The Mortgage Xchange - my weekly newsletter since Aug. '06

Mortgage and Lending with The Loan Doctor

3rd Pig® SOLUTION$

 The Mortgage Xchange

An information source for Real Estate Professionals in New Jersey, Florida and New York brought to you by Rick Lomax, Certified Mortgage Planning Specialist, d.b.a. 3rd Pig Solutions - Smart Ideas for Smart People!

September 5, 2008                                       Vol. 2, Issue XXXV

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 A mortgage plan will have a powerful impact on your overall financial plan. Consumers who secure the services of a qualified mortgage planning professional are uniquely empowered to make solid decisions. Whether optimizing equity or debt, aligning the mortgage with financial goals, adjusting for life events, or saving money through identifying the lowest cost transaction, a mortgage plan clarifies your options and illuminates quality decisions.

Rick Lomax, CMPS      C: 973-420-9849 O: 732-636-0808 ext. 103 | eFax: 732-636-4459 Se Habla Espanol

Certified Mortgage Planning Specialist d.b.a. 3rd Pig Solutions -- "Smart Ideas for Smart People"

Premier Mortgage Services, LLC 123 Green Street, Woodbridge, NJ 07095  

Note: The information contained in this newsletter is intended to be informative. The reported programs and items are subject to change at any time which shall never be considered within the editor's or the Company's control. Said changes will happen without warning. Programs and features should be verified by calling our team prior to committing to any deal based on the information provided here.

For many, many months I have been working to find or create a system or procedure for doing LEGAL double closings that will allow you, the investor, to get paid for your services while funding your purchases with buyer funds. FINALLY, A SYSTEM FOR DOING Double Closings!!! AND THE REQUIREMENTS TO HAVE THIS PROCESS AVAILABLE TO YOU ARE:
1) my team MUST be used for the end-buyer mortgage AND 2) the Title & Closing MUST be handled by the agency we have engaged for these transactions    THIS SERVICE IS AVAILABLE NOW!  CALL FOR DETAILS - 973-420-9849 
Why the Fed cuts haven't worked
One of the Federal Reserve's staunchest proponents of its rate-cutting spree explains why lower rates haven't helped boost the economy
It's been almost a year since the Federal Reserve issued the first of what turned out to be seven rate-cuts to deal with the credit crisis. So why does the economy still seem like it's in a big funk, with banks continuing to suffer? One of the biggest proponents of the Fed's aggressive rate-cutting spree has an explanation. Eric Rosengren, president of the Federal Reserve Bank of Boston, said in a speech Wednesday that the low federal funds rate of 2% is providing "much less stimulus...than it otherwise would" because of the credit crunch. The federal funds rate is an overnight bank lending rate that banks charge each other to borrow money. But Rosengren argues that just because banks are charging each other a relatively low rate, this does "not necessarily translate into lower costs to the vast majority of borrowers." In other words, even though the Fed has slashed the federal funds rate from 5.25% to 2%, many beaten-up banks have nevertheless substantially tightened credit standards for businesses and consumers. Rosengren said that the rate cuts have "merely offset the tightening in credit conditions created by the financial turmoil that began last summer." Rosengren is not currently a member of the Fed's policy-making Federal Open Market Committee. But he was a voting member last year for three of the cuts, and also voted in favor of the surprise three-quarters-of-a-point rate cut at an unscheduled meeting this past January. In fact, Rosengren could be considered one of the more dovish (i.e. in favor of lower rates) of the Fed presidents. He actually dissented with the Fed's decision to cut rates by just a quarter-point last December because he wanted a bigger reduction. So it's interesting that he's now acknowledging that the cuts haven't worked. Still, Rosengren defended the Fed's strategy, saying that "credit conditions would likely be much worse" if the Fed had not acted. But Rosengren's comments highlight a big problem facing the Fed right now. Sure, the recent slide in the price of oil and other commodities - and the rally in the dollar - may give the Fed reason to relax a bit about inflation fears. The global economic slowdown that now appears to be taking place means that the Fed is highly unlikely to raise interest rates any time soon. Yet, the Fed doesn't appear to have much wiggle-room to lower rates further if the economy weakens further or if more banks get into trouble. Few expect that the Fed would want to inch closer to the historic lows of 1% reached in 2003 - especially since many blame the low rate for the housing bubble. In addition, with inflation as high as it is, further reductions to interest rates would hurt savers even more. Rate cuts tend to lead to lower yields on money-market accounts, precisely the type of investments that people might want to flock to in an economic environment as uncertain as this. That's all the more reason to expect the Fed to keep rates on hold for the next few months, and instead continue to rely on more creative ways to end the credit crunch, such as opening up the so-called "discount window" of funding to investment banks and creating the Term Auction Facility short-term lending program to provide even more liquidity to banks. So, simply put, investors and consumers probably have to sit tight and wait a while longer before lower interest rates will have an effect. Rosengren said that "as financial headwinds subside...we will see the rates available to businesses and consumers decline, helping to stimulate demand." But it's anybody's guess as to when those headwinds will finally subside to a large enough degree to allow the Fed's rate cuts to work as they should. 

Extreme Housing Overvaluation Deemed Nil
Extreme overvaluation in the nation's housing market was "essentially nonexistent" in the second quarter, an indication that "the nation's housing 'bubble' has popped and house prices reflect a healthy balance in relation to long-term fundamentals," according to an analysis released by Global Insight Inc., Waltham, Mass. The quarterly housing valuation analysis, House Prices in America, found that prices fell in 152 of the 330 covered metropolitan markets in the second quarter, representing 46% of all single-family units in the United States. "Although the markets that were extremely overvalued two years ago are seeing expected price declines, other areas are seeing price declines due to weak economic conditions," said Jeannine Cataldi, senior economist and manager of Global Insight's Regional Real Estate Service. "The market has a lot of inventory to work through before prices will change course."

Rates Decline
The average 30-year fixed mortgage rate fell from 6.40% to 6.35% over the seven-day period ended Sept. 4, according to Freddie Mac's Primary Mortgage Market Survey. The average 15-year fixed mortgage rate fell from 5.93% to 5.90%, the average rate for five-year Treasury-indexed hybrid adjustable-rate mortgages declined from 6.03% to 5.97%, and the average rate for one-year Treasury-indexed ARMs decreased from 5.33% to 5.15%, Freddie Mac reported. Fees and points averaged 0.7 of a point for 30-year fixed-rate mortgages and 0.6 of a point for ARMs and 15-year fixed-rate mortgages. "Mortgage rates eased a bit over the holiday-shortened week following release of economic data that suggest consumer spending may slow," said Frank Nothaft, Freddie Mac's chief economist. "The economy grew at an upwardly revised 3.3% pace in the second quarter, boosted by the smallest trade deficit in eight years, and residential fixed investment slowed growth by 0.6%, the least amount since the same period a year ago." A year ago, the average 30-year and 15-year fixed mortgage rates were 6.46% and 6.15%, respectively, and the average hybrid and one-year ARM rates were 6.32% and 5.74%, Freddie Mac said. Freddie can be found online at

MI Numbers Hit Record Low
The dollar volume of primary new mortgage insurance written and the number of applications received both hit new lows for the year in July, according to data provided by the Mortgage Insurance Cos. of America. Total primary new insurance written for the month was $12.3 billion (all but $31 million through the traditional channel), a decline from June's $13.7 billion, which had been the low point. Application volume fell from 90,868 in June to 86,734 in July. July's data, according to MICA does not include Triad Guaranty Insurance Corp., which went into run-off during the month. It also does not include Radian Guaranty, which is not a member of the group. Primary insurance in force is $801.6 billion down from $863 billion, but the decline is due to Triad's removal. The cure/default ratio fell from 63.6% to 57.0%, with 39,229 cures and 68,831 defaults. New pool risk written in July was $31.9 million, compared with $30.1 million in June.

Fannie Won't Buy NY Subprime Loans
Fannie Mae says it will not purchase "subprime loans" as defined by a recently passed New York lending law that goes into effect Sept. 1. "Fannie Mae will not purchase or securitize any mortgage loan that meets the definition of a subprime loan under New York law, regardless of whether any provision of the law is pre-empted by federal law with respect to a particular mortgage or for a particular originator," according to Fannie announcement 08-21. The New York legislature created a new category of subprime loans that falls between prime and higher-cost loans. "The [subprime] threshold is so low that FHA loans and lower-grade Fannie Mae and Freddie Mac loans get dangerously close to crossing the threshold, and in some cases cross the threshold," said Don Romano, president of Shelter Rock Mortgage Corp. in Lake Success, N.Y. On Aug. 12, Freddie Mae said it would not purchase New York subprime loans. Fannie can be found online at
Refinance out of a Wachovia Pick-a-payment, Negatively Amortizing mortgage without the 2% Pre-Payment Penalty.


Save yourself time and money by having all of your prospects qualified by the 3rd Pig Solutions Team. This is suggested whether or not they come to you with a pre-approval letter. These letters are only as good as the person writing it. If you don't know the author of the letter as well as you know us, please advise them to call us right away.  973-420-9849

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 Call or Email for Pricing   973-420-9849

Dollar$ in Your Pocket

"LeTip Business Lead Exchange" Thursday at 7:01a,  Colonia Country Club, 300 Colonia Blvd., Colonia, NJ
LeTip is a structured, highly professional, business-to-business networking organization built on the understanding that people are most comfortable doing business with people they know and trust. Since 1978 LeTip has been teaching members how to generate more leads by forming trustworthy and strategic alliances that are mutually beneficial. Currently over 600 LeTip Chapters throughout the United States and Canada meet weekly. During chapter meetings members pass qualified leads known as "Tips", present their own 30-second commercials and develop rapport with other professionals. The result is an increase in business from truly productive word-of-mouth relationships.
Exclusivity makes this idea work, one member per business category and one business category per member is the standard.
I am the President for the Middlesex County Chapter of LeTip International, Inc. We currently have 20 members in our chapter, which means that I have 19 "salespeople" promoting my business while I am promoting theirs.
CALL TO RESERVE A SEAT AT OUR NEXT MEETING. Rick Lomax, 973-420-9849  -- Directions and Information - Chapter web page - LeTip International web page


Loan Modifications  Can't Refi?!?  MODIFY!!!   

Not a Forbearance Agreement! That increases the monthly payments that couldn't be made in the first place to bring the loan back on track.

 Not a Temporary Arrangement! That will revert back at some point potentially putting you back to square one.
 Permanent Loan Modifications!  That can put their lives back in order  by making their mortgage payments affordable.
REAL HELP!  For folks who need it. Those distressed borrowers you've met or those who might be approaching trouble.
Bring us your clients and if they are eligible, earn referral fees on successful loan modifications. Our experts have a high success rate and that includes those situations where the homeowner has tried this themselves and failed.
Call today!  973-420-9849
You may be quite capable, but common sense and fair reason dictate that you take advantage of expertise when it's available and ESPECIALLY when it is FREE.
We offer many unique services that will make your life easier, one such service is...   Mortgages under Management (MuM)

"A Gold Medal Service"   I am your access point for this FREE service; I have access to the research and the tools to handle this for you. 

As mortgage planners, every mortgage we arrange goes into our Mortgages under Management Program.  These new loans are placed into our database and those clients receive regular updates 3 to 4 times per year to alert them of opportunities that may arise. These alerts include notices on what to do and what not to do as well; it is the latter advice that is often the most valuable. Also included are our Rate Watch System and the Equity Optimizer
We are expanding our MUM database to people with mortgages that we did not originate and we are now taking requests to manage those mortgages. I ask you, where else in our industry are you going to find this kind of personalized, long-term, caring service?
Call or Email Rick - 973-420-9849


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Lisa Friedman
Alliance Realtors - Bedminster, NJ
Central New Jersey Real Estate

For anyone who clicks on this blog, I can attest that Rick is a FANTASTIC mortgage rep.  He always returns calls and emails promptly and he really cares about his customers!

Oct 09, 2008 01:53 AM #1
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Rick Lomax

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