Getting a Mortgage Today

  Have you tried to get a new mortgage or worse tried to refinance to cash in on the lower rates?  In case you have not it is a complete mess that very few seem to understand.  The days of no documentation and stated income are over.  Only full documentation loan can be done today and even they get put through the ringer. 

  Recently there was a report put out that Citibank has a large amount of …”incomplete loans”, ….maybe it’s just me but I thought this was called “fraudulent” but that must only be if broker’s originated the loans, loans purchase by Fannie Mae the last two quarters of 2009 and the first two quarters of 2010.  So why is this a big deal?  Citibank does not use brokers to originate loans.  That means that the loans that are “incomplete” were originated by internal Citibank people…..imagine that! 

  Financial reform has all but crushed the Mortgage Industry.  The Borrower’s have to be the best of the best and the Banks are hand cuffed too.  Oddly enough the public thinks the Banks are to blame but that is not the case.  Now that the Feds hot potato no longer gets put into the brokers or appraisers hands the only players left are the Banks, Wall Street, Real Estate Agents, the Feds them selves and CPAs.  Yes I said CPAs because Tax Reform is coming, stay tuned. 

  It is unfair for the President or anyone involved with financial reform to make the statement that the Banks are not lending.  The truth is the banks are lending because they have to lend in order to stay in business.  The problem is you can not lend money to anyone if no one will purchase the Mortgage note created when the money is lent.  This is business 099.  If there is no market for your product then you can make no money which means you will be out of business soon if this is your business plan.   

  First you must understand that Banks hold very few mortgage notes.  The public does not understand this because they make their payments to a particular Bank so that is the Bank that has their loan.  Well hold on there, it is the Bank that is servicing your loan but in most cases it is not the note holder.  Most people do not understand that most loans done today are funded by a Bank and then later the note is sold to a Bond Fund, most likely your own 401K fund, and they collect the interest paid on the loan and pay their service provider a small fee for doing the monthly work.  This is what I mean when I say a Bank needs to have a buyer for the mortgage notes it creates before they will make you the consumer a loan.  Fannie Mae and Freddie Mac used to be the secondary market buyers of mortgage notes.  With Fannie Mae still buying “incomplete” loans does anyone think financial reform is working? 

Stay Tuned….

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