Top 10 Scams of 2010

Click on the title to link. Just thought this was an interesting article for all of us to be aware of because many of them I would imagine are alive and well.

Mortgage Terms Now In Plain English? Funny.

Click on the title to link to this ridiculous article.
Oh my, where do we start? This could be one of the most uneducated articles we have read in some time. This is just the latest example of part of the problem..people like James R. Hagerty with the Wall Street Journal who write articles as if they actually know what they are talking about. I guess "investigative reporting" is a lost art form these days.

I have a question, has anything the government ever come up with "simplified" the issue? Please, I beg you, let me know if you can think of one. This is yet another example of people coming up with a "solution" who now absolutely nothing (and that is not overstated) about what they are trying to fix. The issue is not fees changing at closing. The issue is that our industry is full of idiots who have no ethics and, therefore, get away with it. How do they get away with it? Because nobody governs the established "laws". So what's the answer, according to the government, well let's create a "simplified" form that the lenders and brokers have to "commit" to. But let's not make them actually show how they get the numbers. Let's instead hide the details and only show the consumer the number the lender and brokers have to "commit" to. Make sense? Hardly.

This new GFE (Good Faith Estimate) is undoubtedly the dumbest, most confusing form we now have to deal with. It is so confusing that we are going to be using the old GFE to explain the new one. We continue to stand utterly amazed at how these dopes in Washington come up with this stuff without so much as consulting people who actually know what they are doing. Is it really that difficult? Instead they have come up with a form that goes from one to three pages, shows no detail, does not give the PITI (Principal, Interest, Taxes and Insurance) payment anywhere, encourages to shop instead of working with people you actually have been referred to and trust, and clarifies one thing...nothing.

So just know that we are here to help walk you through the, now, more confusing and less understandable mortgage process. And remember this, we are 100% referral because we treat people the way they should and want to be treated. If lenders and brokers did that then the need for stupid forms like this would not exist. Don't kid yourself into thinking this form "protects" you. Forms and rules will not protect you (trust us, we see it all the time from people who come to us from other places). All that will protect your interests is working with a company, like Premier Choice Mortgage, that will actually do what is in your best interest and not their own.

Getting Things In The Mail To Refi?

Many of you are probably getting stuff in the mail making all these claims about rates and skipping payments. We continue to hear from our clients they are getting these things, and they typically talk about rates in the low 4's and getting to skip 2 payments.

Well, like you have heard before, if it sounds too good to be true then it probably is. You most certainly can get rates in the low 4's...if you are paying a fair amount in points and/or fees. And the whole skipping payments thing is just a ploy to get you to call. Any loan you do, no matter what type it is, you will "skip" at least a payment because you are paying interest at closing as part of your pre-paid fees.

Bottom line...if you care thinking about refinancing and want to see what reality is in an up front, honest, ethical way then you need to call us at 830-9685. Don't trust the letter you get in the mail, call us.

Rental Scam

Read about this today and thought we should make anybody out there aware of it. Click on the title above to link.

Are We Missing Something?

Click on the title above to link to the article.
Cititgroup's CEO distributed a letter to its employees (or what's left of them) claiming, almost victoriously, that they turned a profit in the first two months of 2009. Congratulations, Citi! That is great to hear.
But, wait...this is the same Citi that laid off 52,000 employees, right? And the same Citi that received $45 Billion in government money (or should I say, our money, and our kids money, and our grandkids money, and our great grandkids money...)? This is the same Citi that is now partially owned by the US Government, right? So, I am confused. Could you, Mr. Vikram Pandit (CEO), please explain to me where the "silver lining" is for those 52,000 employees that you laid off in order to become "profitable"? Does that sound really profitable to you? Tell you what, Mr. Pandit, why don't you give that "profit" to those laid off employees and back to the government so generations are not having to pay for you to be "profitable". Can you say, "Smoke and Mirrors".

Selling Your Info

So we have been noticing something lately, when we pull a credit report on a client they have been telling us that other companies have been calling them to say they see they are refinancing and try to push them into working with them. Well, as you can imagine, this ticks us off a bit.
So we called the company we pull credit reports through and learned, to our amazement, that Experian, Equifax and Transunion all sell this data to people so they can call you as soon as they see we pull a report. Can you say unethical? This is absolutely unacceptable in our minds. You can, as the consumer, opt out of them being able to do this. But it is, conveniently, a pain to do. We are looking further into this and will let you know what we find. But be aware that if this happens to you it is not a company we "work" with or endorse.

Foreclosure Future

As Congress contemplates deeper mortgage bailouts, this was an interesting graph we found. It shows you that we have the worst still ahead as far as when adjustable rate loans will start adjusting. The peak of it will be in 2010.

Pathetic

I could not think of a title more fitting than the word "Pathetic" what the article I just read. It is linked above through the title. The article is about how the almost $200 billion given to banks has done little to nothing in stimulating lending. What else would you expect from a "stimulus" that was rushed through and not managed. They should be ashamed.
And for those of you who want to take this opportunity to blame the Bush Administration remember this:
1. Obama is trying to now push through his package. if they do not step back and work the details out prior to then we will be right back here again.
2. Both McCain and Obama backed this plan because it was a political "spotlight" on them.
3. You want more government involvement and help? Be careful what you ask for because you may just get it.
So I do not care what party you are affiliated with, they all should be ashamed for letting something like this happen. It is unacceptable, shameful and, well, pathetic.

Online Lenders

We never cease to be amazed at the perception in the eyes of people that online lenders have the best rates. You need to hear us out on this...that is usually not the case. And one thing that is never, ever the case with online lenders...they cannot compete with us in how they treat clients. Why on earth would you want to work with a lender who does not know you and, really, does not care at all about you because you are a number to them. Do you honestly think they will do anything to "wow" you so that you will refer people to them? It is all about volume; they could not care less.
This is all stemming from the fact that we received a call yesterday (from a past client, no less) who was talking to an online lender. He really thought he was getting a great deal from this lender and was not even going to call us to run it through the "sniff test". Huh? We just will never understand why one would not go back to a company that operates the way we do and, at the absolutely least, have us advise him on whether it is a good idea or not. Unbelievable.
Folks, here us out on this...if you are blindly trusting what an online (or just any other) lender is telling you as fact then you are setting yourself for getting burned, or at least getting a bad deal. USE US, THAT IS WHAT WE ARE HERE FOR. We call it our three E's: Educate, Evaluate and Eliminate. If a lender is not doing the three E's (and we assure they will not) then you are at risk.

Not Too Many Options For Those With "Pay Options"

Click on the title to link to this article. This article is talking about those with "pay option" arms. In our opinion, these along with the drop in housing values are the two biggest reasons for this mess we are in (on a very macro level). We preached to peope, "Stay away from these loans". The problem is lenders did not educate their clients as to the full story on these bad boys.

Here is a run down of a pay option arm. You have the option to make four different payments every month. Remember the advertiing of 1.5% rates and stuff. Well, those were option arms. One of your options was to make a payment with that rate, a 30 year fixed rate (which was always way higher than the going rate), an interest only 30 year rate, or a 15 year fixed rate. The big, big problem with these loans was paying at a 1.5% rate meant your mortgage was actually growing because your note was not based on that rate but a higher one. So you were not covering all the interest every month and, thus, your mortgage would grow. Now for markets like CA, NV and AZ where housing values were sky rocketing, nobody cared. Unfortunately, when the market came crashing down those people were screwed for two reasons:

1. They were now way upside down on the house since the value dropped and their mortgage had increased.
2. The rates on these ARMS started adjusting and, suddenly, people could not make those payments because they did not realize how high the payment would go. So they thought, "I'll just refinance." Oh now you won't because the guidelines changed so fast that most of these people could not get a loan any more because they needed stated income. So what would they do? Walk and get foreclosed on; they literally had no choice because they were stuck.

A screwed up mess has sense unfolded, and this is a huge reason for it. Read the article and shoot us any questions.

The 4% Rate

Consider this post like the late night news. Today was one of those days. You know the kind, you look at the clock and it is time to rush home; only it feels like you just got there. Well, as a result, here is our late night post.

We received an email today from a wonderful, long time client. She was asking whether it was a good idea for them to refinance because they had heard rates were going down and, more importantly (or disturbing), they had received something in the mail stating they were approved for a 4% fixed rate. Here is a quick run down of this "junk mail" (and trust us, that is all it is).

1. We talk more people out of refinancing (by far) than those who actually do. If you ever want to explore whether you should refinance then get with us first.

2. 4% rate? That is hilarious; give me a break. It is unbelievable that lenders are still out there who bate and switch people like this. Think of it this way, when you get an "approval" in the mail from some yahoo lender with this incredible rate offer understand that is about the percentage chance you have of actually getting that rate (and that is too high).

3. This next point is revolutionary...our media does not typically report the whole picture in an unbiased, accurate method. We know, we know, shocking. This is certainly the case with rates. Whatever the media is reporting on the trend in rates is always at least several days behind. Rates can change daily, and sometimes multiple times per day. So the media reporting on it is practically worthless.

So, what is the best way to ensure you are not taken by such a scheme? You should do exactly as our client did...call or email us (great job). And remember, the best way to get an accurate rate quote is to actually give us a call and we will tell you what the best rates are out there. We are here to walk you through the madness, so use us.

The Lying Game

So yesterday we get a call from an individual who was referred by a past client. They were already working with another broker, but were encouraged to call us to double check what they were being told. This is a great borrower in every aspect.

The Lies:

• The other lenders rate quote was not that good. They said it was because their DTI was too high (lie #1) and their credit score was not high enough (lie #2). Plus, they were charging 1 point (1% of the loan amount).

The Truth:

• Your DTI does NOT have any affect at all on your interest rate.
• In this particular case, the borrowers credit score was actually helping their rate, not hurting it.

The Conclusion:

1. We were able to get her a rate that was .375% lower than the other broker, and do it with no points at all.
2. This borrower stated they thought they could trust this guy because he worked with people in their particular industry. Let us assure you of this, no matter who people work with they can still be a bunch of yahoos. Check them out! Ask for references; then call them.
3. Lenders will make up anything to get you to believe what they say. Why? Because they think you are a bunch of idiots and will not know any better. Unfortunately, it is often because you do not know where to turn to check what they are saying vs. reality.

This is why we are here...email us with any questions or scenarios you have. We will happily help educate you on your situation to ensure you are doing something that will actually be good for you, and not just screw you. As a referral based company, actually doing your loan is way down the line. If we take care of you, help you understand the process and point you in the best direction, then you will refer us whether or not we do your loan. There is no doubt, however, that our process is so far superior to others it really is not comparable. But advocating for you is our priority; your loan is secondary (nice, but still secondary).