Sides are quickly being drawn over a pending bill before the House of Representatives which, if passed, will put in place some stringent new standards for mortgage underwriting and the regulation and compensation of mortgage brokers.
HR 3915 is expected to be voted on by the House Financial Services Committee on Tuesday, November 6. Favoring the bill are consumer groups such as the National Center for Responsible Lending, and in strong opposition are industry supports like the National Association of Mortgage Brokers (NAMB) and the Mortgage Bankers Association.
HR 3915, introduced by Representative Bradley Miller (D-NC) and cosponsored by 21 other members of the House, modifies three major sections of Truth in Lending Act (15 U.S.C. 1602), Title I deals with mortgage origination; Title II outlines minimum standards for mortgages, and Title III addresses high cost mortgages.
Here is a summary of the bill as it was submitted to the House.
Title I requires licensing or registration of mortgage originators. The Department of Housing and Urban Development is charged with creating a registry for originators who are not covered by state regulation or affiliated with depository institutions. The legislation appears to assume that those originators who are so affiliated are now appropriately regulated.
This section establishes a "Duty of Care" for mortgage originators which requires that they "diligently work to present the consumer with a range of residential mortgage loan products" that the consumer can qualify for and which are appropriate to his current circumstances and that the originator make full, complete, and timely disclosure to each such consumer which includes the comparative costs and benefits of each product, and nature of the originator's relationship with the consumer and that the originator discloses if he is or is not working as an agent of that consumer. The originator must also disclose any relevant conflicts of interest.
Originators are prohibited from "steering." The proposed law states that an originator may not receive, directly or indirectly, any incentives (and in the most controversial provision, expressly includes yield spread premiums in that definition) that are based on or vary with the terms of the loan.
Title II, which sets minimum standards for residential mortgages states that no creditor may make a residential mortgage loan unless he first makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated the consumer has a reasonable ability to repay the loan under its terms and to pay all applicable taxes, insurance, and assessments. This provision also extends to cases where a consumer has multiple loans against the same property; the originator is charged with taking into account the total payments on these obligations. These determinations about ability to repay must be based on a consideration of the consumers' current and expected income, credit history, other obligations, employment status, debt-to-income ratio and other financial resources other than any equity in the secured property. (The emphasis is ours.)
Under this ability to repay provision, adjustable rate mortgages which defer repayment of principal and/or interest (with the exception of reverse mortgages) must be evaluated on the basis of the payment needed to amortize the loan by its final maturity.
Title II also requires the originator of a subprime loan to determine that any refinancing will "provide a net tangible benefit to the consumer." Conventional loans are presumed to meet this requirement so long as the interest rate does not exceed the rate on comparable Treasury bills by 3 points (5 for junior liens) while subprime loans are acceptable if they are income verified, underwritten based on the fully-indexed rate plus taxes and insurance, are not negatively amortizing, and the creditors debt-to-income-ratio after the loan is funded will not exceed 50 percent. Loans must have either a fixed rate for the first 7 years or have a margin less than 3 percent over its index. Such a subprime mortgage is generally known as a Qualified Safe Harbor Mortgage.
Title II also prohibits subprime prepayment penalties and limits prepayment penalties on conventional loans to 3 years (or 3 months before reset on an adjustable rate loan). It bans mandatory arbitration on any residential mortgage and prohibits class actions against and provides other protections from liability for assignees of loans.
Title III creates special protections for high-cost mortgages which are defined as having points and fees in excess of 5 percent of the loan amount; OR an APR exceeding comparable treasuries plus 8 points (10 for junior liens); or a prepayment penalty above 2% of amount prepaid or extending longer than 30 months into the term of the loan.
The section also defines points and fees and sets rules for yield-spread premiums, prepayment penalties, single premium credit insurance, and other fees already contained in the existing Home Ownership and Equity Protection Act (HOEPA.) The definitions exclude bona fide discount points for conventional rate mortgages.
Title III also prohibits the following on high-cost loans: balloon payments; recommending or encouraging default; excessive late fees; call provisions; financing any points and fees or prepayment penalties; abusive modification or deferral fees and requires pre-loan counseling for high-cost mortgages.
The entire text of the legislation can be read here.
Opinions pro and con the legislation can be found at websites maintained by The Center for Responsible Lending (CRL), Mortgage Bankers Association (MBA) and National Association of Mortgage Brokers (NAMB).
Please share your opinions of HR 3915.
If you oppose HR3915 you can use the following template, contributed by one of our readers, as a starting point for a letter to your state representative.
Related posts:
NY Attorney General Files Appraiser Fraud Suit Against First American
Tuesday, October 30, 2007
Wednesday, October 24, 2007
NY Attorney General Files Appraiser Fraud Suit Against First American
We explored foreclosure fraud pretty thoroughly several years ago (search the website for "appraisal fraud") and learned that no one was more upset over the pressure on appraisers to bring in inflated property values than honest appraisers themselves who were blogging on the subject and gathering signatures on petitions for regulatory action. But what had been a hot topic, threatening to involve lenders, loan officers, and real estate agents in addition to appraisers died down, probably because property prices were rising so rapidly that the appraisers couldn't legitimately inflate prices fast enough to keep up with reality.
Until now.
With foreclosures mounting, homeowners finding they cannot refinance because of negative equity, and investors and regulators asking questions about the numbers of loans granted at 100 to 125 percent loan to value, the appraisers and those who employ them are once again under scrutiny.
On November 1, New York State Attorney General Andrew M. Cuomo announced that he is bringing suit against one of the largest real estate appraisal management companies in the country and its parent corporation for mortgage fraud.
The company, eAppraiseIt (EA) a subsidiary of First American Corporation is accused in the suit of caving into pressure from Washington Mutual (WaMu) to use a list of "Proven Appraisers" who were willing to provide inflated appraisals of residential real estate. Cuomo said that the scheme was outlined in numerous emails that showed EA executives knew that their behavior was illegal but were willing to break the law to lock up WaMu's business.
"The independence of the appraiser is essential to maintaining the integrity of the mortgage industry. First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike," said Attorney General Cuomo. "The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market. By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion."
According to a press release issued by the Attorney General's office, EA began processing appraisals for WaMu in April of last year and the mortgage lender quickly became EA's biggest customer. (EA is also provides title insurance services). However, WaMu soon complained that the appraisals were not coming in at high enough values and pressured EA to switch to employing only appraisers from a new panel of "Proven Appraisers" that WaMu had hand picked specifically because they inflated property values. These higher prices allowed WaMu to close more loans at higher values. Between April 2006 and October 2007, EA provided approximately 262,000 appraisals for WaMu and received over $50 million in fees.
In one example from the 31 page complaint, which was quoted by Amir Efrati in the Wall Street Journal on-line, New York State alleges that EA increased its estimate of a property to $2.3 million from $1.6 million after the company was allegedly told by the Washington Mutual the higher number would help the loan go through.
The press release provided the following details from what were described as "numerous" in-house emails regarding the "Proven Appraisers" program.
* On February 22, 2007, EA's president told senior executives at First American in regards to the program that "we have agreed to roll over and just do it..."
* On April 4, 2007, eAppraiseIT's executive vice president stated in an e-mail to First American: "we as an AMC [Appraisal Management Company] need to retain our independence from the lender or it will look like collusion... eAppraiseIT is clearly being directed who to select. The reasoning... is bogus for many reasons including the most obvious - the proven appraisers bring in the values."
* On April 17, 2007, eAppraiseIT's president wrote an e-mail to First American explaining why its conduct was illegal: "We view this as a violation of the OCC, OTS, FDIC and USPAP influencing regulation." E-mail evidence also shows that WaMu pressured EA to inflate appraisals as a condition for doing future business together:
* On September 27, 2006, First American's vice chairman reported that a WaMu executive told him: "if the appraisal issues are resolved and things are working well he would welcome conversations about expanding our relationship..."
The lawsuit seeks to end the illegal relationship between First American and EA and WaMu. It also seeks penalties and disgorgement from First American and EA. The lawsuit alleges that First American and EA violated appraiser independence laws, which regulate the conduct of real estate appraisers.
According to Efrati, Seattle-based WaMu is not named as a defendant in the suit, although the suit indirectly targets the lender because as a subsidiary of a federally chartered bank, is federally regulated. According to the complaint, however, the bank, which generated $116 billion in residential mortgage loans in the first three quarters of this year, ran afoul of federal guidelines set in 1994 by Treasury Department agencies to protect appraiser independence.
Cuomo's lawsuit was filed in the Supreme Court of New York, New York County, Manhattan.
Related posts:
Current State of the Mortgage Market
Until now.
With foreclosures mounting, homeowners finding they cannot refinance because of negative equity, and investors and regulators asking questions about the numbers of loans granted at 100 to 125 percent loan to value, the appraisers and those who employ them are once again under scrutiny.
On November 1, New York State Attorney General Andrew M. Cuomo announced that he is bringing suit against one of the largest real estate appraisal management companies in the country and its parent corporation for mortgage fraud.
The company, eAppraiseIt (EA) a subsidiary of First American Corporation is accused in the suit of caving into pressure from Washington Mutual (WaMu) to use a list of "Proven Appraisers" who were willing to provide inflated appraisals of residential real estate. Cuomo said that the scheme was outlined in numerous emails that showed EA executives knew that their behavior was illegal but were willing to break the law to lock up WaMu's business.
"The independence of the appraiser is essential to maintaining the integrity of the mortgage industry. First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike," said Attorney General Cuomo. "The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market. By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion."
According to a press release issued by the Attorney General's office, EA began processing appraisals for WaMu in April of last year and the mortgage lender quickly became EA's biggest customer. (EA is also provides title insurance services). However, WaMu soon complained that the appraisals were not coming in at high enough values and pressured EA to switch to employing only appraisers from a new panel of "Proven Appraisers" that WaMu had hand picked specifically because they inflated property values. These higher prices allowed WaMu to close more loans at higher values. Between April 2006 and October 2007, EA provided approximately 262,000 appraisals for WaMu and received over $50 million in fees.
In one example from the 31 page complaint, which was quoted by Amir Efrati in the Wall Street Journal on-line, New York State alleges that EA increased its estimate of a property to $2.3 million from $1.6 million after the company was allegedly told by the Washington Mutual the higher number would help the loan go through.
The press release provided the following details from what were described as "numerous" in-house emails regarding the "Proven Appraisers" program.
* On February 22, 2007, EA's president told senior executives at First American in regards to the program that "we have agreed to roll over and just do it..."
* On April 4, 2007, eAppraiseIT's executive vice president stated in an e-mail to First American: "we as an AMC [Appraisal Management Company] need to retain our independence from the lender or it will look like collusion... eAppraiseIT is clearly being directed who to select. The reasoning... is bogus for many reasons including the most obvious - the proven appraisers bring in the values."
* On April 17, 2007, eAppraiseIT's president wrote an e-mail to First American explaining why its conduct was illegal: "We view this as a violation of the OCC, OTS, FDIC and USPAP influencing regulation." E-mail evidence also shows that WaMu pressured EA to inflate appraisals as a condition for doing future business together:
* On September 27, 2006, First American's vice chairman reported that a WaMu executive told him: "if the appraisal issues are resolved and things are working well he would welcome conversations about expanding our relationship..."
The lawsuit seeks to end the illegal relationship between First American and EA and WaMu. It also seeks penalties and disgorgement from First American and EA. The lawsuit alleges that First American and EA violated appraiser independence laws, which regulate the conduct of real estate appraisers.
According to Efrati, Seattle-based WaMu is not named as a defendant in the suit, although the suit indirectly targets the lender because as a subsidiary of a federally chartered bank, is federally regulated. According to the complaint, however, the bank, which generated $116 billion in residential mortgage loans in the first three quarters of this year, ran afoul of federal guidelines set in 1994 by Treasury Department agencies to protect appraiser independence.
Cuomo's lawsuit was filed in the Supreme Court of New York, New York County, Manhattan.
Related posts:
Current State of the Mortgage Market
Saturday, October 20, 2007
Current State of the Mortgage Market
What a fascinating and tumultuous time is upon us! Both the housing and the mortgage market are convulsing wildly! There are so many facets to the "big picture" that I would never presume have all the answers, so the following disclaimer is in order: I am a mortgage broker and the following is my opinion based on my experience and my knowledge. You might agree with me, you might not. But I urge you not to jump to any conclusions based on what I or anyone else has to say about the current state of affairs. No one can predict accurately how this is all going to turn out. My point of view is incredibly cynical in some ways, yet leaves room for optimism with the famous caveat of "it depends." In other words, my cynical prognostications can all be erased if certain entities take certain actions. Last thing is that this article is written for the masses, laypersons included. If you are an industry insider, I apologize, but I will be stopping to explain some things you definitely already know. Away we go...
The Beginning
In this case, the beginning is not an exact date or marked by an exact event, but rather the confluence of two important factors: the incredible loosening of lending standards and the overly-exuberant boom in the housing market. Yes, there are other important factors, and yes, I will discuss them, but these two are the big two in my mind.
Let's start with the loosening of lending standards. People with large amounts of money (banks, etc...) put systems into place to evaluate the potential risk associated with a loan. They've been evaluating the risk on loans since well before I was born. In the mortgage industry, this is called underwriting. There are underwriters (human beings), and underwriting systems (computers) that render decisions. Be they human or machine, the underwriting systems are employed and acting on the instruction of the money source.
"Money source" is a purposely ambiguous term so I can make the following point. Where does the money for mortgage loans really come from? If Wells Fargo gives you a mortgage loan, you might guess the money for that mortgage came from Wells Fargo, and you'd partly be right. Wells did indeed have the money to fund that transaction, and they may actually hold on to your loan forever, but there is a deeper layer to the money source than that. Even big banks need LIQUIDITY in order to continue doing business. When Wells needs liquidity, they obtain their money at a certain rate based on the appetites of the bond market. Sometimes this means "selling" your mortgage. Ultimately, the actual market metric is what's known as the "mortgage-backed security."
Mortgage-backed-securities (MBS's) are bought and sold just like stocks and bonds. By the time someone buys a MBS, its underlying risk and obligation have passed hands many times. It's gone from the consumer's intention to finance a house, to a mortgage broker, to a mortgage lender's underwriting staff, to the corporate structure of that lender, to be packaged in a "pool." Then it's either sold or held. When it's sold, it can be sold multiple times. The point is that those that are buying and selling them cannot simply call up the consumer that got the loan and ask them if they are a good credit risk. They are many times removed.
So this creates the necessary and crucial task of "judging" how sound of an investment the MBS is. After all, if a bank was selling a pool of loans with an average interest rate of 8%, the effective interest rate would only be 8% if none of the loans defaulted. Just based on historical statistics, a certain percentage of loans go into default. This risk of default is factored into the value of an MBS. In determining risk of default, investors look at several aspects of the mortgages that comprise MBS's: loan amount, credit score, whether income was documented or not, liquid assets, amount borrower compared to appraised value, whether cash was taken out, and many more.
Over time, default rates on certain "standard issue" mortgages have become very predictable. While there are many different types of mortgages, in recent history, but still before the period of so-called "meltdown," a certain type of mortgage was by far the most common. This is a 30 year fixed mortgage, with documented income and assets, with a down payment of some sort (or compensating factors to offset it), and with a reasonably strong credit history. In general, these are the components of a "Conforming" loan. A conforming loan is any loan that "conforms" to the guidelines set forth by Fannie Mae or Freddie Mac, huge Government-Sponsored-Enterprises put in place to help the American public realize the dream of home-ownership while protecting investors. So life is good right? Fannie and Freddie have their conforming loan guidelines in place. Investors can anticipate a predictable default rate and people can buy houses.
Enter the Problem #1
Unfortunately, not every family's scenario fits the conforming guidelines. In the not too distant past, there were little or no financing options for these families. To make a long story very short, investors saw great potential for this untapped market demographic. Alternative loans started to emerge with different standards than conforming loans. Interest rates were raised to account for increased risk of default and investors "guessed" at what would be the best indicators of likelihood of default. They knew it would be higher, but unlike the years and years of historical data behind conforming-type loans, there was no track record for these alternative loans.
What followed was a cataclysmic downward spiral of overly-exuberant underwriting standards. To keep up with competition, lenders got more and more aggressive, all the while operating in a market segment with a non-existent track record. Default rates were being guessed at, and were becoming evident in real time. Also evident was the fact that "experts" underestimated the actual default rate of these new alternative loans. Ratings Agencies (wall street analyst companies), were listing these new MBS's as much better than they were (because no one really knew how they would turn out). This goes back to the point of the investor being so far removed from the consumer. Wall Street analysts were saying that MBS's from these new alternative loans were a hot buy, so investors bought more. And more demand among investors drove an increase in the aggressiveness of loan programs and underwriting standards. It was a downward spiral in which anyone with a pulse could finance a house.
If this existed in a vacuum, it might not be so devastating, but it does not. This fire happened to be ignited at the same time that a large amount of gasoline, in the form of a real estate boom was occurring. There can be numerous "chicken versus the egg" arguments about the housing boom and the loosening of the mortgage market. The fact is they occurred at relatively the same time and they fed off each other.
Problem #2
People talk about the real estate boom that began around 2001 and ended about mid 2006. People and "experts" talk about the boom as if it's something that's happened before. "There have been up times and down times" they say. "This is just another boom." Those "experts" are wrong. There has never been a period like this. We have just experienced the largest housing boom in history. Might there be another one that supersedes it in the future? Possibly, but I would argue that the current time period will serve as a sobering lesson for us in the future. I would argue, this is as big as it gets. And it's not because I have the experience to have lived through previous ups and downs. It's not because I have decades of experience tracking these issues (because I don't). It's not because I have the foresight to predict the future of the markets. It is due to a simple truth: this "boom" is so much more inflated than any previous booms that it will stand as an obvious outlier in historical home price data. That is to say, compared to other upturns and downturns, the current boom is a much much larger digression from the mean than we have ever seen.
Here is an absolutely brilliant graph by the Yale economist Robert Shiller:
As you can see, there have been ups and downs. All have been within a certain standard deviation of the mean. The highest highs and the lowest lows have not deviated more 35% from the mean. Now take a look at the last 5 years. Adjusting for inflation a house today costs twice as much as the average value of a home for the last 100 years! We're over 100% away from the mean. I don't remember a lot from my statistics class in business school, but I do remember the concept of regression, or a return to the mean. It will happen. But remember this doesn't mean a house will eventually return to the same price it was in 1940, it means it will return to the same inflation-adjusted price. Even so, we are in the middle of a housing price correction right now that will likely continue. The severity of the correction and the length of the correction are two things that no one can accurately predict. That is where opinion comes in. You will hear a lot of opinions on the news, especially the economic focused news outlets. They vary, but I don't really think the "experts" realize just how bad things are. This is where my opinion comes in. but first, we need to talk about the interconnectedness of the mortgage market and the housing market.
There are a couple of caveats to the negativity. First, the mean housing data does not necessarily take into consideration that houses are much bigger and nicer (in general) than they were in the past. This may ease some of the regression to the mean. Furthermore, it's very important to note that different real estate markets around the country have behaved very differently. Although the media is national and national home data seems to spell doom for the entire nation, there are pockets around the country where the real estate market should be staying more steady. Some have already hit past the bottom, some have leveled out, and some will actually continue to grow. It just depends where you are and what market forces at play in your local market.
Mortgages and Home Prices: How They Are Connected
In the late 90's, the demand for housing began to rise steadily. Builders rushed to meet that demand by building more homes, yet the demand continued. The mortgage market had to do it's part by making sure more people could qualify to buy homes, so lending guidelines loosened. This also coincided with a period of decreasing interest rates. All the ingredients for the meltdown were in place. The lower interest rates drove an already high demand for homes higher. The easy lending guidelines made sure everyone could get the loan they wanted. Existing homeowners tapped their home equity to finance their lifestyles. Home equity was apparently an infinite well of money. Everyone, including industry professionals, made future plans on the assumption that values would continue to increase and money would continue to be easy to obtain.
There is an obvious downward spiral here. It is now culminating with one of the most dangerous gambles the mortgage market took. Before you read the following sentence, let me say that there is nothing wrong with adjustable rate mortgages (ARMS) if used for the appropriate purpose in the appropriate market. That said, ARMS are one of the main contributors to the meltdown. Short term ARMS were created that allowed someone to have a fixed payment for 1, 2, or 3 years. The introductory rates on these were low enough to allow first time homebuyers to buy homes well beyond their means. Brokers and banks assured these borrowers not to worry because their home would increase in value and they could refinance in 2 to 3 years to a more favorable loan. It seemed like a workable plan as long as everything stayed steady.
It Didn't Stay Steady
The new alternative loans (remember the ones with no track record to judge risk), started to show their track record, and it was worse than expected. When a loan-type has a worse than expected track record, it leads to investors not wanting to buy it any more. As a result, the money to fund these alternative loans began drying up and lenders began to go out of business. This led to a gut-check among all alternative loans and investors preemptively pulled the plug on other less-aggressive products as well. So starting in 2007, it has become much more difficult to obtain any sort of alternative financing. For instance, in 2005, a homebuyer could finance 100% of their home's value, without proving their income, with a 620 credit score. Now, lenders don't even do stated income loans to 100% with ANY credit score! That's a major change that's happened in just a short 3-4 month period.
At the same time, builders had become so exuberant that they had (and still have) immensely over-built for current housing demand. There is far more inventory on the market in terms of new homes than demand can meet. Even if there was demand for these homes, people can't get financing any more. Also, let's not forget about the scores of families that bought homes with short term fixed loans with the hopes of their values increasing, their credit improving, and refinancing into a better loan. In general their credit has not improved. In general, their house has not appreciated, and consequently they cannot refinance into a better loan. BUT they also cannot afford their payment.
Gloom and Doom
Now we have existing homeowners forced into default or short sale scenarios. This has a direct effect on banks and investors. Guidelines are further tightened to prevent future woes and this prevents even more people from getting financed right now. So their foreclosed or short-sold homes are coming onto the market and bringing prices down. Also, let's not forget about the huge inventory of new homes on the market. Builders are languishing and they are forced to drop prices as well. About the only thing that has stayed positive are interest rates. Historically speaking they are near an all time low, but it doesn't matter because they are only low on the Conforming programs. The lending standards are returning to the mean. Home prices are returning to the mean as well.
All that is to be expected, but here is why it's so bad. The volume of adjustable rate mortgages that are "coming due," or in other words, hitting their adjustable period where the payment goes up above what the homeowner can afford, will be even higher in 2008 than it is in 2007. At the same time, loans are harder to obtain than ever. Many of these people will be forced into foreclosure or short sales. These sales hitting the market at incredibly low prices lower the comparable sales data. The builders with too much inventory on their hands also lower the comparable sales data average.
And That's Why It's Worse Than Most People Think
We have hundreds of thousands of families across the nation in homes that are worth less than what they owe. They need to refinance to get out of their ARMS, but cannot due to both lending guidelines and home values. These families default or short sell which causes the lenders to take serious damage, which in turn causes lending guidelines to be further restricted. We are only just on the way down now. The crash landing has not yet occurred. As I said, there are more ARMS coming due in 2008 than there were in 2007, coupled with a tougher financing environment. When these come due and default or short sell, it further drives down the already decreasing value of real estate. This in turn harms builders who now have to take much less profit than expected and in some cases, losses. D.R. Horton's CEO said "2007 is going to suck," and he was right.
I argue that the aspects that make 2007 "suck" are the in greater supply in 2008. "Experts" and analysts incessantly like to state that housing only comprises a small percent of the entire American economy. This may be true in terms of jobs, but these "experts," all with much more education than me and much more air time are failing to see the biggest one of several critical factors in all of this: HOME EQUITY HAS FINANCED CONSUMER SPENDING. When we talk about the housing market being a small portion of the economy, that may be true inasmuch as construction jobs, but what about all of the ancillary effects?
Where do these experts think consumers are getting the money to buy the plasma TV? Maybe it's on a credit card, but eventually consumers want to consolidate that credit card with home equity. In the past they have done this, used home equity to increase their lifestyle, run up the credit cards again, and get bailed out again by home equity. BUT this will not be available in 2008! The simple fact that housing is a small part of the economy does not take into effect the interconnectedness it has with the rest of the economy. Builders losing money hurts the economy on it's scale, but what about lenders going out of business? Less people can get financed, so more people default, so more investors lose money, and less people can pump money into our economy, both on the end consumer level and the investor level.
It's a bad, bad situation. Intervention can come from many places. There are several congressional bills that have passed or that are proposed that would re-work Fannie Mae and Freddie Macs guidelines to allow some aid to the troubled areas of the mortgage market. It's not a panacea, but it will help. One thing is for sure: home prices MUST eventually return to their mean on the inflation adjusted index. Also, lending guidelines MUST return to a sustainable and predictable level of risk assessment. These two things are in the process of happening now, but they have definitely not already happened. It will be well in to 2008 and probably into 2009 before they do.
Should you worry? If you are one of the Conforming borrowers that is strong in 2 of at least the 4 following areas, you will be fine:
1. Income
2. Assets
3. Equity or Down Payment
4. Credit History
These 4 aspects are compensating factors for conforming loans and you will be able to get a decent 30 year fixed loan. That means that even someone with a 600 credit score and no down payment can get a loan right now if they have a good debt to income ratio and have several thousand dollars in liquid assets. But don't expect your home value to be going up like it used to (of course there are different markets all throughout the country, this assertion is general in nature). So buckle in for a bit of a bumpy ride. It's not the end of the world, and it will pass, but it certainly will be the most violent correction of home prices and lending standards this country has seen to date, and it's not over.
Recent posts:
Mortgage taxation. Law and judicial decisions, Arizona and Arkansas
The Beginning
In this case, the beginning is not an exact date or marked by an exact event, but rather the confluence of two important factors: the incredible loosening of lending standards and the overly-exuberant boom in the housing market. Yes, there are other important factors, and yes, I will discuss them, but these two are the big two in my mind.
Let's start with the loosening of lending standards. People with large amounts of money (banks, etc...) put systems into place to evaluate the potential risk associated with a loan. They've been evaluating the risk on loans since well before I was born. In the mortgage industry, this is called underwriting. There are underwriters (human beings), and underwriting systems (computers) that render decisions. Be they human or machine, the underwriting systems are employed and acting on the instruction of the money source.
"Money source" is a purposely ambiguous term so I can make the following point. Where does the money for mortgage loans really come from? If Wells Fargo gives you a mortgage loan, you might guess the money for that mortgage came from Wells Fargo, and you'd partly be right. Wells did indeed have the money to fund that transaction, and they may actually hold on to your loan forever, but there is a deeper layer to the money source than that. Even big banks need LIQUIDITY in order to continue doing business. When Wells needs liquidity, they obtain their money at a certain rate based on the appetites of the bond market. Sometimes this means "selling" your mortgage. Ultimately, the actual market metric is what's known as the "mortgage-backed security."
Mortgage-backed-securities (MBS's) are bought and sold just like stocks and bonds. By the time someone buys a MBS, its underlying risk and obligation have passed hands many times. It's gone from the consumer's intention to finance a house, to a mortgage broker, to a mortgage lender's underwriting staff, to the corporate structure of that lender, to be packaged in a "pool." Then it's either sold or held. When it's sold, it can be sold multiple times. The point is that those that are buying and selling them cannot simply call up the consumer that got the loan and ask them if they are a good credit risk. They are many times removed.
So this creates the necessary and crucial task of "judging" how sound of an investment the MBS is. After all, if a bank was selling a pool of loans with an average interest rate of 8%, the effective interest rate would only be 8% if none of the loans defaulted. Just based on historical statistics, a certain percentage of loans go into default. This risk of default is factored into the value of an MBS. In determining risk of default, investors look at several aspects of the mortgages that comprise MBS's: loan amount, credit score, whether income was documented or not, liquid assets, amount borrower compared to appraised value, whether cash was taken out, and many more.
Over time, default rates on certain "standard issue" mortgages have become very predictable. While there are many different types of mortgages, in recent history, but still before the period of so-called "meltdown," a certain type of mortgage was by far the most common. This is a 30 year fixed mortgage, with documented income and assets, with a down payment of some sort (or compensating factors to offset it), and with a reasonably strong credit history. In general, these are the components of a "Conforming" loan. A conforming loan is any loan that "conforms" to the guidelines set forth by Fannie Mae or Freddie Mac, huge Government-Sponsored-Enterprises put in place to help the American public realize the dream of home-ownership while protecting investors. So life is good right? Fannie and Freddie have their conforming loan guidelines in place. Investors can anticipate a predictable default rate and people can buy houses.
Enter the Problem #1
Unfortunately, not every family's scenario fits the conforming guidelines. In the not too distant past, there were little or no financing options for these families. To make a long story very short, investors saw great potential for this untapped market demographic. Alternative loans started to emerge with different standards than conforming loans. Interest rates were raised to account for increased risk of default and investors "guessed" at what would be the best indicators of likelihood of default. They knew it would be higher, but unlike the years and years of historical data behind conforming-type loans, there was no track record for these alternative loans.
What followed was a cataclysmic downward spiral of overly-exuberant underwriting standards. To keep up with competition, lenders got more and more aggressive, all the while operating in a market segment with a non-existent track record. Default rates were being guessed at, and were becoming evident in real time. Also evident was the fact that "experts" underestimated the actual default rate of these new alternative loans. Ratings Agencies (wall street analyst companies), were listing these new MBS's as much better than they were (because no one really knew how they would turn out). This goes back to the point of the investor being so far removed from the consumer. Wall Street analysts were saying that MBS's from these new alternative loans were a hot buy, so investors bought more. And more demand among investors drove an increase in the aggressiveness of loan programs and underwriting standards. It was a downward spiral in which anyone with a pulse could finance a house.
If this existed in a vacuum, it might not be so devastating, but it does not. This fire happened to be ignited at the same time that a large amount of gasoline, in the form of a real estate boom was occurring. There can be numerous "chicken versus the egg" arguments about the housing boom and the loosening of the mortgage market. The fact is they occurred at relatively the same time and they fed off each other.
Problem #2
People talk about the real estate boom that began around 2001 and ended about mid 2006. People and "experts" talk about the boom as if it's something that's happened before. "There have been up times and down times" they say. "This is just another boom." Those "experts" are wrong. There has never been a period like this. We have just experienced the largest housing boom in history. Might there be another one that supersedes it in the future? Possibly, but I would argue that the current time period will serve as a sobering lesson for us in the future. I would argue, this is as big as it gets. And it's not because I have the experience to have lived through previous ups and downs. It's not because I have decades of experience tracking these issues (because I don't). It's not because I have the foresight to predict the future of the markets. It is due to a simple truth: this "boom" is so much more inflated than any previous booms that it will stand as an obvious outlier in historical home price data. That is to say, compared to other upturns and downturns, the current boom is a much much larger digression from the mean than we have ever seen.
Here is an absolutely brilliant graph by the Yale economist Robert Shiller:
As you can see, there have been ups and downs. All have been within a certain standard deviation of the mean. The highest highs and the lowest lows have not deviated more 35% from the mean. Now take a look at the last 5 years. Adjusting for inflation a house today costs twice as much as the average value of a home for the last 100 years! We're over 100% away from the mean. I don't remember a lot from my statistics class in business school, but I do remember the concept of regression, or a return to the mean. It will happen. But remember this doesn't mean a house will eventually return to the same price it was in 1940, it means it will return to the same inflation-adjusted price. Even so, we are in the middle of a housing price correction right now that will likely continue. The severity of the correction and the length of the correction are two things that no one can accurately predict. That is where opinion comes in. You will hear a lot of opinions on the news, especially the economic focused news outlets. They vary, but I don't really think the "experts" realize just how bad things are. This is where my opinion comes in. but first, we need to talk about the interconnectedness of the mortgage market and the housing market.
There are a couple of caveats to the negativity. First, the mean housing data does not necessarily take into consideration that houses are much bigger and nicer (in general) than they were in the past. This may ease some of the regression to the mean. Furthermore, it's very important to note that different real estate markets around the country have behaved very differently. Although the media is national and national home data seems to spell doom for the entire nation, there are pockets around the country where the real estate market should be staying more steady. Some have already hit past the bottom, some have leveled out, and some will actually continue to grow. It just depends where you are and what market forces at play in your local market.
Mortgages and Home Prices: How They Are Connected
In the late 90's, the demand for housing began to rise steadily. Builders rushed to meet that demand by building more homes, yet the demand continued. The mortgage market had to do it's part by making sure more people could qualify to buy homes, so lending guidelines loosened. This also coincided with a period of decreasing interest rates. All the ingredients for the meltdown were in place. The lower interest rates drove an already high demand for homes higher. The easy lending guidelines made sure everyone could get the loan they wanted. Existing homeowners tapped their home equity to finance their lifestyles. Home equity was apparently an infinite well of money. Everyone, including industry professionals, made future plans on the assumption that values would continue to increase and money would continue to be easy to obtain.
There is an obvious downward spiral here. It is now culminating with one of the most dangerous gambles the mortgage market took. Before you read the following sentence, let me say that there is nothing wrong with adjustable rate mortgages (ARMS) if used for the appropriate purpose in the appropriate market. That said, ARMS are one of the main contributors to the meltdown. Short term ARMS were created that allowed someone to have a fixed payment for 1, 2, or 3 years. The introductory rates on these were low enough to allow first time homebuyers to buy homes well beyond their means. Brokers and banks assured these borrowers not to worry because their home would increase in value and they could refinance in 2 to 3 years to a more favorable loan. It seemed like a workable plan as long as everything stayed steady.
It Didn't Stay Steady
The new alternative loans (remember the ones with no track record to judge risk), started to show their track record, and it was worse than expected. When a loan-type has a worse than expected track record, it leads to investors not wanting to buy it any more. As a result, the money to fund these alternative loans began drying up and lenders began to go out of business. This led to a gut-check among all alternative loans and investors preemptively pulled the plug on other less-aggressive products as well. So starting in 2007, it has become much more difficult to obtain any sort of alternative financing. For instance, in 2005, a homebuyer could finance 100% of their home's value, without proving their income, with a 620 credit score. Now, lenders don't even do stated income loans to 100% with ANY credit score! That's a major change that's happened in just a short 3-4 month period.
At the same time, builders had become so exuberant that they had (and still have) immensely over-built for current housing demand. There is far more inventory on the market in terms of new homes than demand can meet. Even if there was demand for these homes, people can't get financing any more. Also, let's not forget about the scores of families that bought homes with short term fixed loans with the hopes of their values increasing, their credit improving, and refinancing into a better loan. In general their credit has not improved. In general, their house has not appreciated, and consequently they cannot refinance into a better loan. BUT they also cannot afford their payment.
Gloom and Doom
Now we have existing homeowners forced into default or short sale scenarios. This has a direct effect on banks and investors. Guidelines are further tightened to prevent future woes and this prevents even more people from getting financed right now. So their foreclosed or short-sold homes are coming onto the market and bringing prices down. Also, let's not forget about the huge inventory of new homes on the market. Builders are languishing and they are forced to drop prices as well. About the only thing that has stayed positive are interest rates. Historically speaking they are near an all time low, but it doesn't matter because they are only low on the Conforming programs. The lending standards are returning to the mean. Home prices are returning to the mean as well.
All that is to be expected, but here is why it's so bad. The volume of adjustable rate mortgages that are "coming due," or in other words, hitting their adjustable period where the payment goes up above what the homeowner can afford, will be even higher in 2008 than it is in 2007. At the same time, loans are harder to obtain than ever. Many of these people will be forced into foreclosure or short sales. These sales hitting the market at incredibly low prices lower the comparable sales data. The builders with too much inventory on their hands also lower the comparable sales data average.
And That's Why It's Worse Than Most People Think
We have hundreds of thousands of families across the nation in homes that are worth less than what they owe. They need to refinance to get out of their ARMS, but cannot due to both lending guidelines and home values. These families default or short sell which causes the lenders to take serious damage, which in turn causes lending guidelines to be further restricted. We are only just on the way down now. The crash landing has not yet occurred. As I said, there are more ARMS coming due in 2008 than there were in 2007, coupled with a tougher financing environment. When these come due and default or short sell, it further drives down the already decreasing value of real estate. This in turn harms builders who now have to take much less profit than expected and in some cases, losses. D.R. Horton's CEO said "2007 is going to suck," and he was right.
I argue that the aspects that make 2007 "suck" are the in greater supply in 2008. "Experts" and analysts incessantly like to state that housing only comprises a small percent of the entire American economy. This may be true in terms of jobs, but these "experts," all with much more education than me and much more air time are failing to see the biggest one of several critical factors in all of this: HOME EQUITY HAS FINANCED CONSUMER SPENDING. When we talk about the housing market being a small portion of the economy, that may be true inasmuch as construction jobs, but what about all of the ancillary effects?
Where do these experts think consumers are getting the money to buy the plasma TV? Maybe it's on a credit card, but eventually consumers want to consolidate that credit card with home equity. In the past they have done this, used home equity to increase their lifestyle, run up the credit cards again, and get bailed out again by home equity. BUT this will not be available in 2008! The simple fact that housing is a small part of the economy does not take into effect the interconnectedness it has with the rest of the economy. Builders losing money hurts the economy on it's scale, but what about lenders going out of business? Less people can get financed, so more people default, so more investors lose money, and less people can pump money into our economy, both on the end consumer level and the investor level.
It's a bad, bad situation. Intervention can come from many places. There are several congressional bills that have passed or that are proposed that would re-work Fannie Mae and Freddie Macs guidelines to allow some aid to the troubled areas of the mortgage market. It's not a panacea, but it will help. One thing is for sure: home prices MUST eventually return to their mean on the inflation adjusted index. Also, lending guidelines MUST return to a sustainable and predictable level of risk assessment. These two things are in the process of happening now, but they have definitely not already happened. It will be well in to 2008 and probably into 2009 before they do.
Should you worry? If you are one of the Conforming borrowers that is strong in 2 of at least the 4 following areas, you will be fine:
1. Income
2. Assets
3. Equity or Down Payment
4. Credit History
These 4 aspects are compensating factors for conforming loans and you will be able to get a decent 30 year fixed loan. That means that even someone with a 600 credit score and no down payment can get a loan right now if they have a good debt to income ratio and have several thousand dollars in liquid assets. But don't expect your home value to be going up like it used to (of course there are different markets all throughout the country, this assertion is general in nature). So buckle in for a bit of a bumpy ride. It's not the end of the world, and it will pass, but it certainly will be the most violent correction of home prices and lending standards this country has seen to date, and it's not over.
Recent posts:
Mortgage taxation. Law and judicial decisions, Arizona and Arkansas
Wednesday, October 10, 2007
Mortgage taxation. Law and judicial decisions, Arizona and Arkansas
Revised Statutes, 1901. In Arizona (sec. 3847)
property under mortgage or lease is listed by and
taxed to the mortgagor or lessor, unless it is listed
by the mortgagee or lessee. With certain enumerated
exceptions (sec. 3834) all property is subject to taxa-
tion, but double taxation is not permitted. Liabilities
may be deducted from solvent debts (sec. 3835).
Arkansas
Constitution, 1874, art. 16, sec. 5. All property sub-
ject to taxation shall be taxed according to its value,
that value to be ascertained in such manner as the gen-
eral assembly shall direct, making the same equal and
uniform throughout the state.
Present Law. Dig. of St., 1904. In Arkansas
mortgages are taxed as personal property. The law
requires (sec. 6873) that all property, including mon-
eys and credits, shall be taxed, and credits are defined
(sec. 6872) as the excess of the sum of all legal claims
and demands over and above the sum of legal bona
fide debts which the person owes. Every person (sec.
6899) is required to list all moneys loaned by him, but
is not required (sec. 6902) to list a greater portion of
any credits than he believes can be collected.
Court Decisions. A note given for land, and the
land itself, are both subject to taxation; the note as
property of the holder, and the land as property of the
purchaser. Ouachita County v. Rumph, 43 Ark. 525,
1884.
Related posts:
Mortgage taxation. Law and judicial decisions, Alabama
property under mortgage or lease is listed by and
taxed to the mortgagor or lessor, unless it is listed
by the mortgagee or lessee. With certain enumerated
exceptions (sec. 3834) all property is subject to taxa-
tion, but double taxation is not permitted. Liabilities
may be deducted from solvent debts (sec. 3835).
Arkansas
Constitution, 1874, art. 16, sec. 5. All property sub-
ject to taxation shall be taxed according to its value,
that value to be ascertained in such manner as the gen-
eral assembly shall direct, making the same equal and
uniform throughout the state.
Present Law. Dig. of St., 1904. In Arkansas
mortgages are taxed as personal property. The law
requires (sec. 6873) that all property, including mon-
eys and credits, shall be taxed, and credits are defined
(sec. 6872) as the excess of the sum of all legal claims
and demands over and above the sum of legal bona
fide debts which the person owes. Every person (sec.
6899) is required to list all moneys loaned by him, but
is not required (sec. 6902) to list a greater portion of
any credits than he believes can be collected.
Court Decisions. A note given for land, and the
land itself, are both subject to taxation; the note as
property of the holder, and the land as property of the
purchaser. Ouachita County v. Rumph, 43 Ark. 525,
1884.
Related posts:
Mortgage taxation. Law and judicial decisions, Alabama
Sunday, October 7, 2007
Mortgage taxation. Law and judicial decisions, Alabama
History. In Alabama prior to 1903 mortgages were
subject to taxation as personal property (Code, 1896,
vol. 1, sec. 3911, sub sec. 7). In 1903 (Acts, 1903,
p. 227) a privilege tax of fifteen cents on every one
hundred dollars was imposed at the time of record-
ing. The present law was passed in 1907, and is but
a slight modification of the law of 1903.
Constitution, 1901, art. 11, sec 1. All taxes levied
on property in this state shall be assessed in exact pro-
portion to the value of such property.
Present Lau>, Acts, 1907, p. 455, sec. 1. No mort-
gage, deed of trust, contract of conditional sale, or
other instrument in the nature of a mortgage executed
so as to convey real property or any interest in real
or personal property situated within the state is to be
received for record unless a privilege tax has been
paid. This tax amounts to fifteen cents, if the in-
debtedness secured is one hundred dollars or less ; and
an additional fifteen cents is added for every addi-
tional one hundred dollars or fraction thereof. The
law states definitely that the tax is to be paid by the
lender. When the mortgage is presented to the judge of
probate of the county in which any of the property
conveyed is situated and the tax is paid, the probate
judge makes a certification to that effect on the instru-
ment, and then the mortgage may be recorded in any
county where property given as security is situated
without any additional tax, except the fee for record-
ing. An extension or renewal contract is subject to
the same tax as the original mortgage. If the tax
prescribed by this act has been paid, neither the mort-
gage nor the debt secured is to be subject to an ad
valorem tax, either for state, county, or municipal
purposes. The probate judge receives 5 per cent of
the amount collected by him as compensation for his
services. Of the remainder, one-third is paid to the
county treasurer of the county in which the taxes are
collected, and two-thirds to the state treasurer. If
the land which is given to secure the debt is situated
in more than one county of the state, then, this one-
third is divided among the county treasurers in pro-
portion to the value of the property given as security
in each county. In cases where only part of the prop-
erty is within the state, the proportional part within
and without is determined by the state board of com-
promise, and the taxes paid accordingly.
It is made a misdemeanor, punishable by a fine, for
the probate judge to file for record any mortgage upon
which the taxes have not been paid.
Related posts:
Mortgage commercial real estate loans
subject to taxation as personal property (Code, 1896,
vol. 1, sec. 3911, sub sec. 7). In 1903 (Acts, 1903,
p. 227) a privilege tax of fifteen cents on every one
hundred dollars was imposed at the time of record-
ing. The present law was passed in 1907, and is but
a slight modification of the law of 1903.
Constitution, 1901, art. 11, sec 1. All taxes levied
on property in this state shall be assessed in exact pro-
portion to the value of such property.
Present Lau>, Acts, 1907, p. 455, sec. 1. No mort-
gage, deed of trust, contract of conditional sale, or
other instrument in the nature of a mortgage executed
so as to convey real property or any interest in real
or personal property situated within the state is to be
received for record unless a privilege tax has been
paid. This tax amounts to fifteen cents, if the in-
debtedness secured is one hundred dollars or less ; and
an additional fifteen cents is added for every addi-
tional one hundred dollars or fraction thereof. The
law states definitely that the tax is to be paid by the
lender. When the mortgage is presented to the judge of
probate of the county in which any of the property
conveyed is situated and the tax is paid, the probate
judge makes a certification to that effect on the instru-
ment, and then the mortgage may be recorded in any
county where property given as security is situated
without any additional tax, except the fee for record-
ing. An extension or renewal contract is subject to
the same tax as the original mortgage. If the tax
prescribed by this act has been paid, neither the mort-
gage nor the debt secured is to be subject to an ad
valorem tax, either for state, county, or municipal
purposes. The probate judge receives 5 per cent of
the amount collected by him as compensation for his
services. Of the remainder, one-third is paid to the
county treasurer of the county in which the taxes are
collected, and two-thirds to the state treasurer. If
the land which is given to secure the debt is situated
in more than one county of the state, then, this one-
third is divided among the county treasurers in pro-
portion to the value of the property given as security
in each county. In cases where only part of the prop-
erty is within the state, the proportional part within
and without is determined by the state board of com-
promise, and the taxes paid accordingly.
It is made a misdemeanor, punishable by a fine, for
the probate judge to file for record any mortgage upon
which the taxes have not been paid.
Related posts:
Mortgage commercial real estate loans
Thursday, October 4, 2007
Mortgage commercial real estate loans
Mortgage loans for commercial real estate
* You do not have to save money for years to buy commercial real estate or draw money out of your company's turnover-you can buy today, using the money the bank
* We will help you buy commercial real estate, as in the secondary, and in the primary property market
* The cost of your property in the future will only grow
* Your company will make a profit using acquired real estate
general requirements for a borrower
- The status of the borrower may be capable individuals possessing documents substantiating person, valid on the territory of the Russian Federation in order to be able to perform and real estate transactions.
Age-age borrower and individuals whose incomes are taken into account when calculating the solvency of not less than 20 years.
Maximum-on the date of repayment should not exceed the age of retirement set by law (60 years for men and 55 years for women). If the insurance company decision on the date vozyrata age can be increased.
The work - a permanent place of work or work under labor agreements (seniority at the last place of work not less than 1 month).
Credit history is the lack of negative information about the borrower (loan recipients), which previously enjoyed loans.
Nationality, registration, have no meaning if the borrower permanently resides and works in the territory of Moscow (Moscow Region), and has a temporary registration. If the borrower fails to live, but not in Moscow (MO), the credit is only possible if there is documented income.
To get a commercial mortgage loan should contact our specialist with the agency and to come to the office
Specialists advise all of our agencies wishing for a mortgage on commercial real estate.
Related posts:
Mortgages
* You do not have to save money for years to buy commercial real estate or draw money out of your company's turnover-you can buy today, using the money the bank
* We will help you buy commercial real estate, as in the secondary, and in the primary property market
* The cost of your property in the future will only grow
* Your company will make a profit using acquired real estate
general requirements for a borrower
- The status of the borrower may be capable individuals possessing documents substantiating person, valid on the territory of the Russian Federation in order to be able to perform and real estate transactions.
Age-age borrower and individuals whose incomes are taken into account when calculating the solvency of not less than 20 years.
Maximum-on the date of repayment should not exceed the age of retirement set by law (60 years for men and 55 years for women). If the insurance company decision on the date vozyrata age can be increased.
The work - a permanent place of work or work under labor agreements (seniority at the last place of work not less than 1 month).
Credit history is the lack of negative information about the borrower (loan recipients), which previously enjoyed loans.
Nationality, registration, have no meaning if the borrower permanently resides and works in the territory of Moscow (Moscow Region), and has a temporary registration. If the borrower fails to live, but not in Moscow (MO), the credit is only possible if there is documented income.
To get a commercial mortgage loan should contact our specialist with the agency and to come to the office
Specialists advise all of our agencies wishing for a mortgage on commercial real estate.
Related posts:
Mortgages
Monday, October 1, 2007
Mortgages
Mortgages
You do not have to save money for years to buy an apartment, you can buy today
We will help you buy an apartment, as in the secondary, and in the primary property market
The cost of your property in the future will only grow.
Mortgage-loan mortgage (apartments, houses, etc.). As a rule issued by the bank loan, but the lender of an obligation may be secured mortgage and any other person entitled to carry out such activities. The borrower mortgage lien loan guarantees payment of real property (apartment, house, etc.), it belongs to the property rights including those acquired in mortgage lending program.
In Russia the term mortgages and mortgage loan means in the bank for the purchase of residential real estate (apartment or house). In English, there is a special word, the meaning of the transferor type of credit mortgage. This category does not get loans from other target designation granted bail of real estate: for example, to buy cars, household appliances, furniture or other needs.
how to get mortgage
The main stages of a mortgage specified in our pages. We encourage our experts to contact for more information on mortgage lending.
Our client receives:
the best choice proposals on mortgage lending
assistance in applying for a mortgage
the time for the consideration of credit applications and award mortgage from the 1 st day.
Related posts:
commercial real estate
You do not have to save money for years to buy an apartment, you can buy today
We will help you buy an apartment, as in the secondary, and in the primary property market
The cost of your property in the future will only grow.
Mortgage-loan mortgage (apartments, houses, etc.). As a rule issued by the bank loan, but the lender of an obligation may be secured mortgage and any other person entitled to carry out such activities. The borrower mortgage lien loan guarantees payment of real property (apartment, house, etc.), it belongs to the property rights including those acquired in mortgage lending program.
In Russia the term mortgages and mortgage loan means in the bank for the purchase of residential real estate (apartment or house). In English, there is a special word, the meaning of the transferor type of credit mortgage. This category does not get loans from other target designation granted bail of real estate: for example, to buy cars, household appliances, furniture or other needs.
how to get mortgage
The main stages of a mortgage specified in our pages. We encourage our experts to contact for more information on mortgage lending.
Our client receives:
the best choice proposals on mortgage lending
assistance in applying for a mortgage
the time for the consideration of credit applications and award mortgage from the 1 st day.
Related posts:
commercial real estate
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