THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, July 16, 1994 TAG: 9407140351
SECTION: REAL ESTATE WEEKLY PAGE: 26 EDITION: FINAL
COLUMN: Mortgage Matters
SOURCE: David Gilbert and Helen E. Dragas
LENGTH: Medium: 67 lines
I have a background in finance and sales, but I'm having trouble finding a job in the mortgage industry without experience. What should I do to find an entry level position?
Unfortunately, you seek employment in the mortgage industry at a time when jobs are growing scarce. The reason: Recent rate increases have caused business to decline.
Most positions in the mortgage field require technical knowledge gained through experience. For the few jobs available, you will have to compete with mortgage veterans who have been recently laid off.
Your best bet is to wait until job prospects improve during the next business cycle. Today, a new job might not be secure because more and more lenders are consolidating or closing up shop.
If you insist on getting into the business now, you should accept even the most menial job offered. That way, you can hope to advance as business conditions improve.
Finding a loan for a condo
I applied for a conventional loan on a new condominium unit. Unfortunately, I was told I cannot obtain the loan because Fannie Mae has not approved the project.
On the other hand, I was also told that I can finance the condo purchase with a loan insured by the Federal Housing Administration. But I must pay mortgage insurance monthly on the FHA loan even though I plan to make a 20 percent down payment.
What is Fannie Mae? Why can't I get the loan without its approval?
Also, is there any way to avoid the mortgage insurance on the FHA loan?
To answer your first questions, Fannie Mae is short for the Federal National Mortgage Association. It is a large semiprivate government agency that buys mortgages and mortgage securities, or pools of mortgage loans.
Fannie Mae, along with the Federal Home Loan Mortgage Corp., also known as Freddie Mac, sets the standards in the secondary mortgage markets. These cover everything from credit guidelines to property and project acceptance.
Even if a lender does not plan to sell your loan to one of these agencies, the lender may require that the loans meet the same guidelines. That way, the lender can minimize risk and keep the option of selling your loan to these agencies or another lender later on.
For Fannie Mae to buy most loans on new condominium property, it must approve the project. Most condominiums do not have Fannie Mae approval, so this does not necessarily mean the property is deficient in some way.
Because the approval process is costly and somewhat complex, most builders rely instead on financing from the Federal Housing Administration and Department of Veterans Affairs.
But if you are willing to put down a 25 percent down payment, you should be able to find a lender willing to make a conventional loan on your condo. Fannie Mae guidelines require only a limited review of a property for mortgages with a loan-to-value ratio of 75 percent or less.
As for your second question, if you decide to apply for an FHA loan, there is no way to avoid the mortgage insurance. MEMO: David H. Gilbert is president and Helen E. Dragas is immediate past
president of the Tidewater Mortgage Bankers Association. Send comments
and questions to Real Estate Weekly, Mortgage Matters, 150 W. Brambleton
Ave., Norfolk, Va. 23510.
To submit questions by phone, call 446-2060; by fax: 446-2531. by CNB