For All You Website Owners Out There
2007-07-24 20:43:45
Google is updating its stats this weekend, so, for those website owners looking to get a few extra links in before the update, Darin over at Darin.cc will post a link to your site in exchange for linking to his Search Engine Marketing Tools page.
You just have to follow the link above, post something similar to what I’ve got here on your website, and email the guy. He’ll post the links on Thursday, which will give Google enough time to spider the site, and your link, before the weekend.
Miscellaneous Ramblings
Read more: Owners
DTI - Debt-to-Income Ratio and How it Affects You
2007-07-14 19:03:48
I speak with a lot of clients who aren’t familiar with common mortgage terms; no problem, as I explained in my article about the Commoditization of the Mortgage Industry, there’s quite a bit of misinformation out there. So let’s clear the air.
DTI is an acronym for Debt-to-Income
Ratio
and represents the ratio between a person’s monthly debt and his or her monthly income. Pretty simple, right? So how is it calculated and what does it have to do with mortgages?
There are two types of DTI, Front-end DTI and Back-end DTI. It’s important to note that, for the purpose of applying for a mortgage, these ratios are calculated based on your proposed monthly debt, not your current monthly debt. This means that the $2,000 a month you’re currently paying on your mortgage doesn’t make a bit of difference; all that matters is what you’ll be paying after you refinance. (more…)
debt ratios, Mortgage Shopping
The Commoditization of the Mortgage Industry
2007-07-13 13:54:22
Commodity: “Any bulk good traded on an exchange or in a cash market.” Investopedia.com
Mortgage
s Have Become A Commodity - How That’s Happened
In the early years of business, before the information age, consumers chose to patronize companies that were honest and delivered as promised; when a consumer chose a company to work with, that consumer was loyal to that company, sometimes for life. This was the only way to shop; there was no World Wide Web that could connect you with the lowest priced products around the world.
The information age has irreversibly altered the lives of people on this planet. If you want tea from China, you can jump online and have it at your doorstep the next day. With a wide variety of options comes competition, and competition eventually leads to improved products and services. This has changed our world for the good in my opinion and has no doubt led to an incredible increase in the average American’s quality of life. If a company is
“Why Doesn’t The Fed Lower Mortgage Rates To Encourage The Housing Market?”
2007-07-09 13:00:34
Although mortgage interest rates dipped to a one month low this week, they’re still significantly higher than they were several months ago. So, why are rates going up if the housing market’s in a slump? Why doesn’t the Fed lower interest rates to encourage a comeback in the housing market?
Well, the short answer is that the Fed doesn’t have much to do with long-term Mortgage
interest rates. The Fed controls only one interest rate, the Fed Funds Rate; however, several other interest rates are based on the Fed Funds Rate, so, indirectly, the Fed controls these as well. The most important of these to consumers is the Prime Rate.
The Fed Funds Rate is the rate at which banks loan money to each other; banks make money by charging a premium on this rate when they lend money to consumers. The Prime rate is currently set about 3% above the Fed Funds Rate and is defined by the Wall Street Journal as &ldquo
;The base rate on corporate loans posted by at least 75% of the n
Read more: Lower
, Rates
, Housing
, Market
, rdquo
If I Hear Another Person Ask For A Free Loan I’m Going To Lose It
2007-07-06 21:09:53
That’s right…I’ll lose it. I’ll pull out my hair and run around in circles screaming at the sky. Well, not really, but I hear it all the time; and you know what drives me crazy about it?
THERE’S NO SUCH THING AS A FREE LOAN!!
I heard one of my office buddies on the phone today talking to a potential client. I couldn’t tell exactly what the client was saying, but I caught the gist of it. He was asking - no, he was telling my buddy that he wanted a free loan. My buddy tried, to no avail, to convince the guy that there was no such thing as a free loan. So they hang up the phone, no progress made. My buddy tells me exactly what the guy was saying and it made me think of something.
The mortgage business is the only business where some random guy off the street thinks he knows more about the business than the loan officer he’s talking to. I swear I’ve never heard so many people tell me that they’re waiting on rates to drop, or that thei
Read more: Going
How To Avoid Bankruptcy - Credit Debt Spiral Part II
2007-07-05 20:34:35
In Part I I gave the example of Kelly, the responsible college graduate who’s finances took a turn for the worse. If you haven’t read about her attempt to avoid bankruptcy, you should.
You should always keep this in mind: You must be proactive with your finances because by the time you are really in need of some money, you probably won’t be able to get any. For instance, if you’re overdrawn on your checking account, you probably won’t be able to get another account or a credit card anywhere until you pay the bank. If you’ve missed a few mortgage payments you won’t be able to refinance and access that equity in your home at a reasonable rate. You absolutely must secure some backup funds as soon as it appears that cash may be tight in the future. If you’re about to change jobs, make sure you’ve got plenty of room on your credit cards or you open up a line of credit on your home so you have some room to breath. In fact, I recommend yo
Read more: Avoid
, Spiral
, Credit Debt
Create Your Own Sources Of Income - Graduate Finance 102
2007-06-26 14:22:52
This is the second article in my series on graduate finance, although you should be able to take something out of this series no matter what your current situation. In the first article I showed you how to get away with not paying your bills for a while if times get tough. In this installment I’m going to cover what is, in my opinion, a major financial blunder, relying on someone else for your income.
What would you do if, tomorrow, your company announces it’s closing its doors? Are you in a position where you could cover your expenses for 6 months to a year, or are you like most people, facing major financial problems if you suddenly lost the income from your career?
Common knowledge suggests that it’s safer to work for a stable company, relying on that company for your income, than to generate your own income sources. I’m not going to argue that receiving a steady paycheck as a full-time employee from a company like Proctor and Gamble is less risky than jumpi
Read more: Income
, Graduate
How To Get Away With Not Paying Your Bills - Graduate Finance 101
2007-05-23 20:11:17
This is the first article in a series I’m releasing to help recent graduates (or anyone out on their own for the first time) navigate the dangerous waters of personal finance. These are all tips I wish someone had given me when I graduated from college, but like many, I had to learn the hard way. This series will be broken up into separate articles that I’ll release over the next week or so and, if you’re anything like me, no one has ever told you this stuff before and, if you learned it, you probably did so the hard way. On to the good stuff…
My God college is expensive! Like a lot of my friends, I was broke as a joke in college. I got some help from my family and student loans, but I also held a part-time job and used credit cards to cover some of my expenses. I’m sure most of you reading this have gone through times when you were pretty tight on cash; if you haven’t, I can tell you as an expert in being broke, it sucks! The problem is, and I out
Read more: Graduate
, Bills
Pay Off Your Mortgage In 10 Years Without Changing Your Lifestyle
2007-05-19 22:11:59
Not only can you pay off your mortgage in 10 years (sometimes less) without changing your lifestyle, you can also save enough that you’ll retire with $100,000 tax free each year (or more) for the rest of your life - again, without changing your current lifestyle (although don’t yell at me if it gets better). I know, it sounds way too good to be true, right? Well, this website is all about teaching you how to maximize return on your real estate investments, so let the learning begin!
This form of equity management is set up using principles that already exist, but what this does is combine these various financial tools in a way that makes it easy for Joe Schmoe down the street to manage equity like a pro. The system is set up like this:
You set up what’s called a Money Merge Account, which acts as a savings, checking, and line of credit all at the same time. You can read more about a Money Merge Account at Wikipedia and maybe in the future I’ll write an article
Read more: Mortgage
, Years
, Changing
Credit Debt Spiral Part 1 - You’re A Lot Closer To Bankruptcy Than You May Think
2007-05-07 19:16:48
There’s a secret regarding debt that no one finds out about until it’s too late. It’s vital that you understand how your credit score is calculated and be smart about planning your debt; the simple fact is you will learn this debt secret, unfortunately, by the time you do, it may be too late. If you’re an American consumer and don’t have money coming out of your ears, you absolutely must take a proactive approach to debt management.
A lot of us carry debt, and there’s certainly nothing wrong with debt in moderation, but it can get away from you and spiral out of control; and it can happen a lot easier than you may think. A lot of us carry some debt, but it’s easy to let it get away from you, even if you don’t have a whole lot of it. Let me illustrate this with an example.
(more…)
credit card debt, credit score, personal finance
Read more: Spiral
, Credit Debt
Why Subprime Loans Go Bad
2007-07-29 20:29:16
Here’s a great video that I found over at Dan Green’s blog about subprime loans and why the subprime mortgage market is taking a bit of a beating right now.
http://www.youtube.com/watch?v=0YNyn1XGyWg
Miscellaneous Ramblings, subrpime mortgege market
Read more: Subprime
, Loans
Top Subprime Loan Goes Bye-Bye
2007-07-28 02:01:37
Well, it happened; the #1 subprime loan, what we in the mortgage business affectionately refer to as the 2/28 (2 years fixed, 28 years adjustable), also known as a band-aid loan, is no more. 2/28 swims with the fishes boys and girls, and it’s another notch on the belt of the subprime grim reaper.
It happened earlier this week, but who cares, right? What we really care about is understanding the 2/28 and it’s significance in the subprime industry, so here goes nothin’
(more…)
Mortgage Market
Read more: Subprime
How The Mortgage Industry And American Consumers Team Up To Inadvertently Harm Each Other
2007-08-03 10:58:31
I was speaking with a buddy today about how mortgage professionals are taught to sell mortgages as opposed to taking on an adviser role in the refinance process. We both started out in this industry at the same company, which, by the way, if there were a more dishonest company, its owners couldn’t possibly have avoided jail up to this point, but that’s beside the point. I mentioned to my buddy that every tip I’ve ever heard from anyone in this business on how to be more successful has been focused on selling the client using any trick you can dig out of your sleeve. I’ve only heard a handful of people actually mention building relationships and trust as a means to becoming more successful. We were talking about why it is that dishonesty and the “hard sell” are so prevalent in this business. We came to a few conclusions.
Why Are There So Many Mortgage
“Salesmen?”
First of all, the vast majority of mortgage companies pay commission-only. Lo
Read more: American
, Inadvertently
The Monthly Mortgage Roundup
2007-08-01 17:46:51
Welcome to the first edition of the Truthful Lending dot Com Monthly
Roundup! I’ll use these monthly updates to key you in on pertinent mortgage, real estate, and financial news, information and tips you may have never heard. I’ll also use this opportunity to mention some of the most important posts from this month that you may have missed and link to some other interesting sites (although none quite as interesting as this one ;)) that you may enjoy.
Interest rates went down considerably this month. Why? Fluctuations in the economy and various other factors have a small effect, but we don’t care about that; we want to know what’s really affected rates.
It’s quite simple. Interest rates were overinflated these past couple months, and here’s why…Interest rates are determined on an open market, just like stock prices, and we all know that many of the short-term fluctuations in stock prices are a result of investor expectations. Usually, those ex
Read more: Mortgage
#1 Technorati Ranking - Truthful Lending dot Com
2007-08-04 13:56:26
Well everybody, this blog has only been around since March or so and I’ve already achieved a #1 Ranking
on Technorati
. For those of you unfamiliar with Technorati, it’s a social bookmarking site similar to Digg that allows members to bookmark favorite online articles and blogs. Additionally, it ranks blogs based on popularity; achieving a #1 Ranking on Technorati is a pretty impressive feat. Here’s a screenshot to prove it:
Ok, I’m not really ranked #1 on Technorati. It appears that Technorati has a glitch in their system that’s causing all blogs to appear to be ranked #1. I’m not sure what my actual rank is, but it’s a goal to strive for, so I wanted to post it. Thanks to John Chow for the heads up on this one!
Miscellaneous Ramblings, technorati, top mortgage blog
Read more: Lending
, Technorati Ranking
Jumbo Loans Have Gone Haywire - Market Update
2007-08-11 15:40:14
Conforming interest rates dropped again this week, but Jumbo
rates have gone haywire; my price checks are coming back 1-1.5% higher than usual on Jumbo loans. Investor’s have been a little shaky lately; first it was Subprime, now it’s Jumbo that’s taking the hit.
My advice? If you’re looking to refinance a Jumbo loan, wait a couple weeks. Things will settle down and rates will come down. Make sure your Loan Officer knows not to lock a Jumbo (over $417,000) loan for a week or two; if he’s unaware of all this, you need a new LO.
Mortgage Market
Read more: Loans
, Update
Top 3 Reasons Mortgage Rate Shopping Will Kill You (ok, it won’t kill you, but it will cause you pain)
2007-08-10 15:34:28
Because both lenders and brokers will lie to you.
That’s right, even the big lenders will lie to retain clients or get new ones and they get away with it everyday.I see it happen almost every day, and I’m just one broker in one city in the entire Untied States. Not sure if your mortgage professional is being truthful? Post a comment and I’ll let you know what I think.
Because Interest Rates Change Every Day, Sometimes Several Times A Day
I can tell you from experience that Lender A’s rates can be lower than Lender B’s on Monday and the opposite may be true on Tuesday. So you get a quote from Lender A on Monday of 6% and a quote from Lender B on Tuesday of 6.25%. Who do you go with? Well, most people would go with Lender A, right? The problem is Lender A may not actually have the best deal, you just happened to catch them on a day when rates were down. Lender B may very well have lower rates in general, but you’d never know that. This is
Read more: Reasons
, Mortgage
, Shopping
Behind The Wall - An Insider’s View Of The Mortgage Process
2007-08-15 03:47:03
Ok, if you’ve ever refinanced, you’ve probably wondered at some point just what the hell goes on between the time you complete an application and the time your loan funds. I mean, if you’ve had a half-way decent loan officer, he or she has probably given you a little insight, but nowhere near what I’m going to tell you. Now, keep in mind, this is the process your file goes through if you’re dealing with a mortgage broker; maybe someday when I feel like writing about something boring I’ll key you in on what goes on at a bank, but to be quite honest, I don’t really know because I’ve never worked at one thank God. I’ll keep this concise, but if there are any questions, by all means, fire away in the comments section. On with the show…
After The Application:
So you’ve spent a boring hour while your Loan Officer takes down a complete 1003 (pronounced Ten-oh-three), also known as a Uniform Residential Loan Application. If yo
Read more: Insider
, Mortgage
, Process
Lock Your Loans!!
2007-08-13 18:48:41
Just a quick market update.
If anyone currently has a loan in process, please call your Loan Officer today to ensure he or she has locked your rate. I’ve already received around 10 emails today from lenders telling me that their guidelines are changing and any loans not already locked will be subject to the new guidelines. What does that mean? That means if you don’t lock your loan, you may find that the lender gets rid of the program or tweaks requirements so that you no longer qualify. It’s important to note that even if you are approved you need to make sure your Loan Officer locks the rate or you may find that the loan you were promised went up in smoke.
interest rates, Mortgage Market
Read more: Loans
Conforming Loans, The Alternative To High Jumbo Rates
2007-08-23 11:33:06
Conforming mortgage rates dropped this week to levels close to what they were a year ago, which, for those who don’t follow the market, is pretty low. Conforming loans are $417,000 and less. Many of my clients are in California, and a lot of loans out here are over that conforming limit and thus are considered “Jumbo
” loans; unfortunately, the jumbo market has been really bad lately and rates have been high; fortunately, there is an alternative if you’re considering a loan over $417,000.
I’m sure you understand what a second mortgage is, so I won’t go into that, but splitting the Jumbo loan into two smaller, Conforming Loans
will allow you to take advantage of much lower Conforming rates without settling for a smaller loan altogether. So how is it done? It’s really quite simple.
Let’s say you want to refinance your house with a current loan of $500,000; to avoid paying Jumbo rates, you can split that loan into a $417,000 first mortgage an
Read more: Alternative
, Rates
2 Simple Steps To Stop Getting 10 Refinance Calls A Day
2007-08-30 14:32:38
If you’ve owned a home, you’ve probably experienced a strange phenomenon: A million calls from different lenders begging for your refinance business. I know, it’s annoying, right? I’ve had clients who receive 10 or more such calls a day; I’d be pulling my eyeballs out, but that’s never happened to me because I know how the system works, and in 5 minutes, you will too. There are two main methods by which mortgage lenders/brokers get your information and bombard you with phone calls, day in and day out.
Trigger Leads:
As you probably already know, when you apply for a mortgage, your credit is pulled; in and of itself, no big deal, and it’s necessary for a prequalification. What you probably don’t know is that the three credit bureaus, Experian, Transunion, and Equifax, automatically generate what’s called a Mortgage Trigger Lead, the lead is your information, and the credit bureaus sell this information to participating lenders/broke
Read more: Simple
, Refinance
Is That The President’s Hand In Your Pocket Or Are You Just Happy To See Me?
2007-09-03 04:00:35
As happy as I’m sure you are to see me, it’s just Bush, swiping any extra cash you have in your pocket to bail out homeowners who couldn’t be bothered to understand the papers they autographed and secured with their homes.
The Mortgage market is tough right now; foreclosures are on the rise, there is a glut of homes on the market, and no end in sight. President
Bush has come to the rescue with his FHA program to bail out homeowners in need. The program he plans to roll out is called FHA Secure and is supposed to help struggling homeowners with adjustable rate mortgages, no longer able to pay their mortgages due to rising payments, refinance into new, FHA secured, fixed-rate mortgages. Thanks Mr. President, from the bottom of my heart, but how on Earth do you plan to pay to get people out of situations that, in most cases, they put themselves in to begin with? Oh, right, by swiping more money from the American taxpayer.
The Federal Housing Administration
For those unf
Read more: Pocket
, Happy
Top 50 Mortgage and Real Estate Blogs
2007-09-27 18:50:07
It takes way too long to find the best of the best when it comes to mortgage and real estate blogs on the Internet these days. Sure, you may stumble across a handful of major blogs, but what about the hidden gems, the rising stars? They’re a little more difficult to come across, especially when a Google search for mortgage blog comes up with over 32 million results!
So, why not just come up with a list of the 50 Top Mortgage
and Real Estate
blogs so we all have one resource to go to for a fresh perspective?
Over the next month I’ll be compiling the list. I hope to get some community involvement on this project in the form of suggested blogs to rank and how to refine the criteria (as if it wasn’t perfect already ). I plan to use the following to rank the blogs:
Google Pagerank
Technorati Ranking
Alexa Traffic Rating
Completion, Suggested Blogs
, and Comments
I’ll get the list completed by the end of October. Why not any sooner? Because I really don’t hav
Read more: Real Estate
Irvine And Surrounding Areas May See A Further Decline In Home Values
2007-09-27 18:12:19
Irvine Mortgage Blog - The recent release of the New Homes Sales report for August shows that sales dropped sharply by 8.3% from last month. Down to 795,000 from 867,000 in July. The August median new home price was down as well by 7.5% from the month prior. Some of you may be aware that the median price for existing homes actually increased this month. What you may be unaware of is that’s not a very good sign for homeowners.
The New Home Sales median sale price more accurately reflects current market conditions than the current existing median sale price because it’s the price builders are selling new homes for, and since builders can’t afford to let home sit on the market because of holding costs, they lower the prices until the homes start to move. The existing home median sale price, however, is largely out of whack these days because a lot of homeowners don’t need to sell, they just want to, so they can afford to let the home sit on the market for a while a
Read more: Irvine
, Further
, Decline
, Values
Mortgage Market Report - 9/26/2007
2007-09-26 16:59:19
If you plan to close on your mortgage in the next 20 days or so, you should consider locking your rate if you haven’t already. Here’s the outlook from Mortgage
Market
Guide.
Current Trend Direction: Lower
Risks favor: Locking, as 200-day Moving Average looms overhead
Current Price of FNMA 6.0% Bond: $99.91, -12bp
When it comes to the Bond Market, the rule is that good news is bad news and vice versa. So a lousy Durable Goods Report is bad economic news, which should be good for Bonds. But Bond prices have actually worsened because the 200-day MA ceiling is too difficult to break. Durable Goods was reported at -4.9%, which was lower than expectations of -3.5%.
At 1pm ET today, the US Treasury will auction off $18 Billion in Two-year Notes and this additional Bond supply could add selling pressure.
Technically, the 200-day MA is a powerful ceiling by itself, but the 25-day MA is also close by, making this dual ceiling of resistance too tough to break. A locking stance
So Did Rates Go Up Or Down? - Clearing Up The Confusion
2007-09-22 16:10:31
I’ve done a lot of reading over the past several days about the Fed rate cut, if you’ve been following this at all, you’ve probably heard about 10 different opinions on the topic. Trust me, I know the feeling. Before I got into the mortgage industry I was so confused by financial commentary that I thought my head would explode, and that was entirely due to the fact that every commentator has something different to say. I take responsibility in my part of that, and so I’ve decided to explain what may be misunderstood by some.
So Many Factors, Not Enough Time
Probably the major cause of most of the misinformation, or more accurately, incomplete information, is that there simply isn’t enough time in the day to take into account all the different factors that go into explanations and predictions of market conditions, so commentators focus on what they think is important and neglect to mention other things.
I’ll use myself as an example. In my last articl
Read more: Rates
, Clearing
What The Fed Funds Rate Drop Means For You
2007-09-21 17:07:27
Irvine Mortgage - The Fed decided to lower its target for the Fed Funds
rate by 50 basis points on Tuesday, the Dow Jones rallied immediately, posting the largest one day gains it’s seen since 2003. So what does all this mean for you?
Well, the Fed Funds rate doesn’t directly affect mortgage rates, but mortgage rates are down since last week, so let’s examine exactly what happened, and why it may or may not last.
In simple terms, mortgage rates dropped because investors were pleased at the Fed’s decision to lower the Fed Funds rate, when investors are happy and confident in the US Economy, mortgage rates will generally go down, and that’s exactly what happened on Tuesday.
On the other hand, low interest rates can lead to inflation if the Fed doesn’t remain vigilant. The Fed Funds rate is only a target interest rate; in other words, the Fed doesn’t just come out of its meeting and say, “Let the Fed Funds rate be 4.75%,” and it just h
Read more: Means
Irvine Mortgage Rates May Rise With Interest Rate News
2007-09-18 13:19:10
Irvine Mortgage
- Federal Reserve chairman Ben Bernanke is currently in a meeting to announce what is expected by investors to be a Fed Funds interest rate cut, among other topics like the state of the current US economy. Whenever you have big changes being made on high levels like at the Fed, you can expect mortgage rates to change, but not always in the most obvious fashion.
If you’ve read my article about how mortgage rates are determined, you know that a lot of the cause behind the Mortgage Market turmoil we’ve been having is due to nothing more than investors’ ideas about what may or may not happen in the future, however irrational those ideas may be. The same thing is going to happen today, but I predict that, in the event Irvine Mortgage Rates
rise slightly, they’ll come back down to normal levels within a few weeks, and vice versa.
CNN Money states that investors aren’t completely in agreement on their predictions of the size of the rate cut, some
Read more: Irvine
, Interest
The Irrational Price of Irvine Housing
2007-09-18 12:56:11
Irvine Mortgage - As most of my local neighbors here in Southern California are well aware, the Irvine housing market has been completely out of control over the past several years. As a simple reminder of how crazy things have gotten over the years, the Irvine Housing
Blog gives the stats on a house nobody would like to call home on the market here in Irvine at an exorbitant price.
Read more: Irvine
, Irrational
Welcome Truthful Lending Readers
2007-09-17 23:21:16
Irvine Mortgage - I want to say welcome to all of my Truthful Lending
readers. In case you were all wondering, I’ve decided to port Truthful Lending over to a new design and domain name, I’ve forwarded truthfullending.com to johncrenshaw.net. I’ve done this for a couple reasons, one is that this new design is a little better in my opinion. Two is that this new design allows me to share more information with you. I’ve got a lot of things planned for the future, so please enjoy what you find here.
Changes To The Site
The only change is that I’m going to be focusing some of my posts on the Southern California real estate and mortgage markets (the markets I do business in) to build my client base. While I love sharing what I know with everyone, I’ve got to make a living too!
Read more: Welcome
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