RISK: A 4-Letter Word For Mortgages

I consider Judy Jones, Vice President of Metro Brokers Financial to be an excellent source when it comes to questions regarding financing and mortgages. Judy is a woman way ahead of her time in analyzing and evaluating mortgages and risk assessment. Additionally, she is a woman of extremely high character and integrity. She knows how to accomplish tasks and get the job done. She is a true "can-do" personality type. Likewise, she is by-the-book. Judy is a straight shooter. She will tell you in no uncertain terms that what you are proposing will not work. She will also tell you why.

It might interest you to know that Judy Jones holds the distinction of being the ONLY person or private citizen in the banking / finance / mortgage industry to ever be invited to present and speak to FANNIE MAE and FREDDIE MAC. Judy is truly an authority figure in the world of mortgage financing.

For those reasons and many more, I share the following article written by Judy Jones.

RISK: A 4-Letter Word for Mortgages

The current economic climate we find ourselves in could easily be titled, “The Good, The Bad and the Ugly”, “The Best of Times and the Worst of Times” or even, “I have good news and I have bad news”

I’m a very strong believer that if you know what to expect and have an understanding of possible challenges and plan for them and anticipate them, bad news or challenges can be overcome.

Well, here’s the GOOD News:

• Interest rates are at 50 year lows.
• Home prices are at 10 year lows in some markets.
• It’s a buyer’s market.
• FHA HUD homes can be bought with $100 down.
• There are a large number of homes to choose from.
• Etc., Etc.

Some have grown complacent to all this good news.

Some even thought there was better news coming and missed the only Federal Homebuyer Tax Credit in History!

Well, here’s the BAD News:

• The low interest rates mean that Lenders have more to lose than gain by making loans!
• These lenders have already lost large sums due to unpaid mortgage loans that have resulted in the drop in home prices.
• Risk rules the Lending world today. This makes getting a new mortgage a very difficult and long process.

So, be prepared for the reality of the new lending requirements. It’s definitely worth it when you consider what they have to gain.


1. All loans are fully documented today. Many buyers and sellers remember getting a mortgage when the documentation was very limited and qualifying was easy. And, that is what got the industry in the mess it is now.
2. The buyer/borrower needs to provide all documents required as quickly as possible to the mortgage lender to help protect their earnest money.
3. The mortgage lender is not a party to the Real Estate Sales Contract. This means that the due diligence period is not a time line the lender must meet. Often, due diligence periods are impossible to meet due to new Federal Laws which have been implemented to intentionally slow the mortgage process and protect the borrower.
4. Lenders will continue to dig until all their questions are answered. Borrowers who think they can trick the system may find their loan declined or worse, they could be investigated for attempted mortgage fraud, a felony in the State of Georgia!

Here are the top 5 Got Ya’s in obtaining a mortgage today:

1. Buyer/Borrower does not reveal the entire truth of their income, assets or debts when they first make loan application.
2. All Mortgage Lenders (FHA, VA, FNMA and Freddie Mac) pull a copy of the borrower’s filed tax returns from the IRS. Often the income shown on the tax returns does not match the pay stubs or shows business expenses.
3. The money used for down payment can not be borrowed. Often times the borrower’s bank statements will reflect large deposits that do not match their payroll deposit amounts. These large deposits must be explained and DOCUMENTED.
4. Gifts from relatives for the entire down payment are only acceptable on FHA loans.
5. Documenting the gift includes a completed signed gift letter from the relative, a copy of the check from the relative, copy of the relative’s bank statement proving they had the money to give and an updated bank statement for the borrower showing the current balance after the receipt of the gift amount.


For all the information, Judy Jones presented here, its all the more important to ensure that you are a well educated consumer. If you are a buyer or seller in today's market, you really need to have an educated real estate professional represent your best interests. You need someone who can guide you throughout the many challenges involved with buying and / or selling in today's real estate marketplace. It is a great time to buy, but without the proper guide to help navigate the waters, you may end up loosing the money you would have otherwise saved. This counts double for sellers in todays market.

Please call me with your many questions and concerns regarding the mortgage / relocation / buying / selling process. I can be reached anytime at 770-399-8108 or e-mail me at sara.hibbard@metrobrokers.com. I look forward to assisting you when the time is right for you.