Tuesday, September 9, 2008

The end of the mortgage industry as we know it....

The mortgage industry has not known one piece of good news since summer of 2007.
Over 265 mortgage lenders, most of them subprime have shut down. Major US banks have ceased their wholesale operations. Hundreds of thousands of mortgage related jobs have been lost. The government came to the rescue of bear sterns. As of yesterday the government has also taken over both Freddie mac and Fannie mae.
I heard a newscaster on CNN say that the good news resulting from the bail out of major mortgage companies is that 30 year mortgage rates should decline which is good news for buyers and sellers alike.
My question to this clever journalist is how good is a low interest rate to the millions of applicants who cannot even get approved for a loan due to a credit crunch second to none.

Truthfully the only good outcome of this mortgage meltdown is the elimination of mortgage programs(stated, sisa, nina) that should have never existed as well as the elimination of crooked mortgage professionals that should have never been allowed to handle people's finances.

It is crucial that confidence should be restored to lenders in order to loosen up lending criteria but not to pre-2007 levels. Confidence should also be restored to mortgage insurance companies that are currently making it harder to qualified borrowers to get a loan over 80% of the value of the property.

One of the few beacons of hope left is FHA programs that are still being offered to borrowers with spotty credit. Although I do not see how the government can guarantee now more than half the mortgages written in the united states for a long period of time. It puts the federal housing agency as the sole risk taker in this equation and that could spell financial disaster in the near future. Especially if foreclosures continue at the current rate.

The current mortgage landscape is really hard to define. However it looks like wholesale channels are getting extinct. The ones that are left are peddling the same programs which makes competition fierce. Now that could be the best news yet for borrowers.
Retail channels are now taking over. Remember however that obtaining a mortgage directly from a bank can still be costly but at least most banks adhere to higher lending standards than those of most brokers. You can always seek the advice of a mortgage consulting company like BrokerPolice which doesn't originate loans. It simply advises you on your transaction so that you pay a lower rate and lower closing costs.

Visit http://www.brokerpolice.com/ . It is your source for mortgage advice, mortgage help, and your ticket to a low cost mortgage and the best mortgage consulatation.

Mehdi Cherkaoui

Saturday, August 16, 2008

Bad credit mortgage. Does it exist still?

Here are some facts:

The majority of people underestimate the strength of their credit.
The majority of people think that a FICO score in the 500's disqualifies them from getting a good conventional mortgage which leaves them as an easy pray to a subprime lender or a hard money lender.

The reality is that the subprime meltdown is the best thing that could have happened to low FICO score borrowers. Why you ask?

My name is Mehdi Cherkaoui and I operate BrokerPolice.com.

I can tell you that the fall of subprime lenders put the government in a position to step up through FHA(federal housing administration) and offer most bad credit people a shot at the american dream with great terms and low interest rates. These very same people would have been "abused" by subprime lenders offering ridiculously high rates and fees in addition to adjustable rate mortgages. Greedy lenders and unscrupulous brokers combined committed what I like to call "mortgage rape".

One issue rises in the midst of this blessing. How do you keep mortagge brokers from taking advantage of FHA programs and charging low FICO score borrowers, eager to get a home and still skeptical about their unexpected approval, huge fees and high rates.

The answer is HOMEWORK, HOMEWORK. As a first time home buyer there is a lot of research you need to do and help you need to get.
You can also seek the help of a professional mortgage consulting service independent from your broker or lender that can tell you if your getting the right deal. at BrokerPolice.com, we do just that.
On a daily basis, Clients send me good faith estimates loaded with unecessary fees and higher interest rate than they actually qualify for. We write an analysis and give them the best second opinion.
If you have a friend or a relative who is an expert in mortgages, they can help you as well.

Visit us at BrokerPolice.com for more info.

Remember, just because you have a lower score that most doesn't mean you should pay outrageous fees and high rates. I guarantee you that fact.

Can you really trust your mortgage broker or lender?

So you made the big decision. You decided that renting is not for you any longer and decided to become a home owner.
Ahh the possibilities...No more landlords. No more throwing money away. Say hello to BBQ in the back yard, house parties and many other advantages of realizing the American dream.
But before you enjoy all of that, and unless you saved up enough money to pay cash for your slice of real estate, You'll need to meet with a lender or mortgage broker.

See what few people know is your lender or broker is NOT you adviser. It is literally impossible for your mortgage broker to look out for your best interest and still make a living.

My name is Mehdi Cherkaoui and I operate BrokerPolice.com.

A lot of my clients are first or second time home buyers. They are like most Americans fairly oblivious to what rate they qualify for, what closing costs they should pay what program they should opt for etc...

The recent mortgage mess has been partly caused by the combination of greedy brokers and not-so- knowledgeable borrowers.
These brokers pushed for programs that only benefit the size of their pockets.

I have seen good faith estimates emailed to me by brokerpolice.com members that boggle my mind. They contain stratosphericly high origination fees, points broker fees....In addition to inflated interest rates down right criminal mortgage terms.

It is crucial to do enough homework and seek professional help like mortgage consultation services that can steer you towards the right mortgage.

Good mortgage products are still out there. As a matter of fact FHA has made it even easier than before to obtain a great mortgage. FHA basically picked up where subprime lenders left off only with much much better interest rates and mortgage programs.

So once again do enough homework get the best mortgage consultation you can, interview mortgage brokers, ask for a good faith estimate and seek help from a mortgage watchdog especially if you are a first time home buyer. You'll save thousands on your next mortgage.

Please visit us at www.brokerpolice.com for more.
Good luck.