Aventura Mortgage Brokers

The mortgage industry has changed and new trends for 2009 are developing. One of the markets that are being watched by many in 2009 is the mortgage sector. Mortgage brokers in Aventura, Sunny Isles Beach, Hallandale, Hollywood and the surrounding areas are working in difficult times. There was a time not too long ago when it was easy to get a mortgage and even easier for the mortgage broker to write it up. Aventura mortgage brokers are left in a challenging position - to stick with their profession or find another type of work. This is a tough choice for many and it leaves a lot of honest hard working people without employment.

READ MORE on our dot com about Aventura Mortgage Brokers There's great information about loan modification, refinancing, and other challenges in the lending world. Be sure to watch the video by Dan Green.

Mortgage Mistakes for Aventura Residents to Avoid

Happy new year to all of Aventura, South Florida. At a time of year when people decide to change their lives in some positive way with a resolution, I thought I would share an article with all of you residents of Aventura that will hopefully be a resolution for all in regards to mortgages. Whether you already own a home in Aventura, or are looking to make a home in Aventura you should always make sure to make important decisions regarding your financing. I found an interesting article regarding 8 mortgage mistakes a person can make, and thought to share it with all of our Aventura readers.
Feel free to contact me through our email for any assistance in your residential financing needs.

8 big mortgage mistakes and how to avoid them
You can borrow too much or prepare too little. You can misjudge terms or overestimate your credit. With so much at stake, it’s no wonder so much can go wrong.
By Liz Pulliam Weston
Applying for a mortgage can be a daunting experience.
It's not enough that you're agreeing to take on the biggest debt of your life, one that represents two to three times your annual income. You're also confronted with piles of paperwork, flurries of fees and a tidal wave of terms, from amortization to title insurance, whose meaning is fuzzy at best.
"Whether it's a professor at Stanford or a ditch digger," said San Francisco mortgage broker Leon Huntting, "most people don't understand the loan process."
In this confusing and pressure-filled atmosphere, it's easy to make some mistakes. Here are some common ones that lenders and mortgage brokers see, and what you can do to prevent them.
Not fixing your credit
Mortgage brokers say they're confounded at the number of buyers who apply for a mortgage with their fingers crossed, hoping their credit will allow them to qualify for a loan.
Before you even think about applying for a mortgage, obtain copies of your credit report and your FICO credit score. Your FICO score is the three-digit number that's used in 75% of mortgage-lending decisions. You can order your FICO score on the Web for a fee of $14.95, which includes a copy of your credit report.
Doing this at least six months in advance should give you plenty of time to challenge any errors on your report and ensure that they're removed by the time you're ready to apply for a loan. You can also see the legitimate factors that are hurting your score and do something about them, such as paying off an overdue bill or paying down credit card debt.
Not looking for first-time home buyers' programs
These programs, typically sponsored by state, county or city governments, often offer better interest rates and terms than you'll find among private lenders, said mortgage consultant Diane St. James. Some are tailored for people with damaged credit, while most can help people with little saved for a down payment.
Some of these resources are listed on St. James' educational Web site, ABC Mortgage Consulting. You can also call the housing agencies for your state, county and city to see what they offer.
Not getting pre-approved for a loan
Many first-time borrowers confuse being "pre-qualified" with being "pre-approved." Pre-qualification is a pretty casual process, where a lender tells you how much money you probably can borrow based on how much money you make, how much debt you already have and how much cash you have for the down payment.
Getting pre-approval, by contrast, is a much more rigorous process and involves actually applying for a loan. You typically submit tax returns, pay stubs and other information. The lender verifies the information and checks your credit. If all goes well, the lender agrees in writing to make the loan.
In a hot or even warm real estate market, the house hunter who is only pre-qualified is a cooked goose. Home sellers and their agents give much more weight to offers being made by buyers who already have a loan lined up.
Borrowing too much money
Many people take out the biggest loan they possibly can, figuring that their incomes will eventually increase enough to make the payments comfortable. But few first-time buyers have any clear idea of how expensive homeownership can be. Not only will you shell out more for mortgage payments than you probably did for rent, but you'll also need to cover property taxes and homeowners insurance, as well as higher bills for utilities, maintenance and repairs than you faced as a renter.
Lenders are perfectly willing to let you overextend, knowing that you'll probably forgo vacations, retirement savings and new clothes for the kids rather than default on your mortgage.
"Mortgage money … is way too easy to get," said Ted Grose, president of the California Association of Mortgage Brokers. "People tend to overbuy … and that can really stress family life. It's also a formula for foreclosure."
Instead of going to the edge of affordability, consider limiting your housing costs -- mortgage payments, property taxes and homeowners insurance -- to 25% or so of your gross income. That's a much more sustainable level for most people, financial planners say, than the 33% lenders are typically willing to give you.
Not shopping around for rates and terms
Mortgage broker Allen Jackson of Bristol Home Loans in Bellflower, Calif., sees too many borrowers with decent credit getting stuck with loans meant for people with poor credit. So-called "subprime" loans are often more profitable, so less ethical mortgage brokers may push them.
If the borrower doesn't know what the prevailing interest rates are for someone with their credit standing, Jackson said, they can easily pay thousands of dollars more than they need to. You can see a listing of loan rates by credit score at MyFico.com, and a comprehensive listing of prevailing rates and fees can be found in MSN Money's Banking area.
Even people with a few dings on their credit can often qualify for better loans than they're typically offered, said Grose of 1st Mortgage Advisors in Los Angeles. He believes most of the people being shunted into government loan programs, such as Federal Housing Administration (FHA) loans, would pay less if they used mortgages now being offered by private-sector lenders.
Paying junk fees
Lenders can boost their profits by adding on a variety of fees. Some may be legitimate, some may be inflated and others may be pure fluff. Lenders may charge for "document preparation," for example, when all that involves typically is having a computer spit out a form. Or they may charge $150 for a credit check that cost them $15.
The time to challenge junk fees is not when you're about to sign the loan papers. Use a mortgage broker or call a number of lenders to compare their loans. Ask about the interest rate, the "points" charged to get that rate (each point is 1% of the total loan amount) and any other fees the lender charges. Then you can compare terms.
Once you've selected a lender, you'll be given a good-faith estimate of closing costs, which should include any fees being charged. Ask about each fee, and try to negotiate down the ones that seem excessive.
If the lender won't negotiate, "take that estimate to someone else," St. James said. "I'll bet they can beat it."
Unfortunately, this doesn't absolutely guarantee you won't face junk fees when it comes time to sign the loan. Many borrowers complain that they still face higher costs than were originally estimated, and so far the federal government has done little to prevent the practice. You can try challenging junk fees at this point, but most likely you'll have to bite the bullet and pay the fees to get your loan.
Not planning for closing costs
The day you're scheduled to get your loan, known as closing, you'll also be expected to write a check for a number of expenses, which typically include attorney's fees, taxes, title insurance, prepaid homeowners insurance, points and other lenders' fees. Together, these are known as closing costs, and the total can be eye-popping: somewhere between 2% to 7% of the selling price of the house.
"Usually, when people see the closing costs, they're like a deer in the headlights," said mortgage broker Hunting, who works for Pacific Guarantee Mortgage. "It's much more than they ever think it's going to be."
Plan for closing costs by getting a good-faith estimate from your lender as early in the loan process as possible. Make sure you have the cash on hand (or rather, in your checking account) and that it doesn't "disappear" before closing because of sloppy bookkeeping or a last-minute emergency.
Not having enough cash on hand after closing
After borrowing too much, and scraping together every last dime for closing costs, many home buyers have nothing left in the bank to pay for anything unforeseen happening --and something unforeseen always happens.
"It costs so much just to move in," Grose said. "Then the water heater breaks."
Some people are so tapped out by the process, Jackson said, that they're not able to make their first mortgage payment on time. That's why "more and more lenders are requiring [borrowers have] three months' reserves after closing," Jackson said.
That's a smart idea for borrowers, anyway. Having three months' reserves, which means a fund equal to three months' worth of expenses, will help you handle the added costs of homeownership with much less stress.
Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

Bush unveils plan to help subprime borrowers

In response to Michael's post today about the importance of keeping Aventura residents informed, I thought this mortgage announcement should be posted instantly.

“There is no perfect solution,” President Bush said Thursday as he announced an agreement hammered out with the mortgage industry. “The homeowners deserve our help. The steps I’ve outlined today are a sensible response to a serious challenge.”

To view the entire article click - read more

CLICK ON LINK TO WATCH VIDEO
Bush's mortgage plan

City of Aventura Mortgage Report

Today an article ran in the Miami Herald regarding mortgage fraud. It's vital that our readers know what's going on in the mortgage industry. The City of Aventura is a new town that has experienced recent growth. I'm confident that there are many Aventura residents exploring a first mortgage or refinancing in response to the city's development. This makes mortgage news highly relevant to Aventura real estate and the residents that are buying and selling condos in the area.

I hope you find this article as informative as I did. Enjoy.

Seven more arrested in mortgage fraud

BY MONICA HATCHER
mhatcher@MiamiHerald.com

Seven new suspects accused of mortgage fraud were rounded up by police, as Miami-Dade County Mayor Carlos Alvarez unveiled new legislation to increase criminal penalties for people convicted of real estate fraud.

The proposal would allow property appraisers to revalue assessments in neighborhoods plagued with fraud, where inflated values have driven up property taxes for nearby homeowners. It would also create a statewide mortgage fraud task force.

''A lot of people think . . . [mortgage fraud] is just a way of making money, that it's a business, it's an industry. But they are going to find out very differently, '' Alvarez said at a news conference. ``If you've done it, you might be in trouble.''

Launched in September, the Miami-Dade task force is a partnership of lawmakers, law enforcement and business leaders formed to devise ways to combat and prevent the widespread mortgage fraud that slammed South Florida during the real estate boom.

Subcommittees have been meeting over the last several months to craft reform measures, including educational outreach, an industry code of conduct and legislation. The task force recently released a standardized complaint form the public can use to report fraud. State Senators Gwen Margolis, D-Bay Harbor Islands, and Alex Villalobos, R-Miami, and state Rep. Carlos Lopez-Cantera, R-Miami, introduced the measures and said they will back them in Tallahassee next year.

Amid the real estate market slowdown and record foreclosures that have cast a spotlight on questionable loans, police said they had received more than 1,000 complaints of suspected mortgage fraud in Miami-Dade.

Included in the recent spate of arrest is Mariana Navarrete, 44, the registered owner of Confin Home Mortgage & Loan and United Consultants Group, who was arrested last month and accused of recruiting family members to steal the identity of an employee and using it to take out loans.

CONTINUE READING - CLICK HERE

Let's Think Positive

Here is an example of the half truthful, and demoralizing real estate/mortgage news that the media has been spreading. Click here.

Now let me share my thoughts with you on a few of the key issues discussed in the article.
While it is true that overall credit standards have tightened in the mortgage industry, it is important to know why it has happened. Without going into too much detail at this time, the subprime, Alt A, and “exotic” loan products, had a big part in the current real estate/mortgage market that we find ourselves in today. It is important to note though, that today we do have 100% first time homebuyer loans - the difference being that borrowers are required to validate their income and show an effort to pay their bills on time. Lenders don’t ask for "perfect credit" but instead a demonstrated effort to pay on time - indicating that they will more than likely pay back the mortgage they are seeking. Prospective buyers with a proven history of taking out debt and not paying it back will have trouble finding a mortgage in today's environment.

Regarding the sentence: “Lenders not only loosened their standards but also used so-called exotic mortgages, which allowed people of lesser means and weaker credit to buy homes.”
It doesn’t even make sense! The fact that lenders so called “loosened their standards” has nothing to do with “exotic” mortgages. What you need to understand, is that lenders’ standards are based mostly on what risk the investors are willing to take. After funding a mortgage, lenders then bundle similar loans (credit, type of loan, interest rate, Loan-to-value, etc.) and pool them together. These pooled loans are then sold off to investors in the Secondary Markets. Based on this short description, you should understand that lenders’ standards are based on the risks that the investors are willing to take, and their requirements. The reason “exotic” mortgages doesn’t fit into this sentence is due to the fact that they actually had more stringent qualifications than the “normal” loan products (Fixed, ARM’s, Interest Only, etc.). The “exotic” loans required that the customer qualify at the fully amortized payment, and not the teaser rate.

In regards to the article as a whole, I have to say that there are so many more factors to the current real estate/mortgage market, and it’s not as simple as the drive-by-media makes it seem. It’s a combination of the aforementioned reasons and a lot of irresponsible decisions made by consumers that may have used the wrong professionals!