New Consumer Financial Protect Board goes live today. The CFPB is part of last years Dodd / Frank financial reform disaster bill. In theory, the new agency sounds great. The reality is something completely different.
For starters… they are already going after the wrong people…
Here is another great video from the boys over at TBWS.
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A refinance is just as easy to get as your first mortgage… right?
Many people think that refinancing is easier than buying a home for two main reasons:
1) you already have a loan on the home, you make your payments, so it should be easy to refinance.
2) your current mortgage lender already has all their information, so they with easily refinance you, and they are the best place to call **
Sorry… Not true on either count.
There are many factors that might make it hard to refinance:
First, understand that no matter who you call for the refinance – even your existing lender, you have to go through the full underwriting process again. With that said;
– Your financial situation could have changed. Do you have the same job, same income? Better or worse? How about credit. Better or worse?
– Mortgage loan Underwriting guidelines have changed. The crazy days of every getting a loan are long gone. Be are back to old school traditional financing guidelines. Did you buy the home on a program that no longer exists… like a no documentation loan?
– With all the foreclosures, your properties value probably went down. How does that play into your refinancing options?
Most people refinance for three main reasons.
1) Smaller payment
2) Shorter term
3) Cash out / consolidate debt
The good news is that mortgage rates in MN and WI are amazingly low right now, and lenders are still providing home loans everyday. If you are thinking of refinancing, but have been scared away by thinking you can’t for some of the reasons listed above, you are making a big mistake.
Contact a local MN or WI mortgage company with a licensed Loan Officer. Fill out a full application, and let them review your situation.
You may be very happy with the answer!
** WORD OF CAUTION: Many people make the mistake of just calling their existing lender. Almost exclusively, EVERY OTHER lender will have a better deal for you. Be sure to call more than just your current company.
FHA has announced they will allow unemployed homeowners up to one years time before they start foreclosure. Up to one year forebearance is now allowed. Learn more – watch the video!
As a Real Estate Agent, you work 24/7. Here is a quick marketing tip to help you not only enjoy the extended holiday weekend, but to also turn it into future business, closed deals, and more money with very little effort.
The percentage of mortgage applications rejected by the nation’s largest lenders increased last year, spotlighting how banks’ cautious lending practices are hampering the nascent housing market recovery.
In all, the nation’s 10 largest mortgage lenders denied 26.8% of loan applications in 2010, an increase from 23.5% in 2009, according to an analysis by The Wall Street Journal of mortgage data filed with banking regulators.
Although lenders were expected to pull back from the freewheeling conditions that helped inflate the housing bubble, some economists argue they are now too conservative, and say that with the U.S. economy still wobbly, mortgages need to be easier to obtain for qualified borrowers, not harder.
STOP risking your real estate license
Do you unintentionally give legal advice to your clients? Most real estate agents are very aware, and try to stay clear of giving any legal advice. Unfortunately, there are plenty of agents who have crossed that line, and are now facing plenty of headaches and lawsuits.
Have you ever instructed a client to stop paying their mortgage? You’ve given legal advice.
Legal advice is one thing… and rightfully most agents successfully avoid putting themselves in trouble, yet everyday they violate RESPA and the Truth in Lending (TILA) laws by giving mortgage advice.
Yes, mortgage advice. Punishable by a $10,000 fine and jail time!
If you have ever directed a client to a specific mortgage program? Maybe a program offered from “your guy” versus a program from another lender because you simply want to work with your guy versus the unknown loan officer??? Then you are walking a very dangerous line.
Have you ever given mortgage advice simply because you believe you are looking out for the customers best interests? Again, you are walking a fine line.
I have a mortgage originators license. I work 50 hours a week, and have for the last 17-years taking full applications, properly analyzing the clients financial situation, and directing them to the product that I believe best fits them. Even with that, a client can sue me for “putting them in the wrong loan.” You don’t have a mortgage license, and spend most of your time helping people buy and sell homes. Ask yourself. Do you really have any business giving mortgage advice?
The Real Estate Settlement Procedures Act, (RESPA) was enacted to help protect consumers when they buy and sell real estate, and to teach them to be better shoppers.
Prohibited practices for agents include many items. One of the most commonly violated section involves “shared expenses”. RESPA does not prevent joint advertising between two settlement service providers, such as a mortgage company and a real estate broker advertising their services on the same brochure or newspaper ad. However, each advertising party must pay for his share on a proportionate basis.
Another common violation has to deal kickbacks. Kickbacks of any kind are prohibited. Even small promotional items with the agent’s name on them can be considered a thing of value for the referral of business as it offsets the agent’s marketing expenses.
My advice? Learn the phrases “consult a lawyer”, and “consult a licensed mortgage professional” to avoid risking a legal headache and your license.
For more information regarding the Act, you can find it in Title I of the Consumer Credit Protection Act. The act is enforced by the Federal Reserve Board via Regulation Z (12 C.F.R. Part 226).
The real estate industry is a mess… But who is to blame, and who is fixing it?
IN the panic and adolescent reaction to the sub prime mortgage meltdown, Congress led by two totally unknowledgeable politicians, Barney Frank and Chris Dodd, ran amok in Washington with a 2800 page bill to reform the world; we only hope more intelligent heads will begin to prevail and correct the mess those two have made. Part of that mess was a pathetic, thinly hidden attempt to get rid of mortgage brokers. Seems to have worked… Last I saw, mortgage brokers now only account for about 6% of the mortgage loan business, where in 2006 – it was something like 60%.
Has it works? Watch another great video by Frank and Brian of TBWS
Shopping for a home mortgage loan? Despite Government efforts, the industry is still full of slick advertising, phony rate quotes, and bait-n-switch offers from home mortgage loan companies and banks you probably don’t want to really do business with. Joe Metzler explains…
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Need a home mortgage loan in MN or WI? Try www.StPaul-mortgage.com or www.mortgage-duluth.com
QRM. Three letters that will wreck the housing and economic recovery of this nation. Find out what QRM (Qualified Residential Mortgage) means, and how it is going to effect you.
1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
2) What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate.
3) When the Fed “changes rates”, what does this mean and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets. For more information and explanation, just give us a call)
4) What is happening in the market today and what do you see in the near future? (If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.)
One additional important aspect, is also understanding that not all Loan Officers are licensed. Be sure to only work with a licensed professional. You can verify a Loan Officer has a license by going to www.NMLSconsumerAccess.org
Be Smart… Ask Questions, and Get Answers!
(C) 2011 – Joe Metzler – Cambria Mortgage, St Paul, MN #274132.
On January 1, 2010, the government came out with a new Good Faith Estimate document for home buyers. The new document, supposedly designed to help consumers better shop for a mortgage, was and is a complete flop.
A year later, they are testing a new, new Good Faith Estimate from the new Consumer Financial Protection Bureau. You can give your input to the CFPB… Watch to learn how.
What do YOU think? Is this one a flop too? Post below!