Philadelphia Area Mortgage Blog

Delaware County Council will join Upper Darby Township in the "unleashing" of the county's first official dog park on Thursday, July 24, 2008 at 1pm.  A ceremony will take place at the 10 acre, multi-use recreational facility at Kent Park, in Upper Darby on the Clifton Heights border.   At the new park, registered pet owners can unleash their dogs for exercise, play activities and socialization with other canines.  The park is part of a much larger plan to preserve open space and add recreational facilities along the Darby Creek.

There will be an open house from 1-6pm and both pet owners and their dogs are invited to attend.  Kent Park is located near the Lindbergh Bridge in the 3900 block of Bridge Street, off of Baltimore Pike.  More information and directions can be found here.

Primos-Secane, PA is located in Delaware County, Pennsylvania in Upper Darby Township.  Primos-Secane is the name of the post office which serves the area an is not an actual town.  The area could be known as Primos, Secane, or Primos-Secane depending upon who you ask since the borders between which section is Primos, and which are blurry. 

The area was mostly farmland before it was developed and most homes in the area are about 50 years old, although there are a few new construction homes as well. The Primos-Secane swim club provides summertime enjoyment to families in the area.  It is a private swim club and open to members only and their guests.

For more information see Secane, PA.

What would you say if you were shopping at your local home center, looking to purchase a certain type of light bulb.  You ask the first clerk you see where the light bulbs could be located and he replies "Not my department.  I work in Plumbing".  Maybe you are at a local supermarket and one of the employees witnesses a customer shoplifting.  Why didn't she intervene? "Not her job.  That's why the store hires security guards".  

The phenomenon of "Not My Job" is alive and well in the Real Estate industry these days.  The current hot topic seems to be figuring out who to blame for the current state of affairs in the real estate/mortgage industry.  The game of Pass the Buck is playing out like this:

Mr. and Mrs. Homebuyer:  It's not our fault we couldn't afford our mortgage and went into foreclosure.  The Real Estate agent should have showed us homes that were more affordable or recommended a more conservative mortgage person.  We really didn't understand what we were getting into.

Ms. Real Estate Agent:  It's not my fault the client defaulted on the mortgage.  Yes, I do prequalify my clients to determine what they can afford but I'm not a mortgage person.  I don't even understand mortgages as they are not my job.  Selling houses is.  If the buyer couldn't qualify the loan officer should have just told them "No!"

Mr. Loan Officer:  Well, actually the buyers did qualify for the loan, just outside of conventional guidelines.  If the lender offers programs for 500 FICO scores and no verification of assets who am I to say they don't qualify?  In fact, the buyers cannot be turned down as long as they meet the guidelines of the particular program, no matter how absurd the guidelines are.   Besides, I don't create the loan products, the lender does.

ABC Lender:  Well it is true that we create the loan programs which have become more and more lenient in regards to who can qualify, but we couldn't do this unless there were investors who were willing to invest in the products tied to these risky mortgages.  Not our fault.  Blame the investors. Or Wall Street.  The  Fed.  The President. Not us.

The truth is, no one segment of the industry should bear the burden of the blame, nor should anyone be exempt.  Each transaction is unique and may have failed at any point in the chain -  from the overzealous real estate agent who wanted to sell the most expensive home, the unscrupulous loan officer who steered clients to products with the best payout to him without regard to what was best for the client, the lenders who set guidelines that basically approved anyone who could write their name on the application, or the buyers who couldn't  keep up with their loan payments because they were trying to keep up with the Joneses.  It is not just a "Mortgage Mess" because it affects the real estate industry as a whole.   I understand real estate agents wanting to defend themselves but to place the blame squarely on the mortgage industry is irresponsible.   The same goes for mortgage people who want to blame the agents.  But agents, unless you only deal with cash buyers, we're all in this mess together.

There are those who think we should stop trying to place blame and work on a solution.  How very PC and idealistic but how does one find a solution unless he determines the problem?  If your car won't run, and you take it to the mechanic, he can't fix unless he determines what's wrong.  Maybe the battery is dead, maybe the transmission is gone, or maybe you ran out of gas.  Determining the problem is the first step to fixing it.   But passing the buck, saying "not my job" and refusing to take responsibility is not.

Written by Michelle Chamberlain of Above All Financial Services, a Delaware County Mortgage Broker. To apply for a Pennsylvania Mortgage loan or to learn more visit www.aboveallmortgage.com.

Many people have never heard of Secane.  Some would guess that it is a shore town in New Jersey, or somewhere else near the "sea".   In fact, the area known as Secane is roughly 6 miles west of Philadelphia and lies in both Upper Darby Township and Ridley Township.   The closest thing to the sea is the Muckinipatus Creek which runs through the area.

Secane is not actually a town but the name of the section of the township and the post office which serves the area (this may contribute to the confusion).  For mailing purposes a resident's address is Secane but their actually municipality is either Upper Darby or Ridley.   Other "towns" in Delaware County which are actually sections of a township include: Holmes, Milmont Park, Folsom, Westbrook Park, Drexel Hill and Primos.  The area may also be referred to as Primos-Secane which is the actual name of the post office, although the area known as Primos exists only in Upper Darby Township and not in Ridley.  (A bit confusing especially when having a pizza delivered).

Legend has it that Secane was name after Chief Secane (alternate spelling Sicanne) of the Lenni Lenape tribe that once inhabited the area and the Muckinipatus Creek named after his son.  In fact, in the wooded areas along the creek you can almost imagine what the area may have looked like when the Native Americans lived there.  It is not uncommon to see wildlife such as deer, rabbit, fox, and raccoon although the area is pretty much developed save for a few patches of woods here and there.  Almost like living in the country without having to drive 10 miles to the nearest store.

Living in Secane and commuting to Center City Philadelphia is a snap.  The Septa R3 train offers an Express train leaving the Secane Station during rush hour times and will have you at your destination in only 20 minutes.   You can walk to the train station from most locations, but there is also limited parking should you wish to drive.  Secane is also conveniently located to major roadways such as the Blue Route (I-476) and I-95 (about a 10 minute drive to both) and about 15 minutes away from Philadelphia International Airport (no highway driving needed). The Springfield Mall is located 3 miles away and numerous shopping centers, restaurants, and other retailers are even closer.

With gas prices over $4.00 per gallon and rising and the cost of everything else rising faster than the mercury in your thermometer who needs to travel to the Shore or other vacation destinations when there is plenty of fun right in your own backyard?  Delaware County has lots going on the summer and many activities are low cost (some or even free!)  Here are some of the most popular places for summer fun for families in our region.

Swim clubs.  One of the nice things about living in Delco is that just about every neighborhood has its own swim club.  They are not open to the public (except as a guest of a member) but annual membership fees are reasonable and way less than a weekend at the Shore.   You can enjoy swimming all summer long, and most clubs have other features such as playgrounds for the children, basketball and volleyball courts and swimming and diving teams.  Some of the neighborhood swim clubs include:  Aldan, Aquatic (in Morton)Briarcliffe,  Clifton Heights, Creek side (in Wallingford) Drexel (in Broomall) Folcroft, Glenolden, Knowlton and Hidden Hollow (in Media), Lansdowne, Nassau (in Ridley Park), Prospect Park, Primos-Secane, Ridley Township, Springfield Country Club, Springfield Township,  Swarthmore, and Tinicum (this list is not exhaustive).  Some may not be open to new members so you'll need to check with each particular club. 

Libraries.  The Delaware County Library System has great FREE programs for children from infant to high school aged.  Programs vary by local library but include: story and craft times, playgroups, summer reading clubs, Science in the Summer, and other featured entertainment programs like magicians, storytellers, and speakers.  Visit the library website or your local library for more information.

Upper Darby Performing Arts Center.  The Summer Stage program offers theatre programs for young people performed by other young performers from the community.  Some of the performances for children this year include: Peter Pan, Pinocchio and Alice and Wonderland.   The Main stage performance (geared for older audiences) is My Favorite Year.  These are extremely professional and entertaining productions (some have commented better than most Broadway Shows).  Best of all, tickets start at just $5 . 

Linvilla Orchards.  "A 300 acre farmland dedicated to agriculture, fun and education" Linvilla offers a farm market, hayrides, straw maze, playground, and animals.  You can also pick your own crops which vary by season and include: strawberries, blueberries, tomatoes, apples and pumpkins.   Many special events and festivals are held throughout the year like the Strawberry Festival in the summer and Pumpkinland in the Fall.  Admission is free but some attractions like the hayrides are not. 

Rose Tree Park Summer Festival.  Free evening concert performances located outdoors in Rose Tree Park in Media.  Something for everyone including: Big Band, Elvis Tribute, Billy Joel Tribute, Jazz, Classical and Children's Music.  Bring a blanket or a lawn chair and enjoy some dancing and good times.  Check the website for performance schedule and times.

As you can see, there is plenty of fun close to home.  Now get out there, take the kids, and enjoy!

Has anyone else checked out the new Localism site?  Coming July 31 there is going to be an option where you can sponsor a community for a monthly fee.  As anyone who lives/work in Delco knows drawing the line at the boundaries of communities can be confusing.  I guess it is ok if your town is Springfield.  Everyone knows where that is and the boundaries are pretty clear.  But what about if your "town" is really a Post Office or you happen to live in one of the many areas that are in two different townships or boroughs?

Let's take Secane for an example.  It is currently the area listed on my profile. It is not really a town but a section of both Upper Darby Township and Ridley Township.  To add to the confusion, if you are just going by the zip code, 19018, then the area may also encompass Primos, Primos-Secane, Aldan, Clifton Heights, and Westbrook Park.  What about Briarcliffe, which is part of Darby Township but has a Glenolden mailing address (a different municipality all together)? I'm sure there are many other examples as well but those a just a few off the top of my head.

Are you planning on using Localism and/or sponsoring a town?  What do you think is the best way to handle all the quirks of Delco's neighborhoods and boundaries?

Your opinions please.

As we all know there is a current crisis in the mortgage and real estate industry.  Foreclosures are on the rise, home prices are dropping and many people find themselves in loans that they cannot really afford.  Who do you think is responsible for this and what can we do to avoid this in the future?  Let's take an example.

A couple wishes to buy a home.  Their income is approximately $125,000 per year.   Average home prices in their area are about $605,000.   After their down payment they end up with a loan of $550,000.  The lender will approve them for a loan but the payment is a tight squeeze.  Technically they can "afford" the mortgage but they will need to be on a very tight budget to be able to pay their other bills and won't have much discretionary income.  They fall in love with a house  and think it is a great buy as there are similar homes in the area listed for more.  The couple goes ahead and makes the purchase. 

Maybe they even opt for a creative mortgage product like an interest only, or 40 year amortization to lower their payments a bit.  It doesn't really matter because fast forward a year or two and home prices have dropped significantly and the couple now finds that they really can't afford their mortgage after all.  They are falling behind on the payments and face foreclosure.  Who is responsible or should beheld accountable in this situation or others that are similar:

a)      The Real Estate Agent.  She knew that the home was probably a little more than the couple could comfortably afford and should have steered them toward lower priced homes or recommended they wait until prices come down a bit or have a larger down payment.  If she tried, would the couple have even listened, or would they find another agent?

b)      The Mortgage Broker.  He is the expert in the home financing field and should have discouraged the couple from this much of a loan.  If he tried, would the couple have listened to him or would this just make the agent mad for trying to kill her sale and send the couple to the other broker down the road?

c)       The Lender.  They are the ones who set the guidelines and ultimately approve loans for people with high debt ratios and offer the creative financing options that allow people to qualify for loans that they can't really afford.

d)      The Couple.  They should have been more responsible and not rushed into homeownership because ultimately they are the ones who will lose their home and ruin their credit.

e)      All of the above

f)       None of the above

What do you think?

Potential borrowers often wonder where they should go when shopping for a mortgage.  If they are buying a home should they go with their Realtor's mortgage person?  Should they visit their local bank?  Call one of those large national mortgage companies who advertise on TV?  What about a mortgage broker?   There are a lot of choices out there and consumers are often unsure which road to take.

All of these options can work but they each have their own advantages and disadvantages.  Let's take a look at them more closely:

1) Your Realtor's mortgage person/company.  Some real estate agencies have in-house lenders.  Others have relationships with local mortgage people in the area, or your agent may have someone he or she recommends.  Some buyers think this is the best choice because their agent can be involved in the transaction and ensure that it gets done.   After all the loan officer is not going to want the angry real estate agent knocking on his office door every day demanding to know the status of your loan. This may work if you know your agent well, and trust him or her to make sure you are getting into the best loan for you, and not any program that will qualify you just to get the deal to go to closing so the agent and his mortgage friend can get paid.  Also, steer clear of anyone who tells you that you have to use the in-house lender or local mortgage partner.  They are clearly only looking out for one person and it's not you!

2) Your local bank.  You may very well get the best deal at the local bank as they sometimes offer some of the lowest rates, that is if you have perfect credit, can document your income and have the necessary money for down payment and closing costs.  This is a very small number of borrowers and may not be you.  Local banks also have some great programs for first time buyers that you probably can't get elsewhere.  However, don't think that they will approve you just because you are a long time customer, know all the employees, never bounced a check etc.  Unless you meet their strict criteria they probably won't. 

3) National mortgage companies you see on TV.  You may think that this is the safest choice.  How can you go wrong with a company that has ads running during the Super Bowl, right?  Wrong.  In the past years these types of companies have proven to be some of the worst choices for potential borrowers, charging high fees and rates, putting people in loans they could not afford and causing people to lose their homes.  Many of these companies are now out of business, and some well on their way.   Not to mention these companies are huge and get thousands of calls a day, so you can forget personal service and having someone to answer your questions about all the fees and charges that you don't understand.  In fairness, not all national mortgage companies are bad, and there are probably a lot of hard working mortgage professionals employed by these companies who will work to get you the best deal.  The problem lies in weeding out the good from the bad.

4) Mortgage Brokers.  A mortgage broker does not work for anyone bank or lending institution.  A good broker will have access to a variety of different lenders and programs, even those for borrowers with less than perfect credit.  You will have more options for financing with a broker than a local bank and most likely even the large mortgage company so there will be no need to shop around.  If you do not meet the criteria of one lender, you may certainly be able to qualify for a loan at another.

 Also a good broker will be able to offer you personalized service and work to get you the best possible rates for you because unlike the real estate agency's in-house lender (who is basically handed clients by all the company's agents) the mortgage broker will actually have to earn your business and work to keep it.  There are a few brokers that are dishonest, and care more about their commission than they do their clients.  But the majority (and those who wanted to remain in business) are not and know that if they do not find the best loan for the buyer the bank or lender down the street will.

Whoever you choose for your mortgage needs it is most important that you find someone you can TRUST.  Don't be afraid to shop around, and ask questions before applying for the loan. And if you are currently working with someone who is not returning your calls, answering your emails, or helping you understand your options, don't be afraid to take the exit off of that road and go elsewhere. 

It's no secret.  Buying a home is not as easy as it used to be.  Gone are the days when you could NOT have perfect credit, NOT document your income, NOT put any money down and still get a loan.  As a result, real estate agents are starting to notice that what would have once been a slam-dunk deal is now falling through because the buyer cannot get approved for the loan.  Being educating about the mortgage pre-approval process can help minimize the effects of losing deals and this means both happier buyers and sellers.

First, let's clear things up.   I've noticed some comments about lost deals recently that have left me a little bit confused.   One agent commented that he recently lost a deal because his buyers were "prequalified for a certain amount" and they put an offer on a home at the high end of the buyers' price range.  The deal never closed in the end because based on his income, the buyer couldn't get a mortgage for the higher amount.   Other agents comment that they will not even show a client a home unless they have a "pre-qualification letter" from the mortgage company.   Still others wonder, "What good is having a buyer pre-approved if the mortgage company decides in the end that the buyer is not really qualified?"  The confusion here?  It seems that the terms "pre-approved" and "pre-qualified" are often use inter-changeably, when in fact they are different.  

Here's how a pre-qualification works:

Mortgage Company:  What is your yearly income?

Buyer:  About $125,000

Mortgage Company:  And how is your credit?

Buyer:  Great!

Mortgage Company:  And how much money do you currently have in the bank?

Buyer:  About $25,000

Mortgage Company:  In that case, you are prequalified for a loan in the amount of $400,000 at our best interest rate.

Now here's how the pre-approval process works.  Same questions as above but in this case the mortgage company will actually verify the information by:

•·         Ordering a credit report to see whether the buyer's credit is actually "great" or if they actually have a lower credit score that would put them in a higher interest loan or worse, credit problems that would prevent them from getting a loan at all.

•·         Verifying the income with copies of the buyer's paystubs and W2's so we can be prove that the buyer's  income is actually $125,000 and that this is not just the figure he hopes to make if he works a lot of overtime,  gets that large commission or bonus check, or works  "under the table".

•·         Verifying assets with copies of bank or other account statements so we can prove that the buyer really has these assets and didn't just make a large deposit because he took a loan elsewhere or got a large cash advance from his credit cards.

Once all the information is verified, the loan is put through computerized or "desktop underwriting" and the pre-approval letter can be issued to the buyer.  The buyer and the agent can then use this information to look for a home.  Some buyers like to find their home first and then get a preapproval, but this can lead to disappointment if the buyer finds that he cannot really qualify for the home of his dreams.

Does this mean the pre-approved loan is 100% guaranteed?  Well, no.  The loan will still be subject to an appraisal, and will still have to go through regular underwriting as the desktop underlying is only preliminary.  The underwriters will check once again that the information that was provided by the buyer is correct and legitimate, so if the buyer submitted recent paystubs for his job but "forgot" to mention he just quit his job the loan is NOT going to be approved.  Also, if the buyer has some credit problems or is a non-conventional borrower, he may be preapproved for a loan program that the lender decides that, due to stricter guidelines, they no longer want to offer and the deal may never make it to closing.   This is unfortunate and cannot really be avoided but fortunately is also rare.

Is the process of prequalification or preapproval worthless?  Of course not.  The prequalification process may be useful if a buyer wants to begin a preliminary home search online or wants to get an idea of what they can afford because they are thinking about buying a home.  However, the best chance you have at making sure you have a qualified buyer is to have a pre-approved buyer and not one that is just pre-qualified.  The pre-approval means that not only is the buyer serious he is also able to get a loan.  And for anyone involved in the transaction of buying and selling a home, that is not worthless at all!

Written by Michelle Chamberlain of Above All Financial Services, a Delaware County Mortgage Broker. To apply for a Pennsylvania Mortgage loan or to learn more visit www.aboveallmortgage.com or www.mortgage411center.com.