My New Blog

Subprime is not a synonym for bad credit; in fact, today's subprime loans just miss agency guidelines. They don't neatly conform - hence the moniker non-conformimg. You wouldn't believe how many of our borrowers have stellar credit but fall slightly short of the mark in another area. Could be their high Loan To Value or Debt To Income ratio, maybe they're self-employed or made a payment just a wee bit late.

Yet loan-worthy they are. (Great doors still open on small hinges.) And while financing is available on FICOs of 525 and above, every day we finance Subprime borrowers with scores over 700

A good thing to remember is that, at the end of the day, loans are about people, not just numbers.

All it takes is some clarity and common sense in looking at their applications.

Congress sees one of its own become a mortgage “victim”. Rep. Laura Richardson (D-CA) spent her money on financing her campaign instead of making her mortgage payments. She borrowed $177,500 against equity in her Long Beach home, then purchased another home in Sacramento for $535,500 with a no money down subprime loan.

The Long Beach property went into default March 28 but she was able to arrange a loan modification. She wasn’t so lucky with the Sacramento property. It sold at a foreclosure auction May 7 for $388,000 and the lender took a loss of nearly $200,000.

Who gets the black eye here? Will it be the “evil” mortgage company or the irresponsible borrower?

I read a report today that in 2006 the Mortgage Industry consumed the equivalent of 238,000 trees in paper. Eliminating paper by using electronic transmission of documents is here.

The advantages are clear, no more faxes, FedEx or waiting. Documents can be signed electronically and closings can even be completed with an electronic signature pad.

Not all lenders are on board yet, but it is coming. Is this of interest to today's borrower or would they rather close the old fashion way?

People always ask me this question. Consumers who rely on what the Federal Reserve is doing will be surprised because mortgage rates at times may be doing exactly the opposite.

Of course, I don't have a crystal ball so I can only give you an educated guess. Most experts think rates will hover just above 6% for the rest of the year. The key to mortgage rates will be inflation and the bond market.

If inflation ratchets up, the bond market suffers and rates increase. So watch the key indicators, a few of which are inflation and the bond market. Remember, when bonds go down or remain static in the face of inflation. mortgage rates go up.

You can check www.HalTennant.com/DailyRateLockAdvisory on a regular basis to see which way they are headed but don't be surpirised to see them fluctuate frequently.