Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'loans'
New Consumer Article: The 2010 Good Faith Estimate (Page Two)
The second installment in the series The 2010 Good Faith Estimate (Page Two) is now up. Read it and weep - for consumers nationwide who were hoping the government would provide the solution to their troubles. Didn't happen. Instead, it's...
New Consumer Article: The 2010 Good Faith Estimate (Page One)
It's been a while, but the most recent Transaction From Hell (seller's tenants didn't want to move out - or even let inspectors in) is finally over and I've had a little bit of chance to recover. Today's new consumer...
New Consumer Article: Changes In The Mortgage Market And Transparency Since 2005
It's been a while because I've been both busy and depressed over dis-improvements in the market and their effects upon consumers, but yesterday I found time to write a new article Changes In The Mortgage Market And Transparency Since 2005....
New Consumer Article: Low Asking Price on Unfinanceable Properties
The new consumer article for today is Low Asking Price on Unfinanceable Properties. Almost always, the reason for an asking price well below other equivalent properties is the presence of some factor that means you cannot obtain a regular real...
New Consumer Article: The Loan Shopping Koan
The new consumer article for today is The Loan Shopping Koan, talking about the contradiction offered by dueling interests: The fact that while consumers want the best possible loan, against the opposing fact that it's very easy for loan providers...
New Consumer Article: They Told Me Not To Make My Loan Payment
The new consumer article for today is They Told Me Not To Make My Loan Payment. Ladies and Gentlemen, that's one of the top ways to get yourself in trouble when you're refinancing. What if your new loan cannot be...
New Consumer Article: There Is No Fairy Godmother for Loans
The new consumer article for today is There Is No Fairy Godmother for Loans. To avoid becoming a government statistic, ask prospective loan providers the hard questions before you sign on the bottom line - or better yet, before you...
New Consumer Article: Restricted Sale Property: Very Difficult to Find A Loan
The new consumer article for today is Restricted Sale Property: Very Difficult to Find A Loan. Before you make an offer on restricted sale property, know that your financing options are going to be very limited, and being able to...
New Consumer Article: 105% Refinancing With No PMI (Maybe)
The new consumer article for today is 105% Refinancing With No PMI (Maybe). It goes over the straight scoop on Fannie and Freddie's new programs aimed at loss mitigation by helping people who would be able to refinance if values...
New Consumer Article: Shopping For The Best Loan In The New Lending Environment
The new consumer article for today is Shopping For The Best Loan In The New Lending Environment. There have been changes in the lending environment in the last few months, changes that are practically designed to make loan officers with...
New Consumer Article: The Home Valuation Code of Conduct (New Appraisal Standards)
The new consumer article for today is The Home Valuation Code of Conduct (New Appraisal Standards) that are going to be taking effect (appropriately enough) on May 1 ("May Day" or "MAYDAY"). It is going to be almost impossible for...
New Consumer Article: What Are The Note And Trust Deed And What Is The Difference?
The new consumer article for today is What Are The Note And Trust Deed And What Is The Difference?. This is a basic article on the differences and relationship between the two documents; one that documents the debt and one...
New Consumer Article: Loan Fall-Out And The Effects Upon Consumers
The new consumer article for today is Loan Fall-Out And The Effects Upon Consumers. The days when loan officers are willing to lock loans with just a social and the identity of the property are ending, if not already over....
New Consumer Article: Why It May Be Costly to Reject Paying Points
The new consumer article for today is Why It May Be Costly to Reject Paying Points. The advice "never pay points" actually started out as misleading advertising intending to keep consumers away from what in fact were better loans, but...
New Consumer Article: Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10)
The new consumer article for today is Games with Mortgage Loan Rate Locks (Games Lenders Play Part 10), talking about how you can be told your rate is locked when it isn't, what the benefits of playing this game are...
New Consumer Article: Getting A Loan In A Paranoid Lending Environment
The new consumer article for today is Getting A Loan In A Paranoid Lending Environment. Lenders today are over-tightening lending standards in over-reaction to the losses they have taken (which were their own fault), effectively nuking the barn after one...
New Consumer Article: Jumbo Loans and The Current Market (January 2009)
The new consumer article for today is Jumbo Loans and The Current Market (January 2009). There is always a tradeoff between rate and cost on mortgage loans, but lenders vary exactly what that tradeoff is in order to suit their...
New Consumer Article: Be Careful Moving Your Down Payment Money
The new consumer article for today is Be Careful Moving Your Down Payment Money. Underwriters want to see a trail on any money you have. If you don't have or can't show such a trail, the presumption is going to...
New Consumer Article: Fifteen Year Loans
The new consumer article for today is Fifteen Year Loans: Are They A Good Idea?. Lots of nonsense gets put out there about fifteen year loans, and to many people there is a certain cachet to only needing fifteen years...
New Consumer Article: There Is Always A Reason For A Low Asking Price
The new consumer article for today is There Is Always A Reason For A Low Asking Price. Sellers are not looking for people to sell their property to below market price. Usually, low asking prices should be even lower than...
New Consumer Article:"Quantity Has A Quality All Its Own"
The new consumer article for today is "Quantity Has A Quality All Its Own": Low Price. When people can get a good for less than previously, then not surprisingly they will buy more of it in the aggregate. It all...
UPDATED Consumer Article: Refinancing When You Owe More Than The Home Is Worth
This morning I updated my popular article Refinancing When You Owe More Than The Home Is Worth, talking about the changes in the possibilities since I originally wrote it. I really want to be writing more original stuff, but...
New Consumer Article: The Hope (Dashed) For Homeowners Program
The new consumer article for today is The Hope (Dashed) For Homeowners Program. I really thought that most folks understood this was all political theater - unlike the $700 Billion for lenders who screwed up by the numbers, intentionally disregarding...
New Consumer Article: Cash to Close - A Basic Primer
The new consumer article for today is Cash to Close - A Basic Primer. The article discusses how much cash a buyer of real estate has to have in order to make the transaction happen. Proving that you have this...
New Consumer Article: New Good Faith Estimate and HUD 1 Form Approved
The new consumer article for the day is New Good Faith Estimate and HUD 1 Form Approved. The government has come up with new regulations on the Good Faith Estimate (Mortgage Loan Disclosure Statement in California) and HUD 1 Form....
New Consumer Article: VA Loans Have Become The Magic Bullet
The new consumer article for the day is VA Loans Have Become The Magic Bullet. It isn't that VA loans have changed; it's that everything else has severely tightened the qualifications. I'll try and have at least a couple of...
New Consumer Article: Will I Qualify for the Loan to Buy Real Estate During The Market Meltdown?
Today's new consumer article is Will I Qualify for the Loan to Buy Real Estate During The Market Meltdown?, which helps people answer the question of whether they will qualify for and be able to get a loan during the...
What Sort of Loan Can I Get? (October 2008)
Having had two separate very qualified buyers ask me if they could get a loan in the last two days was kind of an eye opener to all of the hype out there about how difficult it is to...
New Consumer Article: Why You Should Not Walk Away From Upside-Down Real Estate
Today's new consumer article is Why You Should Not Walk Away From Upside-Down Real Estate. You shouldn't, if there is any alternative. Doing so takes a theoretical loss on paper and turns it into something concrete with real world consequences....
New Consumer Article: APR vs APY: What The Difference Between Note Rate and APR Tells You
Today's new consumer article is APR vs APY: What The Difference Between Note Rate and APR Tells You. I advise people to ignore APR as a means of shopping a loan. But there is some information in the difference between...
New Consumer Article: Second Trust Deeds: Home Equity Loans and Home Equity Lines of Credit
Today's new consumer article is Second Trust Deeds: Home Equity Loans and Home Equity Lines of Credit, talking about the basics of what forms that these loans take, the Home Equity Loan and Home Equity Line of Credit....
New Consumer Article: "Buy and Bail" or Buying One Home Before Foreclosure on Another
Today's new consumer article is "Buy and Bail" or Buying One Home Before Foreclosure on Another, describing lender response to what has become a widespread phenomenon, as people think they are somehow saving themselves money try to defraud lenders in...
New Consumer Article: The Return of Portfolio Lending
Today's new consumer article is The Return of Portfolio Lending, on the subject of what a portfolio loan is and the differences between portfolio and security based lending, and what the return of portfolio lending means, even to those who...
New Consumer Article September 9, 2008
Today's new consumer article is Personal Loans For A Real Estate Down Payment, which discusses an uncommon but doable alternative for rapidly acquiring a down payment. It has significant downsides even if done correctly, and if you do it wrong...
New Consumer Article September 5, 2008
Today's new consumer article is The State of the Loan Market and How Much You Can Borrow September 2008 (Part II), which discusses the loan market and the state of lender paranoia that currently prevails, and the possible solutions to...
New Consumer Article September 4, 2008
Today's new consumer article is The State of the Loan Market and How Much You Can Borrow September 2008 (Part I), which discusses the loan market and the state of lender paranoia that currently prevails. If you are one of...
New Consumer Article August 21, 2008
Today's new consumer article is The Moment of Truth, Signing Bad Loan Documents and the Right of Rescission, which discusses the Moment of Truth that happens in every loan - when the loan documents are presented. Ideally, there should be...
New Consumer Article August 19, 2008
Today's new consumer article is Loan Qualification Standards: Qualifying Rate and Payment, which talks about how the calculations that determine whether or not you qualify for the loan you apply for....
New Consumer Article August 13, 2008
Today's new consumer article is Why Lenders Don't and Won't Tell Borrowers Their Loan Was Turned Down, which discusses why most lenders don't make this very simple disclosure. Basically, it's because they lose money by being honest....
New Consumer Article: August 6th, 2008
Today's new consumer article is How Do I Know If I've Been Lowballed on a Mortgage Quote?, which talks about how to nail down lenders on their quotes so that they actually deliver what you expect at loan sign up....
Stand Alone versus Piggyback Second Trust Deeds
Second Trust Deeds are something few real estate loan officers really understand well, mostly because the good ones don't make much money on them. Predatory lending laws in most states, limiting total compensation and total expenses to a given percentage...
Deferred Payment Mortgages - Not As Bad As I Expected
(Note: As of the time I updated this, the website of the company was off-line. I do not know why and a casual perusal of search engine results is uninformative) If that title seems to be damning with faint praise,...
NEWSFLASH! SAN DIEGO DECLINING MARKET DESIGNATOR REMOVED!
I have just gotten an email from one of my wholesalers (who shall remain publicly unnamed) removing the "declining market" designation from San Diego loans! This particular lender is still not willing to do 100% loans, but they will...
Why You Want The Lender to Assume Pricing Risk
In the last couple of years a movement has arisen, led by certain well meaning academics, that says negotiating a loan broker's total revenue is sufficient to get consumers a better loan. As far as they go, they are...
The Three Purposes of Real Estate Loans Defined
Purchase Money: This is a loan that enables you, in combination with your down payment, to actually purchase the property. If you spend cash to buy the property and get a loan the next day, that is not a purchase...
Unsustainable Loans You Should Not Use to Purchase a Property
You've probably heard the horror stories, and I've mentioned the possibility more than once. Some unsuspecting person is looking at properties beyond their price range, and it therefore has all kinds of attractive features that properties which are in their...
Protecting My Buyer Clients Good Faith Deposit
As I wrote a few days ago, the buyer's deposit is always at risk. This is just a fact of real estate transactions. I could pretend it's not so, but that wouldn't keep the deposit from being at risk...
Prepaid Interest and Why You Never Really Skip a Mortgage Payment
Many people think that mortgage interest works like rent: paid in advance before you live in the property for the month. This is not the case. Mortgage interest is paid in arrears. As you begin the month, interest begins...
Why Cost Is As Important As Rate For Mortgage Loans
A few days ago I wrote an article explaining why borrowers should consider a 5/1 ARM, because the tradeoff between rate and cost is lower for that loan, and most people don't keep their loans 5 years anyway, so...
Mortgage Accelerator Programs: A Good Basic Idea, But the Devil Is In the Details
The most recent hot thing in mortgage circles is a mortgage accelerator program. Now I've heard other things, most notably biweekly payment programs, called mortgage accelerators in the past, so let me take a moment to define exactly what I'm...
The Best Way to Avoid Default and Foreclosure
We got behind on house pymts & it was sent to an attorney for foreclosure.? The attorney has printed a notice in our paper on Oct 9 that it will go up for public action on Nov.16th. We found out...
Why Buyers and Refinancers Should Consider a 5/1 ARM Again
Right now, due to the problems we had with unsustainable loans, nobody wants to consider anything but a thirty year fixed rate loan. I understand why, especially as I've been preaching the dangers of things like short term adjustable...
Shop Loans By The Total Cost To You, Not By What the Provider Makes
When it comes to mortgage loans, people get distracted by the darnedest things. Let's look at Wal-Mart. You think they got to be the largest retailer in the world by making less money than their competition? I assure you...
Loan Assumption and Assumable Loans
Every once in a while, the subject of assumable loans comes up. An assumable loan is one where the owner of a property has the ability to pass the loan along with the property in a sale. In other...
Consult a Loan Officer to Make a Purchase Offer
I don't know how many people have told me the story of the Purchase Offer That Was Accepted But Couldn't Be Done. They come to me because they lost their deposit or are about to and they want some way...
First Time Home Buyer Assistance Programs: Locally Based
One of the things people keep asking about is first time buyer programs. They exist, but lenders are not the first place to ask. Why? Because many, if not most lenders, actually charge a quarter of a point or so...
Real Estate: Giving Someone a Monopoly Does Not Encourage Top Performance
From an e-mail I've been talking to agents lately and I ask them about the things I've learned about from your site. I thought I would say things like "I want to apply for a backup loan" and they would...
My Sixty Second Public Service Announcement about Buying Real Estate
Here was an idea I had: Pack a list of the most important things consumers need to know about buying real estate, as packed into the words I can say in sixty seconds without sounding like an over-clocked squirrel. Here...
Retirement Account Contributions and Mortgage Loan Qualification
I know 401k contributions impact a persons Adjusted Gross Income, thus would it also affect the amount a person could qualify for? If so, I will delay enrollment for a few months... This depends upon what documentation you use to...
Another Scam: "Negative Equity? Sell and Get Cash!"
Notice that it doesn't claim that you can do so legally. I saw another of these signs on the way to the office this morning. When things are going sour, there are any number of scam artists who will...
My Thirty Second Public Service Announcement On Mortgage Loans
I usually write long articles, Part of that is because I've done all of the easy subjects, part because sound bites facilitate sloganeering, not serious thought that's likely to result in a better answer - or the realization that you've...
The Difference Between Note Rate (APY) and APR
I am continually horrified how many people shop their loans by APR, just as I am by people shopping their loan based upon payment. Why? Because in either case, you're setting yourself up to spend a lot of money in...
Forty and Fifty Year Mortgages
Recently, the forty year mortgage has started to make a comeback, and a few lenders have started introducing the fifty year mortgage. The reason, straight from the horse's mouth, the lender's representatives, is lowered payments. In an uncertain and unstable...
Sourcing and Seasoning of Funds
People sometimes ask, "Why should the lender care where I got the money for the down payment? I earned it, it's mine - cash is cash!" They're right as far as they go. In general, the lender doesn't care...
Debunking the Money Merge Account Scam (Games Lenders Play, Part 8)
Mortgage Accelerators, or Money Merge Accounts, have become the thing that everyone's pushing of late. I have gotten so much junk mail about this from more originators (who don't know who I am) and wholesalers (who should) in the last...
Jumbo Conforming Loans: Tougher Standards Than Conforming Loans
Effective April 1st and for the rest of 2008, Fannie Mae and Freddie Mac will be buying loans above the current limit of $417,000. The is a result of the economic stimulus package signed by President Bush on February 13th....
Refinancing With a Prepayment Penalty
how soon should I start shopping around to refinance my home? I have a 2yr interest only and it's up in (four months) Okay, the 2/28 loans which you are describing all have prepayment penalties for at least two years....
New Temporary FHA Conforming Loan Limits Announced!
Got an email alerting me to this fact. The e-mail was gobbledegook as far as making any sense but I went to the FHA home page and they had better information. It appears as if the FHA, through OFHEO,...
Avoiding Mortgage Prepayment Penalties by Partial Payment
I enjoy your blog very much and figured you would be a good person to ask this prepayment penalty question to. Is there a prepayment penalty if you dont pay down the whole amount? For instance, say I owe 620k...
FYI: FHA Loans, FHA Secure, and Down Payment Assistance Programs
FYI, I attended a class on FHA mortgages, FHA Secure and down payment assistance programs this morning. I'll probably have two or possibly three articles in the next week or so. In the meantime, if I can help with a...
Changing Rates and Streamline Refinancing - Reasons to Love Zero Cost Loans and Hybrid ARMs
Rates move up and down constantly. This is one of the strongest reasons both Intelligent consumers and intelligent loan officers love zero cost loans. Every time rates drop, I call or send an e-mail to those clients who signed...
Is a VA Loan a Good Deal?
Veterans Administration, or VA loans, are government guaranteed loans available to veterans and active duty members of the armed services, that enable them to purchase homes for not money down. In fact, VA loans go up to 103 percent of...
Conforming Loan Limits and the Economic Stimulus Package
Sometime today, February 13, 2008, President Bush is scheduled to sign the Economic Stimulus Package into law. Maybe it's already happened by the time this publishes. I've made my opposition plain from the time it was first proposed, but it's...
Differences Between Loans Look Smaller Than They Are
One of the things I keep getting told by people is that my loans are the same as everybody else's. I quoted a 5.625% with no points a few days ago, and got told, "That's the same rate someone else...
"Should I Refinance?" - Consider Overall Cost of Money, Not Payment
With Rates having dropped again, many people are looking at refinancing their properties. With the state of financial education in this country, many people will shop for loans by payment, figuring the lowest payment is the best loan. As...
Successful Refinancing - An Example of the Issues, Computations, and Thought Process
With rates having dropped in recent weeks, it seemed a good idea to go over the thought process behind a successful refinance. Other than the two issues, of loan to value and whether you're really able to qualify for a...
Another Refinance Boom - With a Difference
With rates having nose-dived in recent weeks, we're experiencing a refinancing mini-boom. Now that rates have fallen by about a full percent from where they were most of the last year, people are waking up to the fact that...
What is Loan Amortization?
I keep getting hits for this, so people must want it explained. Loan Amortization is nothing more than the process of paying the loan off by regular payments over time. Leave it to the experts to come up with a...
Real Estate Agents and Mortgage Loan Officers Don't Want to Compete
It's the same reason the phone company doesn't want to compete, General Motors doesn't want to compete, Wal-Mart doesn't want to compete, Disney doesn't want to compete, and Microsoft will do everything in its power to appear as if it...
First Time Buyer Programs: The Mortgage Credit Certificate (MCC)
This is a nationwide program for first time home buyers that helps them qualify for the loan by saving them even more money on their tax bill. With that said, however, the state of California accounts for more than 50...
Real Estate and Mortgages: Back to Basics?
Over the course of the last few months, I've gotten mass messages from basically every lender I do business with, saying it's time to "get back to basics". About a week ago, my favorite A paper lender became the last...
Greed Envy, or the Tale of Aesop's Dog
At a very young age, my parents bought me a book of Aesop's Tales. Aesop has gone out of style, probably because these are stories with a moral lesson, and it seems the modern society is actively averse to moral...
Quitclaiming Property with a Mortgage
I am currently living with my parents and they wish to deed of gift their house to me but they still have a remaining mortgage on it. Is it possible to do this or do they have to pay off...
New Proposed Federal Reserve Rules: Is This Supposed to Be Helpful Regulation?
I was thinking we were ready for a recovery here in San Diego, but if these go through unamended, that will not be the case. Just in time to be the Grinch that Stole Christmas, the Federal Reserve has...
Yield Spread is a Beneficial Tool That Can Be Misused
If you read the papers and the congressional record on the current housing crisis, you might think yield spread is the central culprit for the entire meltdown. You would be wrong. Yield spread is a beneficial tool, offered voluntarily by...
Available Real Estate Loan Types
So what else is available, besides the thirty year fixed? There are many kinds of loan out there. Here's a quick overview: A Paper In addition to the thirty year fixed, there are several other varieties of fixed rate loan...
Nightmare Mortgages and Self-Destructive Behavior
Just got another one of those desperate consumer fishing calls. First off, she said she had to have an Option ARM. I told her I had them available to me, but... She interrupted me to say she had to have...
Real Estate and Loan Agents Selling Mortgage Life Insurance
Just got another in a long series of emails about this horrid product: (identifying details redacted) Learn How To Make More Money Per Client ($500-$1000) In This Workshop You Will Learn Why The Most Successful Mortgage & Real Estate Professionals...
Lender Paid Mortgage Insurance or Regular PMI?
If I am buying a foreclosed home for 220k of which 200k is being financed, and the home comes back at being valued at 285k from my mortgage company, am I still required to pay PMI? If so, how in...
How to Avoid A Repeat of the Housing Market Mess
HR 3915 is not the answer. We've been here before (in the early 1990s), congress did something remarkably similar except a little bit more sane. It didn't work then. Why would we expect it to work this time? Among many...
The Last Time I'm Going to Write About Blame for the Housing Market Mess
Who is responsible for the sub-prime mortgage failures? There's a lot of blame to go around. Regulators for failing to police existing Federal Reserve regulations on the lenders. This includes both Clinton and Bush era regulators. Bond rating agencies for...
Transaction Case Study
I had been corresponding irregularly with this gentleman during his hunt. It happens he lives outside of California, and I only work inside California, so I wasn't professionally involved. However, when he sent me the email telling me how it...
Cheerleaders versus Analysts in Real Estate
It's not difficult to see how some of the weakest agents and loan officers I know make lots of money. They work for an office of a well advertised chain, and when they get the walk-in traffic, no matter what...
After You Sign Documents, Can You Cancel?
what if i sign all the paper work for a house at a title agency, can i back off the house? Depends upon the laws in your state. The Federal three day right of rescission only applies to refinancing your...
Loan Rates for Low Income Families
What is a good interest rate for a house that is for someone with low income? Well, if you make enough to afford the property, your income isn't a factor on the interest rate you get! You either qualify or...
Mortgage Foreclosure and Taking of Other Assets
if our house is being foreclosed, can they take our retirement or make us sell our cars? we both have 2006 cars that are paid off. Can they take our cars or make us sell them to pay them...
Economics of Home Ownership in High Density Areas
This has been knocking around my head for a while, and I've written on closely related subjects before. But the idea behind this essay really just gelled in my mind within the past couple days. Here are the facts of...
Low Equity (or Worse!) Relocations in a Buyer's Market
Hi, Dan! I just came across your website and you strike me as the type of guy who has answers for our situation: My husband and I built our home 2.5 years ago. We took out a second mortgage...
Down Payment At Purchase or Wait Until Later?
Got a search engine hit for do I make a big down payment on a home or should make a lump sum payment after the mortgage It's very hard to construct a scenario where using it as "purchase money" doesn't...
Debt Consolidation Refinance - Pros and Cons
There's a lot that gets written on this subject, mostly by loan officers looking for business. Well, don't think I'm not looking for business, but not with this post. Or if anybody calls me because of this, at least I'll...
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