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.

If you know what Redfin is all about, this article, Buying or selling a home? Forget the traditional realtor may intrigue you:

The Internet is increasingly taking on the duties once performed by real estate agents. And while no one – yet – is suggesting that it’s a good idea to buy a house over the Internet sight unseen, a new business model is emerging that takes advantage of the convenience of Internet shopping.

80% of all home searches start on the internet. So it’s no surprise that companies are using the internet to transform the way they buy and sell real estate.

More on online home buying:

Buyers and sellers can save thousands on sales commissions and through rebates using online real estate agencies, such as Real-a-Save:

FOR A BUYER

• Home sales price: $300,000
• Traditional 2.8% buyer’s agent commission: $8,400
• 66% Rebate Real-a-Save clients would receive: $5,400

FOR A SELLER

• Home sales price: $300,000
• Typical 3.2% sales commission: $9,600
• Real-a-Save’s standard sales commission: $2,500
• Savings: $7,100.

It’s really too soon to tell whether or not online real estate brokerages will be around or just another passing fad. If you talk to most people they love the idea but would prefer to stick to using a real estate agent no matter how much they despise agents. Why do people despise agents? Same reason people despise the government – a lot of upfront promises, not much after that. The internet won’t solve that problem.

Growing up in suburban NYC, there was one choice when it came to hardware stores – Pergament. When I went to college in upstate NY, there was one choice as well – Chase Pitkin. When I first moved to Denver, there were several choices including Builders Squares and Hugh M Woods.

Today, these stores don’t exist. They’ve been replaced by two home improvement mega centers: Lowes and Home Depot. These home improvement centers are growing at a rapid pace and leaving a closed hardware stores in their wake.

A few years ago we planned on remodeling our bath room but after getting two quotes from contractors we decided that our money was best spent on a Mexican vacation. This year we revisited the idea of remodeling our bath room but we decided to set a budget and keep things within reason since we’re planning to go to Mexico again next year. In order to keep things within reason, it means doing it yourself and going to Lowes or Home Depot.

To make life easier my wife and I ventured to Arapahoe and I-25 in the Tech Center where Home Depot and Lowes are about a block apart. Plus, if we didn’t like their selection, the Great Indoors, was a stone throw away on I-25 and County Line. We went shopping. I hate shopping but you don’t have to twist my arm to go to a home improvement center. We looked at flooring, vanities, sinks, counter tops, faucets, and just about everything in between.

This shopping adventure brought up a great question: How do you pick between Lowes and Home Depot? You can go with Nick Bakay’s “Tale of the Tape” method:

Number of Locations: Way too many (Home Depot) vs Not enough (Lowes) advantage Home Depot

Location of restrooms: At the Front (Lowes) vs At the Rear (Home Depot) advantage Lowes

Parking: Even on a busy day it’s not bad (Lowes) vs No matter what time you go, it’s just plain bananas (Home Depot) advantage Lowes

Checkout: Self Checkout (Home Depot) vs No Self-Checkout (Lowes) advantage Home Depot

NASCAR driver: Jimmie Johnson (Lowes) vs Tony Stewart (Home Depot) push

So far we’re even 2-2, so here’s the tie breaker:

Closing time: 10 PM (Lowes) vs 9 PM (Home Depot) advantage Lowes

So there you have it, Lowes wins 3-2!

Update: We ended up getting the vanity, sink, flooring and counter top at Home Depot. My wife simply didn’t care for my affinity to Lowes.

Yahoo is one of the best websites when it comes to consolidating articles. Want news of Lindsay Lohan’s rehab, they’ve got it. Want news on Kobe Bryant desire to be traded, they’ve got it. Want news on real estate, they’ve got it.

Today there was an article entitled: Mortgage Brokers: Friends or Foes?

The article discusses the fiduciary (a person who occupies a position of special trust and confidence) responsibility of mortgage brokers.

According to the article:

Borrowers often see mortgage brokers as their allies, searching far and wide for just the right home loan at an attractively low price.

Yet the article discusses the inherent flaw of the mortgage broker:

Often the broker’s incentives run counter to the borrower’s interests. Lenders pay YSP to the broker when the borrower is paying a higher interest rate than the best he or she could qualify for, which makes the loan more profitable for the lender. The higher the rate, the higher the payment to the broker. (Some lenders put a ceiling on YSP.) Lenders may also pay brokers a bonus for loans with prepayment penalties, which make it expensive for borrowers to refinance within the first few years.

To counter this flaw, the article advocates shopping:

To protect yourself, one strategy is to shop for a home loan directly at a few lenders and then see whether a broker can find a better deal. When choosing a broker, borrowers should ask tough questions first. Among them: In searching for loans, do you feel obliged to put my interests ahead of yours? Exactly how much will you earn on this loan? And how many lenders do you check regularly for rates and terms?

Are Mortgage Brokers the Enemy? The answer is NO.

There are no enemies in the game of life. People will only take advantage of you if you let them. The only true way to protect yourself is through knowledge. Learn as much as you can about getting a mortgage. It’s a pretty simple process but it’s cluttered with confusing terms and complex arithmetic. Where can you learn about getting a mortgage? For $12 you can get Mortgages for Dummies. It’s the book I got when I bought my first place 10 years ago.

Chances are you’ll need a mortgage broker if your loan doesn’t meet Fannie Mac or Freddie Mac guidelines. In other words, if you’re loan is somewhat unorthodox, you need a broker.

The best blogs for real estate discussion are the Rain City Guide and the Blood Hound Blog. Made up primarily of real estate enthusiasts from around the blogosphere, these two blogs kick ass!

This article initially caught my attention because it discusses the perils of rate shopping. However, it generated a lot of commentary. By a lot, I mean you could write a 30 page dissertation on the comments alone.

Why Selecting a Lender by Rate Alone is Not in Your Best Interest

This article caught my attention because it discusses the trials and tribulations of shopping for a loan via Lending Tree. It’s quite lengthy but the lessons learned are worth reading especially if you’re shopping for a mortgage.

Countrywide, LendingTree and Bear Stearns Mortgage

If you’re going to shop for a mortgage, caveat emptor!

One of the most disappointing experiences in my young career as a mortgage professional is when potential borrowers called me to let me know that they were going with the real estate agent’s lender. Their exact words were “We liked you better but we got a better deal.” The bad news came on the heels of me working til 12 AM the night before getting the loan documents ready to submit to underwriting the next day. It was a bitter pill to swallow.

Whether or not my potential borrowers did in fact get a “better deal” is highly unlikely. More often than not, borrowers end up with higher rates than what they were initially quoted. The stark reality of the mortgage business is that it’s super competitive. However, with competition comes deceit and fraud. When you swim with sharks, the sharks call it “salesmanship” or “doing whatever it takes to get the deal.”

When I meet with borrowers that I know are rate shopping, I challenge them to be more BS sensitive than RATE sensitive. I also tell my borrowers how to shop for a mortgage, following three simple rules:

1. Shop on the same day. Rates change every day, sometimes during the day. So shopping on different days or different weeks is not very effective.
2. Get a good faith estimate then compare only the 800 section. These fees are what lenders charge. The title fees, reserves, government recording fees, etc. are variable.
3. Buy Tylenol or Advil. Shopping for a mortgage is a headache and if you choose poorly, expect your headache to get worse.

Last rule…. if a lender says “I can get you the best rate” or “I can beat my competitors rate”, you should seriously consider another lender. As lenders, we all lend money from the same pool, so there’s not much discrepancy in rate but a huge discrepancy in service. So shop wisely!

South of Denver lies Highlands Ranch, a vast neighborhood in Douglas County. As you drive down C-470 or County Line Road all you notice is how closely the homes are built. Fittingly, the LA Times has article on the development of Highlands Ranch. After all, California based Mission Viejo Co. built “the Ranch” 25 years ago.

The article mixes potshots:

…the epitome of sterile suburbia, with garages but no front porches, a multiplex but no museum, a Wal-Mart but precious few mom-and-pop shops. The stereotype was cemented when National Geographic magazine ran a picture of Highlands Ranch in 1996. It showed a dizzying panorama of rooftops, one after another after another, so close they practically touched.

with praise:

Indeed, for all the carping, Highlands Ranch may turn out to be a model for master-planned developments, said Robert Fishman, a professor of urban planning at the University of Michigan.

I have several friends who live in Highlands Ranch and they seem to enjoy the rec centers, parks, and mini malls that Highlands Ranch has to offer. They cite many advantages such as quiet neighborhoods, well kept lawns, and proximity to shopping. The only disadvantage they see is that it’s not convenient to Denver.

I came across the article via another Highlands Ranch article: Denver Subdivison Moves From Monstrosity to Model Planned Community

This week I’m going to give props to my favorite pizza joints in Denver:

1. Original NY Pizzeria – althought they’re in Broomfield, CO which is about 20 minutes from Denver, they the best and most authentic NY style pizza. After all, the owner is from Brooklyn, NY.
2. Two Fisted Marios – 16th and Market, don’t be fooled by their looks, the staff is the best!
3. Anthony’s – Various locations throughout Denver but I like the one by Kennedy Golf Course on Dartmouth and Hampden. Two slices and a cold Coors won’t set you back much.
4. Pantaleones – tucked in a small shopping center by Evans and Holly, these Jersey guys have the best crust.
5. NY Pizzeria – somewhere on Leetsdale, the place is always packed at lunch.

The mortgage industry now has another player…

With Trump Mortgage, you can stop shopping around. Because our clients have direct access to mortgage specialists who are not only smart, seasoned lending professionals, but experienced, knowledgeable and exceptionally visionary individuals. Their personal commitment to customer service, coupled with our state-of-the-art technological capabilities, ensures quick commitments and smooth, on time closings. We offer a wide range of mortgage solutions for residential, luxury, commercial and home equity financing.

A mortgage for a very stable borrower with excellent employment and credit history. These are sometimes called “vanilla loans” because the meet general mortgage guidelines and are easy to complete.

This type of loan/borrower often qualifies for the most attractive rates available. A credit score of 720+ is one of most important criteria in establishing a “A” rating.

A credit is a very loose term that applies to basically just having good credit with a good score. You can have perfect credit, no lates ever, no collections and no derogatory credit ever and still have a low credit score and not are considered “A” credit. There may be many reasons for this low score. You may be maxed out on all of your revolving credit (credit cards and such) and have a lot of inquiries. These two items can negatively affect your score and remove you from the A credit classification.

When shopping for an “A” paper credit loan, it is important to remember that this does not necessarily guarantee a low rate. Adjustments will be made to an interest rate for such factors of; Cash-out of equity, Self-employment, Income ratios, Loan to Value ratios, Region/location, encase your mortgage professional about what adjustments will affect your interest rate and payment.

“A” paper loans are for borrowers with good credit and work history. “A” paper loans conform to standards set by Fannie Mae and/or Freddie Mac. loans are for borrowers with good credit and work history that do not conform to standards set by Fannie Mae and/or Freddie Mac are called “Alt-A” loans.

A paper loans are also commonly referred to as conforming loans because they conform to standards set by Fannie Mae and/or Freddie Mac.

Other sites: Broker Outpost | Home Page Sample | MIP | Increasing your homes value | Selling your home with a real estate agent | Why choose a mortgage Broker| Pay Option Arm Calculator