Monday, December 1, 2008

For Sale By Owner Program

An active for sale by owner program can really help you find good mortgage leads and it is a real value to the home seller. Actually, if you know your stuff it can really get the homeowner off to a great start and amplify his chances of selling his home by himself. You can't get more Win - Win than that.

Most programs consist of a fsbo manual with good information about advertising, appraisals, preparing the home, home warranty, and most importantly a guest register or sign in log. The manual will usually also contain a blank sales contract and real estate disclosures required for that state.

Your most important investment is the time you spend with the home seller going through the manual and teaching them about the contract and disclosures.

During that time you should also explain about the different loan types and the ramifications to the seller. You know, like VA paper work and inspections or tricky FHA appraisal stuff. There is also a good side to VA and FHA an that is that the seller can help the buyer get into the home with seller concessions, paying closing costs and in helping with the down payment.

You can teach them that is it better to pay closing costs and/or the down payment than to lower the selling price. This approach will cost them less and will actually find more qualified buyers. If you don't understand this concept and the numbers you need to view it at for sale by owner advantage.

It is very important to put these options in the advertising. It will help to bring out the serious qualified buyers. These are the buyers that will sign the guest register, ... and you will follow up on to pre-qualify for the home seller.

You know, I say this all the time and maybe you have heard it before but it is so absolutely true that I have to keep saying it. Fifty buyers may view this home, ... only one will buy it. The other 49 will still need financing. If you can't turn some of these potential home buyers into future clients, you are in the wrong line of work. I really mean this.

I put together a program for a company I used to work for. This program was enormously successful.

I have that manual in pdf format that you may download free. Take a look at it, give it some though, and think about how you would adjust it to fit your level of commitment.

The pdf format manual is free. If you like it and want the MS Word files so you can quickly modify it for your letter head or what ever, we do charge a small fee for those files. But hey, this pdf file will give you lots of ideas and you can develop your own program. FSBO Programs really work if you commit to working them.

Download the pdf for sale by owner manual and give it some thought.

I'll be happy to coach you on your program or answer any questions. Good Luck!

Sunday, November 16, 2008

Converting Existing Homes To Rentals

All of the new mortgage programs and guidelines have got everyone feeling uneasy. Underwriters are leaning conservative and over document. Consumers are just baffled at some of the new documentation requirements. Here is a question I just received from a consumer that illustrates just that.

My question has to do with the Underwriter of a Home mortgage loan. This will be our second home. The mortgage is a couple of days from closing and the underwriter is now asking for a list of items before final approval. The items requested are not items at all, they're questions such as: Must provide an acceptable motivation letter stating why we would move from a higher price house to a lower price home? and must explain what we are going to do with the first home? (these questions really seem out of line to me for the simple fact that we were already pre-approved and frankly what bearing does it have on their decision). The last statement from this item list is the one that made me feel like i am being walked on and lead by the noise: Must be reasonable and the underwriter must be satisfied that the move makes sense for these borrowers. Can these people really play god like this? Any advice/input would be great.

I have a lot of empathy for these people and I'm sure if I were in their place I would feel that this information is none of the underwriters business too.

The guidelines have tightened up and underwriters are overwhelmed with all the new documentation requirements. These people are having to deal with the Mortgagee Letter that came out in September of 2008. It's kind of scary. You can read the letter at this link:

see ya.

Monday, October 27, 2008

Financial Crisis - Mortgage Failure

We have been in the mortgage and financial industry for a long time. We are asked, everywhere we go, "What really caused this financial crisis?".

We stumbled across this video the other day and thought we should share it with you because it covers the cause very well. Our intent is not to offend, but to help you understand the "how we got here" question.

This video moves very fast but it covers the facts on how we got in this financial mess. You may not like what you will see here, ... but it is all true. You can google it.

So ... watch it twice. Send it to your friends.

There are so many lies out there how can anyone know what is real.

This is real.

Jerry and I are in the mortgage business and we have watched it unfold.

If for some reason this video does not play here, you can watch it at:

Wishing you the best.


Tuesday, October 14, 2008

Non-Purchasing Spouse - FHA

The mortgage guidelines on a FHA loan regarding a non-purchasing spouse are ambiguous and difficult to understand. I get questions on this topic month after month.

There are many reasons why a spouse would/should be left off the mortgage application. One is bad credit. Another reason would be income. The primary borrower is determined by the largest income. If that person has poor credit the only way around it is to leave them off the application.

However, this could be a catch 22 if the other spouse does not have enough income to pay all the debt. Is the non-purchasing spouse's credit examined or used in the DTI calculation? The answer is no and yes.

Does the non-purchasing spouse go on the title? The answer is yes, no, maybe. Confusing??

The answers lie around the state the property is in and if it is a community property state. That helps a little but it is still confusing. Remember, confusing or not, right or wrong, you always follow what the underwriter or closing instructions determine.

You can take a look at the actual guideline wording at FHA Guidelines.

Thursday, October 9, 2008

Hope for Homeowners - H4H - Good? - Bad? - Ugly!

Hope for homeowners! I can't believe they picked that title because it is so deceiving! In fact, I would say it is just the opposite.

The homeowner who goes for this is totally screwed because he gives up all future appreciation. (he may as well rent) I guess what he gets out of it is, ... is, ... well, I guess he doesn't have to move. I would like to say that there is no foreclosure on his credit report but my gut says that this product will show on his report and he will be dinged for it. (Any bets here?)

Let me clarify future appreciation. This program creates artificial equity for the new mortgage lender at the expense of the old mortgage lender which must take a 10% bigger loss and accept the new loan payoff as paid in full.

This new loan essentially "mortgages" the new/created 10% equity and any (?) future equity to the government and to any subordinate lien holder that agreed to release their lien. If he stays in the home for the rest of his life, or at least 7 yrs he will get the benefit of appreciation after that point. Most people move every 4 to 7 years. Do the math.

OK, but look at the math this way. If the homeowner had a 2nd mortgage for $30,000 and gave up their lien for a promise of future equity from the new loan, how long would it take for the home to appreciate $30,000?

Oh, and this lender really only gets a "portion of the equity". What does that mean?? I haven't found the fine details yet. Understandably hidden if they even exist at this stage!

So, ... the original lender takes the major hit here because he not only takes the loss from the equity in the declining market, he also takes an additional 10% loss because he has to give it to the new lender. Remember, the new loan is only 90% LTV. And, he is suppose to smile about this.

The home owner is screwed but doesn't have to move. The old lender gets the royal work over but maybe that is justice although I think the blame is placed in the wrong place here as this lender was only following government direction!

The BIG looser is the American people because all our brilliant elected officials have done is spread the loss into the future to cover their ass and given the government "owner rights" to our equity into the future. The government is now in our nickers!!!

WE LET THIS HAPPEN!! Wow, I am really up set about this stuff.

I have added to our site the underwriting guidelines to the Hope for homeowners program. Please go and review this information and then please comment here and change my mind about the smoke and mirrors the politician are using to destroy our Independence and freedom. Please, tell me that I am wrong.

We have also put up the guidelines for the FHA Secure program. I wasn't a big fan but when I compare it to the H4H it is a great program. Few will qualify for it but at least it doesn't sell our children down the road! Review it here: FHA Secure - Rescue Program

Please come back and comment.


Thursday, October 2, 2008

Emergency Economic Stabilization Act of 2008 - HR 1424

I don't know how you feel about all this economic bail out stuff but it really gets me angry. I'm not going to share my opinion because it doesn't matter. However, I think everyone should read the bill and develop their own opinion based on facts, not media hype.

I did some research and have links below of the pdf files so you can read it for yourself, or download it and read it later. I would like to say that in my opinion all bills going up for vote should be available to the public BEFORE they vote. Unfortunately, that is not the case. Maybe we can change that.

IF you want to just download the files to read later you only have to right click with your mouse and select "save target as", then tell it where you want it saved on your computer. I usually just put the stuff on my desktop.

This link is to the pdf file on HR 3997, the Emergency Economic Stabilization Act of 2008 that was voted on in the house of representative on the 28th. This is the original version. HR 3997

This is HR 1424 which is the revised version of the bill (HR 3997) and was actually passed. HR 1424

This link is a one page summary of the Act. One Page Summary

This link is for the section by section summary. It is much better than the one page summary. section by section summary

This stuff is worth the read. Post your thoughts.

Wednesday, October 1, 2008

Economic crisis - we will survive

What actually created this economic crisis? I guess it depends on who you ask. I will say though that I'm really tired of all the spin everyone is putting on it.

The facts are in our history and you can trace it back or chart it if you would like. Does it matter which political party contributed to this disaster? I don't think it really matters as far as the past is concerned but you need to understand the party platforms so we get the right people in office to fix it.

Here is a short but very fast moving account of how we got here. It moves pretty fast, I actually had to watch it twice.

Before you watch it I want you to understand that I am not pushing politics here. It's a good video because of the facts. I am an independent and don't support either party but that is a different subject.

Incase the video has been taken down, you can watch it here on YouTube.

Or, you should be able to view it here on this blog.

My personal opinion is that we should not have a Bail Out. Let the pieces fall and it will clean out all the bad guys.

I think a lot of "how bad it will be" is hype too. Do I have any facts to base that on? Just my gut because they are not giving us any real information so we can make an intelligent decision. You know about the mushrooms, right?

Thursday, September 18, 2008

Mortgage Melt Down - Who's Fault?

The Real Culprits In This Meltdown from Investor's Business Daily

Tuesday, September 16, 2008

FHA Gift Funds - HR 6694 - New Hope

I'm sure everyone is aware that on Oct 1st, HR 3221 will put an end to seller funded gifts for a buyers down payment on an FHA mortgage. The gifts are generally channeled through Nehemiah or Ameri-dream. There are strong arguments on both sides of this issue and I won't bore you by going into them here.

I was about to update my websites when I ran across an article on Congress weighs reprieve for seller-funded gifts. HR 6694 would allow builders to continue providing down payment assistance.

I'm not sure how I feel about this yet but I will say the proposal does add more control or safe guards if you will, for the program. HR 6694 will allow borrowers with credit scores of 680 or more to use seller-funded down payments. A credit score of 620 to 680, if using down payment assistance would pay higher insurance premiums.

Borrowers with scores lower than 620 will not be allowed to use these gift funds until sometime in 2009 if HUD wants to expand the program. The issue here is FHA's insurance requiring taxpayer subsidies. The article goes into more detail so you should go read it.

I do like the controls they are trying to apply. I would do one more thing if I had a voice. I would make these gifts direct to the borrowers at closing and eliminate channeling it through Nehemiah or other such organizations. These organizations charge a large fee which helps to inflate the loan amount. Put it in the guidelines and eliminate the unnecessary middle man.

Home buyers with good credit need access to mortgages with no down payments. If HR 6694 does not go through median income families do have another choice that many people don't know exist. That option is the 100% LTV Rural Housing Loans. It is a very good loan and easy to qualify for. Go to this website and review the benefits and guidelines. 100% housing loans.

Monday, September 15, 2008

Zero Down Payment Mortgage

100% financing is still available in the mortgage market. I know, you listen to all the financial doom and gloom from the media and you would think every lender just locked their doors and went home. It's not a good situation but it is not as bad as the media wants you to think.

Remember, it is also an election year and every election year, both political parties talk about how bad the economy is until we believe them. Then one is elected and they save the day, ... and the economy. Don't ya just love it!!

Here is a news flash. People are still buying homes. Yes, mortgages are available and everyone should realize that this is the best time to invest, or purchase a home. (When the price is low.) Have you ever heard the term "A Buyers Market"? That is what we have here.

History shows that Real Estate and our economy runs in cycles. Back in the late 70's and 80's it was a 4-5 year cycle. You could graph it. Then, when the sub-prime loans were forced on lenders (early to mid 90's) by government regulation the cycle changed. They became longer and were more intense until it all caught up with us and here we are, like it or not.

I don't like it either but more than that I am tired of all the finger pointing and blaming, and dreading, and media hype. I don't believe a "bail out" is the answer but obviously, it is not my choice or yours, or we the people's choice. Our elected officials will make the decision and base it on "no stronger ground" than what you and I base our own opinion on.

Alright all ready! So do it, what ever it is, so We The People can get over it and move on. We have been through worse times and we will survive and prosper. I think it is in the DNA of the USA. (sorry, that was really bad) We survive in spite of the people we have elected to office.

If you must have 100 Percent financing it is available, ... just not in the form of previous no-doc, no-verification sub-prime loans. You have several options. FHA, VA, Rural Development, or special products based on perfect credit and stability. The USDA Rural Development product is one that few remember or know about.

USDA Rural Development has two programs: Direct and Guarantee. Their Direct program is a mortgage provided directly though the rural development office and your income can only be 80% of the median income for that area.

The Guarantee program on the other hand is provided by USDA approved lenders and Broker originators. It is a guarantee program, there is no subsidy or recapture, and the income restrictions allow up to 115% of the median income after special adjustments.

This is a 100% LTV mortgage based on the APPRAISED value, not the purchase price. The credit guidelines are very flexible and the guidelines have no minimum buyer commitment and no maximum on seller concessions. Note: some lender policies may be stricter here and USDA will always respect the lenders prerogative.

OK, so let all of us get over the failure of our market, roll up our sleeves and move on to a brighter future. Remember, NOW is the best time to purchase, during a buyers market!

You can read more about the guidelines for the rural housing mortgage at: zero down payment

Wednesday, August 27, 2008

FHA Rescue Program - FHA Secure

The Housing Recovery Act of 2008, H.R. 3221 has the consumer and mortgage professional in a state of total confusion. This recovery act is suppose to be the answer for all the wrongs in the mortgage industry. It is so over hyped and misunderstood. My personal opinion is that it is a total boondoggle put together by a bunch of politicians to further their own agenda or make themselves out to be hero's, or to get their names in the headlines.

I get questions every day like the following: "I have a $40,000 tax lien on my home, can I get the FHA Rescue program??"

This individual was actually referring to the FHA Secure Program which was available in September of 2007 and will terminate December 31, 2008. (Mortgagee Letter 2007-11)

This is a good program but it too is overstated and misunderstood. FHA Secure does NOT modify or waive FHA underwriting guidelines and requirements. For a better understanding of this program you should read the mortgagee letter here.



Tuesday, August 12, 2008

102% LTV Government Guarantee Mortgage

I just came from a training class on a mortgage product I was totally unaware of. It is the USDA Rural Development Loan. Wow, those of you that follow my blog know that I am an advocate for the FHA Mortgage. It is a great loan and always has been.

But this loan product I have to say is better than the FHA program. The USDA Rural Development program is focused right on median income families. Here are some of the highlights:

  • Funding up to 100% of the APPRAISED Value, not purchase price, or 102% if financing the 2% guarantee fee.
  • There is no private mortgage insurance. (this is a big deal)
  • Purchase loans only
  • Flexible credit guidelines and income ratios
  • There are income and property location restrictions.
  • no reserves required
  • no maximum seller concessions or gifts

Income restrictions mean if you make too much money you can't have one of these loans. Yes there is a debt ratio standard and that is 29/41 or if the home was built to 2000 energy code that can go to 31/43.

Property restrictions are based on location. This is a rural development program so as you can imagine, homes in large cities don't qualify.

The credit guidelines flexibility is totally unreal. If you have a credit score higher than 620, trade line information is irrelevant and not considered. Yes, that means late pays, collections and judgements. Bankruptcy and foreclosures don't have a timeline if there is a substantial reason.

Another great thing about this loan is that it is not an FHA loan and the lender does not have to be HUD approved. That means a lot of independent brokers now have a terrific loan product, better than an FHA product, they can offer to their customers.

I am really excited about this loan product because after all the mortgage crisis fall out there just are not many options for lower income families. This is a Great program and unless you are a total dead-beat you can still get into a home. The funny thing is this is such a great loan that the majority of home buyers actually have credit scores higher than 620. It's their best option and the interest rates are low!

Oh, these loans are only 30 year fixed rate. This is a hoot, I love it. If you have any questions about it send an email or ask in a comment.

Oh, I almost forgot. If you live in the state of GA there is a lender that specializes in this loan. I recommend you contact Peach State Mortgage for your USDA mortgage. This program is nation wide so contact me and I'll turn you on to the USDA office nearest you.



Thursday, August 7, 2008

New Housing Law HR-3221 VA impact

The new housing recover act that was signed by President Bush is just jam packed with all kinds of great stuff. Well, maybe not all of it is so great but indeed some of it I was unaware of. I had no idea it made changes to some of the Veteran issues.

I'll be posting more about the other issues in the coming days but today is just about the Veterans Administration Changes. I think these are all good!

  • It increases VA home loan limit for high cost housing areas

  • It increases the time a Lender must wait before beginning foreclosure proceeding from three months to nine months after a service member returns from service AND gives returning soldiers one year relief from an increase in their mortgage interest rate.

  • The act expands eligibility and increases the amount for special adapted housing benefits for the disabled. This is about money paid by the VA to help Vets make structural changes to their home to accommodate their disability.

  • It also requires the Department of Defense to put together a counseling program for veterans and service members facing financial difficulties. It also establishes a moving benefit to service members who are forced to move out because their RENTAL housing was foreclosed on.

YEA!! I can really identify with the last bullet. This actually happened to my son. He was renting a lovely home in San Diego. He went to sea for 6 months. While he was at sea the house was foreclosed on and he was, ... up that well know creek. He lost his last month rent, security deposit and 50% of his household goods due to theft. When he got home, there was no home. He didn't even know where his stuff was.

This just happened in June of 2008. The stress he went through was unbelievable and he still has not recovered financially. I wonder if this benefit is retroactive and if so, to when?

He is back at sea again and I pray the home he is in now will be there when he gets back.



Monday, August 4, 2008

FHA Changes for 2008

The Housing and Economic Recovery Act of 2008 was signed by President Bush on July 30th but many people in the industry don't understand just what the changes are and how they will be impacted by them.

If those of us in the industry are confused just think how the consumer feels. Part of the problem is that there is so much information and it is hard to research because it is contained in many "ACTS" that were folded into the final ACT. Are you confused yet?

It may be the final ACT that means curtains for many of us. Sorry, that was really bad!

I have put together a page that covers what I have been able to unravel to this point. You'll find it here at Housing Recovery Act. I am still researching so that page will be updated as time goes by.

Here are some of the FHA changes and when they become effective:

  • Minimum down payment has increased to 3.5%. effective Oct. 1, 2008
  • Prohibits down payment assistance that is financed by the seller. (Nehemiah etc..) Oct. 1, 08
  • Places a 12 month hold on HUD's implementation of risk-based premiums.

There are many other issues so visit Housing Recovery Act.

Good Luck

Monday, July 28, 2008

Bush Ready To Sign Mortgage Bailout

An article titled 'Homeowner Rescue Awaits President Bush's Signature' written by Julie Davis, an Associated Press Writer, covers the mortgage bail out better than most articles I have read.

WASHINGTON (AP) -- Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations. Read the article here

I'm not familiar with Julie Davis or past articles by her but this one is really on target.

The foreclosure rescue program has some good stuff and some not so good stuff.
  • It includes $3.9 billion in funds to lenders (that caused the problem!) to purchase and fix up foreclosures so neighborhoods would not be dragged down in value. With this funding, won't they be more likely to foreclose than to work with the homeowner?
  • $180 million for pre-foreclosure counseling
  • The Federal Reserve will oversee Fannie Mae and Freddie Mac
  • $15 billion in tax cuts and tax credits for first time home buyers
  • $800 increase to the limits set on national debt

There are other issues with the program, one of which is that the tax payers will be the ones paying for Fannie and Freddie bail out. This is just wrong in my opinion. I don't think they should be bail out at all or by any means.

Here is another quote from the article and I include it because it cannot be said better:

Conservative Republicans were vehemently opposed to the bill, particularly
the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy
lavish profits in good times and wield their outsized political clout to resist
regulation while depending on the government to bail them out should they

Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats refused
to allow him a vote on a proposal to ban the companies from lobbying or making
political donations to lawmakers.

"We can't have the people who are supposed to watch over these
organizations getting money from these organizations," DeMint said. "At least if
we're going to ask the American taxpayer to be on the hook for billions,
possibly trillions of dollars, let's stop this."

You should really read entire the article. I have the Foreclosure Rescue Program in pdf format if you would like a copy of it. Just send an email to and I'll send you the file.



Wednesday, July 23, 2008

The Credit Crisis Explained

I found and article posted on that totally pissed me off. Sorry for being so blunt but there really is no other way to to express how I felt. It was an article in cartoon format that attempts to explain the mortgage crisis in layman's terms.

This cartoon actually explains it very well except for the first entries blaming Mortgage Brokers for making Bad loans to people that didn't qualify. This is so incredibly wrong, false, untrue, and a total misconception of how mortgage brokers operate.

The captions labeled "Mortgage Brokers" should have been labeled "Subprime Lenders, lenders, or Fannie Mae and Freddie Mac"! Let it be know to all ... that mortgage brokers do not determine or set underwriting guidelines or loan qualification requirements. The guidelines or qualification requirements or lack there of are set by the lender or investor!!

The Mortgage Broker is obligated and required to follow those rules and they do not have an option to deviate from them!! HELLO ... !! In today's market crisis the independent mortgage broker is as much a victim as the consumer.

Yes, a few dirt bag Brokers, lenders, and investors may have committed fraud, which is falsifying documents and misrepresenting products, but that is not what this cartoon is about. Fraud is found in every industry that involves man. Fraud is not what created the mortgage crisis.

In all fairness I might add that perhaps the author of this article is not familiar with the role of a mortgage broker in the united states.

So, take a look to see a good explanation of the credit crisis. Just remember it's not the mortgage broker, it's the lenders. The Credit Crisis Explained in Black and White.


Saturday, July 19, 2008

Underwriters Originating Loans - Good or Not So Good?

I received the following question from an underwriter. I do not know what mortgage lender she works for nor do I want to know.

I did not respond to her question for several reasons, the main one being I do not give legal advice. However, I do have an opinion and perhaps this is a good place to put it. Here is the question:

What, if any, are the ramifications to the Lender if the Lender requires the
mortgage underwriter to originate loans to walk in clients, then underwrite
and approve and/or deny those said loans? thank you...

Wow, that is a loaded question and if it is indeed a common practice me thinks it is an accident waiting to happen. I see that there are at least two ways to look at this.

An underwriter should be totally unbiased when underwriting a loan. That may be difficult if they also originated the loan and liked or disliked the borrower. It would take very strong character to not be influenced one way or the other.

On the other hand, as a person with years of management experience in balancing budget and controlling overhead and costs, I can see why the lender would need for employees to take on duel roles ... especially in today's market. Is it a conflict of interest? What do you think?

Are there legal ramifications? ... I don't have a clue!

Please, leave your opinion.


Thursday, July 17, 2008

Global Funding Crisis

I read an article on the that was titled: "US faces global funding crisis, warns Merrill Lynch". I personally found this article disturbing in that we, the US, have placed our financial stability in the hands of countries that in my opinion are not considered good allies and would like nothing more than to see us destroyed.

Here is a short quote from the article:

The US Treasury is running out of time before foreign patience snaps,
writes Ambrose Evans-Pritchard.

Merrill Lynch has warned that the United States could face a foreign
"financing crisis" within months as the full consequences of the Fannie Mae and
Freddie Mac mortgage debacle spread through the world.

The country depends on Asian, Russian and Middle Eastern investors to fund
much of its $700bn (£350bn) current account deficit, leaving it far more
vulnerable to a collapse of confidence than Japan in the early 1990s after the
Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a
similar retreat by foreign investors.

This was a very interesting article that every one should read. The comments were even more enlightening.


Wednesday, July 9, 2008

FHA Debt Ratio

I received the following question from a mortgage company yesterday. I'm sure many of you may have, or will encounter the same issue someday. I hope this helps.

To Whom It May Concern,

I've got a guy that I'm trying to get approved thru FHA, but I'm having an issue with his debt ratio since the underwriter is telling me that we have to count a child support payment against his ratios even though we've documented that the child turns 18 in less than 10 months and he'll no longer have to pay that obligation at that time.

Since it's less than 10 months my argument is that it shouldn't count against him. If I were trying to do a loan for the lady receiving the child support she wouldn't be allowed to use that as income since it won't continue for 3 years. The underwriter is
saying that the government counts this as a debt regardless of the amount of time left, which doesn't seem right to me.

According to the Child Support section in the credit guidelines on your website it looks like I'm correct. Can you please give me some clarification on who is right here and if it's me if you could provide some type of documentation that I could show the underwriter I would greatly appreciate it.

Thanks for your help.

Pete, You are right to a point. Below is a link to the 4155 and an exert. Note the red...

Good Luck page II-51


2-11 TYPES OF LIABILITIES. The following are types of liabilities that must be considered in qualifying borrowers:

A. Recurring Obligations. The borrower's liabilities include all installment loans, revolving charge accounts, real estate loans, alimony, child support, and all other continuing obligations. In computing the debt-to-income ratios, the lender must include the monthly housing expense and all other additional recurring charges extending ten months or more, including payments on installment accounts, child support or separate maintenance payments, revolving accounts and alimony, etc. Debts lasting less than ten months must be counted if the amount of the debt affects the borrower's ability to make the mortgage payment during the months immediately after loan closing; this is especially true if the borrower will have limited or no cash assets after loan closing.



Wednesday, June 25, 2008

Housing Aid Bill Clears Key Senate hurdle

I found this article on the Drudge report titled: "$300b Mortgage rescue" and the article was from My Way. Sorry, the article does not provide the authors name or I would provide it here. You need to read it.

Here is a quote from the article:“The Senate voted 83-9 to speed up work on the $300 billion mortgage aid plan, putting it on track for a final vote as early as the end of the day”.

Chris Dodd, D-Conn., and friend of Angelo’s (the Banking committee chairman), calls it a gift on independence…. What a play on words! Independence means Sufficient income for comfortable self-support; a competence.

This is nothing more than election year idiocy to buy votes. This bill provides $300 billion in new, cheaper mortgages for distressed homeowners that don’t qualify for government insured, fixed rate loans.

They were financially risky when they obtained their mortgage and in a lot of cases have no investment in their home. Credit guidelines were relaxed and loan programs were created to make home ownership more affordable. Home ownership has been at an all time high and more than 95% of homeowners pay their mortgage on time.

Mortgage rates have been low for a long time. Low rates naturally brought high appreciation in real estate and higher home ownership. Wall Street had a growing appetite for mortgage-backed securities. Lenient programs were created to feed that appetite.

Your comments are welcome!


Monday, June 23, 2008

Rates and Points of FHA Mortgages Versus Conventional Mortgages

What are the rules for FHA mortgages with respect to charging and setting interest rates and points on first lien owner occupied mortgages?

How does the FHA regulations prevent the FHA mortgage from having super high APRs like you find with subprime conventional mortgages?

While 30% of conventional mortgages showed high interest rate spreads, less than 5% of FHA mortgages had reportable interest rate spreads in the 2006 HMDA data.

There are a number of reasons for higher interest rates spreads on conventional loans versus FHA.

As for FHA, the loan origination is limited to 1%, but that is not the sole reason. FHA does owner occupied full doc loans only and does not have a rate adjustment for high loan to values or cashout.

Conventional on the other hand has a lot of different programs that have point cost. Examples are:

Cash out can cost as much as 2.5 Points
Loan to values exceeding 95% Cost 1.75 Points
Interest only Options cost as much as 2. Points
Subordinate Financing can cost as much as 1.5%
Stated Income cost additional Points

Those are just some of the reasons for the APR range on Conventional speaking from a Fannie Mae or Freddie Mac standpoint.

Subprime are conventional loans.

Hope this helps,


Wednesday, June 18, 2008

What Has Caused All The Forclosures?

I received a foreclosure question from my site, and ... I really don't know if it was from a consumer or a loan professional. Most of the questions I get are from people in the industry.

The woman wanted to know what I think has really caused all the home foreclosures in our real estate market today. You know, that is not a simple question to answer, and I am usually pretty up to date on the market and the politics involved.

So, not wanting to offend I sent off a short list of the things that contributed to our housing crises:

  • Politics, and politicians using the market to further their agenda. They have made it look much worse than it is and that media B.S. should clear after the election. Please understand, it is not good, but the market is not nearly as bad as they are blasting out to the consumers.
  • The normal real estate cycle
  • Depreciation of value which was sort of caused by mortgage backed securities which are tied to Allen Greenspan's over exuberance.
  • "Interest Only" programs
  • Teaser Rate Adjustments
  • Over speculation by investors
  • Job loss, divorce, and over extended borrowers

There are more reasons I could add to the list and please note that these are not in any kind of priority order. I know people will say I forgot to include fraud. I did not forget it. Fraud played the least amount of cause and is only significant to the point that it is the primary place where people want to point the finger of blame because is not politically challenging or threatening.

I started wondering about the politics and the bail outs and the federal reserve so I did some research for my own peace of mind. I was Googling everything.

I ran across this video on Google. It starts out talking about income tax but then it gets into the federal reserve and it's history and position in politics today. It is a long video but I was spell bound and watched the entire thing.

I am neither Democrat nor Republican so my putting it on this blog has no political intentions. In fact, I am still researching some of the stuff in the video. It did open my mind and I have many more questions now.

Your welcome to leave comments but I'll tell you right now I am still not sure how I feel about it.

Food for thought I guess. Enjoy.

If the video is not loading here for you, go to:

Or, search google videos for: America: freedom to fascism - directors authorized version

The one you want to view is 111 minutes long.

Friday, June 6, 2008


I found this great video on You Tube and I think anyone thinking about selling their home "for sale by owner" should view it.

I agree with the video on many aspects. You need to be ware of "For Sale By owner Companies", especially if they are charging large fees up front.

On the other hand I do believe you can sell it yourself if you have a good plan and know where to get support.

Listing your home on the internet is a good thing but not if you are contracting them to do the work for you, they are charging high fees, or are trying to persuade you to pay to be put in an "MLS". Many of those on line "MLS" services are internet only and used as lead generation for Agents. They capture the information on buyers looking at homes and then solicite the buyers with offers or other homes on the market. It is not a good thing for you.

However, you should list you home with pictures on lagit or free sites. One good free site is There are others too I am sure. You can also take a short video of your home yourself and put it on You Tube and google video. That is also free.

The best thing that you can do is team with a Mortgage Broker that has a free FSBO program. Many people don't realize that after the contract is signed it is the lender or broker that controls the rest of the transaction.

Many Mortgage brokers are happy to work with you and pre-qualify your potential buyers so you don't get stuck in a contract with people that cannot get financed. They will usually provide you with signs, contracts, and disclosures you may not know need to be signed by buyers and sellers. They can teach you the ins and outs of the contract and explain things you may not understand.

They can show you the best financing options to use in your advertising, teach you about seller concessions and how it can impact your selling price. They can show you how much more you will pay in closing cost if your buyer gets a FHA loan or VA loan instead of a Conventional loan.

Well, whatever. This is a great video put together by a news station in Atlanta.

You may also want to view the video I have on For Sale By Owner Manual if you are a broker.



Tuesday, June 3, 2008

Federal Trade Commission Cracks Down on Credit Repair Violations

I just read an article on Originator Times about the FTC cracking down on credit repair violations. You can read the article HERE. I have included a quote from the article below.

The Federal Trade Commission was concerned with these federal law violations:

  • illegally charging an advance fee for credit repair
  • falsely claiming that they can remove negative information from consumers’ credit reports, even if the information is accurate and timely
I have to admit that it amazes me that people continue to attempt to remove correctly reported information from their credit report. My mind can't sort out which is more wrong, the company for making false claims or the consumer trying to game the system.

According to the complaint, consumers are led to Home Buyers Consulting Network,Inc. (HBCN), which is based in Raleigh, North Carolina, through its Web sites and by a company that sells lists of foreclosed properties and suggests that it's customers call HBCN if they need credit repair or access to zero or low down-payment home financing. In sales pitches for its credit repair services alone, and in conjunction with pitches for its home-buying consulting services, HBCN makes claims such as: “Our program offers the ability to REPAIR, RESTORE, or ESTABLISH your credit so that you may be able to qualify for 100 % home financing, lower interest rates and better quality credit.” HBCN also offers a “money back guarantee . . . to increase your credit score by 50 to 100 points or delete six derogatory items (from a consumer’s credit report).” HBCN also promises consumers help with finding a home to buy, through a referral to its purported network of realtors and lenders, the complaint stated.

Obviously this company had set up a rather elaborate system to take advantage of people in a state of need and ignorance. I still don't understand how people can fall for this. The following is another quote and advice from the FTC. It's pretty easy to understand and really supports the consumer.

The FTC advises that only time, a conscious effort, and a personal debt
repayment plan can improve your credit report. The first step is to learn what
information is in your credit report. If you find errors or mistakes, federal
law gives you the right to have them corrected – free of charge. Federal law
requires that the nationwide consumer reporting companies – Equifax, Experian,
and TransUnion – provide you with a free copy of your credit report once every
12 months, if you ask for it. To order your free report, visit, call 1-877-322-8228, or complete and mail the Annual Credit Report Request Form. Other credit repair information is available at

If it sounds to good to be true, it probably is. It's not hard to get your credit back on track and it doesn't take long to do it. You just have to make that decision and commit to it.



Friday, May 23, 2008

Fingerprinting Loan Originators

Let's fingerprint all Loan Originators, Mortgage employees and Real Estate Agents. Yep, that's the ticket. ... God Help Us! This was slipped into a the foreclosure assistance bill, and hidden in the "manager's amendment", and passed by the Senate Banking Committee.

Here are a few quotes from the article that came from "" and posted by John Berlau.

"a federal fingerprint registry totally unrelated to national security passed a U.S. Senate committee almost without notice. The legislation would require thousands of individuals working even tangentially in the mortgage and real estate industries — and not suspected of anything — to send their prints to the feds. The database and fingerprint mandates were tucked into housing and foreclosure assistance bills that on Tuesday passed the Senate Banking Committee by a vote of 19-2. "

What, ??? so fingerprinting the mortgage industry is going to fix, or would have prevented the problems we have now? Where did these idiots come from. Did we really elect them? What is their real agenda, surely they are not ignorant enough to think this will fix anything!? Here is another quote.

"The measure the committee passed states that “an individual may not engage in
the business of a loan originator without first … obtaining a unique identifier.” To obtain this “identifier,” an individual is required to “furnish” to the newly created Nationwide Mortgage Licensing System and Registry “information concerning the applicant’s identity, including fingerprints for submission” to the FBI and other government agencies."

"The fingerprint provisions are contained in a “manager’s amendment” that was hammered out by committee Chairman Chris Dodd, D-Conn, and Ranking Member Richard Shelby, R-Ala., on Monday and attached the next day to a broader housing bailout bill that had been scheduled for a committee vote. That bill, the “Federal Housing Finance Regulatory Reform Act of 2008,” expands the lending authority of the Federal Housing Administration and the government-sponsored enterprises Fannie Mae and Freddie Mac to refinance the mortgages of troubled borrowers and banks."

"The amendment defines “loan originator” as anyone who “takes a residential loan
application; and offers or negotiates terms of a residential mortgage loan for compensation or gain. It states that even real estate brokers would be covered if they receive any compensation from lenders or mortgage brokers. "

I want you to know that I try to stay neutral about political issues in my blog. I'm not always successful but I really do try. This morning I read this article on the Drudge Report and I am totally outraged. I cannot contain myself. I don't think it matters which party you affiliate yourself with, you should be stunned by this too.

The bill claims justification for this provision as: “increased accountability and tracking of loan originators,” “enhanced consumer protection,” and “facilitating responsible behavior in the subprime mortgage market.” ... Hey, they got this right. All mortgage people and real estate agents are sneaking around and far from trust worthy. They should all be put into a mandatory parole program and should have to check in every week, and provide urine for drug tests. How about an ankle bracelet too! ... "Book em Dan-O"

What has happened to us? The People we have elected and put our trust in are totally out of control. They feel and display no accountability or respect for us or the constitution. And We pay them money to do this to us!

We have to wake up.. I am so angry I can't get my thoughts in order but I wanted to get this out to you. I'll blog more about it after I cool off a little. In the mean time go read the article here, then come back and leave some comments. I need to know if I'm the only person that finds this troubling.

Monday, May 19, 2008

For Sale By Owner Manual

If you are a homeowner and you say, I want to sell my home fast, I would suggest that you seek out a mortgage broker that has a For Sale By Owner Program. Mortgage Brokers have a wealth of knowledge that they are more than willing to share with you.

Most programs include providing you with a yard sign, an information manual, home fliers, and instructions on how to fill out the required paperwork. They will also follow up on everyone that views your home and will pre-qualify them so you don't have the worry of wondering if the buyer can get a loan.

They cannot negotiate for you, but what most people don't understand is that after the contract is signed it is the broker that handles the rest of the transaction.

The lender orders the appraisal, and inspections, and title insurance, and everything else that is needed ... and does all the coordination.

If you don't have a mortgage broker with a for sale by owner program assisting you, you are missing out on the best free help you could possibly get. is a free fsbo website where you can list your home free of charge. They also have a list of real estate professionals in your area that have free programs. I would check that out. If there isn't anyone listed in your area, just get on the phone and call some of the brokers in your neighborhood. Most brokers have a program. also has a For Sale By Owner Manual ($27.94). The manual is in pdf format and it's focus is toward the mortgage broker. I guess by that what I mean is it is an ebook that contains a FSBO manual and ideas for the broker so they can set up a program for their own company.

The video below illustrates to the broker the manuals covered in the pdf, how they are put together and replicated for their loan officers at a cost they can afford.

If you are a For Sale By Owner, you could purchase the ebook/manual but I don't recommend it. What I recommend is what you really need, a Broker to support you and help you along the way. I actually have an ebook almost finished that will be focused just for your use. I hope to have it completed by the end of June.

If you are a seller and have any questions send me an email. I'll be happy to support you anyway I can.

IF you are a broker or loan officer I hope this video helps to clarify any questions you may have.

This program works, ... but like any program, it only works if you work it, ... consistently.

You can purchase this program on on our web site at fsbo manual,



Sunday, May 18, 2008

How Effective Is Debt Consolidation With Credit Cards?

People who are seeking to establish credit will often apply for a major credit card or for a personal loan. On the other hand, people who are in debt will often apply for credit cards, believing it is a solution for debt consolidation. In both instances, the people in the scenario are both risky candidates for getting a loan.

If you do not have credit, it can be just as difficult to get a loan as if you had bad credit. Credit is necessary these days, which is why you should work on building it before you actually need it for something important.

Regardless of the situation, you must stay on track if you find a way to consolidate your debts. Once you begin the process of debt consolidation, you must keep track of your money, spending, and so forth. When you keep track of your money and spending, you are taking the first step to consolidate your bills and manage your money at the same time.

This web page will help you understand your credit history and how to take care of it. Credit Guidelines

Credit cards are nice to have; in fact today, credit cards are essential, as you cannot make purchases in some instances if you do not have a major credit card. Pre-paid credit cards are newer cards that offer a similar effect to credit cards. The cards allow you to deposit your money into the card and use it as though you had a major credit card.

The downside is that these cards have fees and this will not help you to consolidate your debts. It is possible to get a credit card if you have bad credit, but it may come at a costly fee. The interest rates are often higher than on cards given to individuals or families without credit problems.

So if you are bent on getting a credit card to consolidate your debts, think again; if you don't, you could end up in more debt!

Good Luck

Wednesday, May 14, 2008

Which Is Worse - Debt Settlement Consolidation or Bankruptcy?

Many lawyers will take loads of cases, leading their clients into bankruptcy, rather than helping them to find a solution. The lawyers are paid large amounts for their work; therefore, they are out to make a buck in most instances. You should make a visit to the attorney's office as your last resort.

There are a number of other solutions for settling your debts, including debt management, debt consolidation, debt negotiation, and even do-it-yourself strategies.

In other words, if you want to cutback, find ways to make extra cash, work toward paying off your debts to avoid bankruptcy and the subsequent lawyer fees.

If you have recently ruined your credit or filed for bankruptcy, repairing your credit is the most important thing you will ever do. If you have bad credit, it will always be hard to get an apartment, to get a house, to refinance a loan, or to get any other form of credit loans, including even credit cards.

Similarly, if you have not established credit, it is frequently easier said than done to get a line of credit from most banks. Consequently, it is imperative that you protect your credit rating. There are more than a few ways to build credit, as well as to repair credit.

If you are repairing your credit, it will usually take around six months before most banks will allow you to apply for a loan; however, since more than 4% of the population is in debt, companies are coming up with solutions to help these debtors out.

United Way and Credit Unions have joined together to help millions resolve their credit issues every single day and get out of debt. If you want to rely on an honorable source to help you, then United Way or Credit Unions for debt consolidation are your best bet.

Thursday, May 8, 2008

How To Find A Debt Consolidation Loan

There are very few online debt consolidation lenders that will really help debtors reduce their debts. If you choose to use one of these groups be vary cautious and consider the fact that by getting into one of these programs your credit scores will suffer.

Homeowners who are in over their heads in debt can use their homes as collateral to payoff their debts. A homeowner can get a cash out refinance to payoff the smaller debts. How much you qualify depends on how much equity you have in your home.

An FHA cash out refinance will allow up to 95% LTV. A Conventional cash out refinance will only allow 90% LTV. If you don't have enough equity for a cash our refinance of your first mortgage your next option would be to take out a 2nd mortgage. Second mortgages usually allow a higher CLTV (combined loan to value). Some lenders will go as high as 100%CLTV but the interest rate is higher.

The loans offered are given to the debtor to repay the debts; and then the debtor must payoff the loan in monthly installments. In other words, your bills are calculated and rolled into one monthly installment. If you have credit cards, then the interest rates will roll into the monthly installment, as well if you have personal or home loans or other types of loans, then the interest rates are rolled in to one balance per month.

Some debt consolidations make it easy and offer short applications, which will link you to an expert who will search for a solution to reduce your debts by assessing your information. Money Management International (MMI) is one of the many online "Consumer Credit Counseling Services" (CCCS) that is a non-profit organization that offers support to debtors.

The non-profit organizations are sometimes safer to use than the organized services. Since MMI is a member of the Better Business Bureau, I will refer to this debt consolidation reduction organization to help you get an idea of what is available to you.

Once you sign up at an online debt consolidation reduction organization and are approved, then the professional financial guides will work with your creditors, asking for leniency. This means that the experts will work hard to get a reduction on your debts. For example, if you are paying $1000 per month in bills, some debt counselors will work to get your debts reduced to $500 give or take a couple hundred. This figure is half the amount you were paying in the first place. What a bargain!

Tuesday, May 6, 2008

Avoid Mortgage Fraud

I found this great video on Youtube about mortgage fraud. Freddie Mac put out this great view. The first time I watched it my heart was really touched because this is just exactly what happens to homeowners that are close to foreclosure. They are desperate and at that point will believe anyone that sounds real.

There is a lot of mortgage fraud in the mortgage industry but it has always been there, just like in other industries. The media is blowing it out of sight now because of the election and the slow in our economy.

I have put it on this blog because we get a lot of traffic and just maybe this will help to inform people about mortgage fraud.

This is so Sad!

Always take the time to shop for a reputable mortgage broker. this web page may help you do that. How to select a mortgage broker.

You are welcome to leave comments. Just remember to be ware in any market that involves money. People will always want to take it from you. If you are ever unsure, call someone. Ask!

Good Luck,


Atlanta Mortgage Lender

This is a little off topic but I thought I would share it with you. Jerry owns a mortgage company in Marietta, Georgia. We all know the mortgage industry is suffering. It doesn't matter if it is a large mortgage company or a small independent mortgage Broker. The large companies are downsizing and the small companies are going out of business.

I think it is really sad for the independent mortgage broker because most of the fraud was created by the large companies and it is the little guy that takes the hit.

Well I read somewhere that doing videos will really drive traffic to a website. It couldn't hurt and it doesn't cost anything so why not?

I thought I would create some videos to drive some traffic to Jerry's site. I didn't have a clue how to do it but I took a shot at it and this is what I came up with. This is my first attempt.

Of course there are many topics I could use for a mortgage video but in my first effort my focus was just on learning the software. I think the hardest part was uploading it to the different video sites like You Tube, Google, and Yahoo. It wasn't really hard but sort of complicated and each was a little different.

Since I wasn't focusing on content I through in a cute picture of my friend Alex. I think you will like him too.

Wish me luck with my future attempts. That focus will be on major mortgage content.

Ok, watch the video, be kind now, it was my very first one.

Your comments are welcome. Maybe you have some tips that will help with the next one. (I know this one sucks but you have to start somewhere)

See Ya,

Sunday, May 4, 2008

How To Get a Low Interest Debt Consolidation

Debt consolidation loans help debtors lower their monthly bills while paying off credit cards with high interest rates and debt, adhering to an overall debt strategy. Many online counselors or debt management services will offer to make your bills lower each month and may even claim to offer additional funds for your own purposes.

Buyer Be Ware! This is a rip off!

If you are having a difficult time paying off your debts, then consider that some plans will enable you to pay off costly interest rates on credit cards. The monthly installments, once the debt consolidation personnel settle on an amount, will not increase or decrease during your agreed plan. Some companies will claim that the loan offered has no restrictions. They will tell you the date your loan borrowed will be repaid, as well as offer you as much as "$10,000" fast in loans, and even may claim you can get the money the "same day you apply."

Few of the online debt consolidation services will offer a variety of plans that will meet your budget. However, if your loan amount is above the "$10,000, then you will need home equity to get additional loans. The loans then become secured loans, which require collateral - and your home is generally the collateral.

To get a loan online, you must collect all your bills and provide the details on an online application. You must also have a detailed estimate of your debts, plus your income. After you fill out the online applications, some debt consolidators claim to take a few seconds to evaluate your application and then contact with their decision. Some companies who claim to lend you money will also claim that they will lend it on the spot as soon as you are approved.

Be aware that some companies charge high interest rates, plus additional fees for services in debt consolidation.

If your debt is more than 10k and you need to roll it into your mortgage, go to a Mortgage Broker and Do Not fill out an application on line for one of these so called "debt consolidation" companies. They are just waiting to rip you off!!

Go to a lagit Mortgage Broker in you area and get a cash out refinance or a 2nd mortgage. (That is what a loan "using your home for collateral" is) Get it from someone that is reputable and is regulated. They will also tell you of any other options you may have.

Send me an email if you have questions.

Good Luck!


Friday, May 2, 2008

Credit Repair Scams

This video will help you understand about credit repair scams. There are so many of them out there just trying to take your money.

This is a good video. Again, I don't know who the company is and names can be deceiving but the information is excellent. Enjoy.

Here are two good pages that talk about your credit and what you can do to improve it. Credit scores, credit repair

Good Luck,


Mortgage Refinancing Scams

I found this great video on the net. It has some very good information about how a few lenders take advantage of consumers through deceptive advertising. Take some time to view it.

I wish consumers had to take a two hour course on mortgage loans and interest rates before they could apply for a loan.

I don't know who this company is and names can be deceptive but the video is very good. Enjoy!

Here is a good web page that will help you decided which mortgage loan is right for you. Which loan is right for you

Good Luck,


Tuesday, April 29, 2008

Self Employed Equity Loans

If you are self-employed, you will go through slightly different process when filling out an application for an equity loan than most borrowers. Lenders often require that the self-employed supply at least three years of tax returns. Therefore, if you are self-employed seeking home equity loans, you may want to know that your broker is experienced in various types of loans, including self-employed loans where no proof of income may be required.

As a rule self-employed borrowers must be self-employed for two years or more to receive a loan. Today, lenders are making it easy for the self-employed, since scores of individuals today are self-employed. Many lenders will offer competitive rates to the self-employed to help them get ahead of the game. You may be required by a few lenders for home equity loans to prove with audited accounts showing three years of self employment history. If you do not have this proof, the lender may require a letter of confirmation from your accountant.

Lenders are tighter on this kind of loan because of all the controversy in the market.

If you are searching for a home equity loan and are running a small business, make sure you supply the facts to the loan officer where you intend to get the loan. The loan officer will review the details and search out the market for loans available to the self-employed. Few lenders will offer self-employed personal loans in connection with mortgage loans.

Friday, April 25, 2008

Mortgage Questions Webcast ... Live

Watch the live webcast, Saturday, 04/26/08 at 12:00 noon EST. Our plans are to broadcast every Saturday at Noon. We will be inviting guest participants like Appraisers, Title Companies, Real Estate Agents and Mortgage Brokers so you can hammer them with your questions.

We will be answering live questions about your mortgage concerns.

You are welcome to join in but we ask for you patience as we are still having some technical issues with our hook up. Sometimes it is a little choppy, sometimes it is just fine.

Until we get all the tech stuff sorted out we won't be advertising the broadcast. I guess we could say we are in BETA, ??? Hey, it works for google!

Tuesday, April 22, 2008

Equity Loan Comparison

When considering equity loans, borrowers are wise to weigh out the difference in interest rates for refinancing, equity loans, and credit lines. Loans are often based on fixed rate, adjustable rates, prime rates, and so forth. If the equity has dropped below market value, then refinancing the home may be a better option than home equity loans or credit lines.

Refinancing is a source of releasing “further money,” so that the borrower has extra cash to spend. Furthermore, the refinancing presents a scapegoat for recovering the equity on the home value. In other words, if the market value dropped, refinancing is your ticket to increase the equity on your home. Thus, if you want to remodel your home, roll your bills into one, payoff tuition, or else make new purchases, then the home equity loans are most likely choice.

On the other hand, if you feel that you will need extra cash over the next ten years, then you may want to consider the lines of credit offered. The lines of credits are prime rate loans with stipulations, but for the most part, if you need money it is available. Most lenders provide their own types of checks to the borrower when taking out credit lines.

Thus, it depends on your needs, but reviewing your different options can help you decide. If you need to rebuild the equity on your home, then refinancing is the better option; while, if you are considering debt consolidation, then home equity loans are your best bet. On the other hand, if you need on going cash, then credit lines are the best choice.

Finally, reviewing each option is the best solution for finding the right loans; no matter what option you choose, you should spend some time reviewing your different options to ensure you are getting the best possible rates from a reputable company.

Saturday, April 19, 2008

Student loan desaster

There are several ways for students to find relief from debt by consolidating their bills. If you are in over your head in student loans, you should be advised that there are several options for relieving your debt.

To get started you must determine the loan amount and type you owe. Next, you should contact the lenders or college financial agents and request a loan drop. If you are in debt over your head, then this is the best solution for consolidating your debts.

If you fail to seek debt consolidation solutions, then you are at risk of lawsuits, tax refund losses, and possibly of risking wage garnishes. Whether or not you can ask for a cancellation will be dependent on the type of loan you took out, when it was issued, and for how much it was issued.

While it is not likely, some schools issue loans under fraudulent pretense. If this is true, then you can demand a cancellation of the loan.

If you suffered from an accident or became ill and the injuries or sickness have disabled you for life, then you can ask for a cancellation on the loan. Military personnel and particular organization members qualify for a cancellation in student loans.

If you are able to get the loan dropped, imagine the money you will have to restore your credit and eliminate other debts.

If you have paid your monthly installments with good faith until times got hard, you may qualify for a postponement in payments. This is called a deferment request. The student lenders may present you with the "forbearance" option if you ask for a deferment. The "forbearance" means that the lenders will reduce your student payments temporary until you are back on track.

As a student, you have numerous ways to manage your debts if you are currently in over your head. Do not assume that there is no solution; instead, spend your time researching instead of worrying.


Thursday, April 17, 2008

Google Adsense 4.0 Review, Get It Here

The reviews for AdSense Secrets: 4th Edition are already coming in...... and they are RAVING about the content found in this 232-pagebook!

"Joel, this book is more packed with tips than any other ebook I've ever purchased! I'm so glad I down loaded it today... this should change the way I make money with my site." - Dan Adams

"$9.95? 9.95? Are you out of your freaking mind? I paid $97 for your third edition and would easily have paid that much for the fourth version. What are you thinking? Thanks for giving back, Joel. Don't think we don't appreciate it." - Randall Smith

"I can't thank you enough for giving so much for such a small investment, Joel. Not everyone can afford the high-priced ebooks and this one hits the sweet spot. I think I've found the only book I need to buy this year. Now to get busy building my site so I can make AdSense money!" - Cynthia Peters

And that's just the beginning of the comments Joel is receiving about AdSense Secrets 4.0.

There is absolutely no reason for ANYONE to miss out on the content within the definitive guide to making money with AdSense!

If you have your own web site, you may already know a thing or two about AdSense. This book will take it to the next level.

You may be brand new to AdSense. This book will get you on your way. If you've been waiting on the sidelines, it's time to get in the game.

If you've wondered where you can find opportunity online, it's finding you right now. And if you have $9.95, you have all you need to instantly get the one resource which has worked for thousands of people just like you!

You can be reading this ebook in the next ten minutes. Why wait any longer?

Get your copy of AdSense Secrets: 4th Edition right now and get started building your online success story! Get it here now.



Monday, April 14, 2008

FHA Reserves, Required or Not??

Michelle and her husband are from Texas and had been approved for an FHA loan on a single family residence. Their lender had told them that they needed two months reserves in the bank at closing or the loan would not close. They were confused by this requirement and came to me for clarification.

Well, I was confused too! FHA does not have a requirement for reserves (unlike conventional loans). The only reserve requirements with FHA are if a buyer is purchasing a 3-4 family unit. If purchasing a 3-4 unit, the reserves required are three months.

The answer here was a no-brain-er and is actually available on the HUD website. There is however, a really big issue here. Can you see it? Bear with me, here is another example.

Another couple was approved for an FHA loan in March of 08 and the company they were working with said the couple had to pay their 2007 taxes before the lender would close the loan. Hello, 2007 taxes aren't due until April 2008. This couple asked if there was a law stating this. Well, NO! There is not even an underwriting guideline that calls for it.

What is going on here? Do you see the big issue yet?

I have a web site where I answer Mortgage questions from home buyers, sellers, real estate agents, loan officers, and yes, even underwriters. These underwriters and loan officers are from some well know companies. This isn't about my web site, ... I'm not even going to give you the URL. I only bring it up because that is why I see a big picture that others can not. I get questions every day from all over our country, India, and other countries in the middle east.

I see at least four major issues with this information so far but I'm only going to cover two.

First, Why don't Loan Officers and Underwriters know basic FHA underwriting guidelines? Simple, they have no experience or training on FHA! FHA loans are and always have been a terrific option for people that didn't quite fit into conventional guidelines. Best of all the interest rate is considerably lower compared to a sub-prime loan and as I write this today FHA rates are equal to par on a Fannie Mae. It doesn't get any better than that, right?

Well, FHA loans are fairly complicated to put together and they use to have stringent appraisal and inspection requirements. So, if a borrower didn't fit into Fannie or Freddie it was easier and quicker to slap them into a sub-prime. It was a slam dunk and so what if the rates were higher on a sub-prime, few consumers understood their options anyway. (that mentality is why I built my site in 2002)

Another reason companies didn't do FHA loans was because they had to be HUD approved which meant they had to have a minimum net worth and pass a costly Audit every year. So again, why bother when sub-prime was so easy and available.

Now, of course the sub-prime days are almost a thing of the past or at least not as "sub" as they use to be. The savior? ... FHA Loans of course, except that very few, including underwriters have any experience with them or understand the differences between FHA and Fannie. Thus, in the two examples above, underwriters and LOs are just making stuff up or worse case, running scared because of all the flack in the industry right now.

In defense of the underwriter (as in example two) I will say that they have the authority to require what ever they deem necessary to improve a portfolio. Many of the questions I have received from underwriters seem to reveal that it is really a case of inexperience and over caution.

The mortgage industry professionals are struggling to catch up/learn FHA guidelines. If you are a consumer you must be very careful to find someone that has been HUD approved for at least two years. And Do Check, seriously. Some companies are doing FHA loans and they are not HUD approved. They are under the disillusionment that HUD will allow a non-HUD approved broker, to broker, to another HUD approved broker! Sounds a little flaky, no?

How in the world did we ever get in this mess? We can throw some of the blame to the politicians and presidential candidates that are hyping it up for their own agenda. It is not as bad as they say but they are speaking so loudly that the rest of the world is now listening. Did you read what is going on in the UK's market today? Good grief.

I don't believe in bailing out our large lending companies and here is why. Back in this article I mentioned getting questions from India and other countries in Asia. Now I ask myself, why would a mortgage underwriter in India, who I can hardly understand due to "no speaking good English", be calling me on the telephone at 3:00am about a loan in Texas??

Go Figure!

AdSense Secrets 4.0

By now, I'm sure you know my friend, Joel Comm.

As the author of The New York Times Best seller,"The AdSense Code" and the Host & Executive Producer of "The Next Internet Millionaire" reality show, Joel continues to produce top-quality resources and training materials that have helped thousands of people increase their online income.

Well, Joel is thankful for the support he has received over the years, and he is doing something truly amazing to say "thank you".

It's been over two years since Joel last released an updated version of his best selling "Google AdSense Secrets" ebook. This book is the definitive guide to making money with AdSense and it is the only book you ever need to master AdSense.

Joel regularly sells this book for $97.00. It's worth every penny.
But what he is doing now is going to send shockwaves through the industry!

Joel has completely revised and extended AdSense Secrets 4.0 for 2008 to include all the latest AdSense cash-sucking strategies and techniques that allow him to continue earning over $500/day in passive AdSense income!

So how is Joel saying "thank you" by offering this book?

It's the price! Are you sitting down?

You are going to think I am toying with you, but this is the honest truth...
For a limited time, Joel is offering AdSense Secrets v4.0 to you for just $9.95!

Yes, you heard me right! That's just $9.95! (Available on Wed. 4/16/08)

Ok, I don't need to go on and on about this.

Welcome to the biggest no-brainer of the year.

Go pick up a copy of AdSense Secrets 4.0 right NOW while it is still priced at this amazing bargain of $9.95. You'll be able to instantly download your copy and begin implementing the same strategies and techniques that Joel and his customers have used to generate incredible passive income!

Honestly, I don't know how long Joel will make the book available at this price, so I reccommend you hurry and download it NOW! Sorry, now = 4/16/08, Wed

To your success,


Monday, April 7, 2008

What Is The Mortgage Loan Process

I have a web page that explains the mortgage loan process and I thought it was comprehensive but I get at least one question a day about the loan process. Perhaps it is unclear because many things actually happen in parallel.

First of course, you should shop interest rates and find a local mortgage broker that you feel comfortable with, is experienced and reputable.


You go into the brokers/bankers office and you fill out a 1003 (loan application). You also bring copies of your bank statements, retirement accounts, 401ks, W2s and tax returns and what ever else the Loan Officer requested. The Loan Officer makes copies of the documentation and gives you back your originals.

An application can be filled out on line but I don't recommend you do that. Filling out an “on line” application is ok if you know whom you are dealing with and they are local. This can save you a trip to the office. But you should never just fill out an application on line if you don't know who they are or if they are not local (even if they are a major branded company). Do not complete any request that suggest multiple offers as these companies sell your information over and over.

During the time you sit with the loan officer he will review your documentation and with most companies he will pull your credit report while you are with him.

During your conversation the LO will tell you "based on the information he has" that you qualify for "this type" of loan. He should also at this time tell you about all loan types you qualify for. He will also discuss interest rates and terms. He will have you sign several disclosures.

At this point you guys decide on your course of action. HE SHOULD AT THIS TIME GIVE YOU A GOOD FAITH ESTIMATE. The LO then puts all your official paper work in the file and turns it over to the processor.


The processor makes sure all the documents are in the file, puts the paperwork in order, enters it into DU or LP (automated systems) and then receives an automated approval or turn down. This is always "subject to" supporting documentation including appraisal, inspections, and title work.

The processor then verifies employment, verifies residence, orders an appraisal, and orders a title. I won't go into the documentation requirements here but this is when things start to happen in parallel.

When the processor has received all these verifications, the appraisal, and basic title work, they will review the file again and if it still qualifies they will forward the file to the lender’s underwriter.

Note: At this point she does not have a title policy or guarantee, but the title company has reported that there are no clouds on the title. Shame on the processor if she forgot to order this because it can delay your loan later. The actual title policy is not issued until later when the underwriter gives a “clear to close”.


The lender’s underwriter then reviews what is in the file, runs the numbers, and verifies that all of the documentation is present and that it supports the DU or LP approval.

They also review the appraisal and the title at this time. This is part of the underwriting process. If there are problems in the appraisal review or title they will address them to the processor.

The processor will communicate with the LO and appraiser and/or title company to resolve the issues. This is part of the underwriting process. The processor collects the requested “stuff” and then forwards all information to the underwriter.

The underwriter is then happy and gives an "ok to close". This ok is usually subject to receiving the title insurance policy from the title company. The title company faxes or transmits electronically the info to the lender. Then the Lender sends the closing documents to the closing company. This can sometimes take two to three days.

You have an appointment to close. You sign the documents and your loan is closed and you get the keys.

Processing should only take a week after you have provided all the documentation requested. The underwriting normally takes about 14 to 28 days. This time includes communicating with the processor if there are any deficiencies.

Every loan file is different and each Lender has different requirements and markets vary, so it is impossible to give an exact duration for each step.

The Key: Understand the sequence and demand your loan officer gives you full details about what is going on. If you don't understand don't be afraid to say so. This is YOUR investment. Demand the facts. LO's sometimes use industry terminology, ask what they mean if you don’t understand!



Thursday, April 3, 2008

Home Equity Loans

Homeowners who consider equity loans may end up losing over time. If the borrower is getting the loan, he may be paying more than what he was paying in the first place, which is why it is crucial to check the equity on your home before considering a mortgage equity loan.

The equity is the value of your home subtracting the amount owed, plus the increase of market value. If your home was purchased at the price of $200,000 a few years ago, the property value may be worth twice theamount now.

Many homeowners will take out loans to improve their home, believing that modernizing the home will increase the value, but these people fail to realize that the market equity rates are factored into the value of the home.

Home improvement is always good, but if it is not needed, an extra loan can put you deeper in debt. Even if you take out a personal loan to build equity in your home, you are paying back the loan plus interest rates for material that you probably could have saved to purchase in the first place.

Thus, home equity loans are additional loans taking out on a home. The homeowner will re-apply for a mortgage loan and agree to pay costs, fees, interest and capital toward the loan. Therefore, to avoid loss, the homeowner would be wise to sit down and consider why he needs the loan in the first place.

If the loan is to reduce debt, then he will need to find a loan that will offer lower capital, lower interest rates, and cost and fees combined into the payments. Finally, if you are searching for equity loans, you may want to consider the loans that offer money back after you have repaid your mortgage for more than six months.

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