I've never been so amazed on how many people believe every thing they hear on the news. Almost every person that I have met in the last month are amazed that I'm still doing business in the mortgage industry. They all thought that mortgages were near impossible to obtain at this point and were surprised to hear that I was not filing for unemployment. What about the credit squeeze they heard about on the news?
The facts are, that mortgages are still being approved and funded every day. Yes, the guidelines can be tougher in some places and there are a lot of loans that we can no longer due. However, you don't have to have an 800 credit score or 20% down to be approved for a loan. NOT EVEN CLOSE.
There are still 100% financing options available and you don't necessarily have to have GREAT credit to obtain no money down financing. And, YES, you can still obtain a mortgage loan if you can't verify your income. AND, YES, you can still obtain a mortgage for an investment property.
However, lenders will no longer approved loans with layered risk (multiple risk factors). If you don't have great credit and can't verify your income, good luck finding a loan. Or if you want to purchase an investment property with no money down, have fun trying. There are dozens of programs still available (with good rates) that will lend money to people with a lower credit score or can't verify income or don't want to put money down, but you can't have multiple risk factors.
When we look back in 5-10 years at the mortgage meltdown, I believe layered risk will be one of the biggest lessons learned. A lot of these loans are great programs, but there can't be multiple risk factors involved within these loans.
Greg Selters
Mortgage Manager
Prosperity Financial, LLC
http://www.myprosperityfinancial.com/
Monday, November 10, 2008
Monday, July 28, 2008
Why the Mortgage Bail Out Bill Won't Work?
There has been a lot of hype surrounding the Mortgage Bail Out Bill that is scheduled to be signed by President Bush today. However, it's all been for the wrong reason. Our government has waisted a lot of time and tax payer's money for a bill that will cause more harm than good. I'm not sure how they could get this so wrong and not have a clue.
Why won't it work and what is wrong with the bill?
Why won't it work and what is wrong with the bill?
- To be eligible for the bail out you must have obtained a loan between January 2005 and June of 2007. So if you received a loan prior to January 2005 or after June 2007 you are out of luck.
- To receive help your current lender must be willing to write a portion of your current loan balance, similar to a short sale . If you currently owe $250,000 and your home's value is only $200,000, your current lender will have to write of $70,000.00. Don't get me wrong a lot of lenders will do this, but it's a process and not an easy one. Most consumers will not be able to navigate through the process on their own and very few lenders will be willing to help as it will take a lot of time and very little in compensation.
- The consumer will have to share any appreciation they obtain with the government, up to 100%!!! If the consumer refinances or sales their house with in the 1st year the government would get 100% of the profit. The percentage the government would receive decreases 10% every year there after but is guaranteed to receive at least 50% of the profit regardless when you sale or refinance.
- TIME!!! There will also be a huge back log to obtain approval as all of these loans will have to be manually underwritten. Lenders are already struggling to keep up with current FHA loans that must be manually underwritten and a lot of lenders have placed tight guidelines on FHA loans that they will manually underwrite. I foresee a lot of lenders not offering this new FHA program as they will not be able to handle the workload and/or it will be cost prohibitive.
Not only will the bail out fall short in helping the millions Americans, it has made it tougher for millions of American to purchase a home. The bill will eliminate down payment assistance (DPA) programs that millions of Americans use to help purchase a house AND it raises the the down payment requirements to 3.5%. While I agree with the elimination of DPA this is not the time to do it. We have now cutoff millions of potential home owners ability to purchase a house at time that we are trying to stimulate the housing market. How will this help???
If you are in a house or mortgage that you need to get our of you need to call a mortgage specialist and discuss your options. We will provide a free consultation to review your options and help you develop a plan.
Friday, May 9, 2008
100% Financing And Much More
In this market there is no doubt that it's tougher to get financing then it was a year ago or even a few months ago. If you are self-employed or trying to buy a house with no money down you already know this. But it doesn't mean you can qualify for a mortgage, even at 100% or with stated income. Although you can't go to your local bank and get a loan at 100% financing or with stated income, mortgage brokers have access to these types of loans.
Why don't you hear about these programs, because a lot of brokers are lazy and complacent. They are still in the same mind set they were a few years ago, they have a few lenders that they work with and when their lenders eliminate programs they assume every one has. A lot professionals in the business also have the mindset if they can't help you now, they can't help you.
Don't give up if you have been turned by a lender or even 5, there are programs out there that can help you achieve your goals, but you have to be willing to do the research. I spend about 2 hours a day looking for new lenders and new programs that can help my clients (and I know where to look). Yes, you might have to do a little work to improve your credit scores, but your mortgage professional should be able to help you do this. I would say about 25% of our clients needed help with improving their scores 20-30 points before we could do a loan, but that usually can be done with in 60 days.
If you are self-employed, looking for 100% financing, or just need help finding a loan call us, we will work you to find the right solution, whether that is doing a loan with us or another option that will meet your needs better.
Prosperity Financial - Your Mortgage Manager
Why don't you hear about these programs, because a lot of brokers are lazy and complacent. They are still in the same mind set they were a few years ago, they have a few lenders that they work with and when their lenders eliminate programs they assume every one has. A lot professionals in the business also have the mindset if they can't help you now, they can't help you.
Don't give up if you have been turned by a lender or even 5, there are programs out there that can help you achieve your goals, but you have to be willing to do the research. I spend about 2 hours a day looking for new lenders and new programs that can help my clients (and I know where to look). Yes, you might have to do a little work to improve your credit scores, but your mortgage professional should be able to help you do this. I would say about 25% of our clients needed help with improving their scores 20-30 points before we could do a loan, but that usually can be done with in 60 days.
If you are self-employed, looking for 100% financing, or just need help finding a loan call us, we will work you to find the right solution, whether that is doing a loan with us or another option that will meet your needs better.
Prosperity Financial - Your Mortgage Manager
Tuesday, April 29, 2008
Questions YOU SHOULD be Asking
Any time I talk with a client or introduce myself to a stranger as a mortgage professional, the first and usually only question I receive, is what are your rates? Obviously, price (rate and closing costs) are important to every one, but I'm amazed that is the only question I hear?
While, price is an important factor when making a decision on what lender to use, service is more important. The problem is most people don't understand how great service from their lender can save them thousands of dollars and a dozen headaches. Here are some questions that you should be asking your lender and why they are important.
What is your process and how do you communicate the status/progress of the approval process? While all lenders basically have the same process, they all do it differently, and this can be important if there is a time crunch, especially on purchase transactions. Communication is also very important, you want to make sure you are working with a lender that communicates effectively with all parties involved. Also, make sure your lender is willing to fax/email/mail your rate lock to you, this will help you avoid the bait and switch tactic some lenders employ.
What after closing services do you offer? I believe this is one of the most important questions you can ask. You want to make sure you have a great relationship with you lender and that they are looking after you best interest even after the loan closes. A good lender will offer multiple after closing services such as, credit analysis, rate watch, and value analysis. After closing services can save you thousands of dollars, if not hundreds of thousands.
How do you store/dispose of my private information? This should be a no brainer, however, there have been many instances in the news of lenders throwing away clients private information (application, tax returns, bank statements), in the trash with out shredding it. Make sure you lender takes your privacy as seriously as you do.
Ask for Referrals!!!!! It blows me away how few people ask me for referrals from past clients. Any GREAT mortgage lender will have a plenty of refferals that you can call and ask about their services. Great lenders have raving fans as clients and their clients never have problems talking to prospective clients. If your lender is hestitant or will not provide you referrals, find a new lender.
Prosperity Financial - Your Mortgage Manager
www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com
While, price is an important factor when making a decision on what lender to use, service is more important. The problem is most people don't understand how great service from their lender can save them thousands of dollars and a dozen headaches. Here are some questions that you should be asking your lender and why they are important.
What is your process and how do you communicate the status/progress of the approval process? While all lenders basically have the same process, they all do it differently, and this can be important if there is a time crunch, especially on purchase transactions. Communication is also very important, you want to make sure you are working with a lender that communicates effectively with all parties involved. Also, make sure your lender is willing to fax/email/mail your rate lock to you, this will help you avoid the bait and switch tactic some lenders employ.
What after closing services do you offer? I believe this is one of the most important questions you can ask. You want to make sure you have a great relationship with you lender and that they are looking after you best interest even after the loan closes. A good lender will offer multiple after closing services such as, credit analysis, rate watch, and value analysis. After closing services can save you thousands of dollars, if not hundreds of thousands.
How do you store/dispose of my private information? This should be a no brainer, however, there have been many instances in the news of lenders throwing away clients private information (application, tax returns, bank statements), in the trash with out shredding it. Make sure you lender takes your privacy as seriously as you do.
Ask for Referrals!!!!! It blows me away how few people ask me for referrals from past clients. Any GREAT mortgage lender will have a plenty of refferals that you can call and ask about their services. Great lenders have raving fans as clients and their clients never have problems talking to prospective clients. If your lender is hestitant or will not provide you referrals, find a new lender.
Prosperity Financial - Your Mortgage Manager
www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com
Monday, April 14, 2008
Are you Kidding Me?!?!?
As most of you know in February of 2009 all television broadcasts are moving to digital. Which means that you will be required to have a TV or attenna or converter box that can receive the digital signal. What you might not know is that the Federal Government may spend over $1.3 TRILLION to help people with conversion!!!
ARE YOU JOKING????
Your tax money is going to help ensure people don't miss out on American Idol??? I didn't know watching TV was a right as an American? With all the problems we are facing now, we can't find a better way to spend this money?
Why it Will Get Worse
I know I have been predominately optimistic about the local real estate market, however, over the last few weeks I'm starting to think we might not be out of trouble yet. In fact, the problem may be getting bigger. Why the change of heart? Lender guidelines, "Declining Markets, and Americans spending habits"
This ugly tag of a "declining market" that lenders and mortgage insurance companies have set on most of Colorado and the nation is going to hurt. If a market is designated as a "declining market" financing becomes much more difficult for those who are trying to obtain financing (purchase or refinancing). 100% financing, forget about it. In a "declining market" 95% financing is difficult to find, a lot of lenders will on financing 90%-92%. Ten, twenty years ago this would not have been a problem (actually the norm), however, very few people plan or have the ability to make a down payment now.
Lender and mortgage insurance guidelines are becoming more conservative by the day. Stated income loans, which most self-employed borrowers use to qualify, are becoming extinct or so limited they are only useful to a small percentage. Other similar guideline changes have excluded thousand from home ownership or trapping them in bad loans that they can't refinance.
For example, I talked to a borrower the other day, he purchased his house 2 years ago with no money down. He has a great credit score 743, he has never made a late payment in his life, however, because he lives in a "declining market" and is self-employed he has no chance at obtaining a new loan at this time. He can't afford his payment when it increases $650/month, he is going to have to walk a way from his home.
So we have an excess of homes on the market, thousands of people who own homes and now in trouble (because of the economy, life changing events, or bad loans), lenders shutting the doors on a majority of society, and Americans who like to spend and hate to save. This is bad news for the national economy and local real estate market. However, all of the plans that have came from the White House or Capital Hill will do little or nothing to stop the slide. Watch out!!!
Prosperity Financial - Your Mortgage Manager
Lafayette, CO
www.colomortgages.com www.myprosperityfinancial.com www.3bed2bath.net
This ugly tag of a "declining market" that lenders and mortgage insurance companies have set on most of Colorado and the nation is going to hurt. If a market is designated as a "declining market" financing becomes much more difficult for those who are trying to obtain financing (purchase or refinancing). 100% financing, forget about it. In a "declining market" 95% financing is difficult to find, a lot of lenders will on financing 90%-92%. Ten, twenty years ago this would not have been a problem (actually the norm), however, very few people plan or have the ability to make a down payment now.
Lender and mortgage insurance guidelines are becoming more conservative by the day. Stated income loans, which most self-employed borrowers use to qualify, are becoming extinct or so limited they are only useful to a small percentage. Other similar guideline changes have excluded thousand from home ownership or trapping them in bad loans that they can't refinance.
For example, I talked to a borrower the other day, he purchased his house 2 years ago with no money down. He has a great credit score 743, he has never made a late payment in his life, however, because he lives in a "declining market" and is self-employed he has no chance at obtaining a new loan at this time. He can't afford his payment when it increases $650/month, he is going to have to walk a way from his home.
So we have an excess of homes on the market, thousands of people who own homes and now in trouble (because of the economy, life changing events, or bad loans), lenders shutting the doors on a majority of society, and Americans who like to spend and hate to save. This is bad news for the national economy and local real estate market. However, all of the plans that have came from the White House or Capital Hill will do little or nothing to stop the slide. Watch out!!!
Prosperity Financial - Your Mortgage Manager
Lafayette, CO
www.colomortgages.com www.myprosperityfinancial.com www.3bed2bath.net
Wednesday, March 26, 2008
Paying For Other's Mistakes...
You came home after a hard day at work and open your pay check, and you are astonished, upset, angry when you see how much of your check has been taken my Uncle Sam. If you are still mad, STOP READING NOW!!!
Although most American home owner's made a conscious effort to purchase a house within their budget, obtain a loan that would fit their financial plan, and even struggled to make their payments in hard times, they now will be forced to help those who didn't. Many Americans don't know that their hard earned money and taxes they pay will be used to help bailout homeowners who made bad choices and may lose their home in foreclosures. The Federal Government has already allocated billions of dollars to bailout investment banks that made poor decisions and now there is legislation that is gaining popularity to bailout homeowners, AT OUR COST!!!
Politicians are quick to note that some of these homeowners were victims of fraud, and will share personal stories of these people to help them pass these bills. The fact is, a majority of these people made poor financial decisions and either purchased more house than they could afford or gambled with ARM loans and didn't follow up and refinance their house before the loan adjusted or over spent on materialistic items (like new cars, boats, electronics) and now can't make their mortage payment. And now, we have to pay for their mistakes and bail them out.
When will we as society start holding people responsible for their mistakes and make them accept the consequences of their actions??? If I don't manage my business correctly and I'm forced to close my doors the government is not going to come and save me, nor do I expect them or want them to. I understand and fully support helping those who are less fortunate, but I'm responsible for my failures and the consequences, as well as, my success and prosperity. I shouldn't have to bare the burden of others mistakes nor should I share in their prosperity. But I guess that is what our nation is becoming or already has become?
Prosperity Financial - Your Mortgage Manger
Say it Ain't so, Joe
Lenders are once over reacting and creating another mortgage mess. This time they are eliminating programs for qualified borrowers making it tougher for people to purchase or even keep their homes.
Every day I hear of new guidelines or lenders eliminating products eliminating another set of borrowers from purchasing or refinancing their house. There are very few lenders offering 100% LTV loans even if you have great credit, income, and assets it's a lot harder to obtain financing then it was a few months ago.
Self-employed borrowers options to obtain financing is also becoming scarce. A lot of self-employed borrowers typically use stated income loans because their tax returns do accurately reflect their cash flow. However, many lenders are eliminating their conforming stated income programs making it tough or impossible for them to obtain financing. If they can obtain financing the loan amount for which they will be approved will be much lower than before.
These two changes are going to eliminate a lot of borrowers from the real estate market and will also probably help increase the foreclosure numbers around the nation. There are some alternatives for borrowers, such as FHA and others but they will not be able to help a lot of these people. Not good for the real estate market and not good for the value of your house.
Why are lenders over reacting? There are a few reasons, supply and demand on the secondary market and mortgage insurance companies are facing problems with their current portfolio of loans that they insured over the last few years.
If you need help navigating through mortgage chaos to find financing that meets your financial needs, please call and we would be happy to help you or guide you in the right direction.
Prosperity Financial - Your Mortgage Manager
http://www.3bed2bath.net/ http://www.colomortgages.com/ http://www.myprosperityfinancial.com/
Every day I hear of new guidelines or lenders eliminating products eliminating another set of borrowers from purchasing or refinancing their house. There are very few lenders offering 100% LTV loans even if you have great credit, income, and assets it's a lot harder to obtain financing then it was a few months ago.
Self-employed borrowers options to obtain financing is also becoming scarce. A lot of self-employed borrowers typically use stated income loans because their tax returns do accurately reflect their cash flow. However, many lenders are eliminating their conforming stated income programs making it tough or impossible for them to obtain financing. If they can obtain financing the loan amount for which they will be approved will be much lower than before.
These two changes are going to eliminate a lot of borrowers from the real estate market and will also probably help increase the foreclosure numbers around the nation. There are some alternatives for borrowers, such as FHA and others but they will not be able to help a lot of these people. Not good for the real estate market and not good for the value of your house.
Why are lenders over reacting? There are a few reasons, supply and demand on the secondary market and mortgage insurance companies are facing problems with their current portfolio of loans that they insured over the last few years.
If you need help navigating through mortgage chaos to find financing that meets your financial needs, please call and we would be happy to help you or guide you in the right direction.
Prosperity Financial - Your Mortgage Manager
http://www.3bed2bath.net/ http://www.colomortgages.com/ http://www.myprosperityfinancial.com/
Thursday, March 13, 2008
Mortgage Brokers Hitting the Books
Colorado has announced that mortgage brokers licensed to do business in the State of Colorado will have to complete 40 hours of education by the end of 2008. Until now, any one that was registered/licensed could originate mortgage loans with little or no knowledge of the industry.
This is great for the industry and consumers, as consumers can now be assured their mortgage brokers is knowledgeable about the industry and not some one who was selling cars yesterday. However, I would like to see it go a step further and require all mortgage professionals, even those who work for banks, be required to complete education courses. If we really want to protect consumers we need to make sure every mortgage broker and loan officer is required to complete classes that will provide them with the knowledge to originate mortgage loans.
This is great for the industry and consumers, as consumers can now be assured their mortgage brokers is knowledgeable about the industry and not some one who was selling cars yesterday. However, I would like to see it go a step further and require all mortgage professionals, even those who work for banks, be required to complete education courses. If we really want to protect consumers we need to make sure every mortgage broker and loan officer is required to complete classes that will provide them with the knowledge to originate mortgage loans.
Monday, March 10, 2008
Are you Trying to Pay Off Your Mortgage?
I'm still surprised with how many people I talk to on a weekly basis that hold paying off their mortgage as one of their main financial goals. My first question is always why? And I never receive a good response.
While our parents and grandparents worked hard every day to pay off their mortgage, this is not the best use of your money in today's market. I know their is a huge sense of pride to own your house free and clear, but your equity in your house is not making money for you.Also there has been a large marketing campaign recently about a new program in the mortgage industry that will help you pay off your mortgage quicker.
However, if you leverage your equity in the house and invest wisely (and conservatively looking for a 6% return), you would not only be able to pay off your mortgage within 30 years but you would also have hundreds of thousands of dollars in liquid assets.
Your mortgage should be a part of your financial plan that allows you to accomplish your financial goals quicker. For more information on how you can be using your mortgage to help you meet your long term financial goals please call us.
Prosperity Financial - Your Mortgage Manager
Lafayette, CO
www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com
While our parents and grandparents worked hard every day to pay off their mortgage, this is not the best use of your money in today's market. I know their is a huge sense of pride to own your house free and clear, but your equity in your house is not making money for you.Also there has been a large marketing campaign recently about a new program in the mortgage industry that will help you pay off your mortgage quicker.
However, if you leverage your equity in the house and invest wisely (and conservatively looking for a 6% return), you would not only be able to pay off your mortgage within 30 years but you would also have hundreds of thousands of dollars in liquid assets.
Your mortgage should be a part of your financial plan that allows you to accomplish your financial goals quicker. For more information on how you can be using your mortgage to help you meet your long term financial goals please call us.
Prosperity Financial - Your Mortgage Manager
Lafayette, CO
www.colomortgages.com www.3bed2bath.net www.myprosperityfinancial.com
Friday, February 29, 2008
What Your Lender Should be TEACHING YOU!!!!
A majority of the public has very little understanding of the mortgage industry, heck, 70% of Realtors (and a lot of mortgage professionals) I speak with have very little knowledge of the mortgage industry. Even though purchasing a house is the largest financial transaction most of us will ever be a part of and, a mortgage is the largest debt we will ever have there is no LIVE resource to educate the masses.
Yes, you can go online and do research and HUD does have a hot line that can provide general advice, but most sources are general and impersonal or WRONG.
Due to the lack of education sources, your mortgage broker should be providing you with the information you need and want (and what you don't want to hear). Many mortgage brokers often only provide information to their clients that they believe they want or when asked. However, as professionals in a business that is often rarely comprehended beyond the basics, mortgage brokers have a responsibility to educate their customers beyond the scope of "must need" information for their specific loan.
Educating the borrower on program and real estate risks/benefits, how their mortgage fits in with their financial plan, using credit, and how they can become a "better borrower" for lenders should be information discussed with ALL borrowers. Mortgage brokers usually believe borrowers don't want this information unless they ask. The problem is a lot people either don't think about these issues or believe the myths they have heard and don't bother asking because they "know" the answer.
How much do you know? Answer these questions through comments or email.
What are the major factors that determine your credit?
Is it better to have an adjustable rate mortgage or fixed mortgage?
How much money do you need to put down to purchase a house now?
What is a "good" credit score?
What do lenders look at to determine if they will approve your for a loan? How do they determine what interest rate you will receive?
Is it better to payoff your mortgage? Why or why not?
gselters@myprosperityfinancial.com
Prosperity Financial - Your Mortgage Manager and Teacher
Lafayette, Colorado
http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/
Thursday, February 21, 2008
ARMs Making a Come Back???
Over the last 12 months we have seen a decrease in adjustable rate mortgages (ARMs). The main reason for the decrease was that borrowers could obtain a fixed mortgage at the same or a better rate them ARMs. However, ARMs are now offering significant lower interest rates than their fixed counterparts. Currently a 5/1 ARM is averaging about 0.875% lower than a 30 year fixed.
Does the discount on ARM loans mean it they are the best choice at this time? It depends on your situation and goals. If you are planning on staying in your house for more than 5 years it probably doesn't make sense to take the lower rate. On a $200,000 loan you would save almost $110/month if you went with ARM loan, but you would have to refinance your loan to avoid your rate increasing. Therefore, you would save $6,594 over 5 years on your mortgage payment, but would spend $3,500 in closing costs to refinance and would be gambling that you could get a fixed rate as good or better than you could today.
There are also other factors that you would need to consider that may limit your ability to refinance such as; income and liabilities, real estate market, and changes in the mortgage industry. Many people have learned this lesson the hard way in the last 6 months. They were able to save thousands of dollars over a few years, but the real estate market changed or their income decreased and they were unable to refinance.
ARMs are still great options and can save you a lot of money, here are some situations when to consider an ARM:
Does the discount on ARM loans mean it they are the best choice at this time? It depends on your situation and goals. If you are planning on staying in your house for more than 5 years it probably doesn't make sense to take the lower rate. On a $200,000 loan you would save almost $110/month if you went with ARM loan, but you would have to refinance your loan to avoid your rate increasing. Therefore, you would save $6,594 over 5 years on your mortgage payment, but would spend $3,500 in closing costs to refinance and would be gambling that you could get a fixed rate as good or better than you could today.
There are also other factors that you would need to consider that may limit your ability to refinance such as; income and liabilities, real estate market, and changes in the mortgage industry. Many people have learned this lesson the hard way in the last 6 months. They were able to save thousands of dollars over a few years, but the real estate market changed or their income decreased and they were unable to refinance.
ARMs are still great options and can save you a lot of money, here are some situations when to consider an ARM:
- You plan on selling within the fixed term on the ARM
- You plan on refinancing or paying off the loan within the fixed term of the ARM
- You know you will be making more money in the next few years and want to purchase a house that will meet your future needs and an ARM will allow you to afford the house and you can refinance to a fixed rate mortgage within the fixed term of the ARM.
Before refinancing or purchasing you should always think about your immediate needs and future goals and plans before deciding on a mortgage program. If you need help with deciding which loan will be best for you please feel free to contact us.
Prosperity Financial - Your Mortgage Manger
Lafayette, Colorado
http://www.3bed2bath.net/ http://www.colomortgages.com/ http://www.myprosperityfinancial.com/
Wednesday, February 20, 2008
Home Ownership at it's Highest Levels
We have all heard the criticism and negative consequences of the subprime sector and the relaxed guidelines many lenders used to approve loans over the last few years. However, I have not once seen a report on the news regarding the record levels of home ownership. The fact is, that more people own their home now than ever before, about 70% of Americans.
As shown in the cartoon on this blog, lenders can never escape criticism for their underwriting guidelines, they are either too strict or too lenient. Obviously many lenders went a little to far approving high risk loans, but I believe we have once again over reacted and many well deserving people will miss out on home ownership.
Consider this, many experts are stating that 20% of subprime loans are failing or will fail, that would mean that 80% are NOT. Even if their projections are off at worse we are still looking at a 70% success rate, not bad. These are people who otherwise would not have been able to purchase a house or would have lost their house in foreclosure due to a job loss or another life changing event.
I believe if we can approve our financial literacy and regulation in the mortgage industry, we can then afford to take chances on people and avoid the credit disaster we are in now.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
Thursday, February 14, 2008
Finally, They are Trying to Get it Right
A baby could have foreseen what was going to happen when Colorado implemented their mortgage licensing regulation. In last 12 months there have been a migration of mortgage hacks who could not obtain licensing because of fraud or other past issues to federally charted banks (Chase, Wells Fargo, TCF, Washington Mutal). Not any more.
It appears that State of Colorado is finally trying to look at for the consumers and ignore the lobbyist. In an attempt to help protect consumers (which is what they stated was their reason was from the beginning with mortgage licensing), Colorado will require ALL mortgage originators to be licensed by the state regardless of their employer.
Initially, only mortgage brokers that were not HUD approved were required to be registered/license, and then the state amended the law to require all mortgage brokers to be licensed, but employees of federally and state chartered banks were exempt. However, the Division of Real Estate has determined that EVERYONE who originates loans must be licensed in Colorado.
There is a big obstacle that stands in the way of making this a permanent reality. The Supreme Court has ruled in the past that federally charted banks are governed by the Office of Comptroller and Currency and are not subject to state regulations. However, the vote on the decision was very close (3-5) and, at issue then and now will be, whether federal oversight of federally chartered banks extend to their mortgage subsidiaries and granting them exemption from state regulations.
Let's hope they get this right for consumers, a fraud is a fraud, it doesn't matter if they work as a mortgage broker or Wells Fargo and they should have access to our personal information.
Prosperity Financial, LLC -Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/
It appears that State of Colorado is finally trying to look at for the consumers and ignore the lobbyist. In an attempt to help protect consumers (which is what they stated was their reason was from the beginning with mortgage licensing), Colorado will require ALL mortgage originators to be licensed by the state regardless of their employer.
Initially, only mortgage brokers that were not HUD approved were required to be registered/license, and then the state amended the law to require all mortgage brokers to be licensed, but employees of federally and state chartered banks were exempt. However, the Division of Real Estate has determined that EVERYONE who originates loans must be licensed in Colorado.
There is a big obstacle that stands in the way of making this a permanent reality. The Supreme Court has ruled in the past that federally charted banks are governed by the Office of Comptroller and Currency and are not subject to state regulations. However, the vote on the decision was very close (3-5) and, at issue then and now will be, whether federal oversight of federally chartered banks extend to their mortgage subsidiaries and granting them exemption from state regulations.
Let's hope they get this right for consumers, a fraud is a fraud, it doesn't matter if they work as a mortgage broker or Wells Fargo and they should have access to our personal information.
Prosperity Financial, LLC -Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/
Wednesday, February 13, 2008
Why Can't They Report the Full Story?
The Denver Post and Rocky Mountain news both had an article published online from the AP about Denver's foreclosure ranking. The headlines stating Denver is ranked 9th in the nation for foreclosure filing in 2007.
The article has two small paragraphs about the Denver market and then reports on other markets around the nation. However, in the brief mention about the Denver market they fail to mention that foreclosures were down in the 4th quarter compared to the 3rd quarter and from December to November.
The average reader is going to read the article or just the headline and believe that our market is still in shambles, when that is not the case. I understand free press, but shouldn't publications be held to some type of standard to report the full story?
Prosperity Financial, LLC - Your Mortgage Manager
http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/
The article has two small paragraphs about the Denver market and then reports on other markets around the nation. However, in the brief mention about the Denver market they fail to mention that foreclosures were down in the 4th quarter compared to the 3rd quarter and from December to November.
The average reader is going to read the article or just the headline and believe that our market is still in shambles, when that is not the case. I understand free press, but shouldn't publications be held to some type of standard to report the full story?
Prosperity Financial, LLC - Your Mortgage Manager
http://www.colomortgages.com/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/
Tuesday, February 12, 2008
Saturday, February 9, 2008
Don't They Know What They're Doing????
Congratulations Nancy Pelosi and California home owners!!!!
A revised economic stimulus package has now passed the Senate and House that includes a temporary increase in the conforming loan limit and the upper threshold for FHA loan programs to as much as $729,000. Which will help only homeowners in a few markets around the county, but will raise rates around the country and jeopardize the stability of Fannie and Freddie.
The bill allows Fannie Mae, Freddie Mac, and FHA to purchase and guarantee loans up to 125% of the median home price in any given market for the duration of 2008. Currently, Fannie Mae and Freddie Mac are limited to loans equal to or below $417,000 regardless of location and FHA limits are based on the market (Denver Metro is about $310,000).
Regardless, this will have no impact/help on Colorado home owners, as there will be only a few if any "markets" that will have a median home price great enough to matter. Even if you have a jumbo loan now, unless you live in resort community like Aspen, Vail, or Beaver Creek your "market" most likely won't qualify.
Even though we won't benefit from the increase, we will PAY FOR IT!!! Larger loan amounts carry greater risk for the lenders, especially if they are in markets like California, Florida, Las Vegas that are suffering double digit depreciation. Fannie and Freddie must change (increase)their pricing (rates) in order to account for this additional risk they are taking on.
Another problem with this bill, is Fannie Mae and Freddie Mac are barely surviving with the current conditions in the market. This additional risk they will be adding to their portfolio is not coming at a good time and may be the straw the breaks the camel's back. And if you thinks are bad now, wait to see what happens if one or both companies fails.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/ http://www.colomortgages.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
A revised economic stimulus package has now passed the Senate and House that includes a temporary increase in the conforming loan limit and the upper threshold for FHA loan programs to as much as $729,000. Which will help only homeowners in a few markets around the county, but will raise rates around the country and jeopardize the stability of Fannie and Freddie.
The bill allows Fannie Mae, Freddie Mac, and FHA to purchase and guarantee loans up to 125% of the median home price in any given market for the duration of 2008. Currently, Fannie Mae and Freddie Mac are limited to loans equal to or below $417,000 regardless of location and FHA limits are based on the market (Denver Metro is about $310,000).
Regardless, this will have no impact/help on Colorado home owners, as there will be only a few if any "markets" that will have a median home price great enough to matter. Even if you have a jumbo loan now, unless you live in resort community like Aspen, Vail, or Beaver Creek your "market" most likely won't qualify.
Even though we won't benefit from the increase, we will PAY FOR IT!!! Larger loan amounts carry greater risk for the lenders, especially if they are in markets like California, Florida, Las Vegas that are suffering double digit depreciation. Fannie and Freddie must change (increase)their pricing (rates) in order to account for this additional risk they are taking on.
Another problem with this bill, is Fannie Mae and Freddie Mac are barely surviving with the current conditions in the market. This additional risk they will be adding to their portfolio is not coming at a good time and may be the straw the breaks the camel's back. And if you thinks are bad now, wait to see what happens if one or both companies fails.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/ http://www.colomortgages.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
Tuesday, February 5, 2008
Top Foreclosure filings by Zip Code
Realty Trac issued a new report showing the top zip codes for foreclosure filings. The good news, out of the top 100 zip codes Colorado only has one listed, 80013 (Aurora). Colorado once had as many as 10 zip codes listed in the top 50.
A good sign for our market?
Yes, but don't get too excited as Colorado still ranks in the Top 10 in total foreclosure filings and annual foreclosure rate. While we still have a long way to go, Colorado is one of only a handful of states that show a decrease in filings in December 2007 compared to November 2007 amd from the 4th quarter 2007 compared to the 3rd quarter.
We are definetly heading in the right direction and I'm optimistic that 2008 will be a rebound year for the real estate market in Colorado.
A good sign for our market?
Yes, but don't get too excited as Colorado still ranks in the Top 10 in total foreclosure filings and annual foreclosure rate. While we still have a long way to go, Colorado is one of only a handful of states that show a decrease in filings in December 2007 compared to November 2007 amd from the 4th quarter 2007 compared to the 3rd quarter.
We are definetly heading in the right direction and I'm optimistic that 2008 will be a rebound year for the real estate market in Colorado.
Prosperity Financial - Your Mortgage Manger
Lafayette, CO
http://www.colomortgages.net/ http://www.myprosperityfinancial.com/ http://www.3bed2bath.net/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
The Economy Still Stinks? Let the Sell OFF Begin!
Here we go, investors on wall street just figured out that our economy still has some steep challenges in front of it and the latest Fed rate cuts has not fixed the problem. I always wonder if this can happen again, every time the Fed has cut the rates in the last 6 months we have seen this same pattern.
Good news is we should see mortgage rates drop today and again tomorrow morning.
Good news is we should see mortgage rates drop today and again tomorrow morning.
Monday, February 4, 2008
What Happened to Service?
A friend was telling me a story the other day about the terrible service he received from his cable provider. The customer service agent was rude, unable to fix the problem and even told him that a previous problem was fixed by "magic" and she didn't what else she could do.
When did poor service become the norm?
In an effort to try to save money companies not only outsource factory jobs, but also customer service jobs. There is nothing more frustrating than when some thing doesn't work and you call customer service and you have to struggle to understand the service agent. I know they are probably hard workers and great people, but that doesn't help me fix the problem. I know a few times I have recommended my cell phone provider just becuase the customer service agent speaks English that I can understand??? Not becuase the service was outstanding, but they had customer service I could use.
However, it's not like we deliver great service ourselves. From utility companies to waiters/waitress to retail workers service is typically horrible. I went to a rent a movie last week and it took 30 minutes to check out!!! It wasn't busy (my wife and I were the only people in the store), but the cashier had better things to do than help us and when she did decide to do her job she was incompetent and slow. And her manager sat their and watched it all happen?
I wish I knew what was the source or reason for the lack of service in our society and how to fix it, but I don't have that much time on my hands. So instead of crying, I have decided to celebrate good service on my website and blog and will be creating a working list of "GOOD" service that I have experienced. And I'm not talking about just people/companies providing service (which often passes as good service these days), but actual people/companies that go above and beyond.
If you have any nominations or stories, please feel free to let me know.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, CO
Purchase - Refinance - Cash-Out - Home Equity - Debt Consolidation - Great Rates
When did poor service become the norm?
In an effort to try to save money companies not only outsource factory jobs, but also customer service jobs. There is nothing more frustrating than when some thing doesn't work and you call customer service and you have to struggle to understand the service agent. I know they are probably hard workers and great people, but that doesn't help me fix the problem. I know a few times I have recommended my cell phone provider just becuase the customer service agent speaks English that I can understand??? Not becuase the service was outstanding, but they had customer service I could use.
However, it's not like we deliver great service ourselves. From utility companies to waiters/waitress to retail workers service is typically horrible. I went to a rent a movie last week and it took 30 minutes to check out!!! It wasn't busy (my wife and I were the only people in the store), but the cashier had better things to do than help us and when she did decide to do her job she was incompetent and slow. And her manager sat their and watched it all happen?
I wish I knew what was the source or reason for the lack of service in our society and how to fix it, but I don't have that much time on my hands. So instead of crying, I have decided to celebrate good service on my website and blog and will be creating a working list of "GOOD" service that I have experienced. And I'm not talking about just people/companies providing service (which often passes as good service these days), but actual people/companies that go above and beyond.
If you have any nominations or stories, please feel free to let me know.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, CO
Purchase - Refinance - Cash-Out - Home Equity - Debt Consolidation - Great Rates
Wednesday, January 30, 2008
Feds Cut the Rates Again - What Does it Mean
Every time the Federal Reserve cuts the rates the phone calls I receive appear to be ten fold of a normal day. Every one is curious what it will do to their mortgage rate, does it make sense to refinance now? What almost every one doesn't know, is the when the Federal Reserve lowers the Fed funds rate it doesn't necessarily correspond to an equal drop in mortgage rates and often mortgage rates increase. Let's see if I can keep this simple...
When the Fed lowers the fund rates it has a direct effect on short term rates, (credit cards, lines of credit (HELOCs). So you can expect the interest you pay on your credit cards and home equity loans to decrease (unless if you have a Capital One card, they have been known to raise their rates when the Fed cuts rates). However, you will now earn less on money you have invested in CD's, money markets, and savings account.
Unlike short term rates, mortgage rates are determined by the market and adjust according to the market (some days it will adjust multiple times a day and others none at all). The Fed lowers the funds rate to try to stimulate the economy by enticing people to spend money and the stock market usually has a positive reaction to rate cuts, at least in the short term. When people are investing their money in the stock market there is less money to invest in bonds. The 10 year bond is a good indicator of where mortgage rates are heading. If the bond market is not doing well, mortgage rates increase.
There is obviously a lot more than this, but this at least will give you a good idea on how mortgage rates work. While, we saw an increase in mortgage rates today, I believe the optimism in the market will be short lived and we will see rates fall again, at least for a day or a few hours like it did last week. So if you are thinking of refinancing, stay tuned as this next week or two will be the best time to do it.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/
Purchase - Refinance - Debt Consolidation - Cash-Out - Home Equity - Great Rates
When the Fed lowers the fund rates it has a direct effect on short term rates, (credit cards, lines of credit (HELOCs). So you can expect the interest you pay on your credit cards and home equity loans to decrease (unless if you have a Capital One card, they have been known to raise their rates when the Fed cuts rates). However, you will now earn less on money you have invested in CD's, money markets, and savings account.
Unlike short term rates, mortgage rates are determined by the market and adjust according to the market (some days it will adjust multiple times a day and others none at all). The Fed lowers the funds rate to try to stimulate the economy by enticing people to spend money and the stock market usually has a positive reaction to rate cuts, at least in the short term. When people are investing their money in the stock market there is less money to invest in bonds. The 10 year bond is a good indicator of where mortgage rates are heading. If the bond market is not doing well, mortgage rates increase.
There is obviously a lot more than this, but this at least will give you a good idea on how mortgage rates work. While, we saw an increase in mortgage rates today, I believe the optimism in the market will be short lived and we will see rates fall again, at least for a day or a few hours like it did last week. So if you are thinking of refinancing, stay tuned as this next week or two will be the best time to do it.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/
Purchase - Refinance - Debt Consolidation - Cash-Out - Home Equity - Great Rates
Tuesday, January 29, 2008
We Can't Pay for Financial Literacy?
A bill has been introduced at the Capitol to bring financial literacy to Colorado Schools. The goal of the bill is to help teach our children about mortgages , personal finances, savings, budgeting and other financial lessons.
What a great idea!!! Let's provide our children with the information and knowledge they need so they don't make the same mistakes we did. We will show them why it's important to save and invest their money, and then HOW TO DO IT. We will teach them why it's not wise to spend your all you money on things you don't need, why it's no smart to max out your credit cards, and why you don't spend more money than you make.
One problem, WE don't want to PAY for it. This new bill would cost about $550,000 to implement in schools around the state. I don't understand how the State of Colorado can't pay for a bill that will save 100 times that in the years to come. Our state spends over $13 million dollars a year for education and recreation programs for PRISONERS in our state. I have an idea, let's spend $550,000 less on convicted felons and use that money for our children.
There was no vote taken on the bill yesterday and funding options will be discussed before a vote on Thursday (1/31/08). Hopefully, they do the right thing.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/
What a great idea!!! Let's provide our children with the information and knowledge they need so they don't make the same mistakes we did. We will show them why it's important to save and invest their money, and then HOW TO DO IT. We will teach them why it's not wise to spend your all you money on things you don't need, why it's no smart to max out your credit cards, and why you don't spend more money than you make.
One problem, WE don't want to PAY for it. This new bill would cost about $550,000 to implement in schools around the state. I don't understand how the State of Colorado can't pay for a bill that will save 100 times that in the years to come. Our state spends over $13 million dollars a year for education and recreation programs for PRISONERS in our state. I have an idea, let's spend $550,000 less on convicted felons and use that money for our children.
There was no vote taken on the bill yesterday and funding options will be discussed before a vote on Thursday (1/31/08). Hopefully, they do the right thing.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/ http://www.myprosperityfinancial.com/
Monday, January 28, 2008
Did You Miss Out?
In this crazy and volatile market there have been many opportunities for home owners to drastically reduce their interest rate and save hundreds of dollars a month. The problem is that the opportunities were short lived and only a very few were able to take advantage of lowest rates offered last week. On Tuesday, rates in the morning were at their lowest levels in over 3 years, however, 3 hours and 4 rate changes later they were up 0.375%-0.5% (still great rates).
By the time most home owners knew about the rates dropping, they already raised a 0.50% or more. It pays to work with a mortgage broker that will manage your mortgage and knows your target rate and payment to refinance. If you have a $250,000 mortgage a 0.50% in rate could save you about $80/month and over $28,000 over the life of your loan.
If you have not heard from your last mortgage broker/banker please feel free to give us a call and we can discuss and help you determine what your target refinance rate should be and ensure the next time rates drop you don't miss out.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
Purchase - Refinance - Cash-Out - Home Equity - Debt Consolidation - Great Rates
By the time most home owners knew about the rates dropping, they already raised a 0.50% or more. It pays to work with a mortgage broker that will manage your mortgage and knows your target rate and payment to refinance. If you have a $250,000 mortgage a 0.50% in rate could save you about $80/month and over $28,000 over the life of your loan.
If you have not heard from your last mortgage broker/banker please feel free to give us a call and we can discuss and help you determine what your target refinance rate should be and ensure the next time rates drop you don't miss out.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
Purchase - Refinance - Cash-Out - Home Equity - Debt Consolidation - Great Rates
Friday, January 25, 2008
What you Don't Hear About in the Tax Rebate Bill?
As always, politicians can't just try to help the masses. There is always a hidden clause that finds it's way in to bills even though it has nothing in common. Most of us have heard about the tax rebate that we may receive due the economic stimulus bill the house passed, however, I bet most of you don't know that there is a clause in there that will raise the conforming loan limit from $417,000 to a maximum of $729,750.
Nancy Pelosi, a California Representative was able to include a one year increase in Fannie Mae and Freddie Mac's loan limits in to the "Tax Rebate" bill. An idea that has been discussed over the last few months with regard to mortgage reform, but many experts believe it will help on a few and will most likely due more harm than good to the overall market. Pelosi, knowing she would not be successful in passing a bill that only raised the conforming the loan limits, is now trying to piggyback on a bill that will most likely pass (what politician won't vote for a tax rebate in an election year????).
Raising the conforming loan limits would force Fannie and Freddie to assume more risk, forcing them to raise rate to account for the risk. So while, raising the loan limits would help very people (mostly California home owners and the real wealthy), the rest of us will be stuck paying higher interest rates.
You have to love politicians? I still don't understand how they can screw up every thing they do.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
www.colomortgages.com www.3bed2bath.net
Purchase - Refinance - Cash-Out- Debt Consolidation - Home Equity - Great Rates
Nancy Pelosi, a California Representative was able to include a one year increase in Fannie Mae and Freddie Mac's loan limits in to the "Tax Rebate" bill. An idea that has been discussed over the last few months with regard to mortgage reform, but many experts believe it will help on a few and will most likely due more harm than good to the overall market. Pelosi, knowing she would not be successful in passing a bill that only raised the conforming the loan limits, is now trying to piggyback on a bill that will most likely pass (what politician won't vote for a tax rebate in an election year????).
Raising the conforming loan limits would force Fannie and Freddie to assume more risk, forcing them to raise rate to account for the risk. So while, raising the loan limits would help very people (mostly California home owners and the real wealthy), the rest of us will be stuck paying higher interest rates.
You have to love politicians? I still don't understand how they can screw up every thing they do.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
www.colomortgages.com www.3bed2bath.net
Purchase - Refinance - Cash-Out- Debt Consolidation - Home Equity - Great Rates
Tuesday, January 22, 2008
Fraud Alert
Have you ever wondered why you receive so many calls from mortgage brokers and lenders once you applied for a mortgage from a broker or lender? It's called trigger leads. Once you apply for a mortgage loan (purchase or refinance), the credit bureaus/repositories sale your information to mortgage lenders, brokers, and possibly con artists around the country.
Currently it's perfectly legal for the credit bureaus and repositories to sale YOUR personal information. Feel a little vulnerable, wait a second? Companies that sale these leads don't even check or verify if the company/person they are selling YOUR information to are licensed mortgage brokers or if they are on the fraud watch list. Now you have 5-10 people calling you that know a lot about you personally, financially, and your credit offering to beat the rate and closing costs of your current lender. Beware!
A few quick stories from people we have helped recently.
Currently it's perfectly legal for the credit bureaus and repositories to sale YOUR personal information. Feel a little vulnerable, wait a second? Companies that sale these leads don't even check or verify if the company/person they are selling YOUR information to are licensed mortgage brokers or if they are on the fraud watch list. Now you have 5-10 people calling you that know a lot about you personally, financially, and your credit offering to beat the rate and closing costs of your current lender. Beware!
A few quick stories from people we have helped recently.
- The first borrower we were helping refinance their house to lower their rate and they wanted a little cash out. A few days in the process they received a call from a well known national lender (they were just purchase by Bank of America), promising lower closing costs and a lot more cash out. Obviously, any one would be interested in a deal like that. It turned out the loan officer was not familiar with our local market and assumed the house was worth a lot more than it was. After three weeks and $500 later the borrower called us tired of hearing promise after promise but no substance.
- Borrower two received a call 3 days before closing, again a lender promising to beat the rate we had provided. They provided the loan officer all of their personal information and waited for a response, but never heard back. We closed the loan for them after a slight delay, and every thing was great. Until 3 months later we received a call from the borrower, their identity had been stolen.
- Borrower three was purchasing a house and received a call about a week after we pulled their credit, once again some one telling them they could beat our loan. They provided the borrower with a good faith estimate and all the disclosures and every thing appeared great. However, on the day of the closing they received a call from their broker telling them rates had jumped over a 0.50% and their closing costs had also increased.
How can you avoid your personal and credit information being sold? Call toll-free 1-888-5-OPTOUT (1-888-567-8688) or visit http://www.optoutprescreen.com/
Remember it's always good to shop when looking for a mortgage, however, make sure you know who you are doing business with, try to use a local broker/lender that is familiar with the market, and you ask for a lock confirmation as well as the other disclosures.
Please contact us if you have any questions or would like to look over your mortgage package another lender has provided.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
Monday, January 21, 2008
Good Signs for Northern Colorado
Weld and Larimer County both saw sizeable increases in wages for the the 2nd quarter in 2007. Weld County ranked 20th out of 329 of the largest counties in the nation, with a 6.8% increase in weekly wages. While Larimer County, had a 5% increase in weekly wages.
Thursday, January 17, 2008
Good News in Colorado Real Estate?
Many experts believe that Colorado's real estate market troubles are in the past and 2008 should be a promising year. Experts site the strength of our local economy and the fact that we didn't not experience the "Boom" as much as other markets in the country.
Many people I still talk to believe the real estate market locally is still suffering and that we still lead the nation in foreclosures. While foreclosures levels are still high, we not even in top 10 markets for foreclosures. Experts believe the biggest obstacle for our local real estate market are people's beliefs. Almost every day there is a negative report on real estate, however, a majority of the reports are national reports, not local reports. Real estate markets are local and it appears that is a good thing for Colorado in 2008.
http://www.9news.com/money/article.aspx?storyid=84644
http://www.rockymountainnews.com/news/2008/jan/17/economist-sees-denver-housing-turnaround/
Many people I still talk to believe the real estate market locally is still suffering and that we still lead the nation in foreclosures. While foreclosures levels are still high, we not even in top 10 markets for foreclosures. Experts believe the biggest obstacle for our local real estate market are people's beliefs. Almost every day there is a negative report on real estate, however, a majority of the reports are national reports, not local reports. Real estate markets are local and it appears that is a good thing for Colorado in 2008.
http://www.9news.com/money/article.aspx?storyid=84644
http://www.rockymountainnews.com/news/2008/jan/17/economist-sees-denver-housing-turnaround/
Monday, January 14, 2008
Fannie and Freddie Not Helping Many Colorado Cities
A few weeks ago Fannie Mae labeled most of the Denver Metro Area cities as declining markets, and it appears Freddie Mac will follow suit. What does this mean to you? Why do you care? How will it affect you?
To begin for those of you who don't know, Freddie and Fannie are the two largest suppliers of mortgage funds in the nation. The designation of a declining market by both companies will make it more difficult and impossible for some to purchase a house. Fannie and Freddie both determine declining markets based on your zip code.
If you are trying to purchase or refinance a house in a declining market both companies will reduce your borrowing power by 5%. The max you will be able to borrower is 95% of the value of the house, and in some cases lower.
This designation will make it extremely difficult for many real estate markets to improve, and it will surely have a negative impact on many markets. For example, let's take the Highlands neighborhood in Denver, this neighborhood has seen some of the highest appreciation in the state over the last 2 years. However, some how this neighborhood has found itself on the declining market list, which means any person trying to purchase a house using a conforming loan will have to put 5% down. They could try an FHA loan, but currently most of the houses in this neighborhood would not meet their guidelines. Due to this new guideline, there are will now be less qualified prospective buyers, lowering the demand for houses in this neighborhood, forcing sellers to lower the price of the house if they want to sale.
The declining market will also make it impossible for many A paper borrowers to refinance their house if they are currently in ARM, which may force people with great credit into foreclosure, reducing the value of the neighborhood further!!!
On the other hand, this may help cities/neighborhoods that avoided the list. For instance a majority of Broomfield is on the declining market list, while neighboring towns to the north (Erie and Lafayette) are not. Prospective buyers looking to purchase in the north part of Broomfield, are now likely to look at houses in Erie or Lafayette if they don't have 5% down or don't want to put 5% down. Good for Erie and Lafayette, not so much for Broomfield.
For more information on the declining markets in Colorado, or to see if you are in a declining market, please email or call me.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
Purchase - Refinance - Cash-out - Debt Consolidation - Home Equity - Great Rates
To begin for those of you who don't know, Freddie and Fannie are the two largest suppliers of mortgage funds in the nation. The designation of a declining market by both companies will make it more difficult and impossible for some to purchase a house. Fannie and Freddie both determine declining markets based on your zip code.
If you are trying to purchase or refinance a house in a declining market both companies will reduce your borrowing power by 5%. The max you will be able to borrower is 95% of the value of the house, and in some cases lower.
This designation will make it extremely difficult for many real estate markets to improve, and it will surely have a negative impact on many markets. For example, let's take the Highlands neighborhood in Denver, this neighborhood has seen some of the highest appreciation in the state over the last 2 years. However, some how this neighborhood has found itself on the declining market list, which means any person trying to purchase a house using a conforming loan will have to put 5% down. They could try an FHA loan, but currently most of the houses in this neighborhood would not meet their guidelines. Due to this new guideline, there are will now be less qualified prospective buyers, lowering the demand for houses in this neighborhood, forcing sellers to lower the price of the house if they want to sale.
The declining market will also make it impossible for many A paper borrowers to refinance their house if they are currently in ARM, which may force people with great credit into foreclosure, reducing the value of the neighborhood further!!!
On the other hand, this may help cities/neighborhoods that avoided the list. For instance a majority of Broomfield is on the declining market list, while neighboring towns to the north (Erie and Lafayette) are not. Prospective buyers looking to purchase in the north part of Broomfield, are now likely to look at houses in Erie or Lafayette if they don't have 5% down or don't want to put 5% down. Good for Erie and Lafayette, not so much for Broomfield.
For more information on the declining markets in Colorado, or to see if you are in a declining market, please email or call me.
Prosperity Financial - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
Purchase - Refinance - Cash-out - Debt Consolidation - Home Equity - Great Rates
Wednesday, January 9, 2008
Are we Falling in to Recession?
Some experts believe we may already be in a recession, the 1st time since late 2001. Check out this article about our current economic state.
http://money.cnn.com/2008/01/09/news/economy/recession/index.htm?postversion=2008010915
What do this mean for the mortgage rates? Typically, during recessions the Federal Reserve lowers rate in attempt to stimulate the market and help pull the economy out of it's declining state. Some experts the believe the Fed Reserve will lower rates to 2.5%, it currently sits at 4.25%. Which means you will definitely see a drop in your HELOC rates and payments and will see a decrease in first mortgage rates.
Prosperity Financial -Your Mortgage Manger
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
http://money.cnn.com/2008/01/09/news/economy/recession/index.htm?postversion=2008010915
What do this mean for the mortgage rates? Typically, during recessions the Federal Reserve lowers rate in attempt to stimulate the market and help pull the economy out of it's declining state. Some experts the believe the Fed Reserve will lower rates to 2.5%, it currently sits at 4.25%. Which means you will definitely see a drop in your HELOC rates and payments and will see a decrease in first mortgage rates.
Prosperity Financial -Your Mortgage Manger
Lafayette, Colorado
http://www.colomortgages.com/ http://www.3bed2bath.net/
Monday, January 7, 2008
Buyer Beware - Lease Option Scam
The recent boom and bust in the real estate industry has created many opportunities for scam artists to make quick and easy money, while leaving their victims wondering what happened. Real estate fraud has been a problem for decades, however, it typically increases in markets that recently have experienced problems and people are desperately looking and hoping for solutions.
I recently heard of scam that appears to be gaining popularity in the real estate industry. The scam artist, will first prey on people that are having a tough time making their mortgage payment or facing foreclosure and promises to handle their problems if they quit claim the title of the house to them (the home owner relinquishes their ownership of the property). They tell their victims that they will refinance the house in their name or handle the sale of their house so they don't have to deal with the headache and can salvage their credit.
Once the scam artists takes over ownership of the property, they then advertise the property for rent, or even better for them, as a lease option to buy. Once they have tenant, they collect a deposit (on a lease option the deposit could be as much as $10,000) and rents, but never make a payment on the house or try to sale the property. By the time the original owner or tenants discover what has happened they scam artist has collected their money (up to $15,000 in some cases) and has disappeared. The original owner is now stuck with a mortgage that is in foreclosure and has no options to save their property and the tenants are out their deposit and are forced to find a new place to live.
How do you avoid falling victim to a similar scam? First you have to know the people that work these scams are good and very convincing. They will provide you will a deed to shown they own the house, and it's almost impossible for the common person to know who is on the note of the mortgage. However, there are few easy steps you can take to protect yourself.
First, always ask to contact their other tenants for a referral, any good landlord or business person will have no problem providing this information.
Next, check county records to determine how long they have owned the property and how they acquired the house. Almost every county has this information online through the assessor's office or property records. If they acquired the property through a quit claim deed, there is a good chance that they are not responsible for the mortgage and it should raise red flags.
Another good idea (especially for lease options), is to have the deposit held by a non-interested 3rd party, such as a title company. If some thing does happen you will be able to get your earnest money back from the title company.
If you are doing business with a stranger, remain skeptical throughout the process, make them earn your trust, and don't be a afraid to ask for help from some one with in the industry. Feel free to call us and we will take them time to review the transaction and provide any advice that might help.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/
http://www.myprosperityfinancial.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
I recently heard of scam that appears to be gaining popularity in the real estate industry. The scam artist, will first prey on people that are having a tough time making their mortgage payment or facing foreclosure and promises to handle their problems if they quit claim the title of the house to them (the home owner relinquishes their ownership of the property). They tell their victims that they will refinance the house in their name or handle the sale of their house so they don't have to deal with the headache and can salvage their credit.
Once the scam artists takes over ownership of the property, they then advertise the property for rent, or even better for them, as a lease option to buy. Once they have tenant, they collect a deposit (on a lease option the deposit could be as much as $10,000) and rents, but never make a payment on the house or try to sale the property. By the time the original owner or tenants discover what has happened they scam artist has collected their money (up to $15,000 in some cases) and has disappeared. The original owner is now stuck with a mortgage that is in foreclosure and has no options to save their property and the tenants are out their deposit and are forced to find a new place to live.
How do you avoid falling victim to a similar scam? First you have to know the people that work these scams are good and very convincing. They will provide you will a deed to shown they own the house, and it's almost impossible for the common person to know who is on the note of the mortgage. However, there are few easy steps you can take to protect yourself.
First, always ask to contact their other tenants for a referral, any good landlord or business person will have no problem providing this information.
Next, check county records to determine how long they have owned the property and how they acquired the house. Almost every county has this information online through the assessor's office or property records. If they acquired the property through a quit claim deed, there is a good chance that they are not responsible for the mortgage and it should raise red flags.
Another good idea (especially for lease options), is to have the deposit held by a non-interested 3rd party, such as a title company. If some thing does happen you will be able to get your earnest money back from the title company.
If you are doing business with a stranger, remain skeptical throughout the process, make them earn your trust, and don't be a afraid to ask for help from some one with in the industry. Feel free to call us and we will take them time to review the transaction and provide any advice that might help.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, Colorado
http://www.colomortgages.com/
http://www.myprosperityfinancial.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Home Equity - Great Rates
Saturday, January 5, 2008
Are you Kidding Me?!?!?!
Let me begin by saying, I'm a huge sports fan and while baseball is not my favorite, I understand and follow the game. But, why in the world is our government wasting their time and efforts to probe in to the steroid/HGH debacle in baseball? Don't they have better things to do? Don't we have troops fighting overseas? Are we not in the middle of a foreclosure crisis that could force our county in to a recession? Immigration? Social Security reform? Health care reform? The bottom line is, there are more important issues for the government to focus their attention and our money on.
For those of you that don't know what I'm talking about, there will be a 2nd congressional hearing on the steroid problem in baseball later this month. The House Oversight Committee has invited a few players and others that were recently named/involved in the Mitchell Report (the investigation in to steroids and other performance enhancing drugs in baseball).
What I don't understand (besides the obvious question of why are they wasting their time on this issue), is what they expect to come out of this hearing? Are they going to fix the steroid problem in baseball? I understand that baseball players are role models for our youth, and some one needs to fix this problem. However, I don't think our government should be spending time on this problem. Is this why we voted for these people to represent us? I don't ever remember once in a debate a politician discussing their solutions to the steroid problem in baseball? Is this why we pay taxes? Where are their priorities?
Hopefully, they don't spend too much time on this issue and get back to work solving American's real problems.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, CO
http://www.colomortgages.com/
http://www.myprosperityfinancial.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Homey Equity - Great Rates
For those of you that don't know what I'm talking about, there will be a 2nd congressional hearing on the steroid problem in baseball later this month. The House Oversight Committee has invited a few players and others that were recently named/involved in the Mitchell Report (the investigation in to steroids and other performance enhancing drugs in baseball).
What I don't understand (besides the obvious question of why are they wasting their time on this issue), is what they expect to come out of this hearing? Are they going to fix the steroid problem in baseball? I understand that baseball players are role models for our youth, and some one needs to fix this problem. However, I don't think our government should be spending time on this problem. Is this why we voted for these people to represent us? I don't ever remember once in a debate a politician discussing their solutions to the steroid problem in baseball? Is this why we pay taxes? Where are their priorities?
Hopefully, they don't spend too much time on this issue and get back to work solving American's real problems.
Prosperity Financial, LLC - Your Mortgage Manager
Lafayette, CO
http://www.colomortgages.com/
http://www.myprosperityfinancial.com/
Purchase - Refinance - Cash-Out - Debt Consolidation - Homey Equity - Great Rates
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