A day in the life of a mortgage professional: Loans from HadesGary Opper, CPA, CFPloan problems
I just got back from meeting with my title company. At the title
company, we reviewed the work in process. We looked at the pipeline
to see what we could close. Here are the findings (the names have
been changed to protect the guilty).
Mr. K came to us for a $27,000 first mortgage on a $60,000 condo
located on Florida's Intracoastal Waterway. Mr. K had vacated his
condo, and the air and electricity had been shut off. All of the
furniture was missing.
Mr. K had assumed that since the first mortgage company was
foreclosing, any additional proceeds would come directly to him. He
had moved out and was living with a neighbor. He soon found out
that he would lose his property and all of the equity in it. Mr. K
decided he needed to refinance. The loan is about four weeks old
and on hold until Mr. K obtains a dismissal of a bankruptcy that he
had filed earlier. Hopefully, the loan will close soon.
Mr. and Mrs. O have a home that appears to be worth $100,000;
however, on inspection, the property has many nonconforming
additions to it. The house is very unusual. I, personally, would
not want to sleep or eat in the house. When I left, the first thing
I did was wash my hands in a McDonalds.
After the review of the property, I requested an inspection. The
inspector indicated there was $20,000 of repairs needed.
Additionally, the inspector noted that a roof and termite
inspection should be done.
After providing for that, negotiating with Mr. and Mrs. O and
giving into many of their demands, they signed the closing papers
for the loan. The next day, they called the title company and
rescinded the loan. Apparently, their father was going to give them
the money at better terms and without an escrow. The father hasn't
come through with the money yet. Hopefully, this loan will close
soon.
The loan with Dr. and Mrs. E appeared to be a slam dunk. Dr. E
wanted to borrow $20,000 on a second home on the Intracoastal
Waterway in Florida. The property is on the 15th floor, overlooks
the Intracoastal Waterway and is worth probably $120,000. A $20,000
loan on a $120,000 property looked quite easy. Well, Dr. E
neglected to tell us that there was a foreclosure in process. The
attorney for the foreclosure dealings took an inordinate amount of
time to provide a payoff statement. Five weeks later, the payoff
came in. Of course, the payoff was higher than we anticipated, and
the loan closed. Hopefully, Dr. and Mrs. E will pay us.
Mr. P came to us looking for a $35,000 loan on a warehouse in a
so-so neighborhood. Reluctantly, I visited the property. The
property appeared to be in relatively good shape and was well worth
investing $35,000 in a first mortgage.
The property had two parcels; Parcel A had the actual warehouse
on it and Parcel B had the parking lot on it. Ten weeks later, Mr.
P is still trying to find the quitclaim deed on Parcel B, the
parking lot. Our title company was unable to do the title work
because of some liens. Mr. P found another title company that was
willing to do the title work. Mr. Ps title company also found that
they could not find the quitclaim deed on Parcel B and could not
eliminate the liens. Therefore, we are still waiting to close.
Mr. R, a real estate investor, came to us excited about a
property he had bought for $1,000. Upon appraisal, it was
determined that it was worth more than $100,000. The property was
interesting. It was approximately 1,500 square feet. The previous
owner was a carpenter who had added approximately 400 square feet
to the property. Our appraiser recommended that the 400-square-foot
addition be knocked down and a concrete wall be put up. The
property would be worth $90,000 if the house were 400 square feet
smaller.
In addition, a little unique feature about the property was that
the carpenter had died in the property and had been found four to
six weeks after he had passed away.
The carpenter died without a will. An ex-wife, a sister and two
minor children all claimed interest in the property. Mr. R had
contacted the ex-wife and the sister and had them both sign
agreements that he had written, stating that he owned the property
and that he would take care of probate. Of course, they weren't in
the proper legal form, and the probate continues to this day. The
state appointed an attorney for the two minor children. Hopefully,
Mr. R's $1,000 investment and $15,000 in attorney's fees will prove
fruitful with the rehabilitation of the property, which will cost
about $30,000. Hopefully, this loan will close.
Most loans do close. Mortgage brokers close more than half of
all of the residential loans in America. Because of the outstanding
work that mortgage brokers and title companies do, most issues get
resolved, and the loans do close. Occasionally, you run into a
string of mortgages like this, and you wonder why you were chosen
for some special treatment. Why were you singled out?
If you have any loans from Hades and would like to share them
with me, please e-mail
[email protected] or send a fax to (954)
384-5483. They may be published in future articles. You may have
your name attached to them or they may be printed anonymously.
Gary Opper, CPA, CFP is the president of Approved Financial
Corporation and is past president of the Florida Association of Mortgage
Brokers Miami Chapter. He may be reached at (954) 384-4557 or
e-mail
[email protected].
