The Top 10 Reasons

1. Well, it actually is kind of official today that Fannie Mae and Freddie Mac are bankrupt. CNN has the low down on why it happened. The unfortunate part is that they really are not bankrupt. I think its interesting how two organizations that were started by the U.S Government are now being bailed out by the U.S Government. It really makes me want to say “WTF?”

2. Fannie Mae and Freddie Mac were set in place to help free up more money for banks to lend too. In the good old days, banks could only lend in mortgages what they had in their own accounts. As an example, the money they could lend would come from the money you deposited with them for your checking or savings account. The bank would pay you a small rate of return on your money and would lend it out. This is

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

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.

1. Right now around the country your home is taxed based on a percentage of what the value or home is worth based on what the county assessor thinks it is worth. As an example lets say your local county government has a property tax of 1% and your home was assessed at $300k. You would pay $300k x 1%= $3000 a year in property taxes.

2. This is a great system for the county when property values are going up because as your property value goes up the amount of money you pay in property taxes goes up. The county government does not look bad at all because they did not have to raise the percent to bring in more money, it was the market that did it.

3. For the most part people do not complain about paying a little more in property taxes because they have been

1. If you are thinking about buying a home soon you better be putting offers in very fast. On October 1, 2008 there will be new guidelines coming in to play that are administered by the Housing and Economic Recovery Act of 2008. This new housing bill is going to put a major squeeze on people looking to buy a home after that date so you better get a move on. 

2. Under the new guidelines set forth by the FHA the minimum amount down payment will go up to 3.5%. It is currently at 3%. Not so much of a big deal but it does account for more money that you will have to come up with. On a $100k mortgage that is another $500 plus your closing costs.

3. FHA loan limits will decrease which will mean fewer people will be able to get approved on

1. First off there should only be one or two reasons why you would even want to refinance a home after closing on a home. The only time it makes sense to refinance in such a short time period after closing would be to take cash out of the home. Good luck doing it though. You will only be able to get approved on a new home loan is if the home was given to you in a will or a gift of equity (which is when a parent or relative gives you the house for 50% of what the value is).

2. Many parents will have paid off the house or owe little on it and decide to give the house to their kids to help them get started with their lives. Instead of charging the kids full price them give them a deal. Most will just sell them the house

1. In most instances homes usually can have two mortgages placed as a lien against a property. Under normal conditions you can have a first mortgage and a second mortgage. Some companies during the refi boom were putting a third lien against the property. Local banks and credit unions were the ones that did the third lien.

2. When people are trying to refinance their home the mortgage company will look at their credit report and will contact the local city or county government office to pull up who is on the title of the home and any outstanding liens against the property. If you default against anything including credit cards or if you are behind with taxes these can be put as a lien against the property.

3. What these companies do is register the lien with the county and it is recorded. If you ever plan to refinance the home or

1. Credit counseling is an industry that has popped up because of a lack of one very simple thing, education. Its the thing that is not taught in our schools which is causing all of this financial crisis the country is jammed up in. All that a credit counselor really does is say to you to pay your bills on time. The best part is that you are going to pay them a fee to tell you to do that. Doesn’t that sound a bit backwards. You are getting bills from creditors telling you to pay your bills by a specific date, you can’t figure it out without hiring somebody to tell you how to do it.

2. Some of the other features credit counselors do is tell you what balances you need to be working on to get them paid down faster. You will usually be told to do something like

1. Home loans are getting harder than ever to try to close nowadays with all of the changes going on in the mortgage industry. During the refinance boom years of 2002-2007 everybody could get approved on some kind of loan for the most part. Even if you tried to get approved on a normal conventional kind of home loan and could not get approved you could always fall back on a no income no asset loan (NINA) to close the loan. This loan was considered a sub-prime loan and came with higher interest rates but at least it could close.

2. By the time a home loan gets sent down to underwriting a mortgage banker or mortgage broker should already know whether or not your loan is going to get approved or denied. The majority of times your home loan will be approved from the second you talk to your mortgage

1. During the refi boom of 2002-2007 adjustable rate mortgages always had lower interest rates than fixed rate mortgages. In most cases they were considerably lower. As an example you could get a 3 year ARM with an interest almost 2% lower than a 30 year fixed mortgage. This was the same case for the 5 year, and 7 year ARM’s too.

2. There was so much talk about adjustable rate mortgages being for only sub prime borrowers but in reality most of the people that took out an ARM had good credit. They either liked the sound of the lower interest rate, thought rates were going to come down on the 30 year fixed before it adjusted, or just listened to their mortgage broker tell them that they would refinance them in a couple years before their rate adjusts (of course they will, more