Can You Spot ATM Skimmers? - Mortgage by Randy Newsletter - Apr 2012

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, April 2012

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In Issue 49 We Touch On:

FHA Appraisal Tips
Can You Spot ATM Card Skimmers?

Older Workers Stay On The Job

Spring is in the air and the season of nature's rebirth and associated optimism is spilling over into the American consumer psyche. It was only 8 short months ago that we faced a perfect storm of doomsday events that contributed to a low point in American's financial security sentiments, according to the COUNTRY Financial Security Index. Remember the viscious debate about the debt ceiling and the U.S. credit rating downgrade while at the same time unemployment was high and the great unknown about what was happening with the the debt and bank stability in several European countries? 

The winds of change pushed aside those very real problems over the winter and consumer sentiment has ticked up four consecutive months based on the most recent COUNTRY Financial Security Index. The underlying problems have not gone away but maybe Americans are tired of feeling down and are looking for a reason to be positive. One thing that prospective homebuyers can feel good about is that mortgage rates continue to hover at all-time lows.
 

The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family.  You can make your own comments and feedback as well.  Time for the news…

Mortgage Market: FHA Mandatory Property Inspections - What You Need To Know
FHA appraisers have mandatory rules to follow and if they detect any possible safety, structural or health issues during the appraisal the rules become even more strict.  This can cause delays in home sale transactions and possibly ruin a deal. The more you can prepare and eliminate the potential FHA inspection pitfalls, the better.

Well & Septic Systems: If the appraiser is concerned that the distance between the water supply and septic system  could lead to contamination they may suggest to the lender that an inspection be performed by the local health department for certification. Similarly, if water does not drain quickly enough in a leach field, it could cause the appraiser to recommend further inspection.

Paint Repairs: If the house was built prior to 1978 and the appraiser sees chipped or peeling paint, correction is required. If the repair is performed by a landlord, property owner or contractor, that person must be certified and have completed education requirements about repair of lead-based paint surfaces.

Handrails & Trip Hazards: Before opening your property to an appraiser, check indoor and outdoor handrails to ensure they are tightly secured. This is an easy fix if they are loose. Also, if you have significant cracks in a sidewalk, garage floor, basement floor or driveway, an appraiser may note them as a tripping hazard so to the extent possible make repairs before an appaiser is on site.

There are several other common inspection items that FHA appraisers must document that affect manufactured homes, underground tanks, water testing and termite risk. For more details, email me directly.

Personal Credit: How To Recognize A Card Skimmer And Avoid Identity Theft

Some crooks are hi-tech. Small devices, called skimmers, have been in use for many years by criminals intent on stealing your identity. Have you ever seen a picture of a skimmer? Now is your chance. Click over to my article about ATM card skimming and see for yourself.

Skimming is not just happening at ATMs. Be careful at fuel pumps too. If you use one of the outside pumps, be very careful because that's the most likely one a criminal will install the device on since the gas station attendants will be less able to see them. In my article on card skimming devices you will get more tips about how to protect yourself from falling victim.

Have you been given credit score advice that you are not sure about or read an article that has conflicting credit score information from what you believe to be true?  I am here to help.  Submit your question and I will be happy to respond. For more free and easy to read credit score tips visit the DailyDollar and click on the Credit Score and Credit Monitoring sections.

Economy & Financial Insights: Older Workers Staying On The Job Longer
I read an informative newsletter this week from economist Jonh Mauldin. He revealed that our baby boomer generation is staying on the job longer and not retiring as fast as they could. Whether this is out of necessity (can't afford to retire) or out of boredom is hard to say. But one thing is for sure - younger people who already had the deck stacked against them in getting a job due to the lingering after effects of the Great Recession now have the additional challenge of fewer job openings due to the baby boomers.

People over age 55 have seen employment rise 4 million jobs since the beginning of the recession and people 65 and older are staying in the workforce longer too. They are taking jobs that would normally go to younger workers. I made a mental note recently at the supermarket when I noticed the unusual number of elderly people working to bag groceries. I am guessing that access to health care benefits may also be a contributing factor to this trend.

So, the next time you complain about a slow elderly driver on the road during morning rush hour, don't assume they are headed for coffee because they might be in the rat race just like you!

Question of the Month: Can I Get A Mortgage For $30,000?

Small mortgages are easier said than done. In recent years with property values crashing, the size of mortgages have decreased accordingly. In markets with single family homes or condominiums selling for less than $100,000, there is demand for mortgages in the range of $30,000 to $80,000. Ironically, it's easier to get a larger mortgage (more risk) than a small mortgage (less risk).
 

If you have great credit, job and solid down payment to support the deal, then you should be able to walk into your local bank and get approved. I specifically asked a manager at Bank of America recently and they said they could do a small mortgage. I wouldn't bother meeting with a licensed mortgage originator in that situation.
 

The challenge is greater when you can't get approved by a bank and have to turn to working with licensed mortgage originators who have access to more expensive subprime and private lenders to get your loan. The first challenge is that the mortgage originator may balk at doing the work because they can't earn enough commission on the loan to cover their time investment. 

If you do find a licensed originator willing to help, the second challenge is finding a private lender willing to do the deal that small. The lender has to make a reasonable profit too and it is difficult to do so on a small loan. I have received outright refusals to do perfectly good loans based solely on the lack of sufficient profit available in the deal.

Remember, it takes the same amount of work to do a $50,000 mortgage as a $500,000 mortgage. 

If you or someone you know is in this situation there are other options. One is to turn to family for a loan. I have recommended this to several clients and it worked out for them. The loan should be structured just like you would with a bank. Draw up a mortgage, a note, record it with the county, etc and use an attorney to do it right. The mortgage can be a great investment for an older family member unhappy with earning basically zero percent from their bank savings.
 

Another option is peer-to-peer lending like Prosper.com where you can seek out investors who have money to invest in loans. It is easy to do, perfectly safe and secure, but if you have really bad credit, you probably won't get through the front door.

Giving Back: Mitchelson Scholarship Foundation Prepares For 2012 Fine Arts Award
Each Spring we prepare to review candidates for the annual Mitchelson Fine Arts Award given to an aspiring artist graduating from G. Ray Bodley High School in Fulton, New York, The Larry Mitchelson Scholarship Foundation is a 501c3 non-profit that accepts financial donations which you can deduct on your taxes. The Foundation was set-up 8 years ago as a retirement gift for our father to honor his 35 years of teaching art in the classroom to children and adults and promoting the arts in the community via art fairs and decorating store fronts.

You can see photos of previous scholarship winners as well as sample works of art on the scholarship website. Please click to Like the scholarship on Facebook as well. Over 90 cents of every donated dollar goes toward funding the scholarship award - we keep expenses to bare minimum so you know exactly what your donation is funding. There is a safe and secure way to set-up a one-time or monthly recurring gift of $10 or more both on the website and Facebook page. Our family thanks those of you that have contributed over the years.

Need volunteers? Do you have a fundraising event upcoming?   Do you have a personal web site where you are raising donations for your cause?  Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
 

Just back from a few days at Disney with close friends and some welcome bonding time with their children. Looking forward to several weeks staying at home before the summer travel plans kick in for both work and pleasure. Albany, San Francisco, New York City, Denver and a Disney cruise with friends are all on the horizon. 
 

Randy
 

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Mortgage by Randy newsletter, Copyright 2008-2012 Randy Mitchelson.  All Rights Reserved.

Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson.  Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.

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You have permission to publish this article electronically or in print as long as the following is included:

Randy Mitchelson is a business professional, entrepreneur and author with almost 20 years experience in financial services.  Mitchelson has served in leadership roles for Fortune 500 firms Bank of America, KeyBank and CIBC.

As a licensed mortgage professional and member of National Association of Mortgage Brokers, Mitchelson educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy.

He is owner of Estero, Florida based National Web Leads, LLC, (NWL) an internet marketing and lead generation services company. NWL drives new customer acquisition through email, web display, social media, keyword search strategies, mobile devices and more.

NWL distributes customers' marketing campaigns via NWL's network of publishing partners. Clients include payday lenders, auto loan lenders, educational institutions, legal services, health and beauty product distributors and more. Lead generation companies utilize end-to-end lead generation software solutions provided by NWL's technology affiliate company Applied Cognetics.

NWL operates te DailyDollar™. U.S. News and World Report names NWL's DailyDollar to its list of 8 Savvy Personal Financial Podcasts.

Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY.  He is a founding member of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle’s Angels Foundation Inc.  He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.