Mortgage Marketing News a.k.a. The Mortgage Blog

Home Affordable Refinance Program Extended

2011-06-10T15:30:00.000-07:00

The FHA has decided to once again extend the Home Affordable Refinance Program (aka HARP.) Perhaps now is the time to look into whether or not this is an option for you. It is a program created to help the millions of Americans who have had trouble refinancing due to decreased home values. When it is successful, it has similarities to a loan modification, but you actually get new mortgage with new terms (lower interest and lower monthly payments.)

HARP may be an option if:

You are current on your mortgage payments (no 30 day late payments over the past year)
Your home is worth less than what you paid for it.
Your first mortgage is not greater than 125% of your home's current market value.
Your loan is owned by Fannie Mae or Freddie Mac.

The best way to find out if you qualify for a Home Affordable Refinance Program loan, is to contact a HARP lender. Not every lender is equipped to assist you. Here is a way to check and see if you quality for a HARP loan through a trusted HARP mortgage lender. Simply complete this mini-application online.

The Best Bank to Get Your Home Mortgage From

2010-08-25T12:58:00.001-07:00

This article is not about how banks, credit unions, or lending institutions stack up. It is about a paradigm shift that is taking place with or without you.

Can you imagine what it would be like to not have to provide all of your information to a bank loan officer only to have them ask you for more paperwork? It has been said that a traditional bank will lend you money if you can prove you don't need it. So, why not put yourself in a position where you really don't need it? Think it's impossible? Think again.

There is a financial strategy that you may or may not have heard of called the Infinite Banking Concept. Through the Infinite Banking Concept, you actually learn how to become your own banker and solve your need for financing - no matter what the need is - and that includes your mortgage.

I strongly advise you to take some time and learn about this financial strategy by visiting the Infinite Banking Concept website. You will be glad you did as you will be on your way to becoming your own banker. I am and I am loving it!

Ways to Save Money on a Mortgage After You Retire

2010-08-01T13:34:00.000-07:00

For many seniors it’s essential to save money wherever they can after retiring, especially on a mortgage. Once you’ve decided to retire, you need to be certain that you have enough income and have reduced your expenses enough to live as comfortably as you wish. Now for most families, their mortgage is probably their biggest monthly expense.

When you actually retire, unless you have a side business that generates income, your income will come from your pension (if you have one, and it’s increasingly rare commodity these days), your Social Security check (that is if there’s any money left in the Social Security system when you retire, which is another unknown), and then of course, whatever savings and investments you have, including rental properties.

So, unless you have unlimited savings or a substantial income from your investments, it’s of paramount importance to lower your monthly expenses.

One way you can get your expenses down is by paying off your mortgage before you retire. If you can do that, you have lightened your monthly burden by hundreds, maybe even thousands of dollars every month. Depending upon how large your mortgage is, it may seem like an almost insurmountable task to pay it off early. But, there are a few tricks you can try to get your mortgage paid off before you retire.

For one thing, you can make at least one extra mortgage payment a year to pay down your principal. The lower the principal, the less interest you’ll have to pay on it.

Another way to lower your mortgage payment is to look at the rates you’re currently paying. If you got your mortgage a decade or more ago and you’ve been making your payments steadily ever since, then it’s probably a good idea to check out refinancing your mortgage now since mortgage rates are lower than they have been in a long, long time. Once you’ve gotten your monthly mortgage payment down lower you can look at either making an extra mortgage payment every year or making slightly larger mortgage payments every month to pay it off faster. Every little bit helps.

If you’re nearing retirement and it’s just you and your spouse living in a four bedroom house, think about how much house you really need. Perhaps you should sell your house, pay off your mortgage, and relocate to a smaller place that’s more in tune with your current housing needs, and perhaps still have some money left for a down payment. You may still have a mortgage to pay off, but housing prices have really dropped in the last three years, and mortgage rates are lower than ever. If you can lower your monthly outflow of cash, that’s more money in your pockets for investments, travel, or that big-screen TV you’ve been lusting after.

One thing you shouldn’t do, however, is to dip into your 401K account or IRA to pay off your mortgage early. It would be nice to get rid of your mortgage payment entirely, but you need to keep a balance between owning a home, having investments, and having enough cash on hand for emergencies.

The thing is, everyone’s situation is unique, so tailor your approach to your needs and your current situation. The longer you can put off retirement and dipping into your savings, the more money you’ll have in the future. The way the economy is going now, you should probably work as long as possible and work on paying off that mortgage while you still have a monthly paycheck to count on.

About the Author:

Vern is a student learning about all aspects of finance to pass his New York mortgage test this fall.

What is a Mortgage Principal Reduction?

2010-01-27T06:32:00.004-07:00

You may have heard this term recently and not be fully aware of what it is. First, it is not a loan modification. In a loan modification, you have to meet certain criteria and negotiate with the stubborn banks and hopefully in the end get some relief in the form of a lower payment or forgiveness for some of your outstanding mortgage. Second, it is not a short sale. In a short sale, you have to sell your home (with the banks approval), move and and start the process of finding a new home. Who wants to do that?

A mortgage principal reduction is a new form of relief for homeowners who owe more than 25% of their homes current value. In states such as Arizona, California, Florida, and Nevada, this represents a significant population.

This new service is made possible due to the negotiating power that institutional investors have with the banks. It is far more than what you could do or your real estate agent by him or herself for that matter. In the end, you will have a principal reduction that gives you 10% equity in your home, which for some is something they thought they would never see after the market dropped as it did.

Qualifying is even simpler than qualifying for a loan modification or a short sale which is even better news. The basics are that you need to owe at least 25% more than the homes current value, and not have a debt load of greater than 50% with the new lower mortgage payment.

My advice is to be very cautious of paying high fees to have someone help you with a principal reduction. For a while it seemed to be a solution, but one trusted advisor that I spoke with said that the banks are not as excited about doing these as folks had initially thought.

In the end, you might be better off trying to do your own loan modification.

Get a Home Loan and Get Paid for it?

2010-01-22T15:06:00.003-07:00

Yes, as odd as it seems, one company has put together an amazing model that allows customers to get paid for referring home mortgage customers - including themselves. This means you can get paid for your own loan! Loan Home, Inc. is the company and all you have to do is register as a free affiliate then submit your loan; it's that simple. The company provides you with a link to share with others as well so you can profit from their loans as well.

The company even serves businesses by allowing employers to offer this amazing service as a company benefit and serves non-profit organizations, allowing the non-profit to generate much needed revenues by sharing a great service with their constituents.

To learn more, visit www.theloanthatpays.com Today!

FTC Disclosure - This post was written by an affiliate of Loan Home, Inc who is compensated for successful referrals.

Do You Really Need a Home Warranty?

2009-04-15T22:48:00.002-07:00

If you are buying a new home it should come with a builders warranty so you shouldn't have to purchase a home warranty insurance plan. If you are not buying a brand new home, I would strongly recommend making a home warranty a part of the transaction. Often a real estate agent with convince the seller to offer a home warranty as an incentive, but even if they don't offer one, you can write it into the contract. Sometimes (depending on the size of the transaction) the agent may even offer to purchase one for the purchaser as a settlement gift.

Even if you have to pay out of pocket, the cost is relatively inexpensive with most plans running between $250 and $600 per year. Many people don't realize that you can renew the home warranty after the first year.

But What Does it Cover?
Please know that a home warranty does not cover anything that could go wrong with your home. Typically, a home warrany covers major systems and applicances, but you will want to read the fine print to know exactly what is covered on the plan you are considering. Also, keep in mind that often there are deductibles or service charges in conjunction with claims.

The goal of the home warranty is not to eliminate every possible expense, but to help a new homeowner not have any costly surprise expenses after spending most of their savings on closing costs to get into their home.

For more information or to purchase a home warranty, visit American Home Shield.

Record Foreclosures Lead to Record Bankruptcies in 2008

2009-03-28T22:27:00.004-07:00

2008 saw the greatest increase in personal bankruptcy since the bankruptcy laws were reformed in 2005 (33% according to MSN Money). Given the increase in the number of foreclosures, it was to be expected in that a bankruptcy is often a homeowners only option when faced with overwhelming debts, a mortgage shortage, or job loss. A confirmation of the connection of record foreclosures to record bankruptcies is the fact that 3 of the top 4 states for increased bankruptcies are also in the top 4 states affected by foreclosures; California, Florida, and Nevada.

Bankruptcy is not the end of the world. In fact, for many filing bankruptcy can be a relief. It means an end to outstanding debts, no more collection calls, reduced stress, and a chance to start over. I am not encouraging you to go our and file for bankruptcy to get rid of your problems. It is a huge decision and requires serious thought because it is certainly a mark that will stick with you forever even though it will eventually come off of your credit report.

Many ask the question "if they will ever be able to buy a home again?" and the answer is absolutely. It won't be the next day or even the next month or the next few years before a bank will underwrite their loan, but there are several options for those that have filed for bankruptcy to get into a home. A great resource for bankruptcy recovery is The Bankruptcy Mortgage Book, which is an A to Z guide to getting a mortgage after bankruptcy.

If you have not filed for bankruptcy yet, I strongly encourage you to do research some bankruptcy information resources online before you do.

These are challenging times indeed, but I have full confidence that as a nation we will weather this storm as we have in times past. My only hope is that we all learn from this and become better at saving and not living on credit or beyond our means.

MORTGAGE SCANDAL - Mortgage Company Giving Insider Info to Consumers!

2008-08-29T12:59:00.000-07:00

We have always been committed to educating consumers and what we are now sharing with customers does not sit well with the big mortgage companies. We are sharing with consumers how to pay off their mortgages WITHOUT REFINANCING and in many cases WITHOUT SPENDING ANY MORE MONEY OUT OF POCKET.

The mortgage companies don't want you to know this stuff because the sooner you pay off your mortgage, the sooner they lose their monthly revenue stream AND they realize that you may never need them again! They are afraid that this will ultimately take MILLIONS of dollars out of their coffers.

If you are interested in learning what the mortgage companies have been keeping from you and specifically how you can use this information to pay off your mortgage in 1/3 to 1/2 of the time, please call Consumers Advantage Mortgage at 800-757-9704.

For those that are wondering, this is NOT a bi-weekly mortgage program.

Wishing you financial freedom!

Getting a Home After a Bankruptcy or Foreclosure

2008-06-26T13:13:00.000-07:00

While the rules have changed drastically with regard to mortgage lending, it is still possible to get a home after a bankruptcy or foreclosure. The three keys to this are:

1. Credit Restoration. Goes without saying.

2. Documentation of what caused you to have the bankruptcy or foreclosure.

3. A new positive house payment history. Before you get a mortgage, the best thing to do is find a home with creative financing to re-establish yourself. Save all of your cancelled checks as this will be your new "alternative" credit.

A few great creative financing options are:

1. Owner Financing. If the owner has equity, and a heart, you might land a deal here. The best about this is that you will likely have equity when you go to refinance, and a refinance loan is scrutinized less than a purchase loan.

2. Renting With the Option to Buy. You will likely pay slightly above market rent with a rent credit going towards your down payment. Ideal for those who need to save towards a down payment.

3. Lease-Purchase. Similar to a rent with option, in a lease-purchase, you normally establish the price up front, and you become responsible for the property as if you owned it. The key to success here is having enough time to get your credit cleared up to get approved for a traditional mortgage at the end of the lease term.

These deals exist, especially now that there are so many sellers trying to unload investment properties. Just make sure you do your homework so you know you are dealing with the owner and not a "contract owner" as this could cause you more trouble than it's worth - including the loss of your money and the house.

For the A to Z guide to financial recovery after a bankruptcy or foreclosure, I recommend getting a copy of The Bankruptcy Mortgage Book.

Government Aids Investors and Struggling HomeOwners in One Move

2008-06-13T15:27:00.000-07:00

Today the Bush Administration announced a suspension of an "anti-flipping" rule as a means of helping those facing foreclosure proceed with quick sales.

This is good news for both investors and homeowners facing foreclosure.

Read the full story at Yahoo News

How to Buy a Home After a Foreclosure

2008-06-02T18:05:00.000-07:00

This seems to be a very hot topic these days given the massive numbers of people that have been forced into foreclosure. First, let me say, you are not alone. Please don't let this get you down or get depressed - you can recover.

You need to ask yourself if you are ready to jump back into the market anyway. Renting can be a big relief in that you will spend less money out of pocket on repairs and maintenance, so while you are recovering this will keep your expenses down. Also, the market is still volatile; the worst thing you could do is put good money down on a home that once again loses value - that would be discouraging. Make sure you work with a trusted local real estate agent, that know what the market is doing in your area.

Do not attempt to purchase a home if you are buried in debt, have poor credit (middle score below 620), or don't have any money to put down. These are the kind of situations that led to the foreclosure crisis as we know it. There are hard money lenders out there that might seem to be helping you, but trust me the high fees and high monthly payments will make you wish you never bought another home. Take this time to repair your credit, so that when you are ready, you will have the best possible terms.

Perhaps you had a setback and you have recovered, but you don't want to wait the required 36 months following your foreclosure? Here are a few options:

1. If you are married and bought your home in only one spouses name, then congrats you are much closer than you thought. Simply work with a mortgage lender that will help you know what you need to do to obtain a loan with your spouses credit profile.

2. Find a Lease-Purchase home. This is a deal where the owner credits you some of your monthly rent towards the future down payment. Make sure they know that you need how every many months to recover from your foreclosure and don't let them sell you on the fact that they can "help you get a loan". The sad story is they may not care because if you can't buy the property after the lease term, you will lose all of the option money. Also, find a way to make sure they are current on their mortgage. You may want to write it into the agreement that they have to send you their monthly mortgage statement. There are too many cases of rental homes being foreclosed out from under the tenants. This is also a good reason to work with a realtor at a property management firm because they will make sure the rent is paid.

3. Owner Financing. Provided you can find an owner that doesn't need to get the equity out of their home and isn't going to take advantage of you, you can do a transaction where you pay them until you can qualify for a traditional mortgage. Document EVERYTHING including your payments (with canceled checks ONLY).

Before you know it, you'll be back on track just make sure not to buy above your means and get yourself in trouble a second time.

How to Get Rid of Private Mortgage Insurance (PMI)

2008-05-30T17:57:00.002-07:00

PMI, or private mortgage insurance is required on any 1st mortgage with a loan to value of 80% or greater. Contrary to what many believe, its purpose is to protect the lender (not the mortgage holder) in the event of a default on the mortgage. As you pay down your mortgage to below 80% LTV (most require you to pay down to 78%), you should consider what your options are for getting rid of this extra payment.

1. Keep up with homes are selling for in your neighborhood. If you are at 78% loan to value based on what comparable homes are selling for, then simply call your lender to discuss this with them. Personally, I would call even at 80%. They may require you to put your request in writing and they may require an appraisal which you will need to pay for.

2. Refinance. If you know that your home would appraise for at least 20% more than you owe, then perhaps a refinance should be considered. This can accomplish many goals such as reducing your rate or converting an adjustable rate to a fixed rate at the same time. Just know that you will incur fees so make sure there is room for those fees within the 80% loan to value ratio.

3. Pay Down Your Mortgage aggressively. If you aren't close to being at the 80% LTV, then you need to look at how you get their as quickly as possible. You can pre-pay principal to make this happen, but the absolute best way to pay down your principal in the fastest amount of time is with a Money Merge Account. The Money Merge Account is a new system being used by thousands of homeowners across America to reduce their mortgage by 1/3 to 1/2 with out refinancing. It's not for everyone, but currently, you can get a FREE Mortgage Savings Analysis from MortgageZapper.com. I highly recommend the Money Merge Account as a valuable financial planning tool. It will not only help you reach your goal of paying down your mortgage to reduce PMI, but will help you achieve the seemingly unattainable goal if paying off your mortgage completely.

Once you get that extra $50 - $200+ in your pocket every month, I strongly recommend speaking with an investment advisor to discuss the best way to make it grow even further.

What Lenders Could Have Done to Avert the Foreclosure Crisis

2008-05-13T12:43:00.001-07:00

I was chatting with a friend yesterday about her upcoming balloon payment on her mortgage. Like many, she owes more than what the house is worth and we talked about options such as contacting the lender to modify the loan, or paying down enough principal over the next few years to get back to an equity position.

She asked why the banks don't want to work with customers to avoid the losses of foreclosure and that is a very good question. In fact, as I chatted with her, I told her that the lenders really could have avoided their own fate in some ways. I think that extending the fixed periods on ARM's would have been a far better solution that taking back homes, then going out of business - but I guess they didn't. Looking even further back, I guess they could have not made so many "dead man" loans (i.e. loans to anyone with a pulse). As with every other debacle of the banking industry, the government is stepping in to try and right their wrongs with the Foreclosure Prevention Act of 2008.

Two Words That Will Make you Millions in Real Estate Investing

2008-05-12T08:50:00.001-07:00

I have been involved in the real estate industry in some form since 1992. As I came through the ranks, I learned from several seasoned real estate veterans that has made lots of money in the business. I went on to use many of their strategies and made plenty of money in real estate myself.

Years ago (probably around 1995) a real estate "guru" shared with me two words that he said would be the key to my success in real estate investing. Do you know what those two words are? "Make Offers" He went on to say "to get deals, you've got to make offers". Just imagine how much money you'd make on one real estate transaction (buying low and selling high). If it was conservatively $10,000 and you have to make 20 offers to get that one deal, would you do it? Considering an offer doesn't take that long to make, that would be $500 per offer you made - not too shabby.

The big question of course, is where to find properties to make offers on. Here are a few ideas:

1. Check the classifieds. This has worked forever, and still does. Try Craigslist.com and backpage.com for online ads.

2. Here is a free publication you might enjoy this. It's called "How to Buy a Home at a Discount". It is a free download (no registration, no email required):
http://www.bankownedassets.com/dl/discounted-homes.pdf

3. Finding pre-foreclosure properties. There is much to learn regarding pre-foreclosures, but the profit margins are almost always higher:
For more info check out: http://www.bankownedassets.com/pre-foreclosure

4. Banks often list their properties for sale. You can find a free list of banks here: http://www.bankownedassets.com/

5. Do you want to have periodic emails sent to you with homes that come available in your area which saves you time of looking through all of the bank lists, then you can visit the BankOwnedAssets.com Nationwide Foreclosure Center and subscribe. There is a small fee for this, but you can unsubscribe at any time.

6. Would you rather just call a local real estate agent that works with foreclosures in your area? You can request that by filling out this form:
http://www.atozlender.com/real-estate-agent-referral.cfm

7. Do you need to be pre-qualified for a home mortgage? If so,
visit: http://www.atozlender.com

8. Unsure about your credit rating? Check it here: Credit.com

9. Does your credit rating need improvement? Check out these professional and do-it-yourself credit repair resources:
http://www.bankruptcymortgagebook.com/credit-repair.htm

I think that covers it. If you have any other questions, please do not hesitate to contact me.

How your credit will affect your mortgage terms

2008-05-07T18:00:00.000-07:00

Do you know your credit score? Well you should, especially if you are trying to get a home mortgage. Lenders will look at your credit scores from all 3 credit reporting agencies and based on the middle of three credit scores, sometimes referred to as FICO scores, here is how you will do:

> 720 - You can basically write your own ticket and just about get a signature loan based on the fact that you have proven that you know how to handle credit and have made keeping a strong credit score a priority. It also probably means that you are blessed to have not had any unforeseeable losses such as job losses, divorce, illness, etc which often ruins the credit of hard-working people. Trust me, I know this first hand.

680 - 719 - This is an ideal credit score range for getting a home mortgage with a minimal down payment, minimal fees, and optimal loan rates.

620-679 - This is where many borrowers fall, and most borrowers won't have trouble getting a loan here as long as they are not trying to use alternative loan documentation .

560-619 - These borrowers may have trouble getting traditional loans with minimal down payments. Options are sub prime loans or government loans (FHA).

500-559 - Borrowers here will have VERY limited options, due to their poor credit histories and most will not qualify for a loan. I strongly recommend getting the credit issues fixed, rather than over paying for a home loan. See below for info on getting your credit fixed.

< 500 - The only loan options available to people with less than 500 credit are hard money lenders, and I do not endorse them. If you have less than a 500 credit score, we are not able to assist you as we do not want to be associated with hard money loans. Also, you have to think about whether or not it is the right time for you to get a loan. If you get into a home and can't afford it, you really haven't accomplished anything for the long haul.

If you don't know your credit scores, visit credit.com to get your scores and get on your way to home ownership.

If you need credit repair assistance, the only company I can recommend is Lexington Law , a nationwide law firm specializing in credit repair.

I hope this is helpful in your journey to become a homeowner. Please contact Consumers Advantage Mortgage to apply for a home loan when you are ready.

Using A Home Equity Loan to Pay off your Mortgage?

2008-04-30T17:10:00.000-07:00

So the Fed's are continuing to bring the short term interest rates down, this is good news. Some will say it doesn't matter, but lets take a look at what it really means.

Short term interest rates that are tied to the Prime are now a bit lower. Granted most people won't notice because many people choose to live on credit card debt. If you are looking to make a difference in your personal finances, now is a time to aggressively attack those credit cards.

How, you ask? Well, now Home Equity Loans are much lower as well. Back in 2004 Home Equity Loans (a.k.a. HELOC's) were all the buzz. As a loan officer, I think I did at least a few every week. They were like super sizing a loan "would you like a home equity loan with that? There is no additional cost and no extra closing costs as long as you keep it open for 3 years, and you never have to use it". It worked like magic and it was what people wanted. The savvy consumers took advantage of them and converted high interest credit card payments into lower interest, partially tax-deductible payments.

Well, it's 2008. and again, it's a great time to get a Home Equity loan, but this time, I don't just recommend paying off debts with it, I recommend paying off your mortgage with it. WHAT? Yes, you heard me right - I am recommending that you payoff your first mortgage with a Home Equity Loan. Before running out and doing this on your own, I will tell you that you have to work with a financial expert to make this work otherwise, you will be in lots of trouble. There is a special software that will take into account all of your debts including your first mortgage and show you how to leverage short term interest and its payment cycles to pay off all of your debts, mortgage included, in the shortest amount of time - usually less than 10 years.

If you want more information on how to get this done, you can visit UFirst, or call me at 800-453-9290

Until next time,

Anthony

Looking to relocate? Check out these 2008 stats on US Cities and States

2008-03-28T15:05:00.001-07:00

Where to find great foreclosure deals

2008-02-26T15:40:00.002-07:00

Unless you've been sleeping under a rock, you know that foreclosures are at their all time high since the turn of the century. If you live in one of the top 10 foreclosure states (as I do), there is a chance you might be able to find a great deal on a house to live in or an investment property. According to an Associate Press article today, here are the top 10 states for foreclosures:

1. Nevada
2. California
3. Florida
4. Arizona (my home state)
5. Colorado
6. Massachusetts
7. Georgia
8. Connecticut
9. Ohio
10. Michigan

Here are two takeaways from this list:

1. If you are looking to buy or invest and live in once of these states - now is a good time to make your move. The market will definitely come back, and those who are able to take advantage now will do well.

2. If you are looking to move, you may want to consider one of these places if you want to start over a pick up a good deal on a home, which will likely be your largest investment.

Stay tuned for my next posting on the mechanics of how to buy foreclosures. You can subscribe to the blog by using the form in the upper right column and entering your email address. You will receive my next blog post in your email.

Until next time,

Anthony

P.S. - Here are a few foreclosure resources:
- A free list of REO properties nationwide
- A database of REO properties in California.

The Housing Bubble Explained (in music)

2008-02-19T16:39:00.000-07:00

What should be done about mortgage fraud

2008-02-14T14:25:00.001-07:00

The other day, I spoke with a retired gentleman who was inquiring about a home mortgage. As I went through his scenario, it came to my attention that he had just refinanced a few months prior at 11.25% on a loan of over $700,000 (not a typo). Incidentally, he said his loan officer hadn't called him back but had assured him that after the refinance he could get a new appraisal and get the rate lowered. Here is where the bigger problem came in. I asked him how he qualified for the loan (fully documented, stated or other). His comment was "I'm not sure... we don't even make $6,800 per month" referring to his new mortgage payment that he was dipping into his retirement funds for every month to make his payment. To make matters worse, there was still no equity in the property.

So who is really at fault here? Is it the loan officer for trying to make a quick buck and being the alleged professional who very poorly advised this customer? Or is it the customer for signing loan documentation knowing that he could not make a $6,800 payment?

I fault the lender for even putting someone in a position to have to make the decision of whether or not to sign the papers. Granted, no one should ever sign loan paperwork that shows an income that they don't actually have, or a payment they can't actually make. In the end, it's the homeowner that has to live with their foolish decision, but what recourse do these customers have against the lenders?

I referred him to the attorney general in his state as there was nothing I could do for him.

Tell us what you think?

A Review of LifeLock ID Theft Protection (and a special offer)

2008-01-19T10:16:00.000-07:00

I am sure that by now you have heard of Lifelock, the new ID Theft Protection company whose CEO is blitzing the media with his real Social Security Number. My first thought was "that's stupid", but then I figured that it has to work. I don't know if I would do that regardless, because I just feel it's something private; heck, I wouldn't publish my home phone number, so why would I give someone my Social Security Number.

Anyhow, I have spoken with several people, including the company that has done their multi media PR blitz at well as a Lifelock company rep who helped me understand more about what they do as compared to the other services out there. I found them to be a pretty amazing company and very likely will be a huge part in stopping ID Theft from occurring.

There are two types of Identity Theft protection plans:

The first is an insurance like product that will go to bat for you in the event of your identity being stolen. One such product is Identity Theft Shield sold through Pre-Paid Legal Services. I have been an ID Theft Shield customer for years and fortunately I have not had to use the service, however I do know of a few people who have used it and it has worked well for them.

The second type of service is the kind that actually prevents ID Theft from happening by being proactive rather than reactive. That is the kind of service that LifeLock offers. Another difference is that they cover children as well. Why is this a big deal? ID Theft in children is a fast becoming an issue as thieves know that if they steal the identity of a 10 year old, they have at least 8 years before that person will attempt to apply for their own credit.

In the end it boils down to whether or not you want to be proactive or reactive with your ID Theft protection. It's like the difference in having a good diet to stay healthy or have a great cardiac surgeon to do a bypass surgery; I think we all know which one we would prefer.

Because I was so impressed with LifeLock and wanted to share it, I have arranged for a special offer from LifeLock to my clients; and I am extending this to you as well. For just $9 per month (or $99 for the year), you can have full protection against ID theft. I don't recommend publishing your Social Security Number to test it, but I am sure it will give you and your family piece of mind.

To redeem this offer, simply visit: http://www.lifelock.com and use promo code CAMTG1

Here are a few facts about Identity Theft:

FACT: ID Theft occurs every 70 seconds.

FACT: The average ID Theft incident has a financial impact of roughly $90,000

FACT: It takes roughly 600 hours to clear up an ID Theft incident.

Don't wait - Enroll TODAY!

To redeem this offer, simply visit: http://www.lifelock.com and use promo code CAMTG1

4 ways to agressively reduce your mortgage balance in 2008

2008-01-03T21:53:00.001-07:00

Most well known financial gurus (Suze Orman, Dave Ramsey, Charles Givens) advocate paying off your mortgage early when possible. Most likely you've heard about adding extra principal payments to your mortgage to pay it off early. It definitely works, but most people are not disciplines or financially educated enough to do this consistently enough to make a difference. Here are 4 different strategies to keep in mind when looking for ways to pay down your mortgage without changing your lifestyle.

1. Make simple principal payments. I won't assume that you have a fixed conventional loan, but if you do, the difference is that you will not realize the benefits up front. It will reduce your principal at the end of the loan, or at the time of pay off. If you do have an Interest Only loan, you can make principal payments at any time, and the next month, you will see the evidence of a reduced payment because you cannot pay interest on principal that does not exist. Making periodic payments will help you, but not much and you really won't see the benefit until you either sell your home, or was down the road when you pay it off.

2. Make bimonthly payments. If you are paid every two weeks and live on a monthly budget, you will have two extra payments per year which you can put towards your principal payments, this will result in a mortgage reduction of approximately 7 years on a fully amortized 30 year mortgage.

3. Make consistent payments in excess of one payment per year. If you can afford it, you can make additional monthly payments in as much as you can afford. If you can afford to make double payments, then you will pay your home off exponentially quicker. If you calculate your payment based on a 15 year amortization and make that payment every month, you will pay it off in 15 years. The challenge here is that it will be a large payment.

4. Leverage Short Term Interest to Pay your mortgage. This is a new and more advanced financial planning concept, but it is catching on in the states. In short, you would acquire a home equity line of credit and use this account to deposit your check in and pay all of your bills out of. The theory is that as you deposit your checks, you will offset any interest payments and any discretionary monies will be used towards the mortgage. The BIG advantage, is that you can leverage the line of credit to pay down your mortgage in large amounts at the most opportune time based on your loan structure. This allows for the absolute fastest reduction of a mortgage (reduces the term by a third to a half), and even better, you can then take those funds once you have paid off your loan and begin to invest. In the end, instead of paying off your mortgage in 30 years, you will have paid it off in about half the time, and put those fund into an investment account and you are now not only debt free, but have used your home to accumulate more wealth than most people ever dream of.

I am promoting Option 4 as it is the most reasonable option for the average homeowner and the emphasis is on paying off the mortgage in the shortest amount of time without changing your current budget. This program can even help people with little to no equity and those who owe more than their home is worth. After a short period of time on the program, you will be back in your equity position and not have to take a loss if you need to sell.

If you are interested in a free mortgage analysis to see if your mortgage qualifies for this program, please contact me at anthony @ atozlender.com

Wishing you the best in 2008!

Anthony

Save BIG on your next mortgage with Mortgage Zapper!

2007-11-05T10:20:00.000-07:00

Consumers Advantage Mortgage has just launched a new "2nd Opinion" mortgage pricing service. For a small fee (with a money back guarantee), we will review your loan documents to see if there are any fees that you are able to negotiate out, AND provide you with a quote from a "no-fee" direct lender and give you the option of sticking with your current lender, or doing the loan with our designated lender.

There is NO RISK - if we can't save you money, we will refund your processing fee, 100%, no questions asked. You owe it to yourself to make sure you are getting the best deal on your mortgage.

The site has just been launched the in "beta" at a discounted rate of $49 and we expect to save customers thousands of dollars in both up front fees and over the life of the loan by offering reduced rates through reputable direct lenders.

Visit www.MortgageZapper.com TODAY to save on your next mortgage!

Foreclosures up over 100%, what this means to you

2007-11-01T14:56:00.000-07:00

According to RealtyTrac, foreclosures are up 100.1% over the period of July to September of last year. So what does this mean to you? You may find yourself in one of several positions:

1. You own your home, have a great mortgage, with no desire to move. You are safe - Congratulations!

2. You may be one of the many people who are struggling to keep their home. You may owe more than your home is worth, due to the decline in the market, and if so, you still have options, but you may not like them. Some people are being forced to move in the most extreme situations, but there are also companies that will help you get back on track by making you loans against your equity, or helping you negotiate a workout with your current lender. If this is you, time is critical and you need to act now. Don't ignore the problem it wont go away on it's own. If you want to speak with a foreclosure consultant, visit this page and fill out the form: http://www.atozlender.com/stop-foreclosure.cfm.

3. Maybe you are looking to buy a home. This may be a good time to pick up a deal. My advice is don't pay full price, as the market certainly isn't headed up anytime soon. If you need to find a qualified real estate agent to help you, visit our real estate center. You can also check out our foreclosure real estate division to find out how to purchase deeply discounted bank owned properties.

4. Perhaps you are a real estate investor. If you are a veteran investor, then you are enjoying the market. If you want to connect with us to help our clients seeking buyouts, then contact us.

5. Perhaps you are a real estate agent struggling to keep your business afloat. We have several people contacting us DAILY for assistance with buying and selling homes. Contact us to join our real estate agent network, so we can help you learn how to make the best of this market.

6. Maybe you can't find financing due to the demise of so many mortgage lenders. With over a decade of experience, we have lots of connections and offer a wide range of mortgage lending products. If you are struggling with your credit scores being low, this book may be of assistance to you. The Bankruptcy Mortgage Book was written to help people that have had a bankruptcy or other credit challenge. Whether you have had a bankruptcy or not, you can benefit from the advice in this book and use it to improve your credit scores and increase your changes of getting your loan approved.

I know that was long, but I am sure you found yourself in one of those categories. If I missed someone, please contact me and let me know how I can help you.

Until next time...

Anthony

Back in the swing of things

2007-10-09T15:59:00.000-07:00

Dear friends,

I apologize that I have been away from writing for so long. Much has taken place in both the market, my business, and my family causing me to have to pull back from much of my daily activities. I will give you a recap on all three.

1. The Market. As you all know, the mortgage and real estate industries have taken a beating over the past year. I am no different and it has had a dramatic negative impact on our business, especially since many of our lenders have gone out of business or gone bankrupt. We have re-established lenders and once again, are lending in all 50 states. I had the privilege of hearing Robert Kiyosaki speak last weekend and his thought is that it will still get worse before it gets better. If you bought a home within the past 3 years, this is not what you want to hear. If you are in the market to buy a home, well, now is still a great time to do it. There are SO many deals to be made, it's almost unreal.

2. My Business. Over the past year, we took HUGE losses. We had to take a long hard look at what we were doing and figure out what we were going to do to stay afloat. The first thing was to establish relationships with solid lending partners that were going to be around for the long haul. There are never any guarantees, but we think we have a winner. Additionally, we are still on track to launch a few new products and services, here is a brief overview of them:

- Price Shopping Service. I cannot tell you how many times I have offered this service for free, only to have it used against me for someone to get a better deal with their lender. we are now launching an official Price Shopping Service and we will have to charge up front fees for this. It will be best suited for those that are not "perfect credit" clients, because it is the not so perfect credit loans where unscrupulous lenders often try to take advantage of people. We believe in treating people as we want to be treated, so we usually are very competitive in this market.

- Foreclosure Assistance. I have joined a nationwide Foreclosure Consulting Network whose goal is help people save their homes. If you are in need of this service, please visit this page and fill out the contact form: http://www.consumersadvantagemortgage.com/stop-foreclosure.cfm

- Real Estate Services. We are currently seeking to grow the real estate side of the business, where we will offer both buyer and seller assistance in the DC Metro and Phoenix, AZ Metro markets.

Lastly, we have relocated our office to Mesa, AZ - a suburb of Phoenix (more on that below).

3. My Family. Many may not know, but my wife suffered for many months with a hormonal and adrenal imbalance that caused multiple symptoms. For months she went through testing, ER visits, and saw multiple doctors, and none could really offer any hope or answers. In June of this year, she had to stop working due to her condition, which left us in the position of trying to figure out what our next step was. I have to say, the DC Metro area is a very expensive place to live, no matter what you do for a living. My wife has family in AZ so it seemed to make sense to relocate here to have their support, and also to have a simpler a cheaper lifestyle. We certainly miss our friends and family back east, but I will not miss cold winters. We have been here for almost two months now, and we did find a great doctor who is successfully treating my wife and by God's goodness she is doing better than she has done all year.

I know this was a long one, but thanks for reading it all. If you have any mortgage or real estate needs, do not hesitate to contact me and I am happy to be of assistance as always.

Until next time,

Anthony

Zillow.com receives cease & desist order from the State of Arizona

2007-04-18T06:43:00.000-07:00

Per this article http://startupmeme.com/2007/04/16/zillow-becomes-illegal-in-arizona, it appears that the State of Arizona feels that Zillow.com is acting as an unlicensed real estate appraiser by offering its automated valuation serivces.

Here is the original article on the story:
http://www.columbian.com/news/state/APStories/AP04152007news126881.cfm

What do you think?

Mortgage industry changes as Mortgage Companies continue to fall

2007-04-03T08:08:00.000-07:00

It's been a while since I have posted anything here. I almost gave up the idea of blogging just because it takes so much time to keep up with it, but I figured I would rather give something rather than nothing.

Lot's of change has taken place over the past several months in the industry and even with Consumers Advantage Mortgage. We are in the process of partnering with another firm to best serve our clients as the industry has really taken a downward turn. We are also launching our real estate division, and in particular seeking to serve those that are facing foreclosure as so many are.

Mortgage delinquencies and defaults are at a high which has lead to the demise of several mortgage companies. Most recently, New Century Mortgage filed for bankruptcy and they were certainly not the first mortgage company to go down this road. They actually owe us some money and I am not sure if we will ever see it, but more than that, they were one of our premiere providers (on top of being one of the top sub prime lenders in the industry). I won't bore you with the list of companies that have fallen or have cost us thousands of dollars, but I will say this - the industry is changing, and even seemingly strong companies aren't surviving. In this regard, being a smaller company is a benefit because we can change with the market a lot more rapidly than a major corporation.

It is now harder to get a mortgage for those that have had credit challenges. This is due to many sub prime lenders closing their door and/or filing for bankruptcy and the remaining companies offering few options for those that have had credit challenges. It is now more important than ever to know what underwriters are looking for, and one way to do this is to buy my book, "How to get a home mortgage after a bankruptcy or other financial mishap". It is the same book that was originally titled, "The Bankruptcy Mortgage Book", but I decided to change the title to make the message more clear. Visit www.thebankruptcymortgagebook.com to get an electronic or print copy. This isn't just a shameless plug for my book, but rather it's why I wrote the book - to help people that have had credit challenges get approved in a shorter amount of time, while getting the best rate and fees.

If you are looking to sell your home, you may find that there are fewer qualified borrowers now in the market because of the tightened lending requirements. If you are looking to buy a home, now is an even better time to buy a home because there are so many more of them sitting on the market. Even if you have poor credit, there are options for you including the "lease-purchase" (a.k.a. lease-option" which I will write about next.

On closing, if you or some you know is facing a foreclosure or having trouble paying your mortgage, please have them contact me: www.atozlender.com/real-estate-services.cfm

Make it a great day!

Anthony
Consumers Advantage Mortgage

Foreclosures on the rise creating new opportunities

2007-01-31T05:43:00.000-07:00

If you follow the news, its no secret that foreclosures are on the rise. I get asked very often how people can find these "steals and deals". As I did when I wrote my book on bankruptcy mortgage financing, I have put what I know into print to save time and help more people access it faster.

I have launched www.BankOwnedAssets.com where you can get a growing list of real estate foreclosures. It is a list of how to access government and bank foreclosures and covers all 50 states.

Right now, I am offering a unique "name your price" promotion. We will see how this goes and whether or not people are grateful or try to take advantage of this (I am hoping for the former).

Visit the site today and "name your price" by making a donation of any size and you will receive the list and be placed on the notification list for all future updates. You will also get several "extras" such as my pre-construction real estate alerts (big opportunity to save money or make a profit), as well as a growing database of real estate agents and mortgage lenders (on your local area) that specialize in helping people purchase foreclosures.

Visit www.BankOwnedAssets.com TODAY and "name your price" while the promotion lasts.

Wishing you the best,

Anthony

Congress Makes Mortgage Insurance Tax-Deductible in 2007

2006-12-12T14:18:00.000-07:00

Congress Makes Mortgage Insurance Tax-Deductible in 2007

Congress has passed legislation to allow premiums on private and government mortgage insurance to become tax-deductible for qualified borrowers in 2007.

For the first time, borrowers who make less than $100,000 a year will be able to write off the full amount of their premiums.

Homeowners making more than $110,000 will not be eligible.

Private mortgage insurance is often a requisite for borrowers who don't put down at least a 20% down payment or take out a second "piggyback" loan.

Over the last five years, about 20% of new loans have been taken out with mortgage insurance, and more than half of those carrying private insurance, according to Mortgage Insurance Companies of America (MICA).

The tax breaks will take effect for new loans in 2007.

The write offs are expected to result in average tax savings of between $300 and $350.

An increase in the use of home-equity loans by borrowers to cover down payments in recent years has hurt private mortgage insurers.

Private mortgage insurance is most often used on low-down-payment loans bought by Fannie Mae and Freddie Mac.

(source: www.mortgageledger.com

30 Year Fixed Mortgage Rates back in the 5% range?

2006-12-11T10:41:00.000-07:00

Yes, believe it or not, you can get a 30 Year Fixed Mortgage for under 6%. Today, If you have a loan amount of less thatn $417,000 (and are willing to pay a 1% loan origination fee), you can get a home mortgage for only 5.875%.

If you have been waiting for a great time to buy, it is NOW, considering all of the properties on the market from the sellers that still need to sell during the holidays.

Call me if you need any assistance making this happen.

Have a great week!

Anthony

Many investors now facing credit and foreclosure challenges

2006-12-07T07:20:00.000-07:00

I continue hear (and read) more and more about investors who are in financial straights due to getting involved in real estate investing without "full knowledge".

I had a call from someone last week who almost lost his primary residence due to trying to juggle his home payment along with his investment property payment when it was vacant.

I hear more stories from disgruntled landlords (rookie & marginally experienced investors about how their deadbeat tenants are not making payments, which straps them financially.

For those who still don't understand - this is why rates and terms on investment properties are higher. The bank knows it is more of a risk, and they know the failure rates to the decimal point.

Am I saying not to invest in real estate? NOT AT ALL. Real estate is still (and will likely always be), the best form of long term investing. What you need is a trusted advisor that you will listen to. I have talked more people out of investment properties than most loan officers who are just looking to make a loan. Many people are lured in by greed, and others simply by desire, or even need for additional income.

Now is a GREAT time to become a real estate investor, especially as many investors are baling out. The keys are to know your financial situation and how it relates to taking on another mortgage, get to know the property intimately, know the market and where it is headed, have a cushion to fall back on, and don't over leverage yourself too fast.

If you would like to speak to a mortgage advisor whose goal is to help you strategically add real estate to your investment portfolio with minimal risk to your overall financial plan, call me today at 800-757-9507.

Make it a great day!

P.S. - Here is some info to help you in the process of your investment property search:

1. Nationwide Government & Bank Foreclosed Property Listing

2. Course on buying fixer-upper real estate.

What is a Hard Money Loan?

2006-11-09T06:27:00.000-07:00

People often ask about "hard money loans" and the truth is they should be called hard money loans because it would be hard to imagine paying the rates and fees associated with them.

A hard money loan is a loan made by a non bank institution (often wealthy individuals or investor groups) to someone who has demonstrated a failure to manage their finances correctly resulting in an ultra low credit score (a middle credit score (a.k.a. FICO) of less than 500). Some lenders now even consider borrowers with credit scores less than 400!

Here are the pros and cons:

PROS:

1. A borrower with ultra low credit scores can purchase a home. This can be a good thing or a bad thing. If they are ready to make a change and pay the mortgage on time, this COULD help reestablish the credit (more in cons). If they do not make timely payments, they will lose the house AND the LARGE down payment required.

2. Tax savings for home ownership. Your interest should be tax deductible, even from a hard money lender, provided it meets all other IRS criteria. For more info read IRS Publication 936 (Home Mortgage Interest Deduction) http://www.irs.gov/pub/irs-pdf/p936.pdf

3. Can be used to pay off a Chapter 13 bankruptcy or other major debt if you are a home owner. This should be a last resort and analyzed carefully as it may make things worse. Always discuss mortgage and finance matters with a qualified professional.

4. Can be obtained to avoid foreclosure. As with #3, this needs to be analyzed with the help of an expert.
CONS:

1. LARGE Down payment. Hard Money lenders normally do not lend more than 70% of THEIR assessed value of a property. This means you will need to have a down payment (or equity) of at least 30% (some will go up to 80%).

2. HIGH RATES & LOTS OF FEES. Hard Money Lenders are not your local neighborhood bank. They really aren't looking to help you get into a home; rather they are looking for a strong return on their investment. Currently, you will pay somewhere in the 12% range for an interest rate and at least 4 points in additional closing cost. (A point is 1% of the loan amount paid up front to ensure the investors minimum return on their money).

3. MAY NOT BE REPORTED TO CREDIT BUREAUS. Your loan will most likely not be reported to the credit bureaus which means paying it will not help restore your credit in a traditional sense. If you end up with a hard money loan for a mortgage, I recommend keeping copies of your cancelled checks (not money orders) for your records. Some subprime lenders may accept this as evidence of timely payment and may refinance you after 6 to 12 months of on time payments.

4. POTENTIAL FOR FORECLOSURE OR REPOSSESSION. Unlike banks, who don't like to foreclose on properties, a hard money lender makes money by foreclosing on properties with delinquent payments. Their large down payments ensure that they will not lose money, so do not use a hard money lender if you are not 100% sure you can make your payments on time. Of course, life changes happen - people get sick, lose jobs, and get divorced - all I am saying is do not go into a situation when you already know you cannot make the payments to a hard money lender.

For clarification. A hard money loan is NOT the same a a sub prime loan. A sub prime loan is a loan made to someone with low credit scores, but usually above 500 and usually require less money down. Sub prime loans are made by institutions and can help borrowers restore their credit with on time payments and can often help a borrower that has had a bankruptcy, foreclosure, or other financial crisis.

Real Estate Secrets - How to get a great deal on a property

2006-10-12T14:19:00.001-07:00

Currently, houses are staying on the market much longer than in the past. If you are searching for a property, this is good news for you. Often people don't know what to look for in a property to get a good deal.

Here is a real estate tip that can save you THOUSANDS of dollars.

First, you need to be pre-approved (not just pre-qualified, there is a difference). Call me at 800-453-9290 if you would like a free pre-approval consultation, regardless of what state you are in.

Second, you need a real estate agent that will work for you for free. Most agents represent the seller, however if you have a buyers agent, they will work on your behalf and help get you the best deal.

Third, you need a real estate agent that is flexible and willing to make offers for you. (if you need a referral to a qualified agent in your area, send me an email at anthony @ atozlender.com. Ask your agent to do a search to find properties that are vacant, and then ask them to see how long the properties have been on the market. If the seller has a vacant home and is paying two mortgages, they will very likely be willing to entertain a reasonable offer from a buyer. Many MLS listing say this exact thing "will entertain all offers"; I just read this on an MLS printout today after asking on the agents I work with about a property that has been on the market for some time. I am happy to answer questions as far as what seems reasonable if you want some help with that as well.

Lastly, you may want to consider a "fixer upper" or a foreclosure property. These properties may need work, but you can save big and earn immediate equity by buying at the right price. Here are some resources for both:

Foreclosure Property Listing: http://www.bankownedassets.com/ This is the best priced list ANYWHERE on the web. Feel free to search for others and you will see that this is true. It is also a quality list with over a dozen resources including nationwide bank property listings.

Fixer Upper Fortunes: http://www.consumersadvantagemortgage.com/buy-foreclosures
This is an A to Z course on how to buy "fix up" real estate. It comes with a one-year money back guarantee and is available for only $97 through my website (normally $197).

If you know anyone who is thinking of buying, please pass this along to them and encourage them to take advantage of the current downward trend in the mortgage rates.

Until next time...

Anthony

A

Buying Investment Properties

2006-10-04T07:50:00.001-07:00

I often get to speak with would-be real estate investors, and find that although many see the opportunities to make significant profits by buying investment real estate, many are not aware of all of the risks involved and even more just don't know where to start.

I have personally had the opportunity to purchase a handful of investment properties of the past 13 years, however I chose to not hold any properties for the long haul. As you look to become a real estate investor, this is a decision that you will make; whether you are looking to buy and sell for a profit (the best way to make large profits in the short term), or buy and hold to create a portfolio of investment properties (a great retirement strategy).

If you have not considered getting into the investment real estate market, here are a few good reasons to do so now:

1. The interest rates are on the decline. A thirty year fixed mortgage is now back down to 6.25%.

2. Retirement. I see so many individuals who are strapped for money in their 50's, 60's, 70's, and 80's. I am not exaggerating. Many of them are embarrassed when they contact me and have to reveal where they are, and many times they are coming to me to take money from their sole asset; their home. The horrific statistic is that over 90% of Americans do not have the money to retire; owning investment real estate can change this.

I am not a "certified" financial planner, but I am sure any financial planner would agree that real estate is an excellent complement to your investment / retirement portfolio. The market has ups and downs, but over the long haul you usually will not go wrong buying real estate.

3. Market Conditions. It is now a BUYERS MARKET once again with properties staying on the market much longer, and THOUSANDS of properties on the market currently. If you tried to buy an investment property over the past few years (and were not an insider), you probably had a hard time finding a great deal, but now, you will find sellers willing to negotiate more than ever. On average, sellers are now paying at least 2% of the buyers closing costs, and this can save you thousands of dollars on your investment property acquisition.

Here are some pointers for getting into the investment market.

1. LEARN HOW TO BE A REAL ESTATE INVESTOR. I don't recommend high priced courses, but I do recommend getting an education. I found a great real estate investment book called "Fixer Upper Fortunes", which is an A to Z guide with a one year money back guarantee. It is sold as an electronic book which can be purchased and downloaded from the web (you receive it immediately after paying online as opposed to waiting for shipping). The book currently sells for $197, but you can buy it from this link for only $97 for a limited time. Click here for more info:

2. ESTABLISH A TEAM OF PROFESSIONALS TO HELP YOU. You will need access to new financing for your properties (and I would be glad to help), access to real estate agents to help find properties that have been on the market for a while with declining prices and to write contracts to purchase your properties (I can also help with my nationwide referral network), and contractors to estimate and help with repairs and renovations when necessary. Other folks that can be very helpful to have on your team are title searchers to find the true status of pre-foreclosure properties, home inspectors (not all contractors qualify to find problems and may only do repairs), referral sources, and an accountant (to help you keep your profits and pay minimal taxes).

If you are interested, here is some information regarding my first (and very successful) real estate investment:

My first investment deal (in 1993) was a no money down deal and I was able to sell it for more than twice what I paid for it. I am not one prone to hype, so I will disclose that I was an insider on this because I worked for the developer who was selling the property, but I still had to find an investor who was willing to put up all of the money. I actually found one, then got a better deal by using his rate to get a better rate with the second investor. I was able to borrow enough to buy the land, pay the closing costs, pay the development costs, AND have some spare cash. The investor got a 36% return in 6 months, and I walked away with a pretty nice check as well. I wanted to share that so you know it can be done. I know the market conditions are not the same as 1993, but I have more than investor client that makes in excess of $100,000 per year exclusively as a real estate investor.

Feel free to call me to discuss any scenario with you whether it is mortgage or real estate related. I also have some insider contacts with real estate developers nationwide and can put you in touch with some great deals.

I look forward to hearing for you. I am here to help you accomplish your real estate investment goals in any way that I can.

Anthony

Real Estate: Why now is a great time to buy

2006-09-05T22:15:00.001-07:00

Today I read that The Office of Federal Housing Enterprise Oversight tracked the biggest decline in housing price increases in THIRTY years! So why is this good news for home buyers? Simply put, mortgage rates are still close to an all time low. We were spoiled a few years ago with unrealistic rates in the 5% range, but now is a great time to take advantage of the market slow down AND the increase in foreclosures due to people who overbought wih Adjustable Mortgages over the past several years and now can't keep up with adjusting payments.

Call me today to discuss making home ownership a reality!

Until next time...

Anthony

Real Estate Tips - 4 Tips on What to look for When Buying a Home

2006-08-23T16:30:00.001-07:00

There are so many things to keep in mind when looking at making the largest purchase of your life. In the past few years, as we saw buying frenzies and bidding wars, many home buyers opted to buy homes without having home inspections because owners (arrogantly) would not take offers (contracts) with any contingencies including home inspections and appraisals.

Here are some key areas to look at; including two that many people leave out:

1. The Value – Is this house a good value? Of course, most banks will require an appraisal to protect their interest in the home (their interest is usually larger than yours). If the value of the home comes in at lower than the contract price, you may be able to renegotiate the sale price with the seller by proving that it is not worth what they are asking. If the value comes in higher, then you most likely got a good buy based on the value. When homes are sold without a appraisal clause, the buyer is accepting responsibility for the difference in appraised value and sales price. As an example, if you were getting 100% financing on a home with a contract purchase price of $220,000 and the appraisal came in at $215,000 and you waived the appraisal clause, you would have to pay an additional $5,000 to close the loan or forfeit your earnest money deposit. If you didn’t have the money, the underwriter may even turn you down for the loan.

2. The condition – Is this house in good condition? Perhaps you have heard the phrase “caveat emptor”? It is often quoted in the real estate industry and is Latin for “let he buyer beware”. My recommendation is to always have a home inspection to make sure the home is sound and that there are no deficiencies. Another good recommendation is purchasing a Home Warranty, which will cover most appliances and major systems for the first year or your ownership.

3. Parking (one of the two often missed areas). When trying to choose a neighborhood, make sure you notice how many parking spaces you are allotted, how many visitor spaces exist, do they not allow commercial vehicles, and how far will you or your visitors have to walk to your home from visitor parking or overflow parking areas.

4. Safety (the second of two often missed areas). So many people focus on value and property condition that they forget to inquire about the neighborhood. If you already know the area, then it isn’t a problem, but more often than not prospective buyers end up looking in areas other than they originally desired, and this is often due to price factors. Here are a few ideas for checking out an area:

- Don’t ask your agent about the condition of the neighborhood. First, they may not want to do anything to jeopardize the sale. Secondly, in many areas, the agent is prohibited by law to answer these questions because they are not criminology experts, but most of all, because of anti-discrimination laws. I know this is true in Maryland for a fact as I am a licensed real estate agent in Maryland.

- Check with the local police department. Ask about crime statistics on the specific street you are looking to buy on, as well as the surrounding areas.

- Ask neighbors. This is particularly effective if you know them because they will be real with you as opposed to someone who is biased and is denying that crime takes place in their neighborhood.

- Drive the neighborhood at night. One of my pet peeves is lighting. I like to see a well-lit community. Also, check and see if lots of people are hanging out and about or if it seems to be a quiet area. Not every one is the same; some will prefer communities where people hang out til all hours of the night, and others prefer that it is quiet outside by 8PM. Just make sure you do your own homework.

I hope this helps you as you look for the home of your dreams.

Until next time,

Anthony

Are Sub Prime Loans in trouble?

2006-08-22T06:34:00.001-07:00

Read this article from AZcentral.com for more info:

Some lenders cut riskier mortgages due to Wall Street pressure

Dow Jones/Associated Press
Aug. 21, 2006 12:39 PM

NEW YORK - Some mortgage lenders are feeling the heat from Wall Street to tighten their lending standards and cut their exposure to riskier loans.

The force at work is the increasing demand from investment banks for lenders to buy back the loans due to borrowers' failure to make their first few payments on those loans. Such "early payment defaults" so far have largely been limited to nonprime mortgages made to borrowers who pay higher rates than those qualifying for standard loans due to their weak credit or inadequate documentation.

Buybacks of defaulted loans demanded by whole-loan acquirers, particularly Wall Street firms, have in recent quarters led some lenders to incur losses and set aside more money in their reserve funds for potential loan repurchases in the future. An increase in those reserves then cut into their profits. To shield themselves from future buybacks, some lenders including NetBank Inc. and Fremont General Corp. have backed away from offering loans that have seen greater delinquencies, such as those featuring higher loan amount relative to the property value and lower credit scores.

Some subprime lenders have also raised the bar for qualifying borrowers for loans requiring only limited paperwork and implemented more stringent procedures to fend off fraud, a common cause for early delinquencies. Though some of the tight{tspc}wgg measures might make it harder for some borrowers to swing a loan, they coul d )revent lenders from issuing loans they shouldn't make in the first place.

"You'll continue to see us change policies, products and processes to ensure that we achieve the correct returns for our shareholders and minimize repurchase activities," says Jerry McCoy, chief capital markets executive at NetBank. Due to a spike in the buybacks of loans previously sold to investors, the Atlanta bank added $13.2 million to its provision expense in the second quarter, which in turn ate into its mortgage gain-on-sale income.

At subprime lender Fremont General, the amount of home loans repurchased and re-priced reached $238.4 million in the second quarter, up from $67.7 million in the year-ago quarter and $107.7 million in the first quarter of this year. The Santa Monica, Calif., company said it had cut back on "certain higher loan-to-value products and lower FICO" loans during the second quarter to reduce early payment defaults and thereby loan repurchases from investors.

In its fiscal year ended April 30, H&R Block Inc. increased its loss reserves $11.6 million above its normal loss accrual, also blaming loan buybacks triggered by early payment defaults. "The mortgage industry has seen an increase in early payment defaults over the past few months, and we have taken steps in reaction to our loss exposure," the Kansas City company said in its annual report.

A spokesman at the tax-preparation firm, which has been expanding into mortgage banking and other financial services, declined to comment on the specific steps it has taken to cut its loss exposure, citing the quiet period ahead of its earning release.

As a way to manage risk as well as to have more funds available for making mortgages, more lenders are opting to sell the new loans they create in the secondary market rather than keep them on their books. Buyers of those mortgages, such as Wall Street investment banks, pool and package the loans into mortgage-backed securities and then sell them to investors. When inking those loan purchase deals, industry experts say, Wall Street buyers increasingly ask to retain the right to request the seller to take back the loans in event of an early default, which typically occurs within the first three months.

____

So whats the point? Contact me today to discuss getting your credit in order so you dont have to worry about not qualifying for a non sub-prime mortgage.

Have a great week!

Anthony

My New Book is coming out this Fall

2006-08-03T00:28:00.002-07:00

I am pleased to announce that I am releasing my first book this fall (currently scheduled for October). I have written a book based on my experiences helping those who have had a bankruptcy or other financial challenge, overcome significant hurdles and become homeowners.

Right now, you can pre-order this book at a discounted rate of $25.00.

Visit the book sales site for more information:
http://www.bankruptcymortgagebook.com

When you pre-order, you will receive a 60 Day Action Plan to help you get on the right track to getting a mortgage approval after having a bankruptcy. You will also get a FREE no-obligation consultation with me to give you the personal attention that we all desire to make this transition as smooth as possible.

If you know anyone who has had a financial challenge such as a bankruptcy, please direct them to the site as well.

Thanks in advance,

Anthony

Why it is important to resolve your credit issues before writing a contract.

2006-07-28T08:27:00.002-07:00

Someone once told me that if you want to be successful you should to separate yourself from the competition. As a good student, I went ahead and did this and now I take on some of the most challenging financial situations and turn them into happy homeowners.

Why are these cases challenging? Mostly it is because of credit. Credit is the single most important aspect of a loan file to an underwriter. With excellent credit, you can buy a home with a signature - no need to verify money to put down or employment. In short, credit is KING.

With poor credit however, every detail of your loan is put under a microscope. Even former bad debts that you have paid are scrutinized – you will usually have to write a letter explaining why a particular debt was defaulted, or falsely reported as defaulted, and verify that it was paid. The credit bureaus offer little help in that their records are very often outdated and many times when an outstanding debt is finally paid, the creditor isn’t interested in helping you update your credit report.

It is important that you seek advice from a mortgage consultant long before you want to write a contract. Time and time again, I get a call from someone who is in the middle of writing a contract only to find out that they either do not qualify, or that their situation will require more time to process than their contract allows for, or they will have to pay much higher than normal rates because their credit file indicates to the bank that they are a higher risk. In many cases, I can convince the underwriter that the loan is worth doing, even if there are credit challenges, but that will require a fair amount of documentation as to what happened, and an assurance that it will not happen again. It also extends the time required to process the loan.

So how do you make sure your credit is good enough to buy a home? Simply ask your loan officer for your credit scores. Most lenders still use the “middle of 3” rule where we pull credit from all 3 credit bureaus (Trans Union, Experian, and Equifax) and then drop the highest and lowest score, and use the middle score. For example if your scores are 664, 702, and 712, we would rate your file as a 702, which is pretty good (ideally you want to have a middle score of 680 or higher). If your middle score is above 700, your lender will love you and it will make processing your loan much simpler as it will be scrutinized less.

So what do you do if your lender tells you that you have derogatory credit? If you are working with a seasoned loan officer, they can usually help analyze your credit report and give you some suggestions. Most of the time it involves informing the credit bureaus (all 3 of them) by mail of the discrepancy along with sending them some supporting documentation. The process takes about 60 days in total to have an item updated. You can also contact the credit bureaus via the Internet at their respective web sites for an expedited reply, however there is usually a charge for this.

If you are taking on the credit repair challenge, here are a few resources to help you:

1. The FTC has a publication that gives you a step-by-step plan of action including sample letters to write to the credit bureaus. Do a Google search for "FTC guide to credit repair" and you should find the most current copy.

2. Here is a link to Lexington Law, the Law Firm that I have teamed up with to help my clients that desire professional help with their credit repair:
http://www.consumersadvantagemortgage.com/Lexington

If you are looking for a mortgage, regardless of your credit situation, I would be happy to speak with you.

Until next time...

Anthony

Closing Costs - Understanding Mortgage Lender Fees

2006-06-10T06:43:00.001-07:00

When you purchase or refinance your home, you will have to pay settlements fees. A portion of these fees will be paid to your mortgage company (a.k.a. broker, bank, lender). These fees are broken down into two types of fees; closing costs, or fees associated with the loan, pre-paid items which include interim interest and tax and insurance escrows.

The fees charged by your lender are just a portion of the total closing costs, but if you don’t watch out they can add up quickly. Let take a look at which lender fees are considered standard, which are not standard, and which are “negotiable”.

First, are standard fees, or fees that appear on almost every loan:

Appraisal Fee ($250-$400+): Nine times out of ten the underwriter will require an appraisal to determine the value of a home. With the increased “intelligence” of automated underwriting and automated valuations, we see more transactions where appraisals are not required and I think this is the growing trend with the increased relevance of electronic property databases. The price depends on the type of appraisal required and the value of the home (higher home value = larger house = more work = higher priced appraisal).

Underwriting fees ($250-$595): As it implies this is the fee allocated to having your loan reviewed by an underwriter. Some banks call this a commitment fee, which is traditionally the name given to a “junk” fee.

Credit Report ($10-$35): You should expect a charge for your credit report. Often the charge for a couple is twice the cost of a single individual, and for obvious reasons.

Flood Certification ($15-$30): This is the cost of the automated service that tells the lender if the subject property is located in a flood plain or not. If it is, it may require flood insurance.

Tax service fee ($75-$90): This is a fee that covers that cost of the lender monitoring the payment of your property taxes.

Processing Fee ($250-$595): Similar to the underwriting fee, this is the cost of processing your loan.

Next we have Non-Standard Fees, which are charged in conjunction with some types of loans, or shouldn’t be charged at all.

I want to address a term that you might hear and that is “junk fees”. These usually refer to fees charged by lenders that are frivolous, or pure profit. The challenge in trying to explain this to the layperson is that we do not want to indict a lender just because of a term that they use, but we just want to make you aware of all of the different types of fees out there. The key is you should not see a fee listed in EVERY blank of the lenders fees on the Good Faith Estimate, as this would indicate an abundance of fees. With that, here are some additional fees you might see on your Good Faith Estimate:

Origination Fee (1% of loan amount): This is a charge normally associated with sub-prime mortgage. These loans traditionally require more work than a standard (good credit) loan and this is a fee to compensate for this. Lenders will be upset if we say this is negotiable, but the reality is that almost everything is negotiable. If you can find someone to do your loan and not charge this, there is a good chance your rate will be higher so they can make the money else where (the bank pays higher commissions when loans are sold at higher rates). The down side is that if you negotiate this fee away, you may take the incentive away from your loan officer to get the job done and you may not end up getting your mortgage.

Commitment Fee ($200 – 1% +): This is often a junk fee, especially if a processing fee and a underwriting fee are charged. I know of one reputable lender that uses this word synonymously with the underwriting fee. You should always ask what the fee covers; if your loan officer doesn’t know immediately, or has to “check with someone”, that is a sign that you may want to move on either because the fee is bogus, or the loan officer doesn’t know his or her job. Bottom line here is two points:

1. If you are paying a commitment fee along with an underwriting fee AND a processing fee, this is most likely pure profit to the company and can be negotiated out.

2. The higher the commitment fee is, the more it should cover. For example if a company charges a 1% commitment fee, I would not expect to see many other lender fees.

Application fees ($300-$595): Application fees often cover items such as appraisal costs, and may be charged up front so the lender does not get stuck with the cost of an appraisal (should you cancel your transaction). Application fees may also be charged in conjunction with sub prime loans when additional services (such as credit repair assistance) are needed. Some companies charge an up front application fee to ensure that the borrower doesn’t go elsewhere and this is a legitimate business practice. In a case where all other fees are charged (appraisal, processing, and underwriting), this fee can be negotiated out.

Discount points (1% of loan amount): A Discount Point should be used to reduce the interest rate. The bank either makes its money up front in fees or on the rate charged.

Loan Lock Fees ($any): This is a pretty bogus fee. There is not need to pay a fee to lock your loan other than an application fee.

Broker Fee ($any): Broker Fees are often charged by brokers to arrange for mortgage financing. The idea is that if you are using a broker, they should be looking out for your best interest and would charge you fees up front to find you a “less than market rate”. If a broker fee is charged, an origination fee would normally not need to be charged

Some Fees are Paid Up Front, but beware of how much money you spend with your lender in advance. It is common for a lender to collect some or part of the following fees up front:

· Application Fee
· Appraisal Fee
· Credit Report Fee

Now that you are armed with this information, you will be a more educated mortgage customer and should not overpay for your next mortgage.

If you would like a personal consultation from me or a member of my staff, please feel free to contact me at 1-800-757-9704 or info@atozlender.com

Until next time,

Anthony

Fannie Mae to Pay Large Fine in Settlement

2006-05-23T13:19:00.000-07:00

I found this article interesting at www.iwon.com and wanted to share it with you all.

WASHINGTON (AP) - Embattled mortgage giant Fannie Mae (FNM) is being fined between $300 million and $500 million for the alleged manipulation of accounting so that executives could collect millions in bonuses, according to a person familiar with the settlement .

The deal with the Office of Federal Housing Enterprise Oversight and the Securities and Exchange Commission was being announced Tuesday as the government-sponsored company struggles to emerge from an $11 billion accounting scandal.

The housing oversight agency was issuing the results of its extensive, three-year investigation of Fannie Mae, an assessment that is widely expected to be sharply critical and to touch on areas not addressed in a previous report ordered by the company's board of directors.

Those areas include the role of Fannie Mae's board and some executives still at the company in the accounting debacle, according to two individuals familiar with the report, who spoke Monday on condition of anonymity because it had not yet been made public. The regulators are expected to recommend that the company review the executives' actions with an eye to possibly firing or disciplining them, they said.

One of the individuals confirmed the anticipated civil fine against Washington-based Fannie Mae, the largest buyer and guarantor of home mortgages in the country, which was first reported Monday evening by The Wall Street Journal Online.

Officials of the company and the two federal agencies declined to comment in advance of the announcement.

According to regulators, Fannie Mae in 1998 improperly put off accounting for $200 million in expenses to future periods so executives could collect $27 million in bonuses.

"By deliberately and intentionally manipulating accounting to hit earnings targets, senior management was able to maximize their bonuses," the new report by OFHEO says, according to an individual who has seen it.

The report also is said to conclude that Fannie Mae's board failed in its oversight responsibilities and to maintain its independence from the company's former chairman and chief executive, prominent Washington figure Franklin Raines.

Documents cited in a report released earlier this year show that top-level management was focused on the $200 million deferral and meeting earnings targets that would trigger the payment of full bonuses.

OFHEO spokeswoman Stefanie Mullin and SEC spokesman John Nester declined comment Monday. Spokesmen for Fannie Mae couldn't be reached for comment.

Fannie Mae employees falsified signatures on accounting transactions that helped the company meet the 1998 earnings targets, according to congressional testimony by the former director of OFHEO. The agency first discovered in 2004 the accounting-rule violations and alleged earnings manipulation by Fannie Mae to meet Wall Street targets - disclosures that stunned the financial markets.

In December 2004, the SEC ordered Fannie Mae to restate its earnings back to 2001 - a correction expected to reach an estimated $11 billion. The Justice Department has been pursuing a criminal investigation.

Raines and former chief financial officer Timothy Howard were swept out of office by Fannie Mae's board in December 2004.

OFHEO levied a record $125 million fine in 2003 against Freddie Mac (FRE), Fannie Mae's smaller rival in the multitrillion-dollar home mortgage market, for misstating earnings - mostly underreporting them - by $5 billion for 2000-2002.

On Friday, Fannie Mae said it was replacing the chairman of its board's audit committee, a key position as the second-largest U.S. financial institution reworks its accounting and struggles to emerge from the scandal. The company said the board had named accounting professor Dennis Beresford to replace audit committee chairman Thomas Gerrity.

Source: iWon.com

Late Mortgage Payments on the Rise

2006-05-19T05:21:00.002-07:00

According to a recent Wall Street Journal article which quotes industry giants Bear Stearns and Credit Suisse, mortgage delinquencies continue to increase, showing even greater indication that Americans are living beyond their means. Here is a link to that article: http://www.azcentral.com/business/articles/0518mort-late18-ON.html

We all should have seen it coming given the rise in home prices over the last several years which caused people to buy with Adjustable Mortgages, now paying heed to the fact that they have only a short fixed period. Now that rate are at their higher level in several years, refinancing these mortgage into loan with reasonable payments is even more of a challenge as this would tend to increase payments to already strapped borrowers.

So what is the solution?

For starters, if you find yourself in a position of having trouble making an upcoming mortgage payment, by all means, DO NOT IGNORE IT! I have never understood why people seem to think a problem will go away by not addressing it.

Here are several things to consider when in this unimaginable situation:

1. Call your loan officer. He or she should be able to provide you with some counsel.

2. Call the bank and let them know you are having financial difficulty. Trust me, it is better for you to call them than for them to call you about a late payment.

3. Take a hard look at your budget. There are very often places to cut back in your budget such as eating out, getting your nails professionally done, dry cleaning which can be replaced by ironing, etc.

If you need professional budgeting help, get it. There are certainly free resources available, but one source that I recommend is the Financial Freedom Society. In fact, I have arranged for my clients to have a FREE 10-day trial subscription to their service, which you can access by this link:
http://www.ffsi.com
4. Protect Your Credit Rating. One of the worst negative marks you can get on your credit report is a late mortgage payment. By all means guard against this.

5. Increase your income. I know this is more simple than it sounds, but if you run your family budget like a business in terms of "receivables (income) and payables (bills)", you will see that one HAS to change to be successful. You either have to decrease your expenses or increase you income on your own (by budgeting), or you will be forced to do this through bankruptcy.

6. Look into a different mortgage option. In case you haven't heard, we now have several mortgage options to assist people in this situation. As the problem has persisted, the mortgage market has responded with several new mortgage types. Here are a few of them:

- 30 year Interest Only Mortgage - This will help you by providing a fixed interest Only Period of 10 year. The "piper comes" in year 11, when the balance is re-amortized for the remaining 20 years. The question to ask yourself is where you think you will be in 10 years, and whether or not you can obtain a better rate by just getting a 10 Year Interest Only ARM.

- 40 Year Mortgage - Just like it sounds, this is a loan amortized and paid off over 480 months. This will help those who plan on living in their properties long term, but giving them a reduced payment (usually a higher rate, but over a lower term which results in lower payments).

- 50 Year Mortgage - Currently 50 Year mortgages are making their way into the market. These loans can provide additional relief as they are amortized over 600 months, however most have a demand feature where they need to be refinanced after a short fixed period of two, three, or five years. I am sure this will change as time goes on.

I hope this is helpful. If you have any questions, you can always reach me at anthony @ atozlender.com

Make it a great day!

Anthony

50 Year Mortgages?

2006-04-26T19:01:00.001-07:00

YES! The 40 year mortgages haven't even caught on yet, and we now have 50 YEAR mortgages on the way. One product I have seen is a "balloon" which means in 30 years it has a "must payoff or refinance" feature, but it keeps the payments down which is it's intended purpose. You can get an ARM (adjustable) or fixed, and I don't have pricing info, but the rate will be most likely slightly higher than the standard 30 year fixed, although the payment will be lower as it is amortized over a longer time period.

Sorry I have been out of touch with the blog and email newsletters. I have spent most of the month of April traveling to and from Arizona, while I have been working on getting everything set up with the new mortgage company.

The new site is up, but there really isn't much there yet. You can check it out at:
www.ConsumersAdvantageMortgace.com.

More to come on both the 50 Year Mortgages and the updates to the web site. Both should occur around mid-May.

Anthony

Mortgage rates on the rise (again)

2006-04-14T06:38:00.001-07:00

Today, the 30 year fixed rate stands at a nationwide average of 6.49%. Barry Habib, the economist often heard on CNBC predicted that the rate would "dance" between 6 and 7% but most likely end up in the 6.5% range. Some are predicting that rates will creep closer to 7% by years end.

What does this mean and why should you care? I hate to sound like a broken record when I say this, but if you are considering making a purchase or refinance, now is the time. Over the years, I have watched people "play the market" and lose out big time. It is my job to watch the market for my clients, and I monitor it throughout the day with the use of the latest technology. I receive market alerts throughout the day on my cell phone telling me where things are headed and this helps me to "predict" the market in the short run.

If you are considering a purchase, refinance, or any other type of mortgage, and want to know what direction the market is headed, do not hesitate to contact me.

In closing, I wish you all a happy holiday weekend.

Until next time,

Anthony

NARLO

2006-04-11T12:38:00.001-07:00

What is NARLO and why did I join? NARLO is the National Association of Responsible Loan Officers. I joined this organization because I want to take a stand for Integrity in my industry and strive to set myself apart from those that discredit my profession.

Is your Loan Officer a NARLO member? If not, ask him or her why?

Make it s great day!

Anthony

Why did I start my own company?

2006-03-20T16:10:00.001-07:00

Today is a two post day because I am feeling a bit behind. My current excuse for my lack of posting is starting a new mortgage company. I have finally decided to take things into my own hands and launch my own business.

I have enjoyed the past several years in the business and this gives me an opportunity to have more flexibility in how I serve my customers because I can call more of the shots. In the end, the money will still come from a bank and the customers will still have to qualify, but I can control how the loans are priced, how the work flow happens, and timing - just making sure that things are in order long before they need to be. I have seen too many closings come down to the wire and it makes me stress as I try to maintain on time delivery.

I will also have the freedom to diversify by integrating several of my mortgage web sites that serve specific markets such as my www.BankruptcyLoans.info site, doing more writing such as my book on "obtaining loans after having a bankruptcy", and then there is the possibility of teaching continuing education classes to real estate agents.

As things progress, I will be bringing on additional talent to help make these dreams a reality.

Until next time...

Anthony

What is your home worth?

2006-03-20T16:02:00.000-07:00

One of the questions I ask people as they are getting a loan is "what is the house worth?" It is a critical component as this is what is used to calculate your loan to value ratio.

Most people keep up with values in their neighborhood based on recent sales, but there is a web site that is becoming more and more popular which can give you a pretty good idea of what your home is worth. Visit www.zillow.com and enter your home address and see what it says. Keep in mind this is not an appraisal, and an appraisal usually brings a higher value, especially for a purchase.

I don't know about you, but I can't until Spring finally gets here.

Until next time...

Anthony

Anthony Kirlew
>www.anthonykirlew.com
>www.consumersadvantagemortgage.com

The funny thing about banks

2006-03-02T07:12:00.000-07:00

Many people ask me why I need so much personal information when taking a loan application. The obvious reason is so that we can make sure the person is a good credit risk for the bank.

Two things to keep in mind:

1. If you can prove that you don't need the banks money, they will give you as much as you want. (that is the funny thing about banks).

2. You only need to provide enough information to qualify for your loan. Specifically, you don't need to disclose EVERY asset that you have, or every account. All we need to verify is money for down payment, closing costs, pre-paid items (such as escrows), and reserves.

I hope that helps clarify what can be a sensitive area for borrowers.

Make it a great day!

Anthony Kirlew
www.AnthonyKirlew.com
1-800-453-9290 - 24 hour voice mail

New home sales fall across country

2006-02-27T21:26:00.000-07:00

Just an update here as to the state of affairs with the housing market. It is definitely "cooling" as they like to say. Here is an article of interest from Arizona Republic (www.AZCentral.com)

Associated Press
Feb. 27, 2006 12:16 PM

WASHINGTON The backlog of unsold new homes reached a record level last month, as sales slipped despite the warmest January in more than 100 years.

The Commerce Department reported Monday that sales of new single-family homes dropped by 5 percent to a seasonally adjusted annual rate of 1.233 million units last month.

That was the slowest pace since January 2005 and left the number of unsold homes at a record high of 528,000.

Analysts viewed the new data as further evidence that the nation's red-hot housing market, which hit record sales levels for five straight years, has definitely started to cool.

"The decline in new home sales in January makes it clear that there is some real softening in the housing market, said Joel Naroff, chief economist at Naroff Economic Advisors.

The 5 percent decline was bigger than expected, dashing hopes that the milder-than-normal January would help to bolster demand. The warm weather had pushed up the level of construction starts last month by 14.5 percent, the fastest rate in three decades.

But the new report showed that with sales lagging, the increase in building activity left a total of 528,000 new homes still for sale at the end of the month, a nine-year high.

Even with the softening in sales, prices were up in January with the median price climbing to $238,100, up 4 percent from December, but below the all-time high of $243,900 set in October.

For the past few years, home prices have been surging at double-digit rates, gains that analysts said will likely slow now that sales are softening and inventories of unsold-homes are rising.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, predicted "real downward pressure on prices over the next few months."

David Seiders, chief economist at the National Association of Home Builders, said surveys showed that the number of builders who are throwing in various amenities for free in order to move homes has risen to 41 percent.

Seiders predicted that home price gains, which were running around 12 percent last year, will slow to about 6 percent this year.

He said a lot of this year's change will reflect less speculative investor activity and more sales spurred by people desiring to live in the homes. "Hopefully, that is all that is developing here," Seiders said.

Some economists are worried that with the inventory of unsold homes rising, there could be significant downward pressure on home prices, triggering a chain-reaction similar to the bursting of the stock market bubble in 2000, a development that contributed to the 2001 recession.

But new Federal Reserve Chairman Ben Bernanke told Congress earlier this month that for now he was looking for a moderate slowdown in the housing industry, not a crash.

The 5 percent January drop in sales followed a revised 3.8 percent increase in December and was the biggest setback since a 7 percent drop in November.

The biggest decline in sales was a 14.9 percent decrease in sales in the Northeast, which followed an even bigger 23 percent plunge in sales in December. Sales in the Midwest were down 10.8 percent after having risen by 21.2 percent in December.

In the South, sales fell by 10.3 percent in January, following a 1.2 percent gain in December.

Bucking the national trend, sales in the West posted an 11.3 percent increase in January after a 6.3 percent gain in December.

Mortgage rates have been rising gradually with the 30-year mortgage now at 6.26 percent, according to the latest Freddie Mac survey. Many analysts believe 30-year mortgages will rise to between 6.5 percent to 7 percent by the end of this year.

They think that increase will be enough to trim sales of both new and existing homes and slow the double-digit gains in prices seen in recent years. The National Association of Realtors reported earlier this month that a record 72 metropolitan areas saw double-digit gains in home prices in the final three months of 2005 compared with price levels at the end of 2004.

What Your Bankruptcy Lawyer doesn't Tell You...

2006-02-23T06:58:00.000-07:00

I have helped several people get a mortgage after having a bankruptcy. I want to share with you a few pointers on how to position yourself to get approved for a mortgage if you have had a bankruptcy yourself.

Here are a few helpful facts / pointers:

1. A Bankruptcy will stay on your credit report for 10 years. Most attorneys do a good job and let their clients know this. The good news in that even with a bankruptcy on your credit report, you can have a high credit score. If you had a mortgage before, during, and after your bankruptcy and have paid it on time, you will usually have a pretty decent post bankruptcy credit rating.

2. If you have not seen your credit report, order a free copy now. Here is a link to a site that has the contact information for the credit reporting agencies: http://www.worryfreemortgageloans.com/credit_reporting.cfm

You may find that some or all of the creditors that were paid in your bankruptcy are still listed on your credit report. The next thing you should do is draft a letter to each individual credit bureau and send it along with a copy of your discharge papers. They will do nothing if you do not send them appropriate documentation. Here is a link to the FTC's web page regarding credit repair which includes sample letters to use in corresponding with the credit bureaus:
http://www.ftc.gov/bcp/conline/pubs/credit/bbcr.htm

3. Once your credit report is cleaned up, or even while it is in process, you need to contact a mortgage lender that specializes in post bankruptcy mortgages. How do you find one? Ask them.

Do not be afraid to ask your mortgage lender if he or she is experienced in working with bankruptcies. Many of them will tell you flat out that they don't; sadly some will say they do when in reality they just want a higher commission loan. As you ask the hard questions, you will find out if they are the real deal or not.

Currently, I provide post bankruptcy mortgage loans in Maryland, DC, and Virginia so feel free to contact me at anthony@anthonykirlew.com or 1-800-453-9290.

To contact a bankruptcy mortgage specialist for your area, visit: http://www.bankruptcyloans.info/info.cfm and select your state.

4. Get approved BEFORE you find a house. Make sure you clear all of your hurdles before writing your contract. This will reduce your stress, but most of all it will ensure that you get the house. Sadly, very few sellers will allow a financial glitch on your part to hold up the settlement, and they could legally keep your deposit and find another purchaser.

5. Realize that this takes time. Do not rush, and most of all be cautious in using a "credit repair expert" to help you as many of them are not legitimate. You now have the tools to do this yourself.

Until next time,

Anthony Kirlew
www.AnthonyKirlew.com

Mortgage rates rise to highest level in 2 months

2006-02-16T14:39:00.000-07:00

Associated Press Feb. 16, 2006 12:11 PM

WASHINGTON - Rates on 30-year mortgages edged up for a fourth straight week, rising to the highest level in two months, Freddie Mac reported Thursday.

The giant mortgage company said its nationwide survey showed that rates on 30-year mortgages rose to 6.28 percent, up from 6.24 percent last week.

It was the fourth consecutive increase and left the 30-year mortgage at the highest level since it stood at 6.30 percent the week of Dec. 15. Rates on 30-year mortgages had dropped as low as 6.10 percent in mid-January before beginning their latest increase. Economists believe the path of mortgage rates this year will be heavily influenced by what the Federal Reserve does with the short-term interest rates that it controls.

New Federal Reserve Chairman Ben Bernanke in congressional testimony on Thursday left the door open for further rate hikes and many economists believe the Fed will raise rates at least once more at its March 28 meeting and possibly at a May 10 meeting as well.

Private economists are predicting that the 30-year mortgage by the end of this year will have risen to between 6.5 percent and 7 percent, enough to slow the booming housing market.
"So far this year, fixed-rate mortgages have risen only slightly," said Frank Nothaft, chief economist at Freddie Mac. "Long-term rates are only marginally higher than they were two months ago."

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.91 percent this week, up from 5.83 percent last week.
One-year adjustable rate mortgages increased to 5.36 percent this week, compared with 5.34 percent last week.

Rates on five-year hybrid adjustable rate mortgages rose to 5.95 percent this week, up from 5.89 percent last week.

The mortgages rates do not include add-on fees known as points. The one-year ARM carried a nationwide average fee of 0.7 point last week while the other three categories carried an average fee of 0.5 point.

A year ago, 30-year mortgages averaged 5.62 percent, 15-year mortgages stood at 5.14 percent, one-year adjustable-rate mortgages were at 4.15 percent and five-year hybrid adjustable rate mortgages averaged 5.05 percent.

Source: Arizona Republic / azcentral.com

Until next time,

Anthony

www.AnthonyKirlew.com

Do you have a Will? If not, you might want to check out Pre Paid Legal Services. For as low as $17 per month, you can have legal protection, and also have your Will drafted at no additional cost (a $500-800 value). Click here for more details: www.AnthonyKirlew.com/LEGAL or call me at 1-800-453-9290.

$400,000 mortgage for only $1,468 per month!

2006-02-14T08:45:00.000-07:00

I hate seeing headlines like this because they are deceptive to the average consumer. I get calls from customers all the time asking about programs such as this.

These are mortgages known as "Payment Option" loans and usually have 4 payment options: a minimum payment (negative amortizing), an interest only payment, a 15 year amortized payment, and a 30 year amortized payment.

The interest only, and 15/30 year amortized payments should be self explanatory. Let's focus on the "minimum payment" option which gets us this super low payment.

The minimum payment rate is a very low rate such as 1.95% (to give you a payment of $1,468 on a loan amount of $400,000). What you need to know is that the "payment rate" is not the "interest rate". The interest rate (in this market) will always be higher, resulting in "negative amortization". This essentially means that every month that you make the minimum payment, your mortgage balance will increase.

Why would someone want to do this? I have done these for clients in certain situations such as:

- In a divorce situation, where both parties used to pay the mortgage, and the remaining spouse has to now pay the mortgage. In some cases, it is financially easier for them to use the equity to pay the difference every month.

- For someone with children in college (or multiple children in college) where the outlay of cash is significant for a few years, and they want some payment relief until the college payments are finished. This essentially uses the equity to fund the college, by allowing the mortgage balance to increase while paying the college bills.

- For someone in their retirement years, where they want to reduce their payments, but don't want to use a reverse mortgage.

I hope this answers this question. If you have any mortgage related questions, please feel free to contact me via email at anthony@anthonykirlew.com or 1-800-453-9290 (24 hour voice mail).

Happy Valentine's Day!

Anthony Kirlew

www.AnthonyKirlew.com

Need to sell your home? Visit: http://www.fsbotherapist.com/fsbohelp.html for more info.

I performed my first colonoscopy...

2006-02-09T08:26:00.000-07:00

Fortunately the patient wasn't alive... it wasn't even a human.

Have you ever wondered why your vacuum cleaner isn't working like it should? You roll it over "visible objects", and they just stay there. This happened to me, and I had to do a bit of probing, but what I found was that the tube which connects the "floor surface component" with the actual suction unit / bag combo, was clogged, and mostly with carpet fibers that had built up. This is a common occurrence with newer carpets, so it is something to look out for.

I ended up taking the tube off of each end, and since I was not able to manually pull all of the fibers out, I had to find a "tool", to do the job. In my case, it was the shaft of a music stand (hey, it's practical). I imagine anything long enough to fit through most of the tube (when compressed), will work. After cleaning the tube, the vacuum worked flawlessly.

A few other things to look at if your vacuum is not working would be to make sure the band is not broken, and to make sure the bag is not full.

I hope you enjoyed this helpful household tip. Feel free to pass this along to anyone who wants to become a (vacuum) doctor.

Have a great day!

Anthony

www.AnthonyKirlew.com

Identity Theft - Are you protected?

2006-02-07T09:05:00.000-07:00

I don't think a day goes by where we don't read about, or hear about Identity Theft. As a mortgage lender, I see many credit reports in a given week, and sadly, I have seen several credit profiles where customers had experienced ID Theft resulting in problems for these unsuspecting customers.

There is a service called, Identity Theft Shield, offered by Kroll Background America and sold by Pre Paid Legal Services, that can help you have protection against ID Theft.

With the Identity Theft Shield, you get a free copy of your credit report (you should look at your credit report at least annually), credit monitoring (you are notified of inquiries into your credit files), and (the most important) credit RESTORATION. This is the only company that offers credit restoration as a benefit of an ID Theft program. The programs sold by your credit card companies only protect the card company really, but with Identity Theft Shield, ALL areas of your Identity are protected including:

- consumer credit
- driving records
- healthcare records
- police records
- any means of Identity that can be used against you.

Wouldn't you rather have piece of mind knowing that you will not be accused of a crime you didn't commit, be turned down for insurance for a health problem that you don't have, or be denied credit, or charged higher than normal rates because someone has maliciously used your credit?

Apply online and receive full coverage for yourself (and spouse if applicable).

Until next time,

Anthony
www.AnthonyKirlew.com
www.AnthonyKirlew.com/IDTheft

Is it too late to refinance?

2006-02-03T07:41:00.000-07:00

I still have customer inquire about refinances at least once a week, if not more. The reality is that although the days of fixed interest rates in the 5% range are long gone, rates are still historically low.

To determine whether or not a refinance is appropriate for you, there are a few factors to look at:

1. Do you have a Home Equity Loan that keeps increasing as the Prime has? This affects a lot of people as the prime is now at 7.5% (thank you Mr. Greenspan).

2. Is your rate at least one percent higher that the current rate?

3. Will taking cash out of your home reduce your debt load? (it will certainly increase your mortgage tax deduction if you increase your mortgage)

4. What is your mortgage balance? A lower rate on a smaller mortgage may not be the best move.

5. Are you in a Chapter 13 bankruptcy, and want to pay it off?

These are just a few scenarios and every client has a unique circumstance. Call me to discuss your situation and discuss a mortgage solution. I can be reached via 24 hour voice mail at 1-800-453-9290.

Have a great weekend!

Anthony

Helping For Sale By Owners

2006-01-31T07:08:00.000-07:00

How can your mortgage lender help you sell your home?

The simple answer would "seem to be" to sit there with you, greet customers, and help you negotiate your contract. Given that most states require someone doing this to be licensed, it probably isn't the best approach. Even if your mortgage lender is a licensed real estate agent (as I am), it still is not in your best interest to have someone that does not do this on a daily basis to handle this for you. The "costs" will likely outweigh the savings.

For those wondering if I am contradicting myself, I maintain a real license to have access to real estate resources for my clients, allowing me to answer questions effectively, and (most of all), stay current on real estate laws and trends, so I am able to speak intelligently with the agents that entrust their clients to me. (I haven't personally written a real estate contract for a client since 1995)

Here are some simple ways that your mortgage lender can assist you:

1. Prequalify your buyers. You don't need "hundreds of people" visiting your house. You only need ONE pre-qualified buyer.

2. Provide financing option sheets for you to have at your Open House. This makes you look like a professional, and this is important to come buyers who may like your home, but be concerned that they are not dealing with a professional real estate agent.

3. Send pre-qualified buyers to you. Once again, you cannot compensate your mortgage lender unless they are licensed to sell real estate, but we (mortgage lenders), speak with prospective borrowers all day long and can often make suggestions as to new properties on the market.

4. Provide you with professional resources such as home inspectors, termite companies, title or escrow companies, appraisers, and the like.

I have served many For Sale By Owners, and have now launched a new FSBO website, called FSBO Therapist. Why the name? Dealing with the public, will surely "put you on the couch" and I want to take this burden from you. I also sell one of the top selling For Sale By Owner ebooks called "Selling Your Home". Through an arrangement with the author, you can get this book, for almost a third of its cost from my site. Visit www.FSBOTherapist.com today!

Until next time,

Anthony

"Your A to Z Lender Serving all 50 States"
www.AtoZLender.com
www.AnthonyKirlew.com

What is a 3 day right of rescission?

2006-01-30T18:48:00.000-07:00

This is a period following a home equity loan or mortgage refinance transaction whereby, the borrower has 3 days to look at all of the documents that they signed, as well as the terms, and they can cancel the transaction at any time, for any reason, during this period.

This was imposed by the Government (via Truth In Lending Act, or TILA) due to unscrupulous mortgage companies that took advantage of customers by charging fees and rates that were too high.

There is not right or rescission allowed on a purchase transaction however, so “buyer beware”.

Until next time...

Anthony

www.AnthonyKirlew.com

For Sale By Owner (FSBO) – Are you saving money or losing profits?

2005-08-23T12:03:00.000-07:00

In this market, I see many people that try to sell their homes themselves. If you ask them why, most of them are doing so to “save 6%” (i.e. the real estate agents commission).
Unless you are a professional negotiator (not just someone who “wont budge on your price”), you need to be real with yourself and know that you are probably not the best person to negotiate the sale of (what is most likely) your most valued asset. One of the saddest things that I see people do (not just in real estate), is to spend (or lose) money in an effort to save money. I am not opposed to being frugal, but as a real estate professional, let me give you some food for thought.

Let’s say you want to sell your home for $400,000 and keep all of the net proceeds. All other fees aside, you are seeking to net an additional $24,000 by not listing your home with a professional real estate agent. Would you be surprised to know that a real estate agent could possibly get an additional 10% of your asking price (I have seen as much as 25-30% above asking price) due to his or her ability to attract several contracts, choosing not only the highest priced offer, but the best terms for you resulting in an increased bottom line.

In our example of a $400,000 sale price, let say that your agent not only gets a higher price (conservatively, 7% above your asking price), but also does it for only 4% since they will be assisting you with the purchase of your new home. This nets you an additional 3% or $12,000. The best way to look at using an agent, is to look at netting an additional 3%, rather than losing 6%. Now, the key is that you have to work with an agent that will work with you. Many of the larger firms, do not allow their agents to be “flexible” and I don’t recommend working with an agent that can’t (or won’t) work on your terms. Some of you may not know this, but prior to being a mortgage loan officer, I spent several years (1992 – 1995) working as a real estate agent and I maintain an active real estate license to keep current with that side of the business.

If you have any questions related to selling your home (or purchasing a new one), feel free to contact me at 800-453-9290 0r anthony@anthonykirlew.com and I will help you find an agent to assist you.

Until Next Time...

Anthony

Credit Card Minimum Payments to Increase

2005-07-13T20:25:00.000-07:00

Please read this article that I found on Business Week Online that discusses the implementation of new legislation that could increase your minimum payments on your credit cards. Truth be told, I think this is a good thing as too many people seem to be living beyond their means. The immediate down side is that it could make things a bit tighter on the budget. You might want to check with your credit card company to see how this will effect you. If you feel the need to pay off your credit cards and would like to discuss a way to do this with a tax deductible payment (via cash out refinance or Home Equity Loan), please contact me at 800-453-9290.

Here is the article:

Tough Love for Debtors
Credit-card rules that raise minimum monthly payments could hurt banks and debt-burdened consumers alike.

Like a lot of Americans, Robert and Jill Proctor of Kansas City, Kan., are getting hammered by credit-card debt. When Robert lost his job two years ago, the thirtysomething couple ran up $35,000 on 10 different cards just to pay everyday expenses like groceries and gas. Even after Robert found work last year as a country club manager, their combined income just covers monthly outlays for two cars, a mortgage, and credit-card bills on top of household expenses. Says Robert, who makes minimum payments on the cards with the biggest balances as he struggles to pay off the smaller ones first: "If they tack on more charges, we'll be stuck."

That's just what's about to happen. Because of a crackdown by the Office of the Comptroller of the Currency (OCC), most banks and credit-card issuers will ratchet up required minimum monthly payments over the next 12 months or so. In the future, the payments must cover all fees and interest and pay down at least some of the outstanding borrowing.

MINIMUM PAYMENTS. The goal is to help people pay bills faster and slash the interest due. Monthly payments on many cards will double, to about 4% of balances, say card experts. Barbara J. Grunkemeyer, deputy controller for credit risk for the OCC in Washington, explains: "We were concerned that people were making smaller and smaller payments, but not making any headway" in paying off loans.

The new rules will hit consumers hard, especially on top of higher energy prices, rising interest rates, and record levels of overall household debt, now $10 trillion, or 87% of gross domestic product. American households, on average, possess nearly 8 major bank cards -- or 17, including store and gas cards. Either by choice or necessity, some 19 million households -- about 1 in 6 -- now make minimum payments on their cards, according to card tracking service CardWeb.com.
"The main concern is that there could be an increase in defaults and personal bankruptcies," says Michelle Grabow, credit-card research manager at Informa Research Services. That in turn would hit banks' bottom lines as they have to charge off more loan losses. Worse, the shrinking of families' disposable incomes as they step up repayments could put a crimp in consumer spending. The massive indebtedness of Americans is a "huge macro risk factor for the U.S. economy," warns Stephen S. Roach, Morgan Stanley's chief economist. "The debt bomb is ticking."

ON THE EDGE. Banks were so worried about the potential impact on their businesses that they persuaded the OCC to give them a long transition period before applying the rules, originally published back in January, 2003. Their fears seem justified. Bank of America (BAC ), one of the first issuers to raise minimums, in the second quarter of 2004, saw net charge-offs for bad loans soar 63%, to $691 million, though by the end of that year only $40 million was related to the increased minimums.

Bank of America also increased loan-loss reserves by 21.1%, to $170 million. That surprised some analysts because the Charlotte (N.C.) bank had told them that hikes in payments amounted to a modest $10 to $20 per month for most cardholders. Says David A. Hendler, a bank analyst with researcher CreditSights: "It seems that even a small monthly increase in minimum payments can cause some borrowers to tip into default."

Minimal impact? So far, BofA, Citigroup (C ), Discover Card (MWD ), and MBNA (KRB ) -- which together issue some 275 million of the 658 million general purpose cards in circulation -- are among those with timetables for raising their minimums. JPMorgan Chase (JPM ), with roughly 96 million cards, will "experiment" with higher minimums later this year on a "small portion" of its customers, according to Ray Fischer, chief financial officer of JPMorgan Chase Card Services.

STEPPED-UP PRESSURE. Fischer says 90% of the bank's customers make more than the minimum payments. The New York bank is not sure just what the financial impact will be. Still, it reported in a recent filing that it, too, is bracing for more delinquencies and charge-offs.
Some issuers continue to insist that the impact will be small. At Wilmington (Del.)-based MBNA, new cardholders will have to pay higher minimums starting in July. Existing customers will receive notices in September and see changes soon after. They'll have to pay interest and late fees, if they have them, plus 1% of the remaining balance. Currently, MBNA customers have to pay interest and fees plus $15, or 2.25% of new balances, whichever is less. MBNA spokesman James Donahue says the change "won't have a practical impact" since most cardholders make the minimums.

That doesn't mean MBNA and others won't be stung by the extra vigilance of the OCC. It has also warned banks that they must consider substantially reducing interest rates -- which quickly jump from introductory offers of 0% to an average of 16%, according to CardWeb.com -- or eliminating fees so that more of cardholders' monthly payments go to cutting their balances. Banks haven't been "overly keen about the prospect, but we needed to keep the pressure on," says the OCC's Grunkemeyer.

TOOTHLESS IN CALIFORNIA. No wonder. Last year, credit-card issuers reported record profits of $30 billion -- much of it earned on liberal lending policies and punishing fees that often exacerbate the financial woes of cardholders who have gotten in over their heads. Borrowers who make a late payment -- whether it's for the phone bill, a credit card, or a house payment -- often are charged punitive rates averaging 29% on all their cards. These on-the-edge borrowers are the most profitable part of any bank's card operations, as long as they don't default.
To make matters worse for banks, consumer groups and legislators are pressing them hard to disclose more on monthly card statements about minimums and fees. Senator Chris Dodd (D-Conn.) reintroduced the Credit Card Accountability Responsibility & Disclosure Act in March, after a stalemate in 2004. The bill seeks, in part, to force credit-card companies to say how long it would take to pay off outstanding balances if customers just pay minimums, and how much interest they would pay over the life of the loan.

California enacted a similar law three years ago, but "it's not being enforced," laments Tom Dresslar, spokesman for State Attorney General Bill Lockyer, because the banks argue that federal rules preempt the state law.

180-DAY WINDOW. If customers saw exactly how much credit was costing, they might be more inclined to pay higher monthly amounts voluntarily. Consider a customer who has a $10,000 balance with a 16% interest rate, and who makes a 2% minimum monthly payment. It will take more than 40 years to pay off the balance and cost $19,329 in interest. With a 4% minimum, the loan is paid in about 14 years, and interest costs are $4,931.

The full impact of the OCC rules depends on whether customers can pay the new minimums. What is certain is that once banks implement the changes, they have 180 days to charge off any bad loans that result. "The hope is that there'll be only a temporary increase as you push those customers over the edge and they default," says David L. Fanger, a banking and finance analyst with Moody's Investors Service. If so, that would be a big relief for banks, strapped American consumers, and the U.S. economy.

By Mara Der Hovanesian, Finance & Banking editor for BusinessWeek in New York
Source - Business Week - http://www.businessweek.com/

Interest Only ARM's - Good or Bad?

2005-06-17T10:30:00.001-07:00

Lately, the subject of Interest Only ARM's have received lots of press. For those who do not know what this is, I will explain. An ARM is an Adjustable Rate Mortgage; these mortgages are fixed for a certain period (most commonly 3 or 5 years), then "adjust" either up or down depending on where the market is at the time of maturity. Adding an Interest Only feature allows you to only have to pay the Interest portion, which reduces your monthly expenses for the duration of the fixed period.

First, lets look at the "pro's". An Interest Only ARM is ideal for a borrower purchasing their first home in that it allows you to keep your new payment down to a minimum while still realizing the tax benefits of home ownership and increased equity as the property value appreciates. Another aspect is the fact that as you make payments above your minimum interest only payment, you decrease your principal balance, which in turn lowers your minimum payment the following month since you can't pay interest on principal that doesn't exist.

Other people that can benefit from Interest Only loans are:

1. Borrowers working on commission whose may have large commissions where they can make a substantial principal payment from time to time while keeping monthly expenses lower.

2. Borrowers starting in the work force who will most likely have salary increases over the next few years for when they are ready to convert to a fixed mortgage or upgrade to a larger home.

3. Borrowers who have a definitive amount of time in which they will be moving such as those in the military or those retiring soon.

4. Borrowers seeking to purchase (or those who own) investment properties. This allows you to maximize cash flow (lower monthly payment = more money in your pocket).

5. Borrowers needing additional cash flow for a fixed period, such as those with children in college.

If you fit any of these categories and would like to discuss how you can benefit from an Interest Only Mortgage.

Now lets look at some of the risks associated with interest Only ARM's.

If you are planning on staying in your property long term (i.e. empty nesters), this most likely is not a loan for you. There is no way to predict what rates will be in 3, 5, or 7 years and this could put you in a challenging financial position if your loan matures and your new rate is higher and less affordable for you.

Many people use an Interest Only payment to qualify for a larger mortgage. On one hand, this seems like a good thing, however if there is no plan for increased income as the ARM matures, this could spell trouble for the home owner. Many "experts" have predicted an increase in foreclosures over the next several years as borrowers that should not have utilized an ARM begin to see payments much higher than they originally had.

Now is a great time to take a look at your financial picture because today you can get an interest Only ARM at a great rate is that is what your situation dictates. As well, if you are thinking long term and realize the need to convert to a fixed rate mortgage, rates are once again at record lows which was not expected by any of the "experts".

If you know of anyone that can benefit from knowing more about how their mortgage works, please do me a favor and send this link to them.

Until next time...

Anthony
www.AtoZLender.com

Did rates drop again? (YES!)

2005-05-27T04:36:00.000-07:00

Once again, long term mortgage rates have dropped.

Here is a snap shot of rates as of May 26, 2005:

30 year fixed (conventional)

- 5.75% (0 points)
- 5.625% (1/2 point)
- 5.50% (1 point)

15 year fixed (conventional)

- 5.375% (0 points)
- 5.25% (1/2 point)
- 5.125% (1 point)

5 Year Interest Only ARM

- 5.375% (0 points)
- 5.25% (1/2 point)
- 5.00% (1 point)

This is just a sample; if you have any questions about a specific rate or product, please contact me.

Have a restful and safe Memorial Day Holiday!

Anthony

April new home sales climb 0.2 percent

2005-05-25T19:50:00.000-07:00

Wednesday May 25, 10:03 AM EDT

WASHINGTON (Reuters) - Sales of new U.S. homes rose unexpectedly in April, climbing 0.2 percent to a fresh record, a government report showed on Wednesday.

The Commerce Department said new single-family home sales rose to a seasonally adjusted annual rate of 1.316 million units, a new record, from a downwardly revised 1.313 million rate in March.

Wall Street analysts had expected April sales to decline 0.1 percent to a 1.350 million rate, from the previously reported 1.431 million pace. Deep revisions cut the March sales rise to 4.5 percent from the first-announced 12.2 percent jump.

Sales surged 37.2 percent in the Northeast, reversing a 4.9 percent fall in March, and the West recorded a 2.8 percent sales pickup. The South and Midwest both saw sales cool in April, falling 5.3 percent and 0.5 percent respectively.

The supply of homes, which measures the time it would take to deplete homes available for sale at the current sales pace, was steady at 4.1 months' worth in April.

The national median sales price on a new home rebounded to $230,800 in April from $217,500 in March. The average new home sales price was unchanged at $283,500.

©2005 Reuters Limited. (source www.iwon.com)

How is your credit? (and why do I keep asking you?)

2005-05-24T21:10:00.000-07:00

I know its been a while, but it has been a very busy month. I have addressed credit issues in my newsletters, but I wanted to share some information based on a situation that arose with a client.

Often, people that pay their bills on time will assume that their credit is good (and rightly so). Recently, I was helping some clients obtain financing and to their surprise there were some credit issues that they were not aware of. In fact, it was because they had good credit that they found themselves having lower credit scores than they thought they had, yet they had a near perfect (if not perfect) payment history on all of their accounts.

They had opened several new accounts over the past 12 months, and this had in turn reduced their credit scores. It was not a total disaster, as I was able to help them accomplish their goals, and also put them on the road to keeping the strong credit rating that they had.

Why did this happen? Credit score are based on algorithms (which are computerized scoring methodologies based on the factors in the credit report indicating how a borrower is using their credit). When the algorithm sees several new open lines of credit within a 12 month period, it will continue to reduce the borrowers score. This is based on the theory that if they are acquiring lots of new credit, it could be a sign of needing financial resources above and beyond their income. Of course, it could also mean that since interest rates are so low, they would rather use the banks money (especially on a zero interest balance transfer). After paying on these accounts for a few months in a timely manner, the algorithm will realize that the borrower is still maintaining their historical timely payment pattern, and the scores will come back up.

If you would like a FREE credit check up, please contact me for a no obligation credit report and consultation.

Until next time....

Anthony

House price appreciation by metro area

2005-04-29T12:39:00.000-07:00

Here is a great article from MSN Money which lists 265 cities across the nation, showing the specific changes in value over the course of time (1st quarter, 1 year, and 5 year benchmarks).

http://moneycentral.msn.com/

Do you want to find out what YOUR home is worth? Let me refer you to a qualified Realtor that specializes in your area for a FREE Market Evaluation.

Have a great weekend!

Anthony

www.consumersadvantagemortgage.com