We have some very EXCITING news!!!
As may know, my firm has owned CrossWay Mortgage Group for over 5 years. As of mid-June, CrossWay Mortgage completed the merger of its mortgage broker & software technology operations with Southeast Mortgage of Georgia.
Unfortunately, this change will likely signal the end of this blog. We will begin a new, more focused blog in the upcoming months and hope to see all of our faithful subscribers there!
CrossWay Mortgage Group, Inc. will continue operating as a consulting firm in the mortgage and financial industries. A new website will be available in the upcoming months to reflect this change and strategy. KnowledgeSpan (www.knowledgespan.com) assisted in the merger process of CrossWay Mortgage Group.
Monday, August 4, 2008
Friday, June 20, 2008
Mortgage Reform and Anti-Predatory Lending Act of 2007
This post is directed to all of our fellow brokers. While consumers may also find significant disadvantages to this new bill, it is the Mortgage Broker that will feel the full effects! Brokers throughout the country will have their ability to obtain & maintain licensing, ability to make money and ability to act in the best interest of the borrowers severely crippled. It is projected that 60% - 80% of brokers could be out of business within 6 months of the bill taking effect.
In short, the financial requirements ($100,000 net worth) are out of reach for the average small broker, the YSP will be eliminated (or significantly reduced) and it will be difficult for many of the already realing mortgage brokers to hang on. Read on below...
**** Below is a copy of the e-mail NAMB sent out ****
Some information has been removed for privacy purposes & to shorten
Mortgage Brokers are being singled out unfairly - please act!
From: NAMB Government Affairs
Sent: Wednesday, October 31, 2007 3:05 PM
Subject: NAMB Teleconference to Discuss H.R. 3915
To: All NAMB Members
From: Denise Leonard, NAMB Government Affairs Chair
RE: National Teleconference to Discuss H.R. 3915 the "Mortgage Reform and Anti-Predatory Lending Act of 2007"
Mortgage brokers are facing extinction. The U.S. House of Representatives is considering a bill that will fundamentally change the way we are paid, outlaw YSP, and legislate underwriting guidelines into law. Additionally, we fear that all subprime lending will cease to exist due to excessive lender liability. It is important that you read this memo.
We are calling upon our members to respond as never before. To save our industry, we are asking you to learn about this threat and then contact your congressman.
_____________________________________________________________________
Commentary: We urge you to read the balance of this memo and the attached information before you listen to our teleconference.
On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." Below you will find the full H.R. 3915 bill, a section by section summary, the NAMB Press Release, and NAMB’s Testimony presented before the HFSC.
The bill contains three sections. Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.
Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.
Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lenders liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.
This is a critical time. Do not miss this important teleconference!
__________________________________________________________________
We have recently taken steps to ensure long-term security and viability, for both our employees and customers. As a lender, we still have the flexibility of a local broker, but have the safeguards in place to avoid the upcoming crisis in the mortgage industry.
If you don't have FHA...forget about it!
If you are a GA, FL, SC, TN, NC, VA, or AL mortgage broker, you should contact me to learn how I can help you get positioned to make more money (not less) and gain security for you, your employees and your customers.
In short, the financial requirements ($100,000 net worth) are out of reach for the average small broker, the YSP will be eliminated (or significantly reduced) and it will be difficult for many of the already realing mortgage brokers to hang on. Read on below...
**** Below is a copy of the e-mail NAMB sent out ****
Some information has been removed for privacy purposes & to shorten
Mortgage Brokers are being singled out unfairly - please act!
From: NAMB Government Affairs
Sent: Wednesday, October 31, 2007 3:05 PM
Subject: NAMB Teleconference to Discuss H.R. 3915
To: All NAMB Members
From: Denise Leonard, NAMB Government Affairs Chair
RE: National Teleconference to Discuss H.R. 3915 the "Mortgage Reform and Anti-Predatory Lending Act of 2007"
Mortgage brokers are facing extinction. The U.S. House of Representatives is considering a bill that will fundamentally change the way we are paid, outlaw YSP, and legislate underwriting guidelines into law. Additionally, we fear that all subprime lending will cease to exist due to excessive lender liability. It is important that you read this memo.
We are calling upon our members to respond as never before. To save our industry, we are asking you to learn about this threat and then contact your congressman.
_____________________________________________________________________
Commentary: We urge you to read the balance of this memo and the attached information before you listen to our teleconference.
On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007." Below you will find the full H.R. 3915 bill, a section by section summary, the NAMB Press Release, and NAMB’s Testimony presented before the HFSC.
The bill contains three sections. Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.
Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.
Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lenders liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.
This is a critical time. Do not miss this important teleconference!
__________________________________________________________________
We have recently taken steps to ensure long-term security and viability, for both our employees and customers. As a lender, we still have the flexibility of a local broker, but have the safeguards in place to avoid the upcoming crisis in the mortgage industry.
If you don't have FHA...forget about it!
If you are a GA, FL, SC, TN, NC, VA, or AL mortgage broker, you should contact me to learn how I can help you get positioned to make more money (not less) and gain security for you, your employees and your customers.
Thursday, May 22, 2008
Foreclosures: Impact on Real Estate Market May Not be as Severe as Expected
Great Article from www.behindthemortgage.com and Report that validates our belief of how the media has an enormous impact on the perception of the market.
We're talking about foreclosures and short-sales folks, or, as a new report from the Minneapolis Area Association of Realtors terms it: Lender-Mediated Sales.
Jeff Allen, research director at the MAAR and Aaron Dickinson, Edina Realty agent are responsible for this tight little report, entitled "Foreclosures and Short Sales in the Twin Cities Market" which gets to the heart of some questions that have been on a lot of minds lately.
Chief among them: Just how much of the current market activity is foreclosure/short sale related, and what are the broader impacts?
The report itself confirms a fact that many of us tracking the issue anecdotally have suspected: Almost 30% of closed sales (Q1 2008 - see graphic above) are/were in some stage of foreclosure or other "lender-mediated" status, such as a short sale.
One surprising data point gleaned by Jeff and Aaron was the fact that there is a fairly stark dichotomy between lender-mediated and traditional real estate activity in our market. Check out this graphic:
This obvious good news is also seasoned by this fact, from the report:
"The actual number of traditional seller new listings has fallen by 27.4 percent over the last two years...So clearly, homeowners are holding steady in their current residences with greater frequency and home builders are producing far less new inventory."
In other words, many sellers, sensing a bear of a market, are simply opting out, while those that are selling, aren't taking nearly the bath that one would expect.
Though it is still early on, and we have a lot of ground to cover before the real estate contraction is over, this report presents a far more optimistic view of the state of our housing market than we, and many others, would have expected.
Yes, prices are falling dramatically in the aggregate, but the bulk of the carnage is occuring in the lender-mediated market, and the traditional market is holding up rather well, all things considered.
Anyway, go read the report - too much good stuff to list it all here - and kudos to Jeff and Aaron for putting this together.
Jeff Allen, research director at the MAAR and Aaron Dickinson, Edina Realty agent are responsible for this tight little report, entitled "Foreclosures and Short Sales in the Twin Cities Market" which gets to the heart of some questions that have been on a lot of minds lately.
Chief among them: Just how much of the current market activity is foreclosure/short sale related, and what are the broader impacts?
The report itself confirms a fact that many of us tracking the issue anecdotally have suspected: Almost 30% of closed sales (Q1 2008 - see graphic above) are/were in some stage of foreclosure or other "lender-mediated" status, such as a short sale.
One surprising data point gleaned by Jeff and Aaron was the fact that there is a fairly stark dichotomy between lender-mediated and traditional real estate activity in our market. Check out this graphic:
The key takeaway from this is that Median sales prices outside the universe of lender-mediated properties have only deteriorated by 3.9% over the last year. One possible conclusion to be drawn from this is that the rising tide of lender-mediated listings and sales (i.e. foreclosures and short sales) are not putting as much downward pressure on prices of traditionally marketed properties as we would have imagined, and has been reported.
This obvious good news is also seasoned by this fact, from the report:
"The actual number of traditional seller new listings has fallen by 27.4 percent over the last two years...So clearly, homeowners are holding steady in their current residences with greater frequency and home builders are producing far less new inventory."
In other words, many sellers, sensing a bear of a market, are simply opting out, while those that are selling, aren't taking nearly the bath that one would expect.
Though it is still early on, and we have a lot of ground to cover before the real estate contraction is over, this report presents a far more optimistic view of the state of our housing market than we, and many others, would have expected.
Yes, prices are falling dramatically in the aggregate, but the bulk of the carnage is occuring in the lender-mediated market, and the traditional market is holding up rather well, all things considered.
Anyway, go read the report - too much good stuff to list it all here - and kudos to Jeff and Aaron for putting this together.
Thursday, November 8, 2007
I have been asked...why use a broker to refinance?
Whether you're shopping for groceries or looking for a car, you want options. Shopping for a mortgage loan is no different. And there's no better place to find options for a mortgage refinance than with a mortgage broker.
Greg Mischio wrote this article and really summed up why a homeowner should use a mortgage broker when refinancing.
One of this summer's blockbuster films is the Fantastic Four, a movie based on the adventures of four superheroes. The quartet's leader is the genetically altered Mr. Fantastic, who can stretch his body like silly putty. Mortgage broker often use powers similar to the costumed crime fighter. They can stretch and shape a mortgage refinance to fit your financial situation.
Here are five reasons that explain the unique superpowers of mortgage brokers, along with a word on how to prevent a broker from stretching your refinancing budget past the breaking point.
1. One broker, many lenders. Mortgage brokers can put together a variety of loan packages because they have access to a wide range of lenders, who operate on a wholesale basis, relying on the brokers to find customers. A myriad of lenders operate on this basis, and brokers can choose whichever program fits your needs.
2. Superior access. A wholesale lender works only through brokers. As a result, consumers don't have access to their special programs or rates. You need to work with a broker if you want access to wholesaler's unique loans.
3. Stretching that loan package. A broker doesn't have the constraints that you might find at a bank or credit union in terms of structuring a deal. They can stretch or limit their fees and the terms on the loan. More flexibility on the part of the originator means a more flexible loan for you.
4. The ability to be disloyal. A mortgage broker doesn't need to be loyal to a vendor. If you're unhappy with a particular lender or don't like the package it puts together, the broker has the freedom to look elsewhere. Wholesale lenders understand this, and they do what they can to keep the mortgage broker happy.
5. Third party flexibility. The same flexibility brokers have with loans also applies to third-party vendors, like appraisers and title companies. Brokers can shop around until they find the best prices with the best quality work-and they can move very quickly.
For all their flexibility, mortgage lenders do have their downside. Because it's relatively easy to become a mortgage broker, many don't have extensive training or knowledge in the industry. They also derive much of their compensation through fees, so you'll need to keep a close eye on your Good Faith Estimate. Be sure to ask for references and check with the Better Business Bureau before signing on with one of them.
If the broker proves to be established and reputable, let her put her fantastic powers to work. The result should be a refinance that makes a mortgage broker look like a real superhero.
Greg Mischio wrote this article and really summed up why a homeowner should use a mortgage broker when refinancing.
One of this summer's blockbuster films is the Fantastic Four, a movie based on the adventures of four superheroes. The quartet's leader is the genetically altered Mr. Fantastic, who can stretch his body like silly putty. Mortgage broker often use powers similar to the costumed crime fighter. They can stretch and shape a mortgage refinance to fit your financial situation.
Here are five reasons that explain the unique superpowers of mortgage brokers, along with a word on how to prevent a broker from stretching your refinancing budget past the breaking point.
1. One broker, many lenders. Mortgage brokers can put together a variety of loan packages because they have access to a wide range of lenders, who operate on a wholesale basis, relying on the brokers to find customers. A myriad of lenders operate on this basis, and brokers can choose whichever program fits your needs.
2. Superior access. A wholesale lender works only through brokers. As a result, consumers don't have access to their special programs or rates. You need to work with a broker if you want access to wholesaler's unique loans.
3. Stretching that loan package. A broker doesn't have the constraints that you might find at a bank or credit union in terms of structuring a deal. They can stretch or limit their fees and the terms on the loan. More flexibility on the part of the originator means a more flexible loan for you.
4. The ability to be disloyal. A mortgage broker doesn't need to be loyal to a vendor. If you're unhappy with a particular lender or don't like the package it puts together, the broker has the freedom to look elsewhere. Wholesale lenders understand this, and they do what they can to keep the mortgage broker happy.
5. Third party flexibility. The same flexibility brokers have with loans also applies to third-party vendors, like appraisers and title companies. Brokers can shop around until they find the best prices with the best quality work-and they can move very quickly.
For all their flexibility, mortgage lenders do have their downside. Because it's relatively easy to become a mortgage broker, many don't have extensive training or knowledge in the industry. They also derive much of their compensation through fees, so you'll need to keep a close eye on your Good Faith Estimate. Be sure to ask for references and check with the Better Business Bureau before signing on with one of them.
If the broker proves to be established and reputable, let her put her fantastic powers to work. The result should be a refinance that makes a mortgage broker look like a real superhero.
Saturday, August 11, 2007
Did you hear this...?
This year has been a challenge for those working in the mortgage industry. In case you didn't know it, the end is here! No more banks lending money to the average person like you and me. No more tapping into your equity to pay some bills, send your kids to college or remodel your house. No more homes are being built, bought or sold. ...or at least that is what they (whoever "they" are) would like you to think.
Did you hear this during the last couple of weeks???
Home loan demand surges as interest rates drop
(USA Today)
Mortgage Applications Rise Last Week Despite Market's Problems
(Yahoo.com)
Mortgage applications climb
(Mortgage Bankers Association)
The reality...builders are still building, home buyers are still buying, homeowners are still refinancing, etc... Now that is not to say that it hasn't gotten tougher on the people in the mortgage business and the consumer. It definitely has.
The mortgage brokers and bankers have definitely had a lot to overcome. More stems from the bad news in the media than anything else. Keep in mind, I am referring how this relates to you getting a loan, not all the complicated behind-the-scenes financial stuff that makes the system work (and yes, there have been some huge bumps in the road that have driven many businesses out of business). For a while there, all you were reading was that rates were about to go through the roof and it would be impossible to get financing. Simply not true.
The consumer has to be more responsible with their finances in order to secure a loan. Get that credit score up & pay off that debt and you'll likely be fine in your search to obtain financing for a home. You can't just walk up off the street, with bad credit and no income, and get a mortgage like you used to. However, their are still mortgages that fit just about everyone...at very good rates!
Just this week, more doom-and-gloom could be found right here in our backyard. An Atlanta darling, Homebanc, effectively went belly-up and closed mortgage operations (sold/migrated some to Countrywide). Newspapers telling everyone had bad the industry is.
Well, things are tough but there are still some very good mortgage brokers that are there for you...the consumer. We do have some advantages that have shielded us in these rough times. You see, brokers partner with dozens & dozens of banks, lenders and other financial institutions that lend you the money to finance your home. If one goes out of business...say Homebanc for example...that's OK, a broker typically has dozens of additional resources to make sure you have the best loan program at the best possible rate.
In close...don't always believe the hype. All you have to do it call a mortgage broker that you trust and talk to them about your scenario. You'll know for sure in just a couple of minutes if you indeed can still build, buy or refinance that home!
Did you hear this during the last couple of weeks???
Home loan demand surges as interest rates drop
(USA Today)
Mortgage Applications Rise Last Week Despite Market's Problems
(Yahoo.com)
Mortgage applications climb
(Mortgage Bankers Association)
The reality...builders are still building, home buyers are still buying, homeowners are still refinancing, etc... Now that is not to say that it hasn't gotten tougher on the people in the mortgage business and the consumer. It definitely has.
The mortgage brokers and bankers have definitely had a lot to overcome. More stems from the bad news in the media than anything else. Keep in mind, I am referring how this relates to you getting a loan, not all the complicated behind-the-scenes financial stuff that makes the system work (and yes, there have been some huge bumps in the road that have driven many businesses out of business). For a while there, all you were reading was that rates were about to go through the roof and it would be impossible to get financing. Simply not true.
The consumer has to be more responsible with their finances in order to secure a loan. Get that credit score up & pay off that debt and you'll likely be fine in your search to obtain financing for a home. You can't just walk up off the street, with bad credit and no income, and get a mortgage like you used to. However, their are still mortgages that fit just about everyone...at very good rates!
Just this week, more doom-and-gloom could be found right here in our backyard. An Atlanta darling, Homebanc, effectively went belly-up and closed mortgage operations (sold/migrated some to Countrywide). Newspapers telling everyone had bad the industry is.
Well, things are tough but there are still some very good mortgage brokers that are there for you...the consumer. We do have some advantages that have shielded us in these rough times. You see, brokers partner with dozens & dozens of banks, lenders and other financial institutions that lend you the money to finance your home. If one goes out of business...say Homebanc for example...that's OK, a broker typically has dozens of additional resources to make sure you have the best loan program at the best possible rate.
In close...don't always believe the hype. All you have to do it call a mortgage broker that you trust and talk to them about your scenario. You'll know for sure in just a couple of minutes if you indeed can still build, buy or refinance that home!
Friday, August 3, 2007
CrossWay Mortgage Selects Google's Blogger to Shed Light on the Mortgage / Loan Industry
Every day the questions are the same... What are the rates? What is the best loan program? What costs are involved in financing my home? Why should I use xyz company? etc...etc...etc...
There are no wrong questions...but there are wrong answers. We see it all the time. You hear it all the time. You know, the radio ads where that guy is YELLING at you! The other ads where they are going to do everyone's loan for free! hmm...and I guess all those folks in their offices work for free?!?
When purchasing a home, you are typically making the single largest purchase decision you will ever make. The company / person you choose to help you through this important process can save or cost you many thousands of dollars over the life of your loan. When I bought my first home...I talked to that guy who was yelling at everyone on the radio. I also talked to that girl on TV who promised to do my loan for free. After talking with both, and a couple of other "professionals", I made a decision to talk to some local folks.
These local folks represented what I think we all are looking for when we are getting ready to make this important decision. Honesty. Loyalty. Integrity. The guy held my hand (NOT literally!) though my first home purchase and it turned out to be a simple and pleasant process. Not a single moment over the following 5 years did I look back and regret that decision.
When it's time for you to make that important decision, whether it is your first or fifth time getting a home loan, make sure you take a step back and filter through the hype. More often than not, it'll come back to bite you down the road!
CrossWay Mortgage Group, based out of Norcross, GA, has decided to start sharing our experiences with you to assist you in making this very important decision.
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