Things to look for in a mortgage professional.

First off, the days of internet mortgages and 1-800-HOLD-FOREVER are long gone.

I can honestly remember screaming to the heavens in frustration every single time I saw a Buyer utilize a cut rate, working from their basement, inexperienced Loan Officer simply because their website looked cool or they were advertising a really low interest rate. I just wanted to yank the Buyer up by the scruff of the neck, shake them, and ask them why they were trusting all of their personal & private data to someone they never even met? As I survey the battlefield, and most of those guys are now out of business, I feel vindicated that I was correct, but also saddened at the mess they left behind. If you weren’t referred to your Mortgage Professional by family/friend, or they cannot offer you a face to face meeting I recommend running for the hills.

I can honestly remember screaming to the heavens in frustration every single time I saw a Buyer utilize a cut rate, working from their basement, inexperienced Loan Officer simply because their website looked cool or they were advertising a really low interest rate. I just wanted to yank the Buyer up by the scruff of the neck, shake them, and ask them why they were trusting all of their personal & private data to someone they never even met? As I survey the battlefield, and most of those guys are now out of business, I feel vindicated that I was correct, but also saddened at the mess they left behind. If you weren’t referred to your Mortgage Professional by family/friend, or they cannot offer you a face to face meeting I recommend running for the hills.

Check their credentials!

There is a HUGE difference between a Licensed Lender and a Licensed Realtor. Do you get your teeth worked on by the same person that changes the oil in your car? Why would anyone let themselves get talked into using a Realtor for home loans? The Real Estate course has nothing to do with loans, and no where on the Real Estate Exam does a loan question appear. I admit that it doesn’t take a rocket scientist to amortize over a 30 year period, but I’ll bet you could pull the top 50 Realtor into a room, ask them for an honest answer, and every single one of them would say that a Professional Realtor should not be making loans because of the intricate details and how quickly a Buyer can be misrepresented if the mortgage professional is not 100% on their game. Look, my Plumber knows how to unclog a drain, but darned if I’d use him instead of a Proctologist simply because he can save me a couple of bucks.

FHA and VA certification are a must.

Although FHA and VA require the Mortgage Professional to hold the proper certification to write FHA and VA loans, some have found “loopholes” in the system and are submitting their Buyers’ loans to “third party” vendors. All they do is make an adjustment to the job title, restructure payroll, and presto – they’re rocking and rolling. What this means to you is that the person you’ve chosen to represent you, that would later be held responsible in the event of mistakes, actually doesn’t represent you at all and you’ll be left all alone to plead your case if the law was broken. It’s actually rather simple, the FHA and VA both issue a certificate to us as proof that we’re approved to handle that type of loan. Business plans and audits are the way of life when funding these loans, while fraud is not allowed in any form.

Important Mortgage News.

Mortgage interest rates were mixed this past week, 30 year mortgage rates stayed above 5.00 percent this week and are slightly higher than last week’s average mortgage rate.

Fifteen year mortgage rates were lower this week over last and 10 year U.S. Treasury yields rose during the holiday shortened week, as of last Friday yields were at 3.43 percent.

Current mortgage rates are expected to remain low for now but will start heading up when strong economic data is reported by the government and inflation becomes a real concern. Another factor that will drive mortgage rates higher is the completion of the Fed program to buy $1.25 billion of mortgage-backed securities. The Fed has already started slowing down the purchases and will complete the program in the first quarter of 2009.

The current mortgage market.

There seems to be this misconception, mainly propagated by the mainstream media, that this is a “Buyers Market” which couldn’t be any more incorrect. You see, a Buyer’s Market actually refers to a trend where there is much more inventory on the market than there are Buyers to purchase them. In effect, Sellers actually start competing for qualified Buyers and typically try and attract those Buyers thru incentives and/or price reductions. But wait, this gets much more interesting because we’re not actually in a Seller’s Market either. A Seller’s Market describes a market where there are so many Buyers searching for homes that inventory shrinks and Buyers start competing for what’s left.

What we are currently in is what one could only refer to as an Auction. There are tons of properties on the market for sale, Sellers/Banks are demanding top dollar or refusing to sell, so the Buyers are only left with the option of being the highest bidder or losing out. Certainly this would resemble the market during the big refi and purchase boom from 2000 thru 2005, but that market was fueled more by aggressive Adjustable Rate Mortgages and Negative Amortization Loans, which allowed the Buyer to qualify for higher and higher Purchase Prices, while obtaining smaller and smaller interest rates thru these risky loans.

Our market today has none of these options, the 30 Year Fixed reigns supreme, and the typical Buyer quickly finds their Maximum Purchase Power and is then in for the roller coaster ride of their life. We caution our Buyers to develop thick skin, don’t get hung up on one property, and develop the patience of Job because they are truly going to have to fight tooth and nail to successfully out maneuver the competition. Lions, and Tigers, and Bears – Oh my!

Casa Financial Is Back.

Brett Mills and Casa Financial are doing some amazing things in San Diego. Casa Financial (www.cfsloans.biz) is a specialized lending firm that partners with current and ex-military, along with the general public to provide top notch service when looking for a home loan. In these times of question Brett and Casa financial have remained a staple of the San Diego mortgage community for years and have nothing but rave reviews from their clients. Brett insists that each loan is reviewed by him before going to the bank. “I just won’t write a bad loan, I have been in the business long enough and plan to stay”, says Mills. Casa Financial was founded by Brett and remains one of the true diamonds in the rough.
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“We lost our son, who we love dearly, last year and had to go dark for a period of time to clear our heads. We are back now and making sure that he sees us daily doing the good things we do. We want to continue to make him proud.” states Mills, an avid family man and pillar of integrity. This small and growing firm was once a powerhouse in the mortgage marketbefore tragedy struck. Casa Financial ensures that each and every person that walks through the door has the same pricing as the last, a rarity in this market. They have not written one bad loan and still thrived as one of the top producing mortgage firms during the boom. Mills, who served 13 years in the Navy, booked the most submarine time in the military during his time in the military. He shows a level of dedication to his business that is only bested by his dedication to his family and this bleeds out into the file of every client Casa Financial serves.
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The Market.

Mortgage interest rates were mixed this past week, 30 year mortgage rates stayed above 5.00 percent this week and are slightly higher than last week’s average mortgage rate.

Fifteen year mortgage rates were lower this week over last and 10 year U.S. Treasury yields rose during the holiday shortened week, as of last Friday yields were at 3.43 percent.

Current mortgage rates are expected to remain low for now but will start heading up when strong economic data is reported by the government and inflation becomes a real concern. Another factor that will drive mortgage rates higher is the completion of the Fed program to buy $1.25 billion of mortgage-backed securities. The Fed has already started slowing down the purchases and will complete the program in the first quarter of 2009.

Why People Get In Trouble With Their Mortgage.

They put their blinders on. So many Buyers watch the ads on TV, or listen to the commercials on the radio, and actually 100% believe what they are seeing and/or hearing. I promise you that no matter how many times you see that one commercial where they promise you that their 1% interest rate is fixed for 30 years, once you get to the signing table and they slide that 3” thick stack of papers in front of you, what they told you is not what they’re getting ready to sell you.

They allow themselves to be convinced that saving a nickel in fees is worth the risk of working with an unknown entity. The convicted felon working as a Telemarketer from his basement trying to sell you a home loan is NEVER, EVER, EVER going to be able to provide you with personal face to face service, the comfort and security of knowing your personal information is safe and secure, the knowledge that your qualification criteria is being perfectly matched with the Lender, expertise thru years of required schooling and training, years of experience, moral conduct, and down right good ole fashioned hard work. “I can do this myself.”I cannot begin to count how many times I’ve educated a Buyer, walked them thru the entire process, only to see them convince themselves that they could now gallop off into the sunset and negotiate the largest loan that they will ever take in their lives, never stopping to review anything other than the rate. Suddenly, a couple of years later that same Buyer will call me up and ask if they can pop in for a moment of time. I of course being a fine upstanding member of the community looking out for my fellow man will graciously invite them to stop by whenever convenient.

They’ll tell me how they were told it was a fixed rate mortgage, how the interest rate would never increase, that their property taxes were included in their payment and the best one of all – that there was no prepayment penalty on the loan. After a quick review, what we discover is that the Buyer left us for a Bank, Credit Union, or Direct lender who’s Loan Officer’s are paid to do one thing and one thing only – sell the highest rate, with the highest payment on the loan that brings that institution the most profit over the long haul. I explain to this heart broken Buyer that if they’d stayed with us we would have looked out for them and avoided all of this because we do not work for the Bank, Credit Union, or Direct Lender. In fact, those institution’s profit margins are not of our concern because we don’t make our money with them.

I kindly remind the Buyer of the same thing I reminded them before, that as a Broker I only work for the Buyer and am held to full disclosure – no fine print.