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Florida Mortgage | Adjustable Rate Mortgage ( ARM ) about to Adjust?

By David A. Podgursky PA

Real Estate Agent with THE PODGURSKY GROUP @ Re/Max Direct

September 15, 2007 04:13 AM

Lenders have begun sending out letters informing their borrowers that their loans are due for adjustment. So your Adjustable Rate Mortgage ( ARM ) is about to adjust and you want to know what to do? This is a dilemma facing many homeowners right now due to the huge numbers of 2-5 year ARMloans that were written in the past 6 years.

Even with all the hype in the media, many homeowners are taken by surprise. The harshest reality is when you find that your new mortgage payment will be 50% higher (or more!) than your current monthly payment!

So what can you do to ensure you aren't forced into a bad financial situation once your loan adjusts?

First, find your closing package from the title company. You received it at or a few weeks after your closing. In the package, you will find the Mortgage and Note that you signed. You will need to copy these documents...specifically look for the Adjustable Rate Rider and a Prepayment Penalty Rider. You will also want to copy your most recent Mortgage statement that you received in the mail.

Then, contact your trusted Mortgage Broker. Arrange a time when you can sit down with your loan documents and figure out what is about to happen. This may require faxing, emailing or mailing a copy of the Mortgage and Note to the Mortgage Broker.

With this information, your Mortgage Broker can help you to refinance into a new loan with a payment you can afford. With a trusted advisor like this by your side you will be in good hands.

For more information about refinancing your Adjustable Rate Mortgage in Florida, contact me by following this link to my contact page.

To read more about the Adjustable Rate Rider and details about what you can do if your ARM adjusts, read on at: Florida Mortgage | Adjustable Rate Loans ~ Your current loan is about to change on you

More Florida Mortgage & Real Estate News You Can Use from
David A. Podgursky, MBA
The Mortgage Go To Guy!
Your Source for Residential and Commercial Mortgage Loans in Florida

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Sean Allen

International Financing Solutions - Fort Myers, FL

International Financing Solutions

Hey David,

Good suggestions to the home owners. Unfortunately many of these people are upside down on their homes which causes a world of hurt for them.

Sean Allen

Sep 15, 2007 04:27 AM

Dave Cheatham

INC Financial - Bartlett, IL

David, your so right. I am in contact with people that had no clue that their rate was about to go up. It is a sad thing. Many people just forgot, or thought that it would bnever really happen. We must educate people about this.

Sep 15, 2007 04:30 AM

David A. Podgursky PA

THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL

THE PODGURSKY GROUP - Make the Right Move!

not MANY... there are some

there are loans for people up to 100% LTV on Refis right now

The people that are hurting that are over 100% have options but they need to contact a good Mortgage Broker to discuss those options

the thing people need to remember is that BANKS DO NOT WANT TO FORECLOSE

they do not make money when people stop paying. they lose money selling REO

so they'll work with you...

Sep 15, 2007 04:30 AM

David A. Podgursky PA

THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL

THE PODGURSKY GROUP - Make the Right Move!

I am in an ARM... and it will adjust soon

the letter came in and told me what the new payment would be....but not the new rate, margin or anything!

they've been good and my adjustments have been negligible but I'm seeing margins as high as 7.5%!!

Sep 15, 2007 04:38 AM

Cyndee Haydon

Charles Rutenberg Realty - Clearwater, FL

727-710-8035 Clearwater, Beach Short Sales Luxury Condos &Homes

David - great post - there are so many people that really need to take the time to sit round with a mortgage pro like you and get a check-up! This is no time for "surprises"!

Sep 15, 2007 05:01 AM

Jay Beckingham

Christensen Financial Mortgage - Port St Lucie, FL

Seniors ROCK!

i have neither seen nor heard of anyone whose payment increased or is increasing 50% or more. doesn't happen.

Sep 15, 2007 06:54 AM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Great advice, David. October is going to be a tough month - per my friend as Wells Fargo October is the month when the greatest number of ARMs ever readjust. Will be interesting to see what happens on the 18th.

Jeff

Sep 15, 2007 06:57 AM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

David hopefully these people cleaned up there credit a little bit in the last two years, because if they did not there options are going to be very limited, that is if they even have an option at all. I have a feeling there is going to be a lot of hardship for many of these borrowers in the next few months.

Sep 15, 2007 11:08 AM

David A. Podgursky PA

THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL

THE PODGURSKY GROUP - Make the Right Move!

Jay ... I don't know where you're originating loans but just look at any Adjustable Rate Rider from Fremont, Argent, Option One, Ameriquest, Aames etc... Option One has a typical margin of 5.9% and a cap of 10.95% on the first adjustment - if your ARM was at 5.5% 2 years ago then 5.5% to 10.95% is 100% increase. If you had a 5.75% from another lender and a cap of 8.95%, then you're up almost 50%

it DOES happen... thanks for chiming in though... I could show you how to find your County Clerk's office and research ARM riders and then you'd find them. You can email me and we'll set up a tutoring session. I could also teach you how to research archived rate sheets on those lenders and you'll see what the rates were, what the margins are and then I can teach you where to find historical indexes for the 6-mo and 1yr Libor so you can add the margin and the index together to arrive at the new rate

Sep 15, 2007 12:12 PM

David A. Podgursky PA

THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL

THE PODGURSKY GROUP - Make the Right Move!

Cyndee - thanks!! This is a great time to comb through your client files and send out reminders!

Jeff - thanks - I knew it was going to be rough but I didn't know how rough. That means we should get a mini refi boom for Nov - Jan when people start to panic

George - you're right... but what really gets me is how many people with good credit got put with B/C lenders ... it was just some crappy Loan officer trying to get max ysp because B/C paid better for A borrowers. I hate seeing someone that had a 700+ credit and has a loan with Option One or Fremont - they seem to be the worst culprits - wonder why they're out of business, eh?

Dave - forgot or were not informed

this is also a great time to review closing procedures with agents and title companies...

Sep 15, 2007 12:16 PM

Bill Roberts

Brooks and Dunphy Real Estate - Oceanside, CA

"Baby Boomer" Retirement Planner

David, you are right about the readjustments, up 50% to 100%, but some of the neg am's are going to recast at the higher rate and become fully amortized. Some of these people will have increases of up to 300% on their payment.

Nice consumer post. I hope it works well for you.

Bill Roberts

Sep 15, 2007 01:15 PM

Matthew J Blum - (retired from the business)

Palm Beach Gardens, FL

David, Great post. You are right so many mortgage professionals just worried about two things. One get it done and two how much do they get paid.

Sep 16, 2007 03:06 AM

David A. Podgursky PA

THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL

THE PODGURSKY GROUP - Make the Right Move!

Bill - and many of the Interest Only will expire at the ARM adjustment too

there are still those out there doubting the severity and poo-poo-ing the numbers

Sep 16, 2007 04:18 AM

Richard Sweum

1st Security Bank - Everett, WA

A good Letter of Explanation can really add to the strength of a file...I agree with what was written about banks not wanting to foreclose, I have had success with talking with even low level customer service folks at banks. Additionally, as a bank and a broker, we have been able to help many folks who were denied by the big box guys.

Sep 16, 2007 09:20 AM

Leah Ross

Your Tampa Bay Mortgage Source - Tampa, FL

Tampa, Florida Mortgage

David, you did a great job proactively advising customers of how they can avoid a surprise. Kudos to you!

Sep 17, 2007 01:50 AM