Gulf Coast Associates' Blog: Mortgage Information

As those of you who have read our Blog before know, we are not fond of how a large segment of the mortgage industry has conducted itself in the last few years. Common sense went out the window in order for lenders to make huge profits under the guise of helping borrowers obtain more housing opportunities. Unfortunately, it doesn't take an economics degree to see where that got us. Making bad loans because you can does not mean you should. And, originators making them in order to pad their income is even worse.

Perhaps the saddest part of all is that, to date, we've seen very little of the industry actually doing anything to curb the abuses. In fact, we were dumbfounded recently after attending a seminar, where it was made crystal clear that subprime is…

We wanted to give you an update on our government reform post regarding the announcement of the new FHA Secure mortgage refinancing program. FHA Secure is designed for families who are good borrowers but were steered into high-cost ARM loans with teaser rates.

To qualify for FHA Secure, eligible homeowners must meet the following criteria:

• The loan must be a non-FHA ARM.
• A history of on-time mortgage payments "prior" to the borrower's ARM loan resetting to the higher rate.
• The Arm loan interest rate must have either reset or be scheduled to reset between June 2005 and December 2009.
• Mortgage late's are allowed after the reset date if they are directly related to your higher loan payment. In addition, if you are in a mortgage…

In response to the so called "crisis" in the mortgage markets, the Federal government responded today, and in some cases, is taking action for trying to clean up the credit mess. While we've suggested in a past post that the industry itself needs to take steps for correcting the situation, some of the moves the government is considering may help those suffering from possible mortgage abuses in the past few years.

President Bush announced today the new FHA Secure program for helping borrowers with good credit to refinance their ARM loans if they are behind in their payments. The program is expected to help around 80,000 individuals who are not in foreclosure but are experiencing difficulties. While it is a step in the right direction, in and of itself, it…

Many times we're asked about whether or not several mortgage lenders pulling a credit report will affect a borrowers' credit rating. When you are shopping for a mortgage loan, it is not uncommon to have more than one "lender" looking at your credit.  For that reason your FICO score will not be affected if the inquiries are made within a short period of time, usually 30 days. For instance, a mortgage inquiry by three lenders on three different days in the past 30 days will not be counted against you at all in terms of the score. However, a little known fact is that some lenders can also select an older version of the FICO scoring formula that will shorten this period to 14 days. If this method is used then it's very possible that your score will be…

The collapse of American Home Mortgage last week is making all the headlines. Over the past month or so, if you follow any type of financial news you've been hearing about the subprime markets, predatory lending, and the tightening of credit lending standards by State legislatures including Florida. What does all this mean to you? Let's see if we can explain a few of the details so you can understand what actually is happening.

In the past few years quite a few loans were made to folks using a "non-traditional" or a "non-conforming" loan product - this may have been for a poor credit history, unwillingness or inability to document income, or many factors that leave a borrower "outside of the box" for standard loan qualification. Quite a few times these…

According to Bankrate.com's annual survey on loan closing costs, Florida ranked number three behind only Texas and New York. The new ranking was a move up for Florida from being ranked number 5 last year.

This year's top five states included:

• New York - $3,830
• Texas - $3,413
• Florida - $3,175
• Pennsylvania - $3,169
• Ohio - $3,047

The bottom five states included:

• North Carolina -$2,487
• Nevada - $2,467
• Illinois - $2,401
• Wyoming - $2,390
• Indiana - $2,339

The median cost for all states was $2,692. The study was based on a $200,000 loan with 20% down and excluded taxes, other governmental fees and escrow fees.

The survey results reinforce why borrowers need to shop for their mortgage loan and…

For families facing some challenging housing arrangements - we announce the offering of the Family Opportunity Mortgage. Now, if you need to buy a home for a disabled (unable to work) family member, provide housing for a college bound child - "Kiddie Condos", or provide a home for your elderly parents - you will no longer have to pay the higher interest rates associated with the home being considered as an investment property.

For elderly parents or disabled family members, you will need to provide a letter stating their intent to occupy the property as their primary residence and if applicable, an explanation regarding the disability. There are no distance requirements and you will qualify as the primary purchaser on the property.

For "Kiddie Condos",…

It's real easy to confuse a buyer who is pre-qualified vs. a buyer who is pre-approved. But, think of what the words actually mean - you may be qualified to buy a property because of how much money you make. However, if you don't pay your bills on time and you have poor credit, you could still be declined for a home loan. If you are approved to do something - then that means someone else is permitting you to do what you say you can. You can home shop with confidence if you have a loan approval letter in hand.

Agents, buyers, and sellers may equate pre-qualification with pre-approval when in fact these two terms are apples and oranges. A pre-qualified buyer is someone who calls a lender on the phone and speaks about their financial situation. The lender,…