BLOG - in Transition

Words of Wisdom for Worried Borrowers

With problems in the mortgage lending sector dominating the news, home owners who have an adjustable-rate mortgage may be wondering if it's time to re-evaluate their financial situation.

"Think carefully about your ability to handle monthly mortgage payments in the future — and make adjustments, if necessary,"says Susie Irvine, president and CEO of the American Financial Services Association Education Foundation, an organization affiliated with mortgage lenders.

Here are some tips that will help to give peace of mind to borrowers with ARMs:

• Make note of the date your initial interest rate adjusts, or "resets," since the monthly payment may go up substantially. You can find the reset date on your monthly statement or by reviewing your loan contract.
• Be familiar with other terms and conditions of the loan, including what type of ARM you have and if there is a fee for paying off the loan early (a "prepayment penalty"). See the list below prepared by AFSAEF for important terms to know. Contact your lender if you have any questions.
• If you plan to refinance before the reset date, don't wait until the last minute. Lenders need time to prepare the paperwork, check references and schedule the closing. Ideally, the refinancing process should begin two to three months prior to the reset date of the existing loan.

• Find out their options. These may include forbearance (when the lender postpones foreclosure to give the borrower more time to make payments), mortgage modification programs and help with selling the home before foreclosure occurs.
• Watch out for scams. Be leery of "foreclosure specialists" who offer to solve your problems by paying off your mortgage or providing other services for a fee.
• Contact an approved housing counseling agency. For a list of agencies approved by the U.S. Department of Housing and Urban Development provides an online list of approved agencies. Another source of help is the Homeownership Preservation Foundation, which has counselors from HUD-certified agencies and sponsors a toll-free hotline (888-995-HOPE) dedicated to preventing foreclosures.

Trigger Leads: Don't Be Exploited by the Credit Bureaus

Certain mortgage companies will pay top dollar to know exactly who is in the rket for new financing. What's more, the major credit agencies not only allow files to be flagged whenever someone applies for a home loan, they actually sell this private information as leads to the highest bidders!

For a price tag of $25 to $100, names, addresses, phone numbers, mortgage histories, and even FICO score ranges are sold by the credit bureaus to mortgage companies, which then blindly solicit business.

Unfortunately, no legislation exists to prevent credit companies from profiting from this practice. As trigger leads, consumers are simply at the mercy of any number of solicitations designed specifically to discredit the mortgage professionals they've come to know and trust.

Remember, a limited number of sources exist for lenders to obtain mortgage money, and it's unlikely that a borrower will find an unbelievably low rate without an unbelievably high cost. That's why, prior to applying for any loan program, consumers should visit www.optoutprescreen.com to opt-out of credit bureau solicitations and avoid the problem altogether.

As consumers embark on what could be the largest financial transaction of their lives, it's important to work with a mortgage professional who clearly explains all available options and provides comprehensive solutions.

One of the problems with the current real estate world is the abuse on mortgage applications. check on a few FBI articles....  Mortgage Fraud is on the rise.  Check out the FBI Tips to protect you from Mortgage Fraud. 

I just added a new feature to the site... Not only can you access real estate inventory in Marin and Sonoma counties, look for scheduled Open Houses; you now have access to the same in other San Francisco Bay Area counties.  Just click on the appropriate button and search awas.  Ah, the power of information highway :-)