Identity Theft

I have a favorite joke about identity theft. I'll tell people I got my identity stolen, but it GOT RETURNED! (I wrote that one myself) For millions of people, identity theft is no joke. When I was in the mortgage business, I encountered many people who had been victimized by identity theft. It stressed them out and it made qualifying for a mortgage an arduous process.

There are many things folks can do to protect themselves from identity theft. Some of them involve common sense, like not handing out your social security number willy nilly or not getting credit cards stolen. Unfortunately, identity thieves are a pretty savvy bunch, so even people who are very careful can be victimized.

There are new weapons in the war against identity theft. There's a service called Life lock that has a comprehensive identity theft protection program. What they do, once you enroll is immediately order your credit report, set a credit "lock" that requires any new credit issuer to contact you by phone directly, take you off all junk mail lists, and block all "pre-approved credit" offers in your name. They renew this information on your behalf every 90 days. If your wallet is lost or stolen, they'll contact all your credit issuers on your behalf, cancel all your credit cards and arrange for new ones. You can call them 24/7 for this service from anywhere in the world.

Life lock is so confident in their service, the founder of the company publishes his social security number prominently on the site AND they offer a ONE MILLION DOLLAR GUARANTEE! That's a pretty bold statement about their comfort with their service.

I think companies like Life lock will proliferate in the future and if they work as advertised, they'll prosper. Never again will someone seeking a mortgage be blindsided by identity theft.

Mortgage Rates Reduced

With all the doom and gloom about the sub-prime mortgage market causing a huge rise in foreclosures, there is finally some good news about mortgages. The Federal Reserve recently cut its prime lending rates which has resulted in a trickle down effect for mortgages. Mortgage rates have come down and that is always good news. Whether or not this will spark the lackluster housing market remains to be seen.

In the UK, they've taken rate reductions a step further. People who hold a Commercial Mortgage will have the rate on their loans automatically reduced to reflect the new lower rates. Lenders are passing rate savings on directly to customers to help deflect a slowing economy there. In the USA, you'd need to refinance altogether-a lender won't automatically reduce rates.

I think the Brits have this one right. The money is costing the banks less, so they can cut rates on a Commercial Mortgage and still maintain their margin. I think this shows more social and economic responsibility on the part of UK lenders than their American counterparts. Take a lesson from the Brits, US banks!

Money money money money, MONEY

As a small business person and former mortgage broker, I am always thinking about money. Cash flow is important for any business, especially people in the mortgage business since cash is the end use product. People get very emotional about money most of the time and when they are dealing with mortgages in the hundreds of thousands of dollars, they can get very jacked up.

I have been reading about the recent concerns about the "sub prime" lending practices of a few years ago that many are blaming for the current increase in foreclosures. It seems many mortgage brokers engaged in outright fraud in order to get people mortgage loans for homes they couldn't possibly afford. The consumer bears some responsibility, they did sign fraudulently prepared documents that overstated income in many cases, but the originating brokers are coming under scrutiny for knowingly falsifying documents and "over selling" unwitting borrowers.

The result is many of these "sub prime" mortgage loans are in default and people are losing their homes. What happened is mortgage brokers got greedy, mortgage wholesalers fed the greed by encouraging (or not actively discouraging) shady underwriting practices and consumers bought into the whole mess with visions of endlessly escalating real estate values and continued access to low interest mortgage loans with no consequences.

Now the sub prime lenders are facing criminal charges and families are left broke and homeless. This underscores the importance of trust. When borrowing hundreds of thousands of dollars for a home, deal with someone you can trust to do the right thing. Go with established lenders and mortgage brokers when shopping for mortgage loans and don't sign any document that has falsified information. If a broker or lender gives you documents with falsified information, RUN (don't walk) AWAY as fast as you can!

Mortgage Leads

Before I was the Hotdgman, I was the Mortgage Man. I worked as a mortgage broker for about 5 years. Having been in sales for most of my adult life, it was a pretty good job for me. Basically, a mortgage broker finds people who need a mortgage and then finds them a suitable loan. It's a pretty straightforward business.

When I first started out, I bought a lot of mortgage leads. I'd get a list of would be home buyers, refinance leads, home equity leads, sub prime leads, foreclosure leads, and government leads in both FHA and VA loans. The folks on these lists of mortgage leads had usually filled out an online form at any number of "get a mortgage" websites and were requesting a that a mortgage professional contact them. I liked the fact that people had requested contact, it made the lead "warm" (as opposed to a "cold call").

I got a good bit of business from the mortgage leads I purchased and I considered buying them a good investment in my business. Once the housing boom really took off, I stopped making so many phone calls. Interest rates were at historic lows and people called and walked into our office constantly looking for mortgages; plus my real estate broker friends sent me a ton of business. It was a great time to be a mortgage broker-it was almost too easy!

I eventually got tired of working in sales in general and pursued my dream of being the Hotdogman. I kept writing loans for the first year or so of buying the Hot Dog Truck, but eventually got out of the business altogether.

Now that the Real Estate "bubble" has burst, lending guidelines are becoming much tighter and fewer homes are being sold. There's a lot less activity and people who are still in the mortgage business have to work harder and smarter to keep their business afloat. Many of the people I worked with are back to buying mortgage leads from companies like Zip Search. Even though there are less people looking for loans than a few years ago, money is a product that never goes out of style. Mortgage professionals who work smart AND hard and who work their mortgage leads will weather the current storm and emerge successful.

Loan Blight

Finding money to borrow is getting harder and harder. For the past few years, people took out mortgages on their homes like crazy to finance construction of home additions, second home purchases, vehicles, and debt consolidation. Now that the mortgage market is drying up, folks are either turning to unsecured loans or forgetting about borrowing at all.

Many of the construction guys who frequent the Hot Dog Truck are seeing a big slowdown in their business since nobody is spending money like they were a few years ago and they're unwilling to take out loans.

If this continues, the economy is going to go into the crapper until more money is made available to lend. Borrowing money is good when it's inexpensive to do so, but if interest rates are high or there is poor liquidity in the market, it becomes counterproductive.

People who take out mortgages to finance consumer debt are being shut out too. They have no recourse to pay down ridiculously high interest rates on credit cards and tighten their belts or go into default.

Borrowing what you can't pay back leads to trouble and the mortgage industry's loose standards over the past few years have created a situation where defaults are common and loans are scarce.

If people don't spend, we could all be in trouble.

Give Bad Credit its Due

If you are a person with bad credit, it seems like everyone and their uncle wants to offer you bad credit loans. There are so many offers (heck, if you have email, your spam folder is probably full of them) it can be confusing. Finding a place to compare different offers can help ease the confusion.

Whether your looking for a credit card, a mortgage or a car loan, the folks at Bad Credit Offers can help you sort through all the different bad credit loans available. They put their offers side by side on one page for easy comparison so you don't waste lots of time. It's a great idea.

If you use this site to find bad credit loans, make sure you understand the terms and the interest rate so you don't get trapped into a loan you can't afford.

FHA Loans

With all the fallout in the mortgage lending industry, the FHA loan is making a comeback. Originally, FHA loans were designed to help people who didn't have the "standard" 20% down payment purchase a home. You can purchase a home with a 3% down payment with an FHA loan.

With the advent of Sub-Prime Lending, FHA loans took a backseat for a while. Lenders were giving loans with no money down, so many folks went that route.

Now, with many Sub-Prime loans adjusting (adjustable rates are common in the sub-prime lending world) upwards, folks find they can't make the payments and foreclosures are on the rise.

An FHA loan can help these people too. There is a new FHA loan program that would allow borrowers to refinance their homes at a lower interest rate and eliminate the 3% required minimum down payment for FHA loans. This could help lots of folks with less than perfect credit and payments that are too high get back on even footing with their housing payments.

Mortgage Bond

You see the term "licensed and bonded" on company signs everywhere. Not many people know what "bonded" means, but they feel comforted by the phrase. It conveys a sense of protection and stability.

When I was in the mortgage business, we had to fill out a form for our surety bond company. A mortgage broker surety bond basically guarantees that if the broker screws up and violates the law, the company is protected from fines and penalties. For instance, if a broker failed to give their borrower the proper disclosure documents and the borrower complained to the appropriate state agency, the agency would give the broker or the brokerage house a fine. A mortgage surety bond would pay for the fine.

There are, unfortunately, some unscrupulous and dishonest mortgage brokers. I worked with a guy who was arrested for fraud. He was lying to customers about the rates they'd be paying and doctoring their paperwork after it was signed. He spent time in jail and paid a hefty fine. Another guy I worked with was fired because he was running a scam where his friend would verify employment for borrowers so they could qualify for "low doc" loans. Several of his borrowers had their loans called by the lenders and it was a big mess. In both cases, the brokerage house was protected by its surety bond.

There are also large national lenders (like Ameriquest) that have been accused of fraud and deceptive lending practices. The company is facing a class action lawsuit. A surety bond won't help them as bonds don't cover the scope of actions alleged to have been committed.

Overall, surety bonds provide protection but they may not protect against greed and stupidity!

Why a Mortgage Broker

I used to be a mortgage broker. I kind of never stopped being one-I can still write loans if I want to. People still ask for my help on occasion even though I don't actively work the business.

A mortgage broker is a great resource for borrowers. Most brokers have access to multiple lenders and can often provide one stop comparison shopping for folks in need of mortgage loans. Most brokers usually have more knowledge of different types of government loan programs and they usually have access to a wide variety of non-conforming (or specialty) lenders.

A good mortgage broker also gives great service. Most people are pretty cranked up about borrowing hundreds of thousands of dollars and often times the broker keeps them down to earth and eases them through the process.

You can go to the local bank when you need a mortgage if you want, but when you are looking to purchase a home or do a mortgage refinancing, a good mortgage broker is priceless resource.

Where Credit is Due

If you need a new mortgage and you have Bad Credit, you could be royally screwed in today's market. Sub Prime or Bad Credit Mortgages are becoming increasingly more difficult to obtain due to the record number of foreclosures that have forced some lenders out of business.

There is still a place where people with Bad Credit can get a mortgage, a credit card or a car loan. BadCreditOffers.com has lists of lenders who will lend money to people with Bad Credit. You can compare offers side by side and see which lender has the best deal.

Beware the Bad Credit loan. Oftentimes the terms can be so poor, the new loan will just send you further into the red. If you can get a loan you can afford, it can be a great way to repair your credit. Just make sure you pay your bills!

Time to Get a New Mortgage

When I was a mortgage broker,Remortgages or Refinances were our bread and butter. Rates were low and everyone wanted to refinance their mortgages. Our office was directly across from a busy traffic light and we had our rates posted in the window. I can't tell you how many times people called on their cell phones while sitting at the traffic light-when they heard our rates, they'd come on in. I wrote dozens of mortgages that way.

Now I am in need of a new mortgage for my house. Our rate is about to adjust up plus we want to pay down a big chunk to make our principal (and payments) lower. For the next few weeks I'll compare mortgages and find the best deal. Since I was in the business, I'll probably talk to the company I worked for first. I know they won't give me the run around and I'll be able to get a good rate too.

Wish me luck!

Get Loaned

A reverse mortgage is a good thing for folks on a limited income who own their home outright. You basically tap your home's equity for monthly cash.

You need to be over 62 years for a reverse mortgage and there are some other guidelines as well.

Check out GetLoaned.com for more info.

All A Loan

Regular readers know I used to broker Mortgages. I know a little bit about the subject. I know about money too. (I know I never seem to have enough!)

Personal loans are another form of borrowing. Basically a lender loans you money if you: a. have enough in the bank to pay them back or b. have really good credit. There are a lot of Personal loan companies that have really loose terms and high rates. You need to be careful with many of these loans or you could end up paying a prohibitively expensive interest rate.

Sometimes it's better to go with a secured loan to get a lower rate. Just be sure you can afford to make the loan payments so whatever you are offering for security isn't put at risk.

Whether you are looking for a secured loan, a personal loan or a Mortgage, be sure you understand the risk, rates and payments. You should never "sign on the dotted line" unless you understand what you are paying for the money you're borrowing!

Tiger Tom

I got an offer to review a site tonight, so I went to TigerTom mortgages UK tips to see what the site is all about.

Basically, TigerTom mortgages UK tips is a site that gives advice on getting a mortgage. Since I've owned a couple of homes and was in the business, there was nothing new for me here. Most of the content is common sense. Some of the info is so basic, it's laughable. Tip # 9 reads: "Keep your mortgage as small as possible. Aim for easy affordability." Keeping your mortgage small is an excellent idea, but I'm sure most people don't need a website to tell them that!

Seriously though, for a first time buyer, a site like this has some value. Most first time buyers are a bit wide eyed and overwhelmed. Simple , straight forward advice is something most of them need and they'll find it at TigerTom mortgages UK tips.

And remember tip # 13: "The deal that seems too good to be true probably is!"

Making ends meet

At the end of every month there is a scramble to pay the mortgage, insurance, and all the other bills. I'd like to be able to get the best car insurance rates and one of those cheap mortgages so I could save a few extra bucks!

Most of us are one or two "bad months" away from fiscal crisis. When something goes wrong with a job or a business, it is easy to fall behind on bills. And you can't keep getting loans to get back on track.

It's a good idea to have at least 6 months living expenses socked away for a rainy day in case bad luck befalls you. I have found the "passive income" from my blog to be a nice little cushion each month against potential financial setbacks.

What to do When the Money is Gone

If you own a home, you have a mortgage. Mortgages have been very easy to come by for most people in the beginning of this millennium-if you had a pulse and a job you could get a mortgage. Money was pretty easy to get in the past 6 years or so.

Unfortunately, remortgages are becoming less common as banks and mortgage lenders have tightened lending guidelines do to increasing defaults. Homeowners are being foreclosed on at records rates to to the free and easy lending practices of the past 6 years. In the U.S. dozens of mortgage lenders have gone belly up, but they have only their greed and poor judgement to blame. Borrowers who took mortgage payment protection plans with their mortgages are glad they did. These plans pay your mortgage when you can't.

More banks should have pitched mortgage payment protection plans when they were playing fast and loose with their lending guidelines-maybe there would be fewer defaults if they had. Unfortuneateley for most borrowers, high interest adjustable loans obtained 3-7 years ago are adjusting NOW and payments are through the roof. The lenders are partly to blame for this mess and borrowers who KNEW they were overstating things are to blame too.

My Card

When I was in high school I took a production printing class as an elective. We'd do print jobs for local businesses and we got experience in printing and running a business. We also got to print stuff for ourselves. I made up a thousand business cards that simply said "My Card" along with my name and home phone number. I handed them out at college and I'd give them to girls in clubs. It was a cute ice breaker and I got many a phone call from those little cards.

Once I got out into the wonderful word of sales, I always had business cards. When I owned my duct cleaning business, I had a $20.00 off coupon on the back of my business cards. My wife, who works in a Real Estate Office is always bringing home broker business cards with football and baseball schedules on the back. These always grab my attention. I even had magnetic business cards when I was in the mortgage business; they are like mini billboards on my customer's refrigerators.

One of the coolest business cards I ever saw was one of those picture cards that looks like it's in 3D when you wiggle it back and forth. It was from a guy in the printing business who printed all my business cards! His cards grabbed my attention so much I order all my cards from his company to this day; I can even order my business cards online from his company now!

I remember reading a book by the self professed "World's Greatest Salesman," Joe Girard, and he used to go to football games with a couple thousand business cards. Whenever the crowd would rise to its feet and cheer, he'd throw a few hundred business cards into the air! I wonder if the printing lobby paid him to write that?!

When I was in the mortgage business, I was going through about 500 business cards per month. They went into every envelope I sent-marketing mailers, customer correspondence, even my bills! I even put the old "My Card" gag on the back of my "official" business cards to help make folks remember me. Most customers found it amusing and it definitely set me apart from other mortgage brokers.

I have business cards for the Hot Dog Truck, but I don't hand out many. They have the "My Card" gag on the back too. I still send them in with my bills as a goof and I hand them out to customers who want to call ahead for an order. These business cards have my cell phone number on them, so they come in handy for all sorts of situations.

The Mortgage Man

THIS IS A SPONSORED POST

Everyone wants to know more about mortgages. I was a Mortgage Broker before becoming a Hot Dog Man, so I know a little bit about the subject!

It is a wacky business with a great many "shady operators." Many of the loose lending practices of the previous five years or so are creating ugly situations for many homeowners who cannot afford the payments on their mortgages. There were a great many companies who offered and wrote mortgages to people who merely needed to prove they had a pulse to get a loan. The result is a lot of bad loans, foreclosures and heightened regulations for the lending industry.

When I started in the business home values were increasing and interest rates were falling and they eventually hit all-time lows. Many people were looking to remortgage their home to take advantage of lower rates and to pull cash out of their homes. I was making money just by sitting around the office. Walk-ins were common and just about anyone who owned a home refinanced their home.

While this boom in refinancing was going on, I managed to carve out a comfortable niche in the "Jumbo Loan" market- mortgages for people who needed to borrow over $300,000 (the limit kept rising with rising home prices). I dealt primarily with refinancing existing mortgages and providing mortgages to people buying million dollar homes (a market which is very thin right now.

Some of my collegues devoted their energies to bad credit risk customers who needed secured loans to get out of mounting credit card and other consumer debt. That was never a market that interested me personally, but many of the lenders payed good commissions and were fast and loose with their underwriting policies. There were even wholesale reps from lenders who "encouraged" fraud to get deals approved! Like I said before, it was a shady business.

Compared to being a mortgage broker, being a Hot Dog Man is much more fun and a lot less shady!