Lewis's Blog

Is the worst yet to come?

Lewis Poretz - expert mortgage advice — Sun, 05 Jul 2009 22:32:19 -0500

Have you been listening to the media lately?

Many are saying that the housing market has hit bottom and the economy is on the way to a recovery. To these people I say nonsense! As a mortgage banker who fields calls for refinancing and purchases every day I can tell you this is a false statement which is harboring false hope. I have my finger on the pulse and it is not good. Here is a snapshot of how I see it -- like it or not.

The stock market is still 40% off where it was just a year or so ago. And in my opinion will continue to head the wrong way. Unemployment is up. Way up! In fact it will likely go over 10% next month. That means if you put 50 Americans in a room, 5 of them will be unemployed. 1 in 5 American home owners are under water! Foreclosures continue to rise. A recent report shows that 1 out of every 4 homes are delinquent on their mortgage. If you live in a neighborhood of 50 houses, 12 of your neighbors could be facing foreclosure. Staggering!!!!

Here is my finger that is on the pulse and this is what it is telling me.

I am approving fewer loans than I did last month and the month before that.

Housing prices continue to sink at an unthinkable pace.

Credit scores continue to drop.

Income continues to drop.

Personal debt continues to increase.

So what can I do about this you ask? First of all, hunker down. Change your spending habits. Stop using credit to purchase things. Cut up your credit cards. Call your creditors and ask if they have any programs to help eliminate your debt faster and less costly. Pay your mortgage, autos, electric and feed your family first! Do not let unscrupulous creditors and collection departments bully you. And finally this may come as a shock to you hearing this from a mortgage banker, do not open a line of credit or a second mortgage. If at all possible, do not consolidate your bills into a new mortgage and eat up the remaining equity in your house. These may be moves you never recover from.

In my opinion, this country is in for a more serious economic crisis than most so called experts have ever predicted. I see this stuff every single day and I am living this nightmare right along with you. My mission is to provide you with honest answers to your questions. Possibly selling your home and moving “down” makes the most financial sense. Maybe, walking away from your house or negotiating a short sale makes the most sense.

Seek high quality advice and a get a complete credit check up from someone who has a heartbeat and NOT a dollar sign in mind. It may be the most important move you ever make.

Mortgage rates this week should be -- HIGHLY VOLATILE

Rates make a comeback - Property values continue to fall...

Lewis Poretz - expert mortgage advice — Tue, 16 Jun 2009 21:37:54 -0500

As appraisal requirements become more detailed typically resulting in substantially lower appraised values, mortgage refinance deals are falling by the wayside. I have never witnessed such a huge difference in clients perceived value and actual appraised value. Up to 400K spreads just this week.

So what does this mean to me?? – Let’s say you have some equity left in your house and you have a need for cash out – (college, home improvement, bill consolidation whatever…) the true motivation in refinancing would be cash, NOT interest rate alone. Rates are higher – that is a fact, but there is still cash available with acceptable appraised value…. that is the problem… as values continue to fall, consumers are facing less available cash when refinancing.

Don’t let interest rates determine your refinance if cash is a big factor. You may lose the opportunity to achieve your goals. We are still lending money!

The best home equity line in the world...

Lewis Poretz - expert mortgage advice — Fri, 05 Jun 2009 10:54:28 -0500

Why would I ever want to refinance my 2.5% line of credit???

Were you one of the ones who took out a monster line of credit a few years back, because you could? Well there were plenty of you that did. And what a brilliant decision you made huh? Where else could you get a payment that low for that amount of money borrowed? Why would you want to refinance a 100K loan at 2.5% to a fixed rate that is higher?

Let’s assume the prime rate (the tool used in adjusting your line of credit) remains low for a bit longer. Eventually, when government debt must be repaid and inflation hits – (all the experts say it’s coming) mortgage rates will hit double digits. It’s a fact. History repeats itself. To see in black and white what that could mean to you, look at a few examples below, based on the prime rate historical index.

Let’s assume your rate today is set at prime (3.25%) - .75 which would be a rate of 2.5%

100K balance 250K balance

2009 - @ 2.5% monthly payment - $208 $520

2008 - @ 5% monthly payment - $416 $1041

2006 - @ 8.25% monthly payment - $708 $1718

1989 - @ 11.5% monthly payment - $958 $2395

1979 - @ 21.5% monthly payment - $1791 $4479

Never in the history of the world.......

Lewis Poretz - expert mortgage advice — Fri, 29 May 2009 17:14:48 -0500

Purchase activity appears to be attempting to shake off the cob webs…..

By no means does any so called expert have enough facts to call an end to this recession/depression. Many key indicators signal things will get worse. I can add this as a fact. We are receiving many more calls every day regarding purchase money. Refinance still far outweigh purchases but we are finding activity is increasing ever so slightly, with most of the inquiries coming from first time home buyers.

*** If you do not currently own your home, you pay your bills on time and you have a couple bucks saved up -------

There may never, ever, ever - ( i am not kidding about this!! ) - in the history of the world be a better time to buy a house again!

You are what is known as a seller’s dream – a non contingent borrower. Side by side with an experienced real estate agent and a strong commitment letter you are driving the bus and calling all the shots. Many contracts these days are based on the sale of a purchaser’s current residence. Well guess what, houses are not selling.

Find out what you qualify for today. Money is available to lend!

How the stock market moves mortgage rates....

Lewis Poretz - expert mortgage advice — Tue, 07 Apr 2009 22:28:24 -0500

The general rule of thumb when watching mortgage interest rates is as follows –

Good news for the economy causes the stock market to rise and interest rates to rise.

In the most simplistic of analogies - Bad news for the economy causes investors to pull money out of the stock market and into the safe haven of treasuries, causing mortgage interest rates to fall.

This is how it always used to be. In this economic climate no rules seem to apply but trends still remain typically somewhat the same. The stock market rally of the past few weeks has caused rates to increase. Loan level price hits for cash out, high loan to value, lower credit scores and other factors have moved some borrowers qualifying rates from the 4’s to the 5’s this past week. The lower rates are still available but they now come with a steeper cost in the form of discount points.

Earnings reports are expected out on Wall St soon. Many suggest the recent stock market rally was just mere profit taking. Others are calling for another huge drop in the stock market. Using the theory above, this could mean interest rates may possibly drop again. We have witnessed three or four rate drops in the past few months. Every rate dropped stopped at the same level. If you have been sitting on the sidelines waiting for rates to return to the level of recent weeks, pull the trigger when they return and stop speculating on further declines. I have had way too many clients who waited too long only to have rates return to the lower levels and were not ready to make a move.

Timing is Everything!

Maryland Mortgage Rates

I am mad as hell...........

Lewis Poretz - expert mortgage advice — Sat, 14 Mar 2009 11:56:46 -0500

I am mad as hell…..

Through all the years of taking loan applications I have heard many stories. It is not my business why people refinance but usually is to lower their monthly payment by consolidating debt. Regardless of why, I hear the stories during the loan application process. The story below from last week points the gun at why Banks must be Regulated. This is not a bashing. This is a true story that can be backed up with true proof.

We bail them out, but Banks continue to rape consumers.

I had a client last week that called about a loan. His name was Ben Dover. Hang with me, the names have been changed but this is a 100% real story and it is happening every day to millions of us. Mr Dover explained to me that he has somehow survived through this economic mess, paying all his bills on time and supporting his wife and kids, at the same time working endless days running his own business.

He is very proud he chooses not to bail on all his debt, his mortgages, his car payments and other obligations as he watches the growing number of Americans who have given up. He is a fighter! But something happened last week that prompted him to call me.

How does the Government allow this?

My client has clearly battled through adversity and has paid all the BS fees only to get his credit limit cut. Now if I remember correctly President Obama and friends claim that Bank of America is too big to let fail. So the government rescued them several times to the tune of billions of taxpayer dollars. And who is going to have to pay for these financial rescues? But the banks whose own clients have lend to rescue continue with these excessive charges and third world country interest rates. Maybe the movement in America should be to charge up all the available credit possible and then never pay the banks back. After all, what is good for the goose………….

You are one of our most valuable customers Mr Dover…

My client banks with one of the big boys – Bank of America. Matter of fact, he has several business accounts, personal accounts, a few credit cards and even a car loan with B of A. He went on to tell me how tight financially it became last year. Many bills were paid by credit card. Before long his debt accumulated. Surprisingly his business started generating more revenue. Ben Dover began paying down his debt.

Those Bank of America credit cards saved Ben Dover’s financial life. Sure he would call the bank when hit with $39 late fees and $39 over the limit fees. He argued the fact that the credit bureaus regard anything over 30 days as past due yet B of A states in their fine print that any payment received 1 day past the due date would trigger interest rate increases up to 31% APR. But Mr Dover took it like a man. Besides, he had no choice. He was on track to pay off all his debt even if it included hefty fees and unscrupulous interest rates.

Those rotten bastards – they should be shut down

As the story went on, Ben Dover became more enraged by the second. He told me that as he paid his credit cards with Bank of America down, the bank would cut his credit limit as well. That action not only eliminates any future life line he may need but it also lowers his credit score. And they did it in such a sneaky fashion. Bank of America cuts the credit limit to just dollars above the new balance. The new billing cycle comes and boom - $39 late fee and a $39 over the limit fee.

Corruption and greed within the banking system must be stopped!

Rates remain very low – loan level price fees continue to worsen

Lewis Poretz - expert mortgage advice — Tue, 10 Mar 2009 18:22:56 -0500

Want that coveted fixed rate in the 4’s? Oh yeah – it’s still here, never really went away. But toss in any cash out pricing adjustments and loan to value adjustments and mix in a subpar by today’s lending standard credit score and you may find a refinance is counterproductive. Not many months ago a 580 credit score would qualify for a 100% stated income programs. Now the pricing hits start at – get this – scores under 740.

By the way, what's it like to suck on a hose connected to a toilet? How many more billions can we give and let this mess continue. Talk about 1 step forward and three steps backward.

Wait a minute; didn’t we all hear President Obama tell us loans were going to be plentiful? Fannie and Freddie, you know the guys the government had to take over and whose stocks are trading in the 30 cent range are stating that tighter credit standards are leading to better performing loans. No damn kidding! Loans today are underwritten to such tight standards every deal is odds on favorites to perform and not default.

The way I see it, Obama, the Fed and whoever else has a say in this mess are sending the message to refinance and buy houses to stimulate the economy. But they must be living with blinders on as every new guideline change makes it that much more difficult to qualify for a loan. Timing is everything if you are contemplating refinancing – especially if cash out is on your agenda.

Is this the begining of the end?

Lewis Poretz - expert mortgage advice — Mon, 09 Mar 2009 21:07:10 -0500

Look at the program change Countrywide is rolling out. Typically others will follow. This will take refinancing options away from a big majority of consumers who are currently eligible but have yet to jump on the bandwagon.....

Effective 8:00 pm (PT), Thursday, March 5, 2009, the Conforming, Non-Conforming and Soft Market guidelines for LTVs > 80% have changed based on restrictions imposed by the Mortgage Insurance (MI) companies.

Stable Market Changes:
Conforming Loans:

Maximum LTV lowered from 97% to 90%
LTVs > 80%:
- Minimum Credit Score: Increased from 620 to 700
- Max DTI: Maximum DTI of 41%, regardless of AUS decision
- Tradelines: Minimum 3 tradelines required
- Payment History: Minimum payment history 0 x 30 x 12 required
- Reserves: Minimum 2 months reserves required, regardless of AUS decision
- Pay off of Subordinate Liens: All payoffs, including purchase-money seconds, will now be considered cash-out and will not be allowed for LTVs > 80%
Second Home: Maximum LTV lowered from 90% to 80%
Cash-Out: Maximum LTV lowered from 85% to 80%

Non-conforming Loans:

Maximum LTV lowered from 90% to 80%

Conforming Soft Market Changes:

LTVs > 80%:
- Minimum Credit Score: Increased from 680 to 720
- Condos: Maximum LTV lowered from 95% to 85%
Interest-Only: Maximum LTV lowered from 90% to 80%

Impact to Pipeline
The following pipeline protection rules apply:

Loans currently in the pipeline are eligible under the "previous" guidelines only if credit approved in the Wholesale Loan Center and locked by 8:00 p.m. (PT) Monday, March 9, 2009.
- Only loans underwritten in the center with a communicated credit disposition of Approved or Approved with Conditions are eligible for pipeline protection.
Loans in the pipeline must fund on or before Monday, March 23, 2009.
Loans NOT able to lock and fund by the dates above must be recommitted to an allowable program such as FHA, VA or Rural Housing.
Loans requiring Manual MI per existing guidelines must have a valid MI Certification in the loan file prior to closing. Due to MI volatility, it is highly suggested that loans requiring Manual MI per existing guidelines obtain the manual MI immediately.
Loans eligible for CMI per existing guidelines may continue to utilize CMI but must meet above approved, lock and fund by dates.
Lock extensions are not allowed.
Re-locks will be subject to current guidelines.
Reminder: Loan submissions received after 8:00 pm (PT), Thursday, March 5, 2009, that fall outside of these new guidelines that receive an e-Approve "Accept" decision through CWBC will not be honored.

If you have any questions about these changes, please call your Countrywide account executive.

The Death of Time - you must check this out

Lewis Poretz - expert mortgage advice — Mon, 09 Mar 2009 17:31:21 -0500

Below is a link to a post that after reading is downright frightening. It is a must read not just for all AR members but for everyone. Are you aware of what is happening in the world at this moment?

I have been an Active Rain member for a long time and many of you people even know me.

Do not skip over this link. You do not want to miss this information, regardless if you agree, it is a thought provoking and eye opening view on what is going on in the world right now! Below is a synopsis of what this message is all about. I personally know the author and the majority of the time he is dead on with his predictions. enjoy.............. please bring any comments back to this post as well.

http://www.deathoftime.com/2009/03/09/there-is-about-to-be-a-very-significant-change-in-headlines-around-the-world

I have just posted an article that is long, especially by blog standards, but important. I think we are about to see the global economic crisis morph into a global social/cultural/political crisis.This is not so much about my opinion but an objective analysis – in virtually every section of the world there are protests that are often growing into riots. The protests, regardless of the nation where they occur, share a single common denominator: it is the middle/working class protesting against governments they see as corrupt and an upper class they see as having exploited them – both are blamed for the economic situation. In this post, I assemble an iteration of events, along with pictures and videos that establish a clear pattern. The mainstream media, especially in the US, have missed this story almost entirely. But I do not think they will miss it for long – it’s becoming too loud and the protests that have been happening regularly elsewhere are starting in the US. There is more to come, as I also report in this post: a multi-city “March on Wall Street” scheduled for early April. London police are prepared for “a summer of rage.” Putin has warned Russians that he will react strongly if people use the economy as a reason to stage a “people’s revolution.” It’s chronicled country-by-country in my blog, from Latvia to China to Guadeloupe – it’s remarkable.

http://www.deathoftime.com/2009/03/09/there-is-about-to-be-a-very-significant-change-in-headlines-around-the-world

If my analysis is correct, I think the world is about to face a much bigger challenge than just an economic meltdown. I have allowed the facts to speak for themselves. If this is news to you and you think that it should be news to others, please forward the link to others, or post it on line, recommend it on facebook, link it on twitter, etc. Are we in denial about just how bad things are? See for yourself.

http://www.deathoftime.com/2009/03/09/there-is-about-to-be-a-very-significant-change-in-headlines-around-the-world

Just how bad is it?

Lewis Poretz - expert mortgage advice — Thu, 05 Mar 2009 20:48:58 -0600

Let's get candid about a few things.....

Just how bad is it?

President Obama went on TV the other day and told Americans to jump back in the stock market. It seems as if he is on TV just about every day lately. And like clockwork when Obama tells the country things will be ok the stock market gains as if to jump with joy. Well guess what happened this time. The chairman of the Federal Reserve went on TV that same afternoon and stated, “Without a reasonable degree of financial stability, a sustainable recovery will not occur,” Bernanke further commented, “Although progress has been made on the financial front since last fall, more needs to be done.” He also added policy makers would have “preferred to avoid” what is likely to be the largest ratio of federal debt compared with gross domestic product since the end of World War II, and he urged lawmakers not to lose sight of fiscal discipline.

After multiple bailouts to AIG, Citi, Bank of America and others, I ask you in all seriousness – Ya think it’s gonna work? Even kids see what is going on and are asking why? Enough said……………

High Quality Advice - seek it now….

Leave the lowest rate to Lending Tree. In today’s mortgage market, you better know what you are doing. Will a program you qualify for now, a program that puts you in a better financial position, a program that makes sense even be available next week? Talk with an expert who fully understands today’s mortgage lending environment. Have your credit report reviewed once a year. Understand your options. And never forget – Cash is King! If you have to, hide some under your mattress.

Our sincere prayers and thoughts….

As a 15+ year mortgage vet, I have seen a few up and downs. But this time, the percentage of mortgage professionals that have left the business is staggering. Many hung on as long as they could, some too long. Many had great credit and families to support and are now in dire financial straits. Some of these people were my friends for the past 15+ years. As I have told colleagues over and over the past few months, we are not competitors any more - we are all in this together. We should be holding hands. Unfortunately, too many were victims of the industry. We are thinking of you guys and wishing you the best.

hey - wait a minute now...........

Lewis Poretz - expert mortgage advice — Fri, 13 Feb 2009 09:31:01 -0600

I have a question for everyone out there. This question is not just directed at consumers who own a house and are upside down, or people who are overextended on credit because that was what they had to do to survive, or anyone who's job has been terminated. Yeah - they need help. We all need help.

But this question is also directed at the small businees owners who supposedly are the backbone of what America is all about. --- 4.5% interest rates, tax credits and everything else you poiliticians are squawking about are just fine.... but what happened to the money for small business? i am telling business owners in my community every day, owners i hvae respected for years, i am sorry - i cannot approve this loan for you. These business owners need a loan to stay alive because the banks have shut down their lines of credit.

Anyone have a comment on this? Anyone mad?

What would Barack do???

Lewis Poretz - expert mortgage advice — Thu, 12 Feb 2009 13:14:07 -0600

Let’s say you’re the typical middle to upper middle class American. You have worked your butt off for years, always paid your bills on time and even have some equity left in the place you call home. The economy was great a few years back, you were making plenty of dough and you decided to buy a condo in Florida or a place on the slopes or even an investment property or two.

All of a sudden your purse strings have really started to feel the pinch. Your credit cards are whacking you with late fees, over the limit fees, membership fees etc…. By the way, this is still happening every single day. Consumers are getting clobbered by intolerable fees and charges from the very banks our trillions in taxpayer money is going to save.

So the pinch all of a sudden gets out of hand. Something has to give. The condo in Florida you own is now 50K upside down and you anticipate ten years before it will even be worth what you owe on it. Take away that ball and chain of an investment and you can survive. Your family can survive. You can eat and pay the utilities. You call the mortgage company who holds the note and they give you the old we can’t help you until you are two months behind routine. Of course when you call back after becoming two months behind they tell you your credit is no longer any good and they can’t help you. This advice is being told to consumers by banks every single day! Amazing!!!

So I would like to ask Barack, Mr. President, if you found yourself in the situation of the example above – wouldn’t you have to consider the best financial decision for you and your family may possibly be to walk away from your condo in Florida? Guess what – it is happening! And until you pass some new rules to help underwater homeowners out, foreclosures rates will continue to skyrocket. And you know what, the stigma that has always been around someone with a foreclosure or bankruptcy just somehow doesn’t matter anymore. It may just be a very wise financial decision………

ANNAPOLIS MARYLAND MORTGAGE EXPERT

A perfect example of why big business should be left for dead..... F#@& em!

Lewis Poretz - expert mortgage advice — Wed, 04 Feb 2009 20:40:10 -0600

I have a client with a fixed rate of 4.375%. I have ½ point in the loan - which for all you non mortgage people reading this is a razor thin profit margin. His loan has been clear to close for over 2 weeks now. His rate lock has been extended two times already. I have no room to pay for it. My client paid $250 up front to Bank of America for what they claim to be a 10 day turn around. The subordination agreement was FedEx Jan 13^th with a signed receipt from B of A. They have not looked at it yet.

Read below from the bottom up – you can see the B of A guys response to my original email. This guy is in customer service. The subordination department does not even answer the phone calls from their own customer service department. That is exactly what I was told today by a supervisor. I went off on the phone today because I have been told every single day when I call, which has been over the past two weeks, that a manger would call me back within 24 hrs. It never happened and I was not going to listen to the lies any more…… I was told today the head guy there was on a conference call but will call me back before the end of the day with a status update. I left the office after 5 30 - no calls

I joked earlier today with a customer service rep from the bank that i was going to create a web site www.bankofamericasucks.com he laughed and claimed he has heard that more than a few times already. Funny thing is - it is a real website!!!! check it out www.bankofamericasucks.com

Why is the government ... i mean tax payers ..... i really mean our kids who are going to be burdened with TRILLIONS in debt - why do we allow these idiots who can't complete a simple task to borrow billions?????? Someone help me out here. I own a small mortgage company. Where is the help I am supposed to get? Where is the help for all the callers who are upside down in their mortgages who I have to tell - "sorry, the goverment is looking into a solution for your problem"... in the meantime printing dollars by the billions of which most of them are totally unaccounted for ----- what is going on in our country???? We are still allowing these banks to charge outragous fees and get away with it. These banks are charging 31% + interest rates on their credit cards....... how do we loan these criminals money??? who is making these decisions?

HOW CAN I GET THIS POST TO PRESIDENT OBAMA?

he needs to read this.... he needs to be a mortgage broker for a day and tell people... good people who have never been late before in their lives that do not qualify for a loan........

I did a blog previously about the bank and you should check it out below --- it is unbelievable..... we need to go back to the way of doing business when you would visit your local mom and pops store, get some good honest advice and service or products and pay a reasonable fee....... How long are we going to allow this to happen? This is certainly not the only bank that operates horribly inefficient but the are for sure one of the worst....... i will update this post daily as to the progress of my subordination agreement... which at this moment has not even been reviewed!....

check it out ---- i promise you will at least chuckle... unless your an employee or a stock holder--

http://activerain.com/blogsview/615411/Credit-Card-ripoffs-Bank-of-America-does-not-care

and this blog asks the question screw the banks - what about me?

http://activerain.com/blogsview/714044/hey-what-about-me

this is not just a slam on Bank of America. This is the problem with big corporate america today. They do not give a sh1t. They are corrupt. They are mismanaged. They are unaccountable. They are killing our childrens quality of life for many, many years. And we continue to give them billions...............

--------------------------------------------------------------------------------------------------------------

From: Lewis Poretz [mailto:lewis@openmortgage.com]
Sent: Wednesday, February 04, 2009 7:21 PM
To: 'xxxxxxxxxxxxx'
Cc: 'xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Subject: RE: xxxxxxxxxxx subordination agreement per our phone call

xxxxxxx –

I appreciate your update. You are the only person at B of A who has ever returned my call or e mail. I know you don’t make the rules but I must tell you, I am so unimpressed and flat our disappointed with Bank of America that I am planning on closing my business and personal accounts with your bank and taking my deposits elsewhere. With the banking business on life support and every move being scrutinized, you would have thought a giant like B of A would staff their departments with enough competent staff to approve a subordination agreement in less than a month – especially after your customer paid $250 upfront for it. It is pathetic. And to think the government is lending you guys billions of dollars to stay alive. I have been promised a return phone call every day for the past two weeks and have never received one. I am told every single day that the request was just expedited. You have requested a 1003 be faxed back to you by the title company and it was done several times with confirmation the fax was delivered. Just complete incompetence!

I am going to attempt to send this email to your corporate executives, to my state politicians and especially to your stock holders and show them just how well Bank of America can complete a simple task and how they treat their customers. My client is going to lose a fixed rate of 4.375%. You are going to have to deal with it! Just pathetic!!!!!

From: xxxxxxxxxx [mailto:xxxxxxxxxxxxxx@bankofamerica.com]
Sent: Wednesday, February 04, 2009 4:22 PM
To: Lewis Poretz - Open Mortgage
Subject: RE: xxxxxxxxx subordination agreement per our phone call

Thank you for the contact information. I can assure you that our management team is doing everything possible to complete your request as soon as possible. My direct manager is currently on a conference call attempting to get this completed for you. I apologize for the delay and will contact you as soon as I hear word. Thank you.

MARYLAND MORTGAGE EXPERT - MORTGAGE IN MARYLAND - MORTGAGE - FHA EXPERT - MARYLAND MORTGAGE RATES

Don't do it.... never take the points off the board!

Lewis Poretz - expert mortgage advice — Thu, 04 Dec 2008 08:27:48 -0600

The media has done it once again. Trust me on this one. This past week has seen a surge of mortgage refinance applications as rates have dipped. This will help the beleaguered mortgage industry, the banks, the title companies, the appraisers and everyone else connected with the real estate market that has been functioning on life support for quite a while now. But there is trouble brewing. Trust me. I have received a few calls already from clients I have locked an interest rate in over the past few days saying they want to bail on the deal.

You see, they read in the paper or saw on TV that the Fed is going to make rates go to 4.5% and the world will become a better place. This could potentially be destructive. When a loan originator locks a loan with an investor, for ease of explanation, it becomes somewhat of a "forward commitment" where investors hedge their money on the future market. When rate lock fallout becomes large bad things happen. Investors judge mortgage shops on rate fallout and are actually terminating shops who exceed a certain percentage.

If you delve into exactly what the Treasury Department is attempting to do, you will notice the low rate target is aimed at the Purchase money market. It is also aimed at reviving the big banks. There is no certainty this would even be available for refinances as of yet. Besides, when or if this will ever take place is an uncertainty as well, especially with the new guns coming to Washington to take over in about a month.

Don't take the points off the board! Ever watch a football game where the team kicks a field successfully but there is a penalty and they choose to take the points off the board and try and score a touchdown. Do not fall into that trap. If you have locked into the low rates that are available this very second and are second guessing whether to bail and wait, you better think long and hard. If you have a deal in hand that makes sense, do you want to take the points off the board and risk losing the football?

FEAR of FINANCING: The Disease That is Costing The Real Estate Industry

Lewis Poretz - expert mortgage advice — Tue, 11 Nov 2008 18:23:46 -0600

Excellent post preaching the word we are all trying to spread from

Active Rain legend Janet Guilbault

let's continue to keep spreading the work.

BANKS ARE LENDING MONEY!!!! get off your butt and starting buying and refinancing before it is really too late! Stop listening to the media hype!

Via Janet Guilbault, California Mortgage Expert :

There is a new disease out there: Fear of Financing (FOF). FOF is a psychological disease that prevents people from buying houses. While we have yet to discover a cure, you as a Realtor can sell more houses if you understand it, and help potential buyers overcome it.

Buyers have already heard that same tired old real estate mantra: "Prices are low. Rates are historically low. This is a great time to buy". They believe that, too. So what's holding them back?

Their secret fear that they won't have the ability to finance the American Dream.

And they probably won't talk to you about this, either. Fears show weakness. Fears are embarrassing.

Sometimes it is easier just not to get in the elevator if you are afraid of elevators. Enduring those few minutes of fear inside the elevator, and getting to the top floor? Just not worth it.

So they just keep walking, and never get to the 10th floor.

Maybe you are losing buyers because they just keep driving (right past that house they love, overcome with an attack of FOF).

Frankly, Fear of Financing is easy for your buyers to justify. It does take more to qualify than it did before. But FOF has reached a frenzy that is out of control and a bit irrational. It is hurting business.

People approach me all the time with this statement: "I hear you can't get a loan on a house anymore......." The statement sort of trails off because they don't want to finish it by saying this: "unless I intend to brave rejection and the possibility I may not qualify".

The media likes to promote FOF...have you noticed?

Let's face it, the fear of rejection looms large in all of our minds. It is why it is hard to interview for a job. To make your sales calls. To try out for cheerleader or the lead in the play.

Rejection stings.

So how do we get buyers to that warm and fuzzy place where they believe the RISK is worth the REWARD?

The Antidote for Fear of Financing

How about selling houses by attaching financing options and quidelines to each listing that you have? Lenn Harley said it best when she commented on Leander McClain's featured post, describing her best marketing strategy for 2008:

Shifting from advertising our services to buyer to offering financing opportunities for prospective buyers has made the difference.

Okay, I will pause here and remind you of something I have written about many times: Financing sells. Look at the car business. When they want to move cars they do this by selling financing, not the car. Does it work? Yes indeedy.

I love looking at flyers Realtors put in those little boxes on your signs. I bet prospective buyers do too. But only one in a hundred I look at has payment options, rates, or a call to action if the client would like to get pre-qualified. Why is that?

If you don't HAVE a mortgage partner to help you with this, you need one.

I know from personal experience that some people will call the mortgage person on the flyer BEFORE they will call the REALTOR on the flyer. Wouldn't you rather capture that lead by having them call YOUR mortgage partner?

Okay, still on the topic of signage: Why is it that I almost never see one of those little signs that hang below the big signs say something like this: GREAT FINANCING AVAILABLE. Or this: SPECIAL FINANCING. Or this: LOW DOWN PAYMENT. Or if you happen to have a really SMART mortgage partner: BELOW MARKET FINANCING (seller has agreed to "buy down" the rate for future buyer).

Do you really think a sign that says "I'M GORGEOUS INSIDE" will do a better job of hooking a buyer? I don't.

And to those of you who send newsletters: do you have a spot on every newsletter for a mortgage update?

Right now it is extremely important that every POTENTIAL BUYER understand that there is still money to loan, and that you as a real estate professional can provide financing direction and assistance.

Make it easy for every person who responds to your marketing to have a clear idea of what they need to do to GET FINANCING

Give them the option of calling the mortgage partner BEFORE they call you (this gives you 2 chances of getting a call instead of just one

Show them payment options on your listing flyers. Tell them you have financing for "a broad range of credit situations".

Don't try to become an expert on mortgage rates and guidelines. Become an expert on overcoming what keeps your customers up at night. That's the way a marketing genius thinks.

Encourage the discouraged. Remain upbeat and positive about financing. Give them that glimmer of hope that they are secretly hoping exists.

Written by Janet Guilbault, Mortgage Lending Expert with RPM Mortgage, Based Out of the San Francisco Bay Area 925-552-3867 (Direct)

Make believe loans never close – Please STOP the stupidity now people!

Lewis Poretz - expert mortgage advice — Tue, 11 Nov 2008 18:00:36 -0600

Make believe loans never close –

Please STOP the stupidity people!

In the past month I have worked with a real estate agent with 20+ years experience in the business who supposedly teaches class in college on real estate fundamentals tell me that FHA loans are nothing but trouble. This seasoned realtor also has a cell phone that when it goes into voice mail says “ mailbox full “.

Then I had another supposedly seasoned agent of many years dispute the fact that a non occupant co borrower cannot own another house and sign on an FHA loan. He told me I gave him and his client bad advice. Funny thing is his client is ready to dump him and keep me.

I had another agent call after not hearing from him or the clients in a month wanting to know the status of his client’s loan. This is a short sale and the contract has been with the bank for 6+ weeks and is still not signed. This seasoned agent wants me to update him on the status of the loan. --- I have NO signed contract. You want me to do what and piss how many people off when the loan blows up because I didn’t do my job??? You want me to jeopardize my integrity because you know the loan will be ok… you promise it will…….

And then I have this agent who wants me to chase down his clients, who really aren’t certain they want to buy this house. I have told the clients what I need to write a commitment letter. I have told the agents I am not getting any response. But the agent wants me to continue to request his client send me the necessary income docs because he has a lot of kids and a full time job as well and just doesn’t have the time to chase them down. After all, he gave me the deal.

I have had it with part time real estate agents! I have had it with closed minded agents who refuse to let me sell an FHA or USDA loan because they know it all! I have had it with people that still remain in this business and refuse to put in the time and effort to become experts! I have had it.

I fired 2 agents today. They shouldn’t have lasted as long as they did. Sure it was nice to get looks every day at deal, but listen up close one more time.

MAKE BELIEVE LOANS NEVER CLOSE!

Agents, I will make this real simple. Get me last two years W 2’s ( tax returns if self employed ), 4 most recent paystubs, and three most recent bank statements or 401K statements or whatever you can get to back up the reserves and assets the client provides you. Don’t argue. Don’t underwrite. Don’t tell me why this is such a great loan. Just get me what I ask for. Because this is what the rules say. This is what the underwriter is going to ask for. I have the ability to validate the loan so when I send it to my underwriter it is typically good as gold. Do not ask me to send an incomplete file. Do not ask me to issue a loan commitment until I have all supporting docs and can back up my commitment

This is not a hard job. Just understand the guidelines and stop trying to re write them. It will never work. One more time, repeat after me - MAKE BELIEVE LOANS NEVER CLOSE!

Trust your MORTGAGE EXPERT to handle the loans for you. Make your life a lot easier.......

FHA MORTGAGE EXPERT

FHA loans & Mortgage advisory - Part 1 - Understanding Loan Officers

Lewis Poretz - expert mortgage advice — Tue, 11 Nov 2008 00:42:37 -0600

High quality advice from Active Rain legend and FHA LOAN EXPERT Jeff Belonger check out below and all of Jeff's other blogs.

Via Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages -- Mortgages :

FHA loans - FHA mortgages - Conventional loans - VA mortgages

Consumers & Borrowers, please read this !!!

I have noticed in the last few months that some loan officers and lenders are getting more desperate than ever before. In my 16 years of being a loan officer in regards to mortgages, the consumer needs to be aware of knowing when to seek help from another loan officer and not wait until the last minute. It's one thing to trust, it's another to be lied to or misled to.... and not just by accident.

I so love helping people in general. And even more so when it comes to helping my client get a mortgage, no matter if they are buying a home or refinancing. I will also say that I am not perfect nor that I know everything when it comes to mortgages. But I have some pet peeves and concerns.... please read below.

I could share at least 20 to 30 examples that I have come across in just the last year alone. I get about 5 e-mails or phone calls a week from consumers all across the United States, but usually after they feel that they aren't getting anywhere with their current loan officer/lender. I am licensed in many states and more to come shortly. But if I am not licensed in that state, I know of a true mortgage professional that would be able to help them the same way that I could. Just recently, I had a woman e-mail me because her current lender said that her father couldn't co-sign on her new house because of x, y, z reasons. I said that was not true. And the sad part was that her loan officer said no and would get back to her. It was a whole week and still nothing. I gave her the name of a loan officer that I had confidence in and she still hadn't called him, even after 4 days.I just don't get it? Read below for her answer.

Conclusion to the answer -

I asked this women why she would not seek advice from another loan officer, especially one that was highly recommended, if she truly trusted me. She said..."because her loan officer was nice". People !!!! A nice sales person will not always get you the correct answer or your deal done. Yes, it's our job to be nice. But if they throw at you sweet chit chat, words of encouragement such as, "don't worry", "no problem", "I guarantee", "I promise", etc etc.... then you might be shooting yourself in the foot.

Words of advice -

It doesn't take more than 24 hours to get a basic answer to any type of mortgage question. Go with your gut sometimes. Better yet, go with a very knowledgeable and professional loan officer. One that will educate you about the process and educate you during the process. Advice below....

If the loan officer keeps promising to get back to you, but it's been a few days now, seek help elsewhere.

If they are hard to get a hold of now, even more so when you might have an issue, seek help elsewhere.

If the loan officer keeps using such phrases as I mentioned above, seek help elsewhere.

One pet peeve!!! If your lender misses your settlement date for any reason, seek advice quickly from another loan officer. I have heard some borrowers have their settlement postponed up to 3 times. Don't wait nor trust promises that will more in likely be broken later on. It happens.

If your lender denies your deal the day prior or the day of settlement, don't listen to them telling you that they are working on a new solution. And then for them to tell you to hold tight. Seek help elsewhere immediately.

In regards to out-of-state loan officers? 70% of my business is out of state. It comes down to the ethical and knowledgeable loan officer. It doesn't matter on location....

And for more red flags, please read this.... As a consumer, beware of these Red Flags !!!

One last piece of advice...(please read) stop listening to the media... there is mortgage money to still lend.

FHA loans & mortgage advisory - Part 1 - Understanding loan officers

FHA loans & mortgage advisory - Part 2 - Understanding mortgages & principals of mortgages

- FHA Loans - Conventional Loans - VA Loans -

Experience & Knowledge at its BEST !!!

____________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2008 by Jeff Belonger

Be careful out there, pal!

Lewis Poretz - expert mortgage advice — Tue, 11 Nov 2008 00:28:55 -0600

Excellent advice I wanted to share with everyone. Below post is coming from a real estate agent. I second this as a mortgage banker. Choose em wisely....... read below--- MORTGAGE LOAN EXPERT

Via Robert Kaetzel:

As they used to say on Hill Street Blues, "be careful out there". I'll have to confess I really never watched the show much. That show was for old folks. I was too busy watching Miami Vice and trying to pretend that I was Don Johnson/Sonny Crockett. It was 1985 and I was only 15 Years old. Give me a break.

With the current status of the real estate market many agents and title companies are committing fraud in order to stay afloat. You have to be really careful who you do business with. There have been many title companies in Maryland that have been caught stealing escrow monies. One of the title companies that I was forced to work with by the bank (my seller) when I listed REO properties was recently closed. The owner plead guilty to stealing 1 million in client funds. The title company owner was actually caught living in and gambling in Atlantic City casinos with client funds and that is where she was arrested. Truth is sometimes stranger than fiction. http://baltimore.fbi.gov/dojpressrel/pressrel08/ba092908.htm

This market will unfortunately bring out the worst in people. Please make sure that you pick your real estate agent/broker, title company and mortgage banker carefully. Do your due diligence and make sure you aren't dealing with a crook or con. Unfortunately there are title companies out there right now "open for business" that are in the process of being forced to close down by their title insurers.

Be careful out there, pal!

Real Estate Professionals, Inc. is a premier real estate brokerage company in Baltimore, Maryland. The company is more like a private club where successful agents in the real estate industry do business. The company offers affordable 100% commission programs for agents that are serious about the real estate business and want to earn a high income.

The broker, Robert Kaetzel enjoys providing advice, support and leadership to help each agent create their own professional and profitable real estate practice. Many of the agents that Robert has worked with earn $150,000.00, $200,000.00 yearly and more from selling real estate. Those that aren't earning at that level have personal real estate goals that they are working toward.

Earn 100% Commission! Only $295.00/Month http://www.myrealestateprofessionals.com/100_percent_commission.html

Why choose a local lender?

Lewis Poretz - expert mortgage advice — Mon, 10 Nov 2008 23:55:27 -0600

Untitled-3

I get these phone calls more and more these days. I found you on the internet and just had to ask, my loan has been with my lender for a few months now and they are not returning my calls. Listen up people. We are not living in the refi boom of the early 2000's. Loans are scarce these days. Wholesale investors are underwriting loans in three days or less, many of them offering same day turn around.

Man my internet lenders rates are soo good. I shopped and shopped and found the best deal on the internet. I got news for you. If your loan doesn't close, then your rate is make believe. And that is the problem when dealing with internet lenders in 2008. You are most probably dealing with an order taker who doesn't fully understand loan guidelines and is nothing more than a data entry clerk. And what if you have questions during the loan process and your calls go unanswered AND your lender is 14 states away from you????

Margins are so tight these days every lender should be offering very similar pricing. True pricing. Not make believe pricing. there is a difference! Why not deal with your local lender. Support your community. Visit your loan officer personally and get to know them. This is a huge transaction. Get the warm and fuzzy that you have made the correct decision selecting your mortgage company. Visit their web site and make certain they have an " about us " section that describes who the key personnel are and physical address. Seek high quality advice ----- MORTGAGE LOAN EXPERT

FHA - dispelling the myths

Lewis Poretz - expert mortgage advice — Fri, 31 Oct 2008 10:36:26 -0500

A 30 second anatomy of an FHA loan –

What you NEED to understand…

FHA loans have two major advantages.

#1 – they allow a purchase loan with only 3% of borrower’s funds in the deal. These funds may come from allowable sources such as mom and dad, employer, church. They also allow up to 6% seller help.

#2 – They allow cash out refinances to 95% of the value of your house – for now anyway.

The myths - FHA loans are for poor people or clients with terrible credit. NOT TRUE!

Think about it. FHA will allow you to purchase a home with NO MONEY out of your pocket. And FHA offers JUMBO loan amounts as well. FHA is the ONLY program that will allow cash out at 95% loan to value. FHA is the hottest loan program on the market!

FHA has mortgage insurance --- ok, so what.

Conventional loans over 80% loan to value do as well and the factors are much higher than FHA, which means on loans over 80% loan to value, an FHA loan payment will typically always be lower.

If you are looking into a loan and someone is advising you against an FHA loan, seek advice elsewhere. Understand your options.

FHA experts

Realtor refuses a loan...... huh??

Lewis Poretz - expert mortgage advice — Mon, 27 Oct 2008 14:54:24 -0500

It's back to the basics for me the past few months. I am out calling on agents again and I am lovin it. You see, times have changed. The very same agents who wouldn't give me the time of day in the past now inviting me to have a seat and chat. And that is just what I am doing. You see, I am finding out the agents with staying power, the ones that are "lifers", appear to be like a sponge just longing to learn about the products available in today's market and truly understand the mortgage lending business. This is a wonderful thing for me because these agents will always be on the same page as me and it will ensure we work together instead of against each other.

I called on a particular office today and met with an agent who seemed like a seasoned vet. I asked how business was and he seemed a bit bitter, which is totally understandable.... I suppose..... I went on to tell him my mortgage shop was actually having a really good month and purchase business was heating up. Then I asked him if he understood the USDA loans. He quickly told me he doesn't do those bad loans. He said they were the loans that got us into this mess.....

Hmmmmm... ok.......

I tried another approach. I asked if he did Veterans loans. He told me he would not put a client in a car if they didn't have any money to put down. He said that is what caused this whole mortgage mess.

I suppose in some convoluted way I guess he had a point. But explain this - If I can take someone who is renting and turn them into a homeowner with no money out of their pocket AND a monthly payment the same as rent - well, to me that is a BENEFIT to the borrower. Sure the whacky 100% No Doc loans went way overboard, but those traditional 100%'ers have been around forever.

I am interested to see everyones comments on this topic.......

Maryland Mortgage Expert

Real Problems for North Texas Real Estate Agents

Lewis Poretz - expert mortgage advice — Tue, 21 Oct 2008 22:58:18 -0500

Media hype is killing the mortgage lending industry! I am approving loans every single day..... keep spreading the word. Banks ARE lending money....... Great post by Active Rain legend Tom Burris

Via Tom Burris | FHA VA & Conv. Texas Mortgage Loans :

No, the sky isn't falling and the credit crunch didn't get worse....!! The problem is reporting like this. Jay Gormley with CBS 11 News pretty much told all of North Texas that they can forget buying a home. The loans are all GONE!!! And if they aren't GONE, then the financing can be yanked out from under the borrower in the 11th hour.

http://cbs11tv.com/local/real.estate.mortgage.2.836975.html <= see the article if you wish

Email Jay

I sent Jay Gormley an email after reading his article.... And he called me within minutes!! A VERY spirited debate ensued and it pretty much ended up with us agreeing to disagree.

I would like to add that as 'spirited' as the chat was, Jay was very respectul and professional.

Now, I do NOT doubt that he did his research.... But after reading the article, what do you think Joe Six-pack is thinking right now? Do you think Joe will even pick up the phone to call a loan officer or realtor? I DOUBT IT!!

We all need to make a concerted effort to show these authors the positive side of all of this. We need to show Joe Six-pack that there aren't any more hoops to jump through than last year!!

Who's with me?!?!?!

Please Re-Blog!!

Tom Burris
DallasLoanGuy.com
Dallas, TX

"Your Dallas Mortgage Consultant"

http://www.dallasloanguy.com/

Texas Home Loans Dallas Mortgage Loans

I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!! Subscribe to My Blog and stay informed about current lending changes!!

While I personally focus on Texas Home Loans and First Time Home Buyers.... I do lend in other areas. We are in about 46 States and adding programs to bring full service to an area near you.

Communication Break Down ~~~~~~~~~~~~~~ it's always the same ....

Lewis Poretz - expert mortgage advice — Tue, 21 Oct 2008 20:35:33 -0500

.......... I'm having a nervous breakdown... drive me insane .......... ohhh sookie ---- Da Da Da Da Da Da Da Da Da DAA Da Da

Ok - so I stole a piece from the repertoire of what AR legend Jason Sardi adds to his blogs... a bit of musical transition if you will..... now here goes -

I have been working with a realtor for the past 4 months with a client I have been working with for almost a year that I had pre approved and somehow he hooked up with. This agent seems like a nice enough guy, 20 + years in the business, very friendly and engaging on the telephone. But I saw it coming...... Our first conversation started out with him asking if I would honor the rate on the good faith I had supplied these clients --- my clients! - THREE MONTHS PRIOR!

These clients came to me with mid scores in the 400's. I got to give it to them, with great effort, lots of letters to the credit bureau and some slick negotiating with past creditors, their scores got better. Mind you, they are still sub 580 however I can get this loan closed with a manual underwrite as it meets all the guides and there are strong compensating factors. Besides the fact with proof of a few more accounts paid, satisfied and removed I can get them approved through automated underwriting. They are almost there.

Well I tell you, Mr and Mrs Realtor, will you please concentrate on selling houses and leave us mortgage brokers alone when it comes to what rate we charge the borrowers. I apologize in advance to the responses this post will get but listen up people, unless you understand what hits to the price a sub 580 score gets and how much time and effort it takes to submit a tight package to my underwriter, please leave well enough alone. I can open that can of worms on every listing in your pipeline. I elect not to, please do the same. Now my client is asking why can't he get a rate in the 5's like he sees on TV. 97% FHA - 3% gift from mom, 4% seller help, sub 580 scores...... STOP THE NONSENSE!

So that's where I left it six weeks ago. Today I get a call - " hey Lewis, the bank ( it's a short sale of course ) said they will take the deal, can we still close this month? " Well Mr Realtor, yes we can but I need the contract so I can get docs drawn up, signed and submitted. He told me that he can send me the copy that is signed by the buyer and seller but he only has a verbal from the bank ........ I DID NOT FALL OFF THE TURNUP TRUCK LAST WEEK!

How many of you have seen a short sale turned around in - let's see today is the 21st and they want to close the 30th - well, that fast? Can we get it to the table that fast? You betcha! Let me ask are you mortgage gurus a question ---- How many of you submit this loan without the banks approval? Without knowing what the bank will actually accept as a payoff? And without knowing the balance on the property?

It is a short sale people! And neither listing or selling agent knows the balance owed on the property.

THERE ARE REAL LOANS AND THERE ARE MAKE BELIEVE LOANS - do you know the difference? I do.....

MARYLAND FHA EXPERT

How do you like the new company Jingle - live performance

Lewis Poretz - expert mortgage advice — Wed, 15 Oct 2008 19:56:47 -0500

Whats all this bank talk mean to me?

Lewis Poretz - expert mortgage advice — Tue, 14 Oct 2008 09:16:17 -0500

What does all this government intervention and bank talk mean to me?

Not quite sure yet. The Government is talking as if banks were not approving loans. This is NOT the case. It is still unclear as to what will be done to protect consumers who have fallen behind on their mortgages. It is still unclear on how banks will now magically be able to approve loans they couldn't approve last week. We will report on this as soon as the facts are
released. Until then ----

As the Government attempts to help our ailing economy we have seen an increase in the number of purchase applications. Nobody can pinpoint the "bottom" but it appears as if consumers are starting to leave the sidelines, fearing higher interest rates will negate any deals found on purchases.

The stock market has its legs back which is a good thing. Keep in mind one thing. Typically, when the market is on a roll 10 year treasury bonds usually get worse. Mortgage rates tend to follow the 10 yr bond. What this means to you is rates have gone up since the stock market rally of last week and continues to do so today.

Now rates are not skyrocketing through the roof but one thing is for sure, rates were lower last week. Timing is everything is today's mortgage market. Talk to a mortgage professional and seek high quality advice.

Have a wonderful and prosperous week ----

Cash out to 95% still available!

Maryland Mortgage Expert