I'm sitting here minding my own business when the phone rings, Sally Shopper is on the other end. Sally want's to refinance her current 30 year fixed 5% mortgage to take out $100,000 to purchase an investment property.
Sally would like to remain at a 5% fixed rate and not pay any points, and also purchase her investment property with the same 5% fixed rate. After asking all the obligatory questions, I get around to qouting Sally rates.
Sally: Ed I know there are 5% 30 year fixed loans available because I have one, are they just all sold out? Me: No, Sally they're not all sold out they're just not available at this time.
Sally: Ed, I understand they're not available at this time but, can I refinance my current home at the higher rate then, grab up the 5% rate that becomes available for my new purchase. Me: No Sally, interest rates have gone up, a 5% interest rate is no longer available.
Sally: I don't understand Ed, if I refinance my current 5% fixed rate then it should be made available for use on another loan. Ed, if I buy the last sweater at Macy's and later return it someone else can buy that sweater. I'm returning my 5% so, it should be available to me for my investment property. Ed: Sally, it doesn't work that way interest rates are up therefore, 5% is no longer available.
Sally: Well, what can I do? I've called 7 people today and they're all telling me the 5% loan is sold out. How many people have to return the 5% loan before it's made available again?
By this time my eyes are rolling and I'm trying not to laugh at this woman. I try to calmly explain to her how interest rates are determined, etc. She continues on with the same line of shopping and returning, when will I be getting more 5% loans in, etc. By now I'm looking at the clock wondering if 11:30am is too early to have a sit down with my good friend Jack Daniels when she hits me with, Ed I really like you, you're very up front and honest, I'm going to call you back every couple of days to see if any of your clients have returned their 5% loan.
Yesterday’s news of New Century’s bankruptcy filing got me thinking, who’s responsible for the imploding bubble that is the housing market? Are the lenders, the FED, borrowers, Realtors® mortgage brokers, appraisers or loan officers responsible? Who’s ultimately responsible for the real estate debacle we now find ourselves in? The answer to this tough question is that everyone is responsible to some degree or another.
Ultimate responsibility can be laid squarely at the feet of former Federal Reserve Chairman Alan Greenspan. Greenspan lowered rates and encouraged borrowers to...(more)
About the guy who put this all together: I started this blog/site to show a couple of friends the total count of foreclosures by Countrywide. I kept going to Countrywide's website (along with other places) looking for an REO and was frustrated by the way the listings were presented. After noticing a rapid rate of acceleration in foreclosure inventory, I decided to crawl their site and organize the listings. I'd like to thank everyone blogging about the housing bubble who literally saved me from buying an overpriced house a couple of years ago and got me interested in our economy. Let's hope this doesn't end up as badly as some are predicting and that the "American Dream" remains within our hearts for centuries to come!
In part two I promised you a few ways to keep yourself on track and accountable for your spending.
My biggest problem was that I had no one other than the puppies to hold me accountable on my journey to becoming debt free. Let me tell you folks I fudged the wants into needs on many an occasion. I soon started to notice a pattern in my spending. Stress equaled spend, boredom equated to more spending, nothing on TV let’s go shopping for some new music on Itunes.
My ah-ha moment came when I found myself one Saturday night with ... more
I promised you a few tips and tricks to use to help on your way to becoming debt free.
If you are one of the millions of Americans who find yourself living paycheck to paycheck don’t despair you’re not alone, recent figures suggest that over 75% of Americans are turning to prostitution to make ends meet one paycheck away from financial ruin. The goal of this article is much the same as the goal I have personally achieved and the goal I try to get my mortgage clients to achieve.
My goal to debt free living started about 1 year ago when I noticed that no matter the amount I earned each month it was never enough to cover the bills. I’m telling you it was a serious wake up call when I would watch $15,000, $20,000 even $30,000 monthly commission checks be gone within seconds of depositing them and paying bills. I kept asking myself where in the hell is the money going?
In an attempt to answer my question I started carrying around my digital voice recorder (yeah, I’m a techogeek and I’m old. I was forgetting stuff 5 minutes after I said to myself don’ t forget…), to record my purchases for the day. I “wrote down” everything I bought then recorded it in an excel spreadsheet so I could see on paper what I was spending. After a month it soon became clear that I had a spending problem.
Oh, I was spending it quicker than I could make it, ... more
This entry is inspired by Dad Gone Mad’s entry “Brother Can You Spare a Dime?” Dad Gone Mad has broken a social taboo in his blog by discussing his financial status. The number of comments he received topped out at 80, all from people who find themselves in similar situations.
As a Mortgage Broker I speak with people daily who have over extended themselves in their quest to keep up with the Joneses. Who are the Joneses, has anyone ever met them? If you have will you please give them a swift kick in the ass or hang a burning effigy of them so that we can all see the lie that is their publicly portrayed financial well being.
One of Dad Gone Mad’s readers made this statement which truly typifies the thinking of the average American and is a sure way to....(more)
Face it folks all the indicators are pointing toward a substantial increase in the number of homes that are going to be foreclosed upon. As one account executive from a national lender put it “There’s a tidal wave coming and lenders are preparing for the worst.”
An Associated Press article on March 13, 2007, reported that late mortgage payments and foreclosures have reached a 3 1⁄2 year high. This alarming news even made the front page of the New York Times March 11, 2007, when “Crisis Looms in Mortgages,” an article by Gretchen Morgenson, described some startling realities.
When shopping for a refinance or purchase loan I can’t stress enough the importance of comparison-shopping. This past weekend I held an open house for a Realtor®, a couple spoke to me about their mortgage needs, during this discussion they advised me they were working with two lenders one was putting them in a 2 year adjustable rate loan at 7.25% with 2 points charged up front. This seemed a little aggressive even in today’s market. With a credit score in the 800’s and a conforming loan this couple easily qualified for a 30 year fixed rate loan at 5.75% with a 1-point cost.
While holding my own house open today I had a nice Greek couple come in who are out shopping for a home and also looking to refinance their current home which they'll keep as an investment.
They've been talking with Quicken Loans and Amerisave; Quicken Loans calls them everyday and Amerisave let's just say they're gouging the hell out of the client.
On the refinance of $372,000 Quicken Loans is charging them 2 points for a rate of 6.500%, Amerisave is charging them 2 points for a rate of 7.250% both extremely high rates for a couple with credit scores in the 800's. After a quick education about the loan process, rates and points I managed to get them to fill out an application, ran their credit and told them what I needed to complete the rolling of the ball.
I was quoted them 5.750% with 1 point, explained closing costs, tax impounds and all the fee associated with the loan and handed them a good faith estimate. When the left they said they'd be in touch, 15 minutes later they came back with all their required documentation.
Not a bad days income for holding my personal house open. Picked up two loans and possible sold them my house.
This my fellow loan originators is why I work open houses for Realtors, not only do I pick up business but, I pick up contact information and potential clients for my Realtor Partners.
Moral of the story: Beware of the honest guys out there who are upfront and take the time to explain interest rates and the loan process, you'll lose every time.
Bank regulators in New York, New Hampshire, New Jersey, and Massachusetts have all served Irvine California based New Century Financial Corporation one of the nations sub-prime lenders with cease and desist orders claiming some of their subsidiaries have violated state laws.
In their letters, the state regulators claim New Century subsidiaries have failed to fund mortgages that closed and didn't notify the states in a timely manner of its financial woes.
Several of New Century's creditors have cut or halted financing in recent days and demanded the sub-prime lender buy back loans it sold to them.
New Century, which lends money to home buyers with poor credit histories, has said it doesn't have enough capital to satisfy its subsidiaries' outstanding loan repurchase obligations. The company has stopped accepting loan applications.
On a side note: I have information from an attorney client of mine that several California Counties, including Orange County, CA has filed a class action lawsuit against New Century for it's questionable lending practices and loan qualification manipulation. Look for more on this case in the coming weeks.
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