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The view from the 29th floor fat the Cardinal Club in downtown Raleigh (in November!)Located in: Raleigh, NC
Stimulus Package: Lawmakers Raise Lending Limits:
Do you qualify for a better rate?
The Economic Stimulus Act of 2008 is a $168 billion plan intended to jumpstart the sliding U.S. economy. While a lot of media attention has been focused on the $600-$1,200 rebate checks that millions of taxpayers will begin receiving this spring, the new bill is also designed to help certain "high-cost regions" of the struggling housing market by:
If you're looking to purchase or refinance a home in a "high-cost region," this is great news. These temporary increases could help you avoid the higher interest rates associated with "non-conforming," or jumbo, loans. Although these new limits only apply until the end of 2008, the legislation does not exclude the refinancing of any past mortgages into these new "conforming loans." That means, if you qualify, you can take advantage of the new limits no matter how many years have passed since you obtained your mortgage.
While this is great news, I should remind you that qualification standards are tougher than ever. So your credit score and credit worthiness are more important than ever. Give us a call today. We can review your options and discuss if we can make this legislation work for you.
Do You Live in a High-Cost Region?
Not everyone will benefit from these temporary loan limit increases, but experts estimate that areas in at least 17 states will be able to take advantage of it. So how do you know if your neighborhood qualifies?
A high-cost region is typically determined by the median value of its homes. The median value is the specific price that is halfway between the least expensive and most expensive home sold in an area over a given period of time. Do not confuse this with the average home price. The median home price is the price at which half of all buyers bought more expensive homes and half of all buyers bought less expensive homes.
If that sounds confusing, don't worry. It is the responsibility of the Department of Housing and Urban Development (HUD) to determine, within the next 30 days, what the median home price is for regions across the country. But I don't want you to wait until HUD makes its determination; give me a call to discuss if you might benefit from this new legislation. Ricardo Cobos (919) 559-3384
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The Bush Administration announced "Project Lifeline" Tuesday, a new initiative to help struggling homeowners with all types of mortgages, not just subprime or adjustable-rate mortgages. Part of the Hope Now Alliance (1-888-995-HOPE), launched late last year, the new Project Lifeline outreach program would grant homeowners who are at least 90 days late a 30-day break from the foreclosure process while their lenders try and work out a more affordable solution, including restructuring the loan, freezing or even lowering interest rates. The program was put together by HUD, the Department of Treasury, and six of the largest financial institutions, including Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase and Co., Washington Mutual Inc., and Wells Fargo & Co. These banks, which collectively service more than 50% of mortgages in America, have agreed to this program as a means to lessen the anticipated impact foreclosures could have on the open market. The Hope Now Alliance, which includes 25 loan servicers, reportedly helped 545,000 subprime borrowers and 324,000 prime borrowers in the second half of 2007, according to CNN. No estimates on how many homeowners this new program will help have been announced thus far. |
Why are the rates in the Real Estate Section of the newspaper .25 - .50 percent lower?
That is the question I was recently asked by a customer. To him I responded; "that's why we call it the liars section". If you advertise in that section to draw business, clearly you are selling on rate. We have trained a consumer to ask what the rate is instead of "What is the APR" you see, if all you have to sell on is rate, there is apt to be someone above you on the list and someone below you willing to lie just a little bit more to get your business.
More importantly, consumers aren't apt to check the APR to determine the true cost of their credit. For Example, when you check BankRate.com today, they give you the national average overnight which last night was;
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NATIONAL OVERNIGHT AVERAGES |
TODAY |
+/- |
LAST WEEK |
|||
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5.57% |
5.49% |
|||||
|
5.04% |
4.97% |
|||||
|
4.97% |
4.96% |
|||||
|
6.66% |
6.58% |
|||||
|
5.66% |
5.61% |
|||||
Notice that even BankRate.com doesn't bother to disclose APR. I find that interesting because according to RESPA, if you are advertising a mortgage rate, you must also advertise, in the same sized print, the corresponding APR.
If you go beyond the front page of BankRate.com's liar's page, you will see the following under the heading;
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Results of BankRate.com's Feb. 6, 2008, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan: |
|
|
30-year fixed |
15-year fixed |
5-year ARM |
|
This week's rate: |
5.78% |
5.31% |
5.51% |
|
Change from last week: |
-0.10 |
-0.07 |
-0.15 |
|
Monthly payment: |
$966.04 |
$1,331.61 |
$937.89 |
|
Change from last week: |
-$10.52 |
-$6.09 |
-$15.59 |
"The rate on the 30-year fixed has remained below 6 percent for more than a month now. Many homeowners applied a few weeks ago to refinance their mortgages, but latecomers continue to apply. According to the Mortgage Bankers Association, refinances accounted for almost 70 percent of applications last week, and brokers report a fresh round of inquiries this week".
Notice that when you get beyond page one on BankRate.com, you will get to the true "weekly average" which reveals a true rate closer to 6% than 5%. Most of the advertisers on those liar's pages aren't actually lenders, they are lead generators. Therefore if you do respond, to them, you will more than likely be inundated by phone calls at dinner time and SPAM in your inbox from numerous mortgage lenders looking to offer you a realistic mortgage rate.
In other words, if I intend to advertise a rate today of 5.00% for a 30 year fixed rate mortgage and I knew that rate is .57% BELOW the national average, which according to BankRate.com it is, then I need to disclose the APR reflecting the POINTS it will COST the buyer to obtain that rate. A quick survey of the WHOLESALE rates of 4 major US Banks (notice I said wholesale, meaning unless you are a state licensed mortgage broker with a reseller agreement in place with the bank, you do not have access to these rates) revealed Friday Feb. 8th it would cost you 2 ½ Points or $2,500 per $100,000 borrowed and that is just to break even, that means the lender makes no money whatsoever! If you accurately disclosed that cost in your Truth in Lending Statement the 5.00% 30 Year Fixed Mortgage would have a corresponding APR of at least 5.420%.
Most lenders in the Raleigh-Durham –Chapel Hill area operate on a 1.5% gross profit margin. That's pretty slim. Imagine if your business operated on a 1.5% gross profit margin, could you do it? Would you be able to meet payroll? Probably not, but that's ok, because we are looking at an average loan of $300,000. So to look at that same rate, it would cost you $15,000 is closing costs to get that 5.00% Rate!
The monthly payment on $300,000 at 5.00% Rate/5.442 APR would be $1613 per month, but It cost you 15,000 to get to that payment. The same loan with 5.50% Rate/5.574 APR but only ½ point or $1500 is $1706 per month is clearly the cheaper loan even though the payment is $93 per month more in interest, it will take you 161 months or 13 ½ years of mortgage payments before the latter loan is more expensive. You are better off in that case taking a 15 year fixed rate mortgage!
So, to recap, there is no such thing as free money. Everyone gets their money from the same sources. Yes, some are going to be cheaper, more than .25% cheaper is almost unheard of. And remember, you should ALWAYS be asking for the APR, not the Rate. See my earlier post titled;
What is the difference between the "Note Rate" and "APR"?
Finally, rates change daily and yes, sometimes numerous times a day given sufficient economic activity. In order to advertise in the Saturday real estate edition of any newspaper, you must have the rates in no later than Thursday. That means any rate advertised in print, probably doesn't have any real legitimacy unless it is a high rate!
You may also want to download my "Practical Fax Flyer, Practical Questions to ask a Mortgage Lender"
I hope this information was useful and helps to answer your question. If you have responded to any of those advertisers, please comment on your experience.
Thank you,
OK folks, for those of you that know better than the experts...dont read any further.
For those of you who are looking for some advice on whether or not to Fix your ARM and are looking for guidance; here is my answer;
NOW!
Tomorrow rates will be signinficantly lower than they have been in the past two weeks, the last time we saw rates are low as they will be tomorrow ( I know, I am predicting the future, aint it cool?) was Teusday January 22nd. Recall just a moment, then read my posts from that day.
The overnight markets imploded on Monday (MLK Jr. B-day), London & India lost more that 7% of their values, records to say the least. America wasnt open for business to offer our general optimism so they fell all day.
Tuesday, the futures were trading on the big board down more than 400 points! The fed announced an unscheduled rate cut of .75% The market closed down a modest 100points, adding credence to the fact that Americans are a resilient bunch!
Mortgages rates plummeted on Wednesday, not enough people acted, many did. Rates immediately rose .25 on mortgages. (shocker to those of you who DONT read my blog)
The fed met and cut rates the anticipated .25% last week...mortgage rates rose again. (Shocker to those of you who actually read my posts).
OK folks, here it is....proof...rates will be worth locking tomorrow if you need to purchase or refianance a home.
The big board fell 370 points today on the basis of what we the consumer have known for along time...our dollars arent buying us what they used to....ahem,.,,inflation. Again shocker to those of use who follow economic data. Raw goods, ie energy & crude have shot off the grid in the past six months. It now cost $75 to fill the same ugly mini van that last spring cost $45 and dont even get me talking about three years ago. (for those of you having a hard time following..that's called inflation).
All that to say, trader are nervous, and when they are nervous, they buy bonds. That's right, they buy bonds, the security that MOST influences mortgage rates!
So...lock your loans...and if you cant get your loan officer on the phone tomoorow, call me, I am answering all my phones personally, I will have three phones avaialable tomorrow for my clients. You may have to wait for a moment while I having one of them up, but here are the numbers;
(919) 439-9860
(919) 559-3384
(231) 929-0505
Wake County, Raleigh North Carolina Lovely Wake County homes for sale. Zero down payment. Free Report; http://WakeCountyZeroDownPaymentHomes.com
The Truth About the Mortgage Mess
RALEIGH, NC – Subprime mortgages have now been credited for bankrupting well over 293lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out at least two major banks including the Washington Mutual, the largest Savings &
BUY HUD FORECLOSED HOMES
$100 DOWN-PAYMENT
FREE RECORDED MESSAGE
888-440-3948 EXT 126
$75,000 to $220,000
Click Below
Loan in the US, IndyMac Bank, the largest Bank failure in two decades, 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in theUS and around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year.
This means that, for any Americans looking to buy, sell, or refinance a home, they are confronting a very different market from the one that existed just 6-12 months ago.
How did this happen?
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or "exotic" mortgages.
These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street.
Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing.
Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe.
What does this mean to you and your mortgage?
Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your real estate agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.
Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.
ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be.
Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.
Finally, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now – while it seems harsh and could get much worse – is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.
Ricardo Cobos is affiliated with National City Mortgage, a division of National City Bank. For a free consultation or more information about the mortgage market, contact Ricardo Cobos at (919) 559-3384.
# # #
SUBMITTED BY:
RICARDO COBOS
PHONE (919) 559-3384
FAX (866) 605-0079
BUYHUD FORECLOSED HOMES
$100 DOWN-PAYMENT
FREE RECORDED MESSAGE
888-440-3948 EXT 126
$75,000 to $220,000
Click Below
Sent: Friday, October 31, 2008 10:54 AM Hello Ricardo, I wanted to take this opportunity and thank you and your staff for the excellent job you did in transitioning and closing the sale of Sean Anderson. You and Denise were always so professional and efficient, which made all the difference in executing this loan to closing. We would like to thank you for all your hard work and dilligence. We look forward to working with your team in the near future on more sales. Take care.
To: Cobos, Ricardo
Subject: Thank You
Respectfully,
Sherinne Anderson, REALTOR
The Anderson Realty Group
Paradigm Real Estate
_______________________________________________________________________________________________________________________
"Ricardo has been able to consistanly deliver what he has promised. While providing great communication and serviced to my clients. Ricardo will get the job done no matter how long it takes. I highly recommend Ricardo as a Mortgage Lender."
Pamela Rudzki Realtor, Zip Realty Inc.
_______________________________________________________________________________________________________________________
"Ricardo was the most amazing mortgage consultant I have worked with! From beginning to end, he was the consummate professional, always trying to find a way to get my husband and myself into our home. He followed through with every promise that he made and did it in such a way that let us know that it was more than his job; it was his pleasure. He exuded integrity, reliability and respect. Our trust in him was, without a doubt, well placed and well earned. My husband and I would love the opprotunity to work with Ricardo again in the future- and that says a lot!"
June 2, 2008 Top qualities: Great Results, Personable, High Integrity Margie Boyd hired Ricardo in 2007.
_______________________________________________________________________________________________________________________
"Ricardo and I have worked together to refer business to one another. He is active in many organizations including the Cardinal Club Young Executives, a board we serve on together. Ricardo's experience in the business and professionalism really stand out in his industry."
February 3, 2008
David Forrest, Vice President / Commercial Banker, Fidelity Bank
"I would like to take the time to let Ricardo and others know of what a great service Ricardo is to the community. Ricardo's years of experience and knowledge in the Mortgage Industry allows him to help every client of his, get the best service out there.
You can depend on Ricardo to be there for you. When Ricardo is not able to answer the phone, do not worry, he will call you back, normally in less than an hour. Ricardo is always on duty. Meaning you can get him not just on weekdays but weekends when you need him the most to get a client pre-qual and get that offer put in on a home your clients have just found and would like to own. Ricardo stands by his work. He is committed to helping everyone who calls him." 01/29/2008
Susan Trombley, Realtor, Re/Max Hometown
"Ricardo is a pleasure to work with. He has trememndous knowledge of his business and does not hesitate to share to experiences with you to help you further your business. Great communication and response time!" 01/28/2008
Elisha Gutloff
Realtor, Kellwer Williams, Durham, NC
"It has been a long time in the business world since I met anyone that made me really remember them and feel like I had just met a real person with a real heart and soul. And, that I smiled when I thought of them! You know why? People in our career world generally don't really care and sometimes don't even act as if they care about us as a real person with families and loved ones and heartaches and triumphs. Most of the time people ask to be polite, but never hear a word you say because they really don't care or they have too much other stuff on their minds at the same time to listen.".....01/22/2008
Judy Cairns, District Broker
Raleigh/Durham, NC
Zip Realty, Inc.
"i worked with Ricardo when i bought my first home he was prompt accurate and honest throughout the process" July 20, 2007
Brian Bowen, Traverse City, MI
Top qualities: Great Results, Expert, High Integrity "I have known Ricardo for over a year now and have been highly impressed with his work ethics and integrity. Ricardo does not make false promises and is upfront and honest with all potential and existing clients. He has excellent knowlege in the Mortgage world is always striving to better himself for his clients well being." July 23, 2007 Renee Johnston(client) "Ricardo Cobos helped my husband and myself to get a loan for our home. He was professional and extremely helpful. He refused to giveup when things got difficult." July 18, 2007 Loretta Bain Sherman(client) "Ricardo is very knowledgable in his field. He makes getting a mortgage a very positive not overwhelming experience. He really treats each of his customers as if they were his only one. He has a great track record with many satisfied home owners." August 10, 2007 Hollie Rohloff(client) "Ricardo found the best mortgage to suit our complex needs. He will do his best to find what is right for your situation." August 11, 2007 Jonna Stebleton(client)
Real Estate One, Traverse City, MI
Traverse City, MI
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Hello Ricardo!
Thanks for the lead and the excellent job in this deal with Brian! I must say that I am very impressed.
Also, I realize that this was a team effort from Honor State Bank. Jenny in processing did an outstanding job. What I liked was the productive efficient work that was done on time. Please pass on my thanks and appreciation to Jenny and to your other teammates at Honor State Bank.
Let's do some more good business soon.
Don Valentino, Realtor
ColdwellBanker Schmidt Realtors
402 E. Front St., Traverse City, Mi. 49686
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In the future I would not hesitate to call you based on Sue Kelly's recommendation and your timely response.
Thanks again, jan
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I received a phone message this afternoon from Kay Wagner exploiting the positive experience she had with you. She said she just had to call me to let me know how helpful you were when they met with you regarding a mortgage.
Great job, thanks for providing WOW service! You can bet you will get a referral from her!
Ron
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Hi Ricardo,
I just wanted to take a minute to thank you. I don't know if this is how you treat all your clients, but you have been really good to meand beacuse of your help I was actually able to buy a house for me and my boys. The 3 of us really need some sort of stability right now and I strongly feel buying a huse is a good start.
Thank you so much for everything.
Katie
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thanks , Of all the lenders we deal with , your the sharpest , I appreciate your efforts! thanks Thank You, Steve Davis Eastwood Custom Homes
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