real estate finance - full book (500 pgs)

A complete escrow includes written instructions by

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Unformatted text preview: to access lenders via a terminal tied into a lender's computer containing that lender's underwriting requirements and other essential data so that agents can help clients obtain the best financing. Agents are able to offer loan comparisons that allow borrowers to quickly see the amount of finance charges and closing costs, and to compare fixed vs. ARM rates and other loan programs and features before making a decision. Agents may collect fees and commissions, so long as these are fully disclosed to clients. However, recent court cases have ruled that collecting fees carries with it the liability for providing accurate loan information that suits the clients' needs. The Federal National Mortgage Association, introduced its Desktop Originator for use by loan agents. This program allows loan agents to take applications at borrowers' homes or businesses with a laptop computer and pre-qualify prospects right on the spot, obtaining the same information that is obtained for the Uniform Residential loan Application covered in Chapter 14. There are many others who have followed a similar course, all designed to automate the loan underwriting process in a speedier and more efficient manner. LOAN UNDERWRITING After the appraisal has been completed, and any other requirements have been met, it is ready for underwriting by the lender. Dynasty School (www.dynastySchool.com) 14-25 REAL ESTATE FINANCE Loan underwriting is the analysis or evaluation of the risk involved with a loan and matching the risk to the proper return. The individual (or individuals) who assembles and analyzes the pertinent data and is authorized to give a company's approval of a specific loan, to a specific borrower, secured by a specific property, is the underwriter. In making an underwriting decision the underwriter must determine the degree of risk to the lender. The degree of risk will influence the loan–to–value ratio, the length of time for repayment, and the interest rate. The underwriter considers following: Borrower's credit and ability to repay the loan. Market value of the property in relation to the loan. Neighborhood and improvements surrounding the subj...
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