Mortgage Blog

Hello  -  this is my first attempt at blogging. I will try to keep the content interesting.  Hopefully it will be useful information that will keep you better informed about the real estate and mortgage markets.  This blog will give you an insiders view of the markets, obviously it is always just an opinion, so keep that in mind. 

My background:  After I was discharged from the Air Force in 1985, I started selling residential real estate in the Livermore, Pleasanton area.  It did not take long to realize that I did not enjoy showing houses and driving all over the place, so I decided to start a side business buying foreclosed homes at the county auctions.  This worked quite well until I purchased a home that had title problems that could not be resolved without costing a large sum of money.   So, in 1987, I went to work for a motel/hotel real estate brokerage and began selling motels/hotels in Northern California.  My father also worked at the same company.  It was a great experience; My dad set a great example that I try to emulate each and every day: Honesty and integrity are the most important traits you can have.  If you put your clients best interest first, you will always be successful.

Unfortunately, due to the intense traveling demands and the start of my own family,  I decided to look for something where I could stay more grounded.  I tried working for a private money lender that sold trust deeds; however, I was very limited as to the availability of clients.  So finally in 1991, I went to work for a mortgage broker in Sacramento as a loan officer.  I realized very quickly that being a loan consultant was my calling.  Working with people to help improve their financial situations and working with numbers was and still is very enjoyable.  In 1995,  I moved to Cool, CA, started my own mortgage brokerage and have not looked back.   My experience in multiple real estate related fields enables me to offer a unique and comprehensive perspective that my clients can rely on for their financing decisions.

Anyway - that enough about me - just wanted to let you know that I do have the background that gives some credence to my blog opinions

As you know, the overall real estate and mortgage industry has changed dramatically over the past two years. While numerous factors have caused this to happen, I believe that the major cause was the availability and subsequent intense marketing of the “sub prime” loan.

Essentially, the term “sub- prime”  means a home loan that is made to borrowers who have substandard credit, income and/or assets. These loans typically target clients who could not purchase a home without the use of these lesser loans. These loans generally have a two year commitment at a greatly reduced interest rate. At the end of 2 years, the loan rate changes to a very high rate, this causes payments to increase – sometimes doubling the payment amount. For most families, a large increase to your monthly debts would be devastating; thus the large increase of foreclosed properties nationwide.

So who is to blame? The answer is complex: the lender, the borrower, and the person who arranged the loan are all to blame to some degree.

• The lender for creating, marketing and pushing loan programs that are not in the best interest of the borrower.
• The borrower for not reading or understanding the fine print on some of these loans
• The loan officer for not explaining or not understanding the financial risks that these loan pose.

In most cases, the loan officer has the ultimate responsibility for this problem. Borrowers rely on advice from loan consultants in order to make an educated financial decision. They trust that the recommendations are correct. Unfortunately, few loan officers had their client’s best interest at heart. Fortunately, due to the current downward trend in the mortgage industry, many of these same loan officers have left this business for other lines of work

That is not to say that the problem has been solved, just that it is a step in the right direction.