A lot of chatter about the First Time Homebuyers Tax Credit
Let's start with the basics about the First Time Homebuyer's Tax Credit....
Yes, it has helped some that might not have bought.
It has given people money after buying to help fix up their homes, pay off debt, or save for emergencies.
And ___________. ... wait, I really can't think of anything else.
Has the Tax Credit been a mechanism that has artificially stimulated the economy? Some will say yes and some will say no. I will be one of those yes people.
People, we are printing money at record paces that our checkbooks will never be able to pay off.The ATM has crashed…..
From day one, I have been against the tax credit for the most part. I have had my reasons, several of which are starting to show now than later. Yes, it has helped home buyers and it has helped the economy some. But is the damage greater than the good that it was suppose to have done? Yes and there are now news reports giving startling facts. Here is an excellent article from USA Today.. - Home buyer tax credit fraud called 'disturbing' Here are 3 disturbing facts mentioned in the article....
**Costing the government $10 billion. I don't think the government are the ones that write the checks from their own bank accounts. Shouldn't it say, this will cost the American Public $10 billion?***
***Gee, an additional $17 billion. I thought the first time homebuyers tax credit was suppose to stimulate the economy, not weaken it. People, who pays for this? We the tax payer.***
***Apparently our kids haven't learned much in school about fraud. Could these be are next wave of harden criminals? And a 4 year old? I would have to assume that a parent filed that on behalf of their child.***
_______________ _______________
Here is another article by Jackie Calmes with similar answers, but that she also shares some more cold facts that seem scary to me. Home tax credit audit shows abuses -
***Claimed the tax credit, yet didn't buy a house yet. I wrote about this in May of 2009. Fraud Alert on the First Time Homebuyer Tax Credit - Do you chance it? - There have been some realtors that basically told me that nobody would commit fraud on this. I even had one realtor tell me that they had a woman that worked for the IRS that got her money before she bought her house. I truly respect this realtor also. But he was very protecting of his buyer, stating that she would never commit fraud because she worked for the IRS. People, I don't care who you work for, greed will get the best of you at times.***
***Now the government is saying that we still have a weakness in the housing market. Yet they will go on and get the media to state that the recession is over? Jim Crawford brought this to our attention in his blog post, I'm so happy the recession is over! Aren't you? - I am tired of misinformation and politics. Will we ever get the truth? People, I think we don't need to hear it, because the writing is on the wall. Have we forgotten how to read? Or do we need people to tell us what we want to hear? hhhhmmmm***
***Imagine that, a politician needing to be re-elected again and possible trying to push something that might actually hurt our economy instead of helping it. now, this is based on my opinion, but I didn't see this tax credit getting us out of the mess or even truly helping the housing market for the most part.***
Conclusion : What crawls under my skin is not only do the lawmakers on Capital Hill want to extend the Tax Credit, but that they want to increase it to $15,000. Why? What is really wrong with $8,000??? And why can't we go back to the re-payment schedule that was applied in the very first tax credit, when the $7,500 first time homebuyers tax credit was introduced. Seriously, what is so wrong with this? Free is not free. One way or another, we will be paying for this anyhow. Some of you scream about people having skin in the game, when buying a home. Yet some of those same people don't seem to be screaming about having skin in paying back the tax credit.
What about those politicians that just want to sign bills and pass them, just for the sake of getting votes for when re-election time comes around. Yet these same people don't take the time to do proper studies to see if this is actually working as planned. Is this all smoke and mirrors for the most part? Do many of you actually pay attention to this? Or do we just go along with the crowd, because it seems better than what we currently have? We need to think about this and not just roll over in our graves, which could be sooner than later. What say thee?
What is in a name? - Honesty? Integrity? Knowledge? Trustworthy? Creativity? Being reliable?
What is in a name designation? - In most cases, the same that would be attached with any name?
Some of you might be asking yourself, "what am I talking about." How about those names that come with such designations as :
Certified planner - Certified Technician
Mortgage Specialist - Real Estate Specialist
In the mortgage and real estate world, many realtors and loan officers have special designations attached to their names. You will usually find these designations on their business cards or on their web site.
Realtor -
CRS - Certified Residential Specialist
ABR - Accredited Buyers Representative
CNS - Certified Neighborhood Specialist
SRS - Seller Representative Specialist
Loan Officers -
CMPS - Certified Mortgage Planner Specialist
UMB - Upfront Mortgage Broker
CLA - Certified Liability Advisor
My Example : Just last week, I wrote this post about basic information on FHA loans and what you should be careful of. FHA loans 101- The basics of FHA mortgages & mortgage shopping - I truly pride myself on numbers, giving out very accurate figures, and not just my opinions based on assumptions. But to prove them with real numbers, not numbers that can be manipulated to make me look right.
I had a loan officer disagree with my opinion and my figures. Hey, I have no problem with people disagreeing. I might actually learn something. Yet he told me that I wasn't correctly comparing apples to apples and that the upfront mortgage insurance was still a cost to the borrower. That part is true, but he didn't read my whole post and review my comparison examples, which detailed this. And if you know how to compare FHA loans vs conventional loans, you understand the whole mortgage insurance issues. You don't have a specific designation for this.
I mentioned several types of designations, which many of them give that realtor or loan officer more knowledge and education. But there is one type of designation that sells costs and that is an upfront mortgage broker. If you read many sites by upfront mortgage brokers, they sell their costs, telling you that they will negotiate your costs, making them usually sound very affordable. This is great for the average consumer. But what is not mentioned is the service or advice that one might receive or in this case, the lack of. Meaning, my comparisons were sound and flawless. But if you deal with someone that sells costs, but might give you the wrong advice, do you think a cheap loan will still be cheap if they gave you the wrong advice?
Conclusion :
My whole point to this post? To make the average consumer understand that not everyone is as knowledgeable or ethical as they may sound just because they have one of these designations. Yes, many of these designations mentioned require for that person to take classes and a test in order to receive that designation.
How many of you remember going to school and passing a test to a class that you didn't fully pay attention to? How many of you were good at winging things? How many have a photogenic mind, are able to remember what they read or hear, yet might not comprehend what was said?
So, who are you really? Just because you say that you a CMPS, certified mortgage planner, does it mean that you have my best interest at hand? Do you know exactly what you are doing?
In regards to the loan officer in my example. This person advertises lowest cost loans. I have an old saying..."the cheapest loan on paper might cost you more in the long run." If this person doesn't know how to compare specific loans, how can this be the cheapest for you? The best? What happens if that person's choices aren't accurate? Wrong? Misleading? Many loan officers sell costs, but can't give you accurate or reliable comparisons when it comes to specific programs. Just keep this in mind when shopping for a mortgage.
PS... don't get me wrong. In many cases, designations are good. One of the mortgage designations, CMPS, and many real estate designations are great educational tools. But if someone preaches it or slams it don't your throat, that might be their only selling feature to you. A desgination should not be verification for that person to be credible. Just be careful...
The number one myth - FHA loans are more expensive than conventional loans!! - FALSE -
Protection of your family & home purchase will always be with a loan officer with knowledge & integrity… not telling you what you want to hear to make a sale!!
PS… this might be a tad long & boring, but worth it if you are buying/refinancing a home.
I received this e-mail from a borrower yesterday buying in WA. Here are some parts of his e-mail.
Borrower #1
"My real estate agent simply told me there would be more closing cost if I chose FHA, which I don't think true."
A major gripe of mine. When comparing a FHA loan to a conventional loan, you need to compare apples to apples. The only difference would be the upfront mortgage insurance premium (UFMIP). Some loan officers and realtors would like to call this a closing cost. It really isn't. First off, you can roll it into your loan. Hence another myth that some FHA closing costs can be rolled into the mortgage. Still false, because this is not a lender fee. It's a fee from HUD. Yet some will debate this as a closing cost. It's like the VA funding fee or the USDA's guarantee fee.
Same person goes on to say...
"XXXXXXX mortgage is the preferred lender to the property and now offering 4.25% for 30 years. Since my house won't be ready til next spring, XXXXXXXX mortgage can't lock the rate that far. I was told they were not sure how much the rate would be then. This part is very scary to me as a first time home buyer without any previous experiences....!!!"
Rut row.... first off, you can't get a 30 yr fixed rate that low. And even if you could, it would cost you like 8 points. So, this loan officer plays the trump card per say. Knowing that settlement won't be until next spring. This lender is giving an awesome rate that can't be locked in... hhhhmmm
Borrower # 2 -
I have a borrower that was referred to me by a realtor. She gives out 3 names to her clients. (there is a reason for this that I don't totally agree with) I shouldn't have a problem with this, but I do. In most cases, most loan officers can be very competitive, especially when they know you are shopping. This realtor prides herself on giving good referral sources that close on time and give good rates with fees. Okay for now, but I have a point to this.
This borrower wants a 30 yr fixed and a 5/1 arm. I give him several good faith estimates and find out that mine are in the top two. I then get an e-mail from the borrower who wants me to be lean on mine, because he was able to get the other lender to cut a few fees. Huh? First off, I had a $100 fee and this other person had close to $1,000 in fees. Secondly, I will never be the cheapest, but I will be better than average. In many cases, I will give more knowledgeable information than the other loan officers involved. Okay, sounds like I am full of myself. But after years of asking the borrowers questions and getting feedback, so many things aren't mentioned.
Example - I ask this person their goals, how long they think they will be in the house, baring any work related changes. He tells me that I bring up some excellent points to think about. Because I bring up current rates, the future of rates in 3 to 5 years, home values, the cost of refinancing, etc,etc. Gee, from his answer, it doesn't sound like the other loan officers bring this up.
FHA myth - the monthly mortgage insurance will never fall off. It does just like on conventional loans.
FHA fact - No matter how much you put down, you will have the mortgage insurance for 5 years no matter what. He said, well, I hope to have more equity in 3 years. Good for you, but if you refinance into another FHA mortgage, you will then have the MI for 5 more years. Okay, so I will go conventional. Good for you, again. But there are many new rules regarding private mortgage insurance. In many cases, the PMI companies want to now see a 2 year history of payments. If late, this could influence their decisions. Again, just so many unknowns to risk.
Onto round 2.... In the beginning, I just give him a 5/1 arm and not details of how an adjustable works, because I want to see if my competition does. After about 4 days of him shopping, I have him call me Sunday night around 7 pm. I ask him if he was told how adjustables work and if he was told the margin on this adjustable. What is a margin Jeff.. hhhmmm.. Just a fact that could have an impact on his decision and his future.
Onto round 3.... The good faith estimate. I always tell the client how long that rate is good for when giving a GFE, showing their rate and fees. Many loan officers don't point out that it's good for 30 - 90 days. And if they do barely mention this or they don't bring it up again a few days later, when they give you an updated good faith estimate. I know this because I question and quiz these borrowers. Overall, until you are ready to proceed with the mortgage application and lock-in, some of these good faith estimates don't mean squat.
Overall, there are more loan officers than one would think that don't properly educate the borrower. As a borrower, you don't need a Harvard education, hence why you want to speak to a good loan officer an excellent loan officer. I found many holes in my questioning of this borrower, telling me that he wasn't properly educated with buying a home and shopping for a mortgage. My 30 yr fixed rate with fees were better than the other two. Yet one offered a very good price for the 5/1 arm. I later refused to give him an updated quote, because after speaking to him and getting to know his goals, it wasn't in his best interest. He was suckered into the lower payment. Don't get me wrong, adjustables have their place, especially with today's rates. But again, the best rate on paper is not always the best in the long run, no matter if it can be offered or not. Knowledge is power!!!
Give it to me all..... the more that you have down, the more things will work out, that you won't leave your home. And as an investor, I will feel much better. Give it to me, every dime.
Here is my point. There have been a few articles written in the last week or so and several of the comments are screaming for more skin in the game. These comments aren't just coming from realtors and loan officers, thinking that this will help correct the foreclosure market and the housing market, but this is also coming from the government.
Now, do we really think that an extra 1.5% down will correct and or help the foreclosures? In my opinion, I don't think so. Lenn Harley gave a good comment in my FHA 5% down article. Here is a snap shot of what she stated...
"ZERO down payment loans are no riskier than 20% down loans IF THE MORTGAGE COMPANY HAS FULLY DOCUMENTED THE BORROWERS INFORMATION AND DETERMINED THEIR ABILITY TO REPAY. - Ability to repay. What a concept."
Bingo... and here is what angers me with those on Capital Hill that apparently have no clue and or just don't do their research. Did anyone read this article by Kenneth R. Harney. Who's most likely to walk away from their mortgage? -
Wow, someone actually did some research that might blow your socks off per se. Yes, common sense says that more skin in the game would be best, more practical. I don't mind opinions, but assumptions without doing your research and or putting 1 and 1 together does get my blood boiling. Besides, here is a hint to who might walk away: "It's probably not who you think."
Let's take it a step further. Howard Sumner wrote : deliquency and foreclosure study. In this article they talk about the different types of real estate markets and where they see foreclosures most.
Real Estate SOLUTIONS ???
So how can we help correct this real estate market and keep foreclosures from happening? There will be many that will say more money down, because that is how it was done 20-30 years ago. 2 things on that blind statement. First off, this is 2009, not 1970 or even 1990. The cost of living is more expensive now. Secondly, FHA still allowed for less money down than your conventional loans in the 70's and 80's. So how come there weren't tons of foreclosures then? Is it the down payment? I don't think so, just an excuse.
Solutions?
-- Maybe lower debt to income ratios a little?
-- Possibly qualify borrowers just as we do for VA loans? In the calculations, we have to find out family size and to use utility/electric costs also.
-- Claudette Millette shares this article with us : New Housing bill will force loan modifications. At least the lenders will have to explain specific options. Claudette states - "All lenders will be required to perform what the bill terms as a "net present value" test for all seriously delinquent borrowers." - Bravo... it's a start.
-- I wrote this article 3 months ago, Call To Action - We must fix this real estate market ourselves. I made a pledge and I am still working on this. We need to put our heads together and make the gov't realize more issues and not the common sense approaches.
Food for thought to a main solution….
Did we ever come to realization that a lot of these messes are because of unemployment? The loss of jobs and income? Our government spending habits? And that we need to focus on small businesses, which are a large part of America's work force.... Besides, if we ask for 1.5% more upfront, doesn't that deplete the savings of a borrower that could use that extra money for fixing up the house? For moving? For emergencies?
Lenn adds some good insight to this with some good discussion. People, we need to stand up and fight this, letting the gov't know not only how we feel, but what they could possibly do to the real estate market.
Baseball Playoffs are here, starting tomorrow, October 7th. Who do you think will win? Who has been hot? Whose been slumping? Who will win the World Series?
As much as I despise the New York Yankees, they have played the best baseball in the 2nd half and in the last month. But just because Steinbrenner buys a team, doesn't mean that they will always succeed. They have the most pressure, with the New yankees stadium being played in this year, and the highest payroll.... they have the pressure of winning it all. The Philadelphia Phillies have some pressure also. Not only to repeat, but to be the first National League team to repeat, winning the World Series back to back since the Cincinnati Reds did in 1975 and 1976.
Here are my picks for the first round winners....
AT AND AT
Who will be in the World Series? I would love to see the Red Sox play the Phillies, but this is what I think..
AT
WINNER?
Philadelphia
Phillies
Now.. yes, part of my heart is hoping for the Phillies. But from a sports perspective, if the Phillies pitching gets back on track, what it did for a whole prior to the last 2 weeks of baseball, they can win it all. And I am hoping for that and some good hitting. There are so many things to at. What could hurt the Phillies the most is their closing issues. Phillies were second to the Yankees in the long ball, home runs. The Phillies have great defense and what usually helps in the play offs is defense and pitching. Time will only tell. Who do you think wins it all and why?
FHA streamline loans are very beneficial in many ways. A few things to keep in mind. FHA streamlines don't take that long, up to 10 days, and the FHA streamline rates are the same as regular FHA loans.
When comparing FHA streamlines to conventional refinances, depending on your credit score, the FHA rate in many cases will be much better. Keeping this in mind, use a loan officer that is very familiar on how these types of refinances work. Just because it's easy to the naked eye, one still needs knowledge of how to make this work for you.
There are two types of FHA streamlines. Changes have been made as of September 18th, 2009 :
1. Streamline refinance with an appraisal : This is where you can include your closing costs within the loan amount. The lower of the two below would be used.
Outstanding principal balance(a) minus the applicable refund of UFMIP, plus closing costs, prepaid items to establish the escrow account andthe new UFMIP that will be charge on the refinance
OR
97.75 percent of the appraised value of the property plus the new UFMIP that will be charged on the refinance..
***Important - Discount points may not be included in the refinance now. If the borrower does agree to these points, the lender must verify that the borrower does have the assets to cover such points. ***
2. Streamline refinance without an appraisal : The calculation for this is the original principal balance(a) of an existing FHA mortgage minus the original UFMIP (upfront mortgage insurance) that is left over plus the new UFMIP that is added to the loan amount.
Key Reminder - The outstanding principal balance(a) may include interest charged by the servicing lender when the payoff is not received on the first day of the month but may not include delinquent interest, late charges or escrow shortages.
These 2 types of refinancing are only for primary residences only. Investment properties that were originally bought as a primary residence, may only be refinanced without an appraisal to only include the outstanding principal and nothing more. Listed here : 4155.1 3.C.2.d and e
If you have a 2nd mortgage or any junior liens older than twelve months old, then this would be considered a regular refinance and could not be done as a streamline refinance. And then you would have to qualify with income and credit.
Some Key FHA streamline changes as of September 18th, 2009 (all of this goes into effect 60 days from the 18th of September):
Seasoning : The borrower must have made 6 months of mortgage payments at the time of application.
Payment History : Greater than 12 months or less than 12 months of mortgage payments.
A. Less than 12 months - no lates allowed
B. Greater than 12 months - allowed one 30 days late in the 12 months, but no lates allowed in the last 3 months prior to the date of the new application.
Net Tangible Benefit : The lender must determine a net tangible benefit to the borrower, no matter if it's with or without an appraisal. The NTB (net tangible benefit) must benefit the borrower by :
the reduction in the new mortgage payment to include taxes & homeowners
refinancing from an adjustable rate (arm) to a fixed rate
(or) reducing the term of the mortgage
Keep in mind, that the new mortgage payment must be 5 percent lower than the old payment. This is the requirement when going from a fixed rate to a fixed rate. There are different requirements when going from an arm to a fixed rate or from a fixed rate to an arm. Please read the mortgagee letter, ML 2009-32.
Maximum Combined loan to value : If subordinate financing is in place, the maximum combined loan to value, which is CLTV, can't exceed 125%.
For streamlines with an appraisal, it's determined off the new appraisal.
For streamlines without an appraisal, you use the original appraised value.
Certifications & Verifications : The lender now needs to confirm that the borrower(s) have a job and income prior to closing. This must be done on the lender's letterhead and signed and dated by someone at the mortgage company. If assets are needed, the lender must verify and document this also.
*** there are a few more changes, when it comes to the FHA streamlines, yet very minor. All of these changes can be read in Mortgagee Letter 2009-32 ***
FHA loans to 5% down?A 5% down payment for FHA loans?
I totally understand the issues at hand, that many agencies are now having more loans foreclose, that more loans are being lost on the books, and that lawmakers are re-looking at FHA's 3.5% downpayment to possibly raise it to 5%.
I have a few concerns, not only what some politician wants to do, but the reasoning behind it. If you read the article,
Here is a comment by Chairman Ben Bernanke.. "I think it’s undeniable that the FHA loans -- because of the low down payments and so on -- are riskier than other mortgages being made, and therefore have a greater risk of loss which would be made up by the taxpayer,” said Bernanke."
Bernanke went on to mention this, "You can make the restrictions tougher and tougher, that reduces the risk to the taxpayer -- absolutely.” “And it reduces the number of people who can get mortgages.” - BINGO.. it will reduce the number of mortgages that people can get. Then where will the real estate market be?
Here is why I am so blue and upset, with confusion in the background. We talk about ...
the housing bubble
homes losing value
foreclosures & bank sales
people that can't afford their mortgages now
skin in the game - larger down payments
loans that are becoming harder to close
higher credit scores hoping to make better mortgages
And the list could go on and on.... but one major question. Could a lot of what was mentioned above, be attributed to ...
job losses?
Less Income?
Higher family expenses?
Living expenses? (health care? School?)
Overall, if you don't have a job, or lose it in the process of owning a home, or just can't save because the cost of living is increasing... wouldn't this be a larger contributor to what was mentioned above? What about USDA loans and VA loans, that are 100% financing options. Yes, their default rates are increasing. But is it because of 'no down payment'? The economy? Unemployment? Job losses?
Let's dig a little deeper. I know a loan officer, Gerry Suarez, that has a client that bought a house and used a FHA loan as their choice of financing. She had put 3.5% down, had fair credit scores of 625, and in the last year, she is under water on the house. She has been paying her mortgage because she can afford making the payments. If she sold her house in today's market, she would owe about $40,000.
My point? She has a job, is responsible, and enjoys the American Dream of owning a home. How come we never read articles about those that put 10% or 20% down, yet went into foreclosure? It happens and happens more than you would think. I have been giving spreadsheets from other large mortgage companies, showing loans that weren't performing on their books with large down payments. It's scary people. And here is a great example of the government stepping up to the plate, thinking that they know best.
One other thing that was mentioned in the article. "The bill, proposed by Congressman Scott Garrett (R-N.J.), would also eliminate FHA financing of closing costs."
First off, this is how rumors start. FHA doesn't allow you to finance the closing costs, except on a 203-k loan. (a few things can be financed per se) You have what is called seller concessions. So I have to assume that this is what the author means, that they want to take away the seller contribution, which is at 6% at this moment. To take it away completely? And to add insult to injury, have the borrower put down 5%?
My thoughts and opinions. -
Do we really think another 1.5% extra, for a down payment, is going to solve this problem? What about focusing on jobs? What about welfare checks? Sending millions of dollars to other countries, to help them, but not helping ourselves.
Small solution? What about possibly lowering the debt-to-income ratios then? I have recently approved a borrower with 3.5% down, $2,000 in reserves, with a credit score of 710, and her ratios were 38.7% and 47.3%. That means that almost 39% of her money goes to her mortgage payment, to include taxes and homeowners insurance. And that 47% goes to the mortgage payment plus all other reoccurring monthly debt. And this is before taxes !!! But what is missing from this picture?
-- living expenses, such as food, clothing, gas, electric, gas for automobiles, etc, etc
Overall, I know we have many issues that need to be fixed, the housing market is one of them. But every time I see some government official or politician try to get the house and senate to approve something, that could hurt our industry more than help, it ticks me off. What ever happened to common sense? Rhyme over reason? What do you, the American people say? The tax payers, what do you have to say????
ADVERTISING – Those ads that seem too good to be true.
I have been in the mortgage business for 17 + years. I have seen so much advertising when it came to mortgage companies and how many of the ads were misleading or just flat out lies. Those companies advertising low rates that didn't happen. This easily went on from 1992 to 2002. I always wondered why this wasn't regulated as strongly as it should have been. I found out that some of these companies had 100's of complaints, yet they still operated for those 10 years. I think this is misleading and I call it Shark Advertising. It's dangerously misleading, yet it worked for many companies, at the expense of the borrower.
If anyone has noticed, we haven't see as much advertising from mortgage companies or large banks in the last 18 months or so. I am now seeing a few mortgage companies advertise on the radio and as of lately, a few advertise on TV, especially ESPN. The ads are misleading because they appear to make you believe that it's being backed by the government. (Miriam Bernstein made this comment below that explains this part.. - Comment # 30 -)Has anyone seen a few ads on tv that look like a news update, a spokesperson telling you about government funded programs or that the government is helping in sponsoring these programs. Yet if you read the fine print, it's a mortgage company, disguising this ad very carefully, spinning it as thought the government is putting this out to the public??
I am even seeing this more and more in such places as Facebook. Below are a few that I am seeing on Facebook now.
Here are some ads found on facebook and comcast.net. As you can see, these mortgage companies and or companies that are lead generators, make you think that the government is behind this. Obama hasn't asked homeowners to refinance. The first one on the left, upper left, is from a company called Lower My Bills. They sell leads to other mortgage companies, after they have gathered your information online. Then you have like 4 to 10 lenders call you, sometimes daily.
People on Facebook that give basic information – eye catchers to pull you in.
Here is a loan officer on Facebook that placed this on his Wall, to capture the attention of others. You just need to be aware of what you read. Sure, this can happen, but there are some unknowns not mentioned. And sometimes the loan officer will raise that unknown, so you can't obtain that great rate and get the next best thing. Keeping in mind, it's not always about the Best Rate. How service? Integrity? Educating the borrower? And so much more.... Please read : I want the same deal that my friend receivd... & Mortgage payment vs Interest Rate
Web Sites that are deceiving !!!!
As I explained in this blog post, deceptive web sites, here is a great example above. Doesn't this look like it could come from the USDA themselves? But it isn't. It acts as a lead catcher, catching your info to call you and or sell you about USDA loans or any other type of mortgage loan. No Cost Obligation is mentioned on the site. - We always love to hear about free things, but are they free overall?
Here is a FAVORITE of mine !!!
I am sure many of you have seen this one on tv, FreeCreditReport.com. The commercial announces a free credit report. But at the very end, it says that you need to enroll in their Triple Advantage program.
A free credit report? They have tons of commercials & commercials cost money to display on TV. They also have like 3 to 4 different kinds of commercials and. producing commercials cost money.
Well, I feel like an investigative reporter for the news. I filled out my info online, trying to see what I get. It says that it takes 3 to 5 days for me to obtain these credit reports from the 3 credit agencies. (giving my credit card #) And then there is a button that says, to obtain your 3 reports now, click here. Imagine that, it's asking for $24.95 now. See the 2nd paragraph on the left, highlighted in yellow? It talks about the new Federal Law and I am wondering if that is what they are sending me now, because that is free. But from what I know, you have to go to annual credit report to get the free reports.
Conclusion : Just be very careful of what you read and what says free, when it might not be free. I always have said, someone has to pay for it from some where. Is it you? Is it me who pays for it?
Overall....No matter what, consumers will fall for some of these ads. It's called false hope. Especially when desperate, you just want to believe that someone can help you.. or, that it's cheaper with them than the others. thanks
Who is upset by those that say they care about us, but actually don't care. Their sites are set on the ALMIGHTY dollar. How many proclaim to be your friend, giving good advice. I am speaking about those that have their own talk shows, web sites, etc, etc.
Below, Lewis Poretz gives what I think is a good example of someone building fame in the mortgage world, yet something doesn't smell right. Dave Ramsey has been respected by many... I don't agree with his main theme, that you should pay your house down as soon as you can... especially in today's market. But overall, he is selling his name to other loan officers, allowing them to use his name to endorse their name and or product... yet it seems that someone was getting very greedy. Lewis tried pointing this out to Dave Ramsey, but has gotten all resistance and negative feedback. It makes you wonder what Dave Ramsey's primary agenda is. In my opinion, based on the facts below, it sounds like the almighty dollar, coupled with trying to be famous. Again, just my opinion... but if I had a manager watching my e-mails... and a complaint came in such as the one Lewis sent, I would want to respond personally... and to look into these matters. But this has gone on for over 10 days now. Makes you wonder.
People... just be very leery of those that proclaim to be experts and such. Just because one might be all over the internet, have a great following, or be endorsed by someone else that you trust... doesn't always mean that they have your best interests at hand... food for thought. And please go back to Lewis's main blog, because there are some excellent comments that kind of make my point. Get to know who is actually behind the name. Please read comment # 15, by Ken Cook. This is part of my point. How does one become an expert? To be able to give advice that sounds great, but it might not be the best advice? This is slightly off topic, from my major complaint, but it's more food for thought. thanks
Let me begin this post with this disclaimer…. THIS IS NOT AN ATTACK ON DAVE RAMSEY -he is an idol of mine… I have purchased his products and believe in what he is all about….This is simply the facts on how their endorsed agents handle consumers and how Dave Ramsey personnel handle complaints…..
I am a huge fan of Dave Ramsey... honestly, he doesn't preach anything we don't already know but his delivery is spot on and about as real as it gets..... i recently received a loanproposal from one of Dave Ramsey's "endorsed agents"...
- let me ask the Active Rain community.... is 2.75% on the front end in ponts + junk fees what you would expect from the man, myth and legend called Dave Ramsey? I had to take a pic of the actual quote and insert into this post as I was not able to cut and paste it.... take a look for yourself........ i have left out the company and originators name, just as i did in the initial email i sent to the folks at dave ramsey --- see their reply below...... ** as a side note - i copied about 13 of my long time friends from AR.... we all know them...... these people know exactly how this went down.... it is a disgrace!
I have sent Dave numerous emails and all they do is get screened by his workers..... see below... especially if you are a fan of his.... let me know your thoughts...
quote on 9/15/2009 30 Yr loan 5.125% 2.75% points cost of points $9679.56 est closing costs $2825.00 APR 5.56% huh????? I don't think so!!!! ___________________________________________________________________
Dear Dave,
I am a huge fan. I drive my wife and kids nuts making them watch you on TV and listening o your products in the car. I would give my left arm to be endorsed by you. I have tried multiple times but my requests go unanswered. With that said – I have a MAJOR concern.
I am an 18 Yr vet in the mortgage business. I believe in a fair profit. I believe in Dave Ramsey. I do not believe in flat out rip offs such as the example below………. *** I am NOT accusing the actual company off ripping off clients – however I can prove in an email I have possession of that the company in mention does not police their originators -- Let me break this down for you…. I was forwarded this quote from a past client who wanted a competitive loan proposal…….. My mission here is not to get anyone fired or punished but it is to make you aware of the lack of quality control your company has with regards to your endorsed agents…… in fact, I have removed the agents name and cell phone – if you want that information just give me a call…. I can forward the complete email…… regardless, this is not the Dave Ramsey I admire and turn to for advice on a nightly basis and I feel I owe it to you for all the free advice you have given me over the years.
I quote this refinance 5.0% ( which is par pricing ) and 1 point. The one point is my paycheck and it covers associated loan costs as well.
Your Dave Ramsey endorsed agent is charging the consumer 5.125% and 2.75 POINTS!!! On top of that, the APR – which is what the government tells consumers should be used as the basis for loan comparisons – is incorrect! I have not seen 2.75 points since the 90’s and the days of the 125% second mortgage……. this is worse than banks overdraft and over the limit fees….
Dave – say it ain’t so. Tell me you don’t endorse this crap……….. I look forward to your response….
Lewis Poretz President – Open Mortgage
------------------------------------------------- Lewis, please send me the entire e-mail. We take these issues very seriously.
As an 18 year veteran in the business, you certainly know that all loan situations are different. I would ask that you allow me to find out all of the facts before accusing XXXXXXX of being “crooks.” That is a very hefty word to throw around. We have worked with XXXXXXXX for over 15 years and never have I had an accusation like that thrown at them.
I will definitely check into this once you send me all of the information.
Thanks.
XXXXXXXXX
Director of National Sales & Sponsorships
The Dave Ramsey Show
877.410.3283, ext. XXX (voice)
______________________ Below is my response to the original email from dave ramsey people.....
Wow - I think it is awesome you guys responded to this that fast….
listen, I am not calling that company a crook. The company does not create the good faith estimates, the loan officers do…… But I can tell you this – I am part of a weekly conference call of about 20 small and medium sized mortgage shop owners like myself all over the country… we call ourselves the mortgage mastermind group - we are experts….. we also have principals and morals and as Dave says “ a heartbeat”…. I will gladly forward anything you request but I would like a phone call from you guys just telling me my client or myself will suffer no repercussions…… in other words… I don’t want any pissed off loan officer coming after my ass…… so I don’t want my name or my clients name passed out…. can you call and confirm that?
Lewis 410-956-0050 below are comments from my group, they all love Dave as well…. I thought I owed it to Dave Ramsey to blow the whistle… I just don’t want to get in the middle of this….
Shit, tell David Ramsey that he should chop off this loan officers hand, for using him as an endorsement, when she is raping this person. Hey, I don’t see a huge problem with someone making $8,000…. But there is $9,600 in upfront points plus about 1 pt on the back end, which is another $3,500….. so, $13,100 on a $351,000 loan amount? Just a wee too much….. if my client ever found this out, I would not have a client for life nor referrals.
Send it to dave along with a rate sheet
Send it to Dave along with a carefully crafted story and maybe he'll have you on the air.
Lewis, I would have to send the customer’s information to XXXXXXXX in order to get the whole story. It’s kind of pointless without that, wouldn’t you agree? Making a judgment without that information is the equivalent of blindly taking your word over XXXXXXXX and forgive me if I decline to do that.
If you won’t give me the information then I cannot help your client.
at this point i sent him the complete quote along with the originators name and contact info ---
All I want is a call from you… it is not the client you need to help…. he understands that it was a bad quote…… he can clearly see the charges in black and white… it is Dave Ramsey’s reputation… why are you defending this shit… here do what you will but if I find you passed my name out as the whistle blower and something happens to me or my family by some loan officer who has nothing to lose I am giving forewarning… I want myself and my client to remain anonymous… please why do I feel as if I am the bad guy here????…….
and this is the BS i get back from someone who works for one of my mentors.......
1)You refuse to give me all the information needed for me to look into this.
2)I have said that we take accusations like this very seriously and that I would look into this situation once you provide me the information I need to do so. You responded by accusing me of “defending this shit.”
3)You’ve copied 13 people in on the e-mail chain who have nothing to do with this conversation.
4)Your actions and your language are completely unprofessional.
5)I will not waste a single minute on the phone with you.
6)I will not respond to any further e-mails from you.
How many of us truly have a business plan? How many of us are still afraid of the internet? How many of us don't utilize the internet as they should? I am sure marketing dollars are tight for many of us. How do you target your marketing dollars. Keeping in mind, time is money. So how do you utilize your time and your money?
There are so many ideas and marketing strategies, even in a down market, when you don't have much money to use for marketing. In my opinion, I do believe that print advertising (not 100% dead) is out the door, that you can spend your money in better places.
I wanted to share three basic concepts that we might take for granted, and not utilize to our full potential. I was inspired to write this after reading Jay Beckingham's blog, "Rain Power" It's Awesome. Jay gave some good basic tips and talked about Googling yourself. I wanted to take this a step further.
3 Basic Concepts of Affordable Marketing
1. - Business Cards - Probably the cheapest way to advertise yourself or keep your name in front of other perspectives. Sure, you usually have to give that person your business card. I did write 2 informational blogs in regards to business cards, what they should look like, and how to utilize them by being creative.
But how about taking it a step further. If you write enough blogs, and or have a few different web sites/blog sites, and interact on the internet; how about just telling people to Google your name. I have talked about this in other marketing blogs and in my opinion, this could be a very powerful marketing tool. Not only powerful, but cheap. Sure, if you don't have a common name, this certainly helps. But even for those with a common name, if you write quality blogs and use some of the tips that Jay mentioned in his blog, you can sometimes pass those celebrity names. Overall, think about this, just telling a client to Google you. Or even write this on the back of your business card. I think it's a great way for a prospective client to get to know more about you.
2. - Testimonials - Now, I sometimes cringe while reading some testimonials, because I wonder if they are real. I actually saw someone copy someone else's testimonials. Yes, this actually happened. But what another great way to market yourself on your home pages or possibly to have a link on your business card, sharing some testimonials. Now, unfortunately, I can't give you my specific link to my testimonials on my blog page, because it's down for now. But people actually read these sometimes and it can help make a decision, if those testimonials sound sincere and real. Example : I just had a borrower call me yesterday, after having an issue with their current lender, and actually read my testimonials. What impressed her was that I seem to care, because someone wrote that I actually was on the phone with them until 11 pm, answering some questions. Showing that you care, without pushing it down someones throat, or harping on it, can and does work. PS... Video testimonials, which I wrote about a year ago, but I forgot to mention. Thanks to comments by Will and David, comments # 22 & 24.
3. - Internet marketing - Blogging & Social Networking - The basic concept here is having an internet presence. Knowing that 80% of the people that shop for homes and mortgages, first shop/search online. It doesn't mean that they make their final decision from searching the internet, but that it can play a large role in their final decision making process.
There are debates in blogging vs social networking, that blogging is dead, and that Twitter is the best way of doing business. I don't want to get into that debate. If you do want to hear a good topic on this, Jason Crouch and Ken Cook co-host a weekly radio show and talk about this stuff. Yesterday's talk show had Paul Chaney as a guest and they explored some good information. Social Media tricks & tips - (click here to hear yesterdays show)
Overall, I firmly believe that if you aren't actively blogging, that you are missing the boat. In many cases, the expense for this can be cheap, depending on what services you use. In my opinion, if you are new to Active Rain, AR is a great place and affordable to start your blogging with.
PS. - And if you ever have any questions about Active Rain, starting a blog, or any thing else, please never hesitate to contact me. I will try my best in helping.
I just want to educate people about mortgages and the process.
In regards to lending, I am very creative, intuitive, honest, and one who communicates information, may it be good or bad. I am a loan officer that looks out for your best interest.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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