Rob's Rant

There aren't too many things scarier for the American Consumer than to open the paper and see his/her Mortgage Company closed its doors today.  How does this affect me?  What do I do?  Well, the answers to this question depend on where you are in the Mortgage process.

1) If you own your home, are making payments on a Mortgage, and do not have a mortgage applied for or closing.  In this case, you are pretty safe.  Remember that no matter who buys this loan, the original terms & conditions remain the same (Interest Rate, PI Payment, due date, amortization, etc).  You DO need to watch your mail: your Lender is required to tell you if somebody else is now servicing your loan.  DO NOT STOP PAYING ON YOUR LOAN.  You still owe the money, regardless of to whom you pay it.  I also suggest a telephone call to confirm who will be servicing your loan from now on.  Look on your monthly coupon/statement to find this information.

2) If you are currently in the process of a loan.  This depends how far along you are.  If you have simply filled out application paperwork and provided income/asset documents, you should be OK.  I recommend applying with another company.  Don't be fooled by the size of the firm--some of the biggest are the ones going under right now.  A small Broker should be better equipped to help you than a Bank.  It is the big Mortgage Banks who are fighting for survival (and losing) right now.

3) If you are currently in the process of a loan, and further along.  (Refi).  If you have already signed your Closing Documents, this is the case where you may get hurt.  The best advice I can offer is try to place the loan elsewhere.  On a Refinance, this may not be as bad as it seems (except for doing double-paperwork).  Rates on "A" paper loans have been fairly stable so far through this process.  It IS possible that your program is gone, however.  Especially if you were working on a "Alt-A" or "Subprime" transaction.  These programs and prices have changed radically. 

4) If you are currently in the process of a loan, and further along.  (Purchase).  This could be a problem.  Naturally you have committed in the form of a Contract (also called Purchase Agreement) to buy the house by a certain date.  And if you have already signed Loan Documents, that date is likely to be within the next few days, possibly even today.  Call your Realtor if you have one, and talk to him/her about your options.  This person is your advocate and will want to help.  If you chose not to have a Realtor, I suggest you contact the sellers right away.  Share with them the situation and let them know you are doing everything you can to correct this problem.  They may be reasonable, however they are not legally obliged to be.  Remember that through no fault of yours, it is you who are not performing on this Contract, not them.  Try to stay calm and explain that you certainly did not intend to be in this situation.  If the sellers are willing to extend the Escrow, go ahead & try to find another Lender.  Consider working with a Broker if possible (see #2). 

5) Every state regulates Mortgage Loans within that state.  In Arizona it is the Department of Financial Institutions.  www.azdfi.gov  or (602) 255-4421.  Mortgages are also regulated by the Federal Government, under the auspices of the Department of Housing and Urban Development (HUD).  www.hud.gov or (202) 708-1112.  You may register a complaint with either of these agencies if you feel mistreated.  However keep in mind these companies did not intend to go out of business and lay off their entire workforces.  I cannot say how much satisfaction these agencies will be able/willing to provide.

6) If I can be of further assistance, please do not hesitate to contact me directly.  As a Broker I may be able to re-place your loan and save you some anguish.  Call me at (602) 620-1199 or email rob@robrif.com  I wish you well!