MortgagesUndressed

This woman got in too deep. She should’t shop for loans either. For the same reason.

My wife Kathleen is as savvy as they come. In her interior design career she has skillfully managed the construction of many mansions. By the way, to her clients, thanks if you are reading this. She was pleased to serve you.

Yet, I would not want her to weather the hazards of loan shopping in this treacherous part of the business world. This photo triggered the reminder of just how badly a couple of single woman I knew were manhandled by their lender.

I don’t mean physically manhandled: the loan officer was a man, they were ripped off. Same thing in a way, one being a financial assault.

So women, be careful, get an expert real estate agents advice on a trustworthy lender, then have them give you feedback on your loan. Lar

This is about a different kind of limit, limit on how many times you will go through the application process; usually one time. Actually this was a mortgage division of a large out of state bank.

I was in training, the office would advertise real low rates for Sunday, that meant they had to put the rate in on Wednesday. People would call 5 days after we picked a rate, on Monday. We were instructed to take the application over the phone submit for approval and not talk rates if possible.

By Monday the rates had gone up, so we had to sell the new rate if we did talk rates.
The application questions and length of time on the phone, the thoroughness we went through wore the customer out. Forget the rate, they were ours.

I did this one time and refused to do it again.

The principle here applies to you however, you probably will tire of the process. So don’t go into the application process until you are sure of your lender decision. That is one reason we exist, to help educate you. We want you to pick the right lender, preferably one referred by an agent. We want you to be familiar with all parts of the process through the things we teach and the stories we tell.

Too many companies and loan officers know too many tricks to get you into a higher rate. A higher rate gives them more profit. The lenders we want you to find are those in for the long haul, who value the repeat business from the agent that referred you, that values you as a source of referrals and repeat business. As strange as it may seem, this is not the way some operate.

So todays lesson: don’t go into an application unless you are certain this is the lender. Larry Cragun

[url=http://blogyaz.com/mydakar/]buy cialis[/ur

I just deleted approximately 200 messages that looked like this above.

Understand you must speak a foreign language to get the full meaning. I will translate it for you. Larry Cragun

Oh The Tranlation: SPAM

The Option ARM fraud tri-fecta hit me today. First on the radio, second on a fax a relative sent me, and third a phone call I received. The radio add was clearly deceptive, the fax I will share some of with you, and the phone call full of hope and a prayer about a friends great offer. A loan officer friend. I hate this.

As I listened to the radio add I wanted to just throw up. No pictures here I promise. (I did think about it). Then my relative and the phone call seemed so hopeful and the offer so full of crap I wanted to send them all to jail. Why the government doesn’t address this false advertising I dont know. They should start by making an example of the big boys, the on line lead generators that lead with this 1% full of baloney product.

The heading: OLD TERMS and the current lender info

followed by their data and the heading:
INTEREST RATE: 1 %

Payment TYPE: FIXED

No one is going to give you a 1% fixed rate. NO ONE NO ONE NO ONE NO ONE NO ONE. GET IT!
For your tender review, here is part of the fax I received and some commentary.
Dear (My relative)

REDUCE YOUR MORTGAGE PAYMENT TO $772 PER MONTH.

(My relative) after carefully reviewing your original first mortgage loan amount of $(the amount) with America’s Wholesale lender, we have PRE-QUALIFIED you for a new mortgage payment of $772 per month. This is a fixed payment

Commentary: My relative thought it was her lender by the way the heading was organized. She loved the payment amount. It is not a fixed payment except through being a negative amortization loan. You pay $772 and the difference is added to your mortgage balance.

There are three more paragraphs of fluff suggesting they could take cash out and go have a spending party.

My new Friday Fantasy is that some day someone will write me and say they read my tirades and were saved.

From Borrow Smart Retire Rich by Kendall Todd. A firsthand experience. click here for the entire article.

mortgage.com to Buy Three Companies

For anyone digging back this far, this was the press release issued by mortgage.com around the purchase of three companies we built from 1989 to 1999, a 10 year span. One day I’ll take my mental diaries (or diahhreas) depending on your perspective, and share the whiplash that comes with selling your company into a public offering after 10 years of effort, then watching it fold into a black hole less than 12 months later. It was a wild ride, and the most expensive tuition one might pay for a life time of lessons.

The internet, especially with the advent of blogs, prolongs all we write or are written about. It makes us an open book. The lesson? Do a good job. Be competent. Keep your clients happy. Be honest. Watch what you write on line. (My wife is very concerned as I tend to tell people what is on my mind.) Click here and vote for the Reuters Article. Then read my upcoming open letter to Larry the loan officer.

Reuters:

WASHINGTON (Reuters) - In the Internet age, political blunders never die. They don’t even fade away.

Ask John Kerry.

The Democratic U.S. senator, who lost the presidential election in 2004 to President George W. Bush, drew Republican fire for saying college students could “get stuck in Iraq” if they didn’t study hard.

Kerry later apologized. He said it was a “botched joke” aimed at Bush, not at U.S. troops

I refer to it because it touches on something I have not. Reading it will explain why underwriters ask you for documentation. It explains why some mortgage companies go broke, and why some lending institutions are forced to merge. Click here for this great article. Larry Cragun

Here is a sample:

Dear God: Please don’t make me buy back mortgage loans I sold to Wall Street

Mortgage Blog News - Nearly $2 Trillion dollars of mortgage loans were sold to Wall Street investors as “mortgage backed securities” last year.

Many mortgage companies, particularly “sub-prime” mortgage companies are on their knees praying that they won’t have to buy back a good portion of those loans. When these loans are sold, there are buy back provisions for early default and “underwriting errors”.

With the run up in short term interest rates (most sub-prime mortgage loans are two year adjustable rate loans), the housing boom experiencing a “slow down”, and “stated income” mortgage loans beginning to crack, one begins to wonder who is holding their finger in the dyke. The pressure has got to be enormous by now.

Over and over I have emphasized, the best chance you have for a good mortgage experience is to use a lender your real estate agent has had experience with. An illustration of why I say this is a recent actual example.

A first time home buyer refused to use the Real Estate Agents recommended lender. He found something sinister in this. Instead, he went on line and found a lender using Google. It turns out this lender talks a good game, but is obviously a dope.

(Sorry, for the 60’s slang)

Against the request of the buyers agent, this Googled loan officer, in a hurry, ordered the appraisal before the inspection. The inspection caused the transaction to be cancelled, and now the slick talking Gooled lender is convincing the first time home buyer this is common practice.

Guess what? The buyer is paying for two appraisals now. Stupid! Not necessary! Not right!

Larry Cragun

A place I used to work has gone from 300 loan officers to 35.

When I worked there I was amazed how every time rates dropped the number of loan officers in the building grew, and as rates went up they dropped out.

That is one reason I pitch so hard to use loan officers referred by real estate agents. If a loan officer has built their practice on real estate sales transactions, real estate agents, they stay in the business in good times and slow times. To them, all times are good times.

This is important. Mortgage financing is a profession. Deal with a professional that has learned the business and has the support of real estate agents.
Larry Cragun

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