RealEstate Investing :This Sacramento Realtor Doesn?t Agree With HUD

Article Summary:

Article Content:
HUD (Housing and Urban Development) recently published a booklet for home buyers explaining the importance of applying for a loan and the Good Faith Estimate your Lender must provide for each home buyer. 

This really is nothing new, it has always been in effect.  The Lender has always had to provide a Good Faith Estimate however now the Lender must give even more accurate numbers to the home buyer about all the cost of buying a house.

If those numbers are off on the Good Faith Estimate, this will cause a delay in the closing of the house or condo. And yet, the numbers the Lender submits are numbers that are obtained from several different sources.  Will this really help?  Will this eliminate the questionable lender?  I doubt it.  Good lender always provided them.

My problem with this graph in the home buyer’s booklet  is that it really misrepresents the process of the time-line in purchasing property.   Here are the misuse of terms and confusion that I see in the graph above.

Determine what you can afford – since the word “lender” or “bank” is not visible, the reader is left to their own imagination on what they can afford.  Not exactly the home buyer I would want to work with nor as a listing agent would I want to waste my seller’s time viewing their offer .
Find a real estate agent.  That’s a good step but where is the prequalification letter from the lender or bank? 
Find a house and negotiate contract terms.  I sure as heck hope not.  Whose qualified this buyer?  Where is the Lender letter? I wouldn’t submit a contract to a seller from a home buyer who is not pre approved for a loan. Can’t think of any Realtor who would want to negotiate any offer with a home buyer who is pre approved.
Shop for your loan – compare multiple Good Faith Estimates.  I sure hope that you are not shopping for a loan after the seller has accepted your offer.  I would hope that your lender who  pre approved you is now working on your loan so we can close on time as per the contract.
Choose best loan for you.  This is way too late in the process if you plan to go by the contract.

As a Sacramento Real Estate Broker, I have some issues with this booklet the Feds have published.  Time to go back to the drawing board and revise this before too many home buyers believe what you have published.  Sometimes, I think people writing booklets and making laws  have little knowledge of what the real process entails.

Click for a copy of  the HUD (Housing and Urban Development) booklet… Read with care…



Other Articles of Interest:

New Facts About Home Buyer Tax Credit

If  You Are A Home Buyer, Do You Know the 90 Day Rule?

HUD Ruling on Buying Flipped Property

———————