Philadelphia Area Mortgage Blog

Real Estate and Mortgage Professionals are usually not too happy when the media chooses to report on the industry, since they feel that the media tends to emphasize the negative news (home prices falling, foreclosures increasing) instead of the more positive news (lower rates, more affordable housing).  While sometimes I wish that we could gag the media , I try not to get too upset over what's reported in the news about the real estate market or worry that the negative press is hurting my business.  I know that the only person who truly has the media in his backpocket just got elected president, so if I want to get the positive news out there to potential consumers or dispel the negative messages, I have to do it myself.  That's part of the reason why I blog.

While we can't expect the media to takeover as a PR representative for the real estate and mortgage industry, we should, however, expect at least a semblance of professional journalism.  This piece Are You an Idiot to Keep Paying Your Mortgage written by Kathleen Pender, ain't it.  The article, from the San Francisco Chronicle, basically reads like a how to guide on avoiding paying your obligations and sticking it to your lender.

Should you keep paying your mortgage?

If you have significant equity in your home, absolutely.

If you don't, it's getting harder to answer that question, especially when our government keeps giving people who owe more than their homes are worth so many reasons not to pay.

The article goes on to quote the campaign fact sheet of the president-elect which states "the real victims in the subprime mortgage crisis are not the lenders, but the millions of borrowers who followed the rules and whose only crime was taking out mortgages that lenders told them they could afford."  I guess if "The One" wrote it, and the reporter quotes it, it has to be true, right?  I mean should we really expect personal responsibility to come into play here?  If the greedy lender told you that you could get approved for a $2000 monthly mortgage payment, yet you only take home $500 per week, how were you supposed to know you wouldn't be able to make the payment?

While the article briefly discusses the other loan modification available from the FHA, it focuses mainly on the Streamlined Modification Program, for which you must be 90 days delinquent to qualify.  The reporter provides this helpful tip:

The streamlined process looks only at income, not assets. If you refinanced your home to buy a Mercedes or own another home, you won't be expected to sell them to pay your mortgage.

Whew!  That's a relief.  Wouldn't want anyone to have to sell the E-class or the shore house to have to pay their mortgage.  But there's more.  Like any good reporter, we have the requisite "expert" quotes and opinions such as:

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again.

"This is a once-in-a-lifetime opportunity," Schiff says. "People are going to feel like complete morons if they don't participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn't afford."

Gee, I feel like a moron already.  I am one of those people who didn't make an irresponsible decision and is getting punished by not being able to take advantage of this deal.  But I can at least take solace in the fact that these people are gonna have screwed up credit for like the next  7-10 years , right?

Well um, not really:

Risking your credit score for a lower rate "sounds like a game of chicken on the lending highway," says Craig Watts, a spokesman for Fair Isaac, which markets the FICO credit score.

But then:

A 90-day delinquency will hurt your score, but not as badly as a foreclosure. How many points it takes off depends on other things in your credit file, such as the number and severity of late payments on other accounts.

In the latest version of FICO, which is just being rolled out, "one isolated delinquency will do less damage to your score than it has in the past," Watts says.

Consumers who suffer a severe delinquency can rebuild their scores over time by paying all credit accounts on time and keeping their balances low.

And then the priceless:

"If it was me and I was certain that I could keep my home even after missing a couple payments by working out a deal with the lender, I'd be for keeping the home," Watts says. "Your score will bounce back."

While, I know any competent mortgage professional would never dream of advising someone to stop paying their mortgage so that they may possibly get the loan modified, Ms. Pender's piece pretty much implies that not only should you do it, you'd be an idiot not to.  I look forward to her next responsible piece of reporting, which will probably be entitled "Are you an Idiot to Keep Making Payments on your Lexus?  The Repo Man Can't Find You if He Doesn't Know Where to Look."

Written by Michelle Chamberlain of Above All Financial Services, a Pennsylvania Mortgage Broker.  To learn more about applying for a residential mortgage visit www.aboveallmortgage.com .  For information on Small Business Financing visit www.ezmerchantadvance.com.

Recently, I received an online request from a prospect who was looking on the internet for mortgage companies and found us in the search engines.  The good news, is this means my SEO is working, especially since I wasn't even aware that we ranked for that particular keyword.  The bad news is that I was unable to help her out.  Here's why:

The prospect requested that I email her a Good Faith Estimate (GFE) (not an unusual request, as most people who apply for mortgages are shoppers who typically like to compare rates and fees from competing lenders).  However, although she did provide me with some personal information (credit score, purchase price, downpayment) this was not enough information to provide her with the information she needed.  With no contact information other than an email address,  I responded back that we would need a completed full mortgage application, in order to provide her with an accurate GFE.  She never responded back.

Now, I'm not against sending a prospect a GFE, I do it all the time. In fact, it's required that you provide RESPA disclosures within three business days of an initial mortgage application. But the key word is "application".   There are many different criteria that go into pricing a mortgage loan; credit (of course), income, employment history, Loan to value (or % of down payments for purchases), and purpose of the loan, among other criteria. And while a Good Faith Estimate is just that, an estimate, any responsible mortgage professional does everything possible to make sure that their estimates are accurate (or at least very close). If I would have sent that customer a GFE for, say 6% on a 30 Year Fixed Mortgage, and she commited to doing the loan based on my estimate, only to find out later that the rate she qualifies for is actually significantly higher (or that she doesn't qualify at all), at best I would be looked at as incompetent; at worse, a dishonest loan officer that this industry is currently trying to shake out as we speak.  If I'm going to quote you a rate (especially in writing), I want to make sure it's an estimate I can stand by.  

There are other concerns here as well.  First, I'm relatively sure that we are probably not the only mortgage company that received the same request from this potential customer.  She was obviously shopping around and may have even been urged by another mortgage company or perhaps her real estate agent to get a few estimates.  The issue here is that although she was not going to get a GFE without completing a mortgage application from my company, I am pretty sure that she will manage to get one from someone else.  Afterall, most loan officers are hurting, business is down, and this client with her 720 credit score (according to her), money to put down, and good size loan amount would seem like an easy payday.  Some loan officer somewhere will toss out a few figures (which will be way lower than actual figures at closing) in order to get the prospect in the door.  However, this is a bad way to do business, for both the customer and the loan officer since they are both making decisions based on assumptions. 

The second concern is that because a mortgage can be a complicated transaction, there is no one size fits all scenario or price.  Shopping for a mortgage online is not like buying a book, or a camera.  You cannot just type what you are looking for into google and choose the merchant with the lowest price for the particular title or model that you need.  But, even if you could, shopping based on price alone is ignoring another important factor which is service.   If you are not taking time to speak to a loan officer, ask questions, and get to learn about how they do business, and you are choosing your mortgage company based on the lowest quoted price, you may be potentially making another mistake.  The company may be cheap, but are they competent and can they close your loan?   

 I can only hope that things work out for this customer, and that she doesn't have to learn the hard way that it's not Good, to put her all of your Faith, in an Estimate ... without submitting a full  application first.

Written by Michelle Chamberlain of Above All Financial Services, a Pennsylvania Mortgage Broker.  To learn more about applying for a residential mortgage visit www.aboveallmortgage.com .  For information on Small Business Financing visit www.ezmerchantadvance.com.

With home prices in Delaware County and the Philadelphia area becoming more affordable, it may be time to think about buying a home instead of renting.  The following post explains the principals of cash flow and how it may be possible to buy a home similar to the one you are currently renting, for less than what you are paying in monthly rent. 

For additional help in analyzing your decision, you may want to run some numbers in this rent vs. buy calculator or take a look at these additional calculators and tools.

And of course, feel free to contact me directly at (888) 891-7704, if you have any other Pennsylvania Mortgage related questions.

I found an interesting article  from the Chicago Tribune about political tolerance, and being respectful of other people's opinions and beliefs, especially when they differ from your own.  It details an experiment done by a 14 year-old girl in a Liberal suburb of Chicago, who shows up for school one day wearing a T-shirt supporting John McCain, and the next day wearing a T-shirt supporting Barack Obama.  Surprisingly, the reactions to her T-shirt from her classmates are not very different than would some of us experience in the adult world or while blogging in the political forums here on ActiveRain.

On the first day of her experiment, wearing a McCain shirt, the student was called among other things "stupid", told she should be "burned with her shirt on" and branded a "filthy rich Republican".  The next day, while donning her Obama shirt, the very same student was told that the students liked her shirt, she was no longer stupid and had "put the right shirt on" that day.   The reporter asks the student's teacher  "whether it was ironic that she would be subject to such intolerance from pro-Obama supporters in a community that prides itself on its liberal outlook."  The teacher agrees that those who are supporting a candidate that promotes equality and inclusion, should not have behaved in such a manner.  Everybody learns a great lesson... I guess until they become adults and start acting the same way

This article deals with children - in middle school - but the funny thing is that the very same intolerance and name calling occur here on a daily basis -in a community of professional adults!  It surprises me how quickly  some people are to call names or insult , when someone  expresses an opinion that is different from their own, (or heaven forbid presents them with pesky facts that seem to contradict the other person's point) .   Now some people are easily offended, and perhaps they should not be discussing sensitive subjects with strangers or potential business partners.  The same can be said for those who result to middle school like name calling as well.  In fact, those who resort to such tactics are really saying more about themselves than the person they are trying to put down. 

Now I know that some people don't think that political discussions have any place on a Real Estate networking site.  They think that you run the risk of alienating 50% of the people who read your blog or comments, since they may have a different political view from your own.  I don't agree.  For every person who doesn't want to shop for a mortgage or refer a customer in need of small business financing to me because they disagree with me politically, there is someone else who will shop for a mortgage or refer a client to me because we do see eye to eye (of course there are some people who don't care either way which political party you support as long as you give them the best deal). But I do think that if you want to discuss topics such as politics and grow your business at the same time that you should leave the name-calling, schoolyard insults, uninformed opinions, and intolerance out of it.  If this 14 year-old girl "get's it" and understands what tolerance is, then surely we should too.

Don't know how the MSM missed picking up this one.  What do you think? 

As reported on CNNMoney.com the number of small business loans for the Small Business Association (SBA) flagship lending program declined 30% for fiscal year 2008, which ended September 30.  While the SBA doesn't directly fund loans it does guarantee a percentage of the loan as an incentive to banks to loan the money.  Due to tightening credit standards and a worsening economy, the SBA backed only 69,434 loans in 2008 (down from 99,606 in 2007). 

What is worse news for small business is that although the number of businesses backed by the SBA declined 30%, the actual dollar amount backed declined only 11%, meaning that although less loans were backed they were for larger amounts.  This signifies that a greater number of loans backed by the SBA, were for larger established businesses (though still small businesses by definition).  The tightening of credit standards seems to be affecting smaller businesses since most, larger, already established businesses may still be able to qualify for financing, albeit not as easily as in the past.

By contrast,  the Merchant Cash Advance business is booming, as more small business owners seek to find alternate forms of financing.   Contact us  to see how a Merchant Cash Advance can help your small business succeed and get you the cash you need.

This article was originally published by Michelle Chamberlain, Pennsylvania Mortgage Broker on www.ezmerchantadvance.com/theblog.

Reginald Rose's classic courtroom drama "Twelve Angry Men" opens this weekend at Colonial Playhouse in Aldan, PA.  For those of you not familiar with it, "Twelve Angry Men" tells the story of a jury faced to reconsider its nearly unanimous decision during a murder trial, when one juror begins to try to persuade the other members not to convict based on reasonable doubt.  The arguments get heated and the exchanges force all the jurors to confront their own prejudices, in order to render a fair decision.

The play runs on Friday and Saturday evenings at 8 PM, and Sunday afternoons at 2 PM through November 22.  The shows stars local Delaware County residents and includes a theatre debut from Pennsylvania Mortgage Broker, Oliver Chamberlain as the guard. 

Colonial Playhouse is a community theatre that has been entertaining Delaware County residents for over 68 years.   It is located in Aldan at Ridley and Magnolia avenues, one block off of Oak. For more information visit www.colonialplayhouse.org or call (610) 622-5773

Yesterday, I wrote a post in which I expressed my disappointment with the outcome of the election.  My chief concern was that people voted based on emotions and not based on issues.  Although I didn't mention it in my posts, one of the main concerns for me was the issue of National Security, and I thought that John McCain was better qualified infinitely more qualified to keep our country safe.

Someone left an interesting comment, and while my intention is not to single someone out, I think this person echoes the sentiments of many others who voted for Barack Obama and perhaps this thinking swayed their vote to his side.

"Al Qaeda would have loved to have McCain get in.  With Obama being elected... all the terrorist's recruiting programs are now "out the window."  If you wanted the end times to come... then McCain would make sense.  With Obama in... we have taken away their target... meaning their excuse to label the US as a threat.  Now with Obama not pursuing the policy of taking a pre-emptive strike... Now they have nothing to use as an excuse for recruiting new members."

The comment above represents exactly what our enemies wanted us to believe before the election, that radical terrorists viewed the US under an Obama administration as somehow less of a threat than under McCain, and that they would abandon their pursuits against US interests, were Obama to be elected.  What are they saying today?

In an editorial, the Iranian daily Jomhouri-ye Eslami stated: "The most that that black man can do in the White House is to replace some of the staff and change some ceremonial procedures. He will never manage to change the structure of the American regime, which was established by capitalists, Zionists, and racists."

The paper added that President Obama would not bring change to the world, because both the Democrats and Republicans were party to the U.S.'s oppressive and interest-driven foreign policy. Therefore, it said, any changes that do occur would be tactical rather than strategic."

From The Saudi daily Al-Watan stated in an editorial: "There is no significant difference between Obama and McCain. They disagree only on the means to achieve America's chief goal, which is to rule for another hundred years."

From Sheikh Yousef Al-Qaradhawi : "Whoever thinks that the Democrats are less hostile to [the Arabs] than the Republicans should know that the number of Iraqis killed during the siege [of Iraq] by the Democrat Bill Clinton is twice as high as the number of [Iraqis] killed by the Republican [George] Bush."

Clearly some of us have been duped into voting for a candidate with no military or foreign relations experience, someone who was not the candidate of choice for somewhere around 75% of people in the military, under the pretense that our enemies would just leave us alone and we'd all be friends. Tsk, tsk. Didn't your mother teach you never to trust a terrorist?  If the Arab world doesn't believe that "Change Is Coming", then why in the world should we??? 

Just in time for election day your official Barack Obama 2008 flip-flops!!!  Forget, CNN, CBS, ABC etc. The mainstream media will not let you know about these flip-flops, but you can get them here online. Whether you've voted already or didn't make it to the polls yet, this deal is simply too good to pass up. 

He supports gun control, he doesn't support gun control, he thinks Iran is a threat, he thinks Iran is no harm, he'll take public campaign financing, he won't take public financing. Flip-flop, flip-flop, flip-flop. 

Which Barack Obama did YOU vote for??????????????