MortgagesUndressed

FREMONT FOR EXAMPLE: Click Here where Calculated Risk Blog lists what Fremont is agreeing to comply to.

A few days ago I wrote an article stating, “If You Were Approved Yesterday You May Not Be Today”. It wasn’t just an attempt to be funny. While on the phone this afternoon with a colleague they had a transaction crash and burn because a lender backed out. The closing was extended for financing reasons, the closing won’t happen at all. The buyers were using 100% financing to make the purchase. The lenders on most 80 - 20 (2 loans) are pulling back.

The sellers have moved out of state, the utilities turned off, the closing was to be today. My colleage, the listing agent was not aware the problem was serious until it was dead.

My daughter just saved a deal with a similar problem. Deals are falling apart all over the place.

If the source of funding dries up, it dries up.

If you are a buyer or a seller, you better make sure your transaction isn’t the next casualty.

At other times it is the conversation that takes place with the people you come across, the people in your computer.

Sometimes it is coming up with good content.

It causes some to quit and some to wear out.

The truth of it is, it is fun and can open the consumer to a world of insights. I think blogging is the single most important resume that is available.

So, first of all, warn your teenagers bad blogging could lead to tough sledding in the job market.

Second of all, when you find a blogger all worn out and lying on the street, just throw a little water on him, he is addicted but will be fine. Larry Cragun

Then stick with us baby, we can untie any problem for you.

PS: Why did I post this? Cause I am a kid at heart. Just ask the grandkids. Lar

I am noticing that a lot of folks just can’t control their desire to buy with credit cards. They cannot control having high balances. People who took a wise step in getting out of 18% credit card rates through refinancing their home are running their balances up again. The intent was good, paying off those high interest rate balances.

However I have observed:

The urge to buy is running high.
The urge to spend is in control again.

The strength to resist just does not exhist.
Being mature - a trait that doesn’t endure.

So being the pragmatist I am. (ho ho ho) I decided to make the mobs of credit card addicts my benefactors. I took my entire retirement investments and put them in the new mutual investment fund you may have heard of: “Credit Card Cocaine Fund”

“Credit Card Cocaine Fund” is a unique fund that purchases stock in companies that understand the human addiction to high balances and using up every ounce of credit limit one can acquire. It focuses on companies with research departments that identify the people that are willing to pay the highest rate of interest. It has the uncanny capacity to spot those companies that willingly raise the credit lines of those most likely to use them.

Now how about this for business savvy! One of these companies has determined how to identify the genetic propensity to become addicted to continually having credit card balances. Yes this is a fact.

These genetic marvels start receiving toy credit cards for Christmas and anonymous birthday presents beginning at age 8. This idea came from James J Smoke, who was a noted research analyist for the cigarette industry. Smoke is solely responsible for persuading the candy companies to start selling chocolate cigarettes. They had to subsidize the candy companies as this ended up in providing greater sales for the cigarette companies long term. It became a fact that the kids stopped buying the chocolate kind for the hard stuff, you know real cigarettes.

So old Smoke used this knowledge and moved on to higher income at the international advisory council for earning high rates of interest. It is said, his idea of toy credit cards is garnering him a huge bonus.

Aside from all this complicated data, is the simple fact that my retirement is in your hands, all this thanks to the new investment fund that targets the right people buying the right stuff, any stuff. That is any stuff paid by credit card.

Keep those credit card balances high please. I must retire someday.

Better yet, you could move to Addictsville, Texas (shown below) where you must make every purchase with credit cards and are subject to an annual audit proving you never pay the balances off.

Larry Cragun

The advertiser condemned mortgage companies that advertise they can give you a loan with no closing costs and explained lenders charge a higher rate to pay your closing costs.

They then went on to condemn those mortgage companies that advertise low rates saying you can’t trust people who claim to have the lowest rate.

Then they began to sell the fact that they can give you low rates with no appraisal, credit report, or processing costs.

Huh?

I take it back, it wasn’t funny it was sad.

The Company Had two words in their name both starting with C.

Who do you not select as a loan officer? You can add to the list.

1- Your neighbor

2- A rookey

3- Don’t hire anyone who can’t give you a real estate agent reference. (Talk to the agent please)

4-

And what set me off again? This story - crap why can’t people be smarter?

Housing dreams turning into nightmares

Mortgage fraud cases detailed in Lawrence

Click Here for the rest of the sad story.

LAWRENCE — Jose Felipe dreamed of buying a retirement house in Florida, where palm trees and balmy breezes would remind him of his native Dominican Republic. So the commercial painter went to a storefront mortgage consultant in Lawrence two years ago and asked for a credit check. Top-notch, he recalled being told.

Reason 1: This is simple - when your balance goes over 20% of your approved credit lines your credit score will start to fall. The closer you get to tapping out your credit limits the greater the negative impact.

Reason 2: Money. Many people do not REALLY understand the impact of compound interest and the effect of an interest rate. The banks understand and prey on it.

What is the out of pocket cost to you from going to 9% to 18% on your balances? I have had many people say double. It is much more than double.The answer is not even close to correct. Way off. Wrongo. Horribly wrongo.

Paying twice the interest in fact cuts the time the bank doubles their money. WHAT DID I JUST SAY? (it in fact cuts the time the bank doubles their money)
Let me explain: If you secured a $10,000 second mortgage to pay off a $10,000 credit card you might pay around 9% interest. It isn’t hard to find people paying 18% interest on their credit cards.

So follow the money. If you were the bank and loaned money at 18% compound interest you would double your money in four years. If you loaned it at 9% it takes twice as long, 8 years to double your money.

Now, suppose you could do that for 16 years. (Some people always carry balances on their cards.) Using $10,000 doubles as follows in this example:
4 years = $20,000

8 years = $40,000

12 years = $80,000

16 years = $160,000

At 9% the 16 year profit is $40,000 profit - big difference wouldn’t you say?
Now you see why they love credit card balances and are impossible to deal with when you ask them to lower your rate.

It is their hope they can enslave you to balances on your cards.

You were born to be free, so set yourself free. Pay off those credit cards, even if it means a second mortgage. Larry Cragun

“So Sad They Were Bad”

Exotic mortgages bring higher stakes

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Kirstin Downey | The Washington Post
January 16, 2007

WASHINGTON — At 64, and looking toward his retirement next year, Willie Lee Howard agreed to refinance his duplex in Washington, thinking that a fixed-rate loan would help stabilize his finances.
What Howard got instead was a mortgage he did not understand. Baffled by the loan documents he was mailed after the closing, he consulted an AARP lawyer and learned that he now had an interest-only loan, a new and controversial kind of mortgage. Howard was told that under its terms, his mortgage balance will rise instead of fall and that he will need to refinance in 10 years, when he may be too old to work.
“This is a bunch of junk they done to me,” said Howard, a construction worker.

Larry’s Commentary: At age 64 or 24 a loan can be a bad thing or a good thing. The most condemned product, even by me, the Option Arm or Negative (NEG AM) ARM can be a Godsend. More than once I have sold this product to single mothers, recently divorced, with teenagers that need some stability. Moving means new schools, new friends, and that which is wrapped around moving. The neg am product was the only way they could afford to stay. I would sell it again in these circumstances.

However, some crooks, and I use this word a lot lately, prey on people. A new young hotshot joined a firm I was working for and was assigned the cubicle next to mine. It didn’t take long to figure out he was preying on old people. He would sell the negative AM product as a fixed. He was quickly gone as I exposed his tactics to the owner. The last I heard the feds had him in their clutches.

If you gain anything from this site you will learn to be dubious of miracles. There are products that specialize of course. But the too good to be true quote applies so very much to mortgages.

I will tell you what to do. If it seems too good to be true, email me and ask me. I will undress the facts clearly and bluntly. You can count on that. Larry Cragun

This article is prompted by three radio advertisements by mortgage lenders that made me furious. Remember I have worked with hundreds, even employed over 100 at a time.

The refinace hey day is over. These bloaks who made a killing and don’t want to go back to their previous jobs (singing and entertaining perhaps, perhaps comedy) are playing all kinds of tricks on consumers. Even some brokers that have an overhead and lived nice on refinances are in trouble.

So I find they have hit the radio waves and don’t be deceived. Here are snippets (Sorry for the plagiarism Bonnie Erickson of Real Estate Snippets) of what I heard on the way to the store.

1: I can give you a 1% fixed mortgage.

Liar Liar Liar. This is an ARM most of you would vomit over rather than take. That is unless you were tricked by this dupester.

2: I can give you a loan with no closing costs: I will even pay for your appraisal. There is no need or sense in paying closing costs with the other guys. This is a new plan we can provide you.

Liar Liar Deceiver and Liar

If you go no closing costs you pay a higher rate. It isn’t a new concept, it isn’t exclusive to any broker.

3: Rates are at an all time low.

They are not.

Please don’t respond to a radio advertisment. If you think you should refi check the average rates we post each thursday. This is a survey not an offer. I and other lenders post our rates each Wednesday. The composite is published as an average. It is only an indicator.
If it looks good to you, contact a local real estate agent for one to three lender referrals. This is your best opportunity for a good experience. In Washington State, and Nevada I am prepared to set you up with a great loan officer that works with real estate agents. Larry Cragun
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