Mortgage Roundup | AI Prompting Secrets

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Let’s make your job a little easier. The Empire Learning Mortgage Roundup newsletter brings you mortgage industry tips, market know-how, and CE updates—all in one quick email.

🗣️ Quote of the Week

“The real question is, when will we draft an artificial intelligence bill of rights? What will that consist of? And who will get to decide that?” – Gray Scott (Futurist, Techno-Philosopher)

🚀 Featured Article

AI Prompts Every MLO Should Steal

MLOs juggle a ton of communication tasks, from marketing on social media to educating borrowers and updating real estate agents. What if you had a 24/7 assistant to draft all that content? Good news... ChatGPT or other LLMs can be that helper! In this article, we’ll share ready-to-use prompts that you can plug into ChatGPT/LLMs to save time and wow your audience. These prompts cover social media posts, rate-explanation emails, borrower education guides, and updates for your agent partners. We’ve also included tips on refining your prompts for the perfect tone, length, and audience. Let’s dive in and start prompting.

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🏆 Trending on Empire Learning

🤝 Co‑Signing Complications

Parents often co-sign to help adult children qualify for a mortgage, but co-signing comes with serious financial considerations. In a co-signed loan, the co-signer is equally responsible for repayment. They essentially add income and credit strength to help the primary borrower qualify, but at the cost of sharing full liability. This can hurt the co-signer’s own borrowing ability. The added debt appears on their credit report and counts toward their debt-to-income (DTI) ratio, potentially limiting future loans. Before parents co-sign, mortgage loan officers (MLOs) should make sure they understand key issues... DTI impacts, occupancy rules, and long-term risks.

• DTI Impact on Co-signer. Lenders include the co-signed mortgage payment in the co-signer’s obligations when they apply for new credit. This extra debt can easily push the co-signer’s DTI above allowable limits, making them ineligible for new financing. For example, one analysis showed a co-signer’s DTI jumping from 35% to 53%, turning a “qualified” applicant into a “denied” one due to the co-signed loan payment. Unless another party has made 12+ months of documented on-time payments on that loan (allowing an exclusion), co-signing will weigh down the co-signer’s credit capacity.
• Occupancy & Loan Guidelines. When the co-signer won’t live in the home (a “non-occupant co-borrower” situation), there are specific loan program rules. At least one borrower must occupy the home as a primary residence in most cases. Conventional and FHA loans do allow non-occupant co-borrowers, but FHA requires them to be family members for maximum financing (otherwise, a larger down payment is needed). MLOs should verify that the loan program chosen permits a non-occupying co-signer and that all occupancy affidavits are truthful. Misrepresenting occupancy is not only a program violation but also a form of mortgage fraud.
• Long-Term Risks. Co-signers are committing to a long-term, potentially multi-decade obligation. A 30-year mortgage will far outlast the initial favor for a child. The co-signer’s credit will suffer if the primary borrower ever pays late or defaults. They could even face collection or foreclosure proceedings as a liable party. It is also difficult to be released from a co-signed mortgage. Typically, the only ways out are for the primary borrower to refinance in their name alone or to sell the home. MLOs should discuss contingency plans: Can the parent afford the payments if the child cannot? Do they have an agreement on who covers taxes, insurance, maintenance? Because co-signing is a serious long-term commitment (even requiring an estate plan update in case something happens to the primary borrower), these scenarios must be considered in advance. In short, co-signers must go in with eyes open, and a good loan officer will walk them through worst-case scenarios, not just the best case.

💻 The “ChatGPT” Preapproval

Some borrowers get DIY loan estimates from AI chatbots, but real mortgage expertise is still important, of course. A growing number of homebuyers are showing up armed with advice from Reddit threads or even AI-generated “preapprovals.” For example, they might ask ChatGPT for a loan estimate or qualification based on their situation. While it’s great that clients are doing research, MLOs are finding that AI tools often can’t capture the full reality of mortgage lending. ChatGPT might provide ballpark figures or generic guidance, but it lacks live data and nuance. Industry experts note that ChatGPT and similar models might have limited access to real-time rates or specific underwriting rules, and they might fail to consider an individual’s unique financial context or local regulations. In fact, one mortgage advisor said that “ChatGPT may be writing lazy students’ essays, but it’s not ready to provide mortgage advice yet!”, meaning an algorithm can’t (for now) replace the expertise of a human loan officer.

• MLOs should turn this trend into an opportunity for education and trust-building. Rather than dismiss a tech-forward borrower’s online-derived proposal, acknowledge their initiative. “That’s interesting – let’s review these numbers together with real data.”
• Loan officers can also provide personalized insight and empathy that an AI lacks. Mortgage decisions are highly personal and often emotional. Borrowers may have anxiety about payments or need advice on choosing between options. A human expert can listen and adjust to these concerns. No chatbot can display true empathy or tailor advice to someone’s life goals the way a qualified advisor can.
• In short, AI tools and online communities are here to stay, but a smart MLO uses them as a springboard, reinforcing that expertise, combined with understanding the client’s individual needs, still wins the day.

🏠 Manufactured Homes ≠ Modular Homes

Not all factory-built homes are the same... Knowing the difference between a manufactured (HUD-code) home and a modular home is important in financing. Even seasoned real estate agents can confuse manufactured homes with modular homes, but mortgage professionals must discern one from the other to avoid lending misunderstandings. Both are built in a factory and delivered to the site, yet they differ in construction standards and legal classification.

• A manufactured home (formerly “mobile home”) is built to a federal HUD building code and comes with a permanent steel chassis under its frame. It’s typically delivered in one or more sections (single-wide, double-wide, etc.) and can be relocated. The HUD code and chassis are what make it a manufactured home.
• A modular home, by contrast, is constructed in factory modules but must meet local/state building codes (the same codes as site-built houses) and is assembled on a permanent foundation at the site. Once in place, a modular home isn’t meant to move again. In practice, a finished modular home is often indistinguishable from a traditional stick-built home, and it’s classified as real property just like any house.
• These distinctions lead to major differences in financing and require the MLO’s attention up front. Because modular homes are considered real property and built to standard codes, they qualify for traditional mortgages. Banks and conventional lenders finance modular homes the same way as any other house, and buyers can even use standard construction-to-perm loans if the home is built off-site and installed on their land.
• Manufactured homes, on the other hand, are often legally considered personal property (chattel) unless the home is permanently affixed to owned land and converted to real estate title. Loan options for manufactured housing are more limited. In fact, many manufactured homes don’t qualify for conventional mortgages. Financing might require specialized programs... FHA Title I loans (for homes in parks or on leased land), VA or USDA programs, or proprietary “chattel” loans from niche lenders. Even when a manufactured home is eligible for a mortgage, the interest rates can be higher, minimum down payments larger, and resale value considerations stricter due to the home’s tendency to depreciate more like a vehicle than a site-built home.
• MLOs should spot the differences immediately... check for HUD certification labels on the structure, ask if the home has a steel frame, and verify how it’s titled.

🎯 Quick CE Tip of the Week

⏰ CE + Calendar = Done! Busy MLOs live and die by their calendar, so why not schedule your CE like a client call? Block off a recurring 30-minute time slot each week and title it something motivating like “Empire Boost Session.” Treat it like an appointment with your future success. No rescheduling allowed (unless you’re closing a loan, of course).

→ Start an Empire Boost Session Today!

📈 Market Highlight: August Snapshot

🔥 Did You Know? Mortgage rates held steady in the high‑6% range as purchase demand cooled and inventory improved across many markets, while regulatory updates (FHA documentation simplifications, the reinstatement of VA partial‑claim foreclosure relief, and changes to medical debt reporting) are reshaping lender requirements and borrower options. Get key insights on rates, borrower sentiment, refinance trends, and notable policy shifts MLOs need to know heading into late summer.

→ View Full Market Highlight

💡 Feedback Welcome!

We'd love your feedback. The lifeblood of any good business is figuring out what their customers truly care about — the best MLOs also learn this about their clients.

If you have any thoughts, ranging from what topic should be discussed in next month's newsletter to more in-depth ideas on how the CE experience can be the best it can be, please reach out via the email link below — we're truly all ears.

Happy Learning,

— The Empire Learning Team
www.empirelearning.com