NLIC.org

Constance Said:

Are there any mortgage lenders/brokers you'd steer clear of in this RE market when considering buying a home?

We Answered:

Anyone that posts spam in here or emails you with a solicitation. This violates the Y!A TOU, and anyone willing to disregard the TOU is unethical. If they will break the rules here to get business, what else will they do?

I also recommend that you use local lenders, they have a stake in wanting you to be pleased with their service. What are the chances that you'll go back to some lender you found on the internet a few years from now? IMHO, they are not competitive in closing costs, not particularly good at customer service and your loan is just another number. If they miss the closing date, it is the Realtors problem, not theirs. My clients prefer a lender where they can walk in the door and talk face to face with someone, or pick up the phone and say "Hey, its John" and the lender doesn't have to scramble through a database trying to find them, they know who you are.

Best of luck to you.

Ross Said:

Do you blame the mortgage brokers, lenders, or homeowners for the mortgage crisis?

We Answered:

All three.

First, we need to distinguish two things:

Prime mortgages, and sub-prime mortgages.

There is no crisis in the prime-mortgage market. If you have 20% down, ok credit, 2 years job history, and found a house that costs only 2 years salary, you can get a mortgage. No problemo.

The sub-prime crisis was caused by too much greed, too much risk, and a bubble in housing (which means people started buying-to-flip, instead of buy-to-live-in, much as happened in 1998-2000 with dot-com stocks)

Sub-prime mortgage crisis: People who couldn't afford a house got a loan they couldn't pay back, and now the lender is stuck for the difference.

I look at it this way:
A recession is like a forest fire.
Some people get burned, a lot of trash gets cleared out, and the forest as a whole is healthier as a result.

Andrea Said:

Are the scandelous mortgage brokers & lenders realizing that their co-workers being laid off are a direct?

We Answered:

I wouldnt say all the mortgage brokers are scandelous. I will give you a personal example. I had a friend that wanted an interest only loan. She called me and said can you do these types of loans this guy I know talked me into it. I said I can but I wont. I explained to her why I wouldnt do them. She was looking only at the payment and that it started at 3%.

She did it with the other guy she knew. She has a masters degree she isnt stupid or con'd into it. A year later her payments adjusted.... quickly in less then 6 months her rate was at 10%. Fortunately she could refinance and qualify at a 6% fixed interest rate which I did for her. The other guy was out of business.

He didnt do anything wrong. Those loans dont even exist anymore. Its sad for some people because they bought homes based on a 3% interest only payment. They cant refinance at a 6% fixed. Their ratios are too high. Lenders that put people in this position knowing they couldnt afford a fixed payment should lose their license and be sued. Which they probably will be.

But some customers will do it even if you explain why they shouldnt and even if you refuse to do it. They will find somebody that will.

As for the layoffs, many of these were going to happen anyway. It sounds like alot, but in reality its pretty small for how big the mortgage business is. That was a very small portion of the mortgage business.

******************UPDATE**************…

To answer your question, has the government came in and bailed out the lenders? answer. HELL NO!!!!!!!!!!!

They havent given the lenders 1 penny. And they wont. No breaks nothing. They started FHA Secure, this is to help a very small portion of the borrowers that made huge mistakes. This only works for borrowers that could have normally gone FHA but picked an interest only loan. They still have to qualify. In these cases normally the lender will have to be willing to take a 20% loss to close the loan. They are very difficult and might help less then 5% of the people in this situtation. The lender still loses.

The Government is not helping the lenders. They really arent helping the homebuyers either. They arent bailing out anybody. Thats why so many lenders have gone bankrupt. Lenders made mistakes so did borrowers as did the secondary market. And the Government isnt helping any of them, nor should they.

Marilyn Said:

Why aren't mortgage brokers and lenders hiring loan processors from home?

We Answered:

Because of the privacy issues with borrowers credit information, for one - the Lender has control over what is in its own offices. Also, as for the brokers, they're on the road, often, anyway, so when they do need to return to a desk, it should be at the office. I hope this helps.

Good luck!

Bryan Said:

What actual mortgage lenders (not mortgage brokers) offer the Option Arm?

We Answered:

The option ARM can be a great alternative. The problem with the option ARM is people continue to always make the absolute lowest payment possible at the 2% or less interest rate thus creating a Negative Amoritization problem.

The Option ARM is designed to offer a borrower 4 payment options per month (by the way, you can do this owner occupied or non-owner occupied, but you need to be putting at least 10% down, 15-20% down as an investor)

pymt. opt. 1: the lowest payment at 1-2% interest
: " 2: a regular interest only payment at the going rate (say 6%)
3. a regular Principal & Interest pymt. based on a 30yr. loan
4. a regular Pprincipal & Interest pymt. based on a 15yr. loan.

People were going after the option ARM much more heavily when the market was better & prices were going up more quickly. The object of the game was, even if I make the lowest payment possible, my equity is rising faster than my Negative amortizing position, so it makes sense.

With prices falling out there, you're getting a double whammy in losing equity (unless, you're are making drastic improvements to a property creating much much more value & you only plan on holding the property for less than 2-3yrs) then the Option ARM may work just fine for you.

You need to talk to a Direct Lender more about this & figure out if the Option ARM could specifically work for you in your area & even narrow down to , can this work on this specific property i'm interested in.

btw I checked into this New Horizon Home Loan website, It raises a lot of red flags. Without a HUGE down payment & very high interest rates no reputable bank is going to lend someone hundreds of thousands of dollars based on "personal character references". Big red flag

Katie Said:

does the law require mortgage brokers or lenders to disclose home appraisal?

We Answered:

If you paid for it then it is yours. If they paid for it then it is theirs.

I believe that an FHA appraisal is registered to the house and if you sell within six months you have to use that FHA appraisal, but a conventional appraisal does not have to be used so if you want to pay for a second one you will get a second opinion.

Joanne Said:

How do mortgage brokers connect with lenders?

We Answered:

Lenders actually search for new mortgage brokers every day to try to get them to sign up with them. If you are a new broker, looking for lenders simply get on the internet and look up phone numbers for the lenders you want to work with. They will e-mail you a few forms to fill out, and then you are set-up! It is actually pretty easy.

Mortgage Broker