Michigan Mortgage

Great Advice

2010-02-10T09:08:00.000-08:00

Here is a great article from Liz Pulliam Weston of MSN Money concerning how a mortgage can get killed before it's even started. With today's tougher guidelines for underwriting it's more important than ever before to be aware what is out there.

Enjoy!

Ten Things That Can Kill a Home Loan
By Liz Pulliam Weston

The mortgage world has changed dramatically in a few short years.

At the peak of the real-estate bubble, mortgage professionals joked that you needed only to be able to fog a mirror to get a loan. These days, even borrowers with good incomes and good credit scores can get turned down.

Much of the change is driven by the higher standards of the companies that buy mortgage loans, including Fannie Mae, Freddie Mac and various large banks.

Here's what you need to look out for if you're trying to land a mortgage, whether you're buying a home or refinancing:

1. The house needs too much work.

A lot of properties on the market these days are foreclosures owned by banks, and many aren't in great repair. (See "Should you buy a foreclosure?") If a house is in really bad shape, it can be tough, if not impossible, to persuade another lender to give you the money to purchase it.
Broken windows, defective appliances, roof leaks and serious water damage can all cause a lender to bail, said Dick Lepre, a senior loan officer with RPM Mortgage.

"A lot of deals just fall apart" after appraisers examine the homes, Lepre said. "Some sellers have gotten shot down so many times because the buyers couldn't get a mortgage that some homes are put on the market as 'all cash.'" In essence, the sellers won't consider buyers who need mortgages to purchase their homes.

In the past, Lepre said, a lender might have been more willing to set aside some of the cash from a deal to pay for necessary repairs. Today, lenders are far more likely to simply refuse to do deals.

Bottom line: If it's a real fixer-upper, you may need to pay cash.

2. The appraisal came up short.

Occasionally during the bubble an appraiser would decide a home was worth less than the price a buyer and seller had agreed upon. But that was relatively rare. Critics accused appraisers of colluding with lenders to "hit the number" -- deliver the values needed for loans to be approved.
Some appraisers acknowledged the pressure, saying banks would turn to their competitors if they didn't hit the number.

These days, the situation is drastically different. New rules hold appraisers to higher standards and sharply limit communication between appraisers and lenders. So the appraisal on the home you want to buy may fall short of the agreed-upon selling price.Even if the first appraisal goes well, Lepre said, a second evaluation -- known as the review appraisal and now ordered by most investors that buy home loans -- may not.

Bottom line: You may be able to nudge an appraisal a bit by showing there are better "comparable sales" available than the ones the appraiser used. In general, though, appraisers are much harder to influence. You may need to reopen negotiations with the seller or come up with a bigger down payment to make a deal work -- or pay down your mortgage in order to refinance.

3. You have too much debt.

Lenders look at how much of your income will go toward housing expenses (mortgage, property taxes and insurance) as well as how much you spend on other debt payments.

The total amount of your income that can be eaten up by these expenses can vary by the lender and even by the day. Over a matter of months, one major mortgage buyer dropped the ceiling of total debt from 65% to 55% and then to 50% of gross income, said Matt Hackett, the underwriting manager for New York lender Equity Now. Some have lower limits.

The mortgage industry still isn't as conservative about debt as it probably should be, said Michael Moskowitz, Equity Now's founder and president. Moskowitz noted that people can still get approved for loans that don't leave them enough breathing room for other costs, such as adequately maintaining the house or saving for other goals, including retirement.

Bottom line: If your projected housing-and-debt ratio exceeds 40% of your income, you should think twice about buying a home -- not because you won't get approved (you might) but simply because you're carrying too much debt. At the very least, you should pay off all credit cards and other toxic debt. Such debt indicates you're already living beyond your means, a situation that's likely to worsen if you buy a home.

4. You're self-employed and your income has declined.

To get a mortgage, you typically need to submit the past two years' tax returns. If your 2008 income was lower than your 2007 income and you're a W-2 wage earner, lenders will simply use the lower figure to decide how big a mortgage you can get.

The industry is far more leery of declining income if you're self-employed, Moskowitz said. Some lenders will use the 2008 figure, but others won't make the loan at all because they're worried your income will drop further and you'll default.

Bottom line: If you're self-employed and your income has dropped, talk to your mortgage professional about how that might affect your loan.

5. You recently started being paid on commission.

Companies eager to cut costs have been switching some of their staffs from salaries or hourly wages to commissions. That can wreak havoc with your mortgage application because lenders typically won't count commission income unless you've been earning commissions for at least two years.

Bottom line: If your company switched you to commissions before the end of 2008, you may have to wait to get a loan or use a spouse's income to qualify.

6. There's a problem with your tax returns.

Lenders don't accept your copies of your tax returns as the final word about what you earned. These days they order transcripts of the returns you filed with the Internal Revenue Service and compare those with what you had submitted.

Your loan will get tossed if you exaggerated your income, of course. But other problems include:
Unreimbursed employee expenses. This snares a surprising number of borrowers, Hackett said.

Any amount taxpayers deduct for these expenses has to be deducted from the income that can be used to qualify them for a loan. "We've had some loans that blew up because of this," Hackett said. "One guy had $49,900 of income but he wrote off $12,100 in (unreimbursed) auto expenses." Subtracting that amount from his pay left him too little income to qualify for the loan he wanted.

Second-home expenses. Even if you own the property free and clear, the taxes and insurance you pay on it will affect your debt ratio. Borrowers may not list the property on their initial application, especially if there's no mortgage involved, but the tax transcript will pick up any of the second-home costs they deducted.

A too-small payment for estimated taxes. If you're self-employed and pay estimated taxes, you might try to conserve cash by making a smaller-than-usual tax payment. That could be a mistake, since a lender might decide the smaller payment is a sign your income is declining.

It can take up to five weeks for a transcript to be available after a return is filed, Hackett said. So if you got an extension to file your return and didn't do so until the Oct. 15 extended deadline, your transcript won't be available for several more weeks, which could endanger your deal.

Bottom line: Review your tax returns with your mortgage lender or broker when you apply to see whether there are any red flags.

7. You can't get private mortgage insurance.

Technically, you still can get approved for a loan equal to up to 97% of a home's appraised value.

To do so, however, you'd need to get approved for private mortgage insurance. And PMI companies, severely burned by the real-estate flameout, are being pickier than ever before.

If you're the ideal borrower -- credit scores of 720 or above, with a debt load below 40% of your income and several months' worth of expenses in the bank -- you might get approved for private mortgage insurance that would allow you to borrow up to 95% of a home's purchase price in a flat or improving market, Hackett said.

In declining markets such as Florida, the best you could hope for is 90%, he said. And if anything is slightly wrong with your profile as a borrower, you probably will have to settle for less. If you can't come up with a bigger down payment, you likely will get funneled into a Federal Housing
Administration loan, which allows down payments as low as 3.5% but may have somewhat higher interest rates.

Bottom line: A bigger down payment gives you more options. Read "The end of the 0% down payment."

8. The lender doesn't like your condo association's finances.

Mortgage buyers are enforcing guidelines on condo and co-op purchases that used to be widely ignored, as well as imposing new restrictions.

Some that you might stumble into include:

The 10% ownership rule. If anyone owns more than 10% of the units in a building, you probably won't be able to get a loan. Lenders are worried that if this big owner defaults, the remaining owners won't be able to pay for proper maintenance. Yet 10%-plus ownership stakes are pretty common, particularly where apartments were converted to condos or co-ops and the original owner hung on to units to rent.

The fidelity bond. Associations are supposed to buy a bond to protect against theft by management company employees. Many skated along with small bonds, but now lenders want to see more coverage. "A lot of (associations) had $50,000, and now you might need $400,000," Hackett said. The actual cost of increasing the bond is usually just a few hundred dollars a year, but board members may not understand the importance of this requirement and resist coughing up the extra cash.

Cash reserves. Condo associations should generally have cash reserves equal to 60% of the association fees they collect over the year, to make sure they have sufficient reserves to pay for needed maintenance and repairs, RPM Mortgage's Lepre said. Many associations fall short of this mark. As above, owners who aren't actively trying to sell their properties may not realize the importance of this requirement and may resist efforts to boost reserves.

Bottom line: If you're buying a condo, talk to your mortgage pro about the unique requirements for these loans and make sure the association meets them before applying for a loan.9. Your lender is dragging its heels.

Like most other companies in this recession, lenders are often reluctant to hire workers, even if mortgage applications are piling up. If it takes too long to get your mortgage approved, however, you could wind up paying a higher interest rate (if your rate lock expires), or your purchase deal could fall through, particularly if the seller has another interested buyer.

Another issue: getting subordination for second mortgages. If you're refinancing and have a home equity loan or line of credit on your property, you essentially need to get your home equity lender's permission to complete the deal.

Bottom line: Ask your lender how long it will likely take for your deal to get done. If the wait time is too long, consider switching to a company that can offer faster approval. In any case, monitor your loan and follow up frequently with your mortgage professional and any home equity lender to make sure it stays on track.

10. You fail to stay on top of the paperwork.

By now, you should have a pretty good feel for how very much scrutiny your loan application is going to get. Lenders demand a ton of paperwork, and you should be prepared to prove anything and everything, especially your income and the source of your down payment.

Any missing document or oversight can delay or even torpedo your loan, which is why you need to respond instantly to your loan officer's requests.

Right before one loan was set to be approved, for example, Lepre got a notice that page 5 of the loan application hadn't been initialed.

"Before, nobody would have called about something like that," Lepre said. "I try to prepare people that they are going to be asked for stupid things, right up to the end."

Bottom line: Put your mortgage professional's number on speed dial and respond promptly to any document request, no matter how silly you think it is. Without every "i" dotted and "t" crossed, the loan might not get done.

Another great article Liz!

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

Great Advice On Credit Scores

2009-11-17T08:32:00.000-08:00

One of the most important parts of my job is to help clients with their credit scores. With today's lending climate, good scores are a must. And your credit score is becoming a bigger part of your life everyday. From getting hired for a job, insurance quotes; the list is getting larger.

Here is an article from Liz Pulliam Weston of MSN Money that gives a great breakdown the highly misunderstood (and with good reason) world of credit scores

Five Ways to Kill Your Credit Scores
by Liz Pulliam Weston

One of the questions I'm asked most often about credit scores is exactly how much certain actions affect people's scores.

What good is a good credit score?Until now, the best I could do was say, "It depends." That's because the company that created the leading credit score, the FICO, has been wary about releasing specifics.

Fortunately, that just changed. At my request and for the first time, the company (also known as FICO) has released details about how specific actions, from maxing out a credit card to filing for bankruptcy, can affect people with different credit scores.

I asked the company to compute the results of those actions for two examples: a person with a 780 score, which is an excellent score on the 300-to-850 FICO scale, and someone with a 680 score. The results:

Effect on a 680 score Effect on a 780 score
Maxed-out card -25 to -45 -10 to -30

30-day late payment -90 to -110 -60 to -80

Debt settlement -105 to -125 -45 to -65

Foreclosure -140 to -160 -85 to -105

Bankruptcy -220 to -240 -130 to -150

Source: FICO

The results are given in a range because FICO is still a little nervous about revealing too much about its proprietary scoring. But the range is fairly tight, and we can clearly see the disparate impacts of the different actions

A guide, not a guarantee Before we go further, I have to make this clear: Your mileage may vary.

People with the same credit score can have very different credit profiles: more or fewer accounts, a different mix of accounts, a longer or shorter credit history, use of more or less of their available credit, etc.

Because of those differences, the same action -- maxing out a card, say -- can have different effects on people with the same score, depending on the details of their individual credit profiles.
For the sake of this exercise, FICO assumed both people had several active major credit cards as well as a mortgage, a car loan and student loans.

The person with the 780 score:
Has at least 10 credit accounts in total and a 15-year credit history.
Uses 15% to 25% of her credit card limits.
Has no late payments on her credit reports.
Has no collection accounts or other major negatives.

The person with the 680 score:
Has six credit accounts and an eight-year credit history.
Uses 40% to 50% of her credit card limits.
Was 90 days late on an account two years ago.
Was 30 days late on another account one year ago.

Here's what you need to know about each action and the effect it had:

Maxing out a credit card: Using 100% of your limit on any credit card puts you at risk of over-limit fees. It also takes a bite out of your credit score.
Our person with the 680 score might lose 10 to 30 points from this one action, while the 780 scorer could shed 25 to 45 points.

The difference points up an important fact: The higher your score, the more points you tend to lose from "bad" actions. That's because the scoring formula is sensitive to any sign you're getting in over your head. Maxing out a credit card is considered one of those signs.

You also should know that it typically doesn't matter to the formula if you carry a balance or pay off that maxed-out card as soon as you get your statement. What's usually reported to the credit bureaus is the balance on your last statement. Even if you pay the debt in full before the due date, the maxed-out card will hurt your score.

Skipping a payment: Mailing a payment a few days late normally won't hurt your score, although you may incur late fees and trigger higher interest rates. The big hurt comes when you miss a payment cycle entirely.

A 30-day-late report would shave 60 to 80 points from our lower-scoring person and 90 to 110 points from our higher scorer. In other words, one lapse of attention could plunge the 680-scorer into subprime credit territory, and our 780-scorer could find credit much harder to get and more expensive.

This is why it's so important to set up automatic payments to ensure your bills get paid on time, all the time. With credit cards, you can set up automatic payments that take the minimum payment out of your checking account to ward against a late payment. You can always make a second payment that reduces your debt or pays it off entirely. You can sign up for automatic payments on the Web site of your card issuer.

Settling a credit card debt: All the advertisements about "settling your debt for pennies on the dollar" make debt settlement sound like a great solution. But failing to pay what you owe a creditor will take a serious toll on your score.

Video: How to fix your FICO score

The 680 scorer would lose 45 to 65 points with this maneuver, while the 780 scorer would shed 105 to 125 points.

Our scenario assumed that our borrowers would miss one payment before settling the debt with their credit card companies. In reality, debt settlement negotiations can drag on much longer, with each missed payment taking another chunk out of your score.

Settling a debt with a collection agency would hurt less, probably much less, because the FICO formula is set up to weigh more heavily what the original creditor says about you than what a collection agency reports. But if our borrowers were settling with a collection agency instead, their scores would be lower to begin with, because they would have collection accounts on their records.

Also, you should know that the amount of debt your creditor "forgives" in a debt settlement solution is typically added to your taxable income. So you may save some money by settling a debt, but you'll give some of it back to Uncle Sam in higher taxes.

Losing a property to foreclosure: Foreclosure deals a severe blow to your credit score: 85 to 105 points for our person with the 680 score and 140 to 160 points for the one with the 780 score.

Foreclosures have implications for your future ability to get a mortgage as well. Although your score may start to improve as soon as the house is gone, mortgage lenders may not be willing to extend you another home loan until two to four years have elapsed.

In an attempt to protect their credit, many people attempt short sales, selling their houses for less than what's owed, with the lenders' permission. Unfortunately, these transactions, even if successful, are often reported as settlements. And a settlement, as you've seen, is pretty bad for credit scores. To lenders, a short sale isn’t quite as bad as a foreclosure, though, and it may be easier to get another mortgage once you’ve rebuilt your credit.

Filing for bankruptcy FICO spokesman Craig Watts once called bankruptcy the nuclear bomb of credit actions. Filing for bankruptcy would shave 130 to 150 points from the 680 score and 220 to 240 points from the 780 score.

This is different from the other black marks, where the higher scorer was still left with better numbers than the lower scorer. In this case, both would wind up near the bottom of the credit barrel. Getting new credit, particularly in the current credit-crunch environment, would be extremely tough.

Sometimes, of course, bankruptcy is the best of bad options. (See "Quiz: Should you file for bankruptcy?") But if you can't pay your bills, you should at least explore the other possibilities: forbearance, credit counseling or even debt settlement.

Finally, if you have any of these five black marks on your record, remember two things: The impact on your score may differ from what's shown above, and regardless of how many points you lost, you can rebuild your FICO score over time.

You can start by using a free FICO score estimator, such as this one at Bankrate.com, or MSN Money's credit score estimator, which similarly models a score on Experian's 330-to-830 range, to see where you stand.

Or you can sign up for free credit scores from sites such as Quizzle, Credit.com and Credit Karma, which use the actual information on file about you with the credit bureaus. But the scores you get still may not be the ones lenders actually see.

Or you can buy your Equifax or TransUnion FICO score from MyFICO.com. (Experian no longer sells FICO scores to consumers, although it continues to sell the scores to lenders.) With paid scores, you'll get specific advice about how to improve your numbers. In general, when you're trying to build a credit score, you should:

Pay your bills on time, all the time.
Reduce your credit utilization; below 30% is good, below 10% is better.
Have a mix of credit on your reports, including installment loans (mortgages, auto loans and personal loans) and revolving accounts (credit cards and lines of credit).
Refrain from closing accounts.
Apply for new credit sparingly.

Great article Liz!

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

Going Back In Time

2009-11-11T09:52:00.000-08:00

I was sent this article from 2005. It is really interesting reading when you consider what the housing market was like back then and what it has become since then. It is amazing to listen what people were talking about back in the good old days.

The Mortgage Trap

By Dean Foust, with Peter Coy in New York, Sarah Lacy in San Mateo, Rishi Chhatwal in Atlanta, and bureau reportsBusinessWeek Online

Lenders are cranking out an ever-growing array of financing schemes and lowering standards to keep the housing boom going

Nicki Randolph, a San Francisco real estate agent, hasn't been scared off by talk of a housing bubble. Although she already owns both a home and a condo in Palm Springs, Calif., Randolph just closed on a third property -- dropping more than $1 million on a 1,400-square-foot loft in the heart of San Francisco. How does she juggle so many properties in the overheated California market? Lots of leverage, thanks to banks all too willing to provide ever more.

To finance her loft purchase, Randolph took out a mortgage that lets her pay only interest for the first five years -- a tactic that helps her ease into the hefty monthly payments. "Fears that the market is going to crash are way overstated," she says confidently. "It's a seven-mile-by-seven-mile city and a premier place people want to live. You have to be more aggressive here because the prices are so high."

PRESSURE KEEPS BUILDING.

Randolph's story is a familiar one -- and it shows the lengths to which buyers are willing to go to snatch up real estate as well as the extremes lenders will stretch to accommodate them. As prices continue to skyrocket in much of the country, banks and lenders are cranking out an ever-growing array of products ranging from no-money-down or interest-only mortgages, to special "Payment Power" loans that allow homeowners to defer monthly payments altogether twice a year.

Such creative financing is letting even marginal buyers purchase houses with price tags that used to appeal only to the rich and famous. In the process, banks and mortgage companies appear to be taking on more risk than ever before -- and if rates rise sharply or prices tumble, many of their customers could find themselves in deep trouble, too.

All those innovative mortgage products are a sure sign that lenders are doing everything they can to keep the housing boom going and to capitalize on yet another round of falling interest rates that no one expected. There are plenty of other signs of frenzy as well. Home appraisers complain that mortgage originators are demanding the optimistic appraisals needed to close on loans. "They started warning me to 'be a team player' and to 'hit the number' they needed to seal the deal," says Robert Burnitt, an appraiser in Midlothian, Tex.

SUPPORTING A STRETCH.

Enticed by juicy commissions from all those deals, others are jumping into the mortgage biz. Among them are John Switzer, an 18-year-old high school grad from New Bern, N.C., who put off college so he could start work as a mortgage rep for Houston-based Franklin Bank Corp. (NasdaqNM:FBTX - News). "Right now, mortgages are a little more interesting" than college studies, he says.

Yet nothing screams "frenzy" louder than the huge popularity of innovative -- and risky -- mortgage products that allow buyers to stretch for those million-dollar studios and multimillion-dollar suburban colonials. With interest-only mortgages now offered by everyone from ditech.com to Washington Mutual (NYSE:WM - News), such loans now account for 20% of all new mortgages, up from under 5% two years ago.

Option adjustable-rate mortgages, or "option ARMs," have also become all the rage in superheated markets such as California and Washington, D.C. With an option ARM, borrowers can choose among three different payment plans each month, continually changing what they fork over as their budgets shift. The options: a regular payment of both principal and interest, just the interest, or one that may not even cover the interest -- so the overall balance owed on the mortgage could continue to grow.

TREND TOWARD RISK.

The question is, will the proliferation of interest-only and option ARM mortgages leave many buyers strapped down the road, causing higher default rates? David Liu, a mortgage strategist for UBS in New York, notes that after similar products were introduced in the red-hot California market in the late 1980s, they ultimately incurred a default rate that was three times as high as conventional mortgages when the local economy went into recession in the early '90s.

Already there are signs that current option ARM borrowers are straining to make their monthly payment: Liu notes that among a bundle of mortgages originated by Washington Mutual and scrutinized into the secondary market last year, fully 60% of borrowers made only the minimum payment this past March. "That's definitely a sign that people are stretching,"says Liu.

There's plenty of other evidence suggesting that homebuyers and their lenders are climbing out on a limb. According to a survey of homebuyers released last November by the National Association of Realtors, 25% of those polled were able to get a mortgage with no money down, vs. 18% in early 2003 and virtually none in the late 1990s -- a trend that could leave many of these new homeowners under water if home prices take even a small dip.

"FROTH" SPILLS OVER.

At the same time, lenders are extending far more loans to borrowers who have had credit problems in the past. According to the Mortgage Bankers Assn., the share of new loans made to so-called subprime borrowers -- usually lower-income individuals with spotty credit histories -- rose to 28% in the second half of 2004, a sharp jump from the less than 5% of all lending that subprime represented back in 1994.

"I think there are going to be some blowups," says Bert Ely, a bank consultant based in Alexandria, Va. "These are people who are most vulnerable to job loss."

If the housing market swoons and homeowners get into trouble, the mortgage industry won't be far behind, many critics worry. "I'm very nervous about the risk of higher foreclosures down the road," says Stuart A. Feldstein, president of SMR Research Corp., a mortgage research firm in Hackettstown, N.J.

And on June 9, Federal Reserve Chairman Alan Greenspan revealed his unease when he warned Congress that "the apparent froth in housing markets may have spilled over into mortgage markets." He noted that the increasing use of interest-only and other "relatively exotic" mortgages are "of particular concern."

TOUTING SAFEGUARDS.

Lenders insist that worries about their standards are overblown. They maintain that, thanks to the advent of automated underwriting during the 1990s, their ability to analyze statistical trends in lending is far better than before, enabling them to better price loans according to risk.

"Underwriting is still more of an art than a science, but we're making it far more of a science," says Joe Anderson, a senior managing director at Countrywide Financial Corp. (NYSE:CFC - News), a Calabasas (Calif.) mortgage lender.

And lenders note that they've instituted more safeguards since the last housing boom in the 1980s, such as requiring that borrowers have several months of liquid assets to assure that they can keep paying their mortgages in the event of a job loss. "On a scale of 1 to 10 -- with 10 being the worst-case scenario -- my concern level is only around a 2 right now," says D.C. Aiken, senior vice-president for pricing and products at HomeBanc Mortgage Corp. (NYSE:HMB - News), a large lender in Atlanta.

Still, regulators are redoubling their efforts to make sure the banks are right. The Federal Reserve and other bank regulators recently ordered lenders making home-equity loans and lines of credit to do a more in-depth analysis of borrowers' income and debt levels and their ability to repay loans -- instead of relying heavily on credit scores, as many lenders have been doing. And regulators say they're busily drafting similar guidelines for mortgage lending as well.

DEPENDENT ON A ROSY SCRIPT.

State regulators are also starting to rein in hyper-aggressive lenders. In Illinois, legislators passed a bill that would give a state agency the power to review mortgage applications in lower-income areas to determine whether borrowers should be required to attend loan counseling -- paid for by the loan originator -- before receiving the loan. That, lawmakers figure, will discourage brokers from extending loans to high-risk borrowers who have a high probability of ending up in foreclosure.

Of course, Nicki Randolph and many more like her who have used lenders' aggressive mortgage offers to expand their fledgling real estate empires aren't normally thought of as high-risk borrowers. But if interest rates and housing prices don't follow the rosy script that Randolph and so many others are banking on, a whole lot of homeowners could be caught in a painful trap.

If only we knew then what we know now. I'm sure we still wouldn't have believed it.

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

A Couple Of Points Of Interest

2009-09-30T09:34:00.000-07:00

Hello Again!

It's great to be back. After a long absence due to technical troubles (gee, that never happens) and other general issues, it's great to be blogging again. I can only hope that all the issues have been taken care of and are now far behind.

Here we go:

First Time Homebuyers Tax Credit

The time is running out for this credit. If you or any one that you know is looking to buy a home soon, it's time to act right now! The tax credit in it's current form is scheduled to end November 30, 2009. All loans must be closed by that date to be eligible for the tax credit.

But, because of the anticipated rush of closings, lenders are going to be swamped with trying to close these loans before the deadline. This will cause an already slow process to be even slower. So don't get shut out, get the loan rolling today.

And I can't stress this enough, make sure you are even eligible for the tax credit in the first place. Talk to your tax accountant or go to www.irs.gov. for eligibility questions.

I've seen people close on loans and then find out they are not eligible for the tax credit.

Bummer!

FHA Streamline Refinances

Starting in November, FHA is going to change their guidelines regarding how they underwrite a FHA Streamline Refinance as far as credit scores, seasoning , loan amounts and appraisals. The FHA Streamline Refinance was a great tool to help a homeowner lower their mortgage payment with less paperwork and no appraisal. I can't tell you in this housing market how important it is not having to get an appraisal.

So if you are thinking about refinancing your current FHA mortgage, get it going today!

And just a side note, if you haven't seen the episode of "Family Guy" where there are multi-universes, you need to see it. Brilliant!

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

Are we back on?

2009-09-04T12:25:00.000-07:00

For some unfortunate reason, this blog was knocked off line. However, we are back working again so look for more commentary from this blog site coming soon.

Thanks for waiting!

Where Has The Time Gone!

2009-05-19T10:24:00.001-07:00

Has really been a month since I last wrote in this blog?

So much for my New Year's resolution! What happened? It's a combo excuse. Busy, busy and computer issues.

I know. This blog takes 20 minutes to write. And that's once a week.

But sometimes the combination of busy, busy and computer issues helps turn days behind into weeks behind and now the official One Month Behind.

Well it stops here. Let catch up and get back on schedule.

The mortgage process is getting slower and more complicated. Lenders are terribly backed up and there is no relief in sight. There is no such thing as a fast deal and everything needs to be closed at the end of the month when it's crazy busy. It seems that we are jumping through more and more hoops all the time to get deals closed.

However, mortgage rates are still on the low side. And if you are a first time buyer, you could be eligible for a tax credit up to $8000. There even was talk of being able to use the tax credit at the closing table (instead of waiting to get it on the next year's tax refund) where is really needed but HUD put that idea on hold for now.

There are also some good refinance programs out there that may give some homeowners some welcome relief on their monthly mortgage payment.

But most homeowners owe a lot more than the current value of their home, so help is limited. And with Detroit area reliant on the automobile industry, the prospect of economic recovery here is not very bright. The ripple effect of plant closing and layoffs probably will be felt for years to come.

So we dig in and wait it out.

What we are waiting for I'm not quite sure.

But I guess we don't have a choice.

We'll catch up more next time.

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

Mortgage Rates Remain Low

2009-04-16T11:13:00.000-07:00

In an article from CNBC (http://www.cnbc.com//id/30248657), the topic is lower mortgage rates and how low can they go. The article describes how mortgage rates are over a percentage lower than they were this time last year.

And with these lower rates come with some very small shimmers of hope for the housing market. Home sales are a bit up as well as applications for refinances. This is all good news.

But then the "about face" happens.

As soon as someone is talking about the state of the economy and how there are "glimmers of hope", the speaker at the time has to recant and say something like "But we sill have a long way to go" or "the road is long and tough" or "we are still in a mess".

Listen to President Obama's speech from the other day. Every time he said something hopeful, he just about took it back in the very next sentence. It was like a conversational yo-yo.

We're doing good, but not real good. There is hope, but don't hold your breath. We see some good signs on the road to economic recovery, but the road is another 10,000 miles long.

I understand how as a good leader, the President is thinking. He wants to give the citizens hope but at the same time not mislead us into thinking that we are doing good.

I guess the only good thing is that now there is some positive news about the economy where as before it was all gloom & doom. I guess that is a step up.

I will believe we are recovering when the job numbers are better and home prices start to rise. People cannot buy anything without income. And people should be able to sell their homes with out taking a beating. Even if they just broke even and at least get back what they paid for the house, we would be doing a lot better.

Getting back to the CNBC article, how about this quote from Rick Sharga, Senior VP from Realty Track:

"Mortgage rates are at an all-time low but you have to almost be King Midas to qualify for the loan," "You need a nearly perfect credit score and job history and a significant downpayment to qualify," he said. "That wipes out a huge portion of the buying population."

Well that is not completely true, but he is on the right track. Lending guidelines have toughened for sure. But it is still a good time to buy or refinance with the rates being so low.

What is stopping most people from buying from buying a house or a getting refinanced is the appraised value of the house that they are currently living in. They either can't sell the house because they owe more than what they can sell the house for or they can't refinance because there isn't any lender who will touch them now that they owe more than the house will now appraise for.

Want a glimmer of hope?

Get home prices back up. And I think we would be on the fast road to recovery.

And I'm not going to counter what I just said.

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 TenchallGreat 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

The Good Times Are Here?

2009-03-26T09:49:00.000-07:00

Yes, that is right the good times are here. Now keep in mind, when I say good times I mean in a very specific part (a very very small part) of the economy.

I am talking about refinances.

The time is right and the rates are good. If you have any kind of equity position (I know, who does?) then most likely you can refi and drop your rate and your monthly payment. And with as low as the rates are, you might be able to drop your rate 1 percent which can save you a bunch of cash in your monthly mortgage payment and thousands in interest over the life of the loan.

Today, it all starts with the appraisal. So many people have a bigger mortgage balance than their house is worth. And because the house is "upside down", a lender will not take the risk and investment.

Now I can tell you that most of these upside down homeowners are going to be a good investment. They will certainly pay back their loan. They never miss a payment. But because by no fault of their own, they owe more than their house is worth, now suddenly they are not creditworthy.

So you're telling me that someone with a good mortgage history can't refinance but someone who had a foreclosure over 3 years ago can get a mortgage to buy a house?

Do you see how screwed up this finance business is?

Now some lenders may modify the terms for loans that they hold. But most won't. So you have a situation where a good paying customer is turned away and can't take advantage of the lower rates.

And in some cases, 2 years prior, the lender accepted the appraised value of a house and approved a mortgage for a buyer. Now 2 years later, that same lender will not approved a refinance because the value has gone down on that same house.

Now think about this.

The lender would be still holding the loan without doing the refinance. But what do you think puts more pressure on the borrower? The current loan with the higher rate or the new loan with the lower rate?

I'll wait for your answer............

Very good!! I would think , logically, that with the hardships that are associated with this economy, a lender would want to make sure that they would get their money back and allow good payers to refinance if they are upside down.

The word "logic" is open for interpretation.

Somehow the lenders are missing a little piece of trivia. I don't know the stats but I'm sure there are homes that could have been saved from foreclosure by allowing a refinance when the house has dropped it's value below it's current appraised value.

And doesn't that foreclosure hurt values in a neighborhood where that uncooperative lender has other investments?

Logic.

It's a beautiful thing.

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

Just One Man's Opinion

2009-03-19T13:35:00.000-07:00

I typically don't use this blog space to spout off on how the world could be better. (I know it would if I was in charge!) And I don't get to political. I vote for the person I feel will do the best job (sometimes that's a hard choice). I don't vote for a party or any certain beliefs or agenda. So I try to keep the content in this blog light or helpful to the reader.

But there are things that have happened in recent days that I feel like commenting on. (This blog is a nice way to get things of my chest.) Here goes:

AIG

Well, what can I say. I feel like most Americans that there is no way that any bonus should have paid out to employees in a company that received a bailout with taxpayers money. With so many tax paying Americans out of work or in foreclosure or have already lost their homes, why is $165 million being paid out in salary instead of helping AIG get back on their feet? Performance? Retention? For a company that was knocking on the door of bankruptcy? You have to be kidding!

This is what Americans get so upset about. Somehow, whether we liked it our not, our leaders decided that the best thing for the country is to help AIG survive. That somehow our economy would be better which I'm assuming means we would all be better for it. (even though none of the leaders thought it was a good idea to bailout the average American)

OK. We bought into it. Make it work. Get us working again. And save our homes. But to slap us in the face with this bonus crap is just to much to take.

Congrats to Congress for passing a bill today that would tax these bonuses at 90%. How legal is it, I don't know. But at least Congress is trying to make it right.

I hope we don't have to go through this again the next time we bail out something.

Drunk Driving

In a nearby community, 4 teenagers were wiped off the face of earth thanks to some drunk driver. The 4 kids were not doing anything wrong. There were just guilty of being in the wrong place at the wrong time. The very wrong time.

The victims were doing the usual teen things. Going to the mall, getting a pizza, riding around and having fun. They were smashed by a drunk driving a full size van. This drunk driver had a suspended license due to drunk driving in the past. She had trouble with the law before. If fact, the police were called to house she was at earlier in the day where there was a domestic complaint. The police warned her not to drive.

But she didn't listen.

And now four innocent lives are gone.

What happened is tragic. No punishment the drunk driver gets will ever be harsh enough for the murder of 4 kids. And preaching about drunk driving doesn't work. This will happen again. People should be able to go out, have a couple of drinks and drive home in a responsible manner.

But most of the time, a drunk driver doesn't believe they are a danger. They believe that they are able to handle driving and are in control. We know this isn't true. And the hope is, that a cop pulls them over and busts them so all they hurt is themselves.

It didn't work that way for the teens that lost their lives and for their families and friends who now will suffer for the remainder of their lives.

I don't what the answer is. I can't imagine my children being involved in something like this. I'm hoping more people are more aware when thinking about driving if they are drinking.

Maybe the picture of the teen's smashed up car should be put in every bar in town as reminder of what happens when a drunk gets behind the wheel.

But I have a feeling that wouldn't stop everyone from drunk driving.

I just don't understand.

Pre-Approval or Approval? That Is The Question.

2009-03-12T08:22:00.001-07:00

One of the biggest parts of my job (if not the biggest) is analyzing documents from clients to determine if they are eligible for financing for a home they want to buy or refinance. By looking at income docs (pay stubs, W2's, tax returns,etc..), asset statements (checking and savings, 401k & retirement statements etc...) as well as the up to date credit report which will give me the credit scores and current obligations (car payment, credit card payment, mortgage history), I can get a good idea on what my client is able to afford for a mortgage payment.

Sometimes in the case of a purchase, I won't know exactly what a client is approved for because I don't have a property price and I won't know the yearly taxes and homeowners insurance premium. However, what I do is get an idea of what communities a client is looking in to buy and then I will have a good idea of what the taxes are based on the sales price of what I think they can afford.

The next step is running the loan scenario on one of the approval engines on the Internet that are available to mortgage originators. The loan is viewed by the AUS (Automated Underwriting System) which determines credit worthiness based on the information on the application and the current guidelines for the type of mortgage I am trying to obtain for my client.

If I receive a decision of "Approve/Eligible", I know I'm good to go (providing all the information on the application is CORRECT). If receive a decision that reads "Refer", that means that there is something wrong with loan and most likely would not get approved.

So based on all the documentation I have looked at and getting a "Approval" from the AUS, I can tell my clients, they can proceed with buying a house or getting refinanced.

That is a Pre-Approval.

That is not an approval. Because what happens next is that the lender must look at the complete package (along with the appraisal and title work, which I wouldn't have in the pre-approval stage) and decide if they will give my clients a formal approval. No matter what I think or what kind of AUS decision I have, a lender has the final say on if my clients get approved or not.

Assuming that the appraisal and title has no issues, and I have done my job correctly, I am fairly confident that I will get a formal approval from the lender. It doesn't make sense to send a file to a lender that I know will be rejected. Not only do I have to answer to my client, I have to answer to real estate agents as well. I certainly do not want to waste any one's time.

That causes a lot of anger.

There certainly are files (especially with tighter lending guidelines) that are iffy and have a 50-50 chance of being rejected by the lender for some reason or another. As a good loan officer, I will let all parities in the transaction know (without giving out private & sensitive details) that we could see an issue with the file and it may be tougher to get through.

But if the lender is happy with what they see after they examine the whole loan file, they will give the okay to proceed.

This is the formal Approval. (sometimes know as a Conditional Approval)

With this approval, a list of conditions is included. These conditions are where the lender is asking for updated or additional documentation. These extra conditions could include a recent pay stub, bank statement or copy of the credit report. Or they may want to see the appraiser's license or insurance. It could be anything.

But the idea is to send in everything in the file I believe that the underwriter would want to see. You have to look at the file from the underwriter's point of view and anticipate what they possibly they could ask for. By doing this, I save time and make the job of the underwriter easier (which is what I want when they are looking at my files!).

It is better and easier for me and the client to ask for all documents up front that I think the underwriter will need to make a decision instead of making repeated phone calls to ask for new documentation.

When all the conditions are met and the lender is satisfied, the lender will issue the Clear to Close and we can set up the closing.

So that is the difference between a Pre-Approval and an Approval. Some people will tell you that the decision from the AUS is as good as a formal approval. I'm here to tell you it's not. Based on recent experience, I have lenders that will overrule the Automated Underwriting System decision even if you have an "Approve/Eligible" file. The lenders have their own guidelines which can override the AUS guidelines.

Remember, "He who has the gold is King".

Before I go this week, I would like to comment on the Bernie Madoff scandal. Today, he plead guilty (really?) to ripping off billions of investors and is expected to get a sentence of 150 years in prison. He said he was “deeply sorry and ashamed”. Well thanks Bernie!

Short of execution, there is no punishment good enough for someone who rips people off in my mind. The only we can do now as a society is to punish this man so severely that it is a deterrent to anyone think about doing the same thing. I believe that all his assets along with the assets of anyone that would have benefited by Madoff's criminal actions, should be surrendered, sold and then distributed back to the investors by percentages of loss.

I know the punishment should justify the crime, but so should the pain and suffering by the victims justify the punishment.

Let's end this now before I get started.

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

Some Help Is Better Than Nothing

2009-03-06T07:29:00.000-08:00

I was waiting for the Obama Administration to unveil their "Making Home Affordable" program.

I was hoping that it would help the millions of homeowners that are out there who need help to save their home.

I was hoping that this new program would not end up like the old programs that sounded good but in truth did not really help anyone.

I was hoping the homeowner didn't have to rely on their mortgage servicer to give them help.

Well like the old saying says: "I have some good new and some bad news".

According to the U.S. Department Of The Treasury, Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners to make their mortgages more affordable.

There are 2 parts to the plan:

The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a good payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. The issue with so many homeowners is that they are upside down. In other words, they owe more than the house is worth. Under the Home Affordable Refinance program, many of these home owners will now be eligible to refinance their loan and take advantage of today's lower mortgage rates and what is really big, convert an adjustable rate mortgage into a more stable fixed rate mortgage.

Many lenders already have the information on these borrowers on file, so documentation requirements shouldn't be out of hand. And in some cases, an appraisal may not be necessary, which will save the homeowner some costs. This will result in a quicker and less costly refinance.This program ends in June 2010.

The Home Affordable Modification program will help up to 3 to 4 million at risk homeowners avoid foreclosure by reducing their current monthly mortgage payment. Loan servicers can begin immediately to modify eligible mortgages under the Modification program so that at risk borrowers can better afford their payments. (This assumes that servicers are willing to modify the existing loan in the first place.) That was the problem with the old "Hope For Homeowners" program, it was hopeless and it didn't help anyone.

The Home Affordable Modification has eligibility and verification requirements so not everyone will be able to use this program.

Like I said in the beginning, some help is better than nothing. This is still too new to determine how effective this will be. I'm sure there will be some bugs that have to be worked out.

But what I don't see is all the media experts, print and television, applauding this program like it is the answer to all our problems. They all seem confused and uncertain what the long term results will be.

I'm hoping their confusion and uncertainly clears up.

And fast.

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

I Guess I Shouldn't Have Expected Much....

2009-02-27T08:09:00.000-08:00

Today's complaint (gee, that never happens) is about the modified First-Time Homebuyer Tax Credit which is part of the much besieged American Recovery and Reinvestment Act. Let me start of by saying I applaud the efforts by President Obama and Congress to get something to the American people that will help us get out of this economic crisis. The speed that this bill got passed is amazing considering the amount of money that it contained. I guess when you are a president and you are a Democrat, it sure helps when you are wanting to pass a bill that the majority of Congress are Democrats as well!

Now we can debate all day on what this stimulus bill contains is really going to help our economy. Experts on both sides can give you reasons why it will work or why it will fail. (does that make you feel uneasy? It does me.) I like the one comment by an economy expert who said this bill is like shooting a basketball and not knowing if you made the basket until 6 to 12 months later. How crazy is that?

But I think that most people, like myself, believe we have to do something because doing nothing will cause this recession to surely last longer than we want it to. I have to believe that there are some good things about the stimulus package as well as some bad things. So we have to live with that.

But the First-Time Homebuyers Tax Credit is both good and bad from my point of view.

Why is it good? Well first of all, it a great incentive for first time homebuyers, especially those sitting on the fence deciding if they should buy or not. (Hint: Buy, Buy, Buy!) What a nice thing to get: A credit up to $8000 after buying a house. Most first time homebuyers don't have a lot of cash to work with. So this credit will help with buying furniture, appliances, etc. Or maybe fixing up the house because most first time homebuyers are buying exactly that: a fixer upper. Or the most common payback, paying back mom & dad for lending them the money to buy the house in the first place.

And since I believe that the root of all evil in this recession started with the housing industry, any plan that can help boost home sales is fine by me. This new tax credit doesn't have to be paid back like the previous version and they have extended the tax credit program another 4 months.

So you ask "Dan, why are you having problems with this?".

Why limit this program to first time home owners? Why can't anyone who is buying a primary residence get this credit. Maybe someone selling their home at a loss because home values have gone down so much would feel better knowing that by buying a house they might be able recoup some of the losses on the sale of their house knowing they will get some of that lost money back when buying a new house.

And why limit it to $8000? Why not give the 10% to a buyer no matter what the sale price is? (I suppose you would have to limit it to a reasonable amount.) Isn't the idea here to get people to buy homes? And when buying homes, doesn't that reduce the inventory of homes for sale? And when the inventory of homes is reduced, doesn't that raise home values? And when home values are increased, doesn't that increase property taxes? And isn't better for government to collect taxes and have a surplus of cash instead of having to cut city services?

Do I have to go further?

It's all theory. I get that. But to me, whatever we need to do to kick start the housing market, we need to do. Because people need to be able to buy and sell homes when they want to. If they need to unload a house for whatever reason, that opportunity should be there.

We have seen what happens when it's not.

And now we are using the word "foreclosure" way too much now.

Let's slow down the usage.

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

What's Your Score?

2009-02-18T10:48:00.000-08:00

What is your credit score?

Most consumers don't know or don't want to know. But with loans harder to come by and lending guidelines getting more stricter everyday, it more important now than ever before to make sure your credit score is as high as it can be. The days where if you had a pulse, you got a loan are gone. That's the kind of lending that got us into this economic crisis in the first place.

Another reason that you need to stay on top of your credit score is that 70% of the information that is on a credit report is either wrong or old. Can you imagine that? You could be turned down for a loan based on inaccurate information.

This lending thing is hard enough for most people. Let's not make it harder. Let's review some credit report basics.

Credit scores range from 350 to 850. The credit scores are an indication of risk. The lower the scores, the more risk a lender will have. Remember, whether we like the system or not, the credit report is the only tool lenders have to see how historically you have paid back your creditors.

The scores come from the 3 credit bureaus, (Equifax, Experian and Trans Union) who gather up payment history from your creditors (Mastercard, Visa, car payments, etc.....) and use this information based on 40 different pieces of criteria and come up with a score. This "score" is used by lenders to determine your risk factor.

Let's look at what impacts your credit score.

Payment History - 35% Impact.
This one is pretty easy and makes the most sense. On time payments help your scores while late payments kill credit scores. And the more it is late or recent will impact scores even more. And if the late payment is for a good sum of money, that will lower your score as well. I know it is common sense, but making payments on time really helps your score. No matter what the amount of the payment is.

Outstanding Credit Balances - 30% Impact
Keep your balances no more than 30% of your credit limit. I know that is hard to do in this credit crazy world, but keeping those balances below the 30% mark really helps your credit score. When your balance is over 30% of your credit limit, your credit score really takes a beating. For instance, at 30-5o%, your credit score can lose 5 to 25 points. If your balance is 50-75% of your credit limit, it can cost you 20 to 40 points on your score. And if you have a balance on your credit card between 75 - 100% of the high limit, it can cost your credit score 40 or more points!! Ouch!!

So keep those balances down. Way down.

Credit History - 15% Impact
This is the length of time you have had open credit with a creditor. Credit scoring loves longevity and consistency. Your credit score likes to see you have the same cards for many years. It doesn't like to see you have one card for 12 months then close it, then open another one and close it after a short period......etc. You get the picture.

Anytime I see a credit score near the 800 mark (and I haven't seen too many), I know that that person with that score has had the same cards or mortgages for many years without making many changes. You may have card that you have had for a long time but haven't used. Before you close that card, you may want to consider keeping it open and using it once in awhile to keep your scores higher. It's a shame when people close out cards that they have had for many years.

The other bad thing about opening new credit it that it cause inquires from lenders who pull your credit report. This also impacts your credit score but more on that later.

Type of Credit - 10% Impact
This one doesn't carry a lot of weight. But your credit score likes to see a good mix of debt. It's not always possible to do so don't worry about it but a good mix would include a couple of revolving credit cards (Visa, Sears, etc....) an installment payment (car payment, boat payment, etc.....) and a mortgage. But don't go out and buy house just to get a mortgage payment!

Inquires In A 6 Month Period - 10% Impact
A hard inquiry (which is having your credit report pulled by a creditor at your request) can cost you between 2 -25 points. You only have 10 inquires that count against you, but keep them down anyway. Your credit score gets nervous when you try to get more credit. And remember, you don't take such a hit when your credit report is pulled by mortgage or auto companies. You have a little window of opportunity while trying to get the best deal on a mortgage or a car.

Keeping balances low, on time payments and consistency. It's a simple as that. That's the plan for getting the highest scores possible. And it doesn't matter how much money you make. You can be a millionaire with lousy credit but someone making $15,000 can have credit scores over 750. Just follow the game plan.

You are allowed one free credit report a year. It's important that you check it even if you don't intend on buying anything. 25% of the credit reports have errors serious enough to result in denial of credit. 79% have some mistakes. This is information about you that is out there and you want to make sure it is correct.

You can go to www.annualcreditreport.com for your free credit report. If you would like a report reviewing all the information in this blog, just sending me a note with your email address at dan@glmf.com and I will get it to you right away.

Now check that credit report!

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

We're Waiting..........

2009-02-11T13:36:00.000-08:00

Today the Congress agreed to spend billions of our tax dollars for us on programs that they deem necessary for our economic survival. (http://www.cnbc.com//id/29137238)

And in the meanwhile, the housing market is waiting to be addressed. And I don't mean just throwing some kind of lame program at it (IE: FHA Secure, Hope for Homeowners, etc..), I'm talking about something that will make a huge difference in home values and allow people to go back to normal everyday home business.

You know. Things like being able to sell a house or perhaps being able to refinance to get out of a high adjustable interest rate. Most people don't want help or money. They just want to be able to make wise choices when it come to their homes. Why does foreclosure have to be a business decision?

Believe me, I'm not knocking the current stimulus plan. I hope it works. I hope it creates jobs and loans and whatever else it supposed to do. I certainly am not an economics expert. But I do know one thing.

This mess started with the housing market and that's where we need to stop it. Passing this current package is like taking a shot with a basketball and then not knowing if you made the bucket for 6 to 12 months. We need help now.

I heard someone say on TV that with all the money we are spending on stimulus, we could pay off 90% of the existing mortgages that are out there. Can you imagine? Banks would get a whole bunch of money they could reinvest, homeowners would have more money to spend at the end of the month, home values would rise because of the halting of foreclosures and the demand for homes would be higher.

Too simple, huh? A mortgage guy can dream can't he?

I'm still waiting for a housing package that starts to put the brakes on this housing crisis.

Because if you don't kill the root, you'll still have to pull the weed.

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

Even Mickey Is Cutting Back!

2009-02-04T08:04:00.000-08:00

Howdy!

I just got back from 12 days in the Orlando area. It was cold the first few days we were there but the weather was much better than the ugly and miserable winter we had left in Michigan. It finally warmed up for the second half of the trip as the temperatures got up into the mid 70's. Anytime you can wear shorts and a tee shirt in January, it's a blessing. Of course, you can wear shorts and a tee shirt in January in Michigan, but you better be a polar bear or be extremely fast!

But I was able to play 3 rounds of golf (actually 6 rounds if you counted all the strokes!) and go to Disney World without having to put on gear you needed in the Artic Circle. Even 50F degree weather is cold to me in Florida. When I go to Florida, I want it hot, I want to sweat, I want sunburn. If I wanted to be cold, I could have stayed in Michigan.

When I complained to people in Michigan that it was only 50+ degrees when I was in Florida, well you can only imagine what I heard. People can be so touchy.

Back to Disney World.

You can plainly see why Disney World is the number 1 tourist attraction in the world. Everything is done there is first class. The place is clean and spotless. The cast members are so friendly and helpful. They have attractions there for kids of all ages. The pricing is more than worth it when you see what you get.

You can buy into the Magic or not. But it is hard not to. I do buy into it. And when I say buy into it, I really mean it as me and BF (Babyface) have season passes to Disneyworld. We bought a short term rental in Davenport (10 minutes west of Disney) a couple of years ago so we get down to the Orlando area 3-4 times a year to check on our place and vacation. So I have a vested interest in what's happening at Disney World.

So I was perplexed and curious at some subtle changes at Disney. For instance, at the Magic Kingdom, there is a ride called the "Haunted Mansion". This is a cool ride as you are driven through this mansion watching ghosts and goblins. It is normally dark on this ride which helps out in the scary department and also helps you to see the all the ghosts better.

However, it seemed a little too dark. It seemed more dark than I remember it. And it wasn't just me, a friend who was there with us made the same comment. We also noticed it was dark on the "Pirates of the Caribbean" ride, in the area where the cannons are being fired by the pirates. You couldn't tell who was shooting back because it was so dark.

We also noticed this "black out" at the "Dinosaur" ride at the Animal Kingdom park. And at Disney's Hollywood Studio's, "Fantasmic" which is a great show (BF's favorite!) with fireworks and these awesome water screens that have images projected on them, was being cut back from been shown every night to only 2 nights a week.

When we asked a Disney cast member about the cutbacks in the showing of "Fantasmic" we were giving the pre scripted corporate answer that the reason for the cut backs in the "Fantasmic" schedule was due to slower attendance. That answer was hard for us to accept as he was telling us this info while thousands of visitors to Disneyworld were walking by.

All these cutbacks now make sense after reading this article from CNBC:(http://www.cnbc.com//id/29011933)

The article interviews Robert Iger, the CEO of Disney. In one quote, Iger says "We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn." Which translated means that most of the businesses that Disney owns like everything else in the economy is tanking. So all the Disney businesses have to make cuts (including turning off lights) to save cuts to protect the empire.

It's really hard to believe that Disney is losing any money when you see all the Disney bags full of merchandise at every park. People are standing in line waiting to spend hundreds of dollars buying shirts, hats or other souvenirs that have Mickey's or Minnie's picture on them. I believe Disney wanted to, they could open a park just with stores! Can you imagine getting a Fastpass?

Like I always say, be good to Mickey and he'll be good to you.

I really don't know what that means but I like saying it.

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

Hail To The Chief!

2009-01-19T17:42:00.000-08:00

Tomorrow is the day that Barack Obama is sworn in as the next president of the United States. Tomorrow is the day that many have marked as one of the most historic days in this country.
Tomorrow is the day that many believe will be the start of a new way the world looks at us.

I could go on. But the point here is that so much is riding on having President Obama in office that it seems that no one could live up to so many expectations. Whether you are a Democrat or a Republican or black or white or man or woman or young or old, it seems that so many citizens of this great country are expecting great things from this new president.

And we all know what President Obama gets for being the "winner" of the last presidential election: The worst economy since the Great Depression, 2 wars which it seems that there is no ending or solutions to, the United States' position as a global leader, crime, education, race relations and whatever you care to add to his overloaded platter of what's really important.

No matter what group of people I mentioned earlier (or didn't) or whatever cause you want the new president to fix (I know I didn't cover everything. There's too much.), there is one common thread that runs through us all that hasn't been there in a long time. One idea that unites us like never before. One thought that lift spirits and hearts. One unmistakable feeling that makes anything impossible possible:

Hope.

A simple premise. A simple idea. A simple thought. But a monumental feeling of hope is riding through this the people of this country because of everything that is going on. Barack Obama is the new president, not the "Miracle Worker". It will take time and a great deal of luck. It will not be an easy road. It is a road filled with land mines. I hope he's aware of what's out there.

And I hope, we are too.

Good luck President Obama.

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

Happy? New Year!

2009-01-05T16:33:00.000-08:00

Happy New Year Everyone!

I hope the holidays were good to you. I don't care what anyone says: It is the most wonderful time of the year! Whatever holiday or religious time you celebrate, it is a great chance to be with family and friends. Whether or not you exchange gifts, the only gift that matters is how you can make someone happy. It can be as simple as a phone call or an email.

I know we are all ready to say goodbye to 2008. Goodbye and good riddance. What an economic tailspin! Can it get much worse? I suppose but hopefully we have seen the bottom and 2009 will bring us hope. Maybe we won't be all the way back but maybe we will be to see the light at the end of the tunnel.

I believe 2009 will be an exciting time for the real estate business. We know our economy is going to change. We will have a new president who will have a new agenda. I'm sure president-elect Obama will make the economy the number concern in his new administration and it seems that he has surrounded himself with experts in the financial field who know what they are doing.

Also, mortgage rates are lower than they have ever been. If you are going to buy a house or refinance, this is the time. There was talk of the Treasury Department lowering the 30 year rate to 4.5%. That would be crazy.

Lenders are working more with borrowers on the brink of default. Instead of making these troubled homeowners go through foreclosure, the lenders are modifying the mortgages so that these people can keep their houses. It's way too late for the ones already who lost their homes, but maybe now with less foreclosures, more homes will keep their values. That would cause more people to be able to sell their house because the difference between what they owe and what the house value is won't be so great.

So we are in 2009. I have made some resolutions (which I will keep to myself!) that will help me obtain some personal goals. I hope you keep your resolutions and they will help you to be a better and richer person. And when I say "richer", I don't necessarily mean monetary.

I wish you the best in 2009. No matter what you do make it a good one. I hope you have many joyous memories and occasions.

Like when you read this blog!

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

Or You Could Just Not Do Anything.......!

2008-12-10T07:42:00.000-08:00

It looks like the Senate has reach a tentative decision in whether or not the Federal Government should give the struggling auto makers a bridge loan. Not a bail out. Not a gift. A bridge loan to help the big 3 survive for another couple of months. There will be conditions that must be met for the auto companies to get their cash. They will come under great scrutiny, deserved or not.

Living in the Detroit area, I have a great interest in this latest round of "begging for survival" money. The majority of people in the Greater Detroit Metro area are involved with car companies one way or another. If they don't work for the Big 3 directly, they might work for a supporting company that supplies parts or other services. And even if they don't work somehow in the car industry, all businesses are affected. Restaurants, retail stores, theaters...all are hit hard because the slump in the auto business.

Now there is a lot of blame for this economic slump. I'm sure the execs at the car companies could have done a better job. Was it all their fault? Certainly not. However, I agree with the Senate that the Big 3 must do business a different way than they did in the past. Ford, GM and Chrysler must prepare for the future and retool. They must have products that are fuel efficient and are wanted by consumers.

I just love how the Senators act so high and mighty about this. I didn't remember the investment groups having to go through this when they got their bailout. I like what Jay Leno said concerning the Senate auto hearings: "You've got guys owing trillions yelling at guys owing billions!". The Senators are the last ones that should be criticizing anyone for bad management decisions and budgeting issues.

The Senators also will want a Car Czar to oversee that the car companies will change their approach to business once they are granted this special gift. This ruling person will decide that if the Big 3 do not tow the line, The Car Czar (I love saying that by the way!) can pull funding and make the car companies file for bankruptcy.

Pretty important position, eh? Does it make you feel good that this person will be appointed by President Bush? How great is that? We can always count on the Prez to do the right thing.

I hope the Feds have taken notes on these procedures involving the financing of the auto industry. I hope they have written down what to do and what not to do. What works and what doesn't work.

Because you and I know, they are going to go through this again with yet another industry that needs a hand. Tourism, retail, trucking, farming....take a guess.

Because when someone is handing out money, the line gets real long fast.

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

It's Very Sad......

2008-11-13T11:58:00.000-08:00

In an article from CNBC.com (http://www.cnbc.com//id/27701737), Diana Olick, who writes a column called "Realty Check", wrote about the failure of the Hope For Homeowners program to actually help anyone. If you recall, the Hope For Homeowners program is a FHA program that was suppose to help those homeowners with mortgages that were in big trouble and knocking on the door of foreclosure. The idea behind this program was that lenders who currently hold these troubled loans were going to write down the principal that was owed to them up to 90% of the current appraised value. This would reduce what was owed to the lender and allow these troubled homeowners to refinance into something more affordable.

This sentence from the article says it all:

"I’ve just seen the latest numbers on the recently launched government Hope for Homeowners program, and I’d call them laughable if the whole thing weren’t so blatantly sad. "

Once again, that's "blatantly sad".

The article goes on to say on how only 19 applications have been accepted by lenders for this program and how lenders are reluctant use the program because their costs are to great. So the homeowners (taxpayers) who really need this program can't use it because the lenders don't want to play.

Think of the comic strip Peanuts. Charlie Brown is going to kick a football which being held by Lucy. As Charlie starts to kick the ball, Lucy pulls the ball away and Charlie falls on his behind, embarrassed and angry.

I have to imagine that is all the distressed homeowners feel: embarrassed and angry. The government can use billions of the distressed homeowners tax dollars to bailout large financial firms (because it's good for the economy!) but a program designed by the government to help the people who are days away from losing their house, really doesn't help anyone.

That's hard to believe, isn't it.

Let's bailout the taxpayers before we bailout anyone else.

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

True Confessions, Part 2

2008-10-27T13:37:00.000-07:00

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

True Confessions

2008-10-15T07:04:00.000-07:00

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

Could You Please Repeat That?

2008-09-20T08:21:00.000-07:00

How about this excerpt from an article from CNBC.com. explaining Congress's plan to speed up the financial debt clean up:

"The moves cap a week in which financial markets faced their most serious confluence of crises since the Great Depression in the 1930s and threatened national economies and the worldwide banking system."

The Depression?? Are you kidding me? Nice.

You know it's bad when today's financial crisis is being compared to the worse financial disaster in the history of the United States. The Feds have pledged to throw at least 1 trillion dollars between buying up debt and bailing out financial institutions.

Is 1 trillion enough? Here is a quote from the same article from Treasury Secretary Henry Paulson: "We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses.The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy."

I think the Secretary is going to find that the roots of this problem are deep and multiplying fast. I give the Feds much credit for stepping up and doing what they can to help solve this financial crisis to give investors confidence in the markets.

As always, the taxpayers are going to pay for this for a long, long time. I only hope that the 1 trillion does the trick and this pre-depression economy gets turned around fast. While I know that we are saving (or trying to) retirement funds, investment funds, stocks, banks, investment companies and whoever else has their hand out, I think that there is one crisis that we need to help and it affects millions: Falling house values.

While it is good (and I guess now, necessary) that these high powered financial companies are getting help, I am concerned about the millions of homeowners who are upside down on their mortgages and now owe more than their house is worth. Expecting when selling their house to at least break even, most of these homeowners have to bring money to close or go through a short sale which ruins their credit. Or even worse, the millions of homeowners that run out of options and have to face foreclosure.

Until falling home prices are stabilized, I believe we are still going to be in crisis mode in this country. The idea of owning a home is truly the American Dream. In most cases, a home is only investment that people have. A home serves 2 purposes. An investment and you can live in it.

I know we have to protect and bailout the big guys. The amount of dollars at risk is to great to avoid.

But lets make sure we save a little out of the 1 trillion for the little guy. To me, saving homes should be the priority here.

We can't let the American Dream become the American Nightmare. After all, didn't we do this in 1929?

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

Hey It's A Convention!

2008-08-28T10:07:00.000-07:00

Are you watching the Democratic Convention? I'll admit it. I love to watch this stuff. Not that I'm a Democrat or Republican (I vote for the person, not the party.) it's that I find this kind of thing very interesting. It only happens every 4 years and compared to some of the junk on TV, this isn't too bad to watch. You get to listen to the speeches and then the TV commentators tell you what it all means. (you know we can't figure it our for ourselves!)

I know that the convention is a big production. Everything is scripted and preset. Who's going to speak what night and what are they going to say? And most of all, how are they going to say it?

It is all hype, designed to make who ever is the hosting party look like they are for the people, that they have the best plans for us and that if you vote for the other guys, you are making a huge mistake.

I get that.

However, I just think it is important. It is important because no matter who wins, that person is going to face some of the toughest problems an incoming President will have to face. And you may think your vote doesn't count, tell that to Al Gore. Remember the mess in Florida? If anything your vote should be about you saying "Here's how I feel."

Now maybe you feel that you can't select either of the candidates because neither of them doesn't do anything for you. I get that too.

Sometimes that's the way I feel about our choices. But whoever I end up voting for will be the person that I like better. Even if it is just a little better. But I will have my say on election day.

I understand that most candidates promise everything but deliver nothing. And they bash each other during the primaries but after the primaries are over they are the best of friends and practically whispering sweet nothings in each others ears.

But this is the system we have (or stuck with for a lack of a better term). So I choose to join it because this is the true meaning of being an American. Forget about the commercials or the signs or radio ads. What it comes down to is you and your ballot because at that moment, you are in charge.

So I like the conventions. It will help me with my decision. Hopefully, it will help with yours also.

But I have a confession.

I like the debates too.

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

What's On The Way?

2008-08-14T09:53:00.000-07:00

How about this article from CNBC? (http://www.cnbc.com//id/26192036) It states that filings for foreclosures increased a whopping 50% compared with the same month a year ago. 50%!! And we can only assume it going to worse before it gets better. Because in reality, what has changed to make it better? Nothing that I can see.

Now read this quote from the article. "President Bush last month signed sweeping housing legislation that aims to prevent foreclosures by allowing homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan. The bill is projected to help about 400,000 households." Did you read that clearly? "Only if their lender agrees to take a loss on the initial loan" And what if the lender doesn't agree to take a loss on the initial loan? Hmm. Did our government pass some legislation that doesn't really help anyone?

Consider this quote from the article: "The number of foreclosures "could start to stabilize as early as the first quarter of next year if the government program gains any traction," said Rick Sharga, RealtyTrac's vice president for marketing. "That's really the unknowable right now." "if the government program gains any traction" (in other words, will the program actually help anyone) Say it one more time, Rick. "That's really the unknowable right now" Rick, I think we know the answer right now.

The lenders are concerned about losing money, not because the new loan amount will be less, but because the appraised value will be less than what is owed on the property. The lender will not want to lend out more money than the property is worth. However, they were the same lender the gave out the money to the home owner when the appraised value was higher when the initial loan was made.

So why does a lender have to lose money in the first place? Can't the lender just restructure the loan dropping the interest rate, keeping the loan amount the same but putting the lost interest in the back of the loan? Can't they raise the rate back up as the property values start to climb back? Isn't this better than waiting to see if the government program "gains some traction"?

Believe me. I know it is not this simple. But by letting so many homes go into foreclosure just makes the housing crisis even worse. It has a snowball effect that we just don't know the scope of yet.

I want the lenders to get paid back what they are owed. That's only fair. But I think the lenders also need to be more responsible to the people who need them the most: their clients.

It doesn't make sense to wait for a program to "gain traction" when the housing market already stuck in the mud.

And sinking fast.

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

It's Not Christmas Is It?

2008-08-07T09:42:00.000-07:00

"Retailers are largely reporting disappointing sales in July, with many retailers falling short of analyst estimates, as consumers remain cautious with their spending and are running out of extra cash from their tax rebate checks." according to an article on CNBC.com. (http://www.cnbc.com//id/26049865)

Really!?

Of course the retailers are disappointed. I'm sure they were all waiting for consumers to run in the mall with the rebate checks we all got from Uncle Sam (Thanks Uncle Sam, from the bottom of our hearts!) and buy like there is no tomorrow. Christmas in July? You bet! Because this rebate was going to go right in the cash registers of all these stores.

Well, unless these stores sell gas or food, the expected large windfall most likely will not be at those retail establishments. I guess the choice of either gas or food or the big electronic thing that you would like to buy becomes not much of choice of all.

Forget the rebate checks. If you want to stimulate our economy (actually I mean jump start it), lower gas by a $1 a gallon. I know this move is impossible (because it makes perfect sense?) to do. But can you imagine what this would mean? You know, I can't imagine it.

More car sales, lower food prices, maybe more jobs, more home sales, stronger dollar.

Maybe we would be able to buy the big electronic thing.

I still can't imagine it.

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

Is The Good Faith Estimate..........Good?

2008-07-28T12:27:00.000-07:00

In an article by Jack Guttentag for Inman News (http://www.inman.com/buyers-sellers/columnists/jackguttentag/why-good-faith-estimate-needs-overhaul), Mr. Guttentag is asking for an overhaul on the Good Faith Estimate document that gives a potential borrower the estimate of costs when buying or refinancing a home. Mr. Guttentag feels the GFE in it's current state confuses the borrower more than it helps them and that the GFE should be an easy to read document that a borrower can use to shop for the best rates and costs on their future home loan.

Believe me, if anything would make it easier on a borrower I'm all for it. We make borrowers sign so many papers now at closing, it is ridiculous. The borrower doesn't ever have trouble with the note or the actual mortgage document ("6.5%, 30 year fixed. I understand"), it is all the disclosures or the CYA docs we make them sign that make the borrower's head spin.

The problem with Mr. Guttentag's position is that there are too many variables that affect mortgage costs. Most of the costs we have are what I call "pass through" costs (appraisal, title work, flood cert, recording, survey...etc.). We get the invoice and pass the cost on to the borrower. The other costs are fees that vary such as processing fee, underwriting fee and the title company's closing fee to name a few.

Closing costs are costs that are generated by the borrower when obtaining home financing. But what about escrows? (funds collected at closing by the lender so the lender can pay the taxes and insurance). Are the escrows a "cost"? Not really, but if the borrower needs to pay this at closing, you better show this on the GFE. I have seen competitor's GFE's and the escrow section can be hazy at best.

And what about real estate costs? These are not "mortgage" costs but your borrower needs to know that they may need a couple thousand dollars for "tax prorations" (refunding to the seller for taxes already paid). Most loan officers won't put this cost on their GFE's because it is not a mortgage cost and they want to look "cheaper" than the competition.

I'm sure I have lost deals because I go out of my way to try to put all the costs on my GFE. I'm sure the competition has showed those buyers their GFE's without all the costs which makes my GFE look like my costs are way out of the ballpark. But I don't like surprises and I'm sure my clients don't either. Do I want to make a phone call that sounds like this: "Mr. Client, I'm sorry. You need $3000 more to close. Ooops!". I don't think so.

When Mr. Guttentag finds a way to get all the mortgage costs the same, let me know. Because it's a "Good Faith Estimate", not a "Good Faith Written In Stone No Matter How Much The House Costs And What The Taxes Are". Loan Officers need to do a better job on disclosing all the costs.

See if you can get regulation for that, Mr. Guttentag.

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

Do We Even Have A Choice?

2008-07-18T11:55:00.000-07:00

How about this article from CNBC? http://www.cnbc.com//id/25735696 The article discusses how "glum" (how bad does the economy have to be to use the word "glum") consumers have started to save more money and pay down their current debt. I am assuming the reason for this is because consumers aren't sure how much money their going to need in the future. Will gas go up to $10 a gallon? Will vegetables trade higher than gold?

We were caught off guard by gas going over $4 a gallon but we won't be fooled again. We would like to believe that gas just can't go any higher but we still don't know why gas went up in the first place so we have to believe that it can still go even higher.

'"Most of the planned declines in debt and increases in savings are intended as a precautionary measure in the face of a deepening economic downturn," Richard Curtin, director of Reuters/University of Michigan Surveys of Consumers, said in a statement on Friday ahead of Tuesday's release of the poll" from a quote in the article. Which in English means people are scared and now do not have clue if they will have enough of money to survive.

Nobody saw this coming. And now consumers are gun shy and cannot trust anything they see or hear about the economy. With rising gas and food prices, foreclosures, layoffs, banks going out of business everyday and lenders needing a bailout the only thing that consumers can do is take cover by reducing their debt and saving whatever they can.

When you're not sure the floor is going to cave in when you take your next step, you better have the money to fix it when it does.

Hopefully, the step can wait until we have enough cash saved.

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
@glmf.com

Is There Light.....?

2008-07-02T12:03:00.000-07:00

In this clip from CNBC News (http://www.cnbc.com//id/25498530), the article explains that some cities are now experiencing a rise in home sales as banks are selling off more and more foreclosed homes. Some increases in home sales have risen over 10%.

What does this mean? I'm serious. What does this mean? I know this is a good thing. And as someone in the mortgage business, this makes me happy. More homes selling equals more buyers need mortgages to buy these houses. (We know. No stated income, no subprime, no 0% down, no adjustables. Yeah, we got it.)

We are now looking for any hope that is out there. Just some sign that the real estate market is improving. What ever the sign is, we'll take it. It is getting harder and harder to find the good news. Here in the Detroit area, I don't expect good news for awhile. Detroit, anchored by the auto industry, is the first to enter a recession and the last to get out of one. I'm no economic genius, but when gas prices skyrocket, it can't be good for car sales. (I also don't understand that if you make a product, shouldn't you have a major interest in the product that makes your product go? This will be discussed in another blog. Another long blog.)

So the good news is that some of the massive inventory of homes are being sold. The less inventory, the more that sellers can command for their homes. The more they sell their homes for, the more the appraised values in their neighborhood will go up. The more the appraised values go up, the more people will be able to refinance because now maybe they won't be upside down. It's all good.

But....... I believe there are a ton of properties out there that are on the door step of foreclosure. And while good news is good, we know that there are so many things that control our economy that we aren't sure what will fix it. This is a war with many fronts. And no one has an answer because that answer has many parts. Who's in charge of the economy?

So we wait. And wait.

But what exactly are we waiting for?

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

Welcome Back!

2008-06-25T07:59:00.000-07:00

Wow!! It's been a long time since I wrote in my blog. I knew it was a long time but I didn't think it was this long. Time flies when you're having fun.

Plus the fact that the hard drive in my computer died, which is never a good thing. So between the computer not working, vacations and just being busy, I have slipped on my blogging. I'm now hoping to make Tuesday nights my official blog night. I am better when I have a scheduled time to do tasks than to just remember to do them. I know that I just won't unless it's scheduled.

I have a Dell computer. And while Dell makes great computers and products, anybody who has a Dell computer knows that when you have a problem, it can be an adventure getting help. I had a problem with my computer 2 months ago. It was making a grinding noise. It turned out to be some kind of cooling fan. I called Dell to tell them about my problem. After hours on the phone and me running all kinds of diagnostic tests and relaying the results, the fellow at Dell figured it was a bad fan motor. I believe I mentioned this to the Dell technician when I made the initial call but we still had to go through all the tests.

This new problem was even worse. Before, with the computer making noise, I could still use it (even though I was afraid that the computer could blow up at any time!). But now what was happening was that I was getting a blue screen with wording that would only make sense to a computer geek.

I knew I was in trouble when the Dell tech I spoke to referred to this problem as "The Blue Screen Of Death". This can't be good.

So I call Dell and make my self comfortable. I have a drink, a snack and something to read because I know I'm going to be there for a long time. (thank God for the extended warranty I just purchased in April.) You just can't call directly to the service department. You have to enter the service tag number and the product key which is about 100 numbers long. Then you get to hear the worse sounding music on hold that I have ever heard in my life. This is a high tech, state of the art, latest technology type company and they have music that sounds like the first sounds Thomas Edison heard when he invented the phonograph.

When you finally get someone, you have to constantly say "Pardon me" or "Excuse me" or even "What" because due to the distance of the location they are calling from or the heavy accents, it is not easy to understand what is being said.

With "The Blue Screen Of Death" there is no easy answers. So I know we are going to be running all kinds of diagnostic tests, taking the cover off the computer and plenty of restarts. A couple of the tests actually took so long that the Dell tech told me to call back when it was done.

The testing took over a couple of days because I wasn't able to call back Dell to around 8PM at night. And every time I called back, I spoke to someone new. However, I was impressed. By giving the new tech the service number, they were able to see how far the last tech I spoke too got. That was really helpful.

After all this time and testing the conclusion was that my hard drive was shot. (again I think we could all have figured this out from the very beginning) So a hard drive was sent overnight to a local service company who came out to the house to replace my hard drive in a couple of days. But we weren't done there. I had to call Dell once again to install Windows and all the software that originally came with my computer. I lost everything I had on my old hard drive but a this point I didn't care any more. (although I will be looking in to a flash drive for backup now)

More time on the phone with my drink, snack and something to read.

Thank God I had the extended warranty.

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

Can You Really Fall In Love With A Machine?

2008-05-02T09:35:00.000-07:00

Hello Everyone!

Here in my blogspace, I usually write about what is going on in the mortgage industry. (which makes sense because I'm in the mortgage industry.) And there has certainly been a lot to write about. Rates going up. Rates going down. Are we in a recession? What about the gas prices? Who is in charge of that? What about the Feds? Do they have a clue? The stock market can soar one day and then tank the next because some report about farming came in .004 of a percentage point different then what was expected.

And while it is good to talk and understand the happenings in the mortgage market, it can be a bit overwhelming and sometimes it's good to take a break from all that sometime depressing news. And this is one of those sometimes.

So what should we talk about? We should talk about (I know. Write about.) one of the most important subjects that hardly gets mentioned but yet is so important to all of us. That's right: Lawn Dethatching.

Now we all know the problem. Our lawns can be starving for nutrients and water if our thatch is too thick. If you mulch when you cut your grass like I do, this can be a serious build up. The only way to get it out of the grass is to rake. And like I always say: "Raking sucks!". I do everything in my power not to rake. I have lawn vacuums. Not the Hoover type but one that picks up leaves and grass so I don't have to rake. Because: "Raking sucks!".

Well now my friends, I have something that will save us all from that horrible job and hopefully help make our lawns nice and green. I'm talking about an invention that in my mind is just short 0f importance next to the artificial heart.

The Electric Power Rake!

This wonderful gadget (from Sears) is a Godsend. I can not believe how much dead grass was in my lawn that I removed. It became a bigger job figuring out how to pick up the brown, dead thatch that was now laying on top of the lawn. I don't usually have a smile on my face when I'm doing lawn work, but I did using the Electric Power Rake. I'm actually looking forward to doing the front lawn tonight to see what I pick up there. I hope it doesn't rain.

I am always looking for ways to save me work. We have enough to do without spending hours after hours of raking and then admiring our brand new blisters. The Electric Power Rake will change all that.

Now the jury is still out on what kind of effect power raking will have on my lawn. (my lawn is on the critical list already) But I'm thinking all that crappy dead thatch was choking my lawn so it has to do some good. It just has to! And being electric helps me to "Go Green" which is important. So give it a try. And let me know what you think.

I didn't want to go there but it would be nice if there was some tool like the Electric Power Rake to fix the economy.

It seems we have a lot of dead grass choking us there too.

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

All This Money For Crude Is Downright Rude

2008-04-09T17:57:00.000-07:00

What are you paying for a gallon of gas today? Around the Detroit area, I've seen $3.41 a gallon. Today, we would do anything to pay $2 a gallon. When the price reaches $4 a gallon we are going to be happy to pay that $3.41 I saw today.

In yet another article (http://www.cnbc.com/id/24019177) about the rising cost of crude, I ask the same question, why? Why does the price of gas just rise? I'm sorry to say the only reason I can think of is that the oil companies just want to make a bunch more money. And why do they want to make more money? Because they can.

The article states that the reason for this latest price hike is that a government report stated that U.S. inventories showed a sharp drop before the summer driving season. Perhaps the reason for the sharp drop in inventories is because we didn't have much of an inventory in the first place. And if our inventory is low, can't we order more at the same price that we paid last time.

I know when I'm out of milk, I won't always see a price increase because the store where I buy my milk always has it. Milk is available at many different markets and stores. I assume the inventory of milk goes down. And when it does the person in charge orders more. This is pretty simple marketing. Regardless, we just will accept the idea that our inventories are down on crude. Do they not understand how much crude we use per day? Maybe we can get the person that orders the milk to start ordering the gas.

Or what about cars that run on milk?

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

You Got Me Floatin'........

2008-03-23T07:41:00.000-07:00

The circus like atmosphere continues in the mortgage industry as we try to figure out daily what is going on with mortgage rates. This article on CNBC.com (http://www.cnbc.com/id/23724112) addresses this real fact. That not only is it hard to predict what rates will do, we are now having a problem knowing what it is that makes the rates do what they do.

What are making rates move today? Is it the latest cut by the Fed? Is it the stock market making a rally? Is it yet another increase in the price of gas? Who knows? Not the experts. "The reality is that it used to be relatively easy to predict where mortgage rates were going to go," says Mike Larson, real estate analyst for Money & Markets, a business website. "You keep your eye on things like the broader economy. More recently, it's been almost impossible to predict. The thing that's going to make a lasting impact on mortgage rates is whether you can get through this period of credit turmoil." You got that right Mike.

The motto at the office is "Like the Michigan weather, if you don't like the rates, just wait 5 minutes. They'll change!". And that is true! It is common for us to get rate sheets in the morning and then a reprice in the afternoon. It's funny how fast mortgage officers will move to save 25 bps on their yield spread. Certainly makes the day exciting.

Mortgage rates, like the economy, will stabilize. Until then, we'll read everything we can to help us advise our clients concerning rate locks. Their protection is the most important thing we can do.

I'm just hoping someone is out there trying to protect us in the mortgage business.

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

Can You Have Your Cake And Eat It Too?

2008-03-07T15:10:00.000-08:00

In this article on www.cnbc.com (http://www.cnbc.com/id/23520031), it was reported that Countrywide's CEO Angelo Mozilo told a congressional panel that the tightening of mortgage guidelines has gone to far. Mozilo was quoted as saying "For the market to recover, underwriting guidelines need to strike a better balance between providing borrowers with access to loans and lenders and investors with the assurance that these loans will be repaid." That's a great point but who is going to make the first move?

Everyday the challenge for us in the mortgage business is to find something that works for our clients. And everyday it gets harder and harder. We have to remember guidelines from Fannie Mae and Freddie Mac as well as each individual lender we work with. What works today may not work tomorrow. What you told your client last week may not be true now. And forget about constant changing rates. You think gas prices are crazy? Try quoting a 30 year fixed rate to someone only to find that rate moved .50% for the worse. That's a phone call you don't want to make. Now, let's talk appraisals.....

Mr. Mozilo made a real good point in his speech before the congressional panel. "I also want to strongly suggest that traditional guidelines be reexamined relative to the appraised value of a home versus the outstanding mortgage so that current borrowers can refinance at lower interest rates," he said. Now that makes sense. It so sad to see people lose their houses because the values nosedived and now no lender wants to refinance them because these poor people are "upside down" (owning more than the market value of their house).

It's not their fault that values have gone in the tank. Nobody had a problem lending money to them to buy the house but now these same people are a "bad investment". The homeowners that are "upside down" should be able to refinance like anyone else.

If these folks don't get help, "upside down" will just be the first move in this real estate tumble.

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

Sometimes It's Like A Merry-Go-Round

2008-02-27T18:39:00.000-08:00

Did you read this article http://www.cnbc.com/id/23372795? It describes how mortgage rates will stay on the higher side even though Federal regulators have eased investment caps on Freddie Mac and Fannie Mae, the biggest providers of mortgage money in the nation. It makes sense that because there is more money available to loan for home loans, that the rates will go down due to this latest influx of cash.

But no! Check this quote out from the article. "In a mortgage market where lack of liquidity has been a recurring issue in recent months, this is a positive step," said Greg McBride, senior financial analyst at Bankrate.com. "But it's unlikely to result in wholesale changes in mortgage rates overnight, and the impact will probably come at a gradual pace."

And does that "impact" mean lower rates? We'll see. All I know is that this is just another crazy chapter in this wild mortgage free for all. We've seen repricing for mortgage rates just about daily and sometimes twice a day. But today, the rates are higher for a 30 year fixed.

"We have a problem, which is that the spreads between the Treasury rates and lending rates are widening, and our policy is essentially in some cases just offsetting the widening of the spreads, which are associated with signs of illiquidity," Federal Reserve Chairman Ben Bernanke said in remarks before the House Financial Services Committee.

I'm not so sure you want your Fed Chairman to start off a sentence with the words "We have a problem". There is a problem. There are many problems. The biggest problem is that no one is sure how to solve the problem.

It's like cooking on a stove with 4 pots burning at the same time. Which one are you going to save?

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

And You Don't Even Get Kissed

2008-02-19T18:22:00.000-08:00

While reading yet another article on CNBC.com (http://www.cnbc.com/id/23225822), this time about the price of a barrel of oil closing over $100, I thought about what happened to me tonight.

Usually I buy my gas at Costco. It's on my way to work and it is usually cheaper than anywhere else. For the past 2 days, that little irratating "Low Fuel" warning has come on with a dashboard warning and a ring to let you know your tank is getting low. I didn't think this was a big issue because I don't travel far to my office and I wasn't planning to travel a long way. However, when you own an Explorer, you don't need to go far to suck up the little amount of gas you do have left.

Part of the reason I didn't get gas is because I figured the gas I did have left would last and last. And the other reason, and probably the most important, it was to darned cold to stand outside to pump gas. Maybe I'll just wait until Spring.

When the "Low Fuel" warning went off again, I decided to check the warning system that most cars have now to see how many miles I had left until I was empty. "22" was the number. Then the questions start going through my head."Is it really 22 or is it less?" or "Surely, there must be a reserve number of miles they don't tell you about. Isn't there?"

So after awhile of driving to my next stop, I noticed that the "Miles Until Empty" magic number was now 12. Now it is getting dangerous. I had to stop at the nearest gas station. I had no time to shop for the best prices. I was out of my Costco protection zone. Of course, it ended up costing me $3.19/gallon which is extremely high for the Detroit area. So I just put in $10 worth and will fill it up tomorrow morning at our beloved Costco.

$100 a barrel? Does that equal $3.19/gallon?

Who knows.

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

Tell Us Something We Don't Know

2008-02-15T15:55:00.000-08:00

Today's bit of good news comes from this article from CNBC. http://www.cnbc.com/id/23187555

The article explained on how it is getting more and more difficult for borrowers to get mortgages. The guidelines from lenders regarding qualifying is getting smaller and smaller. And we are not just talking subprime, we're also including people with good credit as well. And businesses which are trying to borrow are having a hard time too.

The reason is simple. Lenders and banks just can't afford to take on anymore risk. With $140 billion already written down and an billions more on the way, what lender can take the gamble?

Here's a quote from the article "Credit got terribly easy," said Ronald Hermance, chief executive of Hudson City Bancorp Inc, a $44.4 billion asset, Paramus, New Jersey-based lender that has avoided big losses despite specializing in residential mortgage lending."

Amen, Ron. Credit was easy, but not anymore. But there are programs out there that still work for people. And I believe lenders and banks will ease up down the road but how much easing depends on the beating they take in the coming year.

My drawer full of lenders has gotten smaller as a good portion of them dropped out of the business. And now the remaining lenders in the drawer are reducing their options to the borrower.

I have to get a differant drawer.

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

Too Little, Too Late?

2008-02-12T20:07:00.000-08:00

The news today is that 6 top mortgage lenders and servicers have launched a new program to help homeowners in forclosure work out new affordable terms that may help them save their house (http://www.cnbc.com/id/23126374). Foreclosure proceedings are halted for 90 days while the homeowner and the forementioned lenders try to find away to get the homeowner back to making on time payments.

Hopefully, this will help some of the homeowners that might lose their house. For others, it still won't help. With housing values going down, many borrowers owe more than their house is worth. Or they have so many issues with their credit that lenders just won't take the risk. I have been telling clients and anyone who will listen to please get anyone they know who is having trouble with their mortgage payments to someone that can help. Once the borrower is in forclosure, the only one that can really help them is the holder of the note, the lender or servicer.
As always, this latest help comes to late for the thousands of former homeowners that have lost their house and their good credit already. In this case over reaction is better than slow reaction because there is still unknown thousands of foreclosures waiting to happen. Can we bring out the next program to help these people now? Because if anyone should know how bad it going to be, it should be the one holding the notes that will never get paid.

Ever hear the expression "The future is now"? How about " Now. Or there won't be a future"?

For the latest financial news, go to my home page and scroll to the bottom of the page

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

Another Side Of The Problem

2008-02-08T18:27:00.000-08:00

This article came from http://www.msnbc.com/. http://www.msnbc.msn.com/id/22623144/from/ET/

The article talks about yet another problem that we have in the mortgage industry that is sometimes over looked. The appraised values of housing. Since the values of homes have declined, it is harder and harder to get a residential loan through lender underwriting. The article is originated in Minnesota, but here in Detroit we are getting hit just as hard with no end in site. The first place we start when helping a client refinace is to call the appraiser to see if we even have a chance to get the loan done.

And what makes it so bad of course, is that so many people now owe more than what their house is worth. The same lender that excepted an appraisal 2 years ago at $150,000 now is asking us to justify an appraisal for the same house at $120,000. Try telling someone that they have just lost thousands of dollars for doing nothing. And with a large number of adjustable rate mortgages out there, homeowners are not stuck between a rock and a hard place; they are being crushed between rock and a hard place.

And the same thing goes for selling a house. The article has this quote. "Values might have retreated more than the consumer might be willing to admit," said Tom Musil, director of the Shenehon Center for Real Estate at the University of St. Thomas." Which basically means that if you are trying to sell your house and you really want to sell it don't think about just reducing the price by $5K or $10K. Try more like $20K to $30K.

Who can afford to do that? But who can afford not to?

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

Be Good To Mickey And He'll Be Good To You!

2008-02-06T06:26:00.000-08:00

A great start to the day!

I got to read an article on one of my favorite websites, www.CNBC.com, about my favorite place in the world, Disneyworld! http://www.cnbc.com/id/23015251

The article was explaining how Disney's quarterly earnings were higher than expected. The stock slumped a bit but is now starting to recover. Let me say this right now: I AM NOT A STOCK MARKET EXPERT! And I can't tell you how Disney's other segments are doing (ABC, ESPN, etc.). But I do know Disneyworld. I go to Orlando at least 4 times a year and visit the parks at least twice that. And believe me, I know what I see.

Even in the tough economic times we have today, even when it's cold in Florida, even is it supposed to be the "slow time" at Disneyworld, the place is rockin'. It's not cheap to get in but it's worth every penny. You will never get better entertainment for your dollar. It is truly, in my opinion, the #1 tourist attraction in the world.

In the article, Matt Kaufler of Clover Capital Management said "It's a great beat, I'm most focused on the attendance level at the theme parks, as well as what their comments will be about business conditions going forward." I'm sure Matt is looking at all the charts and stats and anaylizing the numbers. Thats what he does.

But all I do is see the lines to get in the Disney Parks, the Disney mechandise bags that most every "guest" is carrying loaded with Disney shirts and trinkets, the Disney hotels which always have loads of people staying there with lots of kids waiting for their Disney dreams to come true, and the best part, the look on the faces of kids of every age when they see their favorite Disney character close up (that would be Mickey for me!) and the smiles that take up most of their faces.

Again, I'm not a Wall Street expert. And I know those "smiles" are worth millions of dollars in revenue but even better than that: trillions in happiness. And that is a product that sells itself.

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

My Take On The Subprime Mess.

2008-01-29T18:24:00.000-08:00

After reading an article on one of my favorite websites, CNBC.com, concerning the subprime mortgage mess (http://www.cnbc.com/id/22901531), I decided to comment on this subject that has plagued our industry and made front page news. (There is nothing like seeing the industry you work in splattered across the headlines like a disaster.)

First of all, there are many sides to blame for this mess. The lenders who gave borrowers loans who most likely did not qualify credit wise but fell in to the lender's now sorry guidelines. The mortgage officers (like myself) who thought we were helping the credit challenged get a house, to give them some hope and to give a brand new start to some people who might have been down on their luck with credit problems that weren't necessarily their fault.

Not only did it not make sense to give loans to people with bad credit, the loans themselves had high interest rates and steep pre-payment penalties. These folks needing a subprime mortgage already have shown that they can't handle payments so let's make it worse by making it real hard to make payments on the biggest loan they'll have. Not real smart.

I always give advice on improving a credit score when sitting down with a client. When selling a subprime loan, it was probably to much advice for someone to understand.

There is a reason that people qualify for a subprime loan. That is what a credit report is for. The credit report screams out page by page why there is a good chance the person who's history is on the credit report most likely would default on their mortgage.

No one listened to the screaming.

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

Recession or Not: That is the Question.

2008-01-27T10:29:00.000-08:00

I read an article on CNBC today about if the U.S. is talking itself into a recession or is there really one at all. Experts on all sides are saying we are or will be or they're not sure. I'm not a economic forecaster so I can't say if we are in a recession or not. But I know that sometimes perception is reality.

In the CNBC article is this quote:

"We're over-reacting to the recession word," Dow Chemical Chairman and CEO Andrew Liveris told CNBC. "Lots of people get together and talk to each other and people believe the psychology."
http://www.cnbc.com/id/22842552

With all the confusing and mixed data that's even fooling the economic experts, I believe that we won't know if we are in a recession until we are out of it. And if we aren't in one, we must be knocking on the door. We have to think of a name for the economic state we are in now.

I can think of a few, but I won't go there.

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