Jen's Brain. For Sale. CHEAP.

Disappointed in FHA Secure

2008-08-11T19:58:32Z

So, with all the horror stories of people losing their homes, rates adjusting, astronomical mortgage payments, job loss etc..., the government decides to formulate a new FHA program aimed at helpig borrowers who are 'facing foreclosure'.

The short version of the program is this: Borrower has an adjustable rate mortgage. Rate adjusts. They are late on some credit card payments and some mortgage payments, but want to keep the house. The idea would be, FHA would refi the loan to a lower, fixed rate and help keep that borrower from losing the house, which is supposedly a lose-lose situation.

First round of pickiness states that the borrower can have no late payments PRIOR TO the adjustable rate hike. Meaning, no irresponsible loan hog will get a new deal. Fine. I can grasp that. You don't want to 'bail' out someone who is reckless with their spending, and not responsible with their debts.

But the second round is really bothering me. See, they won't help if the house is IN foreclosure. So, if you miss one or two payments, and your lender has not filed foreclosure paperwork yet, you're fine and can get approved. BUT, if they have, you're disqualified.

Who does this help? The people will lose the house, the banks will have another property they don't care about, and sales prices continue to plummet because no one has confidence in the lending system, and therefore won't buy at any price.

If the program is supposed to help those 'facing' foreclosure, why do they leave out the biggest group- people who are IN foreclosure?

I just don't get it. Has anyone had any experiences with this program yet? Positive experiences, I mean. So far, I've just heard of a lot of turned down applications, and a lot of disappointment.

Current Market Conditions- CT/NY

2008-06-14T21:44:41Z

Well the spring season is coming to a close, and I have to say I did see a lot of activity in and around my area.

Inventory is still very high- it seems that everyone is trying to sell right now, and most are not having much luck.

What is it like where you are? Are you seeing the 'bottom' of the market yet? Are we still 5-15% overvalued? Some areas are obviously hit harder than others- Las Vegas for example.

I feel optimistic, but I still wish that people who do not HAVE to sell right now would just take there homes off the market. That would be a great way to get some inventory off the table, and supply and demand could get back onto equal ground.

Rates have gone up quite a bit over the last few weeks, and that is going to be a major concern in the coming months. Why would someone buy now, when they feel they can get a better rate by sticking it out 5-6 more months??? Why would someone buy now if they don't really NEED to? Rates have to remain attractive, and while they still are (6.5%- basically where we were late summer/early fall '07), a month ago they were comfortably at 6% or below... That's a big jump, and I fear it's going to keep going!

Well, we'll all see what happens. It's definitely going to be an exciting summer. But let's hope rates come down a touch, and people get excited about owning homes again!

Good luck out there!

Mortgage Rates Today

2008-05-29T17:26:38Z

Wow... Lots of ups and downs over the last week or two... and unfortunately, most were 'ups'. Rates have gone up about .375% from two weeks ago! Why? Well one reason is the bond yields- I know more people keep talking about Mortgage Backed Securities- I get it... But you can't argue with the fact that the bond yield on the 10 year note has gone from about 3.75 to up over 4.05 today! That's huge! Hopefully rates will back off a bit tomorrow, I did hear that the end of the day forecast for the MBS was better than the morning...

I wish that lenders would let the news of the day play out- instead, what we have is a constant shuffling, and ruffling of the rates throughout the day. We have had days where there were 3 price changes! It's enough to make anyone's head spin. Put a moratorium on knee-jerk rate reprices! Like that will ever happen :)

I just hope rates stay under 6.5% or so... Obviously, we'd all love to have rates in the low 5's again, but with cheap money, came very expensive houses and bad decisions... we don't really need that again...

So, let's hope for steady rates, and an end to this up and down roller coaster of constant repricing.

Yes, Liberals do want to control our oil! errrrr, something like that.

2008-05-29T12:39:23Z

Is that so wrong? On another thread, I asked a very simple question... actually, two if you want to get technical. I know how some of you guys love your semantic arguments.

First, I stated that in the mortgage/real estate biz, we are 'capped' on profits... I can't make more than 5% on a given loan. Boy, was I taken to task for THAT slip up. See, my misuse of the word 'profit' was too confusing for some. Call it what you want, I am CAPPED on what I can make on any given loan. Period. Very simple to understand. My question was- if I am capped, why can't we cap the oil industry as well? They affect EVERY SINGLE other industry, they affect our quality of life, they affect EVERYTHING. Why are they free to do as they please?

Secondly, people were discussing drilling in Alaska, and other places in the US and offshore. I asked a very simple question here as well- When we let the oil companies drill ALL OVER our country, are they not going to sell that oil for the going market rate, and probably to other countries??? The answer, although no one wants to admit it, is that since oil will not be regulated by our government, these private companies will have free reign to sell to the highest bidder. What good does that do us, the consumer? NO GOOD AT ALL.

I say get people signed up for our new public works project- drilling for our own oil. We will not be beholden to any foreign country. We will not be beholden to a for-profit industry that cares for one thing only- PROFIT. We will create thousands of good-paying jobs- if not hundreds of thousands! Let's get our greatest natural resource to work FOR us. Not against us. And not for the Chinese. US.

Is that so wrong???????

Communication IS Key...

2008-05-28T19:40:49Z

Like everyone, I deal with my fair share of 'Communication Breakdowns'. Conversations that should have been had, that weren't. Conversations that should be had, but with SOMEONE ELSE, that never happen. Arguments over fivolous matters occur, probably for no other reason than entertainment or to relieve stress that was built up ELSEWHERE.

What are some good keys to communicating effectively?

I know from my past experiences that if you talk TOO MUCH, you're labeled a 'squeaky wheel' and ignored. If you voice concerns no one is comfortable dealing with, you are ROCKING THE BOAT. People tend to get defensive when they hear things they don't WANT to hear.

How do YOU address situations where discussing something makes someone uncomfortable, or angry, or nervous? How do we say 'I don't like this at all' without coming off as abrasive and trying to pick a fight? How can we voice our opinions and actually be heard???

Ah, a question for the ages.

You owe me $3500... Pay up.

2008-05-23T13:26:09Z

So, again, someone is TRYING to pick a fight about whether or not 'Mortgage Accelerator' programs are worth a penny, let alone $3500. I just wish that people would get off of the 'well, they make it sound so complicated- I must NEED the software' track and take a step back and THINK about what the whole concept is based on- ADDING MONEY TO YOUR MORTGAGE PAYMENTS!

This is what I wrote in response to this particular character, and I am re-posting so this topic gets more attention.

Let's see here....

$118,000 30 year fixed at 6%= 707/month.

Let's say your sister grosses monthly income of $2000

Subtract 707 for the mortgage, plus another heap for regular living expenses- heat, water, cable etc...

That leaves a nice cozy $593 (In my calculations, phew... glad I had a calculator handy- THAT WAS HARD!!!)

NOW:

ADD that $593 to the monthly mortgage payment, and voila! Instead of paying off the mortgage in 30 years time, you pay it off in JUST 10!!!! Wow! Who knew paying off a mortgage could be so much fun!

Tell your sister to give back her software and pay a $3500 contribution to the charity of her choice instead. THAT'S money well spent.

Please, if you know ANYONE who is either being bombarded with sales calls to PURCHASE the product, or if you are a mortgage pro, real estate agent etc... that is being asked to SELL this product, come back here and read this blog again. Don't do it!

Kind of like the smoking ban....

2008-05-22T09:11:51Z

A certain person was just booted off of AR, and understandably a lot of people are upset about that. I am NO fan of censorship, and even though I thought what this person had said on several occasions was pretty foul, I did not ONCE flag the comments or blogs. I don't believe that we should necessarily be without any side of an issue- even the most crass, simplistic and vulgar viewpoints.

BUT, I am reminded of when Connecticut was pushing forward with the effort to ban smoking in bars and restaurants. Being a smoker at the time, I WAS TICKED. How can they tell us that we can't smoke and drink at the same time!!! That's my favorite thing in the whole wide world!!!!! :)

But you know what happened after the ban took place and all that nasty, worthless smoke was gone? People drank more... haha... Just kidding... we drank less- but the point is- we didn't STINK. That foul odor wasn't nesting in our hair every morning after a long night at the bar... :)

Looking back, getting rid of that putrid smoke was the best thing CT ever did. I hope the people that are upset about that certain person's exit will come to realize that he added nothing useful to the debate- and was often times overboard in his comments. He basically stunk up the place. And now he is gone, and so is the stench. Hopefully, that will turn out to be a good thing. Only time will tell.

Thank you AR for paying attention.

And to those who feel let down by AR for this, remember it was this person's own actions that caused this. Warnings, I am sure, were issued. So, don't blame the wrong people here. What is done is done, and I hope that the debate gets healthier now- and we don't drag it down anymore with outrageous behavior.

Mortgage Accelerator Scams

2008-05-08T09:05:21Z

So, these have been popping up ALL OVER. People are trying to recruit real estate agents, mortgage brokers and even Bingo Ball cleaners to sell a software program that can 'help' people pay off their mortgages in record time.

This is my take:

If someone were to take every ounce of their paycheck, after taxes and basic expenses, and put it towards their mortgage- they would pay their mortgage off FAST. In fact, I would guess that they would pay it off just as fast as they would if they used this stupid program. Think about it though- instead of having ANY leverage in your house- every penny you make will be tied up in your home's equity. Sorry, there has to be a happy medium. Why would you want to have 100% equity in your home, but no cash in the bank? What is the brilliant strategy there??? I get the 'ownership' quotient, and the value there- but again, you don't need a $3500 program to tell you how to do it. If you have the discipline to use the program, you probably have the discipline to add $800/month to your mortgage payment.

My question is simple- why would someone actually recommend this ridiculous program??? Surely there are less expensive, less vertigo-iducing ways to explain to someone HOW TO KNOCK YEARS OFF OF THEIR MORTGAGE. In fact, I show my clients how to do it for free, and with a few clicks of the mouse. Am I missing some genius formula here? Or is the cow pattie it seems to be?

How long before this scam gets called out for what it is???

If you plan on commenting, and you are a seller of this miracle product- no spam, just the facts please. Thanks in advance.

A simple way to look at the healthcare issue

2008-05-06T08:46:13Z

Two things I want to mention before I go off on a rant here. One, I do not have health insurance for another two weeks and two, I am a 'liberal'- whatever that means.

The way our system works right now, we have one large group of people pooling their money together in the event one or more people get sick. Employers 'pay' for most of the premiums, but let's be real for a minute and admit those payments are passed down to their employees in the form of lowered salary. That's why people are offered 'salary and benefit' packages- they make the salary look better by saying 'look at all this neat stuff that comes with it!!!'.

In this country, unfortunately, there is a large group of people that do not pay into this insurance pool, and yet sometimes require serious help. I would guess that because of their lack of preventive care, the uninsured in this country probably spend MORE on average than the typical insured person. Just a hunch. Guess who pays when they can't? We all do. Out of tax dollars, or in the form of higher payments at the hospital. Hey, they have to recoup those costs somehow, right? So now, the insured actually pay twice- and a TON. Who thinks that's a good thing?????

The issue is, a lot of people are scared of a nation-wide, low-cost health care system, because they think that has something to do with the 'quality of care' and we'll all die waiting for antibiotics and heart surgery because the wait for a doctor will be too long. How? Why would someone think that we'll see a dramatic spike in health care usage? When the baby-boomers start aging, we'll see a dramatic spike. Are we even prepared for THAT then? Should we start recruiting kids to go to medical school at age 4? What do we do to NOT have exorbitant wait periods? Don't just come up with the problem, come up with a solution! Making sure hospitals are properly staffed would be a great start- and we have t o do that regardless. .

Another problem is that people think health care costs will RISE. Where they get this idea from, I don't know. There is nothing more expensive than an industry driven by PROFIT. If we had a system where we pooled money together for payment of services and NOT PROFIT, I'm not sure things would get more expensive. In fact, I'd say that after everything is totalled, we'd make out much better having state run, health care 'co-ops'. Same thing as 'insurance', just more efficiently run.

The bottom line is, early detection and prevention are pretty key. Why have 43 million plus people mucking up the system when we can all pay ONE time, for each service and be done with it! No sneaky taxes added on, no sneaky loss of income from our employer, no sneaky charges at the hospital. Just patient and doctor, with a fiduciary in between- and not someone bent on making money. the pooling of resources is identical- but in my view it would be a heck of a lot cheaper in the short AND long term. Better healthcare for ALL, means better prevention and lower costs for ALL.

Am I crazy to think health care has NOTHING to do with profit, and everything to do with our quality of life?

We can do this in Connecticut- we would be the perfect place to test it out. For those of you that say 'oh, the government is going to get involved. Whoever told you the government can help is crazy. The government can't get anything right!'. Well, promise me you will never run for office. It's that kind of attitude that really sinks us. Our government is supposed to be by the people, for the people. If you don't see the power that we have, fine, but at some point something has to be done. If you honestly think corporate America is better at making decisions than our government- HIRE NEW GOVERNMENT, because they obviously have their heads up their....

Just a thought.

The Countrywide debacle

2008-05-05T11:11:15Z

So what's the latest on the Bank of America buyout of debt-addled Countrywide? Well, it seems that signs are pointing to an 'oops, we made a mistake... no deal' coming out of BofA in the next few days. Bank of America was never particularly strong in the mortgage lending arena, and this purchase would have automatically catapulted them to the top of the heap. The problem is, is it worth all the trouble that CW brings? Countrywide was HUGE in pay-option ARMS and other risky mortgages that people are all too willing these days to walk away from. I know from first-hand experience that people were misled on these programs. Any other loan officers out there remember the pitch- 'the pay option ARM is great- it's based on a twelve month AVERAGE of the MTA, so your clients can be assured that it won't move greatly in the future'. FAST FORWARD to reality, and those ARM payments were going up every single month, and by a lot. Great product guys, I would expect a class-action lawsuit any day now. And that's just one example of how they did things there- risky, risky risky... all they cared about was the bottom line, and how wealthy they could make their executives. I think Bank of America woke up and realized they don't need CW. In fact, because of BofA's very competitive purchase programs, they could get a significant increase in market share just by good, old-fashioned product innovation.

They are taking risks, but nowhere NEAR as dangerous as CW.

What's the feeling on the street? Is this marriage ending? Will BofA pull out?

I can't believe it's May already...

2008-05-04T19:03:33Z

I get it. I'm getting older, time is going by faster. But when I went to sleep last night, it was New Year's Eve... and now it's Cinco de Mayo? What is going on here? What happened? Where have I been?

The good news is- the real estate market is picking up- and it should be! Rates are still very low, there are tons of homes on the market waiting to change hands. One of the things I have been thinking about is how home sellers can move on in this market whether or not they get their homes sold. Has anyone had any experiences where it made sense for the seller to lease the home out, instead of trying to unload it? Up here, values have dropped but not DROPPED. So, for some people who have plenty of equity they can just suck up their small 'loss' and move on. Sure, they didn't make out like bandits like they would have 2 years ago, but they can still make some money. But, there are many people who owe MORE than a home is worth, and due to work relocations or job loss, they have to get rid of their homes. Why not lease the property? Worst case scenario, the rent doesn't quite pay for the outstanding mortgage. It's better than nothing though, right? I think this is a good way to go for people that NEED to move and don't have time to line up a buyer. Any thoughts? Any experiences good, bad or indifferent?

Mortgage-wise it is not feasible for EVERYONE. But it could be a good option for the time being. Just a thought.

I just hope the rates hold out for a long while. Fingers crossed.

Before you know it, it'll be Thanksgiving. I can't stand it. :)

Zillow argument

2008-04-26T09:02:49Z

I've been on Zillow Mortgage Marketplace since the day it went live (I think, must have been damn close).For the most part, I really can't complain about the system. I've gotten a few good leads, a definite closing, and hopefully a few more clients. I've also been active on the discussion boards, which is pretty fantastic too. I've met some really cool people, some of which may also be on AR- so I should probably check that out!

I got into a little back and forth yesterday with a couple of people, and I'm really not too sure why. This was the deal.

A seller had gotten an offer on the table for her home. It was an FHA loan, with both down payment assistance AND a 3% seller concession. My comments were basically asking 'hey, SHOULD people that have no savings and no money for the inevitable crap that happens when you buy a home REALLY be getting a mortgage these days? Isn't that why we are in the mess we are in?'

A lot of the comments I got back to that were saying that I am too protective of my clients, and that if they QUALIFY, they should do it. It isn't the loan officers job to dictate what they can and can't afford... etc...

Isn't it our job to make sure they have a strong financial plan for the days after closing? I asked innocently. And what I got was snide remarks asking if I negotiate their insurance rates too.

I was kind of surprised at certain people's reactions.

Am I wrong in thinking that as mortgage professionals it's not only our job to get them into a loan, but to also remind them of what can happen and make sure they are prepared and comfortable with the total monthly payments- including gas and heat and food!!!

Am I completely out of line when I say that if we had all done this over the last 5 years, we wouldn't be in themess we are now? 106% financing and no reserves! 125% financing, no asset check! No down payment? No problem, ask the seller for it and we'll raise your loan amount!

Don't get me wrong, I like FHA, I like helping people buy homes. But if they have no money in the bank for closing costs or their down payment, shouldn't their debt-to-income ratios be a bit lower than the regular guidelines? Maybe make it so that if you use BOTH of those options, and will have no nest egg, your ratios must drop by 7% or something like that. It's to safeguard the lenders AND the borrowers! Since when did we only have an obligation to get the deal done?

BTW- one of my FHA clients was at the top of their ratios, and uncomfortable with the payments EVEN THOUGH THEY WERE APPROVED. Instead of pushing them into the bigger loan, I advised them to keep their eyes open for a cheaper house. They found one. I'm sticking to my guns here, but that's just the way I do business.

The Fair Tax

2008-04-12T15:20:11Z

Happy April, hope everyone got their taxes done already.

Wouldn't it be nice if the IRS didn't exist though?

Wouldn't it be nice if a salary of $60,000 actually meant TAKE HOME PAY?

When it comes to the fair tax, there are some drawbacks. But to my mind, having a fully transparent and no-loop hole system would actually mean a more efficient and user-friendly tax system.

Like everything, people like to pretend it's a left/right, conservative/liberal issue. Let's get that out of the way, and say it's more of a common sense issue if anything. I consider myself a liberal, but when it comes to taxation and how money gets spent, I like to think I'm fairly open-minded about people's complaints, and also very interested in alternative tax systems.

If conservative absolutists had it their way, we wouldn't pay any taxes and we would have an 'every man for himself' situation. Not to mention- who would pay for the wars???

My problem with the 'no tax' people is simple- we NEED certain things. Roads, schools, heck even prisons... Someone DOES have to pay for that. But why not have a very small tax at the federal level, and larger taxation in local communities? Wouldn't it make more sense for New York to KEEP more money instead of sending it to the federal government? Wouldn't it make more sense if STATES had more say in where their money was spent?

Just think about this- when people go to H+R Block to get their taxes done, the tax preparer is making sure that their client is getting every possible penny back. That person at H+R Block costs money. SO, a guy right down the street may be eligible for all those same deductions- yet not know it because he doesn't feel like spending 150 bucks to find out. In other words, one person gets their rightful amount back (argue about THAT one hehehe), and the other guy doesn't. How is that fair? How is that transparent? It's not. The current system is confusing and ridiculous.

How much does it cost to run the IRS anyway? Anyone know?

Now I'll get back to watching Red Sox/Yankees game 2!

What is the point of low-balling rates on Zillow?

2008-04-11T13:50:25Z

I'm on the Zillow site, trying my best to scare up some business. For the life of me, I can't figure out why people low-ball and flat-out lie about their rates.

Do they think the customer won't realize they've been lied to?

Do they get paid for the number of phone calls they take and not loans they close?

Do they think that working for free is something everyone should do?

So many low-ball quotes on there, and it seems that until people actually start using the service and leaving feedback, there is no recourse against these guys. I just can't figure out the point. If you want to work for free, you should instead volunteer at a retirement home and do some good with your time. If you are LYING just to get a phone call, get a life and go get your JD. :)

Any sociologists out there want to take a guess as to why a person would shoot themselves in the foot, repeatedly?

Just curious.

Yankees v. Red Sox Game 1

2008-04-11T13:42:15Z

Being a Sox fan, I have to admit I'm a little nervous about tonight's game. Clay Buckholz starting the series? It'll either be an awesome, dominating win- or his nerves will get the better of him, and he'll be out of there in two innings.

Well, it should be an exciting weekend for baseball fans. I will watching every second of the game, hopefully enjoying it!

Go Sox!

Reverse Mortgages

2008-04-09T09:19:05Z

I'm not going to go all Robert Wagner on you all and push reverse mortgages, I just wanted to mention a few thoughts on when I would recommend such a product.

If someone is over 62, and facing foreclosure, a reverse mortgage is practically a godsend. In these times where lending guidelines are so strict, even low loan-to-value deals have no home if you have mortgage lates on your credit. Add to the situation a job loss, or some other negative circumstance and you are SOL in most cases. BUT, a reverse mortgage doesn't take those credit issues into account- after all, they don't count on you to pay any mortgage payments, they 'pay' you.

This is the ONLY time I would actually recommend a reverse mortgage- they are just so costly to the homeowner and their family.

For some people with plenty of equity and good credit, taking out a mortgage to place in a trust or a special bank account for living expenses would be just as good, if not better, than the 'government-insured' reverse mortgage set-up.

Here's a quck overview on the HUD website about reverse mortgages:

http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm

Has anyone dealt with situations where a reverse mortgage has been the right thing to do, other than when someone is facing foreclosure? Perhaps I'm overlooking a value of the program, educate me! :)

Obviously, if someone cannot qualify for conventional financing, this product should be on the table- but under what other circumstances should I recommend it?

WAMU gets rid of it's wholesale lending...

2008-04-08T13:21:44Z

How bad does this affect mortgage brokers? WAMU had tons of correspondent lenders as well. All gone as of the 10th. Wow.

Soon, there will be no more wholesale/correspondent lending. Banks will hold on to whatever they can- and that means NO MORE MORTGAGE BROKERS.

Who's next?

Reading a GFE takes some common sense.

2008-04-07T10:44:50Z

I had a client who was relocating from Georgia up to Connecticut and needed a 95% LTV loan. He was adamant about doing an 80/15, and I said 'perfect, I wouldn't recommend going any other way'. He had the credit for it. Everything was peachy. At the time, I was using Principal (before they sold CITI- blegh!) and their high CLTV stuff was awesome. (I just got teary-eyed thinking of the good old days.) Everything seemed to be going fine...

But then something happened. He had shopped around like a good consumer, and decided my GFE was too high. There was a gap of about $300 between me and the next guy's GFE. Ok. I said let's go through the numbers. Depending on the time of month you close, you could pay more or less at closing. This is an estimate, and I'm not going to lie to you to get you to use me.' See, we use 15 days interest on our GFE's, some guys only used 5 or so. There's the $300+. It's not like I was charging him points, or ridiculous fees- it was literally that small of a difference.

Dan, we'll name him to protect his identity, ended up going with another company, a company that promised him all I had and MORE- they 'saved' him a whopping $300.

Dan calls me FRANTIC on the day of his closing. 'I need help, they said they aren't licensed to do second mortgages and they just did the one loan. I signed the paperwork, they said they'll refi me in a few months. What should I do?' Let's just say I had no sympathy and leave it at that.

THIS IS A TRUE STORY. I AM NOT MAKING THIS UP, AND IF I HAD THE NAME OF THE COMPANY, I WOULD POST IT KNOWING THAT THEY PROBABLY ARE NO LONGER IN BUSINESS.

Lesson #1: If a client bickers about $300, drop them like a bad habit. It will only end badly.

Lesson #2: If a company says they can do second mortgages, and then admits they can't AT THE CLOSING- sue their asses and file a complaint with the Banking Department.

Lesson #3: Honesty is sometimes lost on fools. I have lost more business than I care to admit by being honest. Why does honesty scare so many people?

Lesson #4: Don't get wrapped up in the 'bottom line' on a GFE. Numbers change. Any buyer out there should educate themselves about this fact- the only things they should care about are the actual lender fees- everything else is variable. Add up the app fees, the processing fees- all that stuff. Use that to negotiate- not things that MOVE from day to day- like interest or even attorney fees.

An honest attorney? Never.

2008-04-03T21:13:46Z

So, I had an attorney 'friend' of mine say he wouldn't budge on his price for my parents closing when they were buying a house. 'Ok, fine, I'll go somewhere else. I've given you enough business (tens of thousands of dollars of business, not peanuts), but whatever'. Jerk.

Go to attorney 'friend' number two and he says 'sure, I'll give them a discount. $50 bucks off.' Oh really> Oh you're sooooo accomadating. Let me kiss your $1000 dollar shoes.

HA! We get to the closing, and there is a $50 'courier' fee stuck in there. Hmmmmm. You know what was REALLY amusing? I was the 'courier' who brought the paperwork where it needed to go! His office is right around the corner from me, so I swung by and picked up some things that needed to get over to the other attorney two towns away.

Now, excuse for being a tad bit pissed, but don't tell me you'll give them a discount just to stick them with some garbage fee! It's not like these attorneys up here don't make enough money on the title insurance- what's the take? 70% of the premium? (this is CT, I know some states operate differently. Here, the attorneys order the title and get paid handsomely on the insurance). So let's not feel bad for these guys. Here I am sending them real estate business, and they are all friendly when I see them out at the bar shoving their faces with gin and tonics and sushi (blegh).

For real, why can't people- regardless of occupation- be good, decent, human beings with more on their minds than just getting every little penny they can?

Needless to say I have used neither spineless little wimp since. I'm Italian. Piss me off once, and I'm done with you.

FHA offers $100 downpayment on HUD home purchases?

2008-04-03T20:35:39Z

From what I hear, it's true. Any agents out there have some good REO's (HUD only, it seems... I could be wrong)? Maybe we could do some co-marketing??? :)

Let's get rolling on this! I know a lot of HUD homes are dumps, but that may not be true these days.

Some things have been done to add a little energy to the market- is anything going to work? I already know the loan limits being raised has proved to be huge up here.

Good luck out there!

Jennifer

False Advertising

2008-04-03T08:34:19Z

I know this couple who are buying a house today in New Jersey. Since it's one of the few states we don't do business in (for about another 30 days or so), I couldn't do the loan for them. They searched and searched for just the right lender. They came across a local bank offering knock-out rates. Untouchable really- and this is jumbo- land I'm talking about.

Anyway, I caught an ad for this 'bank' and in it's mortgage rate breakdown it says 'No Commitment fees!' and then describes the commitment fee charged on specific loan amounts- say anything over ZERO dollars. And their commitment fee? 1%! I have NEVER heard of a refundable fee being THAT high. Then I realized that it's typically between 5 and 10 grand , and people may have a hard time parting with that money. How can they say there is NO COMMITMENT FEE, and then charge a commitment fee? It's right there in the ad! They have a little asterisk saying 'funds refunded at closing'- well no crap! 'Commitment' or rate-lock fees are always refunded. They are basically just small scale extortion to keep your clients from shopping around. So, to hang on to that shred of false savings and yet charge people a full percent seems a bit ridiculous and dishonest

I just hope that they don't get screwed at the closing. Lenders can do a lot when they've got a chunk of your money and won't give it back unless you 'close with them'.

I've never liked those fees, I think they are garbage. Even in the more competitive market, I NEVER charged any type of up front "close with us and I swear I'll give it back to you" money. Other companies that did, charged what is referred to as a 'rate-lock' fee. Basically the same thing. BUT it was a much smaller percentage, or just a flat fee of a couple hundred bucks. This I don't condone, but hey, if you put time into a client, they should be respectful of that. So I can almost see why people were kind of forced into charging that- there was no client/loan officer loyalty.

I'm off on a tangent- the point is, how can this lender state there are no commitment fees, and then go on to charge a commitment fee? Are they relying on people's stupidity- that they would actually think other lenders keep an extra percent just for fun???? Such honest tactics. No wonder the mortgage industry is viewed to be on par with used car salesmen. :)

Are lenders scared to make loans?

2008-04-02T08:28:42Z

It seems these days it's very difficult to get any kind of niche financing. I have a theory that this issue is due more to the fact that lenders no longer service or hold on to any of their mortgages, but sell them instead to the secondary, who in turn sells them again... That's what it seems like anyway. A lot of 'lenders' and 'servicers' seemed to just care enough to collect a little interest and then a payout when they resold it. Moving on. If the loan goes bad, they are in huge trouble and have to pay back a bunch of money, whereas if they kept the loans they would have an easier time working out a solution that makes sense for them- and wouldn't be faced with such 'losses'.

So, all the stated income/stated asset loans are gone, as is no-doc, no ratio etc... even 100% is becoming a thing of the past- for better reasons, but still, it's a sticky situation for all of us to lose that niche.

Would we all be better off if we used local banks for our loans, and left the big conglomerates to doing what they do best- collecting ATM fees??? :)

Just thinking out loud.

This just in!

2008-03-28T09:22:01Z

I received a phone call last night from a client of mine that I've done a few mortgages for- but most recently a HELOC through CITI. I have done a ton of business with CITI, and due to a few unethical things they have done, I refuse to do business with them any longer. BUT this takes the cake.

It seems that CITI is calling upon the super fine print at the bottom of the closing docs and RE-EVALUATING ALL LINES OF CREDIT. They are claiming that due to 'property devaluations' all lines of credit will be adjusted accordingly. Now, we did a HELOC about a year ago. If anything, her value has gone UP. She's done a ton of renovations and where the property is located is considered to be pretty insulated from the average market woes.

What does this mean for my client? Well, for one she is now maxed-out. Her credit line was chopped down to where she had already used funds. So, this will affect her credit score of course. But it gets worse. The letter was dated for the 24th of this month, but said that the new terms took effect on the 21st. So, retroactive. Fine, I get that they don't want a mad rush out to use the rest of the funds in the HELOC accounts. BUT, she had just sent a check out- a check that must now be returned. So that's hit number two against my client.

Why not send a letter a month prior to the change saying 'do not send ANY checks out as they will not be honored. As of this date, your new credit limit will be XXXXX.' Is it entirely necessary to screw people over at all times? I know every lender is desperate- I don't question what they did. But I question how they did it.

Also, I am starting a group called 'Battle Scars'. Look for it. We can discuss our nightmare clients, nightmare bosses, and all the bad stuff that happens in the real estate and mortgage industries.

Blaming it all on Mortgage Brokers

2008-03-24T14:27:56Z

It seems that this is a popular route these days. For every 'ill' that plagues our country, there inevitably has to be a scapegoat to blame it all on. When it comes to the mortgage industry, who better to blame than the mortgage brokers?

In the most recent discussions and legislation, it's become clear that the majority of the 'crackdowns' will be focused on the abuses perpetrated by brokers that only did their jobs- SELLING products formulated and underwritten BY lenders.

"He who haveth the gold, maketh the rules".

Sorry, but mortgage brokers had no gold, and therefore made no rules. Were there bad apples? Absolutely. I had a manager once tell us to LIE about a borrower's credit score to get them into a 2/28 ARM. This was commonplace. Perhaps more-so in the brokering world than the lending world. But for every abuse that was committed by a broker, surely there were just as many committed by lenders and their loan officers. Has everyone forgotten about Ameriquest? They were among the biggest abusers out there! And they were LENDERS!

Why is there such hatred for mortgage brokers, who in MOST cases are good people that do act in the best interests of their clients???

Without brokers in the mix, aren't we at risk of having a less competitive marketplace?

And isn't blaming the sub-prime crisis on mortgage brokers a bit like blaming car salesmen for the Pinto???

Don't get me wrong, I like the lender I am with. But I am not going to listen to people bad mouth a section of the mortgage industry simply because it's convenient.

Jennifer Monastero

The sticky side of short sales.

2008-03-21T11:04:08Z

With Spring right here at our fingertips, I've been wondering if buyers of all sorts will start coming out in droves to take advantage of not only the great interest rates but also the tremendous inventory on the market. My only concern is the 'low-ballers' out there who try to get a house for a steal, but bring down property values in the neighborhood if they succeed. I think some people don't fully understand how interconnected the real estate market is.

One quick example would be short sales, which I unfortunatley had to go through personally. A tough market is a tough market, and there isn't any way around that. But I had the property listed a decent amount- a 'starting point' if you will, and I knew there was a good chance of the lender accepting OR countering. An area agent submitted an offer of $35,000 LESS than asking. Why bother? Long story short, it wasn't accepted. Another agent found a buyer, they put in a full price offer (which was a steal!) and lo and behold- the lender accepted! No counter, no complaints- they accepted. Phew. BUT, that sale will impact the future sales in that neighborhood- it has to. There aren't many sales! So while they got a steal, they also brought down the value of other houses on that street, including their own in a way. See how sticky this can get?

If you don't know how short sales work, get educated. There is great opportunity out there for both buyers AND agents in this market. But please, try not to get too cocky. Do your research on what the sellers owe, get as much info as you can to make an EDUCATED and REASONABLE offer. And above all, keep in mind the longer range ramifications on the market as a whole.