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Archive for February, 2012

How To Avoid Foreclosure – Or – Cant Refinance? – Maybe Its Time To Modify Your Loan

The real estate market has been stable and climbing for over a decade whenever a homeowner’s mortgage needed to be addressed for any reason refinance was the initial thought. Refinancing was easy; the variety of loan products available was unending. Easy money coupled with an increasing market gave homeowners the ability to take cash out when needed lower their interest rate fix their interest rate as well as a number of other options.

In today’s declining market easy money is a thing of the past. Refinancing is available to only a select few. Nowadays trying to get approved for a refinancing is extremely difficult. Wall Street is no longer purchasing loans from originators and banks lenders have slashed programs and applied stringent requirements for qualifying for a refinance. Without a government guarantee to buy the loan most bankers and lenders will not make the funds available for a loan.

The FHA Fannie Mae and Freddie Mac are being stretched to the limit and can’t possibly keep up with the demand. As a result their underwriting criteria have tightened and the money supply has also. New homebuyers and current homeowners looking to get financing must have excellent credit plenty of equity job stability disposable income assets galore and proof of all of the above. If any of these conditions can’t be met getting a loan is next to impossible. When you have little or no equity there is no option to refinance. This is true for all borrowers well qualified or not.

You don’t always have to pay huge closing costs to reduce your mortgage’s interest rate. In this type of market loan modification is the only way to achieve a change in your loan terms that will make it livable. Study this course and put it to work for you. Smart homeowners can “modify” their mortgage by negotiating with their existing lender for a reduced interest rate or reamortization of their current loan. Some homeowners who are upside down in their loans may even be able to negotiate a principal balance reduction.

For the time being at least lenders are approving nearly 90 percent of loan modification requests. If it’s properly prepared and makes sense they’ll probably approve it the first time through. Unfortunately if your request is sloppy missing information or just not very clear they will set it aside and move on to the next one. They’re just inundated with loan modification requests right now. Loan modification is a laborious process but the rewards are well worth the time and energy spent negotiating.

COPYRIGHT C 2008 ALL RIGHTS RESERVED ORIGINAL AUTHOR DANIEL HARRIS

About the writer:  Dan Harris operates Harris Capital Management Inc. and Mobil Settlement LLC in New York and can provide detailed information on How to Negotiate a Loan Modification with your current lender. Homeowners in Danger of Losing their Homes will be happy they stumbled across Mr. Harris. Dan is also available for seminars and speaking engagements. He can be reached at LoanModBook.com

How To Advance Your Career As A Loan Officer In The Mortgage Industry

Each week I receive countless emails from loan officers dissatisfied with their small commission checks looking for something better within the industry. Theyve learned the mortgage business inside and out and have made the necessary sacrifices to put their career on firm standing. Not satisfied with the measly yield spreads and basis points their current company is paying they look at other options and a way out.

You may recall in a previous article I mentioned that:

When I first started in the industry my commission spread was 20 of the yield spread premium or YSP. And if that wasnt bad enough we worked on teams of three peopletwo loan officers and a processor. This meant that any commissions I and my team earned had to be split threeways amongst us all. Im not kidding! My commission after all was said and done was a measly 6.57.0 of the YSP. So on a 3000 loan I would make about 200 at most. You dont want to see what it looked like after they took taxesout. Absolutely pitiful. Being ignorant of the mortgage industry didnt make me stupid. END QUOTE.

If you are currently working as a loan officer and want to know your career options here are a few to consider:

Option 1: Become a fullfledged mortgage broker and open up your own mortgage company.

This is really the only way youll get 100 commission and be able to dictate life on your own terms. However there are a few hurdles you must overcome as well as drawbacks. One of the biggest hurdles is that many states require a certain level of capital to be held in reserves before you can even get licensed.

Many states have personal net worth requirements too and wont even allow you to do anything under your own license until you can meet the standards they have set. Of course there are experience requirements as well as a mandatory background check that is part of the process as well.

Youll also have to not only sell the loans but process them market your company and handle all the backoffice paperwork and legal requirements. Not to mention your choice of lenders you use will be extremely limited as the lenders themselves have their own set of criteria BEFORE they will even approve you for business. Mortgage brokering solely on your own under your own license sounds great at first glance but only if you have the personal and financial fortitude to weather the inevitable hiccups.

Option 2: Become your own mortgage banker and finance your own deals.

This doesnt really apply to you unless you are first a mortgage broker trading under your own license. Many brokers become large enough to where they make the transition from broker to lender. The reasons for doing so are obvious. Warehouse lines of credit if secured from the right source can provide a banker with an even larger yield spread than if they simply stuck to being a broker and going off other lender rates sheets. In this case as a banker you make your own rate sheets and set your own commission spread levels. Some mortgage bankers even go into wholesale lending and have other brokers feed loans into them.

Financing for mortgage banking can come from a variety of sources such as warehouse lines outside investors etc. And the state and federal regulatory rules and regulations vary. One of the main advantages of mortgage banking is that you can set your own lending criteria and can approve loans that others deem too risky.

One of the best known examples of a mortgage broker transitioning into a mortgage lender is Ditech Funding. I am sure youve seen their commercials with the loan officer character!. I was told that their wholesale line comes from GMAC and that Ditech was their largest client. This could be you some day!

Mortgage banking is certainly something to consider if you are already your own mortgage broker with your own license.

Option 3: Leave your company and join a net branch as your own branch manager.

Becoming a net branch is probably the best of both worlds. You are on your own under your own mortgage branch but maintain much of the control over the daytoday operations of the firm. The home office handles all the backend stuff such as accounting legal and regulatory requirements. They also have established relationships with national lenders many numbering in the hundreds. They can set you up quickly and provide a structure and support system to help you succeed.

The commission spreads from net branches vary widely and most firms require a minimum past experience of at least two to five years showing a track record of success. Some firms have a set yield spread split such as 70 to you and 30 to them. Others give you 90 or even a full 100 but charge a fixed fee per file as in between 300 to as high as 600 a loan. Although 100 sounds great Ive heard stories of even higher fees fixed file fees out there!

If the net branch doesnt have a fixed split per loan they may markup their rate sheets they give you and take the extra spread. For example a lender sends the net branch a daily rate sheet the net branch home office marks it up a tad and sends it off to you. And you never see what the real rates are!!! You are pricing off an already markedup rate sheet and are never even aware of it! Sneaky eh?! Not all firms do this but some do!

Also with net branches although you are on your own you still have to follow their set policies and file procedures. And the firm will have other unknown requirements and miscellaneous corporate rules. However you wont find these out until you are well underway and committed to them.

Its funny many mortgage companies are really net branches in disguise. Maybe even the company you are working for now! Thats right! They probably were once a small little oneperson net branch at some point too! But they grewup expanded and hired people to work for them. You can do this to! Its a definite possibility.

Overall net branches are a great way to own your own business without all the headaches and hassles that go along with it. However a word of caution: research each firm thoroughly before you join and dont make any rush decisions.

Some of the biggest net branches out there are: Allied Capital Corporation Carteret Mortgage Allfund Mortgage Global Home Loans Summit Mortgage etc. There are literally hundreds of choices these are just a few!

Option 4: Stay as a loan officer.

If becoming a broker banker or net branch manager doesnt appeal to you you can always stay as a loan officer and change firms. If you dont want the responsibilities of running your own shop why not simply move onto greener pastures.

There are many mortgage companieseven within your own citythat probably pay a lot more than youre getting at present. Why not have a little look around and see what the other guys are paying? It doesnt hurt to ask. Remember being a loan officer is really being a salesperson. And working on commission means that most firms will hire you with little hesitation provided you have the educational and professional background. Its little risk to them if you dont succeed because if you dont sell you dont get paid.

Dont be afraid to look elsewhere because if you stay where you are youll never get ahead.

Option 5: Move into another area of the mortgage industry.

As you know I work in training and help loan officers and mortgage brokers succeed in the industry. Ive been there and done that already. After selling and closing thousands of loans I know what works and what doesnt. When I got burnt out from originating fulltime I decided to use my knowledge and experience to help train others.

This way I am still a part of the mortgage industry I love and have all the freedom and control over my life I want. You can do the same. This industry is in dire need of professional trainers. Like many people Ive spoken to Im sure your training wasnt much more than a cold telephone and a couple of bum leads. Mortgage training is a great area to consider.

And if not mortgage training why not become an appraiser title company owner real estate attorney loan processor notary public underwriter wholesale account representative etc. These are all great careers and still in the mortgage field.

Ultimately where you go in the mortgage business is entirely up to you. The sky is the limit and your opportunities are endless. Ive only just opened your eyes to a few of them.

About the writer:  Rob Lawrence is ranked one of top national trainers in the mortgage industry. He is the currently the CEO of Battlecall.com coaching tools and resources to turn mortgage professionals into mortgage warriors. Visit http://www.battlecall.com for his free Sink Or Swim weekly newsletter mortgage training marketing advice and more! Jumpstart your career in the mortgage business starting today.

How And When To Get Secured Loans With Guaranteed Lowest Rate

What are Secured Loans? A secured loan is basically a loan wherein you the borrower will offer a sizeable value of property as collateral to be allowed to take out the loan from the lender. Hence you are securing your loan so that the creditor feels secure in lending money to you. The collateral becomes a form of security against the day that you fail to pay back the loan on time. The timeframe between defaulting on your payments and when the creditor can take possession over the form of security the collateral may depend on the terms of your Secured Loan but that is how all Secured Loans generally function.

Why does the creditor need your property as collateral? If you fail to pay back the loan within the timeframe specified in your agreement the creditor needs your collateral to sell so that he can get back the value of the amount he lent to you. Secured Loans can reduce the level of financial risk that the creditor assumes by lending to you. Secured Loans also gives the creditor a basis for putting faith in your word when you pledge to repay the loan.

The assets you can pledge as collateral in the Secured Loans you are offered will range in size depending on the amount you want to borrow. Generally the larger the loan amount the larger will be the value of the asset you have to pledge as collateral. The best type of collateral has to be real estate like your home provided it is in good condition because real estate usually appreciates in value over time. The next most common type of asset used as collateral is a vehicle though this is not as valuable as real estate because cars depreciate over time due to wear and tear of use.

People try to get Secured Loans because this is the usually the most convenient way to get money to finance a significant need like growth of their small business or a down payment on a new home. If the loan amount you are seeking isnt very big do not go for Secured Loans because you get a better deal on a personal loan or extension of a current mortgage instead plus you need not put up your home as collateral.

To get Secured Loans with guaranteed lowest rate possible for your circumstances you need to figure out how much payments per month you can afford on your current income. Some people like to figure out how much they can borrow using their property as collateral only to find out the repayment terms are rather heavy. If the lender agrees you can have a longer repayment term period. But the rule for repayment periods is: the longer the time given you to pay the bigger is the cumulative payment. Still at least with a longer repayment period you need to pay less per month out of your income so maybe a longer repayment period is more comfortable for you to absorb.

Another aspect of Secured Loans you need to bear in mind is the lockin period. This means if you borrowed 1000 and agreed to pay within 1 year at 10 interest then discovered another lender who can loan you more over a longer period of time at a lower rate and want to switch to the second lender you have to pay lockin penalties to the original lender which cover the trouble the first lender now has to absorb because youre switching to another lender.

In short the best advice you can get regarding how to get Secured Loans with guaranteed lowest rate possible for your circumstances is to: a get a loan only when youre sure what you want; and b look before you leap.

About the writer:  For more resources about Secured Loans or even about Debt consolidation loans please review this webpage http://www.phillipsfinancialservices.co.uk