How To Find Good Mortgage Advice In A Difficult Market
So what’s the real story? Does a crisis really exist? Clearly the mortgage industry is going through a serious “cleansing. Lenders are closing their doors Wall Street is treating mortgage backed securities like the plague and borrowers are struggling to make loan payments.
If you listen to the TV folks youll be stirred into a bona fide panic. But is it a real crisis or is it a natural business cycle? I believe the answer is no.
Starting in 2001 after the 9/11 attacks the real estate and mortgage industry reaped the benefits of falling interest rates. And while many people in other industries suffered through tough economic times anyone in the mortgage business had the best years financially of their lives from 2002 2005.
And anytime there is money to be made there will be a flood of people looking to cash in and the mortgage industry was no exception. People from all walks of life jumped in to become loan officers processors and managers as the industry reached higher levels than it could sustain long term.
According to Wholesale Data the number of mortgage brokerages in 1997 was around 33000 nationally. By 2005 it had ballooned to more than 55000. Double the number doesnt sound too bad but the study shows the real problem: the market share of mortgage brokers was 64 in 1997 but had dropped to 58 by 2006. Twice the numbers of people were competing for a smaller percentage of loans.
The logical next step with so many people competing for smaller parts of the pie was for everyone to cut standards and rates to try and get what they can. Then came the advent of easy money with high loan to values reducing credit restrictions and increased risk across the board. Again not good.
So is there a need to downsize the mortgage industry and regain control of guidelines and quality standards? Absolutely.
But what about this crisis what are the facts?
Fact Mortgage money is still readily available. The main difference is that credit qualification has really tightened up in an obvious reaction to the easy credit guidelines of the past few years. There are still options available for 100 financing low down payment options and rates are still quite competitive.
Fact Credit worthy borrowers are finally being rewarded. Lending had reached a point where any and all credit problems including bankruptcy and foreclosure were being brushed aside in favor of volume. These trends never made sense so when they backfire does that constitute a crisis? A borrower who pays their credit on time and saves money for reserves or down payment can still get a loan.
Fact The downturn in real estate is a natural cycle.When you look at thebig picture the real estate industry went through a historic growth cycle created by historically low interest rates. This growth was fueled artificially by something that cannot be sustained so it shouldnt be a surprise when the ride is over.
Fact The mortgage industry needed to be downsized. Studies show that the number of mortgage professionals more than doubled since 1997. Anytime an industry sees such an influx of new people you can expect the sort of issues we’ve seen in our business:
- lower levels of training and accountability
- new players from other industries that dont quite understand what they are in for
- less emphasis on long term relationships
- shrinking margins due to increased competition
- lower levels of professional standards
Fact Mortgage guidelines had reached a risk level never seen before in history. Some tightening of credit standards was inevitable.
Those in the subprime market have taken a beating over loose guidelines but the facts are that this issue was industry wide. Subprime in particular was never a “bad” thing if done at the right rate or loan to value. If credit or income standards were not up to conventional levels it makes sense that you should get a higher rate or lower loan to value than the conventional market. The problem comes when the nonstandard rates and LTVs are just as competitive as conforming products which is exactly where the market wound up by 2005.
And don’t think for a moment that conforming lenders weren’t pushing the limit. In order to keep up with competition guidelines loosened for them just as quickly as everyone else. The shutdown of conforming loan operations and the mortgage insurance losses we have seen over the last 18 months confirm this.
So with all of these trends the downsizing of the mortgage industry should be seen as a good thing. Those professionals staying in the mortgage business should be wiser and more professional than ever before. You can be sure that they want to stay in the business and fully realize what they are in for.
Industry changes bring new solutions
These sweeping changes in the industry have caused mortgage professionals to make some changes. Buckle up change your ways or get out!
The industry changes inspired one mortgage broker to come up with a new service offering mortgage advice for borrowers with loans in process for a small flat fee. The company TrustedMortgageAdvice.com www.trustedmortgageadvice.com offers to review a borrowers mortgage documents for the loan in process and help them negotiate the best terms with their lender. Its a unique twist for a mortgage professional no bait and switch no I can do better instead its that second opinion that most borrowers go to their friends for.
With so much uncertainty so many changes and so many “bad faith” stories out there I think there is a real need for borrowers to get independent third party mortgage advice. So many times in the process borrowers call their friends or family to find out if they are getting a good deal or if what the broker is telling them make sense. So going to another lender only assures they promise to beat your current deal. With TrustedMortgageAdvice.com www.trustedmortgageadvice.com they will give you that second look to make sure you get the best deal possible.
About the writer: Professional Internet Marketing Firm and Writer
How To Find A Solution To Stop Foreclosure Sale
In order to stop foreclosure sale on your home you will need to find a solution that fits your unique situation and needs. You will need to ask yourself some difficult questions in order to do this and you will need to be brutally honest with yourself about the answers.
Here are some questions you will need to ask yourself:
Do I want to stay in the home?
Am I currently financially able to afford the payments on my home?
Will I ever be able to afford the payments on my home?
What caused me to get behind in my mortgage payments?
What is my current monthly income?
What are my current monthly expenses?
In what areas can I cut my spending?
Do I have any friends or family members who would be willing to help me get current on my mortgage?
Am I currently talking to my bank to try to actively find a solution?
What workout packages can my bank offer me?
Have I called local state or national foreclosure resources to find out what my options are?
Do I know how foreclosure works in my state and the timelines involved?
Do I know when my foreclosure sale date is scheduled?
Can I afford the help of a foreclosure attorney?
The answers to these questions will give you at least a starting point to help you stop foreclosure sale on your home. The biggest piece of the picture here is figuring out whether or not you can realistically afford to stay in the home.
If you can stay in the home it means that your financial problems are temporary and can be fixed. At this point you need to develop a plan for how to fix your financial problems. For a while this may mean working more than one job in order to get back on your feet. This may mean asking friends or family for money so that you can get your mortgage current. This will mean working with your bank. Depending on your bank and your current financial situation your bank may be able to offer you a loan modification that will help you keep your home. If you can stay in the home and you want to you will need to find a way to stop foreclosure sale.
If you have looked at your finances and realize that you simply can no longer afford the home you will need to look at how you can stop foreclosure sale by leaving the home. If the home would be able to sell for more than what you owe on your mortgage selling the home or asking your bank about accepting a deed in lieu of foreclosure may be options for you. The deed in lieu of foreclosure basically means that you offer to hand over your house to the mortgage company in exchange for them not foreclosing on the house. If you owe more on the home than it is worth a short sale might be an option for you. But a word of warning on short sales banks tend to take their time with these and there is no guarantee of approval by the bank.
About the writer: No matter what your financial situation is your best bet to stop foreclosure sale on your home is to get educated about foreclosure. This will mean doing some research and especially understanding what the laws are in your state that govern foreclosure. Get more help to understand foreclosure at http://www.StoppingHomeForeclosure.com/StopForeclosureSale.html
How To Complete Loan Modification Forms – Steps To Take Action
Understanding how to complete loan modification forms can be a very useful piece of information any homeowner can have. When you are a homeowner you may feel the little struggle financially with the rapid decrease in sales for homes causing homeowners to have to pay a little more into their mortgages each year. When you begin filling out loan modification forms you will quickly learn that it isn’t going to be a simple process. You will want to prepare yourself and understand the entire application process. Your mortgage broker may be able to assist you with this if you just ask for a little assistance. They can explain to you some of the pieces of information you are going to need to supply to them. Right away when you consider getting a loan modification you are going to need to sit down and determine your financial standings. To determine this you will need to look back to the past two years of time and calculate all your earnings and expenses. This could take a bit of time and you may need to contact your accountant if you have one for a little assistance. With the rapid increase of demand for loan modifications there are still many lenders that are getting use to the new plans that have become available. Some lenders are still not use to the brand new guidelines but they will still be able to provide you the necessary details to get on your way through the entire loan modification application process. The lender will right away request that you give them the loan modification forms alongside your financial statements. If you’ve filled out any of these forms incorrectly you could find the process taking much longer then needed so make sure to double check everything before you file them through. One thing many forget to do is include all of their debts but this is one thing you really need to do. Your lender will actually run a credit report to ensure everything is in order and compare all the necessary information to make sure that all the information is correct. It can be difficult learning how to complete loan modification forms but with a little extra help you can really be on your way to doing things properly. You can look for a little added assistance from your local bank or lender who can help you fill out all the necessary forms correctly to avoid having to go back redoing the forms.
About the writer: For more information and resources on completing loan modification forms visit the 1 loans modification resource on the net: http://HomeLoanModifications101.com