Paying Double Mortgage
I don’t understand the whole mortgage deal and people who are dealing with one mortgage and yet decides to take out another one to buy another house. They are not the easiest things in the world to and yet I am watching friends live in a house for two years and then decide they want something “bigger”.
Right. Because a large and spacious three-bedroom house with a two-car garage, backyard, porch and huge living room/dining room just isn’t enough.
I think it’s very sad to see people live above there means. They can live comfortably but choose to put themselves in debt and end up struggling with the bills.
Mortgage and Home Buying Beginners Style
It’s easy to say I want to buy a house when many first-time buyers are completely unaware of the long process and major paperwork involved. Before you pop a blood vessel read this article and learn some helpful tips that will help get your started on the right track.
8 Arrested In Mortgage Fraud
Mortgage fraud has been rampant and everyone who has to deal with it from the homeowner up is paying. I’m glad to see that police have caught 8 who have been scamming the mortgage system for a few years now.
Officials say that they were actively defrauding lenders out of millions of dollars over the years before they were caught.
Attorney General Eliot Spitzer announced that they would file a civil forfeiture action. This will help them recover the $8.3 million assets from the indicted individuals. It was reported that the amount was for the 20 transactions that were involved in the scheme.
Spitzer said that the scheme did not only damage the victims and the lending firms but also the housing market in the neighboring cities. Spitzer claimed that in the 83 counts of criminal charges, Louis and Michael Sandella were the leaders of the group and have submitted fake house mortgage documents since 2001.
Sandellas did the scheme by filing a loan more than the needed amount. This was done with the help of attorneys and individuals who acted as buyers. They will buy the property using a name of a so-called “straw buyer”. They will then keep the difference that usually reaches $100,000 per transaction.
There were many straw buyers who participated in the scheme. They would lend their names on the transaction and were paid a few thousand dollars for that holding on to Sandella’s promise that they will be prompt in paying the loan. Eventually, Sandella stopped paying which has left the straw buyer accountable for the outstanding loans.
Applying For A Mortgage Equals Junk Mail/Calls
You would assume that when you go to get a mortgage quote that your information is private but it’s actually not. Before you know it, all your private information is being sold again and again and it’s only a matter of time before your hanging up twenty times a day from junk phone calls.
What happens is a company will give your info usually to mortgage companies, so they will call you trying to bully you into leaving the competition and come on board with their company.
But aren’t our most intimate financial and credit affairs sliced, diced and served up to the highest bidders on a regular basis anyway? Sure, but consider the experience of Pat Barney, who lives outside Minneapolis. Barney recently applied for a home equity credit line from a large national bank. Shortly after application, he got a phone call from a competing lender trying to persuade him to switch to an equity line from her firm.
Then he got another call, this time from a competitor who began the conversation by saying, “I’ve been notified by your lender that you’re looking for a (home equity) loan.” Barney, who manages a branch office of Summit Mortgage Corp. in Edina, Minn., knew that was an outright lie.
“Why would (my lender) want to let anybody else know about my application?”
He was also suspicious that lenders calling him this way — especially those who were dishonest up front — would be highly likely to lowball their estimates on rates and fees to steal him away.
“This is a set-up for a bait and switch,” he said. Worse yet, he added, “here I am in the mortgage business and now I see that my customers’ credit information may be marketed and sold within hours to my competitors.”
Getting A Mortgage 101
I just read a great article on what to do when your just starting out and trying to get a mortgage. You will find the article here.
Lots of us know that buying a car can be tricky at best with less than honest saleman and paperwork but getting a mortgage can be even tougher and twice as confusing.
If you’re looking for a mortgage, you may want to look for a mortgage broker first. There are plenty of ways to get mortgages — banks, credit unions, savings and loans, and mortgage bankers, among others — but you can also get set up with one via a mortgage broker. In exchange for setting up a mortgage, most lenders charge origination fees, whereas mortgage brokers charge a broker’s fee (and are sometimes compensated by the lenders they work with, as well). More than half of all mortgages in America originate with mortgage brokers.
Just Sign On The Dotted Line
I remember a mortgage scam I heard about early last year and have since forgotten about until recently when I heard that it’s bigger than ever. Let’s say you lose your job and fall behind on the mortgage payments. You get a phone call or a knock at the door and it’s a company willing to help you save your home from foreclosure. Worse is the fact that some of these scammers pray on peoples religion by saying their a Christian Organization that just wants to help. (Of course they do. I think help take your money is what they meant to say.)
This “company” says that they can take over the payments until your back on your feet and able to help yourself. All you have to do is sign away your home to them, but don’t worry it’s just a temporary thing. You will get your home back and they will have helped and everything will be A-OK.
Truth of the matter is you are signing your home over to them. Your giving someone your house. It belongs to them now. They don’t have to pay the mortgage or they can pay it and sell it. They can do whatever they want because you gave it to them, mistakenly thinking that you can trust them. Beware.
Read this article, this is what reminded me of the scam I had already forgotten about. I am big with watching scams because I’m very stubborn and don’t tend to believe people easily. It’s sad to say, but there are just too many untrustworthy people who want to take your hard earned money for nothing on their part.
Mortgage Rates Keep Going And Going And…
It seems that week after week there are reports of mortgage rate increases and there are. Almost every week in the last four years there has been a rise in the rates and it doesn’t look as though it will end anytime soon.
Freddie Mac, the mortgage company, reported Thursday that for the week ending April 20, rates on 30-year, fixed-rate mortgages averaged 6.53%, up from 6.49% last week.
This week’s rate was the highest since the week ending July 12, 2002, when 30-year mortgage rates stood at 6.54%.
Mortgage rates rose as Wall Street investors fretted that inflation might pick up, analysts said. These worries were fanned by government reports released earlier this week showing big increases in both wholesale and consumer prices for March.
Source: USAToday
Risks of Reverse Mortgages
Thinking about a reverse mortgage?
Before you sign that contract, make sure there aren’t any traps.
The Australian Consumers Association recently studied 19 lender contracts. It discovered default clauses that, if breached, could result in a call for the immediate repayment of the entire loan.
Property titles remain in the borrowers’ names and they are responsible for rates, repairs and maintenance. It is here where borrowers can find themselves in default, for example:
• REPAIRS not done after the lender has demanded them;
• RENOVATIONS made without the lender’s permission. “Renovations such as a wheelchair elevator or ramps may not be allowed because they may have a negative impact on the property’s value,” said the ACA;
• RATES, taxes not paid on time;
• PAPERWORK not maintained or done correctly, such as failing to give an annual statement declaring you still live in the home.
Once the borrower was in default, the lender could demand the immediate repayment of the loan and charge a penalty interest rate of 2 to 3 per cent more until it is repaid.
The Association also found that the contracts’ “no negative equity guarantee” (”where the lender covers any shortfall if the loan exceeds the proceeds from the sale of a home”) often gave virtually no protection to the borrower.
Source: News.com.au
Beware of these Mortgage Companies
Delinquency rates are on the rise. They jumped “more than 7%, to 4.7% in the fourth quarter of 2005, from the year before,” according to the Mortgage Bankers Association.
Despite this, many lenders aren’t cutting back on exotic mortgages — in fact, they’re “charging ahead on such high-risk loans full tilt.” They claim that cutthroat competition leaves them no other option.
But pushing the envelope today could lead to major problems tomorrow for these aggressive finance outfits. Be especially wary of the following companies:
- ECC Capital Corporation and New Century Financial Corporation “do big business in California, where the median house price jumped 16% last year, to reach a record $548,430.”
- Long Beach Mortgage Corporation (a unit of Washington Mutual) and NovaStar Financial “require only limited documentation and therefore may invite fraud.”
- Fieldstone Investment Corporation and First Franklin Financial Corporation “write lots of loans called interest-only or option adjustable-rate mortgages, which allow borrowers to postpone making repayments of principal and even add unpaid interest to the debt.”
Source: BusinessWeek
Hawaiians Know How To Pay The Bills
Out of all 50 States it was reported today that Hawaii has the lowest over due mortgage payments. The residents tend to pay their bills on time and the percentage of homeowners who fell behind in payments fell from 2.07% to 1.9%.
This is due to mortgage lenders who allowed homeowners to make minimal payments and in some cases skip a payment altogether.
Mortgage bankers believe that as these new products proliferate at the bottom end of the housing market, the risk is that shaky borrowers will overextend themselves.
Meanwhile, Hawaii’s default rate among subprime borrowers — usually lower-income individuals with spotty credit histories, was 5.8 percent in the fourth quarter of 2005, said Mike Fratanoni, senior economist for the Mortgage Bankers Association in Washington, D.C.
The national average was 12.4 percent, he said.
To cover their mortgages, brokers and real estate agents say homeowners are doing everything from foregoing vacations to the Mainland and bypassing their favorite Thai restaurant to pulling children out of private schools and even paring down contributions to 401(k) accounts.
Hawaii’s delinquency rate doesn’t surprise local mortgage bankers.
“Historically, our delinquencies have always been lower than the national average,” said Gayle Ishima, president of the Mortgage Bankers Association of Hawaii. “For one thing, our lenders are a lot more conservative than lenders on the Mainland.”
Source: Pacific Business