The HUD-1 statement change. It's VERY simple; do this ONE thing!

Is it just human nature, to make things far more confusing then they need to be? Does it make us feel brilliant, to take the long way around a problem?

Keep It Simple Stupid (KISS)

Recently, my son brought home some math homework, and proceeded to work the problem in front of me. Huh? What?!!! "What the heck are you doing"...I inquired. He shared with me, in his ooh-so-I-know-everything voice..."my homework, duh" (eye roll).

Did you know there is a NEW way to do math? Do you also know that Albert Einstein on Ginseng couldn't figure it out?!! Apparently, there is a fantastically update version of arithmetic; and well...it's stupid. The way we did it before was just fine. Some things need to be left alone; and, others could use a little change.

Thank you....The Consumer Financial Protection Bureau. No really, thank you...for the change.

"I just don't get it"!!!

I've been a Realtor a couple decades, now; and I still don't know how to truly read a HUD-1 Statement. For most of us, client and professional, alike; getting close to "the close" is the best part of buying or selling a home. Yet, without fail, and, unbeknownst to my clients; I panic when the call from the title company comes. "Hey, we are sending over the HUD-1!". Elation to anxiety, all in one fell swoop. Granted, it is not my sole responsibility, to make sure those numbers are exact; but, man that pressure is strong. I'm a bit of perfectionist, when it comes to keeping my word, therefore, upon my phone alert, that IT is on it's way...I say a pretty solid prayer; and grapple with the thought.."boy, I hope those numbers line up".

But, guess what happened? CFPB decided to simplify our lives, by removing HUD-1 Settlement Statements and Good Faith Estimate Forms! Hallelujah! (repeat, repeat and repeat)! Someone, in that bureau decided, straightforward documents (for consumer and Realtors, both) was an ingenious idea. Whew.

Albert Einstein steps in (and CFPB)

Innovation 101 strikes...and, we now have 2 new forms, written using the alphabet, versus morse code. Moving forward, I can drop my angst meds; and, with sincere excitement hand my clients the keys to their new home!

In place of, the two baffling and archaic documents, we now have...

1.) The Loan Estimate
2.) The Closing Disclosures

The will look something like this...

Education & The 3 Day Rule

Whoa! Far less painless to comprehend. For those of you, that have never had the pleasure of seeing one of these statements; lucky you! For those of us, who aren't mathematically savvy..."bye-bye Pumpkin".

Drawback; but, only if you've been living under a rock. All this change means, the client has to receive The Closing Disclosures 3 days before the closing date; just to be sure, nothing has changed from the original terms.

In reality, all the mental chaos regarding this modification, is pretty unnecessary. These adjustments are good! Educating yourself, and adding those additional 3 days, to any contracts that involve lending; will put you, and your clients, right where they need to be. Back to effortless calculation.

Now, if I could just get the school system back on board with this. #KISS

The 5 Biggest Mistakes made during a home loan process

Tweeting birds, dancing squirrels, brightly colored floating hearts swirling through my mind; as a voice that mimics Mini Ripperton, says...."we are clear to close". I hang up the phone with a heavy sigh of relief, and gratitude. I quickly begin a celebratory series of text and emails to all parties involved; reiterating the lovely words I just heard. "We are clear to close"...I type. Now, on with my day, and my latte. Yet, no sooner did I hit the last send button; my cell rings, again...this time with a far more serious tone. "Caitlin". I reply...yes. "They bought a car, today. They just signed the loan docs". Silence. I can hear us both holding our breathe, as if it was our last; waiting to determine how the other will respond. 20 seconds, or so pass...and, without warning, and with all the force in me, I project just 3 precise words to convey my thoughts at this moment..."OH HELL NO!"

Suddenly my "Loving You" melody has turned to AC/DC's "Highway to Hell". No more, chirping chicks, or twirling animals...just a dark canvas in front of me, with the 3 new words...DEAL IS DENIED.

A Massive Waste of Time 

I would venture to guess that more Realtors have heard these words, than clients; as we deal in quantities. Regardless, of who or how often they have been uttered; it is heart-wrenching. For the real estate professional, it means anywhere from 4 - 8 weeks of work, having been wasted (sometimes more, if you've had a client with special needs or is a bit particular). And, as much as I know we are NEVER to mention money in this business (as it makes us seem like mongers)...we just lost our pay check. Let's be crude, here...do you know of anyone that would be cool with going a month + without income, anticipating it; and, then snap...gone. Me, neither.

Now, let's flip the coin...client; buyer or seller, this is not good. The majority of real estate sales involve people moving from one location to another; and more often than not, those funds to do so, have to come from the sale of a home. So essentially, you outta luck, padn'r.

So, having dumped salt on the "what if" wounds of what could happen if your home loan is NOT cleared to close; let me soothe that burn, with a list of medicinal suggestions to prevent it.

5 Simple Tips 

#1. Do not put anything on credit, while in contract. I don't care if the Encyclopedia Britannica dude shows up at your door, with a book that is guaranteed to parallel you with Einstein. "Only $29.99, on approved credit". Send him packing. If the extra cash isn't in your stash...then it's a...no!

#2. Do not spend any of the money you have saved for closing (per the suggestion of you lender). I have seen this mistake. "Well, we have 30 days to replace it. I have that bonus coming in. I was promised overtime this week." A month comes and goes quickly, sales quotas don't always get met, and overtime should never be in the same sentence as, promise. Leave the stacks be.

#3. Don't get married. Now, the title issues are all messed up. Don't get divorced, either. Just chill for 30ish days. Your honey will still be around; and, unfortunately so will your ex...lol.

4#. Don't take a new job...and, for god's sake; don't quit one! I get that it's an opportunity of a lifetime; but, any respectable company wanting to hire or promote someone equally respectable (insert your name) will understand you are in the middle of buying home. Change the date on your offer letter to match your CEO (close of escrow). And, if you quit your job...um, how did you think you were going to pay for your new house? Right.

#5. And, finally...don't transfer big chunks of money from one account to another. I know, how could this make any difference; it's still your money, in your accounts. Here's a little insider tip on securing a home loan...it's all about "the trail". The paper trail that is. When you buy a home, you will be asked to provide more paperwork than you ever have in your lifetime, or that to come. So, if you know a potential home purchase is on the horizon; save every paycheck stub, direct deposit receipt, pay off letter, wire transfer record...heck, even keep you receipts from your last Starbucks purchases (I'm sure they will want it to verify cost of living expenses; I normally write if off every year, as therapy).

Break your heart...Break the bank

These mistakes could be costly; not, just financially, but emotionally. Imagine the scene...boxes neatly taped, labeled and stacked to load on a truck, going to your new home. All the dishware is secured in bubble wrap, which means dinner at fast food joints for the next few days; but, you don't mind. You are about to move into YOUR own home. No more rentals, no more living with friends or family. And, you love this place...it is not just a house; but, a home. The circular driveway, french doors off the kitchen, and stone fireplace welcomes you into the family room. Sigh.

But, you can't return a car...no changing your mind. You can't instantly remove a credit inquiry, that has brought your score down to a non-qualifying state. These things, along with a variety of other derogatory marks cannot be easily removed; which changes your DTI (debt to income ratio). That's it...no new home.

Therefore, by taking heed, and following these few simple rules...that hope for a cozy new homestead can happen! First come the keys; then comes the Klaussner. When it comes to home ownership; there are no sweeter words than "clear to close".