The Wrong Loan Officer Can Get You Into Trouble

Why do I title this article, The Wrong Loan Officer Can Get You Into Trouble? The shady ones don’t always look like this.

I write this because of a phone call I received from a very worried woman who knew that I used to own a large mortgage company.

She had committed loan fraud and that fact was just thrown at her by the company she did the mortgage with. She was terrified over the phone call she had just received.

She was guided into it by her loan officer. At the time it didn’t seem like a big deal to her, as it was explained to her she was just fine, so she thought.

The fraud was this: she and her husband refinanced their primary residence with this mortgage company. The interest rates were great at the time, it was a smart idea, they had purchased the home years ago with a VA loan and the refi paid that loan off.

A month later they went out and  purchased another home using their current VA eligibility.

The events, refi and purchase, started the fraud. Investment properties have different underwriting rules and benefits. One big difference is that there is a higher interest rate on an investment property.

They turned the home they did the refi on into a rental. Now we have the fraud.

I asked her if she had all of the paperwork signed at closing. The answer was yes. I asked if they had signed an addendum warranting that they would remain in the home as their primary residence for at least a year. The answer turned out to be yes.

But…… she said when discussing the possibilities with their loan officer they were guided that they weren’t certain at the time they would be buying another home and renting this one out. They were told that since it wasn’t certain that it would be ok.

Now I refer back to the title of this post, “The Wrong Loan Officer Can Get You Into Trouble.” As far as the Feds go the intent is obvious. They purchased a new home 0 down VA 30 days later. It’s a pretty obvious crime. (Even if they did this months later, it is still loan fraud)

The lender came to her in a panic. The loan officer no longer works for this mortgage company. They must believe that they have some liability. Loans are usually sold to an investor. The investor in reviewing this loan found the fraud and rejected it. The mortgage company is now offering to refinance the fraudulent loan to a non owner loan at their cost. They will lose over $10,000 to make this old loan go away.

I have suggested to them to be cooperative with the mortgage company, it seems like it will suffer the costs to get rid of this fraudulent loan. I also referred them to an attorney that is a mortgage industry expert to guide them through these next days, and hopefully not with future problems.

My advice to you is to always use a loan officer that is personally recommended and introduced to you by a full time real estate agent. There are a few flakes out there and this person found one. There are some great loan officers in the business and they usually work with real estate agents. Real estate agents are demanding. They want loan officers that deliver what was promised, as promised.

Take note on my statement above, “deliver what was promised, as promised.” This is outside of fraud. It refers to delivering your loan on time to stay under contract with a seller. This refers to deliver the terms you were promised. One real estate branch broker sourly told me that, “too many transactions the buyers are told all along, the loan is ok and then at the end, “sorry not ok’.

I always refer my clients to Aaron Morgan, a producing branch manager of Academy Mortgage. (801-560-8162)To follow my proposed procedure, make sure I let him know that you are contacting him.

I use the cute little fraud guy to depict the Wrong Loan Officer by license with PresenterMedia.com

 


Posted on June 4, 2018 at 5:50 pm
Larry Cragun | Posted in Mortgages, Purchasing A Home or Condo, Vendors I Recommend |

The Avenue’s Is A Great Community

From monthly meetings that are engaging to annual events such as the Memory Grove cleanup which took place last Saturday, to the Greater Avenues Street Fair we find another example of the advantages of living in downtown Salt Lake City. First of all, The Avenues Is A Great Community.

Saturday was the Memorial Grove cleanup event. Many of the neighbors turned out with gloves and a strong (some not so strong) back to chip in. It was fun to get to know more of our neighbors and work along side friends we already knew.

Here are a few photos Kathleen took of the event:

Yep, that’s Kathleen and I doing back breaking chores. It was fun for sure and the park is looking great. Below you see one way the park is often used, for a wedding or wedding photos. I am not sure just how happy this bride was about the crowd.

Memory Grove Park is a must visit. It has unlimited access to hiking, you can go for miles. Up the side hill is the State Capitol. Access it by turning off 2nd Ave onto Canyon Road. Canyon Road Towers is at the corner of 2nd Ave and Canyon Road.


Posted on June 2, 2018 at 4:05 pm
Larry Cragun | Posted in Uncategorized |

Salt Lake City Condominiums Near American Towers

Salt Lake City Condominiums Near American Towers. This is an important topic as Windermere will be opening an office next to Mid City Salon. We will be licensing Teresa Bowman and she and I will be focusing on downtown Salt Lake City condominiums. I told Teresa t0day that I have had ab0ut 50 downtown condo transactions in the last two or three years. Teresa owns Mid City Salon and will be making sure that your needs are forwarded to me.  You will get the great service you deserve and that I and Windermere are known for. The office should be ready to go about June 5th.

From their website

American Towers 44 West Broadway Website

The search links in this article pull all active listings in the particular building and in many cases units close by that meet your search request.

American Towers listings. click here

Best location in the city. Half block to Trax, near Gallivan Center. Be where the action is!

Broadway Park Lofts: click here 

Convenient downtown location and only a walk away from the farmers markets, restaurants, and plenty of shopping. 

The Metro condominiums:   click here

Downtown SLC retreat. Walt to the finest eateries, entertainment, & shopping. Steps to Trax light rail and City Library.

The Sterling Building: click here

Originally built in 1905 and completely renovated by one of the best architects in the city as an architectural statement deserved to be in any major metropolitan area delivering that special feeling that you belong.

Uffens Marketplace: click here

Those near downtown condominiums for sale north of South Temple can be searched on this link: click here

99 West South Temple – City Creek – click here

3 properties located in and around City Creek Shopping Center

Let me know if  there is a project nearby or anywhere that you would like to have more complete information provided for your review.


Posted on May 25, 2018 at 8:00 pm
Larry Cragun | Posted in American Towers |

You Can Make The Mortgage Process Go Well

You Can Make The Mortgage Process Go Well. Consider these facts. Today more than ever before you need to be responsible to make your mortgage process go well. Federal Laws changed last week. They affect lenders and Title Companies, as well as you and your agent. Delays in closing are a huge hazard now. The new law is designed to help consumers understand better what they are receiving. There should be no last minute gotchas on rate or fees. That’s the good part. The rougher part is that everyone, including you, need to be diligent with their roles in bringing  your purchase to an on time and satisfactory conclusion

What may excite a borrower is that the automated underwriting can give a quick approval. Yeah baby, you are done, you are approved.

Not so fast.

This is just step one. You have a long way to go to get to the end. It has always been a trek to the end, but with the advent of the meltdown everyone involved in your loan became fearful of making a mistake or being too lenient. This resulted in a lot of last minute issues.

Now I bring up the pressure event – the U Haul is rented and the loan must close on time. Nothing is more problematic than a delayed closing. It can actually be worse than the U Haul issue, closing late can kill the transaction. Sometimes a seller gets remorse, maybe has a better offer as a backup.

You are responsible to provide everything asked for, be it pay stubs, bank statements front and back, everything. So many of my borrowers have been slow, sloppy, even resistant to requests. And hey, your loan officer and processor might have more than your loan to get funded. Push Push push your way around. “What is the status, do you have everything, may I see the list of conditions by the underwriting” are all things you can do.

No matter what your nature, detailed or not, get involved in every detail of your loan. Make sure you see a copy of your credit report. See if anything is fishy. Fix everything fast that needs fixing or explaining. Ask your loan officer if they have a back up plan if trouble arises. I did. Doing loans was pressure packed for me. I laid awake at nights or woke up early in the morning scouring the loans in process in my mind. What if this happens, what will I do? I loved it, but it was grueling. At times I had 11 to 15 loans of my own in process. If you only knew what a gigantic list of details that created.

Don’t lie. The only loan that I had that blew up at the end was not my fault, yet I was the target of blame. The borrower was from Hawaii. Hawaii like Utah, isn’t a community property state. Spouses can buy real property separately. In Washington, where I was working, the opposite is the rule. This borrower – buyer, lied on his application. He said he was single. We came right down to closing and the underwriter conditioned a document to be signed  by his wife. He was furious and wouldn’t comply. “How did you find out I was married?”. Dumb question! He made such a fuss that since I was working for a mortgage company owned in part by the real estate company he pressured the real estate company to fund the loan out of their own capital.

I will never forget the brokers statement. He too was out of step. He said he hated it – that loan officers say all the way through the process; he is approved, he is approved, he is approved and then at closing – sorry he’s not approved. He lied folks, and got caught.

I had another borrower that two days before closing came to me to back out by blaming it on me. He had $5,000 earnest money in escrow. I listened to his accusations which were many. I finally had had enough and said, “listen buddy this is all crap. I don’t know what is the real excuse but you better come clean with me right now. I have done loans for several members of your family, if you don’t come clean that’s it for the whole bunch of you.” He then humbly apologized and confessed that he had his accountant provide us with phony tax returns. I felt compassion for him, for he had already confessed this to his young wife. He said it broke her heart, both in losing this great home and in his actions. I assured him it was better to quit now and lose his earnest money than proceed with committing a crime. His conscience was his buddy even though the consequences were painful.

I once received a call from an underwriter. It was over one of our loan officers who had submitted his own loan. She tactfully said she was sending the loan back and that I should confront him over the income he claimed. I did. He blew up and threatened my with bodily harm that I should suggest that he faked his income. He said that he had filed amended returns and how dare I insult him. He was fired that moment and I informed him the underwriter had pulled a summary of all of his tax returns and I had copies. They did not match his application and he could leave now quietly or my next call was to the Feds.

He left.

So please do all you can do to make sure things go will with that you haul you have ordered. It’s on your shoulders too. Do it all, do it immediately, and do it right.


Posted on May 24, 2018 at 4:56 pm
Larry Cragun | Posted in American Towers, Larry K Cragun, Purchasing A Home or Condo |

Ah The Great Life – Living In The City

So I hop over to Harmons City Creek on Friday about lunch time and what do you know – it’s rockin! Great Music at the back street entrance.

2    People hanging out enjoying the fun and the sun, and obviously each other.

And food, all too tempting food on the Barbie.    3

4

And did I partake? No way, Kathleen fixed Italian for lunch.

But I did hang around for the upbeat music.

 

Larry K Cragun – Windermere Real Estate

Condominium and Residential Professional

801-244-1666  –  larry@cragun.net


Posted on May 23, 2018 at 4:50 pm
Larry Cragun | Posted in Larry K Cragun, Shopping, Windermere Real Estate |

What? They Won’t Allow Your Puppy? No Dogs No Cats?

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Soon after Kathleen and I moved into our condominium at Starpoint I noted the fact that we had to put up with rules and regulations as well as the actions of our neighbors.  I coined the phrase, “welcome to the condominium project”.

There were no pet restrictions. As a result the common areas were the potty place for some of our inconsiderate neighbors. That courtyard smelled badly after awhile and we had to give up worrying why the plants were dying and the ground dug up. What bothered me the most was when a new next door neighbor moved in. I met her in the elevator, I should say I met her and her dog in the elevator. “Is that a pit bull I asked”. ‘Yes, but she is harmless was her answer”. OK, how should I react? I have heard the pit bull tales. The no animal restriction policy got so carried away that I say no wonder some properties don’t allow them.

But they restrict cats too? How come these harmless loving animals are restricted? Note, I am a cat lover. We had two cats that lived to be over twenty. We couldn’t part with them. Waiting for them to die to move, and then the emotional pain of them getting so bad they had to be put away was terrible. But rules are rules, probably just some of the rules that may bug you when “joining the condominium project”.

Since it’s a common question, are pets allowed I am going to publish the Salt Lake City Condo developments that do and don’t allow pets.

I am referencing those which begin at $200,000 in price. Most under that price do not have pet restrictions.

Do allow: (Note: Some allow but with size, number of, or other restrictions. Some allow cats but not dogs). Contact me if you want to sort out what would work  in your situations.

Allow:

  • The Presidential Club
  • Northridge Heights
  • Belmont Downtown Condos
  • Brickyard
  • Broadway Park Lofts
  • Broadway Tower {Under 20#’s}
  • Country Club Ridge
  • Meridien
  • Oak Crest
  • The Metro
  • Avenues Condo
  • The Presidential Villas
  • Parc Gateway
  • Parc 7
  • Liberty Park Place
  • One and Nine
  • Salt Creek Condo
  • Mayflower
  • Millcreek Terrace
  • Millcreek Hollow {Under 20#’s}
  • Patrick Lofts
  • Old Farm
  • Highland Springs
  • Laurelhurst Condo
  • Highland Springs
  • Monte Carlo
  • Northpoint Estates
  • East Point Lane
  • Urbana on 11th Condo
  • Wasatch Towers
  • Westgate Lofts
  • Wolf Hollow

Don’t allow:

  • American Towers
  • Aztec
  • Bonneville Towers
  • Canyon Crest Condo
  • City Crest
  • City Creek Regent
  • City Creek Richards
  • Canyon Road Towers
  • Eagle Springs West
  • Garden Towers
  • Governors Plaza
  • Terrace Falls
  • Forest Glen
  • Trevi Towers
  • Royal Oaks
  • 838 Condos
  • Zions Summit
  • 99 West
  • Wilshire Condos
  • Forest Glen, maybe small with a loophole

This is not complete yet as some of those listed in the MLS do not state yes or no to pets. I will work on updating this information as fast as I can.


Posted on May 22, 2018 at 6:26 pm
Larry Cragun | Posted in Pets |

If You Are Going To Use Zillow You Better Hire Zorro, Revisited

This article is also about checkmate. If You Are Going To Use Zillow You Better Hire Zorro, Revisited

I used to write one of the top 5  nationally ranked real estate blogs. An article I wrote on this blog is the theme of this post, as well as the title.

Many years ago I was in attendance at a real estate industry, Inman News “Connect” Conference, when the Zillow team with great fan fare announced their presence. To the internet world, Zillow was an instant hit. Their founding CEO had made a big name for himself in the online world by disintermediating the travel industry, basically terminating the need for most of the travel agencies. This new .com took off like a rocket as many people, buyers and sellers thought it might be cool to eliminate real estate agent fees.

Not many months later I published an article with this title: “If You Are Going To Use Zillow You Better Hire Zorro.” This tongue in cheek article was based on a couple of issues I was experiencing that the new Zillow was creating in the marketplace. It made me famous. KING 5 TV soon called and wanted to interview me for the evening news. I thought, “how cool”.

The point of the article was that Zillow’s algorithm was way off and people, mostly buyers, were using Zillow to determine what they felt they should offer for a home. I did make the evening news, as did founder Rich Barton, who admitted on the show that they could be off by as much as 7% up or down. Seven per cent high or low meant that really they could be 14% off. I don’t know the formula for their computing values, but at the time, and probably now, it includes the details available in the County assessor sales records.

So, if you are looking at a home on the market for $300,000 and Zillow was off by 7%, that is a $21,000 disparity.

Frustrated with sellers contacting me and telling me my listings were over priced I began to become frustrated with the holy Zestimate. Buyer after buyer challenged the listing price, not only of my listings but many that were on the market.

Here is the text from Zillow.com regarding their zestimate®: The Zestimate® home value is Zillow’s estimated market value for an individual home and is calculated for about 100 million homes nationwide. It is a starting point in determining a home’s value and is not an official appraisal. The Zestimate® is automatically computed three times per week based on millions of public and user-submitted data points. 

In many markets the County Records are an obvious important data source. In my old market, King County, Washington, every transaction had to be recorded with an actual sales price. Each sale had a significant sales tax and the County  wasn’t about to lose that revenue. One could not overlook recording the sale and sales price. Zillow had access to those records. It is reasonable that over time a Zillow could create a pretty reasonable estimate of what neighboring homes were creating as value. Of course some important variables are missed this way, but as time went on and recordings were published, it cold be better for those interested.

As mentioned, I do not have privy to their formulae. It has to be significant to have the local MLS data. Herein lies what prompts me to revisit, “If you are going to use Zillow you better hire Zorro”. Two important obvious data points are at play in Utah, and perhaps in other markets. The first is that Utah is a non disclosure State. In other words when a sale is recorded at County level the sales price is not disclosed. I don’t agree with the policy, it makes it difficult for appraisers, and therefore borrowers and sellers, if they cannot obtain the sales prices of comparable properties. So what one might say, they have access to the MLS records. That isn’t always the case. For example, in Canyon Road Towers and Terrace Falls condominiums much of the sales were consummated by agents with a Utah License, but they are not members of the MLS. The quantity of these unrecorded non MLS sales has dropped significantly in Canyon Road Towers since I became licensed in Utah. A couple of years ago I came across an appraiser in Canyon Road Towers. I asked him how he could comp the building. I knew of sales that weren’t public. He couldn’t use them so he had to do what was in fact a faulty appraisal. He had no choice as he had no information. I told him I knew some of the buyers and could possibly obtain a settlement closing statement for him. He declined, he couldn’t use them.

So, in Utah, Zillow has less information to work with, important information.

OK, so they have MLS info and that is important, right? Now we come to the point that triggered me revisiting this topic. I recently closed on selling a condo to a savvy person moving to Salt Lake City from Washington DC. She shared with me her frustration that listings she wanted to see were in the MLS, including on my website, but not on Zillow. It seemed to bother her. There is a reason for this fact. Some MLS’s, including ours, have decided it is the right or responsibility of the agent or brokerage that secured the listing to allow the data to be published on Zillow. Actually Zillow, Trulia, or any site other than http://UtahRealEstate.com/ or their member agent sites like mine. Instead of a listing being automatically uploaded it is optional. This is why my client wasn’t finding listings she was interested in on Zillow.

‘Zillow Zorro’

Herein lies a moral debate. On one hand does a listing agent owe the seller or buyer an obligation to market their listings on these sites. Zillow has purchased Trulia and more informational websites). On the other hand, the agents are giving these sites the ability to use their hard work and make billions. They may sell things as a lead, or advertise paying agents alongside their publication of the listing. Trulia was purchased for Billions. Having this data is worth billions, but not to the listing agent. According to Brad Inman of Inman news it is now checkmate for agents with this Zillow Trulia acquisition. Checkmate in that agents are going to have to pay through the nose for leads that come off of Zillow/Trulia. The claim here is that too many of the consumers will come first to these sites and then in fact, in a way, the agent is truly disintermediated as were the travel agencies. The difference here is that the savings to consumers is unlikely. Typically the lead cost will be a significant new cost the real estate professionals will or do incur as a cost of doing business. Rare will there be a savings to the consumer. Also, it isn’t necessarily a fact that the consumer will be sold as a lead to a competent agent. It his he or she agent who needs to or is willing to pay to play that is connected to the customer. Whichever stance you take, that these sites are pilfering from the real work of the professional that did the grunt work, or that the dotcoms or their site visitors have the right to expect free access to the data on these sites, the fact now remains that all of the data is not published on all websites. In Utah and other States the only place to find all of the listings for sale is on the MLS sites. It’s a fact, that it is now optional to submit listings to other non MLS websites, and that real estate agents can choose to contribute to “checkmate” or not. What led to my clients frustration is many are saying that they won’t submit to aiding and abetting their financial intermediation, or checkmate, by not publishing them. To her, too often, the listing that she wanted to see on Zillow just wasn’t there.

By the way, being famous on TV was not so fun. The interview started off friendly and again I thought that this was cool. The interview then took a sudden turn. The reporter was a young guy who loved the idea of Zillow. I wasn’t prepared as he was. I found myself not such a great interview and I was beginning to hope no one I knew watched the news that night. Wrong again, I received a lot of, “hey I saw you on TV last night”. It turned out that perhaps I was the one who should have hired Zorro.

‘Zillow Zorro’


Posted on May 20, 2018 at 4:55 pm
Larry Cragun | Posted in Statistics | Tagged

What About Investing In Real Estate? – A Series

What Investing In Real Estate Part 1 Duplex and/or fourplexes. I’m not into encouraging your going this route. Click here for the article

What Investing In Real Estate Part 2. own your real estate free and clear or have it in debt as close to 100% as possible CLICK HERE FOR THIS ARTICLE

What Investing In Real Estate Part 3 Buying now that rental property as the home you will move down and live in. Purchase a second home for the kids college. Click here for that article. 


Posted on May 15, 2018 at 5:53 pm
Larry Cragun | Posted in Uncategorized |

Sales Prevention Program #84: Sorry It’s Rented

It really is a bear of a situation, being an agent selling a home that is rented. Of course you want that income stream. The fact is that it will impede what is perhaps the right buyer from finding it.

In many cases it is worse on your pocket book to have it rented and for sale at the same time. I say this because the longer the home is on the market the more likely it will be that you lower the price. I don’t and won’t encourage that, but it is a fact.

In almost every price range and location there is competition. Your home isn’t the only one to choose from. If you throw any hurdle in the way of showing your home it is possible the right buyer might miss it. Maybe I should use the work probable, not possible. Rented homes almost always need appointments. Some renters don’t cooperate. Often the rule is at least 24 hour notice. There is one condo currently for sale in downtown Salt Lake City that only allows showings once a month. It’s pretty ridiculous to even have it on the market. In lesser extremes it’s still a problem.

Having your home presented for sale is important. I believe in staging it as practical as possible. I showed a home this week that was rented and kept in sloppy condition. Hey the renter doesn’t care, it wasn’t their home. Instead of staging this home was, shall we say, destroyed. In many cases the buying or not buying decision is made the minute they walk through the door. It is an emotional decision. To some buyers the condition affects the decision.

Sales Prevention Program #84: Sorry It’s Rented. Do you like snakes? I showed one rented home that had a python to greet you as you entered the living room? We did a fast exit out of the front door.  I wonder if the home ever sold.

We showed one home where the renter was present. Hey “no problem” they said. We were then treated to a clear explanation of everything that was wrong with the place.

Do you like smells of the unusual nature? We have been subjected to them. Renters rarely care, so there.

Of course it’s a financial situation. My suggestion, if you really want it sold, wait until the renter is gone to put it on the market.


Posted on May 14, 2018 at 7:44 pm
Larry Cragun | Posted in Sales Prevention Programs | Tagged , , ,

Featured Home Of The Month – May 2018

crt1.pngFeatured Home Of The Month – May 2018 123 E 2nd Ave #401 downtown Salt Lake City, Utah. Canyon Road Towers. In addition to the number of bedrooms, this corner 3 bedroom condo has the two most important features when it comes to price and popularity; great condition and view. Location helps the value but when comparing units within a building, especially an older building, these two things can make a huge difference in value.

Canyon Road Towers was built in 1976 as was Zion Summit. Many, should I say most, are in original or near original condition. I have seen people have to spend over $100,000 to upgrade one of these condominiums. Many have spent less but $50,000 to $80,000 is typical.

This featured home of the month for May has been nicely updated. The fireplace is rally quite unusual and quite nice. It is in great condition.

The view is surprising for being on the 4th floor. It is a corner unit, facing West and North. The view is the setting to the West. Some may say the higher the better. In this case you can be sitting on a couch with a beautiful setting to see the park and Temple Square. I refer the West view on both 4th and 5th floor units as the setting. I actually prefer these views to those on the higher floors, even the 13th floor. Yes, they are higher up but the higher ups miss the setting.

To the North the view is to the Capitol. A home is in this view but at night the Capitol building lights up and is just great.

The parking stall for this unit is indoors and one flight of stairs down. (3rd floor parking level). It’s real close to the door you exit this floor, easy and convenient. The storage unit is just a few steps from your parking stall.

Aha, you can walk through the condo on line. Here is a link to a 360 Matterport tour click here.

This tour will save you time, if you like it on line you will love the visit. If you don’t like it online, you won’t waste time with an unnecessary visit.

It is rented until the end of July for $1850.00 per month. The tenants are very cooperative. I do need an appointment to show it.


Posted on May 12, 2018 at 8:43 pm
Larry Cragun | Posted in Canyon Road Towers, Condominiums, Featured Properties |