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Midwest Mortgage Consultants "WHO's WHO"

It would seem that A LOT of people are scared of re-financing or buying homes after seeing where our economy is at and hearing the horror stories associated with the "MORTGAGE MESS" as it has come to be known. It's true; A lot of people found themselves in bad positions in just the past few years. Why is that? Let me give you a list of reasons: 1) Certain lenders helped many people to get into housing that they could not afford through stipulations in the laws which allowed them to get into homes that were way outside of their affordable price range. How did they do that? Well... Many loan programs such as  "ARM 's" (adjustable rate mortgage's) and interest only loans allowed people to prove that they could sustain their payments as shown on paper. It did not factor in properly what would happen when those rates "ADJUSTED" leaving many MANY homeowners in a position where they could no longer afford their home payments. When the rates adjusted; many of these homeowners opted to miss payments on their lesser bills figuring that they could regain what they had lost down the road. Unfortunately, this sent most of these homeowners into a tailspin which could not be recovered. As this happen to more and more people; foreclosed homes rose sharply in numbers. The amount of homes not moving on the market caused home values to drop nationally. 2) Why did people choose these programs? Many people, as is common in the US, were chasing the "American Dream". They went into a lender and asked what they would be able to afford. Many lenders gave them the "Sky's the Limit" pitch noting the savings in the above listed programs and disregarding warnings of instability in their loans figuring that by that time they adjusted; they would be doing better financially. Soon after the economy started fluctuating causing many companies to lay off employees and pushing our national unemployment rates to some of the highest rates ever with as much as 1 in 8 being unemployed. 3) What does it all mean? Heres my simple break down of the situation.... If you can't afford it or it sounds "TOO GOOD" to be true; There's a good chance that you are correct. Be leary; work with someone who has your future in mind as much as their own pocketbook. Watch out for obvious problems such as increasing payments down the road or "Interest Only" loans. Interest only means just that.... you make no gain on your principal balance until you refinance into a program that allows you to put money towards your principal. 4) Who are these "BAD LENDERS"? There are many sites on-line that will offer to SELL you a copy of these bad lenders for around $29.99 however, Forbes does conduct surveys and release their very own TOP 10 worst lenders list. Heading the TOP 10 "Bad

Lenders" (+1) are the following: Citigroup Bank of America Wells Fargo Bank Wachovia Golden West Financial Corporation BB & T Popular M & T Marshall and ILSLEY Amsouth Bancorp and Synovus Financial My first observation when looking at this list is that the majority of the names are large banks. It is always my feeling that smaller banks and or mortgage lenders are a much better way to go than the large lenders. Why's that you ask; well... at a smaller bank or a mortgage broker you will most likely be dealing with the person who will make any profit from the loan face to face. This is good because in their eyes you ARE a person and they want you to be satisfied and come back for years to come with all of your financial needs. The big banks view you as a statistic, a percentage and someone that "THEY" are "giving hope to". The person making the rules and reviewing your loan to say yes or no will probably never look into your eyes or know who you are and whats important to you. Large banks offer way less program options as they are limited by their own investments and power in the market. They probably figure that by "word of mouth" you will find your way to them and they will not need to try to compete for your business as they are readily available and spend millions of dollars a year in advertising to pursuade you to believe that they care about you as an individual. Its funny that so many people believe that, yet Forbes who is a leader in breaking financial knowledge and one of our countries most regarded watchmen in the industry, shows statistics and findings based on facts that prove otherwise. 5) Did you know? Citigroup has set their aspirations to make a 75% increase in dividends currently. What do you think that means to everyone still suffering? Most of the smaller bad lenders who scammed people into bad loan programs have already shut their doors due to financial collapse and bad review. Many people are still able to qualify for re-financing and now is an EXCELLENT time to look into purchasing a first home if you are a new homebuyer.

Mortgage Matters NEWS informative video

Wrap-Up......  It is my belief that the majority of bad lending practices have been nipped in the bud and it is time for our country to start growing again as a whole. Look at that new homes. (You need 3 years after a foreclosure in most cases) Ask about where your at and whether or not you can qualify to be a first-time home buyer.  Stop feeding the CEO's at the top of the Big Bank ladder. There is no such thing as a stupid question........ only questions not asked. Shawn Johnson Midwest Mortgage Consultants 600 Babcock Blvd Delano, MN 763-972-5970 Ext 104

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Labels: adjustable rate mortgage, american dream, ARM, bad, bad lenders, bank, big banks, Forbes, foreclosed, interest only, lenders, loan programs, mortgage mess, unemployed, warnings

Category: American mortgage

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