The Top 10 Reasons

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Archives for August 2008

The Top 10 Reasons To Not Vote For Barack Obama

August 27, 2008 by Brad G

1. First off, I wanted to start with that I do not support John McCain or anybody currently on the ballot. The person I wanted to vote for dropped out because he kept to his word that if not elected as the Republican candidate he would not run as an independent. I will not tell you who it is now but at the end of this. I am not a Republican or a Democrat. I believe that when you pick a political party you really are segregating yourself from helping the country do anything productive. I pick no allegiance except for the person that actually wants change and will help all Americans not just the ones who vote for them. The sad thing is that there really is no difference between Democrats and Republicans as you can see by the last couple of elections. The final results come out to 51% to 49% every time. Does not seem like a lot of difference and no “Change” ever happens. So lets see why Barack Obama cannot guarantee us anything besides having a new person to look at on the TV when the President gives us a State of The Union address.

No Obama Ringer T

2. Barack Obama’s defense plan sounds like George Bush’s current plan. More and more government. On Barack Obama’s website it clearly states that he supports the idea of increasing the size of the U.S Army by 65,000 and the Marines by 27,000 troops. Its funny because on his website the very next point it has him talking about leadership from the top. The current leader of the U.S is not doing a good job of doing that if its hard to find people to want to join the military. Barack says that by increasing the amount of personnel it will “help units retrain and re-equip between deployments and decrease the strain on military families.” So if it is really about the families then why would you want a larger government to begin with. I understand the whole concept of having more troops on shorter deployments to keep them fresh but shouldn’t we be looking at a policy where we need less troops. Saying that you want another 92,000 troops ready to go at anytime does not solve anything. It is going to raise taxes because now we have to pay more salaries and more for equipment to suit them. When you say you need more troops I get the feeling that you are wanting to plan another attack on a nation. I remember a quote from one of my favorite movies (Spies Like Us starring Dan Aykroyd and Chevy Chase) where a Air Force General has had this secret base and his plan all along was to make a situation to use his new weapon. The weapon was a Soviet ICBM and was set off by Chevy Chase and Dan Aykroyd from Russia to be shot at us. The weapon we had was a laser that would shoot down any incoming nuke. Well, the laser missed and after it missed the protocol was to do nothing and let the nuke hit the U.S with nobody knowing it. The General told everybody that “a unused weapon is a useless weapon.” Pretty powerful statement knowing that he knew he was going to be responsible for the deaths of millions of Americans. So Barack, if you want more troops then you have to use them? Because your not just going to have them sitting around doing nothing, right? There was one guy who was running for office this year who suggested that we need to lower our troop levels and as a matter of fact bring all of them home. Do you think by doing this it would save a couple lives? Probably a lot of lives. This guy’s idea was to close every single base around the world that the U.S runs and bring the troops home because the goal of the United States Military is to protect its borders not bases we run in other country’s. His idea was to overhaul the intelligence communities (FBI, DEA, CIA) and make them work together instead of working with leaders of other opportunistic countries. He was also a retired flight surgeon for the U.S Air Force. Have to listen to somebody who has been there. Not going to tell you who yet, but soon.

3. Barack’s foreign policy states that he wants to do more of being in every body’s business. On his site he has all of these great plans to help out other nations like Israel, Sudan and other nations in Africa. What have any of those nations ever done for us? I cannot think of one. After reading what he had to say I feel like we would be getting in the way again and even more than before. On July 19, 2005, Obama passed a bipartisan amendment, along with Senators Chuck Hagel (R-NE), Patrick Leahy (D-VT) and Judd Gregg (R-NH) to provide $13 million for the Special Court for Sierra Leone. That’s right, he signed a bill to give $13 million to keep a court in Sierra Leone open to be able to convict all of the bad people that are committing crimes to its citizens. I do not like what is going on over there, but its not your right to give them $13 million dollars to run a court. Wouldn’t it just be easier to send the Navy Seals in and take out these rebel groups instead of spending the money? How about all of the rapes, murders, burglaries, and other crimes that are happening in Detroit, MI? Do you think some cities around the U.S could of used that money (that was pulled from mid air because it does not exist anyways) to keep things up and running? His stance on Darfur was to raise $20 million dollars for the African Union Peacekeeping mission to make sure the U.S is the world leader in ending the genocide going on there. He also had another bill passed and this comes straight from his site, “Obama revamped U.S. policy in the Congo to include a commitment to help rebuild the country, develop lasting political structures, hold accountable destabilizing foreign governments, crack down on corrupt politicians, and professionalize the military. The bill also authorizes $52 million in U.S. assistance for the Congo“. This sounds all too familiar. $52 million dollars for the Congo? WTF? Aren’t you already bashing George Bush about what’s going on in Iraq? Its probably that $52 million does not sound as bad as $1 trillion in Iraq and that is why it has gone un-noticed. When we add it all up that is $85 million dollars going to help the people in Africa and not going to support the people of the United States. You are running for President of The United States, right? Why do we need to support…anybody with money? The U.S government should not be handing any tax payers money over just because it looks good. A good foreign policy would be none at all. Let those nations decide what they want to do. If we like them then we could do something like…business. Yea, like trade goods and services which leads to prosperity. If there is one way to always make someone aware of something its always in their wallet. There is this guy that was running for office that suggested this because giving any money to another country is a competitive dis-advantage to us because we do not have that money to do things.

4. Barack’s “universal health care system” is not going to work. It sounds great because it is told to us that all Americans get it. I even thought this was great at first. No more paying anything. But, that is not how it works. It is just going to come from increased taxes. I don’t like increased taxes so how is this better? Its not. What will happen when you let more government get in the way is there will be more mandates set forth that the insurance companies have to follow. The drug companies are spending more money on advertising than they spend on research and development. They do this mainly because when they get one drug that sells good the have to sell the crap out of it to stay in business instead of focusing on making better and cheaper drugs. With Barack’suniversal health care it gives more government control than before because now the Physicians boss is the government. He says he will make health insurance companies more competitive by making them pay out a reasonable share of their premiums for patient care instead of keeping the profits. I’m confused. If we have a “Universal Health Care” why would there be a need for Health Care Insurance Companies. I would think that you would force all of those companies to go bankrupt the next day because now the government would be running all of the administration things. Isn’t that what it means. I’m starting to think that what it means is that every body gets health care and the same large health insurance providers stay in business to do all the admin and clerical work. The government just writes the check to the health insurance companies after you come in for a visit, no questions asked. The government has to print up more money to pay them and the health insurance companies can now do whatever they want to a degree because the government is writing the checks. What this system does not promote is “good health.” With everybody getting health care regardless of your life style it does not give back to the people that try to live a health life. If anything, it penalizes them. Take for instance a person that works out 4 days a week, does not smoke, and eats right would pay the same as somebody who smokes a pack a day, is obese, and obviously does not work out. Both people pay the same even though the person who keeps them self healthier has to pay the same premium as the unhealthy person. I hate knowing that I keep myself in good shape and have not been to the Dr.’s office in two years and I have to pay the same as some people I know that do not live a healthy life style and go to the Dr’.s office 6 times a year. The Dr. always says to them that you need to eat right and exercise. Really? There is this other guy who was running for office that is against “universal health care” because he says that government has proven it cannot manage it and has no business being in it. What he suggests is letting each American decide what Health Insurance Company they want to go with. By doing this it would let new health insurance companies start up and make their own rules, not the ones that government mandates. By doing so it will fight the large health insurance providers into bringing down premiums. He also suggested the idea that certain health care providers should start giving health check ups and if you are healthier than the next you will get lower premiums. I don’t know about you but I think I could take an afternoon off from work to get a physical and some tests to show how healthy I was if it was going to save me $30 a month in health insurance bills. I think that would make every person who likes to get McDonaldsevery day think again about getting it because they know that if they ate healthier it would save them a lot of money. This same guy is not only a Senator but is actually a Dr. himself. He has delivered over 4,000 babies before he left medicine. Do you think this guy knows a thing or two about health care or do you want to go with the career politician who wants more government control?

5. Barack’s energy plan is pretty impressive sounding. He wants to give a tax credit to all Americans feeling some pain at the pump (When are we never feeling pain at the pump? How about just lowering taxes?). Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future (Where is this $150 million coming from, let me guess taxes?). Within 10 years save more oil than we currently import from the Middle East and Venezuela combined (Agreed, but usually politician talk.). Put 1 million Plug-In Hybrid cars, cars that can get up to 150 miles per gallon on the road by 2015, cars that we will work to make sure are built here in America (Sure, but are you going to build these with your hands). Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025 (How can you ensure anything? This is just more politician talk to help you get elected.). Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050 (Why promote any program when what needs to be done is say “hey consumer this type of energy pollutes and this one does not, which one do you want?”). There is this guy who is trying to do a lot of the same things but in a better way. Get government out of the picture and let the market dictates what happens. Barack’s plan is to enfore more gvernment involvement (getting in the way) to make it look like something is getting done when he is in office. It’s always easier to bring in the EPA to clean up your mess while you go into bankruptcy then bail you back out on the tax payers dollar. How about no! Leave it up to the consumers to decide what they do and do not want. People are not dumb, they will figure out a whole lot faster what is better when your not there to bail them out. Nobody learns anything Barack’s way.

6. Barack Obama’s social security plan is to have people and their employers that make over $250k a year contribute 2-4% more of their pay checks to help balance out what is going to be a lack of funds within the next 10 years. At first I thought this was a good idea and it mainly is because I do not make over $250k a year. Then I thought about if I did make over $250k a year. I came to the conclusion that I would be angry because now you are taking another $10k out of my pocket on top of the $30k you already took to fund a program that does not work. I would rather keep that money in my pocket and invest it and make a 5%-9% return. I could do this probably because most people that make that kind of money a year are smart enough to figure out that they can make more with it than the government can. The people who struggle with any financial education would rather other people just “take care of it” for them and let the government tell them that there will be money waiting there for them when they are in their 60s. I started wondering if this system is ever going to work moving forward. I came to the conclusion that it is not. What we are doing is spending money to have the Social Security System running which comes out of those dollars we pay into it. I understand that there are people out there that need some sort of income because they cannot work due to disabilities or other mental illnesses, as I have an aunt that (supposedly) has one. For everybody else though this system guarantees nothing and all that Barack is doing is looking for a way to tax the rich. How about we just get rid of Social Security once and for all? The guy who was running for office was one of the only Senators to suggest this. He showed how this system does not work and is not ever going to work unless the government starts taking more which leaves less for the people to have to get by with. He instead suggested personal savings accounts (tax free forever) and letting younger people get out of the system now because there is not going to be anything left for them when they get old. What a great idea! Get government out of my way and let me invest it back into the companies that are going to grow this nation instead of giving it to one (government) that has proven it cannot manage a retirement system.

7. Barack Obama’s stance on taxes is not that bad, its just that all of his other stances need tax dollars to stay afloat. Some of his points are to provide tax rebates up to every American worker (how about just lower our taxes for good and stop spending on useless programs), establish a $10 Billion foreclosure prevention fund to help families keep their homes (so taking more tax payers dollars to not only bail out the family but the bank too? Good ol’ government just printing up money again and letting our dollar value fall), provide another $10 Billion to hard struck state and local governments due to the housing crisis so they can keep vital city services open (so one government bailing out another government for making unwise decisions and approving every housing permit because you thought this would mean more property taxes and revenue for the cities even though it backfired in their faces pretty fast. Its okay, we will let the U.S government print up another $10 Billion and lower the value of our dollar), and extend unemployment benefits to people who have been out of a job for a long time. I can relate to all of these because I use to work at a mortgage company but lost my job when we could not longer approve anybody on a 30 year fixed rate mortgage. I in turn lost my job and have been on unemployment benefits for 8 months now because I cannot find a new job yet in Michigan. I do not have that many bills and actually have about $400 left over every month to spend on whatever I want. Some of my friends can’t believe I have just not taken any job just to get off of it but I told them that I would only be making about $1k more a month than what I am getting and after income taxes and spending money on gas just to get to work it wipes out any monetary advantage. If anything, I am getting back all of the money I have paid in income taxes over the past two years and have been able to enjoy my summer. I hate saying it but its true. I started thinking again about what if we did not have any income taxes at all. Would you believe that this same Senator suggested getting rid of the IRS all together. He said that if he was elected President he would get rid of the IRS the very next day. He says that the income tax is stealing and its not Constitutional. He says that by doing so it would eliminate the money needed to keep the IRS functioning (saving millions of dollars a year in taxes) and put the money back into its citizens. Sounds like a nice guy. I wonder why more people don’t like this guy. Barack Obama wants to make filing your taxes simpilier but at the end of the day you are going to be paying more to support his programs.

8. Barack Obamas education plan is definitely good. I can tell that it has the best interest of the students at the fore front but when looking at all of the points he makes on his website it sounds like more political talk to try to get him elected. There is so much that he wants to do and I can tell that his intentions are in the right place but one of the problems he brings up is funding for all of the schools. The only mention he has in his points of a tax credit is for college. I like that idea because colleges around the country are ripping kids off but we are missing the point. If we looked at everything he wants to implement you have to start wondering where that money is going to come from. Barack plans to keep all of the current education programs open and add more on top of it. Where does this money come from? If you guessed taxes you are right. To get more education programs you can expect to pay more taxes if you elect Barack Obama. What Barack is telling us is that he wants to fund even more money to the Department of Education which is proving to all of us that it is not working. Even Barack says that only 70% of all high schoolers graduate and those that do read at levels way below their age level. This other guy that was running for President suggested shutting down the Department of Education completely!! What, who says that. Most people when they hear that they will turn on you and say that you do not believe in our kids education and their futures. He counters with getting government out of the way you leave it up to each individual state to teach the kids what they want, not some know it alls in Washington D.C. By doing this the States can focus on what technologies and businesses are popular in their state so hopefully when the kids get out of high school they will want to stay in state and start their families and careers there. By getting rid of the Department of Education Americans would save $59.2 Billion dollars a year. Pretty ridiculous number huh? Barack Obama wants to increase that number and it is going to come from your Federal Income Taxes. This other guy wants to help the American population save $59.2 billion a year and let the citizens of your state decide what you want your kids to learn. By doing so it will hopefully keep the economy of your state growing as it competes with others.

9. The one point he makes about families in the United States got me thinking pretty deep. I come from a strong family and was interested in what had to say. I just do not know what to say. His intentions are good but again he wants to tell all of us that the government needs to be in your business. He wants to “provide a living wage” for people. Great, you raised the minimum wage which buys you nothing. Inflation is out of control and now since you told all employers that they need to raise wages or lose their business license they are going to do that and probably let another person go making the person that got the raise work harder. If you read all of his points on his site about family all that I see is him wanting to add more funding to more programs and more services. I agreed with some of it (as I will with all candidates) but the main issues is that Barack Obama sees the only way to help out America is by making the decisions for them.

10.  Barack Obama is not a bad guy by any means. He means well. I know that he is trying to make “Changes” but in reality it sounds like more of the same but just from somebody who can speak a little better than the current President. I know I have gone over a lot of his points and I hope you can take the time to ask yourself this one simple question, “When I wake up in the morning do I want more government telling me what to do or can I make my own decisions?” If you answered that you want more government to tell you what to do you have officially called yourself an idiot. Sorry, but its the truth. If you answered with I don’t even know what the government does for me on an everyday basis than you are on the right path. Every time I have ever looked at a paycheck and saw 15% of my income gone for taxes that I do not even get a receipt for it kind of makes me mad. Now to know that if I vote for Barack Obama its probably going to be 21% of my taxes to pay for things I do not use. The only reason I can think of that would be great for Americans if Barack Obama was elected President is because he is black. This would eliminate affirmative action once and for all regardless of what race you are. How could any body from a minority complain that they are being discriminated against based on their color? You can’t, there would be a person who is from a minority (I feel that word minority is over used nowadays because if you add up all the minorities in the country they out number the majority) who occupies one of the most powerful jobs in the world as President of The United States. I feel the whole race card would be brought to an end the second he would take the oath. From what I have read about Barack Obama from his website and from the videos I have seen I feel that anything but “Change” is going to happen. Nothing he says or promotes is going to change the day to day life of any American. The sad thing is that most Americans are raised to believe that the government has all the answers. Then you get older, start working, raising a family and start wondering what the government actually does for you from day to day. Its not much or anything at all. If you want to learn about a person who has some great ideas and really has his head on straight I would highly suggest reading about Dr. Ron Paul at one of his websites or just doing a search about him. Better yet, here is one of the most popular videos on YouTube ever.

If you really believe in “Change” America you will learn to change yourself without having government do it for you.

Filed Under: Politics

The Top 10 Reasons Realtors Do Not Like FHA Loans

August 22, 2008 by Brad G

1. The FHA loan has became popular once again over the past 6 months mainly due to it being one of the only 100% financing loans able to use to buy a home. With all of the major mortgage companies going bankrupt around the country they all lost their ability to use their own loans. What I mean by using their own loans is that many companies, let’s say Quicken Loans for example worked with larger banks and investment firms and they wrote their own guidelines. This means that they made their own rules and as long as a bunch of underwriting guidelines were met than the loan could be written and sold on the secondary market for a profit.

2. Realtors loved this during the days of the refi/purchase boom. Since the mortgage companies had their own guidelines a person looking to buy a home could buy just about anything they wanted as long as it had four walls and a roof. It was up to the person buying the home to make sure that the house was up to par with a home inspection.

3. The mortgage companies did have some standards (have to give them some credit). They would not allow you to buy a home that did not have any type of flooring covering the sub floor. This means that the whole house had to be carpeted, tiled, or wood floors down to cover the sub floor. The kitchen had to be complete. You could be missing a dishwasher or a fridge but the sink had to be in. The mortgage companies would find out when the appraisal got back because in the report it would state what is missing and there would be pictures on it too.

4. Now when the FHA is the only option out there for people to get approved on a loan some new standards have been imposed. The FHA’s main guideline is that a home inspection must be done on top of an appraisal. An appraisal and a home inspection are two different things. An appraisal looks at the features of the homes compared to the other homes like it in the neighborhood and determines a value (even if it is missing flooring). A home inspection looks for things like leaky pipes, bad foundation, broken windows, bad roof, mold, and others.

5. If the home that the buyers put an offer on fails the home inspection than the loan cannot be closed until all of those things that made it fail the inspection are cleared up. At that time the loan can close. In reality though, how many people are going to go and dig into whatever space they might have on their home equity line of credit just to fix up the house to be able to sell it to you in a couple months after all of the repairs are fixed. What they are going to do is wait until somebody else comes around that is approved on a conventional 30 year fixed rate mortgage that does not need to pass a home inspection to sell the home. More than likely the people trying to sell the home are probably upside down on their home anywyas and can’t afford to put any money into it because then they will need to bring money to closing. If somebody does not come to them with a normal conventional loan they will probably have to foreclose on the house.

6. With the home not passing the inspection you already know what the look on your realtors face is going to look like. Its going to be one of disbelief and anger at the same time. Since realtors get paid on commision they just waisted a bunch of time on a deal that has a 95% chance of not closing now. The realtor can either keep looking with you for new homes or just bail on you completely. In this real estate market you might get lucky and find somebody who will stick with you because the realtor is not closing a lot of deals right now because not that many people are getting approved on mortgages at all.

7. The FHA requires all borrowers to escrow their property taxes and home owners insurance with their mortgage payment. This means that they now have to bring more money to the closing table to suffice what they need. In total they need money for escrow, down payment, and closing costs. More than likely the person looking to buy the home do not have this kind of money in a bank account any where so this becomes a lost cause.

8. FHA loans require twice as much paperwork as a normal loan. With all of this paperwork mandated by the FHA there always seems to be some thing that pops up and deters the loan from closing. This alone can drive a realtor crazy because all they want to do is show you a house that you like and close the deal so they can move on to the next client.

9. If you are in the market to buy a home right now and are using a pre-approval from a mortgage company using a FHA loan you better get a move on. On October 1, 2008 the FHA is implementing new guidelines that gets rid of all down payment assistance programs and requires borrowers to come to the table with 3.5% downpayment now. I hope you have told your realtor that you are using a FHA loan because imagine how mad they will be if they find out in the middle of September that you have one and the offer you put on a house gets accepted and then the loan cannot close. If you want to get into a house and can only get approved on FHA you better start hustling because it takes most mortgage companies 3 weeks to close a loan and about 4 weeks to close an FHA loan due to its lengthy paperwork.

10. If you want to see your realtor make a funny face just say the words “FHA” to them. You will probably be asked if this was your only loan that you could get approved on. Do not be insulted because of it, the realtor is just trying to cover their butt and not waste a lot of time showing you houses that you will never be able to close on. With so many quirky guidelines you can see why the FHA does this. To really see why they are so stringent you need to step into their shoes. Why would I want to lend you money on something that is not even up to code? If I lent you the money and you defaulted on the home than all I (the FHA) would own is home that is broken down, beat up, and probably needs thousands of dollars to bring it up to code to hopefully sell it. I guess we can thank the U.S Government for doing at least one thing right and making sure we are not buying run down houses.

Filed Under: Real Estate

The Top 10 Reasons More Mortgage Companies Will Go Bankrupt When The FHA Changes Its Guidelines October 2008

August 19, 2008 by Brad G

1. Since 2006 some 270 major lending institutions have failed and gone bankrupt. This does not include the other hundreds or thousands of other people who got their mortgage brokers license hoping to make a quick buck only to fail when the housing bubble burst. What is really crazy to think is how many people lost their jobs within those 270 companies. Estimates right now are in the 100,000 range. This includes everybody from the loan processor, the mortgage banker, IT people, and leadership with the company.

2. When the new housing bill came out it came out with a bunch of new standards that the mortgage industry is going to have to follow. All of the major mortgage companies that are left and still surviving have already gotten rid of sub-prime loans such as the negative amortization mortgage. Good luck even finding a a mortgage company to do a home equity line of credit for you. Many have decided to wait it out before writing second mortgages all together. All that they have left to do for people is normal conventional loans like the 30 year fixed rate mortgage.

3. Many lenders saw their investors leaving them because the mortgage market was just way too risky to stay apart of. Many major hedge funds and investment firms like Bear Stearns were bought out or taken over by the government (good job government, save a loser and put us more in debt!).

4. So the FHA decided to change some of its practices to try to help this mortgage crisis out. They increased the loan limits for people trying to refinance their mortgage or buy a home. While many major mortgage companies like Quicken Loans did not do FHA loans during the height of the refi boom, they realized they better start doing them now.

5. Many mortgage companies did not do FHA loans because they were twice as much work as a normal loan to do. The paperwork was ridiculous and getting all of the inspections and certifications on top of the appraisal was just not worth it when the mortgage companies could do the one that was already in their product lineup instead of dealing with the FHA.

6. When the investors started bailing on them the FHA became a great option. Most mortgage companies could only do refinances up to 90% LTV (loan to value) or home purchases up to 95% LTV. The FHA allowed purchases up to 100% LTV and refinances up to 95%. This was short lives also when the FHA lowered it down to 97% purchase because with all of the values dropping around the country they did not want to hold onto mortgage notes that were higher than what the value of the house was in less than 6 months.

7. Now the mortgage company could not do their own loans and had a max up to 90% LTV. FHA was their only option with purchases and refinances. FHA loans comes with some weird guidelines. In most cases you could buy a home without a credit score as long as you could show some sort of documentation that you have paid a cable bill, rent, water bill, or other ford of payments. This was perfect for people who have never had a credit card or a car payment and was especially good for first time home buyers. The mortgage companies could either start doing FHA loans or go bankrupt. Tough decision huh?

8. All of the mortgage companies jumped on the bandwagon mainly because they had to. They could not qualify anybody on their own guidelines because pretty much everybody who owns a home has seen 20%-30% of the equity of their home go bye-bye. You know that hardly anybody ever saves up any money to put as a down payment on a house so the FHA 100% financing was their only option. After all of the major mortgage companies let a lot of their employees go they started training their mortgage bankers about the FHA loan. The employees started understanding how it worked and many mortgage companies started closing a lot of FHA loans to the point where it was now 50% of their business. Things looked like they were going to level out and the FHA was going to be the life saver it was meant to be.

9. Many mortgage companies thought they were doing well enough again to hire people so they started doing it. I even started getting a few phone calls and e-mails from a couple of resumes I have floating around the internet. Since I did use to work at a mortgage company in the past for a couple years it would look like on paper that I would love to go back to it. All of these mortgage companies (especially mortgage brokers) were telling me how much money they are making now with the FHA loan. This sounded like the same speech I heard when I started working for my previous employer. They kept telling me that I could be making $20k a month. Sounds pretty good, but there is one thing they were not telling me. The $20k is revenue, not profit (take home). After expenses it was more like $3700. The thing with mortgage bankers is that they do not make a lot of money, their Regional Vice-Presidents do. Sure, there are some mortgage bankers that made around $100k a year but most of them had been there for 3 years or longer and did not mind working 80 hours a week. If you broke it down to what they would make in a 40 hour work week it was more like $45k a year. Anyways, I enjoy more talking about mortgages and finances more than working for them anymore. I respectfully declined all offers because I knew this short burst of business was not going to last. And it didn’t. This short burst of new business from the FHA started around January 2008. The FHA October 2008 guidelines will be getting rid of down payment assistance. Down payment assistance is a joke to begin with. All it is is a way to get a business to lend you money to help you close on the house and the seller would have to take the profits out to pay for it in the closing costs. This is really a bad practice because it does not promote anybody taking an initiative in saving up any money to buy a house. The FHA realized this and recognized that what they were doing was enabling people to get into a house and instead of mortgage companies continuing the mortgage mess, it was them doing it. One of the other guidelines that will be changing with the FHA on October 1, 2008 is that everybody buying a home must put down 3.5% plus their closing costs. This eliminates a lot of people looking to buy homes right then and there. So what does this mean for all of these mortgage companies?

10. It means that there are going to be less home owners that can get help to refinance their home and less potential home buyers that can get a loan. A friend of mine that still works at a large mortgage company told me that a lot of the people are nervous for the month of October because at that point they are going to lose a lot of business due to the new guidelines implemented by the FHA. I was told by this person that around 90% of their new home purchases already use the old FHA guidelines and if the new ones were to get into effect tomorrow, 60% of that 90% could not qualify for a loan. With less business for mortgage companies to write, expect to have more mortgage companies, mortgage brokers, and banks go into bankruptcy. This means more job losses and more time that our country will spend in this mortgage debacle.

Filed Under: Mortgage

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