For nearly 28 years I have faithfully been put-ting my mortgage check in the mail monthly, not knowing much about the recipient other than the fact that I was approved for a loan on a house in West Valley City in 1963.
A person needs faith to keep sending the checks every month to a faceless organization whose only contact with you is a yearly printout of what taxes you paid the year before, what your new payment is and how much money is in escrow to pay for homeowner's insurance.Oh, yes, they also send a dozen more labels to use in remitting the next 12 payments.
They must have been providing a service for me because I don't have to worry about paying property taxes, paying the insurance and making certain the principal and interest are repaid to the Federal Housing Administration.
To understand more about mortgage companies and see if there really are people behind the annual printouts, I went to my mortgage company, Richards Woodbury Mortgage Corp., 1935 E. Vine St., a private mortgage banker serving the Intermountain Area since 1954.
RW was founded by the late Franklin D. Richards Sr., a member of the Council of the Seventy of The Church of Jesus Christ of Latter-day Saints, and the late F. Orin Woodbury. Families of the two founders controlled the ownership until April 1986, when they sold it to Lowell L. Leishman, the current sole shareholder.
Leishman has been a mission president for the LDS Church since July 1988 and returned this month to resume his duties as chairman and president. Filling in for Leishman have been Orin R. Woodbury, acting chairman; Kenneth R. Cutler, president; L. Scott Leishman, executive vice president; Mark S. Francom, residential senior vice president; and August F. Brand, commercial senior vice president.
With a work force of more than 100, RW is the link between investment capital and real estate ownership. The company also has branches in Logan, Ogden, Bountiful, Salt Lake City, Park City, Orem and St. George in addition to two branches outside Utah.
In 1990, the company provided financing for residential loans of more than $90 million and commercial loans of more than $33 million. RW currently services a permanent loan portfolio of more than $300 million for 40 investors. This year, RW is on track to originate 2,300 loans worth $150 million, a 60 percent increase over 1990, said Scott Leishman.
Has the mortgage business changed since 1963 when a nervous (fear of being rejected) newspaper reporter and his wife went to see an RW loan officer in the company's old office at State Street and South Temple?
A lot has changed, said Francom, referring to increased paperwork. RW has 10 loan officers in the Salt Lake office and their first job is to complete an application that notes an applicant's job stability, income and credit record. He said many people like to prequalify for a loan, meaning a potential homeowner knows how much he or she can borrow and doesn't go looking for a $150,000 home while qualifying only for $85,000.
Then the loan officer orders a credit report andappraisal on the house (can be taken from the plans if it hasn't been built), a verification of employment and title report. Fran-com said the average loan at RW is $65,000 and the application time takes between one and two hours.
The next step is sending the application to a processor who gets it ready for an RW underwriter. The underwriter checks all of the information, and if it meets all of the requirements the loan is approved and sent to a closing officer. Eventually, the loan must be approved by the Department of Housing and Urban Development for mortgage insurance.
Finally, the loan is ready to close and the paperwork goes to the title company and the applicant is summoned to sign the papers. The loan is recorded. At that time you become a homeowner, and even though you have many years of hefty payments staring you in the face the excitement is overwhelming.
The trust deed shows that RW still has an interest in the property. Some mortgage companies sell loans to other companies outside Utah, but Francom said with modern communications like fax machines and toll-free telephone numbers that isn't much of a problem.
You receive a coupon book or a dozen labels to send in the monthly payments due on the first day of each month, although there is a grace period of approximately 14 days. During the tenure of the loan, RW collects the payments, holds the money in escrow and pays the property taxes and homeowner's insurance when they come due.
When the loan is repaid, as mine will be in slightly more than two years, RW sends a notice to the title company and RW is eliminated from the title. Then I have to save the money to pay the property taxes and insurance.
So, now I know. Mortgage companies aren't the faceless entities that I imagined. In fact, they provide a service that make buying a home a little easier.