Mortgage ramblings brought to you by Beth

The dramatic urgency of now is one of my favorite expressions. Act now, based of the knowledge you have garnered from your past, to affect your future. Waiting until the future to act means you've left it until too late.

I have always lived my life by this guiding principle. Until, well, now. If one more talking head or bar stool politico says one more time that we need to act now my poor little head is going to explode. I do NOT respond well to being pressured.

If you don't buy this car today, someone else might. Really? I couldn't figure that out myself? I'll take my chances.          

If you won't go out with me Friday night someone else will. Oh, okay. Have fun with that. I sure feel sorry for her.

Call now and we'll double the offer but only if you call in the next ten minutes. Are you serious? I really won't get BOTH my Sham Wows for 19.95 if I call, lets say, tomorrow?

Do you see where I'm going with this? Our "leaders" pushed TARP down our collective throats because we had to act now or terrible things would happen. Guess what? We have TARP and terrible things happened anyway. Not the least of which is TARP. I'll bet it would be a lot easier to stabilize the financial sectors if we hadn't rushed into TARP and now have to fight the public outrage over that mishandled abomination. Hurry up, if we don't give the auto makers loans they will go out of business! We have to act now or millions of jobs will be lost. Uh, guess what? All indications are that they ARE going to fold, millions of jobs may be lost and all that bailout money will go up in smoke.

I don't see anything better for this affordable housing bill or the so called "cram down" bill. Are you kidding me? The major problem right now is the credit freeze. We really think that passing a bill that essentially tells anyone lending mortgage money that they may not have recourse to collect the full amount of that debt is going to make mortgages MORE available? MORE affordable? I say it will take lots of lenders out of the game and the ones who are left will increase their costs and fees to cover future losses. Well that should certainly help the housing markets. Certainly make housing more affordable.

The dramatic urgency of now needs to be put on hold for a few days. I could be completely wrong about the above but I don't see how waiting a few days, tapping a few more people for ideas and really taking the time to think things through is going to hurt. I watch 3 news programs in the morning, Morning Joe, Fox and Friends and the Squawk Box. I'd like to think those folks are smarter than me but the only thing they seem to agree on is that we are not acting fast enough. I respectfully and wholeheartedly disagree.

I feel like we, as a country, are on a first date and are being pressured to "go all the way". Do we really want to go all the way on the first date and be labled "fast"? Or do we want to be the "good girl" who values herself and waits. At least until the second date...

I'm not complaining. Really I'm not. I'm just lost or confused or both.

5) Why can I organize my associates but not the blogs I subscribe too? It makes no sense. My list of blog subscriptions is varied. I subscribe to some because I work with them (Bill), some because the author usually makes me laugh (JL), others because the author is very informative(Scott).It's very vexing that I can't put them into categories.

4) Speaking of associates and blog subscriptions, why can't we anonymously delete or unsubscribe? Come on, you know what I'm talking about. Someone added you as an associate and you don't want to be associated with them for whatever reason but feel no real animosity to them and don't want to hurt their feelings. Or after reading a particularly good post you subscribe, only to find out it was a one off. Most of what they post is drivel. How do you unsubscribe without saying "Hey you! You bore the heck outta me"! (Sardi)

3) The points. The freaking points! I'll bet there is a very good explanation for it but the blogging point system is over my head. Not hard to do since I'm only five feet tall but still... Here's an example: Total points 475. 68 comments of which 9 were from the author. Post was featured. Total points 517. 38 comments of which 12 were from the author. Post was not featured or reblogged. I just don't get it unless the AR gods are giving out consolation points??

2) Feature me???I know this has been blogged to death already but I still don't get it. Now the AR gods will probably take away my meager supply of pretty gold stars for questioning it but it still makes no sense. One person gets featured twice in one day, another never gets featured at all. Similar content but unequal gold stars. Again, systems been good to me so far but it seems like a game the AR gods play to drive the rest of us crazy.

1) Why are Loan Officers, Inspectors, VAs etc the red headed step children of AR? If you are not a Realtor you know what I'm talking about. We don't get any cool tools or toys. Maybe this is just a microcosm of the industry as a whole in which we non Realtor types are considered hangers on?? Why isn't there a place for loan referrals or leads? We Want TOYS!

Yes folks, I Beth Forbes, have a solution to the housing crisis! I'm a genius. The problem in a nut shell is over supply coupled with under demand.

I read an article a few weeks ago, Fear of Financing, written by Janet Guilbault that I felt accurately described part of the cause of the current crisis. The people who can qualify to buy homes are afraid to finance, afraid they don't qualify, afraid they don't have enough money for down payment and closing costs. The people who qualify are also afraid to buy, afraid that they will over pay, afraid that the bottom hasn't been reached, afraid they may lose their job.

So here is my super duper, genius plan. Rather than give a ridiculous amount of money towards rate reductions or throw good money after bad bailing out delinquent homeowners who will never NOT be delinquent home owners (until they become renters) lets lend some money to the only people who are not afraid!

I'm talking about real estate investors. Before you get all crazy and tell me that these are the people who got us into this mess, hear me out. I'm not suggesting lending money to speculators, people who can't verify their income or people with questionable credit ratings. I say, let's get a government program together that lends money to people who already own multiple properties, who have excellent and deep credit who actually WANT to buy up the over supply of inventory. There are a large number of investors who own multiple properties that actually produce income for them who would just LOVE to buy up some of the great deals available right now but are hamstrung by current lending guidelines that say they can't own more than 4 financed properties.

Here are the guidelines. 700 credit score (if you have multiple mortgages on your credit and can maintain that score you're doing great). Must have 5 or more years experience as a multiple property landlord. Must put 20% down on a single family or 25% down on a 2-4 unit. Subject property must debt service at 1.2. Total property portfolio must debt service at 1.0. Must have 6 months liquid cash reserves. Must be able to fully document income and have a total back-end ratio no higher that 45%. Must pay an upfront "loss reserve" payment similar to the upfront MIP on an FHA loan and monthly "loss reserve" payments much like monthly MI.

There are a LOT of people who would qualify for that, would love to take advantage of it and those people would start clearing out the over supply of inventory. Any plan that does not include provisions for these people is underutilizing a private sector solution to what is becoming a government problem. While I understand that this would still be a government subsidized program, I don't see how it's much different from the FHA.

The problem with home values is that banks continue to foreclose and there aren't enough buyers to keep up with the supply. Rather than subsidizing the buyers that already exist ( like the rumored 4.5% rate subsidy), let's make a whole new pool of buyers!

See, told you I'm a genius!

For those reading this who do not know my sense of humor please understand that this whole post was written with tongue firmly in cheek. (although I DO think it's a heck of an idea)

Beth Forbes Your 24/7 Loan Officer (484) 239-2014

Call me for all your mortgage needs. Areas of service PA, NJ, NY, CT, DE, MD, VA, SC, FL, MI and IN

Many people have told me recently that I'm crazy but I think I have finally come to my senses. It's been a long year with lots of ups and downs.

This time last year I was made an offer I couldn't refuse. I was offered a position as the Eastern and Southern Region Sales and Operations Manager for a wholesale lender. I was honored to be offered this chance when jobs were scarce, especially in the mortgage industry. This job gave me the opportunity to work in a different segment of the industry, behind the scenes if you will. It offered me the chance to work on a national level and enhanced my knowledge of secondary markets. I remain grateful for the faith that was placed in me and for the wonderful education I received. One of the things I loved about this position was being able to talk to mortgage brokers and lenders all over the country. These are my brothers in arms, their stories are mine.As much as I enjoyed the camaraderie, I felt like something was missing.

I posted my first blog entry on Active Rain in April of this year. I became addicted to the community. I am not always as Active as I would like to be but I'm trying. What do I love about this community? I love signing on in the morning, looking at the dashboard and knowing that I am connected to people just like me. I love reading the stories of good closings and the challenging ones, hearing your horror stories and your triumphs. I love seeing the advice given and the advice asked for, seeing the community help each other and heck, I love the occasional squabble.

The more Active I became the more I realized how removed I was from what I really love, how far I really was from being in the thick of things, how long it had been since I had qualified a borrower or attended a settlement. I missed all of that so much but I was apprehensive to make another change. As we all well know, this is a tumultuous time to be in the real estate industry and any change is nerve wracking. If it ain't broke, don't fix it.

Sometimes ya just have to jump. With the support I have received from the Active Rain community (those who knew I was making a change and encouraged me, those who have never heard of me but who's stories inspired me) I jumped. I resigned my prestigious (and salaried) position to become, once again, your 24/7 loan officer.

I'm taking this show on the road, I'm takin' it to the streets. If you are a member in the Lehigh Valley, expect a call from me. Heck, if you live in the Lehigh Valley and I happen to catch your eye in the grocery store expect to be handed my card. If you are one of my many on line social networking associates, don't forget I do mortgage loans for a living, I'm very good at what I do and I'm available to discuss your needs or those of your clients.

 I may be crazy but I've never been happier!

Now that's the 85 dollar question, isn't it? There are many wonderful resources that explain the information lenders need to pre-qualify and pre-approve you for a mortgage loan. Call me if you have any questions about this or need to be preapproved. Your mortgage lender reviews and verifies the information you give them and then they determine a payment amount that you qualify for. They will give you an idea of the loan amount and purchase price range you should be looking in.

This payment amount that you qualify for is your total payment amount. This amount includes your repayment of principle, your interest payment and your payments for real estate taxes, homeowners insurance and mortgage insurance as required. This is very important to understand since unless you have a specific property in mind, have already gotten the tax information from your Realtor and a quote from your insurance agent this can impact the amount of loan you qualify for. Huh???? Your lender already told you the payment you qualify for so why would the loan amount and consequently the purchase price change?? I'll let you in a little secret, unless the lender knows the exact tax and insurance payments we (gulp) guess. Please work closely with your Realtor so you are targeting neighborhoods where the combination of price and tax amounts will fit in with what you qualify for.

Now you know what you qualify for it's time to think about what you can afford. These are often two very different amounts. Your lender knows what your debts are but they may not know that you pay hundreds of dollars a year so your daughter can be a cheerleader or that you have an expensive gardening habit. Sit down and write out your monthly and yearly expenditures, build in regular savings as well as an emergency savings and add what your lender tells you that you qualify for in a housing payment amount. You might be shocked to find yourself left with a negative number when you subtract that number from your take home income. When you are figuring out what you can afford be honest with your self. Don't figure out what you can afford based on a raise or promotion you haven't gotten yet, don't discount your "fun" money and most importantly don't short your savings amount.

I will leave you with this, only you know what you can afford. Unless you think you can afford more than you qualify for. Don't be pressured by your lender, realtor, cousin, pastor or anyone to spend more than you can afford. Don't buy with your heart, buy with your head!

There has been so much said recently about Patriotism, Heroes and being a true American. I have kept my mouth shut (mostly).Election Day is really the day we celebrate being Americans. The 4th of July is a great picnic and the fireworks are always appreciated but Election Day is the real celebration.

The talking heads and pundits all have their take on what being a true American means. The armchair politicos and bar stool experts will tell you what they think Patriotism is and who they think is a Hero.

On Election Day my mind turns to someone I consider to be a Hero, a Patriot and a great American. He served in Vietnam, by choice. I'm sure he could have come up with some type of deferment but he didn't. He served his country because he felt it was the right thing to do. He came home from the war and was so ill treated for his service that he hesitated to tell people where he had been. This did not sour or embitter him to his country, he remains proud to be an American.

He owns a small business, has helped many people get started in their careers and has always paid his taxes. According to some, that alone makes him a Patriot although I'm not too sure. He is involved in the political process as an informed voter. He is not afraid to argue a position even if it is not popular. He is not overbearing in his opinions and is always willing to listen to the other side.

This man taught his children to be fair, to be aware and to be unafraid to stand up for what is right. He taught his children that liberal is not a dirty word and neither is conservative. He taught his children that every vote counts and even one person can make a difference. He practices what he preaches and in my mind this makes him a hero.

In a time when there seems to be a spin on everything from the environment to a candidate's wardrobe it's nice to know there are real heroes we can count on. We may not be able to vote for them but we can count on them to vote with us.

Thanks Dad!

I have read so much lately about whether or not it is a good time to buy real estate. There are many factors in favor of doing so. Heck, it's a buyers market! I can't think of a better time to buy something than in a market that favors the buyer. I am surprised that my colleges have not given much thought to the other side of the mortgage business, that of refinancing.

Is now a good time to refinance your existing mortgage? I will go on record as saying now is a good a time as ever. There are some challenges to doing so but the principles of the buyers market spill over into the mortgage side of things.

There are a number of reasons you may need or want to refinance your mortgage and most of these have nothing to do with the market. You may be looking for a rate or term reduction to your existing mortgage. Either of these can potentially save you thousands if not hundreds of thousands of dollars over the term of your mortgage. You may need tofix in an adjustable rate or pay off a balloon payment. You may have taken out a mortgage that required you to pay a Mortgage Insurance Premium that you would like removed. You may need to refinance to take the mortgage out of someones name or you may want to refinance to add someone to the mortgage. These are all valid reasons to speak with a mortgage professional to determine what your options are.

Credit markets are tight right now. That means as a consumer you may find it harder to borrow unsecured money. You also may find that rates are going up on your revolving debt that you have already borrowed. You might want to consider taking some of the equity out of your home to pay for something you need such as education or a child's wedding or you may want to consider taking some of the equity out of your home to consolidate your other debt. These are all valid reasons to speak with a mortgage professional to determine what your options are.

When you seak professional advice, please be clear about what your objectives are. Remember, it is a buyers market and deals are available. Just remember my mother's advice, sometimes you get what you pay for. Never sacrifice trust and professionalism for a good deal.

Yea!!!!!!! You have gotten your mortgage loan approved and "clear to close"! You are ready to go to settlement but, as you may have guesed, there is one more step.

The closing. To close on a mortgage transaction you need to have loan documents prepared, funds ordered and sent to the title/escrow company and a closing scheduled with all parties (you, the sellers, the Realtors and the title company).

The closing department needs to review the loan approval, the rate lock (usually handled by the mortgage processor and/or the loan officer) and the title report to accurately prepare your loan documents. Once this has been done, the documents are sent from the closing department at the lender to the closing department at the title company. The lender will give instructions to the title company on what to put on the settlement statement, also called a HUD-1. Once the title company has complied with the lender's instructions the lender will approve the final settlement statement and you are ready to close!

You will go to the scheduled closing and sign your loan documents. The closer from the title company will guide you through where you need to sign and may be able to answer questions you may have about what you are signing. If you have any questions about a document that they cannot answer please contact your loan officer before you sign it!

This is a complicated process but do not sign anything that you do not understand or doesn't look like what you agreed to. Questions at closing can save you so much time, money and heartache in the long run. Do not take anyones word for something that is not in black and white. Closings can be rescheduled, loan files can be re-underwritten, closing documents can be corrected but once you sign and the deal is closed you have an obligation that will last for the 10, 15, 20 or 30 years.

Congratulations! You're finally done.

It's time. All your documents are in ordered, your property has been appraised and now you're ready to close right? Well, not quite yet.

Your loan application and all supporting documents must be reviewed and approved by an underwriter. What??? You may be thinking "but my loan officer told me I was pre-approved, the processor told me they had all the documents they needed". That is all true but ultimately your loan must be approved by an underwriter. The underwriter is the one who makes the final decision on your approval. It is their job to make sure that all of their company's guidelines for lending are met. They are not out to get you (although it may seem that way), they do not make stuff up to drive you crazy (although it may seem that way) and they usually don't get any pleasure in adding conditions to your loan approval (although it may seem that way).

The underwriter will review all of the information and make a recommendation based on the information that has been provided. Sometimes the recommendation is a denial. Typically though, the recommendation is an approval based on certain conditions being met. This is called a "conditional loan approval". The terms of this are sent to your loan officer and the mortgage processor. If items are needed from you, they will request those and they should notify you of they are waiting for items from other parties.

Once all the conditions have been met, the underwriter will issue what we in the mortgage business call a "Clear to close". This means that your loan has been final approved and can move forward to the lenders closing department.

Okay. You know what your loan officer does for you, what your mortgage processor's role in your loan transaction is, who will order the property appraisal and have a basic idea of what they look for and now on to the pesky title report.

This is very State specific so I will only give a brief overview of this step. If you have a relationship with a title/escrow company or an attorney who does this type of work you can certainly use them. Just let your mortgage processor know so they can check to make sure this company is approved with your lender. If you do not have a relationship established, in purchase transactions I typically advise that you use one of the companies that your Realtor recommends and in refinance transactions I typically advise going with one of the companies that your lender recommends.

The title company will order a courthouse search of the property and compile that information into a preliminary title report. This will include the current and previous owners, the legal description of the property, any easements or other issues as well as any liens against the property. Any liens must be cleared prior to or at closing. If you are purchasing the property, this is the seller's responsibility. If it is a property you own, you will need to take care of the liens.

Every lender requires title insurance and when you buy a home you also need it. This protects you from title defects (undisclosed liens, boundry disputes etc.) and it protects the lender's lien position.

The title/escrow company is also responsible for the actual loan closing, notorizing signatures on legal documents, recording of the mortgage and deed and dispursing any funds.