When we last spoke together (just to you. nobody else.), I wrote on how bad it was talking to homeowners who are in trouble with their mortgages and how the word "foreclosure" comes up in almost every conversation when I talk to new clients looking to refinance. Foreclosure is now a budget strategy for most people because they have no where else to turn. By no fault of their own these troubled homeowners do not have any other options because they now owe more than their house is worth and therefore can't get financing to help bring their payment down.
Because the values here in the Detroit area have plunged so much, most of the people I talk to are upside down, owing much more than their house is worth. So, without a government "bailout" for people who are on the brink of foreclosure, we are going to see a whole bunch of trouble.
And I mean a whole bunch of trouble.
On the other hand....
One of the coolest things I get to do is help first time buyers get financing. I'm not saying that it's fun securing a mortgage payment for these folks for the next 30 years, what I'm saying is that it's satisfying to help people get their part of the American Dream: Home ownership.
While thousands of home owners are struggling to keep their home, we still have people wanting to buy their part of the dream. Because whatever size house they buy, it will be their castle. As a participant of many closings, whether it was my own or a client's, I'm still amazed at the amount of paperwork we need signed. I have never seen so many people sign documents that they have no idea what they are signing. The closer at the table shoves a document towards the buyer, gives a 10 second overview of what the doc is all about, and expects a signature. In the meanwhile, the buyer(s) are confused with all the text on all the docs and are wondering to themselves "Should I be reading all this stuff?"
The most important documents are the mortgage and the note. All other mortgage related documents are either disclosures (CYA) or final editions of documents the buyers signed at application.
I wonder.......Do you think that much of this sub prime loan mess was due to miscommunication at the closing table? And that if the note and the details of note were explained in great detail, instead of being rushed over because of the great amount of closing docs, do you think that buyers with sub prime mortgages would understand what they were getting into?
Well it's too late to wonder.
However....IF...down the road if the housing market gets better (can it get much worse?) and we revert to some "imaginative" mortgage lending again, maybe we can take some extra time at closing to explain what a buyer is really getting into.
Hopefully, it won't scare them right out of the closing.
If you have any comments on this article, I would love to hear what you have to say!
Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
Monday, October 27, 2008
Wednesday, October 15, 2008
True Confessions
Sometimes, I don't know what to say.
In the past week I have talked to many desperate people on the brink of foreclosure looking for any way to save their homes, saw yet another "rescue plan" by the government to help some banks, wrote to my United States Senator and got to do one of the things I enjoy the most, help a young couple buy their first home.
Whew!! What a roller coaster of emotions. From one extreme to another.
Let's begin.
A local newscast reported on the existence of the "Hope for Homeowners" program which was part of the Housing and Economic Recovery Act which was signed into law July 30, 2008. This program requires lenders to write down the size of the existing mortgage to a maximum of 90 percent of the home's current appraised value. The homeowner is then refinanced into a FHA insured fixed mortgage.
The idea behind the H4H is that it might be a better business deal for lenders than having to go through the cost of foreclosure with all the mortgages out there heading for default. It trades a bad note for a good one that the lender can hold on to. For lenders, this could be used as another way to avoid losses.
And naturally, when the word got out during the local television broadcast that was even a glimmer of hope of help, our phones went crazy with homeowners looking for anything they could use to help them keep their house. We even had people walking into our office with all their paperwork in hand, ready to apply right then, just because there was a glimmer of hope. Our normal office routine came to a screeching halt!
When I was calling some of these troubled homeowners back, I realized that this country has a problem that needs to get fixed right now. We have so many people on the verge of foreclosure that if their problems aren't solved quickly, this country will be headed for an economic disaster that we have never seen.
As I spoke to these folks looking for help with their mortgages, I was told some of the saddest stories I have ever heard. Loss of jobs, death of a spouse, accidents, even rate increases. Whatever the reason was, these folks were in a lot of trouble for reasons that weren't necessarily their fault. Fate had delivered to them some cruel twist and now they have to deal with the possibility of losing their home.
I couldn't take it any more and I had to stop making phone calls. It was too sad.
These desperate people didn't want a "bailout". They are perfectly willing to pay back what they owe. Heck, they are even willing to pay back more if they have to. What ever they need to do.
They just need help now. Just some temporary help until they can get back on their feet and catch up with the mortgage payments.
The tone on the phone was the same with all of these calls. These folks were so happy to talk to someone. Anyone. They all called their current lender but never got a call back. Some of them called FHA and they never got a call back. So when they finally got a human on the phone, someone who would listen, they unloaded.
I mean the average time on the phone was a half an hour. They wanted to tell their story to someone whether the person they were talking to could help them or not. They just wanted to talk to someone who might be able to help them.
The sad thing was, I couldn't.
(To be continued)
If you have any comments on this article, I would love to hear what you have to say! Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
In the past week I have talked to many desperate people on the brink of foreclosure looking for any way to save their homes, saw yet another "rescue plan" by the government to help some banks, wrote to my United States Senator and got to do one of the things I enjoy the most, help a young couple buy their first home.
Whew!! What a roller coaster of emotions. From one extreme to another.
Let's begin.
A local newscast reported on the existence of the "Hope for Homeowners" program which was part of the Housing and Economic Recovery Act which was signed into law July 30, 2008. This program requires lenders to write down the size of the existing mortgage to a maximum of 90 percent of the home's current appraised value. The homeowner is then refinanced into a FHA insured fixed mortgage.
The idea behind the H4H is that it might be a better business deal for lenders than having to go through the cost of foreclosure with all the mortgages out there heading for default. It trades a bad note for a good one that the lender can hold on to. For lenders, this could be used as another way to avoid losses.
And naturally, when the word got out during the local television broadcast that was even a glimmer of hope of help, our phones went crazy with homeowners looking for anything they could use to help them keep their house. We even had people walking into our office with all their paperwork in hand, ready to apply right then, just because there was a glimmer of hope. Our normal office routine came to a screeching halt!
When I was calling some of these troubled homeowners back, I realized that this country has a problem that needs to get fixed right now. We have so many people on the verge of foreclosure that if their problems aren't solved quickly, this country will be headed for an economic disaster that we have never seen.
As I spoke to these folks looking for help with their mortgages, I was told some of the saddest stories I have ever heard. Loss of jobs, death of a spouse, accidents, even rate increases. Whatever the reason was, these folks were in a lot of trouble for reasons that weren't necessarily their fault. Fate had delivered to them some cruel twist and now they have to deal with the possibility of losing their home.
I couldn't take it any more and I had to stop making phone calls. It was too sad.
These desperate people didn't want a "bailout". They are perfectly willing to pay back what they owe. Heck, they are even willing to pay back more if they have to. What ever they need to do.
They just need help now. Just some temporary help until they can get back on their feet and catch up with the mortgage payments.
The tone on the phone was the same with all of these calls. These folks were so happy to talk to someone. Anyone. They all called their current lender but never got a call back. Some of them called FHA and they never got a call back. So when they finally got a human on the phone, someone who would listen, they unloaded.
I mean the average time on the phone was a half an hour. They wanted to tell their story to someone whether the person they were talking to could help them or not. They just wanted to talk to someone who might be able to help them.
The sad thing was, I couldn't.
(To be continued)
If you have any comments on this article, I would love to hear what you have to say! Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
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