The LoanSource Mortgage Blog

Mortgage Rates Are Not Dropping - CNBC Explains

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Mon, 05 May 2008 20:48:21 -0500

The Federal Reserve dropped their short term Federal Funds Rate an additional .25% last week which brings the total adjustment of 3% since the fall of 2007. The questions remains, why are mortgage rates not dropping in sync with the Federal Funds Rate?

Click on the link below to watch a CNBC video which includes an easy to understand explanation. Enjoy. Video title: Assessing Mortgage Rates - Making sense of mortgage rates, with CNBC's Steve Liessman.

If you have questions or comments, just ask.

Jim Hogan, The LoanSource

Federal Reserve 5/30 Press Release Commentary

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Sat, 03 May 2008 13:26:46 -0500

Included are a few exerts from the Press Release by the Federal Reserve yesterday, April 30, 2008 concerning their action to lower the Federal Funds rate by an addition .25%. If you want to read the entire press release, just click here.

"Recent information indicates that economic activity remains weak. Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters".

My translation: Yes, we are in a recession and have been for a while.

"Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months".

My translation: This recession is reaching deep into everyone's pockets.

"Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully".

My translation: The Fed is as confused as we are.

"The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability".

My translation: Just reminding everyone that it is their (The Federal Reserve) job to monitor economic and financial developments. Duh!

If you have comments or questions, just let me know.

Jim Hogan, The LoanSource

The Game Has Changed

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Mon, 21 Apr 2008 13:33:49 -0500

The game has changed but mortgage rates are still low and opportunities remain for those people who are prepared to take advantage of the depressed housing market and some of the lowest fixed rates in over a decade!

Are you prepared?

The Federal Reserve has been lowering the Federal Funds rate since last year, but their next scheduled meeting on April 29 - 30, 2008 is not expected to provide the same result. The fear of inflation seems to have put the Federal Reserve in a difficult position. They would like to spur business and commerce by lowering the Federal Funds rate again, but reports indicate that inflation has taken a strong foot hold on the US economy and by lowering rates again, they could accelerate inflation.

According to a poll I read recently, 1 out of 3 homeowners have no idea what kind of loan they have. Under better market conditions, that might be ok. But in the current market where over 2 trillion dollars of adjustable rate mortgages are set to increase and over 2 million homeowners loosing their home due to sudden, unexpected and devastating increase in their mortgage payments, it's imperative you know exactly what kind of loan you have. Even more importantly, when and if your loan will recast and go up.

The Game Has Changed!

Guidelines and mortgage programs have expanded and increased... Now they are tightening and retracting.
100% loan to value programs are going away (or at least very limited).
Debt-to-income ratios are getting tighter.
Banks are not as flexible as they have been over the past five years.
Foreclosures are going up and financially stressed homeowners need advice now, more then ever.

I am hopeful that homeowners are proactive so they can navigate a soft landing. If not, they could find themselves in situations outside their control that could lead to personal financial disaster like bankruptcy and foreclosure.

Whether you need to get cash out, pay off those high interest credit cards or consolidate your first and second mortgage into one low monthly payment, we have the fixed rate solution for you! I would be happy to talk with you and conduct a complete Equity Review of your home and Mortgage Review of your loan, FREE OF CHARGE!

Jim Hogan
Your Trusted Loan Advisor

It’s Leap Day…What did you do with your Extra 24 Hours?

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Fri, 29 Feb 2008 20:43:25 -0600

Eon’s ago, smarter people than I determined that in order to keep summer during the summer months and winter during the winter months, we would have to add one extra day to the calendar every four years. Since February was the shortest month, it was the most logical choice. I don’t know if that is true, but it makes sense to me.

So, what did you do with your extra 24 hours?

You have heard the old adage…”There is no time like the present”. We get hung up in the pressure to do more, perform better, deliver more.

Well, a very smart man I have met and admire greatly turned that around to say...

“There is no present like time”

Say that out loud right now…”there is no present like time”! Sounds good and feel’s good, doesn’t it? So, as today winds down, I want you to reflect on your day and enjoy the present of time that you were given.

The gentleman who promted me to release my thoughts on Leap Day is Dan Thurmon, the President of Motivation Works, Inc., a nationaly recognized professional speaker and published author. If you are not already on his e-Newsletter list, get to his web site and sign up. You will love it. If you want to read his thoughts on Leap Day, just click here.

What did you do with your extra 24 hours? Let me know.

Have a great day and remember…what you think about, you bring about!

Increased FNMA & FHLMC Loan Limits Will Solve the Mortgage Loan Crisis…or Will It?

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Mon, 11 Feb 2008 15:55:32 -0600

Let's take a look at the effects of the economic stimulus package on the mortgage industry and how it may filter down to the consumer.

The US Senate has passed the Economic Stimulus Package and the President is scheduled to sign it into Law which means that we are one step closer to the implementation of higher FNMA/FHLMC loan limit. As is with most laws, the written word does not dictate to the "market" how to apply these changes.

Uncertainties remain:

Will the entire country be allowed to move to the higher loan limits? The method for determining which geographic area will move to the higher loan limits has not been determined. Most consumers believe that the loan limits will be applied across the board to the entire country. FNMA/FHLMC however are not setup to apply loan limits in that fashion. Will they do it by state or by Metropolitan Statistical Area (MSA)?

Product & Program Variety:

It has not been determined which products and/or programs will be available for the increased loan amounts. Will it be for 30 year and 15 year fixed rates loans only? Will investor properties be included? Can "Expanded Approval" or "Flex" product loans become eligible even though they carry higher risk?

Pricing and Delivery:

Pricing and delivery is another missing piece of the puzzle....(Warning, behind the scenes mortgage content included here) In the mortgage industry, the loan pricing dictates the wholesale rates and the delivery refers to the method that the Mortgage Backed Securities (MBS) are pooled and sold on Wall Street to the public.

The Securities Industry and Financial Markets Association (SIFMA), not HUD or FNMA/FHLMC, decides which loans are eligible to go into the FNMA MBS's. Blending the old and the new models will create a great deal of uncertainty in the marketplace and this alone will affect pricing and rates. Even though we do not know how much of a premium will be applied to the new loans, it should be a significant improvement over the current 30-year jumbo rates.

Stay tuned as our free market economy figures out how to adjust to the new FNMA & FHLMC Loan limits and what effect it will have at the consumer level.

Buying a foreclosure using the FHA 203-K Renovation loan…a Match Made to Order!

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Wed, 06 Feb 2008 14:59:37 -0600

Atlanta GA, -- Foreclosure’s are on the rise and there are huge opportunities for home buyers who in buying real estate at bargain prices. Opportunities yes, but they come with their own set of problems and risks.

The Problem:
Most foreclosed properties are not in the best of shape
Most foreclosed properties require extensive repairs and renovation
Most buyers today do not have the cash available to renovate
Most lenders will not lend on properties that require extensive repairs until the work is complete.

What is a buyer going to do?

To the Rescue…The Department of Housing and Urban Development offers a home loan through the Federal Housing Administration Called the 203-K loan. The “K Loan” allows a buyer to purchase a home, allows them to roll the cost of renovation into the loan and if the renovations require that the owner vacate the home, the borrower may finance up to 6 months of payments.

One restriction is that the final base loan amount remains under the FHA loan limits for the county in which it is located. In the Atlanta MSA (Metropolitan Statistical Area) has a loan limit of $252,890 for a single family home, $284,834 for a two-family home, $346,060 for a three-family home or $399,300 for a four-family home. If you are not sure of your counties loan limits, go to the FHA Loan Limit Website, Choose your state and look through the list.

The property does not have to be a foreclosed property; in fact, it could be a home that the borrower would like to update the kitchen or bathrooms, maybe some paint, new appliances or new carpet. You could use this loan program to add a room or a 2nd floor to the home. The borrower can use this loan program as a refinance and fund home improvements. The “K Loan” is a great loan for renovations, so if you are thinking about a renovation or know of someone who might need a loan product like this, just call or e-mail Jim Hogan, the LoanSource.

Jim Hogan is with Opteum Mortgage and is an FHA 203-K Renovation loan expert. You can contact him at jhogan@opteum.com or 404-240-2348.

Notework Your Way to Success...and Into Your Customer's Hearts

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Wed, 28 Nov 2007 14:56:17 -0600

I have found a system that has helped differentiate myself from my competition? Just think of the feeling you get when you see a hand addressed notecard sized envelope on your desk or at home. You open the envelope and smile because the message make you feel important. You will be remembered if you follow the Noteworking Success System ^TM, a simple system that will reap big rewards. The key word here is system...a planned, repeatable event that is designed to generate a desired outcome.

Take a few minutes to learn the secret directly from the President and Founder of Profits in Progress, Vanessa Lowry, who developed this money making system.Find a way to your customers hearts, be remembered, be re-markable, learn how to add personal notes to your current marketing plan. Visit http://www.profitsinprogress.com/ or call Vanessa Lowry to find out more.

Your Partner in Success,

Don't Believe everything the News Media it Saying About the Mortgage Industry

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Thu, 25 Oct 2007 14:47:25 -0500

There is ample money available for those looking for a Mortgage Loan

The Mortgage industry is continuing to experience unprecedented change and that is a good thing. Why?

1) Mortgage Lender and Brokers are exiting the business in record numbers which leaves the professionals available to help those searching for a competent consultant.

2) The news media has been largely inaccurate in reporting the availability of mortgage credit. Actually, there is ample supply of mortgage money available for the traditional borrowers. The difference is that if you are in search of a solution to your mortgage needs, you need to plan ahead. What a concept!

3) Numerous borrowers have been left at the closing table as lenders close their doors. The good news is that the majority of these borrower were able to find another lender to close their loan quickly.

What do you think? Have your customers had trouble finding money?

Your Friend in the Mortgage Business,

Jim

The Death of Down Payment Assistance...

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Wed, 03 Oct 2007 15:38:20 -0500

What else is going to happen to prolong the housing slowdown and create additional road blocks to home ownership, especially for the First Time Home Buyer?

First, it was the end of Sub-Prime mortgages then, tougher underwriting standards at all levels of the mortgage industry, a housing market which continues to get pummeled and then HUD publishes their Final Rule concerning using private down payment assistant programs to fund the 3% minimum borrower investment on HUD insured properties.

On October 1, 2007, The Department of Housing and Urban Development published in the Federal Register a new ruling concerning the Standards for Mortgagor's Investment in Mortgaged Property: Final Rule which basically eliminates the use of privately funded down payment assistance programs that "in whole or in part, is funded by the seller or any other person or entity that financially benefits from the transaction or any third party or entity that is reimbursed, directly or indirectly, by the seller or any other party that financial benefits from the transaction".

But Wait! Is there hope that this ruling could be over turned? Both the Nehemiah Corporations of America(Sacremento, CA), and Ameridream (Gaithersburg, MD) have filed separate law suits to challenge this directive. In addition the politician's are beginning to make a lot of noise over this issue. An article published in the National Mortgage News on this subject says that the Nehemiah Corporation of America has a six month reprieve from this ruling because of a law suit from 1998.

The Federal Register report revealed that there is a "2 to 3 time greater risk of default and claim with purchase loans that receive down payment assistance from the seller or other persons or entities that financially benefit from the sale of a home to the borrower than from all other loans with down payment assistance from all other sources".

It also mentioned that in May of 2007, the IRS ruled that "companies that funnel down payment assistance from seller to buyers through "self-servicing, circular-financing arrangements" are inconsistent with operations as a section 501 (c) (3) charitable organization". The down payment assistance companies sprung up all across the US during the 90's and organized their companies as "Charities" to circumvent the HUD/FHA rules. Now their existence is in jeopardy.

So where do we go from here?

HUD has been working on a 100% financing program by restructuring their mortgage insurance system to a tiered system, but it seems we are still a long way off from this happening. There are also public funded down payment assistance program like the Georgia Dream Program which is part of the Georgia Department of Community Affairs. They help create home ownership opportunities for first time home buyers through the use of state bond money.

As dedicated mortgage professionals our consultation becomes even more important and the coordination between the real estate agents and lenders should strengthen as additional road blocks to home ownership are created. We are more than just mortgage or real estate sales people; we are consultants and counselor's, we are educators and it is our responsibility to do the right thing and help create successful long term wealth through proper mortgage strategies.

Deceptive Mortgage Ads: The Federal Government Is On The Hunt!

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Thu, 13 Sep 2007 13:51:26 -0500

Have you ever watched the movie "Hunt for Red October" or any other naval war movie as the good guy put a shot across the bow of the bad guy's vessel? The warning shot send a very clear message and can not be ignored.

Well, consider the Press Release on September 11, 2007 by the Federal Trade Commission (FTC) concerning Deceptive Mortgage Ads, as the warning shot by the Federal Government to all mortgage bankers and brokers. The entire mortgage industry is currently in the cross hairs of Congress and that is a really bad thing.Every time I hear one of those incessant radio ads, receive a fax offer or open a junk e-mail that touts some mortgage offer that is too good to be true or leave out the most important piece of information, I want to tell the world "Don't believe it". These types of ads and offers are the driver behind the current mortgage meltdown.

The September 11^th press release states that "many mortgage advertisers are making potentially deceptive claims about incredibly low rates and payments without telling consumers the whole story'. The FTC works for the consumers to prevent deceptive and unfair practices in the marketplace and to provide information to help consumers spot, stop and avoid them. They have brought 21 actions against companies in the mortgage lending industry which has resulted in collectively returning more than $320 million to consumers.

The FTC Consumer Alert titled "Deceptive Mortgage Ads: What They Say; What They Leave Out" is available on their website. The FTC can be contacted toll free at
1-877-FTC-HELP (1-877-382-4357).

We can all learn from the Sub-Prime Mortgage Melt Down and must be more available to our customers to guide and advise them through these turbulent and confusing times.

What Happens if your Mortgage Company goes Out Of Business?

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Fri, 07 Sep 2007 15:49:36 -0500

I have addressed this questions more time in the past month than I have during my entire 14 year career in the mortgage business so, let's get everyone on the same page. The company who receives your payments may not actually own your mortgage note. In today's market place, mortgages are "Pooled" with similar loans and sold on Wall Street as Mortgage Backed Securities. The Mortgage Backed Securities are considered an asset to the owner of the security. The mortgage company that you pay, may only act as a loan servicer. They process your payments and pass on the payments to the security holder (after their servicing fee is subtracted of course).

What should you do if your mortgage company goes out of business?

First and foremost, keep making your mortgage payments. In addition, it would be a great idea to make your mortgage payments electronically through an on-line bill pay service so you can prove when the payment was made if any problem arises. Most banks offer this service for free. It would be more difficult to prove that you send a check "on-time" if the servicer did not have the staff to deposit your check and then blames you for sending it late.

When mortgage companies go out of business, they will likely be forced to sell your mortgage to another lender, to Fannie Mae, Freddie Mac or to Ginnie Mae.

What are my rights if my loan is transferred?

The federal law which governs the borrower rights during the transfer of a mortgage is the Real Estate settlement Procedures Act (RESPA). The servicer is required to notify you in writing at least 15 days before the servicing of your loan is transferred and the notice must include; 1) the effective date of transfer, 2) name and address, 3) toll-free phone number, 4) inform you whether you can continue any of the optional insurances which you elected previously, 5) and that the transfer of servicing does not affect any term or condition of your mortgage loan.

It also requires that the lender NOT treat your payment as late if you mistakenly send it to the old mortgage servicer within a 60-day period. If you have a problem during the transfer of your mortgage loan you should take action right away and send a complaint letter to help preserve your credit.

Important advice - Once you have been notified of transfer, you should pick up the phone and call your old loan servicer and the new loan servicer to verify that your loan was actually transferred. In today's world, you can't be too careful.

Foreclosure Sale "On the Courthouse Steps"

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Tue, 14 Aug 2007 13:08:59 -0500

The Headlines are screaming “Foreclosure”, “Mortgage Meltdown”, “Credit Crunch” and Crisis in Lending”. Curiosity got the better of me and I decided to take a field trip to the August 7th foreclosure sale at the Dekalb County Georgia, Court House, to see for my self.

What happens when someone’s home is sold at foreclosure “On the Court House Steps” The legal process varies by state, but the end result is the same. The home is actually sold on the courthouse steps. Foreclosure is the legal process to where the ownership (Title) of a home is taken by the mortgage holder and the sale if forced. Anyone can buy a home at a foreclosure sale, but what I learned was that if you are interested in buying a home at the foreclosure sale, research and preparation is the key.

The crowds started gathering around 9:35 am for the 10:00 am sale. As I talked to a few people, I was able to determine that there were 3 different groups represented in the crowd. The Attorney’s where present to perform the actual foreclosure and offer the home for sale on behalf of the lender.

The next group was the investors armed with research on the home(s) of their choice. There is a great deal of opportunity for savvy investors but, come ready with a great deal of research, be ready for some hard work, and hope for a little luck.

The last group were the curious who were in attendance to observe or maybe to learn about the process for future bidding

I identified four different Attorney Firms representing various lending institutions. In no particular order, one gentleman started by review their current list to let the potential bidders know which homes were still available. A few minutes later another attorney started reviewing their list.

Some of the homes had been sold during the “pre-foreclosure” stage, which ends the foreclosure process. Some of the owners had filed for Bankruptcy, which stops the foreclosure process for the time being. The status of a few properties changed to forbearance. This occurs when the owner either bring the mortgage current or otherwise satisfies the lender.

The review process was still going on and one of the attorney’s started reading the legal notice of foreclosure. He began with “Here ye, here ye”, and finished with “Sold to the lender”. There were no bidders on that particular property. He then marked the time on the document so it could be recorded in the county records.

Take a few minutes to watch my “On the Court House Steps” video and hope that you learned something today.

To Lock, or Not to Lock...That is the Question?

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Thu, 02 Aug 2007 13:46:02 -0500

The answer to this question is very important and really only can be made by you. The problem is that deciding when to "lock" your interest rate for your loan can be a very confusing decision. As a mortgage professional, I understand that you want to catch the rate at its lowest point during the time your loan is in process. However, that is "easier said than done". Even professional economists are not able to predict the market with accuracy.

Wall Street has replaced the traditional bank and now pulls the purse strings of this vast mortgage market via "Mortgage Backed Securities". MBS's are traded in the free and open market everyday just like stocks and bonds. The movement of interest rates in the mortgage market is directly related to the buying and selling of the Mortgage Backed Securities on Wall Street.

An important fact to remember about your decision "to lock or not to lock" is that both your commitment and ours are made on the "good faith" of the participants involved. We feel that a promise made is a promise kept, regardless of which way the market moves after the transaction is made.

Of course, all of us as consumers would like to be guaranteed the very best rate in an escalating market and also have a low rate offered in a declining market. Unfortunately, the market cannot provide this assurance in the normal course of business.

If you choose to "float" your rate, you are at the mercy of the market and your interest rate could improve from the time your application was taken or rise as market conditions deteriorate. If you choose to "lock", we will keep our side of the agreement and deliver the agreed upon rate so you will not have to second guess your decision. Either way, talk with your mortgage consultant to fully understand the impact of your decision.

Atlanta Mortgage Loans | Are you "All In" or avoiding Technology in the Real Estate and Mortgage industry?

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Wed, 01 Aug 2007 08:11:26 -0500

"All In". A term borrowed from a popular card game is used when a player knows that they have a winning hand and puts all of their money in play. From here, you either win or you're out.

Well, as a relatively new Active Rain member, and a casual poker player, I wanted to let you know that the Atlanta Loan Source is "All In" with new technology and Active Rain because I know that this is a guaranteed winning hand. I can't loose. Thanks to all those who have blazed the trail before me and especially to Leah Ross for introducing me to Active Rain. I am looking forward to getting to know many of you as we accelerate into the future.

Your Friend in the Mortgage Business,

Jim Hogan

Atlanta Mortgage Loans | Do You Focus on the IMPORTANT or the URGENT?

Jim Hogan - Atlanta Loan Source (Your Atlanta Loan Source) — Thu, 26 Jul 2007 09:14:49 -0500

Atlanta home buyers: Do you focus on the important or the urgent? It is so much easier to fall in love with a home than take a few hours to choose a competent Atlanta mortgage consultant to formulate the perfect mortgage plan that will help you to create and preserve wealth. The mortgage itself is boring because you can't touch it or see it. The home itself brings everything into focus and allows you to dream about yourself in that home into the future.

If you have not consulted with and chosen a local mortgage professional, before you sign a purchase contract, then it will much more difficult to create and execute a competent mortgage plan. You focus on the urgent. The purchase contract deadlines do not allow time for clear thought. The changing mortgage market or unknown restrictions imposed on a buyer because of underwriting guidelines or the surprise when the payment for the home you fell in love with is significantly more than you "thought".

Creating a Mortgage Plan is the important, so focus on it first. You may want to examined in every part of your life and ask yourself the same question. If you don't have some sort of Estate Plan, and a Will, a Directive for Health Care or a comprehensive Financial Plan, then you remain in the "URGENT" camp. BREAK CAMP NOW.

ACTION ITEM: Gather your Personal Board of Directors(PBD's), and begin to focus on the IMPORTANT. How do you find your Personal Board of Directors, you ask? I will save that for future posts.

Your Friend in the Mortgage Business,

Jim Hogan