This has been a very exciting week for Guardian Mortgage Company. The 51 year old, Plano-based mortgage firm was celebrating up north as it expanded its Michigan footprint with the grand opening of its Troy location on Wednesday, April 6, 2016.

This marks Guardian Mortgage Company’s second Michigan location—with the first in Grand Blanc—and the tenth across the country. Guardian currently operates offices in Grand Blanc, Michigan; El Paso, Plano, Arlington, Richardson and San Antonio, Texas; Santa Fe and Albuquerque, New Mexico; and Scottsdale, Arizona. Several more offices throughout Texas, Arizona and Colorado are slated to open later this year. We wanted to find Guardian’s secret sauce: how can the company be making such great strides in the shadow of all the new federal regulation?

We grabbed executive vice president Marcus McCue, to ask, after saying super duper congrats on the huge swath of success you are taking!

CD: Marcus, we are so happy for you and your expansion! Curious, with TILA RESPA Integrated Disclosure or TRID, you guys are killing it! Have those new rules not slowed you down? (more…)

With rates falling as they have over the past few years, a lot of people refinanced their homes and investment properties. And yet, rates keep falling to historic lows. Does it make sense to refinance again?

According to’s recently announced 2011 Closing Costs Survey, Texas once again has the second-highest closing costs in the country, behind of all places, New York – ouch! While the nationwide average is $4,070 (up nearly 9% from last year), Texans pay $4,944 on average. This is the fifth year in a row we’ve had the dubious honor of being #2. I chatted recently with Marcus McCue, SVP of Guardian Mortgage Company about why our closing costs are so high and what, if anything, can be done about it.

Candy: What’s with all the fees going up up up?

Marcus: Several factors impact costs – some are in the lender’s control, and some aren’t. Assessed by the lender, the “Origination Charge” includes the lender’s costs to provide financing – like processing and underwriting fees.

Third-party fees include title, appraisal, postage/courier and survey charges. In Texas, the state’s Department of Insurance sets one overall fee for title insurance, title search and settlement services, so title agencies compete on service, not price. The standard owner’s title insurance premium (which protects the homebuyer) on the purchase of a $225,000 home purchase with an $180,000 loan is $1,450. Although the seller on resale contracts typically pays this premium, it is much higher than the $605 national average from the survey. If you add the $240 lender’s title insurance premium (protects the lender) on the same loan, then the total title insurance premiums is a whopping $1,700.

Candy: According to the survey, origination fees went up by over 10% this year nationwide, why is that?

Marcus: Much of the increase is a result from the stricter mortgage regulations the government has imposed over the past year. More paperwork and regulatory compliance means more staff, which means higher costs. Even in areas where additional staff is not required, required software updates and revisions increase costs. Nearly all software vendors with products focused on the mortgage industry have made significant changes to become compliant to changing government requirements for disclosures, quality control and document revision. This additional cost for making these changes is passed on to the mortgage companies using the software, which then results in higher costs for borrowers.

Candy: What can a homebuyer do to reduce closing costs?

Marcus: First, make sure your lender goes over the Good Faith Estimate (“GFE”) with you carefully so you understand all the fees and where they are coming from. If you are reviewing more than one GFE, then check each lender’s “origination charge” against each other. Again, this is the cumulative total of the lender’s cost associated with providing the financing. This fee can vary greatly from lender to lender.

The “required services that we select” section of the GFE includes items that are required by the lender, but are solely selected by the lender. The most common of these fees are the appraisal, credit report, flood certificate or the upfront mortgage insurance premium on FHA financing. Charged by vendors selected by the lender, these costs are passed-through, so you may see differences from lender to lender. Because you are not able to provide the lender with other vendors for these services, you should consider these fees with the “origination charge” when deciding which lender has the best loan terms for you.

The “required services that you can shop for” section of the GFE includes things like pest inspection or the cost of a survey. Unlike the services the lender selects, you have some options here. These are again pass-through costs, but you can lower them by identifying a lower priced provider and making the recommendation to the lender. If you see a lot of variation among lenders on this item, it may be worth your while to source another provider.

In addition, if you are refinancing a loan within seven years of your last loan closing, you will qualify for a “re-issuance” credit on the owner’s title policy. You will have to pay a new premium for the title policy to be renewed and extended to the new loan, but this credit will reduce the cost of that new premium. This credit is on a sliding scale, with the largest credit being a 40% reduction of the premium if the refinance occurs within two years of the last closing. This credit is available from all title companies, so it does not require using the same lender or title company from the last closing.

Candy: Is there anything else that can be done to reduce closing costs?

Marcus: Obviously, the lenders have some control over their own fees. Last week Guardian Mortgage announced we joined the Lenders One Mortgage Cooperative of independent lenders. One of the big benefits of being part of a cooperative is collective buying power. These cost benefits from the cooperative will allow us to keep our costs lower than our competitors as they continue to increase their fees to accommodate those aforementioned changes with government regulations and compliance. In addition, we will be able to offer more services to our customers and provide better training to our staff. It’s exciting news for our customers and us.

If you have additional questions about your particular situation, feel free to contact Marcus McCue at (214) 473-7944, or on facebook.

This may be a great time to BUY a second home, but are banks, who make it hard enough to finance your primary residence, cooperating? The answer is yes, if you have good credit and a hefty down payment. But I have heard so many conflicting stories on the nuances of getting a second home loan, I decided to consult broker extraordinaire Marcus McCue of Guardian Mortgage. Is it true, for example, that the home has to be a certain distance away, and that some banks would rather eat a Listeria-laced cantaloupe than make a second home loan. Raw land? Impossible, Wells Fargo told me — too many underwater mortgages. So I needed to bring in the big gun, aka Marcus. He tells us the biggest challenge is defining just what a second home is. Here’s a secret: even Real Estate agents get confused and need the Loan Ranger:

It seems obvious what it means when you tell your REALTOR® or lender you’re buying a second home, right? If only that were true! Many surprised homebuyers have gotten part-way through the loan process and been denied before they discovered that their home cannot be categorized as a second home and cannot be financed as a second home due to the occupancy requirements for second homes.

1. The second home must be located a reasonable distance away from the borrower’s principal residence.

What is a “reasonable distance” can be up to interpretation. For example, if the property is a lake house or beach house, the property may be located less than an hour away from the borrower’s primary residence and still be acceptable to the underwriter as a second home. However, if you live in Dallas and are buying a second home in McKinney, the originator or their underwriter is likely to deny the loan as a second home and will require the loan to be processed and closed as an investment property.

2. It must be occupied by the borrower for some portion of the year

If the property is a second home, then this means the property will be occupied by the borrower for some portion of the year. This could be seasonal for those properties located in ski or beach areas, numerous times per month like weekend visits to a lake house, or periodically during the year like a home grandparents purchase near their grandchildren.

3. Financing is restricted to one-unit properties only

A duplex or other multi-unit property is categorized an investment property by conventional guidelines even if you live in it part of the year. The owner would be occupying only one of those units – with the other units leased to tenants – the financing on the entire property would be categorized as an investment.

4. The property must be suitable for year-round occupancy

A property that is only functional in one season like a hunting cabin with no heat will be denied.

5. The borrower must have exclusive control of the property (no timeshare or split ownership situations)

6. The property must not be a rental property or a timeshare arrangement

7. The property cannot be subject to any agreements that give a management firm control over the occupancy of the property.

Basically, see point #6. If you have an agreement where a management firm controls the occupancy, then the borrower does not have exclusive control of the property and the property is likely to be rented to tenants during the year.

Question: Does this mean you can never rent out your beach house?

The issue here is intent. The intent at the time of closing needs to be that the property will be owner-occupied and not rented. If the property is rented after closing or years later, but the borrower occupies the property themselves at some time of each year, then the loan is not fraudulent.

Question: What if you want to buy a house for your child to live in while in college?

In this scenario, the property is an investment property and not a second home. Your children are not you … so if they occupy it is not owner-occupied. There are very limited and specific scenarios where properties can be financed for family members as owner-occupied properties, but these are limited to disabled children and elderly parent situations.

If a parent is buying a property in a college town because their child is attending the college, then their intent needs to be that they will be occupying this property themselves when they visit the child in college: Not that the child will live as the occupant and they will have a room to stay in during visits.

Question: If you’ve determined that your home is not a second home, what are your financing options?

The options are primary residence, second home or investment property. If a property is not your primary residence and not a second home, then the only other option is investment property. Both primary residence and second home properties are in the “owner occupied” category. If the property is not owner occupied, then it is investment. Investment properties generally require more of a down payment and do not qualify for the same tax benefits as an owner-occupied home.

If you have additional questions about your particular mortgage financing situation, feel free to contact Marcus McCue at (214) 473-7944, or find him on Facebook. Or email me and I’ll hook you up!