Mortgage Rap



Never TILA lie, but tell the cost of credit,

APR and finance charge, so your clients get it.

Make sure you disclose, before you grow your nose, the following list and how it goes.


TIL statement and a guide

A charming booklet that adjusts just fine

A prepayment disclosure for them peeps

and notice of their right to rescind

HELIicopters(HELOCS) line up at your home

with a chance of ARM balloons if that’s your type of loan.


Reg Z gives some  time guidelines

For the TIL Statement the lender provides.

After the app arrives, we have 3 days,

At the latest 7 days before closing day.


What defines an app, for TI LA,

6 bits of info, think about it, duh

3 from the borrower, and 3 from the property

name, social, income for the first,

Next comes value, address, loan amount.


After they close, and everything is rosy

The client still has 3 days to rescind.

Every business day, and time runs away, every day counts, except sundays, holidays.

But failure to notify, or understated buy, gives the buyer 3 more years to decide.


Advertising sucks, with all these guidelines,

And the feds get along with Steve Lines

Number means trigger, so watch what you say, better tell the APR or bye to Fannie Mae.

Terms to fit your budget, 12% APR, both are acceptable things to say.


And so ends my rap, of TILA, it’s better than vanilla, and you’ll close your Deala.



Arizona MLO Rap

Arizona MLO, part 1

Arizona MLO part 2

Arizona MLO part 3


Arizona MLO

Lyrics and Music by Ryan Hartwig


Part 1


Wanna to be an MLO, take the state exam

Wanna pass the test, study this jam.


10% of interest, is the legal rate

no prepayment penalties if you just can’t wait.


AZdfi punto gov

is the state’s website you’ll come to love


The superintendent is the man,

he’s appointed every 4, and audits every 5.[audits financial institutions annually, banks every two, and brokers and bankers every 5]


Some basic definitions, are very good to know

investor, commercial property, closing and escrow.[closing is when all the docs are executed and recorded]

Escrow records the deal, then the deal is closed.

An investor means a person, or company purchasing.

Commercial land consists, of more than 4 families,

And the commercial banker is okay without licensing.


What goes on your business card,

Along with those balloons,

Company name license, NMLS too.


You also need these three, for any kind of sign,

blog twitter facebook, just look online.



ARS 6-991.01

Talks about your license, and when you don’t need one

If it’s your own house, or for family,

commercial mortgage banker(small pause), or their employee

Receives deeds of trust, or ancillary lawyer.

manufactured homes, and loss mitigation.


Part 2


Half of the test, is on the prohibitions,

Not the prohibition or the wine in your kitchen.


Don’t work or advertise, for yourself

get paid without a license

or give loans less than minimum [10k min for banker, 5k min for broker]


Don’t hand out a loan, not secured by deed

Unless your employer is indeed the lender.

You can’t work two jobs, and you can’t be the agent,

unless you tell the customer upfront like it is.

Can’t disburse the green stuff, can’t commit fraud, can’t make the max insurance more than the cost.

Have to be employed, can’t knowingly withhold, info from the auditor, when he’s told.

If, you’re the processor or  you underwrite,  you can’t publicize, loan origination.


What’s prohibited, for a banker/broker


Let’s start with servicíng, can’t mix PI TI [appraisal fees and credit report fees go in one account, application fees are separate]

No blank spaces, if you know what I mean

Can’t keep from, shopping around

If the loan is under, 200 thou

Can’t delay the loan, to increase the cost

or your precious license, will soon be lost.


What about them records, piled in a heap

Bankers for 2 years, brokers 5 years keep.


What to tell the client, when it comes to fees,

app fee, appraisal, credit then you’re done.

Feds are always watching so be sure and tell all three.


Part 3


4 types of encúmbrances for your deed.

Easement, deed restriction, encroachment, and lien.


Mortgages specific, and voluntary.

Lots of traps to fall in, better to be wary.


The last few facts, about Arizona

Lien theory state, not toyota tacoma.


Property tax is due, in October and March.

But if late you pay,

In November and May.


Wanna pass the test, study this rap,

use it all the time, like a google app.





Book Review: And Then The Roof Caved In

This book, written by David Faber, summarizes the collapse of the mortgage industry in 2007, and details the many factors that created this collapse.

He mentions the creation of an entity and an industry: Fannie Mae in 1938, and the subprime mortgage industry in 1993.

Of the many factors that colluded to cause this financial catastrophe were the following:

  • The inability of rating companies to gauge the risk of subprime mortgages.
  • Wall Street replacing Fannie and Freddie as regulators of the secondary mortgage industry.
  • Alan Greenspan lowering interest rates after 9/11/2011, thus reviving the dying subprime mortgage industry.
  • The creation of synthetic CDOs, mezzanine CDOs, and CDSs, with no contemplation of a decrease in home values.
  • Teaser rate underwriting, and no verification of income for homebuyers.

Definitions and Explanations:

All these are basically inventions designed to sell an untested, high risk product to clueless investors.

  • An MBS is a mortgage backed security, which is a compilation of mortgages sold to investors.
  • A CDO is a collateralized debt obligation, which is a compilation of MBSs.
  • A CDS is a credit default swap, which is insurance in the case of a defaulting CDO.
  • A synthetic CDO is a compilation of CDSs.
  • A mezzanine CDO is a way to turn high-risk mortgages into low-risk mortgages, based on subjective criteria.

My Take

David Faber provides a wonderful synopsis of this catastrophe, however, I disagree with him on the so-called “greedy” Wall Street. Wall Street is driven by profits, and so it was natural for them to take advantage of the situation.

Yes, I admit there may have been a certain level of greed involved, but another problem started in 1938, when the government created an entity to help the market. The government essentially created a new industry, and with their superb credit and government-backed reputation, Fannie and Freddie became leaders in this new industry.

Fannie and Freddie worked well until they were taken out of the picture in 2003, being replaced by Wall Street. When the government created a new market in 1938, they didn’t imagine Wall Street taking Fannie’s place in the distant future.

However, when Wall Street took Fannie’s place between 2003-2008, capitalism collided with a government-created market, and the result was chaos.

The government basically created demand for a product, financed it, and made a profit, but they were the only entity who could effectively manage the secondary mortgage industry. Without their reputation, financing, and non-profit driven ideals, they regulated the industry. Without them, the vacuum was filled by the free market.

Government agencies serve a purpose, but when they cease existing, the vacuum must be filled. When the entity filling that vacuum is un-government like, there is bound to be conflict.

As they say, you can’t fit a square peg in a round hole. If the round holes are capitalism, and the government is square, then my concern is the following: how long until the government stops trying to fit its square pegs, and starts creating its own square holes?