Category: Education, SubPrime | 
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In the summer of 2005, sub-prime mortgage lending was at its peak. Rates were relatively low and lending guidelines were relatively loose.
At the time, the “standard” sub-prime mortgage product was the 3/27 ARM.
The 3/27 had a few basic traits:
1. A fixed, 3-year “starter rate”
2. Every six months thereafter, the mortgage rate changed
3. The formula […]
Category: Education, Federal Reserve, Rates | Leave a Comment
The Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent this afternoon, as expected.
In its press release, the Federal Reserve noted the co-existence of inflation and recession.
On inflation, the Fed said that energy and food prices are contributing to an “elevated state” of inflation, but that it expects price pressures to […]
Most homeowners make four housing-related payments each month:
Principal on a mortgage
Interest on a mortgage
Taxes on the real estate owned
Insurance for the real estate owned
Collectively, these payments are known by the acronym PITI but don’t let it fool you — a homeowner’s monthly expenses are still called PITI even if one or more of the elements doesn’t […]
Category: Consumer Insight, Education | Leave a Comment
When homeowners borrow more than 80 percent of a home’s value, mortgage lenders often require a corresponding insurance policy called Private Mortgage Insurance.
PMI provides a cash payment to lenders in the event of a homeowner defaults.
But because PMI policies are designed for high LTV loans only, they usually contain cancellation options for when home equity […]
Category: Best Practices, Education | Leave a Comment
Traditional loan officers and mortgage planners have obvious similarities. Although both processes result in a mortgage transaction, MP’s focus on the long-term relationship and financial well-being of the homeowner. TLO’s focus on the transaction–getting the loan closed and moving on.
TLO Objectives:
Transaction speed
Taking applications
Measuring units and outcomes
MP […]
Category: Best Practices, Education | Leave a Comment
Because it’s time to wake up and smell the roses! Between the FOMC slashing interest rates like it’s going out of style, to JP Morgan’s bailout for Bear Sterns, what does this all mean? And how does this actually affect my mortgage rate?
As responsible investors, realtors and homeowners, we owe it to ourselves […]
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