Mortgage Information and insight from a Utah Mortgage Lender.

A Dark Day on Wall Street

Lehman Brothers Bankrupt - Merrill Lynch sells out to avoid probable disaster

I found myself in awe through out the day today and into the night.  I was not surprised by what happened today on Wall Street but it was a feeling inside me, a feeling of "I cant believe this plague just keeps going" feeling.  The plague I am referring to is the Sub Prime Plague.  The one that has claimed so many banking lives this past year and the same one that just wont stop.  Today it claimed to more lives Lehman Brothers and Merrill Lynch.  These two institutions were not the type that I though would succumb to the Plague, they were not the New Century, Argent, Green Points.  These were 2 of the BIG BOYS.  Two of the rocks that have been perched over looking Wall Street for more then a century.  They have weathered the biggest recession and even The Great Depression, and now one could not secure the financing it needed to stay alive, and the other sold out before most any of us new it was for sale in an attempt to keep what value it had left.

I feel like we have crossed a line today.  Along the roadkill highway of what was mortgage death row there were the usual suspects those of which were mentioned above, but today we crossed the median and took out some of the Trophy animals that have avoided pitfalls, and traps of all shapes and sizes for decades.  For what some might ask?  To end up a name on some public Bankruptcy Papers filed in the state of New York today.  Amazing really.

A Little Perspective

I think its important after days like today and times like we are experiencing to sit back, take a deep breath and look at the Big Picture.  The markets are up over the last 5 years and the markets are really up over the last 20, 30 and 40 years.  And it is my opinion that the markets will be back up again in the very near future.  For those that have extra money to invest it is a virtual blue light special on every isle of the Stock Markets.  Everything is on sale Big Time.  You name the industry and you may be able to pick it up at 70% off.  Back when I had time to shop for clothes I liked to go to a store called TJ Max, I like the feeling of buying a $100 pair of pants for $25 or a $50 neck tie for $6.99.  Well the next few months might be the TJ Max or the Marshals (if your from the east coast) stock market clearance sale.  The thing I didn't like about the discount stores is that you had to wade through piles and racks of clothes to find the diamond in the rough.  I would plan on sifting through piles of less then desirable companies and earnings reports to find the diamonds in the Market that are at clearance prices right now.  Call your financial planner and put together a plan, a plan to continue investing in America and in our economy.  Call me if you need to review your mortgage and make sure you are in the best mortgage loan possible to help you accomplish your investment and retirement plans.  The silver lining about a day like today on Wall Street is that rates are unbelievable!  As stock traders flee to safer bond investments the yields drop like a lead balloon.

A Mortgage Brokers Perspective

It's all a little bit unsettling, what the Fed's reaction might be, how the markets will react, how this will affect Home Sales?  The bottom line is that the show must go on.  The Strong in some ways are getting stronger and the weak for the most part are systematically being thinned out.  Underwriting is reverting back to (what I've been told) how it used to be.  Much more thorough and complete.  I'm still closing loans purchases, refinances everything but I do have to set the borrowers expectations a little more up front.  Gone are the days of Fast & Easy's, here are the days of Make Me Queasies.  I may need to trademark that one.

Too Easy

It was just to easy there for a while, at the end of the day the average Joe isn't ready to own 5 homes with out ever proving his income.  A lot of people should rent for a year or two before jumping head first into a mortgage and not every guy with a general contractor license should be calling them self a home builder and building spec homes as fast as they can cash their draw checks.  It's just not good for the long term health of our economy.  We as a country showed up to the Thanksgiving Dinner of a housing boom with eyes far bigger then our stomachs.  We ate and we ate and we ate and when grandpa (greenspan) asked us if we wanted seconds we took him up on it and had 2nds, 3rds, and oh yes why not 4ths.  Well we are now paying the price and we are sick.  Stuffed to the brim and bursting at the seems we are yakking up the housing dinner getting back to where we can function and see clearly.  There are a few banks and lenders that took a small portion and chewed like their Mom taught them and they are doing just fine, Thank Goodness for them.

I prefer the couch watching football and just snacking the whole day through.

Stetson Lowe - Utah Mortgage Insider - UtahLoanTips.com

What is a Mortgage Planner?

Lately I have been asked the question over and over, "What is a Mortgage Planner Stetson and why should I use you (a mortgage planner) for my next Mortgage transaction."  To answer that question for every one who is asking I have written the following post.

What to Look for In a Mortgage Planner

By Stetson Lowe

Nowadays, it seems as though there are almost as many types of people offering home loans as there are  home loans themselves! So before it comes to choosing between different home loans, you need to choose between different loan providers.

That being the case, here are a few considerations for what to look for in a mortgage planner. These relate to whether they are really a mortgage planner or just a broker, what services they offer, what loans they can source, their level of responsiveness, and their fees.

The first thing to take note of is whether a given professional is a mortgage planner or a mortgage broker. Mortgage brokers focus on matching people with loans. While they aim to recommend the most appropriate loan for someone, they don't really consider the “big picture”. Mortgage planners, on the other hand, consider a borrower's home loan in the context of their overall financial plans. On that basis, a mortgage planner will consider your current situation and aims, as well as your future likely circumstances and goals, in order to select and assist in structuring the most appropriate loan for you.

As a practical matter, you'll want a mortgage planner who can source the types of loans that are likely to suit you. If you have general needs, then someone with access to a broad range of loan products may be suitable. If your needs are very specific – for instance you are self-employed and may not qualify for the typical home loan – someone who focuses on sourcing loans for people like you is likely to be better. 

You should also seek to work with a mortgage planner who is responsive and accessible. Put it this way, if they're not there to answer your questions or assist with matters that are worrying you... they probably won't be of much use to you!

Equally, you want someone who will provide guidance and explain everything to you in plain English. Buying a home can be challenging, especially as you're unlikely to understand all of the jargon and complexities associated with real estate and banking. Therefore, it's a good idea to find a planner who will take the time to explain these things to you.  Buying a home is one of the biggest decisions you will make in your life and you need to be clear on the commitment you are making.

A good mortgage planner should not require you to pay any unusual fees. Most planners will typically charge a commission (usually a percentage of the value of the loan) and may also charge extra fees for conducting an appraisal of the home you want to buy. They will also pass on other costs such as the closing costs and a down payment for the home.

That said, it's not generally wise to simply go with the person offering the lowest fees. They may not provide the level or range of services you need... which, long term, may end up costing you far more than the slightly higher fee charged by an expert mortgage planner.

To sum up, when looking for a good mortgage planner keep in mind these factors: are they really a planner, or just a broker? Will they source the kind of loan you need? Are they open and responsive? And are their fees appropriate for what they're offering?

I hope that helps answer the question What is a Mortgage Planner? 

The Mortgage Insider - Stetson Lowe