IF YOU OWN A HOME... (Page 2)

Great.  Now, how many of those Refi’s included a DEBT FREEDOM plan?  Or, how many of them came with the education to make it the Last lone and not just the next one?

Again, Refi and free up money for a family.  Great.  They take that money, go get themselves into debt again, and refi again a few years later.  By doing that, the consumer barely gets any principle knocked off the load before refi’ing again and paying the lender interest upon interest.

Congrats to your wife on that volume of loans.  But if some of those refi families are called back in the next 3-5 years to refi again because of rate rate rate, then I take a serious issue with keeping families debt and not educating them on the concept that it is possible to get and stay debt free.

Countywide DOWN, not to take out the rest or make them change their ways.

P.S. by successful do you mean, in order to reap the profits of making interest for a few years, refi-ing them and making more interest and keeping a consumer in that never ending loop?

Tony, you are correct.  If someone is in debt it is the sole responsibility of that person.  I agree with you 100%.

Now, try on these shoes.  You get a mortgage and are told it is a 5% fixed rate (note rate).  You are not shown (read:  Not Full Disclosure) that due to expenses and fees the Annual Percentage Rate is actually 6.5%.  Therefore without knowing it you are paying 6.5% on a loan instead of the 5% you thought you had and are bragging to your friends about.  On top of that, your payment is, saayyyy, $800 a month.  Yet you are not informed (not fully disclosed) that your loan is actually negative amortization where the actually payment need to cover the interest is $900 a month.  So you’re not even paying all the interest each month and that extra $100/month is being tacked onto the Principle and interest is being compounded on that added Principle every month.  Yet, you are happy because you have that fixed rate.  After, let us say, 5 years, you go to refi and the Principle amount on the loan is more than you started and more than the house is worth.

Tell me, how would you feel the person who gave you that loan? 

Legalized stealing isn’t it?

It is crap like that in the industry that ticks me off.  Like I said, Countrywide down and more to follow.

Tony, you are correct.  If someone is in debt it is the sole responsibility of that person.  I agree with you 100%.

Now, try on these shoes.  You get a mortgage and are told it is a 5% fixed rate (note rate).  You are not shown (read:  Not Full Disclosure) that due to expenses and fees the Annual Percentage Rate is actually 6.5%.  Therefore without knowing it you are paying 6.5% on a loan instead of the 5% you thought you had and are bragging to your friends about.  On top of that, your payment is, saayyyy, $800 a month.  Yet you are not informed (not fully disclosed) that your loan is actually negative amortization where the actually payment need to cover the interest is $900 a month.  So you’re not even paying all the interest each month and that extra $100/month is being tacked onto the Principle and interest is being compounded on that added Principle every month.  Yet, you are happy because you have that fixed rate.  After, let us say, 5 years, you go to refi and the Principle amount on the loan is more than you started and more than the house is worth.

Tell me, how would you feel the person who gave you that loan? 

Legalized stealing isn’t it?

It is crap like that in the industry that ticks me off.  Like I said, Countrywide down and more to follow.

Here is another lovely of the mortgage industry:  Yield Spread Premium

If a client qualifies at, for example, 5% and the mortgage broker gets that client to sign off on a 6% loan by obviously not telling the client about the 5% and letting them know they qualified at 6%, the mortgage broker is paid more for duping the client and selling a higher interest loan.

http://www.thetruthaboutmortgage.com/mortgage-dictionary/yield-spread-premium/

You trying to just stir the pot Ty?  I make a living on yield spread premium.  Banks make revenue on it too--but they don't have to disclose it like I do as a broker.  This is attention grabbing headline stuff.  If YSP goes away so do brokers and BOOM, banks are the only source for mortgages, and accordingly, there is less market competition and the consumer loses out.  Guess what lobby is pushing to eliminate YSP?  BANKS.

Just like any other business, the more you sell something for the more money you make.  My gross revenue is disclosed at the time of signing applications and again at closing.  How is this so bad?  For those of you who are curious, look at the HUD1 settlement statement from your last mortgage.  If you used a mortgage broker, line 808 will show what their gross revenue was.  If you used a bank, you won't see anything.  You won't see me making a ton of money on any one deal.  No home runs here, just lots of singles.  Not many other businesses disclose their revenue to the end user.

This can benefit the end user.   Just locked a few million in free refi's.  (I wish it was $21mm!!!).  How do I provide a free refi?  I use the yield spread premium to pay for the costs (appraisal, title insurance, etc.).  You take away YSP, and there goes the ability to provide tangible benefit to the consumer.

The refi's I'm doing today are dropping rates between .375% and 1%, every single one a 30 year fixed mortgage with no prepayment penalty.

No time to dig through and discuss the minutia this afternoon, gotta call some more people to save them money and make a little for myself too! 

Sounds like you guys are taking a smart apprach - google yielded an interesting recent article about the house market in Sonoma

http://www1.pressdemocrat.com/article/20080117/NEWS/801170374/0/BUSINESS01

Some unusually frank language from RE professionals in this article:

"Job growth isn't that strong. Job creation has a direct impact on housing demand and that feeds into prices," said David Berson, chief economist for PMI Mortgage Insurance, of Walnut Creek. "There's just an overall lack of housing demand. The inventories are just way too high."
...[His company predicts that:] Home prices face a 58 percent chance of falling in Sonoma County in two years, up from a 38 percent chance just three months ago.

"The ability to negotiate now is probably as good as I've ever seen it. You're not competing with everybody. You're not competing with a lot of investors, though I expect them to start coming back," he [Brian Connell, broker-manager for Frank Howard Allen Realtors in Santa Rosa] said. "But it's also possible that we may have another year of grinding through it and the market doesn't level out until 2009."

My thoughts: When a realtor accidentally slips and predicts two years until the bottom, that appears to me to be a sign to wait for the blood to flow for a while.

Sounds like you are in a great position being renters with cash in the bank. Best of luck to you.