AZ Mortgage Pro- VA and FHA- Michael George

As a mortgage professional, clients often call to ask about whether or not they should file bankruptcy or call one of the "non-profit" credit counseling agencies that advertise on late-night television.

There is no simple answer to this question.

If you ask a credit counseling company (a.k.a. "debt negotiation company"), they will surely say that credit counseling is superior and if you ask a lawyer, he or she will say that filing bankruptcy is the better choice.

I operate a mortgage company and I am not in either business. However, I can tell you what the difference is between the two and hopefully you will come to the best conclusion yourself.

With consumers, there are basically two types of bankruptcies:

1. A Chapter 7 bankruptcy is when the bankruptcy court discharges all of your debt completely.

This means that every debt that you choose to put into bankruptcy will be eliminated. If you put your car payment in your bankruptcy, you will have to give your car back. If you choose not to include your car in your discharged debts, you can keep your car, but you keep the car loan also.

2. A Chapter 13 bankruptcy is when your bankruptcy court decides that you have the ability to pay your debts and they offer you a payment plan.

In other words, a Chapter 13 bankruptcy doesn't eliminate your debt, it just allows you to pay it back in smaller, more affordable installments.

The biggest misconception that people have is that credit counseling is better than bankruptcy, as far as credit goes.

This is absolutely not true.

When you enter an agreement with a credit counseling company, you get a label on your credit report that says, "In Credit Counseling." And from the perspective of a creditor, this is no different from being in bankruptcy.

When you are in credit counseling, you will not be able to obtain an Arizona mortgage.

Here is the bottom line: If you have more debt than you can handle, see if you qualify for a Chapter 7 bankruptcy.

If you can completely wipe-out your debt, I suggest you consider paying a lawyer and filing Chapter 7 bankruptcy. If you are so deep that you actually qualify for the Chapter 7, based upon the "means test," It's definitely worth the money.

Typically, Arizona lawyers charge between $800 - $2000 for a Chapter 7 filing. However, if you are wiping out tens of thousands in debt, the cost of a bankruptcy attorney is almost insignificant.

However, if you can only qualify for a Chapter 13 bankruptcy, then you might as well call a credit negotiation company and have them negotiate with your creditors for you.

It's going to affect your credit the exact same way that a bankruptcy would, except you will only pay a couple of hundred dollars for credit counseling.

There is no reason to pay an attorney for a Chapter 13 bankruptcy if you can get the same results from credit counseling.

Bottom line: If you can qualify for a Chapter 7 BK, you should probably do it. If you can only qualify for a Chapter 13, forget the bankruptcy and Google the term "credit negotiation help."

Update: Wow! This post has already been indexed by Google. Check it out. Less than an hour in the rain!

This post will be important to anyone who has owned a domain name for a very long time; it will also be very important to anyone who cares for a little more insight into Google.

If, at some point, you have changed websites, or changed the software on your site... It could damage your index position in Google.

So check this out: For years and years, I've been number one in Google for the term "Arizona Jumbo Loan" or "Arizona Jumbo Mortgage" or almost anything to do with jumbos. Same thing with FHA, VA...you name it. I had a good grip on Google.

Recently, I decided to update the website-- best thing I ever did by the way-- but, oh no! I was dropped out of Google! My VA loan page? The best in AZ? I can't even find it on the first five pages.

All of my content remains the same-- I even made it better. But now I was out of the index. All of my competition was above me.

How could this happen?!?

If you search for AZ Jumbo Mortgage right now, you will find that I am right back in number one position. I was gone for a few weeks-- and now I am back.

So...no big deal. I was out, but now I am suddenly back on top. I fixed it. Aren't you just thrilled?

Here is what I did:

I used the Wayback machine right here: http://web.archive.org/

They index your domain and you can see what your site looked like a long time ago.

So I wrote down all of the old links as I took my trip down memory lane.

Oh! How cute! My first Arizona Wholesale Mortgage design!

Then I opened up my website and changed every single URL back to what it was a few years ago. Google really liked me before and I want Google to like me again.

"Look Google! I've changed! I'm back to the way I was when we first met..."

It worked. Today, I am back on top for Jumbo Loans in Arizona.

But Google hasn't indexed everything yet. I was number one for years for the term Arizona VA Loan or AZ VA loans, or anything that you can think of to do with VA loans and VA mortgages.

Since our favorite search engine crawls ActiveRain so regularly, please let me take a moment to let Google know that all of my old pages are back.

You can click on my links if you want to, but they WILL NOT open in a new window...so you will leave ActiveRain. This is purely for The Google. So...check it out Google:

Arizona VA Loan

Arizona Jumbo Mortgage --- nah. What's the point? Already there. My competition does not realize this, but there is such a thing as overkill... So I won't link to that one. This time.

Right now, if you Google AZ VA Loan, I am nowhere to be found. Try it.

I bet, within the next week, I will be back on top for AZ VA Loans. Yep. I am just that bold. I'm pulling the old Babe Ruth and pointing to left field before I swing. (Actually, I am so confident that I would say "2 days", but I figured I would give myself a whole week, just to be cushy.)

Finally, it should be said, that this post is public...for now. I just need Google to find this page and once this page is indexed and my new / old VA link is found, this post will go to "Associates Only." So feel free to re-blog...

Now to get back to my work. I still have more links to change.

This girl really likes to party. She likes swimming pools. She likes it all. She's a total party animal.

Of course, she isn't really an Arizona Wholesale Mortgage Client. She isn't old enough to have a job and everytime you want to talk about interest rates, she just wants to talk about how much fun she's going to have and blah, blah, blah...

She has no attention span whatsoever. I would put documents in front of her, and she just flipped them over and used the blank side to doodle.

Then I found out she didn't even have a job. Oh but she can talk away all day on her Barbie cell phone!

This particular borrower was unable to qualify for herself, so she looked to her parents for assistance. Fortunately, her parents are far-less party-minded and actually work for a living. Thank goodness for mom and dad, right?

If you are an Arizona first time home buyer, and you have a job, we can help you find a mortgage. Even if you have no credit!

However, if you are a first-time home buyer and you are just a kid without a job, we may still be able to help you qualify for an Arizona FHA loan, but you will likely need your parents as co-borrowers.

If you are a student-- at ASU for example-- and you want your own place, your parents can help you qualify for an Arizona mortgage by putting their signatures on your loan documents. In the business, we call this a "kiddie condo." (The "FHA kiddie condo program" is not actually an FHA program at all-- it's just a term that was coined by mortgage folks.)

Nonetheless, we often have clients who want to buy a home for their college student children. The parents figure that it would be far less expensive, in the long run, to buy a home for their kid than to pay for Arizona State University housing. (And these are very smart parents indeed!)

So the parents list themselves as a co-borrower. It happens so often that mortgage brokers started calling an FHA loan with a non-occupying co-borrower (mom and dad) a "kiddie condo."

If you are a student and you have no credit or good credit, and you have a co-borrower (your parents) who can qualify for two payments (their housing expense AND yours), you can still get an FHA loan.

If you have BAD CREDIT, nobody can help you. Mortgages are not like auto loans. There is no such thing as a co-signer on a mortgage loan. If you have bad credit, you will not get a mortgage, even if Bill Gates is your co-borrower...or co-signer. 

But if your parents can qualify for two house payments, you too can have a swimming pool, and parties, and all the other advantages that come with being a homeowner, just like the little girl in our video. Just try not to party too much. Someday, you'll get a job and you'll want a mortgage of your own. And thanks to your parents and the FHA "kiddie condo," you'll have the credit to do so!

A friend of mine just closed his mortgage business in Arizona. Too bad. He was a good mortgage broker.

Well he's not dead...I guess he still is a good mortgage broker.

And I got to thinking: I wonder what happened to American Mortgage Specialists?

American Mortgage Specialists, Inc. was a company that I worked for briefly. I was the Chandler branch manager.

The reason I didn't work there too long was because the management was lying, cheating, scum.

Does that sound too harsh? Perhaps I'm not gifted with a silver tongue.

At one company meeting with branch managers, the President of the company bragged-- in front of over 100 employees-- about screwing an old woman out of $10,000 with a negatively-amortizing option ARM loan.

It was "everything to make a buck" with these people, and they all slept just fine every night.

I pretty much had it at that point. I resigned. I wasn't going to work for a mortgage company which clearly had an idiot for a President. Not only was he an idiot, but he wanted us to push the Option ARM loan on our clients-- due to the high profit margin--which I always thought was crap (the Option ARM).

In my entire career, I closed one Option ARM mortgage loan and it was for a close personal friend who very clearly understood that he was taking out a mortgage that I thought was crap.

I discouraged people from taking it and it cost me clients. It cost me money. But I wasn't going to be a guy who puts senior citizens upside-down on their homes, with a very confusing and decieving loan, just so I could have a nicer car.

I remember, after I registered AZWM.com and opened the Chandler branch of Arizona Wholesale Mortgage, I had just hung up the telephone with the Arizona Better Business Bureau. So I thought I would check out my own former employer.

Thirty-three consumer complaints in a very short time span. Thirty-three!!!

And guess what? Turns out that in June of 2010 the AZ Department of State Banking issued an "emergency suspension" order and shut them down. The legal document filed by the state actually says that emergency sanctions were necessary because this Arizona mortgage company was a danger to public health and welfare and needed to be shut down immediately.

Arizona Wholesale Mortgage has been in business since 1998 and we have never, ever had a single consumer complain...ever.

The BBB is certainly not foolproof. Bad businesses sometimes have excellent reputations, just because they've jilted mortgage clients who never took the time to complain.

But I still can't help but think that a good number of those 33 people would not have been jilted if they would have taken the time to check out the company before they signed their disclosures, not after closing.

I'm sure many of you are aware of the Fannie Mae Homepath Loan.

Basically, it is a loan where a borrower can buy a home for zero down-- using a Fannie Mae loan-- if the home is bank-owned, and owned by Fannie Mae. You can find available properties at www.homepath.com.

I hate this loan for a number of reasons-- because, from the get-go, I thought it was a consumer rip-off-- but I'm sure other mortgage brokers have written about the fact that the closing costs are so substantial that the "no down payment" option is utterly ridiculous.

But I want to talk about something different. How Fannie Mae is screwing themselves, the economy, and every single one of us with the Homepath loan.

I recently took on a client who wanted a Fannie Mae Homepath loan.

I tried to encourage the client to use FHA, even though it would be ten times the work for me, because I felt the Homepath loan was a lousy option for my client. I've never done subprime loans, and this reeks of subprime to me. It's covered up with lots of perfume, but it still reeks.

No luck. As it turned out, the house was owned by Fannie Mae, so they insisted on taking Homepath loans only.

Now why would Fannie do that?

Because Homepath loans do not require an appraisal. This home has some missing roof tiles, and an appraiser would find those.

So Fannie Mae, the seller, doesn't want Fannie Mae, the buyer, to know the roof has problems. Maybe major problems, maybe minor.

So Fannie Mae is screwing the new lender with an over-inflated value... But guess what?!? Fannie Mae is the new lender!

What the heck is going on here?

That's not all. The closing costs are so prohibitive, that my borrower decided to cancel the contract. So Fannie Mae counters: They offer to give him $7000 in closing costs (about 5%) and they move the price of the home up slightly to make up for the difference.

So Fannie Mae over-inflates the value of the house-with-a-bad-roof, so that the guy can get approved with...Fannie Mae!

Am I losing my mind here?!?! Fannie Mae is messing with the borrowers, messing with their own profits, messing with home values, and thus messing with EVERY SINGLE ONE OF US.

I don't care if you sit on the left or the right side of the aisle, this has got to stop.

Copyright 2010, Michael George, Arizona Wholesale Mortgage