MortgagesUndressed

What do I call him…. he is 91 1/2?

What do I call him…. he had a heart attack a month ago.?

What do I call him…. he flirts with the nurses?

What do I call him… he went home for a week and drove his car?

What do I call him… he stopped for chinese food on the way home?

What do I call him… he is back in the hospitol again - still flirting with the nurses?

What do I call him… he is still talking marriage?
Serious marriage -

What do I call him?

DAD

I realized today just how much the implosion of the subprime world has affected our business. Everyone is running and hiding. Few are willing to take any chances. Things that used to be easy decisions are difficult. No one at the lender level is willing to take any chances. The days of getup and go have got up and went. It reminds me of a poem: How do I know my youth is all spent? My get up and go has got up and went.

This state of affairs has important implications for you the borrower. Expect no favors and no exceptions. Additionally you should go overboard to prove how worthy you are to borrow. Give no crap to anyone asking for anything, just do it and do it right.

If you are requested to give bank statements give copies of all pages front and back.

Do it fast. Do it thoroughly, Do it all. Otherwise your loan will drag out and no one will have any sympathy for your state.

No one is moving fast so you move fast to help compensate.

Larry Cragun

Enough of this renting crap. I am going out and buy a house.

Should you rent or own? Owning is my advice. I am sure that is your preference also. Don’t get discouraged if you are not there yet. But perhaps you should grow up intead of being discouraged.

Life has a way of sobering us up doesn’t it? The sub prime mortgage implosion took away options, where being patient is the new answer. Take note, patience is part of being an adult. All too few of us like being patient.

The past programs giving 100% loans if you had a 580 credit score was irresponsible. An industry with standards lost its way. So now you have to do business the old fashioned way: prove your income, have a credit score, maybe even put some money into the purchase. (Oh Shame)

Much of my career has been using FHA 3% down programs to purchase. This is probably your best option in the future. Back then I dealt with some who hadn’t grown up. Putting 3% down seemed impossible.

If you think you are mature enough to have someone loan you a few hundred thousand dollars be also mature enough to add some skin to the game.

When people said to me I can’t save 3% I wanted to send them to the corner for an hour. Of course you can. Sacrifice or time might be required.

The people who bought homes with a 580 score and 0 down were trading maturity for wanting their popsicle before lunch. Get your priorities straight. Are you a parent or a child? Act like it. Go save some money.

Pride might keep you from getting a second job. Fear might keep you from talking to a head hunter. Lazyness might play a role. Pride, fear, lazyness are qualities of the 12 grandchildren we have under 8 years old.

So the issue probably isn’t should you rent or own. The problem is are you a child really, instead of an adult.

Larry Cragun

PS: The photo is not of one of our grandchildren.

If you go out and buy a house without researching mortgages you may be doing just that.

Intro by Larry Cragun, Article by Teresa Boardman

I have taken some pretty hard stands these near 11 months agains banks. All of my comments have favored mortgage brokers.

In a conversation with Teresa Boardman about lenders I found a surprising difference of opinion.

I wanted what she said available here for you the consumer. Teresa relucantly provided this article. Thanks Teresa, and you aint no weenie. Lar

Mortgage Brokers Vs. Banks for home loans.

This post is my opinion based on my experiences as A Realtor/Broker in St. Paul, MN. This is not intended as an indictment of all mortgage brokers. There are wonderful mortgage bookers all over the country that I have the utmost respect for. Both the mortgage industry and the real estate industry are highly regulated on the state level, my experiences and those of my clients may not have meaning in other markets. Most of my experiences with the mortgage industry have been positive.

There are three lenders that I recommend when buyers ask for advice. These three lenders get rave reviews from my clients, have the utmost integrity and are wonderful to work with. Helpful, honest outside the box thinkers, who care about our clients and who always do the right thing. Two are loan officers with banks and one is a mortgage broker.

That said, in general I prefer to work with banks rather than mortgage brokers. The money for home loans comes from banks, even if the loan is handled by a brokerage. I believe that the banks I deal with have the best rates and they have more access to first time home buyer programs. My business has an affordable housing component in it as a business goal, these lenders are also involved in affordable housing initiatives.

I have not had any problems when dealing with USBank or Wells Fargo but I have had problems when dealing with some of the local mortgage brokers.

It is easy and inexpensive to get a license and go into business as a mortgage broker. We have too many of them and it is almost impossible to research them.

Here are some of the problems my clients and I have had when dealing with mortgages brokers:

1. Not being able to find them. When dealing with a bank we can find someone to help us if the loan officer is not available. As a listing agent I get a pre-approval letter from the buyers agent for an offer on one of my listings and it can take a business day before I can talk to anyone who can tell me if the letter and or the company are legitimate. As a buyers agent I want to know that my buyers are getting the best rates and are not borrowing more money than they can make payments on. How much money someone borrows is none of my business but if I can educate a borrower before it is too late they just might be spared some of the misery caused by a loan that is too risky or expensive.

2. The money not arriving in time for the closing. In Minnesota we close at the table, to accomplish that the money must be wired to the title companies trust account so that it can be disbursed at the closing.

3. Surprises at the closing, in one case $3000.00 dollars in fees that were never mentioned on the good faith estimate but showed up on the settlement statement. The surprise came on my 26th wedding anniversary so instead of enjoying time with my spouse I spent the evening on the phone with an upset buyer and confused closer. After hours of negotiations I was able to get the lender to remove or reduce most of the charges.

4. Higher loan costs, the interest rate may look lower. An examination of good faith estimates and settlement statements often reveals that the total cost to the borrower is not lower. Do mortgage brokers have the the same access to loan programs as the banks own lenders? I have been told that they do not.

5. Lack of access to some of the local city and county first time home buyer programs.

6. Failure to attend the closing. A closing mostly involves signing loan documents, the loan officer or someone from the bank always shows up. I have never had a mortgage broker show up at a closing.

7. Banks appear to supervise their loan offices and have some quality control built into the hiring process. A full time loan officer with a bank has more credibility than a part-time mortgage broker who also owns and operates the local pizzeria.

I am not an expert on mortgages, I sell real estate. Each December I take a class that gives me an overview and update of various loan products and how they work, a legal update and an overview of local mortgage trends. I rely on people I know and trust in the mortgage industry to answer my questions and those of my clients.

The homes we purchase, and loan products we choose have an impact on our long term financial health. Each time one of my buyers gives a mortgage I am struck by the enormity of it all.

The one mortgage broker that I refer business to has 12 years experience in the industry. Also a person with a lot of integrity, he has more experience working with investors, than either of the loan officers. I believe that the investors I work with will come out ahead when they use his services.

The owners of Keller Williams Integrity Realty also have ownership interests in a mortgage company. In general I avoid recommending any company that is financially tied to the brokerage I am affiliated with, an almost unheard of stance in our industry. Many have tried to change my mind about “affiliated” services but no one has made any progress.

Teresa Boardman

Off of Tinas Blog: Home-
We re-fied the house and we are saving ourselves a small sack of gold every month now. It is a huge relief for both Aaron and I. Adjustable mortgages are EVIL!

The lesson: Equity is a big deal. The suggestion: Obtain an amortization chart - look at how much it would take to make an extra principal payment. Make as many extra principle payments as you can each month. Place this as a priority.

Equity is good.

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

In mortgage lending you hear I am an honest low cost lender. Or you hear all sorts of claims and buzz words. They imply “I wear the low cost hat”. I am not a cat I am a frog. You can trust me.

The truth isn’t in the hat you wear, it is in the paperwork. What you are really comes out eventually.

You the borrower must be responsible to see past the disguise. Take every precaution you can.

I write this with a little bit of fury in my mind. A few months ago I referred a follower to a trusted loan officer I knew in another state. The loan officer called me and said she was amazed, that she couldn’t match the offer of a local competitor. So our friend went with the loan officer in the frog hat.

A few months have gone by and this member of this faithful 25 has some money to reduce the mortgage balance. This time she took my advice and gave the loan officer I recommended a full interview.

Guess, what? The Cat, maybe I should say rat, that had the great rates sold our client an ARM. Now we see why the rate was unmatchable. An adjustable rate vs a 30 year fixed is not a comparison. It is a different product.

Guess what else, you the client are responsible to read what you sign. There is more than one cat to blame here. Larry Cragun.

I was asked this by someone who thought he wanted to make the big bucks. I told him to not go into the business.

I have been asked this by many real estate agents. I have actually trained a few of them.

I was asked this by someone who thought they would be good at it. I encouraged him, but not the way he expected.

Here is a list of thoughts I have, which I may expand later.

Consumers, just know, it is easy to say you are a loan officer, it is easier to be a refinance loan officer than one who handles purchase transactions.

1- It is easier for a loan officer to become a real estate agent than a real estate agent to become a loan officer.

2- To those who think they would be good at this business, start with working for a bank. The training will be more concentrated as banks are managed better. That doesn’t necessarily mean that a bank is a better choice for you the client.

3- It helps to have a mentor. I mentored my grandaughter. She had the brainpower and the get up and go to become good. We worked on transactions jointly until she was comfortable, then she just came to me with questions, then she only came with issues, and now she is on her own. It isn’t easy to find a mentor as it takes from the mentors day.

4- Go into it for reasons other than how much money you can make.

5- Understand that their are peaks and valleys, be able to sustain yourself in those valleys, save money in the peaks.

6- Go get a finance degree in college first if you can.

7- Love numbers and math. I was always the guy who kept the bowling averages and baseball statistics on every team I played on or coached, in every league I bowled in. WHooee, I was in the all college bowling tournament. Who else do you know that lettered in college, in bowling? Larry Cragun

Things are rapidly changing for home borrowers. Click Here for an article we posted on realestateundressed.com