Archive for July, 2007
Visiting the bubble again, in the meantime feel free to peruse the blog, a good starting point is here.
Home mortgage rates dropped across the board, with thirty year fixed rate mortgages going from an average 6.73 to 6.69%. When compared to a year ago, mortgage rates are still significantly higher, and given the current instability of the market, it seems unlikely that they will be falling much further.
With that in mind, and with an increasing number of mortgage companies leaving the business, now seems to be the best time to grab a mortgage before rates jump again.
Wells Fargo Mortgage, the nation’s second largest mortgage company, and one that encouraged me to lie in order to get a mortgage with them, has announced that they will no longer be permitting third-party brokers to issue subprime loans.
The company will continue to offer such loans directly to consumers (which is the method I had pursued when I ran into the loan officer’s ‘encouragement’ to fudge the truth. Hopefully they’ll proceed to further reform their in-house lending practices.
This move is seen as being indicative of widespread broker-abuse and predatory lending problems which have helped contribute to the increasing number of foreclosures across the nation.
I recently wrote about the possible appeal for real estate investors in purchasing homes using lease-to-own contracts.
As I stated then, I wish to reiterate that it is plumb stupid to purchase a property without having an attorney examine the rent-to-own contract first. Most rent-to own contracts end in in eviction, or in the buyer not actually purchasing the property, often because of contractual fine print.
If you aren’t careful, you may end up with a contract that makes it more profitable for the seller to evict you than sell to you. Guess which option will be selected. Remember, the whole point of a lease-option deal generally isn’t for the landlord to sell the property. It’s just a way for the landlord to collect 110% of the normal rent, and have the renter fix the place up real nice, and have the renter be responsible for the unit’s repairs.
Lease-option contracts will usually include some incredibly strict default clauses. For example, if you are late paying the rent just once, the deal is off, or if you violate any one of a number of other small infractions.
WRONG. Legitimate businesses don’t recruit distributors with the prospect of selling to, or recruiting other distributors. Instead, they focus on the prospect of selling to retail customers.
If you find yourself invited to a ‘Free Real Estate Seminar’ or have a friend pushing you to attend with him or her, fake a major illness, run to Mexico, or just plain say no. Real friends don’t let friends attend real estate seminars.
Why? Chances are you’re familiar with Timeshare presentations. You get a free hotel room, or a discounted trip in return for agreeing to attend a ‘90′ minute course that quickly spins into an all day full court press in which sales agents do everything imaginable to persuade you to buy a highly inflated timeshare.
Who in their right mind would fall for something so incredible wasteful? Everyone. They give those free hotel rooms because people are easily suckered. The same applies for the ‘free’ real estate seminars. You’re really attending a long sales pitch aimed at persuading you to spend thousands of dollars to ‘learn more’ in further seminars. Most people find that the ‘free’ vacations, trips, and seminars they attend end up being by far the most expensive.
If you ever find yourself being pushed to join up with a company that operates via referrals and multi-level commissions, RUN.