Comments on: How to Understand the Mortgage Mess Puzzle http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/ Greater Cincinnati Real Estate News and Information. Tue, 07 Feb 2012 20:45:19 +0000 hourly 1 http://wordpress.org/?v=3.2 By: Many Reasons Why Lenders Should Jump on Short Sales | Looking for an attractive property http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1855 Many Reasons Why Lenders Should Jump on Short Sales | Looking for an attractive property Mon, 05 May 2008 20:38:23 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1855 [...] Sale  Advice for the Greater Cincinnati Area“, “Foreclosure Assistance“, “How To Understand The Mortgage Mess” and “4 Truths About the Subprime Bailout“.  And while the article in the Wall [...] [...] Sale  Advice for the Greater Cincinnati Area“, “Foreclosure Assistance“, “How To Understand The Mortgage Mess” and “4 Truths About the Subprime Bailout“.  And while the article in the Wall [...]

]]> By: Foreclosure Assistance http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1854 Foreclosure Assistance Thu, 03 Apr 2008 19:08:22 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1854 [...] other day I wrote about how to understand the mortgage puzzle mess and promised to follow up with information to help property owners facing foreclosure.  Well I [...] [...] other day I wrote about how to understand the mortgage puzzle mess and promised to follow up with information to help property owners facing foreclosure.  Well I [...]

]]> By: Kathy http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1853 Kathy Tue, 01 Apr 2008 17:32:58 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1853 Kim, Thanks for your honesty and help. Kim,
Thanks for your honesty and help.

]]> By: Kim Schieldknecht http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1852 Kim Schieldknecht Tue, 01 Apr 2008 14:33:49 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1852 Kathy, I was wrong! The till does not show worst case. The new truth in lending form needs to show worst case scenario's Great blog. Keep it up! Kathy, I was wrong! The till does not show worst case.

The new truth in lending form needs to show worst case scenario’s Great blog. Keep it up!

]]> By: Kathy http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1851 Kathy Tue, 01 Apr 2008 12:51:25 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1851 Kim, Great point/counter point. Here's the challenge- you and I understand adjustable rates but the normal consumer doesn't. As far as "Truth in Lending" disclosures (better know as "Truth in Confusion")it is like reading a auto repair manual writen by the senior automotive design engineer who labored for 5 years on the car. I would like a car repair manual written by the lady next door, in language I understand. So here it is. Buyer is financing $200,000. on a three year adjustable. They had 5% down. You pick a dollar amount for property taxes, home owner's insurance, pmi and interest rate. Give me a simple to read chart: year 1 minimum payment - maximum payment year 2 year 3 year 5 and so on. We can test the old format and your new format with buyers and let them select which one is the easiest to understand. Finally this is not a blame game of Realtors versus Lenders, it is a way to help the majority of buyers understand the cost and payments for entire loan. No amount of legislation will prevent borrowers who utilize their homes as their personal ATM machine - withdrawing equity all the time- from having financial problems. Kim,
Great point/counter point. Here’s the challenge- you and I understand adjustable rates but the normal consumer doesn’t. As far as “Truth in Lending” disclosures (better know as “Truth in Confusion”)it is like reading a auto repair manual writen by the senior automotive design engineer who labored for 5 years on the car. I would like a car repair manual written by the lady next door, in language I understand.

So here it is. Buyer is financing $200,000. on a three year adjustable. They had 5% down. You pick a dollar amount for property taxes, home owner’s insurance, pmi and interest rate.

Give me a simple to read chart:

year 1 minimum payment – maximum payment
year 2
year 3
year 5

and so on.

We can test the old format and your new format with buyers and let them select which one is the easiest to understand.

Finally this is not a blame game of Realtors versus Lenders, it is a way to help the majority of buyers understand the cost and payments for entire loan. No amount of legislation will prevent borrowers who utilize their homes as their personal ATM machine – withdrawing equity all the time- from having financial problems.

]]> By: kim Schieldknecht http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1848 kim Schieldknecht Tue, 01 Apr 2008 11:33:49 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1848 Kathy, the majority of people with adjustable rate mortgage understand what the payment will be and the adjustments. All adjustable rate mortgage are tied to an index and a margin. Add the two and you have your fully indexed rate. Say you get an adjustable rate fixed for 5 years at 5% with a 2 and 6 cap. That means that after the 5th year the rate can go up no more than 2% per year and it caps 6% higher than the start rate of 5% ( so 11% would be the cap) These increases are clearly reflected on the TIL ( truth in lending) Is the problem the Realtor wanting to sell the home and helping the buyer get what they want? The Mortgage company following the lenders guidelines and helping the customer get into the home? The builder buying down the rate? ( Some adjustable rates used allowed the buyer to qualify at the lower rate, not the fully indexed rate. ) Wall street coming up with new types of equity's (CDO'S) It is a very complex issue with no clear path. I agree that the government,in the quest to "fix" the problem will most likely over regulate and create even more problems. I think the majority of Realtors, Mortgage Brokers, Banks and Builders want to do the right thing for people. Hopefully we can find a balance. Kathy, the majority of people with adjustable rate mortgage understand what the payment will be and the adjustments. All adjustable rate mortgage are tied to an index and a margin. Add the two and you have your fully indexed rate. Say you get an adjustable rate fixed for 5 years at 5% with a 2 and 6 cap. That means that after the 5th year the rate can go up no more than 2% per year and it caps 6% higher than the start rate of 5% ( so 11% would be the cap) These increases are clearly reflected on the TIL ( truth in lending)

Is the problem the Realtor wanting to sell the home and helping the buyer get what they want? The Mortgage company following the lenders guidelines and helping the customer get into the home? The builder buying down the rate? ( Some adjustable rates used allowed the buyer to qualify at the lower rate, not the fully indexed rate. ) Wall street coming up with new types of equity’s (CDO’S) It is a very complex issue with no clear path. I agree that the government,in the quest to “fix” the problem will most likely over regulate and create even more problems.
I think the majority of Realtors, Mortgage Brokers, Banks and Builders want to do the right thing for people. Hopefully we can find a balance.

]]> By: Kathy http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1850 Kathy Mon, 31 Mar 2008 19:24:41 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1850 I am with you on that. Adjustable rates should be on one page- large type with min and max for each year. Buyer could see actual dollars and make an imformed decision. I am with you on that. Adjustable rates should be on one page- large type with min and max for each year. Buyer could see actual dollars and make an imformed decision.

]]> By: Will Ohio searching the mls http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/comment-page-1/#comment-1849 Will Ohio searching the mls Mon, 31 Mar 2008 18:53:01 +0000 http://thecincyblog.com/2008/03/31/how-to-understand-the-mortgage-mess-puzzle/#comment-1849 hello, i was searching misc mls's online and wondered upon your site. The whole mortgage thing is a mess, who knows who exactly to blame. It does make me scared to sign any loan papers, but its always a good idea to read and understand everything you sign. They should ban small print =) and 30 page contracts. have a good one, Will hello, i was searching misc mls’s online and wondered upon your site.

The whole mortgage thing is a mess, who knows who exactly to blame. It does make me scared to sign any loan papers, but its always a good idea to read and understand everything you sign. They should ban small print =) and 30 page contracts.

have a good one, Will

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