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LindaH
Florida
1754 Posts |
 Posted - 05/25/2009 : 05:48:40 AM
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quote:
Originally posted by jbelmont
I really think we should ask an actual loan officer for why they do it. We are only speculating here.
Yes, Jeremy, all due respect but LO's are probably the LAST ones I'd ask about this...they'd only be speculating too and blaming everyone but themselves - you want a true answer as to why the EOM craziness, then IMO lenders first, then title companies, are your best source. They, and ONLY they, know what's delaying the final process on any given loan. And I'll tell you, there'll be lots of fingers pointed at LO's who didn't do their job (didn't get this signed, didn't tell the borrowers xxx, didn't collect the proper documents needed in a timely fashion, etc)...then there's the final verifications needed before a loan is cleared to close. But as the LO's for the answer - never...but that's my feeling.
Lots of stuff...but the bottom line is it happens...part and parcel of the business and something we all need to expect, face it and deal with it if we want to stay in the business. And I repeat, our (meaning SA's) EOM craziness is NOTHING compared to what title and lender staff are going through.
Linda
www.notarydepot.com/notary/lindah
http://www.notary.net/websites/LindaHubbell
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Renee
Michigan
549 Posts |
Posted - 05/25/2009 : 03:59:51 AM
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With all due respect, these points made here aren't speculation - they're fact. There are a variety of factors that play into the EOM, combined they equal the word Linda used: frantic.
While the pre-paid interest & pp penalties, and the FHA's quirk of a full month's interest on pay-offs might add to it, if you remove them entirely it changes nothing.
I've worked for lenders whose first payment was a straight 30 days out, so there was never any pre-paid interest. Alt-A, so a prior FHA to pay-off was as rare as snow in Brazil. The last lender (wholesale) I worked for did loans for over 800 mtg brokers (in our office alone) - 99% of them paid as previously noted. EOM was horrendously frantic for all the reasons given.
We did have one broker, a large/lucrative one, who tried to circumvent EOM by changing their own cut-off date to the 15th, so they wouldn't have to deal with the lender/title EOM issues. But that was only 1 of 800 of them, and it certainly didn't dent the internal EOM push.
Most of Corporate America runs off month-end numbers. This is how they set projections, goals, budgets, etc. Most L/O's are paid a small draw, plus their commissions - if they don't meet their quota, they become a financial liability and are canned. Same with wholesale AE's - hit the numbers or lose your job. Job loss is a strong motivator.
In a round-about way, you could even say that EOM fertilized the NSA industry. This industry really took off in the late 90's, during the "refi boom". The traditional in-house closing became almost impossible to pull off, as title/settlement agents simply couldn't supply the closing rooms & the bodies to put in them, particularly at EOM. |
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jbelmont
California
3106 Posts |
Posted - 05/24/2009 : 8:21:06 PM
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I really think we should ask an actual loan officer for why they do it. We are only speculating here.
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PWinFL
Florida
469 Posts |
Posted - 05/24/2009 : 6:15:10 PM
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quote:
Originally posted by vince
But I believe it saves money for the borrower in most cases to have it as close as possible to the end of the month. Well, that’s just an opinion.
In a refi, there may be little money to be saved by closing at month end. No matter what day you close on, the old mortgage is accruing interest that must be paid at payoff. Since interest is paid after it is accrued, the first payment on the new loan would pay the previous months interest. That's why it seems like a month is being skipped, but the fact is, the current months accrual (from date of closing to end of month) is paid up-front. So in essence, the borrower really hasn't saved much, if anything, at all. But, if the refi is for a larger sum, then the accrued interest that must be paid up-front (at closing) would be higher than the old mortgage interest accruing during that month. So that's why purchases and refi's with cash-out or larger loan amounts benefit to be closed at month end, but streamlines and refi's that lower interest rates and principals should be closed early in the month.
Never drive any faster than your guardian angel can fly.
I am not an attorney licensed to practice law in the State of Florida,
and I may not give legal advice or accept fees for legal advice.
Visit us online at http://www.PAWnotary.com |
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vince
Kansas
324 Posts |
Posted - 05/24/2009 : 4:43:09 PM
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quote:
Originally posted by KanDoNotary
My question is: Why is the majority of an entire system set up to wait until the last two weeks of a month to run?
I asked one of the contacts when I called to get a status report, and he said in his 14 years of doing this, that's the way it has always been. "The loan officers wait until toward the end of the month so they can get their commissions up." He also explained various causes for delays and problems that occur for the title companies (who I have enormous sympathy for their crunch, even though they are getting paid by the hour and often overtime).
So the stress of trying to run our notary businesses is based on the last minute desire of a person who realizes on the 15th that they won't have anything coming in on the 1st if they don't hustle?
I often say, the 15th of April and 25th of December come the same time every year, but there are still those who wait until the last minute. Is this true here too?
Have Seal, Kan Travel!
I believe the end of the month rush is less insidious and more simple than the sales commission. Think about it. Loans that close before end of month right now typically have the first payment due 7/1/09. So much fewer days to add daily interest payable to the settlement expenses and thereby making the loan “cheaper” than if it had been done say May 2, 2009. Most loans require the loan being paid off to have interest calculated to the first of the following month (per the pre-payment language in the Note) so it saves on the number of daily double interest charges. Now, some could argue that it is easier to “hide” various fees at the end of the month because the total settlement expenses may still be less then the good faith estimate. The larger the loan and interest rate, the higher the total daily interest expense. But I believe it saves money for the borrower in most cases to have it as close as possible to the end of the month. Well, that’s just an opinion.
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LindaH
Florida
1754 Posts |
Posted - 05/24/2009 : 05:52:04 AM
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quote:
Originally posted by Renee
Linda - there should be a club for people who've been there, who 'know'! I once worked for a title office that had 13 (of 15) people quit at once! Not fit for humans!
I developed a heart condition, any my tiny bottle of Nitro I looked at as my 'trophy', what I 'won' for working like that for so long. I went from having episodes almost every day, to maybe one every 3 mos after I quit.
Absolutely I do believe it would've killed me, literally. How many years have I lost already, I guess I'll never know - plus the quality of life while I was 'in there'. I feel for those who are doing it now, I hear it in their voices, too. All for the dollar - some that have no choice; and some that just need more, and faster.
Probably the same with you, Linda - it's SO HARD to read posts that allude to this notion of anyone inside being 'lazy' and 'waiting until the last minute' and how nobody cares about the stress the NSA is under and ....all that.
All so true Renee - a heck of a price we pay for loving what we do..no? No one tied me to my desk and forced me to take it, but I did because I loved what I did - and I was good at it.
I swore when I left there I was coming down here and getting into another line of work - and look at me!! But the stress is so considerably lower. I am firm, though, that if I end up back in the 9-5 structure, it's NOT going to be in real estate closings....if not a completely different occupation, then an office that will guarantee me I'll never see Real Estate Transactions. I will not put myself back into that situation again.
Linda
www.notarydepot.com/notary/lindah
http://www.notary.net/websites/LindaHubbell
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Edited by - LindaH on 05/24/2009 05:53:13 AM |
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Renee
Michigan
549 Posts |
Posted - 05/24/2009 : 05:43:27 AM
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Linda - there should be a club for people who've been there, who 'know'! I once worked for a title office that had 13 (of 15) people quit at once! Not fit for humans!
I developed a heart condition, any my tiny bottle of Nitro I looked at as my 'trophy', what I 'won' for working like that for so long. I went from having episodes almost every day, to maybe one every 3 mos after I quit.
Absolutely I do believe it would've killed me, literally. How many years have I lost already, I guess I'll never know - plus the quality of life while I was 'in there'. I feel for those who are doing it now, I hear it in their voices, too. All for the dollar - some that have no choice; and some that just need more, and faster.
Probably the same with you, Linda - it's SO HARD to read posts that allude to this notion of anyone inside being 'lazy' and 'waiting until the last minute' and how nobody cares about the stress the NSA is under and ....all that. |
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LindaH
Florida
1754 Posts |
Posted - 05/24/2009 : 04:43:02 AM
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"someone burst out crying, someone wanted to stand up and quit."
Been there done that too...when you're the ONLY one in a firm handling all aspects of a real estate transaction from contract to close (including reviewing title searches, resolving issues, and drafting title insurance policies) and your boss wants to close as many as will walk through the door, the above statement is the end result. I cried several times, stood up and quit - even got as far as the door. The stress level is unreal and it's something I don't ever want to go through again...I heard that same stress level just the other day in the voice of the girl at the title company scheduling me for Friday...I felt so sorry for her.
Frantic working conditions like that had me to the point where if we hadn't moved out of state I'd have been leaving that job - I just couldn't take it any more. It's no fun - when you drive home crying almost every day, it's time to re-assess your situation. So, for as much stress you think you're under waiting on docs, believe me, that's nothing compared to the others trying to push that closing out and pull those docs together!!
Linda
www.notarydepot.com/notary/lindah
http://www.notary.net/websites/LindaHubbell
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Renee
Michigan
549 Posts |
Posted - 05/24/2009 : 03:41:51 AM
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The notion that any one of approximately 4 to 8 different departments that put a loan together are 'sitting around waiting until the last minute' is just not true - though it's often the way it feels to whomever is next on the list, waiting.
The reason I am now an NSA is because I couldn't take the stress, pressure and horrendous hours, coupled with working with all the others who can't take it (it's not exactly good for anyone), and it certainly charges the working environment with a lot of negative energy.
Lenders - like most businesses - have a monthly quota to meet to maintain profitability. Paychecks, perhaps bonuses, and quite literally jobs are based on meeting those numbers.
L/O's are usually paid their commissions on loans that have funded within the month. MOST L/O's don't get as many closed loans a month as you might imagine, most I've known (on average) aren't making The Big Bucks. They also have quotas to meet, or lose their job.
So, the entire system is set up for this EOM insanity. The first week of the month everyone is in a bit of 'recovery mode'; the 2nd week the push begins, to 'make up' for actually breathing during the first week. The 3rd week is the start of Panic Mode and the 4th week is just a nightmare.
By "nightmare", I mean - I used to work 70 plus hours a week, averaged 90 phone calls in/out a DAY, managed a closing dept of 10 pushing out 80-100 loans daily and back-end auditing 80/100 back IN a day. Every day, someone burst out crying, someone wanted to stand up and quit, someone got into an argument, someone called in sick (not showing up during EOM would cost you your JOB).
No matter what little challenges I might get in my day now, as an NSA, it's a walk in the park comparatively - AND it's all entirely within my own control. Nobody pushes on me but ME. It really is all very relative - until you've walked on fire, you might think warm pavement is simply intolerable.
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KanDoNotary
Oklahoma
69 Posts |
Posted - 05/23/2009 : 10:02:05 PM
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I was called Friday afternoon to do a closing on Saturday at 1:00. This being Memorial Day weekend, I agreed to take the job that's 75 miles away, and asked when I would get the docs. "By early Saturday morning."
I ended up waiting the better part of the day to receive the documents (expected by 10:30 to meet borrowers at 1:00; received at 3:55), drove two hours--one way, a total of 152 miles RT, in a thunderstorm, and had to separate and handle 50 pages of fax backs. Considering I was on stand-by, dressed and ready to go as soon as the docs came in, I've "worked" this job for 12 hours. I had several conversations with different people at the hiring company while trying to see when I could complete the job. They all sounded harried and kept commenting on the number of closings they were working on.
My question is: Why is the majority of an entire system set up to wait until the last two weeks of a month to run?
I asked one of the contacts when I called to get a status report, and he said in his 14 years of doing this, that's the way it has always been. "The loan officers wait until toward the end of the month so they can get their commissions up." He also explained various causes for delays and problems that occur for the title companies (who I have enormous sympathy for their crunch, even though they are getting paid by the hour and often overtime).
So the stress of trying to run our notary businesses is based on the last minute desire of a person who realizes on the 15th that they won't have anything coming in on the 1st if they don't hustle?
I often say, the 15th of April and 25th of December come the same time every year, but there are still those who wait until the last minute. Is this true here too?
Have Seal, Kan Travel! |
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