Understanding the VA Home Loan Benefit

Today is the day we’ve set aside to honor those who have served our country through military service.  Each of us, in our own way, has the ability to give something to show our appreciation.  Because financial education is so important for all aspects of our lives, I’m sharing my insight to clarify information on using the VA benefit of home financing.

Loans guaranteed by the U.S. Department of Veteran’s Affairs (VA loans) help service members, veterans, and eligible surviving spouses become homeowners. VA home loans are provided through authorized private lenders, such as banks and mortgage companies, and are not directly available through the VA. For information on eligibility, supporting evidence, and instructions for application to receive confirmation of benefit eligibility to present to your lender, visit the Certificate of Eligibility.

VA home loans can be used to:

  • Buy a home, townhome, or a condominium unit in a VA-approved project
  • Build a home
  • Simultaneously purchase and improve a home
  • Improve a home by installing energy-related features or making energy efficient improvements
  • Buy a manufactured home and/or lot


Tip: If VA financing is for you, it’s important that you seek and connect with both a realtor and a mortgage professional that are fluent in the workings of the VA home loan eligibility standards. If you fall into the hands of someone who isn’t schooled in the intricacies of VA financing, you may find yourself locked out of an opportunity.

When reviewing your loan program options with your lender,  be sure to tell them if you may qualify for VA home loan benefits as nine times out of ten, this program will be the best priced, require the least out-of-pocket monies and offer the most flexibility in underwriting standards. As complex as mortgages can be, there are many additional intricacies that apply exclusively to VA loans. Here are some clarifications over common misconceptions about VA loans:

  • You don’t have to be a first-time homebuyer
  • You aren’t limited to a maximum purchase price of $417,000 (check loan limits in your area)
  • You can reuse the VA benefit through reinstatement
  • VA-backed loans may be assumable


The Benefits of a VA Loan

  • Zero down payment is required for a purchase transaction when the sales price doesn’t exceed the appraised value, the amount financed doesn’t exceed four times your entitlement benefit, and the loan amount is $417,000 or less. In cases where the valuation is less than the sales price, you can choose to proceed with the purchase at the higher price as long as you make up the difference between the sales price and the appraised value.
  • There is no requirement of monthly mortgage insurance premiums.
  • VA loans typically provide the lowest total monthly payment when compared to FHA financing and conventional financing with mortgage insurance.
  • There are no prepayment penalties.
  • They are assumable by a buyer. Assumability means that the buyer may be eligible to take over payments on the VA loan regardless of whether they are civilian or military. A word of caution: Unless you obtain written approval from the VA (not the mortgage servicer), a veteran will remain liable on the assumed loan even after the sale of the property. Be sure to go through this extra step to protect yourself against possible future financial mismanagement by the buyer.
  • Up to 100 percent of the valuation may be available on a rate and term refinance.
  • Up to 90 percent of the valuation may be available on a cash out refinance.
  • Financing is available with credit scores as low as 620.


Tip: When presenting an offer for purchase, ensure the agreement includes an addendum for the VA Option Clause. Here’s a sample of a VA Option Clause:
“It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest money or otherwise be obligated to complete the purchase of the property described herein if the contract purchase price or cost exceeds the reasonable value of the property established by the Department of Veterans Affairs. The purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs.”

Understanding the Intricacies of VA Loan Guaranty

The VA loan guaranty is insurance that the Department of Veteran’s Affairs provides the lender.  The VA guarantees a portion of the loan, which enables the lender to provide you with more favorable terms. Guarantee simply means the lender is protected against loss in the event of a foreclosure and replaces the protection the lender would normally receive by requiring a 20 percent down payment and/or private mortgage insurance. This guarantee allows the veteran to obtain more favorable financing terms.

VA Funding Fee

The VA charges a funding fee to pay for this insurance. The VA funding fee is required by law and can cost you anywhere between zero and 3.3 percent of the loan amount depending on your eligibility status, whether you’ve used your VA benefit in the past, the size of your down payment (if any), and whether you qualify as a service-connected disabled veteran or are the surviving spouse of a veteran who died in service or from a service-connected disability. The fee is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduces the cost passed on to taxpayers. When refinancing a VA loan with a new VA loan, the new loan is eligible for a reduced funding fee of .5 percent.


The VA provides each qualified veteran with at least $104,250 in entitlement and extra entitlement in select high cost counties as determined by HUD. Entitlement requires that 25 percent of the loan amount be guaranteed to the loan. With that, a portion of the entitlement is charged to the loan as a guaranty to the lender in the event of default. All qualified veterans start out with $36,000 in basic entitlement and $68,250 in bonus entitlement or $120,375 bonus in Alaska and Hawaii. With the basic amount provided, the veteran receives $104,250 in entitlement and we count this as 25 percent of the guaranteed loan amount of $417,000. With all bonuses available, the maximum guaranteed loan amount can be as high as $1,500,000. The VA provides its yearly updated list of home loan limits online.”

For example, the 2015 VA loan limit for Miami-Dade, Florida, is $417,000. This means that if the veteran has full entitlement, the VA will provide a 25 percent guaranty on the loan up to $417,000. If a veteran has a contract to purchase a home in the amount of $480,000, the lender may require the veteran to make a down payment of 25 percent of the $63,000 difference, which would be $15,750, providing the lender a full 25 percent guaranty. In the same example, a borrower not using VA benefits and instead opting for using a conventional loan product, may have to place a traditional down payment of 20 percent of the total purchase price which in this case, would be $111,000.

Understanding entitlement benefits can be a little tricky. If a veteran purchased a home using his VA entitlement (in full or in part), the mortgage on that loan is assigned a portion of his entitlement as guaranty. Because VA loans are assumable, a veteran can sell a property and have the existing VA mortgage assumed by the new buyer. If that new buyer is an ordinary citizen with no VA entitlement benefits, the seller’s VA entitlement stays with that mortgage and the veteran is not released from liability. If on the other hand, the new buyer is active military or a qualified veteran and has entitlement benefits that he can assign to the existing VA mortgage, the seller can take back his entitlement and be released from future obligations on the existing note. With release, veterans can use the home loan benefit multiple times. Release is requested through the VA.

Restoration of Entitlement

Veterans can have previously used entitlement restored to purchase another home with a VA loan by completing VA Form 26-1880 and submitting a request through the VA Eligibility Center if one of these things happens:

  • The property purchased with the prior VA loan has been sold and the outstanding loan has been paid in full.
  • The property is sold to a qualified veteran-transferee (buyer) who agrees to assume the existing VA loan and substitute his or her entitlement for the same amount of entitlement that was originally used by the veteran seller.
  • If the veteran has repaid the initial VA loan in full but has not sold the property purchased with his initial entitlement under a VA loan, he can still place a request for restoration and use his restored entitlement to gain the benefits of a new VA loan.

Condo Project Approval

If VA financing is the only way to go for you, be sure to not waste your valuable time by selecting a property that is not eligible for financing with a VA guaranty. Resale of existing homes doesn’t require any special approval, however, new construction, condos and PUDs will. Prior to 2009, if a condominium project was FHA certified, the VA would accept the FHA approval for VA loans. As of December 7, 2009, the VA no longer accepts newly added FHA condominium approvals in lieu of an independent VA approval. FHA and VA maintain separate approval lists on their respective websites.

Tip: Narrow your property search by selecting a condo project, planned unit development, or builder of new construction that is already on the VA approved list before you enter into contract. You can search the VA database at Veterans Information Portal Condo/PUD Search Tool (https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch).  Searching this site is not exactly user friendly.  You will find that city names are abbreviated and the system is not searchable by zip code. For example, a search for condos in Rancho Santa Margarita, California, has four results; however, a search for Rancho Santa Ma, California, returns twenty-one results. Projects can be listed under original tract numbers, parcel maps, or lot lines, and the project name is often abbreviated. This can preclude the searcher from finding accurate results.  Once you locate your community on the search site, you will find one of three statuses:

  • Accepted without conditions: These communities are 100 percent accepted for VA loans and lenders can use the condo ID with no issues.
  • HUD accepted: This community was accepted under the pre-2009 reciprocity agreement with HUD where FHA approved projects were automatically eligible for VA Guaranty. For the most part, these communities are still accepted by VA, however it is recommended that the lender call the regional VA office that is assigned to the state where the community is located to verify. Current FHA status is not relevant to HUD-accepted VA designations.
  • Unaccepted: VA loans are not permitted in these communities.

Refinance Transactions

VA loans aren’t exclusively for purchase transactions. A VA Interest Rate Reduction Refinance Loan (IRRRL) is a VA-to-VA loan, meaning you are only eligible for this loan program if you are refinancing an existing VA loan into a new VA loan. An IRRRL requires less documentation that provides for quicker loan decisions and carries a lower VA funding fee limited to .5 percent. When considering an IRRRL, keep in mind:

  • Only the veteran and their spouse may be on loan and title.
  • Nonoccupant co-borrowers are prohibited.
  • Co-borrower must be married to the veteran. (Same-sex marriages are now allowed in certain states.
  • The VA must approve eligibility prior to submission to underwriting.)
  • In the debt-to-income calculations, we must include childcare expenses for all children under age twelve.

VA Jumbo Loan Program

The VA limits the loan amount it guarantees, but that does not mean you can’t buy a home that is valued at greater than your full entitlement benefit insures.

For counties where the VA maximum loan amount is $417,000:

  • You don’t need to make any down payment on the first $417,000.
  • When the purchase price is greater than $417,000, your lender may require only a 25 percent down payment on the amount that is greater than $417,000.
  • For loan amounts between $417,000 and $1,000,000, you aren’t able to finance the funding fee, so it must be paid in full at closing either by you or by the seller.


In counties determined to be of high cost by HUD, when the VA loan amount exceeds $417,000, the following applies:

  • You don’t need to place a down payment on the portion below the high cost county loan limit.
  • You will need to place a minimum down payment of 25 percent on the portion of the loan amount that exceeds the high cost county limit.
  • For loan amounts exceeding the high cost county limit and up to $1,000,000, you aren’t able to finance the funding fee so it must be paid in full at closing either by you or by the seller.


Additionally for any VA jumbo loan that exceeds the county limits set by the VA, the following overlays apply:

  • Minimum credit score of 640 for loan amounts above $650,000
  • Manufactured homes are not eligible
  • Two-to-four unit purchase transactions are capped at $417,000
  • Only fixed rate loan products are allowed

To connect with a loan officer and/or Realtor that knows and understands the intricacies of the VA Loan Benefit, seek persons who identify themselves as Military Housing Specialists.  Gain a referral to a local mortgage loan originator or realtor by asking some of your comrades.  Or, seek assistance from one of many public offices available to support service members and veterans.  Here are a few suggestions to help you on your quest:  Veteran’s Service Officers, USO, USA Cares, American Legion, and AmVets.

Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.
Licensed and registered mortgage loan officer with NMLS id: 372427

Under TRID, Can A Lender Review Loan Documents Prior to Issuing a Loan Estimate?

As part of the implementation of the final rules of the Dodd-Frank Act, one of the most contested issues regarding the changes under the Truth-In-Lending and Real Estate Settlement and Procedures Act  Integration Disclosure (aka TRID) is the question of whether or not a lender can review loan documents prior to issuing a Loan Estimate. The Consumer Financial Protection Bureau has issued clarification on this and many other questions that lenders, realtors, closing agents, and borrowers have through the Federal Reserve System’s audio conference series on consumer compliance issues that can be found here:  Index of TRID Questions Addressed During Webinars-2.

The short answer to the above question is yes.  A lender CAN review loan documents prior to issuing a Loan Estimate if the borrower volunteers the information.

Borrowers:  When shopping for a home loan, ask your loan officer for a Pre-Application Cost Estimate for any loan program you wish to consider.  This is non-binding to the lender and allows you to view different options prior to deciding which loan program, rate, and terms are best for you.  Information quoted is based on many assumptions including:  loan amount, intended occupancy, credit score, property type, valuation, timing of rate lock, and whether or not your debt-to-income ratio falls under 43%.  Changes to any of these assumptions may result in changes to quoted terms or access to loan programs.

Lenders:  If you haven’t programmed Pre-Application Cost Estimates for your loan officers to assist borrowers in their selection process, you’re behind the 8-ball and may be exposing yourself to unnecessary compliance and fair lending risks.   Also, take a moment and remember when you were buying your first home.  Didn’t you want to see all the closing costs in writing before you made your buying decision?  Before you gave a stranger your social security number?   Allow your LOs to provide the proper tools for borrower decisioning and train your LOs to go over the above mentioned assumptions.  With a clear explanation of risks, an educated borrower will appreciate the lesson and identify you’ve earned their business.

Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.
Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors

6 Things Great Presenters Do Very Well

Fear of public speaking is the most common of all phobias. It’s a form of performance anxiety where a person becomes very concerned they’ll look visibly anxious. Because we are all—at some point—required to speak to more than three people at once, I thought I’d share some of the things that have stuck with me that great presenters do consistently.

  1. Be Positive. No matter what horrible industry changes are coming up or grave statistics are being shared, great presenters always deliver the news with a positive spin.
  2. Have an Agenda. They know what they are going to talk about in advance so if they lose their place (as sometimes we humans do) they easily find their way back.
  3. Blow off Gaffs. Shit happens. Great presenters don’t let themselves get all flustered when something goes wrong. They laugh at themselves when they trip over a cord or make light of the projector that just blew out a bulb to which they have no replacement. No sweat. They improvise and move the presentation forward.
  4. Stay on Topic. Now here’s one that can be a little bit tricky. Great presenters want their audience to stay engaged and they’ll throw out a topical question here and there to make sure everyone’s on the same page and that’s ok. But taking an audience members question mid-presentation can ruin their creditability and here’s how. The audience member usually has a very specific question to ask and is rushing through it because they are probably a little bit nervous about speaking publicly so they leave out important context. Without proper context, a presenter may inadvertently provide an incorrect answer and lose the attention of the rest of the audience. A great presenter will defer all questions to the end and for those that require more context, take them offline.
  5. Follow-up. People don’t carry encyclopedias in their head. Sometimes, a valid question requires some thinking. Great presenters will tell the audience member just that, and then, they actually follow-up.
  6. Request Feedback. Great presenters welcome feedback. As a matter of fact, they highly value constructive feedback. If they were great, tell them what about their presentation had you engaged. If you felt the presentation was a waste of your time, tell them how the information they presented differed from what you were sold.


Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.
Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors

7 Ways to Get from Contract to Closing Faster

Beginning October 3rd, they’ll be a new sheriff in town and his name is TRID. Who is TRID and why do you need to know his role?   The Truth-in-Lending Act and the Real Estate Settlement and Procedures Act are being integrated into new loan disclosures and updated timing requirements so borrowers will be better prepared for mortgage loan closing by having three business days to look at the final closing costs on their real estate transaction.


This transparency is awesome for the housing market.


But in an industry where timing is everything, loan execution (the amount of time it takes from loan application to loan funding) is being compressed. The TILA/RESPA Integration rule is making realtors, lenders, and closing agents work more cooperatively to ensure you get to close on your new home by contract closing date. Here are 7 things buyers, sellers, realtors, lenders, and closing agents can do to support an effortless transition into this new landscape.


  1. Buyers: Get your financial house in order. Having organized and current financial records scanned into PDF format is a critical necessity in today’s digital world.
  2. Sellers: Have a home inspection completed before you list your property for sale and repair the nuances that will delay a buyer from closing on their loan.
  3. Realtors: Be sure to maintain solid connections with at least four different mortgage professionals representing the different mortgage origination options. You’ll need one of each from: a major bank, a community bank, a nonbank lender, and a mortgage broker.   Not all loan programs are built the same and buyers rely on you for recommendations to lenders who can work with their particular situation.
  4. Closing agents: Get your lien searches done early on and issue title commitments as quickly as possible. Don’t ruin your reputation by holding off until a lender’s loan commitment is issued. Invest in your business and avoid critical delays.
  5. Have a 360-degree view of your transaction on a weekly basis to include the buyer, realtor, lender, and closing agent to ensure everyone is on task and to address any potential issues as they arise. I would venture to say that most everyone has some sort of smartphone or tablet they touch over 25 times in a day. Manage expectations by using the Tasks, Notes, and Events features to track interactions at every point in loan execution.  Maintain the target dates and never let a deal lose momentum.
  6. Before writing a condominium purchase offer that is subject to VA or FHA financing, be sure to check if the condominium project is eligible for VA or FHA financing.
  7. Buying a property in an area that is governed by a homeowner’s association? Be sure to review the financial soundness of the association as this will impact which loan programs your eligible to receive and may impact the long-term appreciation of your investment.  Have the association complete the HOA Project Questionnaire as soon as possible and deliver it along with the requested project financial documentation to the lender.


Sylvia M. Gutiérrez is author of Mortgage Matters: Demystifying the Loan Approval Maze. RealWorks Press: 2015. Available at Amazon, Barnes & Noble, iTunes, and independent booksellers everywhere. Distributed by Ingram.

Licensed and registered mortgage loan officer with NMLS id: 372427
Diversity & Inclusion Co-chair, NAMB – Association of Mortgage Professionals
Government Affairs Chair, South Florida Mortgage Bankers Association
Associate Member, National Association of Real Estate Editors



Goodreads Giveaway: Mortgage Matters

I’m excited to share with interested Goodreads Users five advance copies of my upcoming release titled, Mortgage Matters: Demystifying the Loan Approval Maze. In return, I’ll ask that once you’re finished reading it, you’ll post an honest review on Goodreads and then again on Amazon when the book is released to the general public on June 8, 2015.

Winners will be selected by Goodreads on May 12th. If you’re not selected, don’t fret. Here are some other options for content:

  • Sign-up for my newsletter (link at the end of this page) to receive notification of additional giveaways or shared content on the mortgage approval process.
  • Follow the Facebook Book page
  • Follow me on Twitter 

Goodreads Book Giveaway

Mortgage Matters by Sylvia M. Gutierrez

Mortgage Matters

by Sylvia M. Gutierrez

Giveaway ends May 12, 2015.

See the giveaway details
at Goodreads.

Enter to Win

Are Realtors ready to explain the implementation of the 2015 TILA-RESPA Integrated Disclosure Rule to homebuyers?

According to a recent survey conducted by Wells Fargo, the answer is a resounding “No.”

Here’s a primer…
As part of the implementation of the final rules of the Dodd-Frank Act, there will be a combination of various RESPA and TILA regulations to create all-new disclosure documents designed to be more helpful to consumers, while integrating information from existing documents to reduce the overall number of forms.

Implementation of this new rule impacts two processes of the mortgage transaction and affects everyone involved in real estate and goes into effect October 3rd, 2015*. As Realtors are typically the ones who have the first interaction with homebuyers, its important that they are provided with educational resources to clarify the impact these changes will make upon borrowers in their home loan shopping process and with the scheduling of loan closings when the rule’s implementation can potentially require last minute negotiations for sales contract extensions.

Key Features of the Integrated RESPA/TILA forms include:
-When applying for a loan, the new Loan Estimate (LE) document replaces the Truth-in-Lending Disclosure (TIL) and the Good Faith Estimate (GFE).
-At loan closing, the new Closing Disclosure (CD) replaces the Final TIL and HUD-1 Settlement Form.
-Loan applications taken prior to October 2015*, require the use of the traditional GFE & HUD-1. As such, lenders will be telling closing agents for months to come whether to use the HUD-1 or the new CD at loan closing.

In essence, consumers will receive one document instead of two and implementation of the rule will expire the traditional Good Faith Estimate and the HUD-1 Settlement Form for certain loan transactions, but not all. These rules apply to most closed-end consumer mortgages. They do not apply to home equity lines of credit (HELOCs), reverse mortgages, or mortgages secured by a mobile home or by a dwelling that is not attached to real property (i.e., land). Oddly enough, for these loans, the old forms will continue to be used which will create a slew of issues for both lenders and settlement agents.

The Consumer Financial Protection Bureau (CFPB) governs implementation of the rules which define a loan application as the collection of these six items: 1) borrower name, 2) borrower Social Security Number, 3) borrower income, 4) property address, 5) estimate of property value, and 6) mortgage amount requested. Once these six items are collected, lenders are not permitted to require other items before issuing a Loan Estimate, as had been allowed previously before issuing TIL disclosures and/or GFEs.

The Loan Estimate
The Loan Estimate (LE) has been designed as a comparison tool intended to provide financial uniformity for borrowers with which to shop different lenders and aims to provide them with a better way to understand the information being given. Uniformity of the LE throughout the marketplace also applies to timing. The LE must be delivered to the borrower within three business days of taking a loan application. No fees can be collected and no Intent To Proceed (ITP) can be requested until an applicant has received the LE much as is required in today’s operating environment with the Good Faith Estimate.

Effects on Implementation and Unintentional Consequences
In the shopping phase of the mortgage lending process, a borrower traditionally expects to collect various pre-application cost estimates to view loan program options and these cost estimates can then be used to compare the same offerings from different lenders. These estimates are non-binding to the lender because they are based on certain assumptions which include:
-credit score
-property type (single-family, condo, PUD, number of units (1-4)
-value of property
-loan amount
-intended occupancy (owner-occupied, second home, investment)
-debt-to-income ratio (DTI) <= 43%
-date and time of pricing request

A fault of the proposed LE is that it doesn’t list all assumptions the lender has made in its calculation of pricing for clarity of comparison from one lender to another.

To provide a pre-application cost estimate, a lender needs only three of the six components that define a loan application – borrower name, estimate of property value and mortgage loan amount requested. Therefore, providing pre-application cost estimates does not trigger the issuance of regulatory disclosures for loan application.

Today, there is no rule in existence that prohibits a lender from issuing of a pre-application cost estimate prior to a borrower making full loan application. After August 2015, again, there is no rule that will prohibit this activity. Post August 2015, a pre-application estimate is prohibited to look like either the new LE or the existing GFE and will need to include specific language that it is not to be considered an LE.

Overall, the Loan Estimate is intended to give consumers more helpful information about the key features, costs and risks of the loan for which they are applying, but here’s the thing… If lenders begin using the LE in place of designing pre-application cost estimates and if their loan operating systems (LOS) have limitations that simultaneously prohibit the issuance of an LE to only instances where all six components of a loan application are received in order to ensure compliance with the timing of the delivery of the LE to the borrower (as they currently do when issuing a Good Faith Estimate [GFE]), then a borrower will essentially have to make application with a lender in order to receive the Loan Estimate– which is then counterintuitive to the partial intent of the LE which is to compare loan options prior to making application.

Additionally, the TILA/RESPA rule prohibits a lender from requiring that supporting documentation be delivered prior to issuing the new Loan Estimate. As such, in most cases, the LE will be issued based on the unverified information that is provided to a mortgage loan originator (MLO). If borrowers unintentionally misrepresent their income, assets, property type or intended occupancy between one lender and another, the LE’s (and/or pre-application cost estimates) received from each lender will invariably produce different pricing.

The Closing Disclosure
The second component of the RESPA/TILA integrations is the Closing Disclosure and is intended to reduce surprises at the closing table regarding the amount of cash borrowers will need to bring to the closing table. The new Closing Disclosure (CD) is a blend of the existing Truth-in-Lending (TIL) disclosure and the Settlement Statement (HUD-1). It’s important to note that the new CD is governed by the Truth-in-Lending Act (TILA), not the Real Estate Settlement Procedures Act (RESPA). TILA provides different accuracy expectations and enforcement provisions than RESPA, as well as some differences in definitions, with associated risks and penalties that are much more severe than RESPA.

The biggest change that will come from the TILA-RESPA Integrated Disclosure Rule is that the borrower must receive the Closing Disclosure at least three business days prior to consummation as opposed to the current one day requirement of delivery for the HUD-1.

TILA defines consummation to be: “The time that a consumer becomes contractually obligated on a credit transaction.” Each lender is left to decide at what point it considers that a borrower has become contractually obligated on a transaction. Although a 3-day right of rescission rule applies when refinancing owner-occupied properties, many lenders are choosing to define the consummation date as the date the borrower signs the loan documents even though technically, the borrower still has three days to rescind the offer.

While its affect is no doubt a positive for all parties, its implementation is creating major challenges for lenders and settlement agents alike. Traditionally, settlement agents prepare the HUD-1 Settlement Statement. In this new environment where lenders are required to show compliance of delivery of the Closing Disclosure to the borrower, there is much debate and concern over who is responsible for the accuracy of the CD. Lenders can only guarantee their fees. Settlement agents are responsible for ensuring all other fees are accurately represented on the closing statement. This marriage of responsibilities is requiring lenders and settlement agents to open better lines of communication much earlier in the process.

RESPA-TILA Integration Details
The new Loan Estimate consists of three pages and the Closing Disclosure consists of five pages.  For borrowers and Realtors, to view the proposed new disclosures, visit the Consumer Financial Protection Bureau (CFPB) homepage and scroll to the Participate tab and then select the dropdown for Mortgages. For lenders, the CFPB has also issued a detailed 96 page explanation of these two new forms which can be viewed online at Guide to the Loan Estimate and Closing Disclosure Forms.


*Updated July 2015 to reflect the CFPB’s decision to delay implementation from August to October 2015.

The World Is So Loud

What ever happened to thinking before we speak? I hear crowds chanting to tear down our system of order and these nationwide protests are calling for what exactly? Are we preferring a lawless existence to one that is flawed by the very nature of our humanity?  Two officers were gunned down on Saturday in Brooklyn, NY and Sunday morning, another was gunned down in Tarpon Springs, FL.

We want officers to trust that we have good intentions. How can we ask them to be compassionate, when we show that we aren’t on their team? Instead of tearing them down, we must raise them up. We can begin by offering the respect and kindness that one would show to their son or daughter who wears the uniform. That officer is a husband/wife, father/mother, brother/sister, son/daughter, and friend to someone. They offer what many of us are unwilling to give.

While I observe the system isn’t perfect, criminal acts of violence against those who are called to serve and protect incites further fear and apprehension. Is this what we want our police officers to feel? Police officers have families and while we suppress our thoughts of the dangers they face on the daily, this recent uprising is causing us to question whether their honorable commitment is worth the senseless sacrifice of their lives. Shame on those who don’t value a life, any life.

I’ll share a story of how fear incites anger and leads to aggression. When I began my career in mortgage sales, I was often on the road meeting with strangers outside of the office. To protect myself, my husband insisted that I learn how to use and carry a gun, so I did.

One afternoon, I was driving in traffic and I absentmindedly cut off another driver. The man was angry and let me know as much. I blew him off and this further aggravated him. At our next stop, he continued to yell at me. Being young and stupid, I yelled back and continued the exchange. I became increasingly afraid that he was going to get off the car and come at me. So what did I do? I took my gun out of the glovebox, cocked it back and laid it on the passenger seat and waited to show him that I could and that I would protect myself. But did I really need to?

As we continued to push through traffic, I thought to myself, ‘This is crazy. I’m wiling to shoot this person, for what?’ So, rational thought returned and I turned off on the next street, pulled over, took a few deep breaths and made the decision to never put myself in that position again. A few things changed on that day. First thing is that I no longer carry a weapon. Second is that I began to take appointments with clients only in my office or in real estate offices. Third thing is when I realize that I cut someone off in traffic, I roll down my window and profusely apologize before they can start screaming. And lastly, I don’t respond to angry drivers.

This is my nephew Brian and his son, Shayne. His wife is seven months pregnant with a daughter on the way. Our family prays for his safe return every day and while we hope that he never has to draw his weapon, I hope he doesn’t hesitate and draws his first.

Brian and Shayne

Psychological Impact of the Recession and Housing Recovery

By all accounts, being a homeowner is seen by most as a sign of great accomplishment and success. Where we live affects our perceptions of self-esteem, perceived control of our environment, and financial security. Its interesting to see the results of a Harvard Study on Reexamining the Social Benefits of Homeownership after the Housing Crisis where despite the sufferings of foreclosure, owning a home remains an important desire for many Americans.

During the recent recession, home values fell dramatically, resulting in massive decreases in household wealth. Homeowner equity reached an all-time high of $13.5 trillion in 2006, but by 2009, had fallen to $6.2 trillion. Mass unemployment made it difficult for many to make their mortgage payments and to adequately maintain or repair their homes and many suffered the negative psychological emotions of foreclosure including anxiety, stress, fear, hopelessness, depression and embarrassment.


Elements of Women in Leadership Roles

I wonder if there is a way to talk about being a woman in a male dominated field or an ethnic minority in an organization that is not very diverse, without receiving a negative, defensive reaction?  Have we evolved enough to have a conversation about what is prevalent without offending?  Whether we’re women or men, we have mindsets about women and men, and about careers in leadership.  Unexamined mindsets won’t close the gender gap at the top.

Yes, its true that women are generally groomed to be nurturing, caring and supportive and as tribes, we seek leaders who are risk-takers, aggressive, assertive, and confident.  How would an organization benefit by having a leader that is both confident and caring, assertive and nurturing?   Can women show all attributes of great leadership while remaining feminine?  Must we fold away our floral dresses and replace them with standard issue blue, grey and black suits to be taken seriously? No. I believe those who can turn those traits on and off – depending on the situation – can find great successes at executive leadership levels without masking their identities.