Mortgage Blog

The media has been reporting in recent days on the demise of Subprime Lending. "Subprime" loans are those extended to borrowers with less than perfect credit or those who otherwise would not qualify for a "prime" or "conforming" mortgage.

In return for the higher risk associated with Subprime loans Lenders typically charge a higher rate of interest. In order to stay liquid and continue to lend, these subprime Lenders then resell loans on the "secondary market". In recent months as more and more of these loans have failed to perform the secondary buyers have been exercising their right to return loans to the originating Lenders; thereby drying up liquidity and forcing many Lenders to cease lending or go out of business altogether.

It should be noted that if you currently have a subprime loan none of these changes will affected the conditions of your loan; those are set by the contract ("note") you signed at closing.

What should be of concern is the inevitable backlash. Already we hear calls for more regulation and even putting an end to Subprime Lending altogether. It should be noted that large segments of the population who otherwise would not have qualified for a mortgage; have been able to enter the world of homeownership through the avenue of these loans. Also while the Mortgage Bankers Association recently reported that 13.3% of Subprime borrowers have had trouble making their payments - the reverse of this is that 86.7% of these high risk consumers have paid their payments on time.

While it is unquestionably true that some Lenders have extended loans to people who probably should not have received credit - it is also true that a far larger number of people have benefitted by the availability of these second chance loans. Let's not panic and throw the baby out with the bath water. Market forces are already weeding out the Lenders who were less than responsible in their lending practices. Laws already exist to deal with those who are truly "abusive". Lets enforce those laws but leave in place an important tool for citizens who may have nowhere else to turn.

If your closing is within 60 days our advice to the typical client is "lock your loan today". However if you are the kind who likes to play with chance whether the slots in Vegas or the Stock Market we can offer you a unique service. Absolutely free of charge we will send you the best advice of our market analyst on when to lock your loan. The "lock advisor newsletter" comes with an easy to read graphic.

If you would like to receive this email on a daily basis simply contact us at info@myfloridarates.com. In the subject line type "rate lock advisor". In the body of the email let us know the time frame you wish to receive this. For example "month of March" or "ongoing". You will receive your first email the very next day.

Unless you have been marooned on a desert island for the last 12 months you probably know that the Real Estate market is not so hot these days. So the response of many people is to stay out of it. People choose to rent instead of buying. Makes sense right? Well maybe not. Any serious financial advisor will tell you that you buy when prices are low and sell when they are high. This applies to any market, be it the stock market or the housing market. Yet the average person tends to do the opposite. They get caught up in the hype - buying when prices are about to peak and then staying out of the market when the best deals are to be had.

Right now we are in what is called a "buyers market". This means that for the first time in many years buyers are in the driving seat. There are great deals to be had and sellers are willing to negotiate like never before. On top of this mortgage rates have again declined to near historic lows. So should you buy now? Well that is a decision only you can make. Our advice is as always - buy low and sell high.

We wanted to kick off this blog by discussing something which is of great concern to many of our clients - Protecting your credit information. First of all identity theft is on the rise and it is important that you view your credit report at least once a year as this may help you spot any suspicious activity.

As of June 1^st 2005 Florida residents can obtain their credit report for free regardless of employment or financial situation. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each agency provide you with a free copy of your credit report, at your request, once every year, from www.annualcreditreport.com.

Whether you are thinking of buying a home or simply curious about what’s in your credit report, it’s important to correct any errors you discover as soon as possible. You don’t want errors in your credit report affecting your eligibility for credit in the future.

What you may not know is that the credit agencies are now selling your private financial information to third parties for the purpose of unsolicited offers. You can opt out by calling 888-567-8688. However, you may also want to contact your Congressman or Senator and ask that they take action to stop this invasion of your privacy.

Starting Tuesday March 6th, MyFloridaRates.Com will be introducing our new Mortgage Blog. We will regularly post information on the Mortgage and Real Estate Industry. We hope you will find the information interesting and we look forward to your comments.

The Staff at MyFloridaRates.Com