Recession: Good news for mortgage companies

Despite mortgage companies going out of business, and housing companies feeling the pinch of the housing recession, many mortgage companies can benefit from a slow down in the economy. After 9-11, many mortgage companies flourished in refinancing borrowers multiple times as interest rates fell to historical lows. While these opportunities will be available again with the fed lowering interest rates, the types of borrowers, and mortgage companies being able to flourish will be diminished.

Why? With the credit market crunch, and investors requiring more of a return in order to purchase mortgage backed securities, many mortgage products have gone the way side. This, coupled with borrowers using their homes as their personal ATM machine for the past years will make it difficult to do as many refinances, unless you are keen to doing government loans, and know how to take advantage of the new FHA secure program that President Bush has implemented.

Yes, FHA, VA, or borrowers that can qualify for the FHA secure program will benefit from the government bailout, and Bernanke's decision to lower rates. Mortgage brokers that know how to market to these borrowers will also benefit tremendously. Borrower who are looking to refinance, but don't qualify for the traditional refinance should look at an FHA refinance. Rates are as low as 5.0% on a 15 yr mortgage, and 5.5% for a 30 yr mortgage as of September 17th, 2007. Borrowers who are currently in a FHA loan, or VA home loan should shop around for the best refinance rate. I, personally recommend www.correctlending.com. Along with specializing in using a decision making tool to help borrowers find the correct loan, borrowers can go to www.correctlending.com, and apply for a no obligation free quote for their refinance. It can possible save borrowers thousands, and years off their mortgage!!

FHA Reform

Is FHA really the answer for the mortgage crisis? This morning I participated in a conference call regarding the FHA Secure Program that George W. Bush unveiled in hopes of helping so many home owners that could lose their homes. Frankly, after reviewing the program I don't think it is quite enough. It is designed for borrowers who have made 6 months payments on time before their ARM made an adjustment. The problem is these people still need to qualify with a total debt ratio under 43%, unless there are compensating factors such as assets, good job history, and of course whatever else the underwriter deems necessary. Initial estimates are that it could help 80k home owners, and for the time being, sure.
I do believe FHA streamline refinances, cash-out refinances, and rehab loans are the best FHA products. Not to mention the FHA purchase combined with a down payment assistance program still enables a borrower to finance their home with no money out-of-pocket. So, without a doubt, you will see more and more FHA loans being originated, and more and more loans being refinanced into FHA loans.
The next step for borrowers is to find a lender that can meet their needs. I blog about www.correctlending.com all the time, because it is the greatest product created for the home owner. It matches a borrower with the type of loan that meets their specific needs, goals, and personality. As argued in previous blogs, we would not be experiences the credit crunch we are currently experiencing had lenders originated better loans, and borrowers had been better educated about the risks associated with mortgages. Use Correct Lending's Correct Loan Analyzer for yourself, its free, and guaranteed to help the borrower make the correct loan decision, and get that loan at the lowest possible price.

Rational Lending During Irrational Times?

Rational lending will bring about calmness in this troubling times in the mortgage market. As a loan originator it is apparent to me that there are so many people that are backing off buying homes due to the fear that a housing recession is looming. Some borrowers are even questioning whether or not their 700 credit score is still good enough to get a loan. The response is absolutely! In fact, take out the fear of recession, and analyze the fundamentals in the economy; locally, nationally, and globally, and I would argue that for many this is a great time to find a great deal on a house, and a loan. 30 yr fixed rate mortgages are currently at 6.0%, and trending downward.
But, no one wants to make a mistake, and chance loosing their home, or even worse declare bankruptcy. So, how can you proceed in buying a home at a great deal, or refinancing your ARM to a fixed rate, and limit the borrowing risks? I have blogged about www.correctlending.com before, but I will do it again, because I have never found such a tool that replaces the loan officer in such an efficient manner. Not only will you find the best loan type, but you will also receive the benefit of Correct Lending shopping your mortgage to ensure you will be getting the lowest possible price loan. Moreover, the process looks simple. What I really like is the unbiased approach to the loan process. Check it out, it could bring about rational decision making, during irrational times!

Mortgage Fear?

It never fails that each time I turn on the TV every morning to get my Bloomberg or CNBC fix, I hear so many different opinions regarding the current mortgage crisis. Just today, WAMU's ceo was talking about the housing market as the "perfect storm." Many lenders have fed on the fears that the media has created and pushed advertisements stating refinance your adjustable rate mortgage into a fixed rate. Is this the correct move? For some yes, but others it is not. Fear encourages people to act irrationally to the point where people who only plan on being in a home for 2 years are refinancing out of that arm into 30 yr fixed rate mortgages.
With a background in data analysis and being a principle owner of a large mortgage brokerage, I set out a year ago to bring about a team to create a decision making tool that will help borrowers take charge of the mortgage. Our tool known as the correct loan analyzer uses a myriad of factors including economic conditions, duration you are going to be in the home, your goals regarding home ownership, risk tolerance, and other factors to help you put you in the correct loan. Once the correct loan is chosen, correct lending prices out the loan, and fulfills the loan thus creating the best of all worlds-the correct loan, at the lowest possible price. Check it out!! www.correctlending.com