Archive for the ‘lending’ Category

Teaching First-Time Buyers

Friday, April 9th, 2010

Everytime I have the opportunity to teach a group of first time buyers, I realize more and more where my passion lies and why I became a mortgage lender in the first place.  It is such a life-changing decision to buy a home (and usually in a good way). Converting a family from renting to owning can change the course of their financial future.

I had an opportunity this week to teach a course as part of Team Buckley Saves at Buckley Air Force Base right here in Colorado.  Met a great group of our service men and women and was able to answer many questions regarding home ownership.

Some were in the process of buying, some had had bad experiences in the past and had questions, and many just had misconceptions about the mortgage process.  It was great to see all of the “lightbulb” moments and give a little back to the brave men and women who serve us all.

Posted in Mountain Crest Mortgage, Society of Financial Awareness, education, lending, mortgage, sofa | No Comments »

Client Questions

Wednesday, July 30th, 2008
Recently, I had a client pose a few questions relative to the mortgage process.  They are questions probably many people have, so I thought they were worth repeating.
 
Where does the money for the loan come from?
The money comes directly from us as we are a mortgage banker (the funds do not come from Fannie or Freddie).   At present, Fannie Mae has announced they will not be using the credit line offered by the Fed (they made a few billions dollars in the 1st quarter of this year).  The Fed more or less offered the “bail out” to calm the financial markets.  
 
What are the benefits/risks of working with a broker like Mountain Crest Mortgage?
There are two main benefits of going with a banker like us vs. directly to a bank.  1)  If the bank closes, borrowers with pending closings are out of luck.  For example, borrowers who were scheduled to close with IndyMac now have to re-apply someplace else and reschedule their loans.  If this is a purchase transaction, the impact can be disastrous.  As a banker we just take you to a different bank if one of them closes;  2)  We work on the wholesale side and have the ability to “shop” your loan to multiple investors to find the best overall loan package for you and your clients. 
 
What’s impacting interest rates so much?
Regarding the rates, what is driving them up (or down) is news of inflation.  We’re in a volatile market.  I’m advising all of my clients to lock early to avoid major swings in interest rates.  We have some investors who allow a “float down” so if rates dramatically improve after locking, we can still take advantage of the pricing improvement for our clients.  Rates for the past 7 months have been bouncing up and down between 6% and 6.5% with 0 & 0 points - I expect this to continue over the next few months.  
 
Have other questions?
Let me know.  I’d be happy to answer them here or privately.

Posted in Uncategorized, education, lending, licensing, mortgage | No Comments »

I Passed!!!!

Wednesday, July 30th, 2008
I am pleased to report that I sat for and passed the state mortgage broker licensing exam yesterday, July 24, 2008.  I now hold both the mortgage broker license as well as my Certified Mortgage Lender designation.
 
Let’s be candid for a minute. With record foreclosures, unscrupulous mortgage companies were part of the problem. 
 
To help combat mortgage fraud, predatory lending, and bait and switch tactics, the Colorado Legislature now requires persons who take mortgage applications to be licensed, carry an individual state bond, individual errors and omissions insurance, 40 hours of industry education by the end of the year, continuing education, and passage of mandatory state exams.  I have completed all of these requirements.
 
But the Colorado Legislature has no legal authority over national banks or state credit unions which are regulated at the federal level.  As a result, these lending institutions’ loan officers are exempt from the strict requirements placed on mortgage brokers and bankers (like Mountain Crest).  Their loan officers are exempt from the all of the above requirements.
 
Especially during these turbulent times, be sure to work with a Colorado-licensed Mortgage Broker.
 
Mary Steinmeyer
MB License #10017382

Posted in Mortgage Training Institute, education, lending, licensing, mortgage | No Comments »

Latest Fed Cut

Friday, May 2nd, 2008

The Federal Reserve cut short-term interest rates for the seventh time within seven months on Wednesday, May 1, 2008. The .25% reduction brings the federal funds rate (the rate banks charge each other for overnight loans) down to 2%.

Stocks responded positively in the short run. Shortly after the rate cut was announced, the Dow Jones Industrial Average briefly topped the 13,000 mark for the first time since January.  But it was short lived.  The Dow dropped significantly later in the day over worries about what the Fed would do next. The index closed at 12,820.13, down 11.81 points from Tuesday’s close.

Now the big question is, is Bernanke done?  Will the Fed sit tight or are more adjustments in our future.

In a related article, MarketWatch (New York) reports that the Federal Reserve, along with other central banks, said Friday that it was increasing the funding it is providing to banks and announced that, for the first time, it was willing to accept bonds backed by auto loans and credit cards.
 
“In view of the persistent liquidity pressures in some term funding markets, the European Central Bank, the Federal Reserve and the Swiss National Bank are announcing an expansion of their liquidity measures,” the Fed said in a statement.
 
The Fed took the move in an attempt to flood the market with supply and lower short-term lending rates, such as the London interbank offered rate, or Libor.
 
The U.S. central bank announced an increase, to $75 billion from $50 billion, in the amounts auctioned to eligible depository institutions under its biweekly Term Auction Facility, beginning with the auction on May 5.

Posted in Federal Reserve, forecast, lending, mortgage, prime rate cut | No Comments »

Fast & Easy Problems

Friday, May 2nd, 2008
TheWall Street Journal had a very disturbing story on Wednesday about the “Fast and Easy” loan program of Countrywide Financial Corporation, many of whose mortgages were bought up by Fannie Mae.
 
Some of the problems are surfacing in a mortgage program called “Fast and Easy,” in which borrowers were asked to provide little or no documentation of their finances, according to people with knowledge of a Federal probe and to former Countrywide employees.  Fast and Easy borrowers aren’t required to produce pay stubs or tax forms to substantiate their claimed earnings. In many cases, Countrywide didn’t even require loan officers to verify employment, according to an October 2006 presentation by Countrywide’s consumer-lending division. That left the program vulnerable to abuse by Countrywide loan officers and outside mortgage brokers seeking loans for customers who might have been turned away if their finances had been more closely scrutinized, according to three current and former Countrywide senior executives and to several mortgage brokers who arranged loans through the program.
 
Both Countrywide and Fannie Mae, the government-sponsored company that bought many of the loans, classify the loans as “prime,” meaning low-risk.  A Fannie spokesman agreed that the verification of employment wasn’t required on all loans, but added that Countrywide was expected to verify employment details on a “sampling” of loans. The Countrywide spokesman said his company fulfilled that obligation.
 
In a related article from Bloomberg.com, its interesting to note that Bank of America Corporation. the second- biggest U.S. bank, said it may not guarantee $38.1 billion of Countrywide Financial Corporation’s debt after taking over the mortgage lender, increasing the likelihood of a default.“There is no assurance that any such debt would be redeemed, assumed or guaranteed,” the bank said in an April 30 regulatory filing, adding that no decision has been reached. Investors had grown more optimistic the bank would back Countrywide debt, and Standard & Poor’s said this week it may raise Countrywide’s rating to match Bank of America’s.

Posted in forecast, implode, lending, mortgage, real estate, wholesale | No Comments »

Flawed Home Price Data?

Friday, May 2nd, 2008
San Francisco (MarketWatch) — Commonly cited measures of US home prices are overstating the degree to which the vest majority of Americans’ home values have declined in the last year, producers of two of the most widely tracked indexes acknowledged this week.

 
Top officials with the National Association of Realtors and Standard & Poor’s, which issues the S & P / Case-Shiller Home Price Index, agreed this week their monthly reports are giving imprecise readings of price changes at all levels — national, state, and regionally — due to rare market conditions that are skewing survey results.
 
NAR reported last week that US median home prices fell 7.7% in March from a year ago.  The decline resulted largely from a market anomaly — a steep decline in costlier home sales due to tighter lending standards and high jumbo-mortgage rates coupled with a foreclosure-driven spike in cheaper homes.
 
“If there are a lot more homes sold on the low end and fewer on the high end, the median price is bound to drop dramatically,” NAR Chief Economist Lawrence Yun said.  “In normal times, a median price would reflect typical homeowner equity changes, but these are not normal times.  The jumbo [mortgage] market is frozen and the buying activity is more concentrated in lower value homes.”
 
The S & P / Case-Shiller Index, which Tuesday posted a 12.7% decline for February, is skewed for two reasons of its own — it tracks just 20 major markets (many among the hardest hit) and its “repeat sales” survey by design pulls individual homes both bought and sold in the last few years.  Many of those are now being dumped by distressed home owners and investors who bought at peak market prices and face higher mortgage rate adjustments.
 
The misleading home value figures are just one example of recently sketchy readings of the US economy.  US consumer confidence readings, for instance, have been wildly divergent.  NAR’s Yun said the financial media is seizing on the gloomy numbers and providing little analysis or historical perspective.  He freely admits that NAR’s readings are not accurately reflecting what’s happening with home values for the overwhelming majority of Americans.

 

Posted in forecast, lending, mortgage, real estate, realty | No Comments »

Recession Good News?

Friday, May 2nd, 2008
According to The Street, there are seven reasons to welcome a recession. 
  1. AFFORDABLE HOMES:  Those who bought homes looking to flip them for a quick profit and those who took out huge loans they couldn’t afford to pay will look at a recession with fear, but a recession should have little meaning for those who bought a home with the purpose of living in it for a long time.  For those who had been unable to afford a house because of soaring prices in the past few years, a recession is a golden opportunity.  It brings housing prices down to a more affordable level.  Its a buyer’s market, whether your looking for your first home, an investment property, or a vacation getaway.
  2. LOW MORTGAGE RATES:  Mortgage rates continue to be in the range of historic lows, allowing consumers to get more bang for the buck when looking for quality housing.
  3. GREAT CONSUMER DEALS:  As the economy sours and people buy less and less, stores need to provide better deals and discounts to attract consumers to their doors.  This can mean steep discounts through sales and promotions as well as attractive financing options.  This isn’t just true of retail, but also the second-hand markets, since there are more people trying to sell and fewer looking to buy.  So if you are an investor in collectibles and know them well, you can often benefit in a recession.
  4. INEXPENSIVE STOCKS:  While everyone is taking their money out of the market, hard economic times can be a great time to pick up stocks on the cheap when you look at them as a long-term investment.
  5. GREAT TRAVEL DEALS:  During times of recession, most people don’t think about traveling, so traveling can be a great deal when the economy is shaky.  Lack of demand results in excess inventory to choose from and the ability to bargain for upgrades and other perks.
  6. STREAMLINE YOUR FINANCES:  When things look like they are going to get a bit tougher, people begin to look at their personal finances a bit more closely and start to trim some of the fat.  They look at ways that their money can be better spent and how they can get more for each dollar.  This “trimming of the fat” is a good exercise that can help you see the important financial goals you want to achieve.
  7. LOWER CREDIT CARD RATES:  If you have a good credit rating, you are in a position to get extra perks from your credit card company.  Credit card companies see higher delinquency payment rates during a recession and it becomes even more important for them to keep their best customers. 
While most people will look at a recession with fear and uneasiness, it’s important to also realize that this is an opportunity to get some deals and improve your personal finances.

Posted in forecast, lending, mortgage | No Comments »

Wholesale Lending Changes

Wednesday, April 16th, 2008
Its been another eventful week for wholesale lenders. Washington Mutual announced they are exiting the wholesale market and focusing exclusively on retail operations.  The last day for brokers to submit loans to Washington Mutual’s wholesale operation was April 10, 2008, and wholesale operations will officially close August 31, 2008.
 
In March 2008, reports began to spread announcing that Washington Mutual was “melting down.”  According to cnnmoney.com, the company it a 12-year low on March 7 with shares of the Seattle-based lender dropping 15% to $10 per share after The Wall Street Journal reported that WaMu, under pressure from regulators, had begun looking for cash infusions from private equity and other investors.
 
According to Bloomberg (April 8), Washington Mutual does not stand alone.  Citigroup, Bank of America, and Wells Fargo have the thinnest safety cushions against losses reported in seven years.  These margins may drop further in coming weeks as credit ratings on $704 billion of bonds have been cut following the decline in the housing market nationally.  Sheila Bair, chairman of the Federal Deposit Insurance Corporation, said last week “that downgrades may compromise bank capital ratios enough that some of the largest institutions will no longer be considered well capitalized.”  If this happens (banks with capital levels below regulatory benchmarks), then these institutions could be subject to even greater scrutiny from regulators.
 
What does this mean to you as a real estate agent?  Ensure that your lending partner is not captive to a single mortgage institution or investor.  This is a market where diversification will serve the client’s best interests.

Posted in implode, lending, mortgage, wholesale | No Comments »