The credit crisis got a much needed shot in the arm this week with the government takeover of Fannie Mae and Freddie Mac. Immediately we saw a nice improvement to interest rates as well as many sectors of the stock market. Nobody knows if this is going to be the answer to the housing crisis, but we do know that rates are much lower than they have been in months, so maybe now is the time.

Within the next few months, over 1.2 trillion dollars in mortgages are about to reset. Many of these customers have been waiting and gambling with rates before refinancing. Unfortunately, 40 to 80% of these borrowers currently in adjustable rate mortgages and interest only mortgages are going to see a significant payment shock. In other words....their payments are going to skyrocket!

There are a few more pieces that fit into this equation, but one area going to be hit the hardest is the Alta-A and Jumbo market. Currently, 15% of all Alta-A customers (those with slight credit issues) are currently at 100% Loan to Value. This means they owe as much if not more than the house is worth. The Jumbo market is being hit even harder. 25% of all Jumbo borrowers are at 100% LTV or higher.

Many believe home values may continue to drop, although we are very close to the bottom. Why would current home owners gamble with interest rates AND decreasing home values? Every day I work with homeowners that qualified a few months ago, but a drop in home value now eliminates them from a refinance. If you add up the numbers and a refinance makes sense now, don't put it off. This market can change tomorrow and you may miss out on something that could have really helped your financial situation.

We have all read about the homeowner who has taken out the 50 year, interest only, adjustable loan 3 years ago and now that the payment is recasting, they can no longer afford their home. It seems you can't read a blog or newspaper article about homeowners, and not find one who hasn't fallen behind on payments. Now these homeowners are looking at bankruptcy, foreclosure, short sales or attempting a loan modification, just to survive. If you read my last post, you know I feel for these people, and hope a solution is right around the corner. However, I want to explore a different borrower that seems to have done everything right, but cannot catch a break.

The recent change in the economy has caused many to fall behind one way or another. The increased prices to gas, milk, bread, and everything in between has caused even the most prudent consumer to be stretched beyond their means. Homeowners that have paid their mortgage on time for years and are now facing tough times, cannot seem to catch a break. Have we now reached a point where we cannot extend help to those that have been so good to us in the past? Aren't we all allowed a moment to gain our composure and regroup?

I see it in sports all the time. I watch NFL teams so out of sync that they need to call a timeout and regroup and regain some composure. Why doesn't this work for some homeowners?

If I am a homeowner and have paid my mortgage on time for the last six years without a hitch, and suddenly I had some financial hardship, can I call a timeout? Shouldn't my past give me some type of breathing room? Doesn't a flawless payment history for 6 years on EVERYTHING and a 750 FICO score allow me to get something other than a collection call from my mortgage company?

NOT IN THIS ENVIORMENT!

It really is sad to see what has happened in the mortgage industry, and how so many bad loans have caused so much paranoia amongst lending institutions. Mortgage companies are no longer hiring wholesale account executives to sell, they are now staffing up on collection agents and loss mitigations specialists. At what point do we realize that everyone, regardless of Credit, Capacity, and Collateral, are going to run into a road block along life's journey? It can happen to anyone, even you!

My question is simple. Who is going to be there to help those that have done right so many times in the past, and have always figured out a way to make a payment, now that they have fallen onto hard times? I want to help, but there is only so much I can do. The bailout by the Federal Government? Hey, I don't want to get political here, but most programs I have seen are for those that have fallen behind on their mortgage after it has adjusted. What about Mr. and Mrs. Jones that are in the 30 year fixed at 6.5% and have had some medical issues the last three months and their mortgage history has suffered? Do we have some economic stimulus for these people?

I have heard the saying many, many times....LIFE IS NOT FAIR! I understand this now more than ever. I just wish there were more ways to make the playing field a little more even.

ATM's charge high fees when you withdraw your OWN money from a competing bank's machine. This fee ranges from $2.00 to as high as $10 if you ever needed to get some cash from a Casino in Atlantic City. It is absolutely insane that we pay these high fees in order to access our own cash, but I have to tell you, it is a lot cheaper than another method many people use...Refinancing!

In the past 5 years, many homeowners have used their house like their own personal ATM machine. Homeowner wants to put on new siding....Refinance! Homeowner wants to put on an addition, paint the house, take the kids on a vacation, shopping spree, new car, vacation house, new lawn mower, new basketball hoop, college education...Refinance!

I know this sounds strange coming from a mortgage professional, and I do make my living through refinances, BUT it is not always the best solution. Many different variables go into a refinance along with fees. Deciding to take the plunge needs proper planning, but more importantly, it takes a pad, a pencil, a calculator, and an honest mortgage professional to guide you along the way.

Many sub-prime loans were taken out with some interesting options and descriptions in order to create a lower payment. Many of these refinances were done based on the notion that the value would increase forever, and more equity would be available later. Some really paid the price because of the product chosen. Here are just a few examples of these exotic products:

Interest Only loan - homeowners pay only the interest that accrues on the loan. They are not required to pay any of the principal. This offered homeowners a lower payment on which they could qualify.

40 and 50 year terms - in order to reduce the monthly expense and qualify for a lower payment, many borrowers were offered longer terms. By stretching out the loan to 40 or 50 years, payments on loans would decrease several hundreds of dollars, allowing homeowners to buy or refinance more house.

Negative Amortization Loans - The "Neg -AM" loan actually allowed borrowers to pay less than the interest each month. The loan balance on this product would increase each month because homeowners were not required to pay the interest accruing on the home. Many homeowners were losing hundreds of dollars in interest each month.

The "Fixed - Adjustable" Loan - this is a term created by sub-prime lenders that created the illusion borrowers were in a fixed product. The "fixed" period lasted for 1, 2, or 3 years, then the loan would adjust. Many times these loans were sold with high margins which would increase interest rates by 2 or 3 percent. Often times these are considered "teaser rates". (This is a term I have heard from many homeowners trying to refinance in the last year. In my opinion, it was a tactic to trick borrowers into specific loans)

Most homeowners in the products above have already come to realize the product was not what they were expecting, and some are finding out the hard way that a drop from a 50 year term to a 30 year term, regardless of the rate, makes a pretty significant dent in their monthly budget.

I just wonder how many people in the loans described above actually took the loan not to lower their rates or consolidate debts, but to use the money for something more enjoyable. I can tell you from experience, many just refied because they were accustomed to a lifestyle and needed some cash to continue. Now they are paying the price.

When it comes to a refinance, first ask yourself the question..."what am I trying to do?" Do you need cash for a necessity, or are you trying to keep up with the Jones? Can you save for the next several months to get what you want? Do you have money in a rainy day fund that you can use? What is in your checking or savings account?

Often times, a Refinance is a Great Option and can accomplish many goals! Decreasing your rate, shortening your loan term, consolidating debts, getting out of an adjustable and into a fixed are all excellent reasons to refinance. You still need to run the numbers and make sure it makes sense. Talk with a mortgage professional that is looking out for your best interest, and will tell you if a refinance is not the best option.

To find out more about refinance opportunities and whether a refinance makes sense for you, check out our website today at www.tmmortgagegroup.com or call 1-800-696-1424.

Is it possible that someone can benefit from decreasing home values, record setting foreclosures, short sales and a volatile economy? Not only is it possible, it is happening daily! Home Buyers are finding bargains on every corner and now the buyer seems to be holding all the cards.

We have all heard the saying, “what goes up, must come down”. This is true of the housing market. Values skyrocketed since 2003 and now we are seeing a correction. Housing values are going to increase again, just not like they have in the past. 15 to 25% appreciation is a dream, but purchasing at the bottom of the market will show you some aggressive appreciation over the next 5 to 10 years.

The 100% loan is gone unless you are a Veteran. Stated loans were called “liar loans” for a reason. They have vanished! Reality has set in for lenders and borrowers must prove income, have good credit, and have money for a down payment. If you are one of these borrowers and are currently looking for a new home, you may be getting the deal of a lifetime!

A seller concession (kind of like a cash back rebate) can help offset most closing costs in an FHA loan. This loan only requires a 3% down payment (which can be a gift) and an average credit (580) score or higher. Rates on these loans are very close to conventional rates and higher loan amounts (up to $729,750) are available through the end of 2008.

Debt Free, money in the bank, a good income and a good credit rating? Start looking on the corners for that “deal of a lifetime”!

To learn more about loans available in this buyer’s market, check out www.tmmortgagegroup.com or call 1-800-696-1424.

I have been doing a lot of self promotion on the internet over the last few months. I have participated in the Active Rain community which I think is great. I have published articles on Ezine, and have had several other articles published on a site called the American Chronicle. I also had a press release done on my new website. I have received a couple of good comments and one application from a borrower that found me on the net. I am just trying to see what you have experienced in regards to your self promotion and time frame.

If I blog 3 times a week and continue to submit articles to different online sites, can I expect to have 1 new client a month? 1 every 3 months? I know active rain does a lot, but I was looking for some honest feedback so I am able to see the light at the end of the tunnel. I know I am getting in the game late, but would really like to see this flourish.

Any insight would be much appreciated!

Tim