Congress Looking At Lending Rules?

May 10, 2007

I read this article posted on the Press Enterprise web site yesterday. It’s title is what I titled this entry although without the question mark.

The very first sentence of this article sums it up: “Congress is looking at potential changes to home lending practices,…”

When government steps in to create lending rules and guidelines, it’s going to be a very bad day for homeowners and those who want to be homeowners. Money will be restricted so much that very few will be able to qualify. Loans exist because someone is willing to give them. Ultimately, we as loan originators need to cousel our clients and make sure they fully understand the loan they are choosing. A loan that is fixed for 5 years and then switches to adjustable is a great loan for a family that plans ahead and moves before 5 years is up. There are a lot of families where it makes sense to have a 5 year fixed because of the lower interest rate and because the family knows that they will be moving in 5 years of less.

Option ARM loans were GREAT for investors and savvy borrowers when the MTA index was super low 3 years ago. The 30 year fixed payment based on that MTA was in the 4%s. That loan made sense in the right situation. Obviously for some people it’s the wrong loan, but that doesn’t mean that you should eliminate it so that no one can have it.

Thoughts or Comments?

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Foreclosure Activity High in Riverside County

May 3, 2007

Riverside County has had a record number of default notices filed in the first quarter of 2007. The notices of default for the first quarter are the highest they have been in 10 years in Riverside County.

For people having trouble affording their loans I can't stress enough how important it is to not get any mortgage lates. A mortgage late is considered late on your credit after it is more than 30 days past due. At that point, your credit will get dinged severely and your options for a refinance or a home loan down the road start to diminish, there is still hope, but doors start closing. When you get even more lates the credit will continue to tumble.

If you see yourself getting into trouble make sure that you look into refinancing before you are late on your mortgage. If you've already been late, then don't wait any longer. Don't put your head in the sand and wait until you've been late 3 or 4 months in a row.

If refinancing won't help, then it might be time to sell that property. The sooner you make that decision the better because your property may not sell right away. If you need help call your a realtor that you know or let me refer you to someone who can help you get back on track.

Basically, stay on top of your debts...if you are getting into trouble, try to do something about it before it becomes too late. I've spoken to people who had perfect credit until they fell behind on their mortgage for whatever reason. The drop in credit score was very significant. I ran their credit after they had been late 3 times due to their loan switching from a fixed rate to an adjustable rate. Unfortunately for them they didn't act fast enough and didn't plan ahead (refinance into a fixed loan sooner), and now there is nothing that I or any other lender can do for them...

Foreclosure Activity High in Riverside County

May 3, 2007

Riverside County has had a record number of default notices filed in the first quarter of 2007. The notices of default for the first quarter are the highest they have been in 10 years in Riverside County.

For people having trouble affording their loans I can’t stress enough how important it is to not get any mortgage lates. A mortgage late is considered late on your credit after it is more than 30 days past due. At that point, your credit will get dinged severely and your options for a refinance or a home loan down the road start to diminish, there is still hope, but doors start closing. When you get even more lates the credit will continue to tumble.

If you see yourself getting into trouble make sure that you look into refinancing before you are late on your mortgage. If you’ve already been late, then don’t wait any longer. Don’t put your head in the sand and wait until you’ve been late 3 or 4 months in a row.

If refinancing won’t help, then it might be time to sell that property. The sooner you make that decision the better because your property may not sell right away. If you need help call your a realtor that you know or let me refer you to someone who can help you get back on track.

Basically, stay on top of your debts…if you are getting into trouble, try to do something about it before it becomes too late. I’ve spoken to people who had perfect credit until they fell behind on their mortgage for whatever reason. The drop in credit score was very significant. I ran their credit after they had been late 3 times due to their loan switching from a fixed rate to an adjustable rate. Unfortunately for them they didn’t act fast enough and didn’t plan ahead (refinance into a fixed loan sooner), and now there is nothing that I or any other lender can do for them…

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