Well this is a fine mess we find ourselves in. The housing market has scene the largest run up in home values in history and now possible the largest decline in home values in history in terms of dollars. Main Stream Media can only paint a picture of doom and gloom in regards to the “Mortgage Meltdown”. This industry has a way of weeding out its bad apples.
Currently a set of CA loans disclosures have 14 individual disclosures listed below;
- Good Faith Estimate
- CA Mortgage Loan Disclosure Statement
- Truth-In-Lending
- Itemization of Amount Financed
- Loan Application
- Borrower’s Certification & Authorization
- Credit Score Information Disclosure
- Mortgage Loan Origination Agreement
- Patriot Act – Information
- Patriot Act – Borrower Identification
- Patriot Act – Co-Borrower Identification
- Right to Receive Appraisal
- Tax Return Request (4506-T)
- CA Fair Lending Notice Disclosure
After all of this then we can get started on a loan.
In mid 2007 most of the bad apples left the industry. In January 2008 the market began to correct itself. We had 30 year fixed rates at 5.0% fixed interest, gas was near $3.00 and the Stock Market was good. Shortly after this the Fed’s began to put their spin, aka help, on the market conditions with several prime rate cuts and a stimulus package. The prime rate cuts have proven to hurt us due to a devalued dollar which has oil, gold and inflation at record highs. The stimulus package, in regards to mortgages, the “Stimulus Package” is not helping anyone other than the banks. The banks are getting money from the central bank at 2% and lending it to the public a 6+%.
All of the banks have also a few added fees behind the scenes. There is now two fees that are called risked based fees that are hidden in the background;
- Fico Score below 720
- Loan to value over 70%
Neither Fannie Mae nor Freddie Mac requires these fees to be passed on to them so why are the banks charging these fees? The banks are putting this new found money in their pockets at the public’s expense.
Main Stream Media reports nothing about this….why? We are continuing to get a steady diet of out dated information in regards to the “Mortgage Meltdown”. We have plenty of people that want to purchase a home but can not qualify for a loan. It is time for Fannie Mae & Freddie Mac to remove emotion from the equation at reasonably set loan guidelines and approval process.
Main Stream Media needs to give the Real Estate market a chance to recover. All of the talk about banks in trouble, home values falling and foreclosures has continued the negative spin on the market. The lenders that did the….creative loans…., are now gone the real estate market should start to improve. We have scene a 20% increase in the home purchase business. Every bank is in trouble to some degree due to the slowdown in business. It is to be expected, any business from a major bank to a lemonade stand would be hurting if business slows down.
If the main stream media would report real time data then people would begin the settle down and invest in real estate again. 60% of the resetting mortgages where done in 2004 & 2005 so these mortgages have already played out. These mortgages have already been refinanced or foreclosed on so we have gotten through the bulk of these mortgages. Currently the market is at its lowest values in years. If you are in a position to invest then real estate, in the right market place, is a good buy at today’s bargain prices.
For answers to current mortgage condition questions ask online at info@emeraldpac.com
Visit us online at www.emeraldpac.com
D Fragoso