Beware of these Mortgage Companies
Posted on April 17, 2006
Filed Under Home Mortgage, Mortgage Companies, Mortgage Company Reviews, Mortgage Updates
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
Comments
Leave a Reply