The San Diego Mortgage scene

It certainly is getting ugly out there when looking at the methods of many mortgage broker’s recently. I recently hired a young aspiring loan officer that is nineteen. Although not in the business long, he learned of the cut throat nature that exist in the business quickly. At his first mortgage shop he was told by a manager to lie and do whatever it takes to close the loan. Wow , what a nice first glimpse into this young man’s career. He is good hands now.

We have had alot of loans falling out from other mortgage broker’s straight up lying to people. The market is in such a tough time right now that homeowners really want to believe they are going to get a magical deal for free. It turns out that it isn’t free nor all that is magical, unless you like seeing money disappear. It useually goes down like this.

(Me) We have a fair honest deal for you, a thirty year FIXED rate Mr. Borrower that is going to save you a ton in the long run
( Bob the Boastful broker) Mr. Borrower I can get a much better rate on a thirty year loan, and do it for half the price

(Borrower) On a thirty year FIXED?

(Bob) yes sir, that’s a thirty year loan

(Borrower) that great!, (1 hour later) I’m sorry Levi, I really appreciate all your help but’s it’s better down the street at Bob’s
(Me) Let me explain how we have arrived at your specific rate for your specific loan, and how Bob is LYING

(Bob) Well Mr. borrower here is why my deal is vastly better than the good ol boy’s with Levi and www.sdcahomesandloans.com

(Borrower) That’s great Bob let’s do it.

…….. Time to sign………

The borrowers hasn’t made their payment for May and it’s June. Bob said you don’t have to worry about your payment because we are going to skip two months of payments and it will al be handled at closing, sweet.

Here comes the notary.

Mr Borrower looks and noticed there are some extra fees in the loan, like 7k more. What’s up with this Bob. Bob says ” That origination fee is to get that great rate we talked about, we lost a little on our rate lock since this thing took two month’s to close, but don’t worry your making the money back by skipping two payment’s”. OK Bob

Hey Bob I thought this was i thirty year FIXED loan, this one says it’s only fixed for two years?

Bob- “uh, it is a thirty year loan, it must be a mistake we’ll get that fixed up, go ahead and sign everything and I will have the bank fix that up, we need to get this closed.”

(Borrower) I’m not signing this $%&

(Bob) Dang, I lost another one. Oh well at least I make enough on the ones I do get to keep me fat and happy.

********* next day****

(Borrower) Bob was lying Levi, I knew I never should have trusted him. Can we still get that rate that was little higher than Bob’s but fixed?

(Me) I’m sorry Mr. Borrower but our rate lock expired and the market has not shifted in a good direction for us. You also now have a late on your mortgage and your credit score is now 3, with a fico of 3 I can’t help you a whole lot. I will put you in a credit repair program and if you do it right we can get you a decent deal in a year.

This will cost our borrower more than 135k in interest if we can get him a 7.25 thirty year fixed in a year, I hope we can.

Account executives are in the office all the time trying to tell us about the cool new product. Most of the time they aren’t new or cool, but recycled ideas.

Some of the new loans worth noting is a 50 year fixed mortgage available thru a well known sub-prime investor. It comes in the 2,3,5, and 30 year fixed varieties. It’s a good choice for people who want to pay P+I but want interest only like low payments.

Another great new one is a FIXED option ARM loan from a lesser known player. This thing is a god send for San Diego. So many home owners in San Diego are on option arm type loans and just letting the rate float around. They love the low payments or can’t really afford a higher payment, this one locks the rate for up to 30 years. This is great because homeowners know how much interest they will defer for the entire term of the loan, and still have a low minimum payment of 1-3%

I’ve saved the best for last. The “home ownership accelerator” offered only from broker’s through CMG Mortgage. This is the real revolution in the future of home owning. I’m not going to go into great detail, but you basically have the chance to pay off your home in half the time with no change to your spending habits. Check out

Home Ownership Accelerator
These loans are some of the new more interesting products on the market. I hope to hear your thoughts on some of these and the results your borrowers are having or if your a home owner reading this blog.

 I can smell the fear in the air. San Diego is starting squirm from rising interest rates. People that plan to be here in ten years, better get their rates locked in tight. I have been solely trying to contact option ARM clients who plan on being in the home long term and shouting the news. Lock your loan. It’s not that this is a revolutionary idea or anything, but one that few mortgage brokers are willing to tell clients. Why, because the short term 2 year fixed loans and other hybrid loans, pay out more.

 The banks almost force loan professionals to do this, because they dictate the payout. If they would pay the same for the loans that would do borrowers good for the long haul, it may help improve the economy… Too bad that will not happen.

 I’m not against short term loans, but the broker community and banks in general push it so much, they’re almost as bad as the pharmaceutical commercials. If we as brokers guided our clients better, we wouldn’t have the bad aura that surrounds us. Something to nibble on. Stay turned for another bite.

 Visit this blog for the real lowdown on the local real estate and finance community, from a guy who spends alot of time in the trenches.