According to the Blueprint for Stronger Regulatory Structure, fresh from the steaming hot presses of the U.S. Treasury, the era of financial market band-aids is over.
On Monday morning, Treasury Secretary Henry Paulson revealed an overarching plan for straightening up mortgage lending, consolidating banking and securities oversight, as well as establishing “optional” federal monitoring of insurance.
What’s worse than dropping the F bomb once?
Dropping it 73 times, which is exactly what HTFC Mortgage Company CEO Aron Wider did. Wider and his lawyer received a $29,000 sanction from a federal judge for his potty mouth and his lawyer is attributing the profanity on an anxiety disorder.
There’s a lot of finger pointing going on in this subprime mess. And there’s more than just one person to blame. But it seems yucky that someone who can barely manage his career-damaging motor mouth isn’t also controlling a gazillion dollars of consumer money. There’s an even scarier F word at the root of Wider and his fellow mortgage mates agony - foreclosure.
Those finance types have always been kind of intense, but 73 uses indicates that they’re shaking in their Armani boots.
Maybe. But in the short term, Wider might just need a new PR team.
PS - For added fun, here’s the Wikipedia list of movies that use the duck (minus the d, add the f) word the most. Around here at FiLife, we’re content using terms like “turdburglar” and “barfatarian,” but the list is there for the F curious.
Today’s post comes from Steve Heideman, President of the Upfront Mortgage Broker Association and, more importantly, a genuine and official FiLife Guru. Like other FiLife Gurus, Steve will be contributing articles to the site, answering questions from users on topics he knows a lot about and helping in innumerable other ways.
I don’t think anyone grows up wanting to be a mortgage broker. In the minds of most of the public, we are just above “used car salespeople” in terms of our business ethics and integrity. We would need to reach up to scratch the belly of a snake.
I got into the mortgage business pretty much by accident. I was working in sales support at an organic gardening products company (my college major was Biology with a Botany concentration) and my supervisor’s husband owned a mortgage company. Being a Gen Xer, I was always good with computers. One day my supervisor came to me and said that her husband needed help putting together a computer network for his mortgage company. Making a little more than slave wages at the time, I jumped at the chance for a side job in computers. When I went to his office and started to learn about the business, I became intrigued by the idea of being a “financial professional.” Since I was always good at math, I found a natural affinity to being a mortgage loan officer.
A few years into my career, I was lured away by a financial services firm that did financial planning, insurance and asset allocation. They hired me to start a mortgage division for them. During that time, my financial education took a quantum leap. I began to make the shift from looking at a mortgage as a debt to be paid off, to viewing it as a financial planning tool-a view that would later be affirmed by a study done by the National Bureau of Economic Research.
When I was done with my stint at the financial services firm, I knew that I had a vision for a different kind of mortgage company. One that did not focus on pushing products and “selling” loans, but rather a company that put the mortgage where it belongs-in the context of a family’s short and long term financial planning goals. This is why I moved to Arizona and started United Mortgage Financial Group, Inc.
One thing I never could get comfortable with was the degree to which bait and switch tactics were commonplace in my industry. I guess I’m too Pollyannaish, but I always find it amusing that one of my unique value propositions as a mortgage professional is that I am honest. In my world, that is just the way business is done. It is my core philosophy that the surest and best way to get what you want, is to help as many people as possible get what they want. One day I was reading the paper and I came across a column written by Jack Guttentag (aka “The Mortgage Professor“). He was discussing the mortgage industry and his concept of an “Upfront Mortgage Broker.” An Upfront Mortgage Broker is a mortgage professional who works for their clients on a fixed-fee basis that is negotiated (surprise, surprise) up front. The fixed fee may be paid by the client, the lender or both, but all lender rebates above the agreed-upon price are given back to the client. The commitment of an Upfront Mortgage Broker can be found here.
This concept was music to my ears. So I wrote to the professor and, shortly after that, became a bona-fide Upfront Mortgage Broker. In 2005, the professor came to me and asked me to be the founding president of a new association to ensure the survival of the Upfront Mortgage Broker after his retirement. I agreed and in 2006 the Upfront Mortgage Broker Association was born.
As far as my own mortgage, I utilize interest-only loans because I am a believer in keeping myself as liquid as possible for emergencies, disabilities or economic downturns. (Boy, am I glad I did with the current mortgage credit crunch :))
SPONSORED POST: Even a Costco dilettante might know that few deals at the warehouse retailer are as rich as the $1.50 Hebrew National dog and soda combo. After all, the company sold over 69 million of them in 2007. But, Costco and LendingTree offer up an even better deal just for being a member.
Costco members who apply for a mortgage, home loan or realtor through LendingTree can earn up to a $300 Costco cash card.
Here’s my problem with the rescue plan.
The Bush administration intends to reward some borrowers who are in over
their heads by cajoling mortgage companies into leaving those borrowers’ artificially low interest rates where they are. Those rates won’t jump, as they were scheduled to do soon. Read the White House’s explanation here.
But what about the folks who have saved diligently, have impeccable credit, earn a decent income and yet still are priced out of many homes because of the stratospheric real-estate prices that were propelled by easy credit? Folks like, oh, say, me for instance? (more…)
Money earn
ing more money – it’s a wonderful thing.
As regular FiLife readers may know, my husband and I are looking to buy our first apartment. Our down payment resides in a Citibank e-Savings account, which currently yields 4.0%. We’ve saved a respectable sum, and I get a sense of satisfaction watching it grow without having to do anything at all.
But the last time I checked the balance - and I do this often - I started thinking: Can I do better?
So I came up with an idea. If I was a bank product manager for a day, I’d create something tailor-made for first-time homebuyers: an account specifically earmarked for down payment savings that offers one percentage point more in interest than the highest-yielding online savings account already in the market. (more…)
The lead story on the Yahoo home page at the moment is headlined “Fear of Foreclosure”
The teaser copy reads as follows: “Foreclosures are on the rise, but what could cause a bank to actually go ahead with one?”
When you click on the link, however, an error notice pops up on a Yahoo Answers page saying that customer care had to remove the question. Then, there’s a link to the community guidelines, suggesting that someone, in answering the question, committed an egregious violation of them.
Any guesses on what sort of offensive opinion on the topic might have caused Yahoo to shut the whole thread down so quickly that the company forgot to remove it from the home page, where tons of people are likely to click through to the dead end in the next few hours?
Our journey towards homeownership drags on: my husband and I have probably seen at least 25 apartments in brownstone Brooklyn, but we still haven’t found the one.
In the meantime, a broker recently told us that we should get pre-approved for a mortgage – stat – for several reasons: (more…)
I recently checked my credit score on myFico.com and was delighted to learn that at 776, I’d qualify for the lowest mortgage rate available. The site said that a 30-year fixed rate loan for someone like me runs at 6.11%.
Armed with this, I visited some banking web sites to see how much apartment they think we can afford and what kind of loan they’d be willing to extend to us — especially in light of this whole credit-crunch business.
I started at Washington Mutual. I tinkered with their “How Much House Can I Afford?” mortgage calculator, and it came up with a figure. Turns out we can’t swing the gentrified Brooklyn neighborhood where we rent, which now attracts the likes of Heath Ledger and possibly Moby (my broker told me he was looking).
That wasn’t the surprising part. What irked me was the type of mortgages suggested at the bottom of WaMu’s calculator: two interest-only adjustable rate mortgages (ARMs), and a plain-vanilla ARM, which has a fixed rate for the first year and would adjust thereafter. Isn’t this precisely the type of loan behind the skyrocketing default and foreclosure rates? Where was the 30-year fixed rate I was looking for?
Home