Archive for September, 2008

The trouble with “I told you so.”

September 30, 2008

Mortgage Meltdown.  Credit-Crisis.  The Bailout Plan.

It has to be someone’s fault (or at least a group of someones).  It can’t possibly be EVERYONE’S fault as the Wall-Streeters would have us to believe.  It just can’t possibly be everyone’s fault.  The CEO’s of large banks and mortgage lending companies who invested heavily in sub-prime, high-risk mortgages, drove their stock values up and then jumped-ship with millions, maybe.  But, my grandmother in Louisiana who’s monthly mortgage payment of $184 per month was paid off some 30 years ago?  Really?  Everyone’s fault?  It’s not everyone’s fault.

Unfortunately, it is everyone’s problem.  Whether you like it or not, we are all in this together, because the ability to access credit and the ability to get a mortgage will ultimately affect you (or your neighbor), which will ultimately affect you (and the value of your property).

So, here is the trouble with “I told you so.”  One, it seems a little childish.  Two, if I DO tell you that I told you so, then I come across as arrogant and aloof.  And C, if I DON’T tell you that I told you so, then how will you ever know that I told you so, SO that the next time I tell you so, you will listen to what I am telling you?

There are two main catalysts for the current US economic problems (as it relates to mortgages).

1 — MTA loans (also called PayFlex loans, Pick-a-Payment was Wachovia’s brand name, Payment Select, Garbage-loan with Negative AM)  Oops.  That last one was my name for the MTA loans.

2 — Sub-prime mortgages (high-risk, high-rate mortgages to borrowers who should have waited to buy a house, but lenders and Wall Street couldn’t resist the idea of big $$).

These two mortgage-vehicles allowed people to buy houses that they could not afford, day one.    

So, here are some revisits on “the Mortgage Blog”:

September 8, 2006 — an MTA loan (sing) “More than meets the eye.”  “The loan and monthly payments start out well-and-good but quickly ‘transform’ into something very different.” ” . . . the usefulness of an MTA loan is pretty slim.” ” . . . and your interest-payment has gone from $662 per month to $1,229 per month, you might just wish you had a 30 year fixed rate loan at 5.25%.”

January 15, 2007 — Finally, the truth about MTA loans.  My question to a wholesale account rep who thought I was insane for not pushing MTA loans with my clients . . . “Why wouldn’t I sell the customer a 5 year interest-only ARM instead?  Why is the MTA loan better than a 5/1 ARM?  Can you even tell me one situation where an MTA loan would be better than any interest-only type mortgage?”  “Well Jeffrey,” he said, “I guess it’s the perfect loan for the customer who wants to buy more house than they can afford.”

March 19, 2007 — The Sub-prime Mortgage Meltdown.  “In the past few years, investors had become more and more aggressive as to their credit and financing guidelines  . . . ”  “And then the interest rate adjusts and the problems get even worse.”

March 30, 2007 — Trickle-down-sub-prime-melt-down-nomics.  “a lot of people who (unfortunately) have been placed into a sub-prime mortgage would have been much better off (and better advised) to have rented for 12 to 24 months, taken the time to get their finances and credit in-order and then moved forward in purchasing a home (at a reasonable rate and program).” 

April 13, 2007 — A Tremor in the market.  “So, what are the chances that all of this sub-prime mortgage debacle stuff will just go away, never to affect the average Joe homeowner.  Probably about the same as “successfully navigating an asteroid field . . . approximately 3,720 to 1.”  – C-3PO ”

August 1, 2007 — “So long, farewell, auf wiedersehen, good night.”  My version of the classic . . . bidding farewell to the subprime mortgage market.  “So, who’s fault is it?  The financially-struggling borrower who bit off more than they can chew?  The loan officer who sold the borrower on the benefits of homeownership now instead of later?  The lender who created the loan in the first place and sold the idea (and off-the-wall credit guidelines) to the investor?  Or the investor, who thought that in one scenario, they would make an 8.5% return and collect a hefty pre-payment penalty (if the borrower somehow managed to refinance the mortgage within the first 24 to 36 months), and in the second scenario, they would make a 12.5% return once the loan hit the adjustable rate feature?  Apparently there is a third scenario.  I can’t tell you who’s fault it is . . . but don’t look at me.”

More to follow . . .

 

Jeffrey Pinkerton is a Mortgage Consultant and President of Hillside Lending, LLC and writer for “the Mortgage Blog.”  Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about available programs and interest rates, please visit www.hillsidelending.com.

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Hello – past clients, friends and referral partners

September 23, 2008

Hello . . . past clients. 

Hello . . . friends. 

Hello . . . real estate agents and referral partners. 

Now, more than ever, your REFERRALS are critical to my business, because . . .

 

All joking aside, I do love your referrals! 

Thank you for entrusting me with your personal mortgage and thank you for referring friends, co-workers and family.  Your referrals complete me (my business)  — and that’s right . . . I’m not letting you get rid of me!!  : )

 

Jeffrey Pinkerton is a Mortgage Consultant and President of Hillside Lending, LLC and writer for “the Mortgage Blog.”  Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about available programs and interest rates, please visit www.hillsidelending.com.

This is a test.

September 4, 2008

 

This is a test.  This blog, “the Mortgage Blog” is conducting a test of the “Mortgage Rates Are Moving Lower Service.”  This is only a test.  [eerrrrrrrrr . . . . aarrrrrrrrrrr . . . . . ]

“This is a test of the “Mortgage Rates are Moving Lower Service”.  Your mortgage broker, Jeffrey Pinkerton in cooperation with the myRateTrack.com website service has developed a MUCH BETTER system to keep you informed in the event of lower mortgage rates that would benefit you. If this had been an actual “Mortgage Rates are Moving Lower Alert” and if in fact you were registered for your FREE account with myRateTrack.com, the Attention Signal you just read would have been replaced by an automatic email delivered to your inbox notifying you that your TARGET REFINANCE RATE was available.  This email Target Refinance Rate Notification would have also been sent to your mortgage broker.  Hillside Lending, LLC serves the Georgia and Louisiana states only.  This concludes this test of the “Mortgage Rates are Moving Lower Service.”

This blog post is certainly not the best way to communicate if mortgage rates go down to a point where it makes sense for you to lock-in and refinance.  For a much better way to monitor your mortgage and your personal refinance options, visit myRateTrack.com and sign up for an account for FREE using the promo code “the mortgage blog”.

Rates went down to 5.125% on January 15th of this year.  Most people missed out on the opportunity to refinance because they didn’t act quickly enough when rates dipped.

Don’t miss out again . . . ever.

 

Jeffrey Pinkerton is a Mortgage Consultant and President of Hillside Lending, LLC and writer for “the Mortgage Blog.”  Hillside Lending seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about available programs and interest rates, please visit www.hillsidelending.com.