions of the mortgage process.  If the borrower never sends in the required documents, we can withdraw the loan after we send out a ‘notice of incomplete’.  This notice gives the borrower a specific amount of time to respond before their loan is cancelled.
The standard mortgage contingency has an ‘apply by date’ to insure that the buyers perform in a timely manner.  This contingency forbids them from saying that they are unable to get their loan approved by the commitment date as a result of them not getting their information to the mortgage company by the dates in the original contract.
The time to make sure that buyers fully understand their contractual obligations is before the offer is made.  An offer is a contract and the purchase and sales agreement is a secondary contract, however once the offer is signed there is no guarantee that you can change the terms when you get to the purchase and sales agreement.
In another situation, we have a set of buyers approved to close on their new home.  There is an escalation agreement in their offer stating that the seller could continue showing the property.  If the sellers get an offer higher than the agreed upon price our borrowers would then have 48 hours to meet the new offer.  So, lo and behold, a higher offer comes in!  The agent negotiates the seller down a bit to keep the current buyers on track, but of course the current buyers are upset about having to pay more.  However, they did sign the offer and the worst-case scenario as outlined in that offer materialized.  Their only choice was to meet the higher price or start their home search all over again.
This same scenario also played out in a precedent setting lawsuit.  In this case, a seller accepted an offer but the buyers didn’t sign the purchase and sales agreement on the date specified in the offer, the seller then accepted a higher offer from another party and the first buyer filed suit and won.  The court determined that the original offer was a contract and had to be honored.
The bottom line is to not take any risks; make sure all parties fully understand what they are getting into when they make an agreement to purchase a piece of real estate.  Be certain that they know what they can and cannot expect as the transaction moves forward and they fully understand their legal obligations in the event they get cold feet.

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Extraordinary Customer Relationships Grow When You Provide Knowledge!


I read recently that the recent drop in interest rates has bumped up the “re-fi population” to 6.7 million borrowers from 5.2 million last month, according to a report put out by Black Knight Financial Services.
How many of those homeowners did you sell a home to in the last 8–10 years? You now have a very good reason to reach out to your successful homebuyers and provide them with this news. For many homeowners, the barrier to refinancing was inadequate equity, a disruption in employment or simply bad timing in the interest rate markets. When rates were lower people were not in a financial position to refinance for many reasons. Still for others, it could simply be a lack of awareness of the financial markets and the current interest rate environment.

Delivering valuable and timely information to your clients is one of the best ways to grow extraordinary customer relationships. In these times of extremely low inventory, the agent with the listing wins every time. Connecting with your homeowners consistently is the best way to stay top of mind when they are considering a move.

However, this information regarding declining rates and rising values could also spark a conversation about listings. Research and anecdotal evidence shows that many homeowners do not have any idea what refinancing options are available to them. They are often unaware of the amount of equity in their home and of their personal buying power. There continues to be so much negative press about the availability of mortgage credit that people who are well qualified to move up don’t believe that they may qualify. You have an opportunity to raise awareness and in the process, generate a couple of listing possibilities!

Timely and value-added communication with customers is key. This simple act of service could help them save money today or on future mortgage payments, which could put them on a path to new housing opportunities. Ongoing conversations with customers bring more value than any recipe card or sports team event calendar ever will.

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Speed = Sloppy = More Work for all in the process chain.

It is busy in the mortgage world.  Rates have dropped enough to spur a refinance boomlet, and the spring market has opened early due to fair weather and The New England Patriots loss. 

As frequently referenced in this post, the mortgage process is exacting.  It requires that all documents match and that the mortgage application is bolstered by the supporting documents.  The appraised value must be supported by the report and the comparable properties and the title commitment should be clear.

When business ramps up everyone gets busy and when everyone gets busy mistakes get made.  Those mistakes require extra work for all involved because there is zero tolerance for sloppiness in the mortgage process.

Recently an appraisal report was submitted for a second home on Cape Cod.  The report was written subject to the utilities being on and verification that those utilities work.  We went to the client on this refinance and they stated to us, “that does not make sense, we use the house year round, while the appraiser was there the heat was on, the lights were on and I gave the appraiser a glass of water out of the tap!”

Apparently there was an error on this report.  It can be a common practice for an appraiser to simply open their software and copy over an old report.  It is not uncommon to see erroneous data on an appraisal report due to this practice.  Now everyone in this transaction is impacted, our processor had to drop everything to call the borrower.  Then the processor had to reach out to the appraisal management company to get the report repaired to contain the correct information.  The appraisal management company had to connect with the appraiser who then had to fix the report and re-upload it into the system to be reviewed yet again.

These types of situations are experienced daily in the mortgage business, from incorrect condo questionnaires to incorrect listing data.  Remember that we in lending are held to a very high standard by our regulators.  We are supposed to have all information 100% perfect, yet we are only humans, dealing with other humans who we depend upon in this process.

In a tightly timed process with penalties that hit if the timing is not met, data has to be right the first time.  Take a few extra minutes up front before you fill in the blank.  Make sure that you have the right data going into the right box.  Rushing through this process increases the likelihood of errors and can create a chain reaction of more work for all in the process chain.  Speeding can cause accidents not only on the road, but also in mortgage transactions.

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