Real Estate

When I read the news on HUD’s proposed reform of the Real Estate Settlement and Procedures Act (RESPA) I was skeptical. Cathy from Sequim challenged me to read the 96-page federal register document so we could all figure out what’s going on. I am here to tell you that there is one very good change coming out of this proposal. In fact, it’s so good that I am borderline hopeful that this change might do what legislation is suppose to do and what HUD forgot to do when they signed the original version of RESPA in 1974. But first, the changes that will have many, but not all mortgage brokers screaming bloody murder:

Fannie Mae and Freddie Mac have entered into cooperation agreements with New York’s attorney general to only purchase loans that meet a new home valuation protection code, the state announced. The code is effected on Jan. 1, 2009. Under the new code, mortgage brokers and loan originators are prohibited from choosing or communicating with appraisers.

Who is not to blame for the mortgage mess? Take one step back. As lenders, money was flowing from the spigot like there was no tomorrow. As mortgage brokers, there was money to be made by cranking the faucet, and it was a foot race to see who could get to the sink first. As agents, we sang the “Houses are expensive, but money is cheap” refrain until we were blue in the face. And, as for the consumer, it really doesn’t matter in the final analysis whether they were motivated by necessity, opportunity or unadulterated greed. We all helped make this bed in which we now must lie.

What else can you say to such a ridiculous report, such obvious sensationalism? The sad thing is, many people will read this wild hyperbole and imagine that the TV station’s salacious report has a “point” to it.

Joel has a good interview with Dave Wengel of TargusInfo around Mortgage lead scrub rates. Specifically that lendingtree and lowermybills have a 15% scrub rate whereas the free ipod guys (lure people in with promise of a free ipod but they and their friends have to signup for credit cards, netflix and talk to mortgage brokers to get it) have around a 50-60% scrub rate.

Having been an FHA lender I can attest it is a pain at times. FHA requires annual financial audits of the mortgage brokers financial condition and more. We always have survived the several day pain, and the expenses tied to it, but only FHA drags brokers through this. The actual banks that sponsor the mortgage broker go through even more red tape and grief. Loan officers have to know more rules. FHA doesn’t rely on the easy automated underwriting or the quick answer from a subprime lender. FHA restricts how the borrowers pay for certain expenses and how much the lender can charge.

I’m not a professional financial anything, but I was square in the middle of the housing boom working as a title clerk for a company that has a brother mortgage brokerage on the other side of the coffeepot, both owned by the same guy. I don’t know much, but here’s my take.

Presidential candidate Hillary Clinton unveiled her “mortgage reforms” on the campaign trail yesterday. You won’t be surprised to hear they are more pandering than problem solving. Her rhetoric was emotionally charged placing the blame specifically and solely at the doorstep of the “mortgage brokers”. No mention was made of Wall Street mortgage investors, wholesale lenders, retail mortgage divisions of home builders, or big banks.

While this could be my Bloodhound tag line, this is the time where it will pay dividends. Many lenders have been changing their policies, leaving buyers who were previously approved out in the cold. Mortgage brokers that have been around for 20 years or more will have been here before. They will be able to provide excellent advice and great service at a time when both are at a premium.

Second, it’s hard to tell who has your best interest at heart in any real estate transaction. There are lawyers, mortgage brokers, home inspectors, and real estate agents all vying for your business. This translate into vying for your money!!!! Be careful what color glass is in their set of eye glasses. If you are like me, you have found the only people who have your best interest at heart is family.

Many mortgage brokers and financial advisors can’t set up the Smith Manoeuvre for you. Why? Let’s start with the mortgage brokers.

Countrywide was the largest originator of what they call “Pay Option ARMs” in 2004 and 2005. They were successful by offering large yield spread premiums to the mortgage brokerage community for these products. They knew that unscrupulous brokers and originators would “sell” the low 1% start rate while ignoring the fully-indexed rate charged to a customer.

There are of course predatory lenders to avoid, (even in Annapolis) but just as important, there are incompetent mortgage brokers out there. And I would never recommend using one of the on-line lenders, or non-local lenders. Why? Because accountability and experience.

Behind the scenes, your mortgage broker is juggling all these criteria, and building relationships with lenders — the best mortgage brokers compare 30 or more — each with a myriad of rate offerings, in order for you to get the best pricing possible for your particular transaction.

Brokerage companies were on the Congressional hotseat after 2000 stock market bust. Now, it is mortgage brokers’ turn, facing the rising national foreclosure rate. The article “Mortgage Bankers On The Defensive” cites the claims from the Mortgage Bankers’ Association, such as:

Jeff Corbett is one of the rising stars in Real Estate 2.0 . I interviewed Jeff last month in Laguna Beach, CA. Jeff is a remarkably shy person who bears little resemblance to the hard-hitting, on-line, pit bull who advocates transparency inxbroker mortgage brokerage and banking. He is unfailingly polite with a great sense of humor.

Why are these loans sold? They do have a perfectly legitimate purpose - mostly, for investors who use the extra cash to fix up homes, then “flip” them, selling the house for more money. However, these people generally know how to read loan programs and are often mortgage experts themseves. You do not fall into that category. All too often, these loans are sold by disreputable mortgage brokers to people who are either simply ignorant about loans or do not have much money and believe that they “need” a loan of a certain size.

As for that “Deal Killer” home inspector, I bet that your real estate agent or mortgage broker will call them when they buy their own home.

There is more demand for mortgage brokers today than ever in history. And demand will continue to grow. The U.S. population continues to grow. Everyone wants the American Dream of owning their own house. If you become a mortgage broker you can make that dream come true for your fellow Americans.

Fanny May now set to ban on line applications. Lending Tree putting out dog repellant, worried dog thinks it is a tree. E-loan requiring Skype direct contact with underwriters to verify pedigree. DiTek implementing don’t wag the dog policy.

However, it’s not absolutely impossible to find lenders who give out loans at reasonable rates and agreeable charges to the people who have a bad credit history. All a borrower needs to do is look around and talk to different mortgage brokers, which would prove to be helpful to find a lender that can get them an approved loan with a reasonable interest rate and fair terms of repayment.

That would be the hedge funds, who making huge profits gouging the unwary with option Adjustable Rate Mortgages (ARM). Business Week details the slippery accounting practices, greedy hedge funds, unscrupulous mortgage brokers and banks - as well as how some homeowners will soon find their itty bitty mortgage payment just got way more costly. Some, unquestionably, will lose their homes.

I took some business cards and stopped to talk with everyone that I thought could help out with my business and met some nice people. I met a couple of mortgage brokers that are kind of new in the business and said they do not have any realtors on my side of town yet and they promised to send me some leads.

At the other end of the spectrum mortgage brokers are now the preferred contact point for larger transactions, and people would rather spend time getting impartial advice from them and not their customer banking service rep.

19. I hate dealing with real estate agents, mortgage brokers, and people like that. I never want to do it again. They’re in the business of toying with emotions, and it’s ridiculous that they can make you do the things they do.

We’ve all heard that you make money when you buy, and this is true. You can also make a good deal an even better deal if you put some creativity into your financing strategy. There is a very simple recipe to follow when buying any non-commercial property (4 units or less). I recently deviated from my multi-unit buying to pick up some homes in appreciating markets. I was new to single family home investing and quickly learned that there are tricks involved, and oddly enough, realtors don’t seem to know about them and most mortgage brokers don’t either. So I thought it would be worthwhile to pass along what I’ve learned. Here’s the recipe:

A friend and client of mine is a mortgage broker in South Florida. He’s feeling the heat of news stories from the likes of the one I’m about to parse for you. I’ve been on a rant lately about debt and how the housing market will be a slow, non-newsworthy unwinding that could take a few years to play out and take the rest of the economy with it. So naturally, when I first see a story like this one I see it as support for my position, however, I want to make it clear that I never felt the mortgage brokers were at fault.

He talked about finding motivated sellers by placing newspaper ads. He also suggested putting together a “power team” of people from code enforcement, real estate agents, and mortgage brokers.

On the divorce front, apparently Paul's lawyer has changes to make to the settlement before I'll see it again. I'm hoping that comes soon. I've got mortgage brokers lined up, paperwork started and everything ready to go to get it done before the ink has even completed drying on the settlement.

More than $106 million in home loans collapsed in Palm Beach, Martin and St. Lucie counties in the first quarter of this year alone, according to a Palm Beach Post analysis of data collected by RealeSTAT.com, a local commercial firm that gathers foreclosure and default records. A little more than $68 million in mortgages defaulted in the first quarter of 2005.

After getting approved with a couple different mortgage brokers and comparing their programs, interest rates and upfront fees, I ended up going with the broker that my agent recommended. The numbers that the different mortgage companies came back with were all largely the same, so I ended up making my decision based on the experience of the actual person I would be working with. While I liked a Manhattan broker the best (pleasant, easy going, very professional), I ended up working with a fast-talking NJ mortgage guy because he understood exactly what my investment objectives were and was able to assemble a loan program that accommodated my desire for minimal upfront costs, no pre-payment penalties, etc. The other brokers I spoke with seemed completely unfamiliar with the concept of purchasing a house solely for the purpose of fixing it up and re-selling it in short order.

Paulette Ensign, the Tips Booklet Queen, makes a great suggestion for Realtors, mortgage brokers and others who work in crowded markets, particularly where business is slowing right about now.

That's not how you compare home loan rates. You can call around to get a general idea but, when it comes to actually doing a true comparison, you need to contact several lending institutions (bank, mortgage brokers, whatever) and ask for a "Go0d Faith Estimate" on a specific property at a specific price.

Of course the exchanges have these products targeted to homebuilders and other companies affected by bubble uncertainty, but individuals could use some hedging, too. What bubble-area homeowners need is a smart mortgage broker who can include options for managing your bubble exposure as part of the loan package.

All these people, living off their imaginary equity! This is one of those times when it pays to be poor, because sooner or later, the bubble will pop:

On March 9th Washington State’s Governor Christine Gregoire signed House Bill 2340 which will regulate all Loan Originators in the brokering of residential real estate loans. According to Washington Association of Mortgage Brokers the new legislation requires the following:

Lenox Financial Mortgage and other dishonest mortgage brokers look for suckers who believe that they'll "never pay a nickel" in closing costs. Not true. The borrower always pays closing costs, in one form or another, at closing or after.

This list of the highest-paying Google advertising keywords is exciting for its very dullness: if there’s one thing that’s become clear it’s that in 2006, the most aggressive users of keyword advertising are asbestos lawyers, ambulance chasers, and mortgage brokers.

In terms of the directory, I’ve added the following categories: Appraisers, Construction, Escrow, Handymen, Mortgage Brokers, Real Estate Photographers, Real Estate Agents, Real Estate Lawyers, Real Estate Technology, and Title Companies. But the beauty of a wiki is that if I missed your line of work (assuming it is within real estate), simply edit the page and add your profession. (By the way, I haven’t added separate webpages for any of the people in the directory yet, but if you’d like to add a page to expand on yourself and the services you provide, feel free to create a page by putting your name in brackets, as in [John Doe].

Freakonomics made me think about my business and all the people that I interact with on a daily basis from clients to home offices. Economics is a funny thing in that not a lot of people understand it. It is especially alarming to me that the financial advisors and planning industry is terribly misinforming the general public about what they should be doing financially. Most financial planners, much like stock brokers, real estate agents, life insurance agents, mortgage brokers and countless other “professionals” are misleading their clients in ways that are seriously detrimental to their financial health. There is so much garbage out there that is flat out wrong that it is no wonder there is so much consumer debt and lack of education out there. Unfortunately there just isn’t time right now to dispel some of the myths of traditional financial planning, but I will begin to illustrate, from an economic point of view, so of the fallacies that are hurting the American public. Some of the problems that I have in mind are taxable compound interest, “Buy Term and Invest the Difference”, Credit Card Debt, Term and Permanent Insurance, Dollar Cost Averaging, 15 year Mortgage’s just to name a few.

I’ve seen how much entities like mortgage brokers are willing to pay for leads. It’s no wonder that phishers have such a financial incentive to engage in activity such as this.

If you get an email like this, its a safe bet that they’re just phishing for your personal information to sell to other companies. In this case, they want to sell my information to mortgage brokers as a ‘hot lead’. I may also end up on a list of ’suckers’ who would fill out those forms. Don’t let that happen to you.

HouseValues has a nearly useless and manipulative value proposition for consumers looking to get a fix on the value of their property: if you're dumb enough to give us your name, address and other qualifying information, we'll sell it to the first real estate agent(s) who are willing to pay us for access to the ZIP code of your property. We may also sell it to mortgage brokers and insurance agents. That's our call. And we won't guarantee you anything about any of those people. We won't even guarantee that they're properly licensed. They may be scum – that's your problem, not ours.

This is the second time that I have used Virginia Commerce Bank, at Mike’s recommendation, both times the process has been relatively painless I worked with the same person both times and surprisingly he remembered me when I called him earlier in the month. I didn’t think a lot about this until I started talking to some of my friends and everyone else had complaints about their mortgage application process including their mortgage brokers forgetting their names (in the midst of the financing process), forgetting what paper work had been submitted, losing paper work, and screwing them with undisclosed closing costs. At both of my closings, conservative estimates were made, and we ended up walking out having paid slightly less than estimated in closing costs.

Have you ever wondered what happens to your mortgage once it closes? Probably not, but the chances are that it ended up as a package with hundreds of other mortgages and sold as a security. What typically happens is the mortgage brokers sells the debt to a bank, who sells the debt to Freddie Mac or Fannie Mae, who packages mortgages together, guarantees that they will be paid as promised, and issues securities to investors with the big bag of mortgages as collateral. Which means that at the end of the day, the only ones that are holding any significant risk are Fannie and Freddie.

Beginning the loan application process without any idea of the actual value range of a property is something similar to launching a space exploration without knowing where you are going. Throughout the last twenty plus years, I have been asked continually to support the same kind of idiotic practice, by loan officers, mortgage brokers and borrowers alike. It is a practice that I candidly term as “Value Roulette.”

I remember a few years back that mortgage brokers were in hiring frenzy especially here in the Triad to service the refinancing boom that was happening. That frenzy lasted less than two years after all of the major refinancing had already taken place and the growth in business slowed dramatically. People rarely refinanced more than once every few years thus repeat business was unlikely.

Mortgage brokers can help borrowers who need specialized loans or crave personal service when shopping for a mortgage. But they are less regulated than banks and other lenders. Consumers need to shop carefully for one as a result. Mortgage Broker Check List. · Get a detailed description in writing of the exact programs being offered has a decent arms length relationship with a quality mortgage broker.

The AP reports that Ohio is being especially hard hit by a growing nationwide problem - inflated appraisals and collusion between appraisers and mortgage brokers. When borrowers need to sell a property appraised for more than its real value, and often with negative equity as a result, the homes often end up as REO where inflated appraisals contribute further to losses when used to set pricing.

If anyone is aware of any other local programs, I’d definitely be interested in hearing about them. In particular, I’d be interested in hearing about mortgage brokers that are working to educate minorities.

A home equity line of credit - which lenders and mortgage brokers may refer to as a HELOC - is a different kind of home loan available today.

Another reason why I didn’t want to make an offer then and there was that I was afraid I might be forgetting something important about the whole process. We went to a first home buyer seminar and talked to some mortgage brokers and in both instances, we received various advice about buying a house. The only problem was that, we couldn’t remember most of the advice given. I had to refer to the notes we have filed at home.

Some screwy stuff has been going on in real estate in Kansas City. Federal investigators say some of it involves fraud. They say unscrupulous mortgage brokers, loan underwriters and appraisers used inflated appraisals to sell 1,000 or more dilapidated houses in the urban core to gullible investors.

Basically, wholesale lenders use mortgage brokers as their loan officers. They offer a lower rate to the broker, the broker adds on his compensation, and the rate is usually about the same as you would get using a mortgage banker. Sometimes the rate is lower, sometimes higher, depending on how much compensation the broker adds on.

The real heart of your question is, “Why do closing costs vary so much from lender to lender?” There are several reasons for this. Mortgage brokers work through “wholesale lenders” who actually provide the money for the loans. Each lender sets its own administration and underwriting fees to cover their overhead expenses. These fees are typically passed on to the borrower, and they range from $400 to $700, depending on which lender the mortgage broker is using. So that accounts for some of the variation in closing cost estimates....

If you think you will ever get another home loan, you need to know this. Loan officers and mortgage brokers know something you may not. They know about Par and Rebate (aka Yield Spread Premium). These are tools of profit for them and a way to take more of your money without you ever knowing about it.

There are dozens of loan types and hundreds of loan programs available through thousands of mortgage brokers, bankers, lenders, finance companies, credit unions, even stock brokerage firms.

Contrary to popular belief, finding a mortgage doesn’t begin with an application.

Education is a better first choice. Mortgage information sources are as vast as the number of mortgages available. Web sites, topical newspaper articles, mortgage books, consumer seminars and workshops, financial planners, real estate agents, mortgage brokers and lenders are all available to assist you along the way.

Mortgage brokers say those who believe they cannot afford a house because they don't have money for a down payment are wrong. As housing prices have climbed - leaving more and more potential home buyers behind - the mortgage industry has responded with loan programs that allow even those with a short credit history to use, for example, cell phone bills to prove their credit worthiness.

A trend is emerging among some very smart and capable young individuals that can scare the banks and mortgage brokers heavily. It is a concept of living debt free. In India, America and Europe every individual working professional dreams of living debt free forever.

Here’s how “No Money Down” actually works. Lenders will pay mortgage brokers a rebate for giving the client a higher rate than necessary. Brokers will then use that rebate to pay your closing costs. What remains from the rebate after closing costs, the broker will retain as his/her origination fee or broker fee. The thing to note here is that there is no such thing as “no cost”. The broker is paying your costs for you with the money they receive from the bank.

How I became a mortgage broker may in some ways seem accidental, however, I always intended to be in business for myself even in my youth. No, I don’t think that there are people out there planning to become mortgage brokers because it’s a “glamorous” career choice. Most people are probably like me. I new I wanted the independence that comes with owning your own business and the means to do that, by some chance, just happened to be the mortgage business. That being said, do not doubt for a minute that I love my job. I do! It is a very gratifying thing to help someone buy a new home. Your home is your sanctuary even if everyone’s idea of sanctuary is different. Nonetheless, we all want the place we can go and know that we belong there and are safe. That’s a pretty good feeling…………….helping people find their sanctuary!

Revealing the need to keep the salt shaker nearby when studies roll out, a new survey says consumers get a better deal from mortgage brokers than lenders, but the study’s either-or proposition overlooks a third technique that is even more satisfying.

VI is a magazine dedicated to people interested in investing in Vancouver BC. It is written by people that are active in the Vancouver market, from real estate agents to mortgage brokers. It will be an un-hyped, honest look at what’s happening in Vancouver and give you an insider look at the market.

Too bad the mortgage industry has no single federal agency monitoring its affairs, said industry experts. Government regulation is splintered, and in some cases -- notably mortgage brokers -- almost non-existent, they said.

Some trade groups -- notably appraisers and mortgage brokers -- are asking regulators for stronger governance to roust their wrong-doers.

Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Your Mortgage Specialist and Real Estate Professional work as a team to help you find the right home and select the best financing.

"We commend Dr. Elliehausen's detailed research on this very important topic," said NAMB President Bob Armbruster. "We have always believed that the customer who works with mortgage brokers, especially NAMB-affiliated mortgage brokers, receives some of the most favorable terms possible for mortgages. The findings of this report simply prove what NAMB has known for years."

This number is also where your loan officer / loan originator receives his/her pay (as a percentage). Most loan originators make somewhere between 35% and 70% of the figure on line 801. As a result it may be difficult to get that amount lowered as no one likes to give away their paycheck. Also, some mortgage brokers will not allow any of their loan originators to drop below a preset amount.

This information was originally designed for attorneys and was designed to teach them avoidance of problems. Naturally, we use their lessons against them and do all we can to get them to screw up so they can be sued. You will find a lot of ingenious tricks and traps can be devised to make them goof it up and lose their collection efforts and their cases against you.

"What's happening with rates is hurting the seller worse than it is the buyer, and home prices will flatten out if not go a little lower," said Bob Long, president of the Georgia Association of Mortgage Brokers.

Jennifer Walter gave Vivia Elaine Palmer a $2,850 check to make a deed change on the house she was living in.

Palmer, 59, of Sunrise, told Walter the $2,850 was ''good faith money,'' and she would get it back once the transaction was completed.

The deal never happened. Palmer, who passed herself off as a brokerage services expert, investigators say, was a fraud.

Palmer was arrested a second time Wednesday on charges of real estate fraud, according to the Broward Sheriff's Office.

"What's happening with rates is hurting the seller worse than it is the buyer, and home prices will flatten out if not go a little lower," said Bob Long, president of the Georgia Association of Mortgage Brokers.

Bait and switch. You know the term. It is most commonly used when a retailer advertises a great sale on a large screen television or new car. When the buyers flock to his store, that item is sold out or the ad was a mistake. However, the retailer has something “almost as good” that he will let go at a steal to make up for the confusion. Well this practice is rampant in lending as well.

Here are two examples of mortgage bait and switch.

A borrower commits to a mortgage under a set of terms: a certain interest rate, a fixed or adjustable mortgage with a specified frequency and method of adjustment; length of loan; and so forth. Then, at the closing table, the borrower realizes that the loan documents specify a higher rate, more frequent adjustment, a five year note with a balloon or other terms to which he was sure he had not agreed.

January’s employment by the Bureau of Labor Statistics reports that employment in the mortgage industry hit an all time high of 489,400 full time employees. But, mortgage and non-mortgage broker jobs were 123,100, the lowest number since September of last year.

This is in line with the estimated 30-60% decrease in overall broker activity that has been reported during the most recent quarter.

PowerCore provides mortgage brokers and their affiliates with sophisticated software without the expense and hassle usually associated with automation. Instead of purchasing and maintaining expensive networks, mortgage brokers ("parent branches") and their affiliates ("net branches") access programs and data over the Internet using a network belonging to an "application service provider" (ASP). Instead of a large up-front cost, there is a monthly fee based on the number of loans processed.

A mortgage broker is an independent real estate financing professional who specializes in the origination of residential mortgage loans. Mortgage brokers normally pass the actual funding and servicing of loans on to "Wholesale Lending Sources." A mortgage broker is also an independent contractor working with (on average)as many as 40 lenders at any one time. By combining professional expertise with direct access to hundreds of loan products, your broker provides the most efficient way to obtain financing tailored to your specific financial goals.

With more people than ever before applying for new loans and refinancing, an easy-to-understand guide has become a necessity for anyone confused by the complicated issues at stake. Mortgages 101 answers all the questions readers typically have, detailing all the latest changes in mortgage processes, and showing readers how to save money by:* understanding important terms like ARMs and Hybrids -- and what's in the fine print * improving their credit scores to increase their borrowing power* using technology to get the lowest interest rates* maximizing their return on investment, and cutting the cost of mortgage insuranceArranged in an easily accessible question-and-answer format, the book provides up-to-date lending formulas, as well as important information on lending requirements and application procedures. Mortgages 101 contains all the information readers need to know, in one must-have reference.

Should you go with a mortgage broker? It depends. See what your alternatives are and go with the best deal you can find. It's smart to do a bit of research before talking to mortgage brokers, though. You'll delay their hard sell and you'll be more informed.

Reputable commercial mortgage brokers can provide borrowers with an entree to lenders that they may not have otherwise had access to thereby broadening the borrower's ability to expand their lender network.

A good commercial mortgage broker can not only provide access to lenders, but should also add-value to the transactional process as well. "We have spent a great deal of time creating a nationwide indirect channel consisting of commercial mortgage bankers and mortgage brokers," said Mike Myatt, executive managing director of Pacific Security Capital. "We have found that mortgage brokers and mortgage bankers can provide us with consistent deal flow from quality sponsors that may not have found us on their own," said Myatt.