Smart Borrower Blog

Archive for October, 2007

How Mortgage Lenders Lost Their Way

One of the questions I am often asked is how mortgage lenders could have made so many crappy loans over the past several years and not know it? While there is no simple answer, I do have my own theories as to what happened. Greed is the obvious answer, but I believe the real answer is efficiency. Yes, efficiency. It used to be when you needed a mortgage, you put on a suit and went down to your local community bank and explained to the loan officer why you deserved to get a mortgage loan. The loan officer carefully looked... more »

Hold My Hand While I Borrow Thousands

A lot has been written lately about the state of the mortgage lending business. Although I totally agree that lenders have both a fiduciary and moral duty to the borrowers they work with, and in many cases they have failed, I also feel–strongly–that borrowers must take responsibility for some of their actions. We all know that if we borrow money with an adjustable rate, we are taking on some risk. Borrowing money in the subprime market or taking on a loan with negative amortization is even more risky. Yet borrowers want to take the money now and blame the lender... more »

Cool New Mortgage Rate Tool

Loan.com just launched a nifty new rate graph tool that provides a display of rates for various loan products over a recent snapshot of time. But WAIT! That’s not the cool part. The news is that you can get this gadget for your own website. See right below it, where it says “get this for your site”? That means if you own a website about Mortgages Real Estate Investing Other Related Sites this toy could be for you. Web gadgets like this one help drive traffic, create links, and garner clicks–all keys to having a terrific website. Check it... more »

The Housing Market Bailout

First, let me apologize to readers for not being able to post the second part of the interview with Damion Flynn.   I did an upgrade to my Linux box today and am having some issues accessing the article.   I will post as soon as I can get this straightened out. We look today at the current multi-billion-dollar proposed bailout for the housing market.   It seems the Dems and Repubs aren’t too willing to talk about it right now.   The reality is that the risky loans made near the end of the housing boom just can’t be... more »

Interview With Damion Flynn, Realtor

In a recent post, I mentioned that I would like to do an interview with a Realtor in Gulfport, MS. I’ve known Damion Flynn for several years, having met him on Rich-Jerks.com membership site. This was shortly after Katrina, and Mr. Flynn gave me some real insight into what was going on in Gulfport after the hurricane. I mentioned this to Lauren, my editor, and she of course agreed to the interview. Lauren felt this to be very timely with the disaster at present in California with the wildfires and people’s loss of their homes. I sent Mr. Flynn an... more »

The Pension Plan View

Today, while searching news about the mortgage market, I kept running across references to Countrywide financial Corp and the concern over CEO Anthony Mozilo.   I have written about Countrywide a lot in the past few months, and though it may seem that I single out the company, the fact remains that the fallout from everything mortgage related lately seems to come back to Countrywide and its actions.   I have to think that when I search on Countrywide and find 10 pages related to the problems within the company, that there is probably something to it. The Pension Plan... more »

Cool New Mortgage Rate Tool

Loan.com just launched a nifty new rate graph tool that provides a display of rates for various loan products over a recent snapshot of time. But WAIT! That’s not the cool part. The news is that you can get this gadget for your own website. See right below it, where it says “get this for your site”? That means if you own a website about Mortgages Real Estate Investing Other Related Sites this toy could be for you. Web gadgets like this one help drive traffic, create links, and garner clicks–all keys to having a terrific website. Check it... more »

Quirky Guidelines You Should Know

One of the reasons we tell consumers to get pre-approved BEFORE shopping for a house is so we can avoid any last minute financing issues.   Often times, consumers are unaware of the little underwriting rules that could potentially sink their deal.   Believe me, there are a lot of them.   What usually happens is someone thinks they are adequately qualified only to find out the bank won't do their loan for some obscure reason.   You should be aware of these common little quirks. Here are a few that I see most often: Gifts as Down Payments: Buyers... more »

Financing a Remodeling Project

If your remodeling or addition project is extensive, you may be wondering where the funds will come from. It is much easier than most people realize to get financing for a home upgrade–especially if you already have equity in the property. You may have equity because you have paid the mortgage down, or you may have it simply because the value of the house is higher than the amount you owe. The easiest way to get financing for a large remodeling project is by taking out a second mortgage on the home. You can choose between a home equity... more »

The Problem With SIV’s

I had no idea until today what a “structured investment vehicle” was.   I am of course not a banker or mortgage lender, so I just felt that it was just one of those things I didn’t know about nor had much use knowing.   It really came as a surprise to me to learn that many bankers aren’t aware of them either.   Let me get a little more specific - recently, there was meeting of bankers initiated by the Treasury Department.   At that meeting was Nazareth Festekjian, a 15-year Citigroup veteran.   Mr. Festekjian was a part... more »