This past Wednesday, Freddie Mac said they will loosen their restrictions on Alt A loans to help calm the mortgage market. At least someone is trying to do something.
Here is a quote from Charles Coulter, vice president in Freddie Mac's single-family mortgage operations....."We felt it was important for us to make a statement saying we are active in this marketplace," Coulter said. It is also "a good opportunity" to "add value" to lenders' loans.
For anyone who doesn't know, Alt-A loans have credit scores above sub-prime, but include characteristics that have become common among loans gone bad. Some of these similarities are no proof of income or loans to borrowers with no down payment. The market for Alt-A loans has deteriorated in recent days as investors shy away from any security that is not guaranteed by Freddie Mac, Fannie Mae or Ginnie Mae.
Some people say that the sub-prime borrower deserves what they get but I am not part of that crowd. Some people were put into sub-prime loans by brokers who were looking out for their best interest and not the interest of the client. Some good people just made bad mistakes and they do not deserve to have their biggest asset become unaffordable. Sure, everyone should read what they are signing but perhaps we, the mortgage industry, could have a disclosure that made it easier to understand and that was on one piece of paper, not 23 and written so only a lawyer can decipher it. I feel that this current market will eliminate most of the "riff raff" in both the mortgage and Realtor industries. This should help align professional Realtors and mortgage individuals together again.
One mortgage association that puts the clients interest first is the Upfront Mortgage Brokers Association. The following is taken directly from the Upfront Mortgage Brokers website....
The Upfront Mortgage Brokers Association (UMBA) was founded for consumer advocacy.
Most professional associations are formed to further the interests of the individuals forming the organization.
Members of UMBA believe that the interests of the public must come first over the interests of the individuals making up the association.
Association members believe that, in serving the public interest, they will be working toward a better profession, which, ultimately, will further their professional/personal goals.
Upfront Mortgage Brokers®
If you are interested in hearing from from a registered Upfront Mortgage Broker, contact me.
Respectfully,
Joe Bartolotta
Mortgage Consultant
Fidelity Mortgage Services
http://www.joebartolotta.com/
Direct 407.340.0220
Office 407.786.9500
Fax 407.786.9501
Ask me about my Lender Fee Guarantee
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Joe, sometimes when I think of mortgage brokers I think of that line in The Wizard of Oz by Dorothy, but it goes like this..."What would you do with a soul if you had one."
It's easy to blame the poor sub-prime borrower for not paying attention, but the responsibility lies with the guy who's putting them there as well. Thanks for the post.