Upside Down Mortgage

Archive for November, 2008

Credit Subprime

From a loan point of view there are by and large three types, a fixed rate mortgage, an adjustable rate mortgage (ARM) or an interest-only loan. With an interest only loan, you are merely paying the interest portion of your loan. In an adjustable rate mortgage, the interest rate is typically fixed for a period of time, after which it will periodically (for example, annually or monthly) adjust up or down to some market index. In a fixed rate mortgage, the interest rate, and hence periodic payment, remains fixed for the life (or term) of the loan.

With a fixed rate mortgage, payments for principal and interest should not change over the life of the loan, however ancillary costs (such as property taxes and insurance) can and do change. Your monthly cash flow, number of years you expect staying in the house and your general credit past will all factor in to the type and length of loan you should select. Mortgage lending rates are still at a low level, making it a good time to buy a house.

Again, mortgage loans are those loans that are secured against your personal property such as the house you're looking to acquire. For borrowers who have exceptional credit and limited debt, there may be for all intents and purposes no documentation of income or assets necessary at all. Lenders look to lend as much money as possible, but are always looking to accept as little risk as possible.

In approving mortgage loans, lenders in almost all markets rely on credit reports and credit scores that result from them. The higher the score, the less of a financial risk the borrower is supposed to be. We've all heard that anything has its price and mortgage lending is exactly the same. Just about anyone can get a mortgage with the price tradeoff normally being a higher interest rate. Other borrowers may fall into the class of subprime lending.

At the time of making a mortgage loan for purchase of a property, lenders commonly have the borrower make a down payment, that is, make an upfront payment of a percentage of the price of the property. At one time, the necessary amount, or percentage, of a down payment has been tightly reflected on a person's credit history. However, 100% or more loan choices are out there in the mortgage lending space, even for those with a negative credit file.

In determining a clients loan amount, interest rate and cash required, lenders will consider many factors. These factors, in turn, help lenders to calculate their apparent risk of the mortgage loan, that is, the probability that the finances will be paid back. None of us will altogether understand the inner workings of a mortgage lender but the fact of the matter is that mortgage loans are on hand for all kinds of homebuyers with all kinds of credit.

Subprime lending, also called near-prime, or second chance lending, is a general term in reference to the practice of making loans to borrowers who do not meet the criteria for the top market interest rates because of their flawed credit history. Subprime lending carries risk for both lenders and borrowers because of the blend of high rates, weak credit history, and unknown financial circumstances often coupled with subprime applicants. The term "subprime" is in reference to the credit status of the borrower, not the interest rate on the loan itself. Statistically, roughly 25% of the population of the United States falls into this category and while there is no sanctioned credit profile that describes a subprime borrower, most in the United States have a credit score less than 620.

There is a web presence of very reputable lenders who are interested in helping you obtain a mortgage loan. Do a little research, get a few ideas from these lenders as to what you can qualify for, and then go out and buy your dream house. Mortgage loan rates are still at a low level, making it a good time to take the step to homeownership. Find the way to pay for your home is a necessary evil but the thought of buying a new home should excite you, not frighten you. Find the way to pay for your home is a necessary evil but the thought of buying a new home should excite you, not frighten you.

About the Author:

WebSourceMortgage is a resource site for those considering mortgage loans or mortgage refinance. Visit us or check out our article directory for free article distribution.

Article Source: ArticlesBase.com - Bad Credit Mortgage Loans-You Can Still Get Your Dream House

Credit Crunch due to the Subprime Mess

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Loan Modification Arrests

If you are just starting a loan modification business, adding loan modification services to your existing business, or are about to do either, you will need to research and address several different legal issues before you begin. Every state has different rules and laws regarding modifications, so it’s best to find this stuff out beforehand, rather than after you’ve been fined or even arrested for breaking the law.

First off, you’ll want to find out who can do modifications in your state and who cannot. Are there any licensing or certification requirements? Are real estate brokers allowed to do modifications? Are mortgage brokers allowed to do modifications? Can you simply outsource an attorney to write the letters for you, while you just handle the sales and “processing” (i.e. you do everything but sign the pre-written letter that you send over to the attorney to print and sign)?

You’ll want to decide which states you want to do modifications in, and what the different licensing requirements are for each state. Furthermore, you may need to get special licensing or certification, and possibly submit to expensive audits, in order to do modifications on FHA and VA loans, so make sure you look into this before you agree to take on an FHA or VA loan modification.

Can you pay referral fees to just anyone in your state? How much are you allowed to pay? Can you pay referral fees to mortgage brokers and/or real estate brokers? Many state-level real estate and mortgage oversight boards and commissions can get really touchy about this issue, so make sure you don’t cross any lines you shouldn’t be crossing. What about referral fees to accountants, bankers, and financial planners? Many states have regulations about referral fees to these professionals too, so find out before you start throwing money around.

Be careful about who in your company has access to your clients’ personal files and information. For that matter, be careful about who even discusses these issues with your clients and their lenders, as your release forms will necessarily be pretty limited in their ability to protect you. Some states even require you to have locking filing cabinets and a certain level of firewall protection, password logins for you computers, and other internet safety before you can even begin your first modification.

Be aware that some states do not allow you to charge up-front fees for your services. Even if your state doesn't care, you run the risk of a lawsuit by a frustrated client if the modification is unsuccessful, even if it’s not technically your fault.

Consider having an attorney draft some of your forms, including your Client Authorization, your Client Services Agreement, and any other disclaimer or important form. These are your only protection from lawsuits, so don’t let them be shoddy and loose. Spend the money to ensure that both you and your clients are fully protected. For that matter, you may even want to print this article up and take it to a local real estate attorney to help you answer these important questions. Your state real estate and/or mortgage commission may be able to help you as well.

About the Author:

If you'd like to learn more about starting a loan modification business, or if you want to access all the necessary forms, spreadsheets, and templates, click here:

http://StartALoanModBiz.com

Matt Sparks is a successful entrepreneur, both offline and on. He is also a licensed mortgage broker, employing real estate broker, and Realtor. He has written books, articles, and blogs about small business, real estate, finance, New Urbanism, and sustainable cities.

Article Source: ArticlesBase.com - Loan Modification Legal Issues to Watch Out for

Phoenix Arizona Criminal Defense and DUI Lawyer

Mortgage Relief Law Center Irvine Ca

The Feldman Law Center, a Law Firm that provides nationwide loan modification and debt relief services announced the recent acquisition of former Lending Tree Vice President Mr. Jerry Koller to head up their expansion. Mr. Koller brings us a wealth of knowledge, says Mr. Steven C.Feldman as Koller has worked for Mr. Anthony Hsieh Former ETRADE Financial CEO who then founded HomeLoanCenter.com and sold it to Lending Tree in 2004 for an undisclosed sum. With over 20 years in the finance and mortgage industry Feldman feels the long awaited acquisition could not have come at a better time.

Feldman Law Center was one of the original loan modification attorneys providing loan modification services throughout the country and has grown at a record pace over the past year. Back in the day, homeowners facing foreclosure or immanent hardship due to interest rate adjustments didn't know what a loan modification was and with the recent development of our Internal Management System Software and the acquisition of Mr. Koller we can structure our growth accordingly as to not adversely effect our day to day operation. The newly developed IMS system will improve the way we do business and allow us to process and negotiate over 5,000 loan modifications per month. Currently the Feldman Law Center manages a large case load and negotiates pools of loan modifications with the major loan servicers like Country Wide Home Loans, Chase and CITI Mortgage. The original staff of five has grown to over 65 in a year that most new nothing of loan modifications being used to stop foreclosure. The Law Offices occupies over 10,000 sq.' in Mission Viejo, Ca. and is currently negotiating the lease of another 35,000 sq.' in Irvine, Ca. Coincidently within a mile of the former Lending Tree campus Mr. Koller frequented. Feldman sees the rapid growth as the next "refi boom" and it should be smooth sailing with Koller aboard. "We couldn't do it without a man of his caliber" says Feldman.

Mr. Koller went to every Loan Modification Company and Law Office that provides loan modification services in town before settling on the Feldman Law Center. When asked why Koller says, "He has the reputation and I want to work for the best". When asked why loan modifications, Koller says "I like helping people and I miss the fast paced operations".

About the Author:

The Feldman Law Center is owned and operated by Steven C. Feldman, attorney at law. Mr. Feldman has been a member of the California State Bar since 1983 and is well versed in federal
loan modification
law.

Article Source: ArticlesBase.com - Feldman Law Center - Feldman Law Center Acquires Former Lending Tree V.P. To Head Up Expansion