I'm Getting Crazy
This Home Mortgage thing is making me crazy.
I've spent the morning looking at news articles and blurbs about the Home Mortgage fiasco that we're in and the expert opinions are driving me nuts. Not just in Salt Lake City, but nationwide.
Judging from the calls and responses I've been getting none of it makes any sense to you either.
So.... My mission this week is to continue to pour over the articles of economic mumbo-jumbo, cut through the hype, and share with you at least one good home mortgage tip each day.
Today's insight has to do with an article by Holden Lewis for Bankrate.com about the nations largest mortgage lender, Countrywide Financial. Countrywide is also the largest or next to largest loan servicer. (the people you send your money to). Countrywide makes money by packaging the loans they make and selling them to investors. That money is then loaned to new home buyers to create additional home mortgages to package. And on and on it goes. Since many of the loans in the "packages" are what are called sub-prime loans, and since we are being told that sub-prime loans are not performing very well, investors are reluctant to buy them.
The article singles out Countrywide, because they are the biggest. That doesn't mean that smaller home lenders are not facing the same pressures. In fact, because a smaller lender may not have the resources of a Countrywide, they could be in trouble sooner.
Based on that, here are a few things you should consider if you are waiting for a Countrywide loan or similar lender to fund, or have made application with Countrywide, or considering financing your home purchase with them.
1. If you are waiting for a traditional home mortgage (conforming), you should have no problem, as Countrywide will probably fund the stronger loans first.
2. If your loan is less than perfect, or for more than $417,000 try to move the closing forward. ASAP,...ACT FAST. If you are the home seller, consider moving early to help the home buyer. That inconvenience is better than loosing the buyer at the closing table.
3. Look for a lender that has other sources of income, like local Banks or Credit Unions that have depositors money and need to put that money to work. Utah has a great group of Credit Unions, contact one of them.
4. Find a loan officer that has been in the business a number of years, and knows how to match home buyers with appropriate home buying products. There is a lot of product out there, but you need to talk to someone with a lot of home lending experience, that can "make it happen".
5. Finally, if you have an adjustable rate mortgage, talk to a lender ASAP about a "worst case scenario" when you adjust. Consider refinancing. If you have a prepayment penalty, discuss buying your way out of it.
That does it for today. I hope you don't think I'm overreacting, especially after yesterdays article where I pointed out that only a small percentage of home loans were sub-prime and a smaller number yet were in default.
The fact is, there is a problem out there, and I don't want it to touch my people if I can help it.
As you know I'm not a lender, I sell Real Estate, but I know many fine lenders and would be happy to recommend some. If you think you might like to talk to one, give me a call. Corie @ 567-0946