Feb
18
No Country for Mortgage Brokers
Filed Under mortgage | 3 Comments
Over the weekend I finally caught the movie, No Country for Old Men. It’s critically acclaimed and several friends recommended that I go see it. At times the movie was boring and slow. At times it was quick witted and interesting. However, most of the time nothing about the movie made sense.
In the current mortgage landscape nothing makes sense.
I still get several refinance requests from the internet where people are shopping and getting quoted rates that haven’t existed in years. Moreover, to get a loan closed today is much more difficult than ever before. So for anyone to do a loan at the lowest possible rates doesn’t make any business sense.
Some requests are for home purchases by real estate investors. Every day lenders are limiting their risk by limiting what a mortgage broker can and cannot submit. Every day programs are disappearing. There are very few high risk loans available. It’s only a matter of time before buying a home with no money down will become extinct.
Most of the inquiries I get are questions. Simple questions such as “Is now a good time to refinance?” or “Will not paying my bills hurt my credit?” The people who ask these don’t give me any information about themselves just a name and an email. That’s like asking your optometrist (eye doc) “Do I have ocular degeneration?” without having him/her/it look at your eyes.
Just like the movie, No Country for Old Men, there is no end in sight to all the madness.
Feb
10
File under small victory: Colorado cracks down on mortgage brokers
File under mortgage + home equity loan + checking account : Aussie ARM can pay off
File under conforming loan limits: It’s still $417,000 in Denver and Colorado. California is a different story.
File under money from the Feds: Rebates, What you need to know
File under 16th & Court makeover: Adam’s Mark sale done
File under not a lopsided trade after all: Manning for Rivers
File under an interesting experiment: Due to Top Five Fridays I rank well for Mailman Newman
Dec
11
Denver’s relationship with Fannie Mae and Freddie Mac hits the rocks:
The chief executives of Fannie Mae and Freddie Mac on Tuesday warned that their ailing mortgage-finance companies will suffer further in 2008 because of a weakening housing market and rising home-loan defaults.
Read the full article: Freddie and Fannie: More woes in 2008
Metro Denver’s designation as a “declining market” could delay any recovery in the area’s long-suffering residential real-estate market, local housing experts said Tuesday.
Read the full article: Fannie label on Denver ominous
What does this all mean: Putting 5% down is the norm to get a Fannie Mae or Freddie Mac loan. They do have several high risk 100% loans but these loans have higher rates with higher levels of mortgage insurance.
FHA only requires 3% down.
Some companies will have 100% down programs it just remains to be seen who.
Dec
6
These rates are freezing
Filed Under economy, mortgage, rates | 2 Comments
Five-Year Mortgage Rate Freeze Looms
Wednesday December 5, 8:42 pm ET
By Martin Crutsinger and Alan Zibel, Associated Press Writers
Bush Mortgage Plan Will Freeze Certain Subprime Interest Rates for 5 Years WASHINGTON (AP) — The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.
The aides, who spoke on condition of anonymity because the details have not yet been released, said the five-year moratorium represented a compromise between desires by banking regulators for a longer time frame of up to seven years and mortgage industry arguments that the freeze should last only one or two years.
Another person familiar with the matter said the rate-freeze plan would apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.
The administration said President Bush will speak on the agreement at the White House on Thursday and the Treasury Department announced that Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson would hold a joint news conference Thursday afternoon with mortgage industry officials.
Treasury also announced there would be a technical briefing to explain more of the proposal’s details.
Paulson, who has been leading the effort to craft a plan, said on Monday that the program would only be available for owner-occupied homes — to ensure the break is not given to real estate speculators.
The plan emerged from talks between Paulson and other banking regulators and banks, mortgage investors and consumer groups trying to address an avalanche of foreclosures feared as an estimated 2 million subprime mortgages reset from lower introductory rates to higher rates.
In many cases, the higher rates will boost monthly payments by as much as 30 percent, making it very difficult for many people to keep current with their loans.
The plan is aimed at homeowners who are making payments on time at lower introductory mortgage rates but cannot afford a higher adjusted rate.
Through October, there were about 1.8 million foreclosure filings nationwide, compared with about 1.3 million in all of 2006, according to Irvine, Calif.-based RealtyTrac Inc. With home loan defaults still rising, the trend is expected to worsen next year.
The plan represents an about-face for Paulson, who until recently had insisted the mortgage crisis could be handled on a case-by-case basis. However, he and other administration officials became convinced the tide of foreclosures threatened by the mortgage resets represented such a severe threat that a more sweeping approach was needed. They opted for a proposal that was along the lines of a plan put forward in October by Sheila Bair, head of the Federal Deposit Insurance Corp.
Paulson and other federal regulators began holding talks with some of the country’s biggest mortgage lenders, mortgage service companies, investors who hold mortgage-backed securities and nonprofit groups that provide counseling for at-risk homeowners.
Under the typical subprime loan — those offered to borrowers with spotty credit histories — the rates for the first two years were at levels around 7 percent to 8 percent. But after two years, those rates were scheduled to reset to levels around 9 percent to 11 percent.
For a typical $1,200 monthly mortgage payment, the reset could add another $350 to the monthly payment, greatly raising the risks of loan defaults by homeowners struggling with the current payment.
The wave of mortgage foreclosures threatened to make the most severe slump in housing even worse by dumping more foreclosed properties onto an already glutted market, further depressing home prices and shaking consumer confidence.
The deepening housing slump has already roiled financial markets, starting in August, as investors grew increasingly concerned about billions of dollars of losses being suffered by banks, hedge funds and other investors.
The administration plan is designed to deal with the crisis by letting subprime borrowers who are living in their homes and are current on their payments to avoid a costly reset for five years. The hope is that by that time the housing downturn will have stabilized, clearing out the glut of unsold homes and halting the steep slide in prices that is hitting many parts of the country.
With sales and prices once again rising, the expectation is that homeowners will be able to renegotiate their current adjustable rate mortgages into a more affordable fixed-rate plan.
The housing crisis has become an issue in the presidential race with Democrats Hillary Rodham Clinton and John Edwards putting forward their own proposals this week that would go further than the administration.
Clinton said her own proposal that would impose a 90-day moratorium on foreclosures and freeze the rates for five years or until they had been converted to fixed-rate loans was a better approach that would help more people.
“Although the administration is finally giving the foreclosure crisis the attention it deserves, it seems that President Bush is going to give struggling homeowners far less than they need,” she said in a statement.
Mark Zandi, chief economist for Moody’s Economy.com, called the administration plan a good first step, but said the government eventually will have to go further given the problem’s size and the threat to the economy.
“This is the most serious housing downturn we have seen in the post World War II period,” Zandi said. “It is a threat to the broader economy. The risks of a recession are very high.”
Associated Press reporters Deb Reichmann and Nedra Pickler contributed to this report.
Nov
14
PMI PAIN
Filed Under denver post | Leave a Comment
Mortgage articles from the post:
As the housing market crumbles, homeowners are worried about mortgage payments and sellers are worried about slumping prices - but the companies that insure their loans are worrying about their very survival in the face of billions of dollars in claims.
Read the full article: Mortgage insurers feeling housing slump
Oct
29
Countrywide Financial Corp., the nation’s largest mortgage lender, plans to offer refinancing or modifications on $16 billion in loans whose interest rate is set to adjust by the end of 2008.
Rocky Mountain News: Countrywide to push refis, modified loans
New York Times: Countrywide to Help Restructure Loansm
Or are they simply trying to get more business?
Mortgage giant Countrywide Financial Corp., whose loan volume is down sharply in the wake of the housing downturn and the sub-prime meltdown, is aggressively trying to get its customers to refinance. Here are excerpts from two pitches the company sent recently to homeowners:
Exciting news — we are now offering a Special Online Rate Discount. . . . If you qualify, you could get up to $511,006 to pay off credit cards and other loans.
– Countrywide e-mail
No need to show bank statements or verify other assets . . . no paycheck stubs or proof of income required . . . no new appraisal needed (in most cases).
– Countrywide flier
Could be a combination of both. However, this uber annoying Countrywide commercial has been in HEAVY ROTATION:
Oct
22
Option Arms are in the news again
Filed Under foreclosure, mortgage, personal finance, rates | Leave a Comment
File this under: Unsuspecting borrower duped into getting a difficult loan to comprehend.
From Sunday’s Denver Post: Crushing ARMs squeeze homeowners
In 2003, 1.1 percent of mortgages originated for a purchase or refinance in Colorado were option-ARMs and another 2.5 percent were interest- only loans that didn’t pay down principal, according to First American LoanPerformance, a San Francisco mortgage research firm.
…
Many borrowers don’t understand negative amortization, how their payments are rising, and why the loans they expected to rescue them are dragging them into foreclosure, he said.
The mortgage brokers who sold these loans were (most of them are out of the industry) dumber than dirt yet were great at selling these products. If you went with a mortgage broker because they sold you on a loan products, who’s really to blame?
Oct
12
Oct
5
Universal REO
Filed Under foreclosure, real estate | Leave a Comment
Here’s a press release for Universal REO. What’s my connection to Universal REO - my buddy Dan is the CEO.
LOCAL DENVER COMPANY RELEASES NATIONAL WEB-BASED FORECLOSURE EDUCATION WEBSITE FOR REAL ESTATE AGENTS.
UniversalREO.com, a Denver-based company, is reaching out to thousands of real estate professionals across the nation by providing a ‘Resource Center’ for those trying to make a difference in the foreclosure epidemic. According to founder and CEO, Daniel Waterman, “UniversalREO.com is an unparalleled stratagem designed to unify the real estate foreclosure industry. Through the shifting of the REO (Real Estate Owned by Lender) paradigm to meet a more streamlined business model, professionals are enabled by technology and informative resources. Our objective is to elevate the standards by which REO professional operate on every level.”
By offering thorough education on the valuing of properties, the resources and tools on how to determine values, marketing tips, as well as where to obtain new REO business, UniversalREO.com is providing a service that not even real estate colleges offer. After spending years as an REO Specialist for the top REO Real Estate Marketers in the nation, Mr. Waterman realized his true calling as a teacher. His trial-by-fire education in technology was what gave him the foresight to provide this knowledge to the masses via the information highway.
In this “Web 2.0” universe there exist many one-offs offering overnight REO Business success schemes on the web. UniversalREO.com offers more. Education, Valuation, and Marketing are the keys to success in a real estate market flooded with properties for sale due to default mortgage payments. Cutting-edge concepts on moving these properties into the appropriate hands while maintaining value to companies like Countrywide Home Loans who recently took out an $11.5 billion dollar loan to aid their default mortgage deficit is the only way this country will ever jump back on track. By conveying knowledge through on-line video courses, eBooks, blogs, podcasts, certification, and connecting REO Management companies and direct lenders with the educated real estate agent, as well as the end consumer, UniversalREO.com is blazing new trails throughout the nation. UniversalREO.com currently covers over 50% of the nation for Real Estate Agent and Vendor clientele.
Oct
1
You’ll pay but you’ll pay less
Filed Under denver post, real estate | Leave a Comment
As the weather and the leaves turn, for some reason the Denver Post and the Rocky Mountain News have had a blitzkrieg of real estate and mortgage articles. This latest one called, Commission remission regarding the the declining commission for real estate agents is a doozy.
Commission rates last year averaged 5.2 percent nationwide, according to Littleton-based Real Trends newsletter, whereas in 1991 that number came in at about 6.1 percent.
That’s 5.2% of your home price. So if your house sells for $250,000 or $500,000, you’ll be shelling out 5.2% of that amount. However, the article discusses that real estate agents are willing to negotiate their commissions:
…real estate clients can haggle over more than just a home’s asking price. They might just work with their Realtor to find a mutually agreed upon commission rate too.
What makes this article somewhat interesting is this quote:
Too many mortgage lenders will do anything to get a loan through…
Actually once I read that quote, I went to read the entire article.
What do I think? If a real estate agent charges 6% to sell your home and sucks, fire him/her. If they charge 4.6% and kicks ass, refer them to everyone you know.