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Jane's Place

by jmax123 from Jersey

Last Post 39 days, 14 hours Ago


Inside Information---A Consumer Advisory
Aug 3, 2007 | 9:45 AM
Category: News
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You might think, "I am not in the real estate industry, so this won't affect me"---------WRONG!    The mortgage sector is the main strength of our country's economy, and we may be heading for a melt-down!

As an insider in both the real estate and mortgage industry, let me offer you this as a consumer advisory:

Back in March I posted a blog about how the subprime mortgage industry lost all of their investors due to the super-high forclosure rate in 2006.   Of course they created this mess themselves, by offering mortgages to anyone who can breathe, to make a quick 1 to 2% of the loan amount in a conduit Wall Street trade to the investor.   Sheer greed got in the way of banks even caring about the fraud involved to misrepresent the loan to the investor.   The most common types of fraud are stretched appraisals, phoney employment, phoney stated income; although there are many other types as well.

For those not aware, the banks may service your mortgages, but 98% of them were funded and owned by rich investors in mostly Korea.   These investors stopped investing in our mortgages because the high rate of forclosures, made them take a huge loss.   Now most banks can only fund loans out of their own resources, and the designated amount loaned to them by the federal reserve.    It seemed as if we would be okay with just the subprime lenders shutting down, but now seeing A-credit lenders shutting their doors, is very shocking!

American Home Loans, is / was a very large wholesale mortgage lender, that I have brokered many A-credit loans through myself.   I was surprised to learn that they closed their doors two days ago.  Their stock dropped 90% that day.

I was told at my real estate office that last week;  right at the closing tables in two separate incidences, Countrywide Bank recalled their loans, and left the homebuyers sitting at the closing table in shock and helpless!   They actually wired the mortgage money to the closing attorney, then requested it back!

I am receiving emails daily from large wholesale banks stating their new limitations and stricter guidelines, while defending how much money they have in reserve, so we don't give up on them.  

I am not sure why the public isn't being alerted to what is happening, and how it could ramify into a much weaker economy-----hopefully not a crash;  but I sold all my personal investments last week just in case.   I am in no way recommending to anyone to sell off their investments, that was just my personal choice.   I can always reinvest if a solution to this problem somehow comes about.   I just don't see one in sight.

Not to create a panic, but I am advising you to do your own research, and stay alert to what is happening in this industry, because it will affect you, no matter who you are.  

Jane

 

 

 

 

 

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Member Comments Total Comments: 13
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helivet333 read my blog view my photos
Aug 3, 2007 | 6:25 PM

Well the average Joe Sixpack, with a wife 2 kids and a mortgage doesn't really have the wherewithal to have much invested in the market. That aside, you have to be in Wonderland with Alice, the Queen and the Cheshire cat if you haven't heard or read of the sub prime mortgage mess. If you sold a week or two ago fine, but most of the money lost on the Street is the little guy panicking near the bottom because he was last to get the word or too wrapped up in life to pay attention to what investments he has. The jury is out on whether a full blown credit crunch will develop. So it's too early to predict a recession. Fannie Mae and Freddie Mac can provide liquidity in the short term. The Fed can also lower rates and ease any potential crunch. The Big banks like Bear Stearns might take a hit to earnings and a bunch of hedge fund shareholders will get hurt. ( I don't really feel sorry for them. They would sell your kids and theirs to turn a profit.) So the most money made on the street is made by the guy who buys when all others sell. We had a kids rhyme for that. It went like this. If you buy when others sell, everything will work out well, if you're selling when their buying, they'll be laughing when you're crying. In other words those investors who do their homework and don't panic reap the rewards.
jmax123 read my blog view my photos
Aug 4, 2007 | 5:27 PM

.....and the ones who do not do their homework end up like this poor Joe Sixpack that you mention.
I say don't get married to your investments; after you sell them, you can always reinvest the money right back where it was----but after the smoke clears. You don't want to be the duck sitting on the BBQ grill while it's still smoking!
BronxGirl1 read my blog view my photos
Aug 7, 2007 | 7:05 AM

jmax123

You are right on again with the mortgage/stock market issues today. Unfortunately, the ones at fault are New Century, Aztex Mortgage and most of the not-so-well known lenders. If you deal with Citi or Chase - one of the big guns - you have a better chance of a no-nonsence mortgage transaction. I am somewhat into real estate - I work for an attorney and I am his Real Estate Paralegal. I shutter whenever clients come in with commitments from some off-the-cuff lender - too too much room for the lender to goal some poor guy into a mortgage he REALL CAN NOT AFFORD. There is the foreclosure market. These guys make thousands on the deal and you never see them again. If you deal with a bonafide mortgage broker - better yet - deal directly with a major bank and there would not be all the foreclosures there are. We also do foreclosures sales and believe me they are not the major banks. Argent Mortgage, New Century, names such as these. Got to go, talk to you later.
jmax123 read my blog view my photos
Aug 7, 2007 | 8:47 AM

Ameriquest (same owner of Argent; Roland Arnall) was the biggest wolf in sheeps clothing that led the pack for years, they were one of the first to go too. I had dinner with Roland when I used to be employed by Ameriquest. The nicest guy you'd think if you met him, but he was the man behind it all. The sold owner of the predatory empire.

The lender death count is over 50 now, and today I got this email, another one down:


To: All National City Home Equity Origination Sources

RE: Suspension of Approving Loan and Line Applications




Date: August 7, 2007






Effective Monday, August 6th, 2007, National City Home Equity suspended the acceptance of new applications and the issuance of preliminary approvals on previously submitted loan and line applications.



Loans and lines in the pipeline will be handled as follows:



Fixed-Rate Loans:

· Fixed-Rate Loans with a locked rate and a final approval must be funded within the remaining lock period. Locks cannot be extended.

· Fixed-Rate Loans with a locked rate and a preliminary approval must have remaining conditions cleared and fund within the remaining lock period.

· Fixed-Rate Loans with a floating rate and a preliminary approval can be locked at prevailing rates through Monday, August 13th, 2007. The application must qualify for final approval at the locked rate. The remaining conditions must be cleared and the loan funded prior to the 60-day lock expiration.



Home Equity Lines of Credit:

· Lines of Credit with a final approv
jmax123 read my blog view my photos
Aug 7, 2007 | 8:50 AM

I meant to say Roland was the sole owner (not sold owner), but he did sell out to the devil, so it works either way, LOL
BronxGirl1 read my blog view my photos
Aug 7, 2007 | 12:47 PM

Jane - an interesting article in the NY Times today "Mortgage Maze" goes right in with our conversation and how much it hurts the average Joe.
BronxGirl1 read my blog view my photos
Aug 7, 2007 | 12:53 PM

P.S. - Ameriquest - I am sorry to say - was the worst the very worst to deal with - and forget about getting a payoff letter....
jmax123 read my blog view my photos
Aug 7, 2007 | 1:05 PM

You know why? Because while you were waiting for a pay-off letter, Ameriquest's loan retention department was back-soliciting the customer by phone, pleading with the borrower to stay with Ameriquest. They held back the pay off letter to the maximum time the state's department of banking allows them, so they have time to convince the customer to redo the mortgage with them.
BronxGirl1 read my blog view my photos
Aug 9, 2007 | 7:14 AM

jmax - that is really sh***y. If someone wants a pay-off letter just to have a pay-off letter he should be able to get one whenever. In today's news the President vetoed the mortgage bail-out. It is a big and sad set of events that brokers would lie and talk people who really should not have a mortgage into getting a high-rate or variable rate mortgage. I am talking about brokers who take advantage of their own kind and rip their hearts out. They tell them they can, that anyone can get a mortgage, that is is no problem, we will get you out of the higher rates as soon as it comes about, and when they try to refinance it is not a possibility especially with one of the major banks. And as you said they disappear right after the closing, or soon after, leaving these people no other choice but foreclosure. These brokers take huge monies out of the loan for their "fee" and they do not care about the person they are robbing. We have a large spanish-based client list, who are all wonderful people. Our clients come in with these horrid stories about being told they have to use their attorneys and their title companies, etc., etc. My firm will not take the deal if the attorney after reviewing the mortgage paperwsork that the client is being robbed. I am talking $12K in points and "fees" and better. It is awful and sinful. These poor people get led down the wrong path by people they trust because "he is from Puerto Rico", "she knows my sister", these are the worst people to get involved with. Thankfully, most of our clients when they do start something will stop by the off
jmax123 read my blog view my photos
Aug 9, 2007 | 8:14 AM

It's all true what you are saying. Especially at Ameriquest, where in some branches they wouldn't even approve the loan unless it was priced at a 108-----meaning 8% goes into the company's pocket. 8% of the average 300,000 loan is $24,000. But it doesn't stop there, when the same loan get sold to the investor, there is a SRP (service release premium) of an addition $3000 or $6000! All that on just one loan, that took only 2 to 3 hours total to process!

I remember when "loan officer" was just under "anesthesiologist" on the top 10 paying jobs list on AOL! No college degree required, and earning as much as doctors, that is why.

I had to leave Ameriquest and open my own mortgage branch in order to get away from that. It was like a rape camp for people who were either stupid or desperate. For the past 5 years since I left, I did all my clients right. In fact, lawyers actually tell their clients that I charge them much less than the average mortgage broker.
As the say, "The cream always rises to the top" Ameriquest is out of business, and I am still in business------

Bronxgirl, we may never be rich, but at least we can sleep at night knowing we don't hurt people like they do.
jmax123 read my blog view my photos
Aug 9, 2007 | 11:46 AM

Lender Death-Row Toll as of today from http://ml-implode.com/

115. Deutsche Bank Correspondent Lending Group (CLG)
114. MLSG
113. Trump Mortgage
112. HomeBanc Mortgage Corporation
111. Mylor Financial
110. Aegis (Everything)
109. Alternative Financing Corp (AFC) Wholesale
108. Winstar Mortgage
107. American Home Mortgage / American Brokers Conduit
106. Fieldstone Mortgage Company
105. Nations Home Lending
104. Wells Fargo Alternative Lending Wholesale
103. Entrust Mortgage
102. Flick Mortgage/Mortgage Simple
101. Alliance Bancorp
100. Choice Capital Funding
99. Premier Mortgage Funding
98. Stone Creek Funding
97. FlexPoint Funding (Wholesale)
96. Starpointe Mortgage
95. Unlimited Loan Resources (ULR)
94. Freestand Financial
93. Steward Financial
92. Wells Fargo (Correspondent)
91. Altivus Financial
90. ACT Mortgage
89. Alliance Mortgage Banking Corp (AMBC)
88. Concord Mortgage Wholesale
87. Heartwell Mortgage
86. Oak Street Mortgage
85. The Mortgage Warehouse
84. First Street Financial
83. Right-Away Mortgage
82. Heritage Plaza Mortgage
81. Horizon Bank Wholesale Lending Group
80. Lancaster Mortgage Bank (LMB)
79. Bryco (Wholesale)
78. No Red Tape Mortgage
77. The Lending Group (TLG)
76. Pro 30 Funding
75. NetBank Funding
74. Columbia Home Loans, LLC
73. Mortgage Tree Lending
72. Homeland Capital Group
71. Nation One Mortgage
70. Dana Capital Group
69. Millenium Funding Group
68. MILA
67. Home Equity of America
66. Opteum (Wholesale, Conduit)
65. Innovative Mortgage Capital
64. Home Capital, Inc.
63. Home 123 Mortgage
jmax123 read my blog view my photos
Aug 9, 2007 | 11:47 AM

62. Homefield Financial
61. First Horizon Wholesale
60. Platinum Capital Group
59. First Source Funding Group (FSFG)
58. Alterna Mortgage
57. Solutions Funding
56. People's Mortgage
55. LowerMyPayment.com
54. Zone Funding
53. First Consolidated (Subprime Wholesale)
52. EquiFirst
51. SouthStar Funding
50. Warehouse USA
49. H&R Block Mortgage
48. Madison Equity Loans
47. HSBC Mortgage Services (correspondent div.)
46. Sunset Direct Lending
45. Kellner Mortgage Investments
44. LoanCity
43. CoreStar Financial Group
42. Ameriquest
41. Investaid Corp.
40. People's Choice Financial Corp.
39. Master Financial
38. Maribella Mortgage
37. FMF Capital LLC
36. New Century Financial Corp.
35. Wachovia Mortgage (Correspondent div.)
34. Ameritrust Mortgage Company (Subprime Wholesale)
33. Trojan Lending (Wholesale)
32. Fremont General Corporation
31. DomesticBank (Wholesale Lending Division)
30. Franklin Financial (Wholesale Operations)
29. Ivanhoe Mortgage/Central Pacific Mortgage
28. Eagle First Mortgage
27. Coastal Capital
26. Silver State Mortgage
25. ResMAE Mortgage Corporation
24. ECC Capital/Encore Credit
23. Lender's Direct Capital Corporation (wholesale division)
22. Concorde Acceptance
21. DeepGreen Financial
20. Millenium Bankshares (Mortgage Subsidiaries)
19. Summit Mortgage
18. Mandalay Mortgage
17. Rose Mortgage
16. EquiBanc
15. FundingAmerica
14. Popular Financial Holdings
13. Clear Choice Financial/Bay Capital
12. Origen Wholesale Lending
11. SecuredFunding
10. Preferred Advantage
9. MLN
8. Sovereign Bancorp (Wholesale O
BronxGirl1 read my blog view my photos
Aug 10, 2007 | 7:01 AM

Jane - thanks for the list and I will keep you in mind i.e. mortgages. Talk soon!
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jmax123

I believe every great person, at some time, was encouraged by someone who had the ability to see their hidden talents, and cared enough to lead them to see it too. Without this caring person in their past, we may have never known many people that we admire today. "FLATTER ME, AND I MAY NOT BELIEVE YOU. CRITICIZE ME, AND I MAY NOT LIKE YOU. IGNORE ME, AND I MAY NOT FORGIVE YOU. ENCOURAGE ME, AND I WILL NOT FORGET YOU. (Sir William Aurthur)"

Member Since: 3/14/2007


 

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