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At this time lots of folks are thinking about doing something different with a mortage thanks to these trying times.

There are a variety of re-financing remedies so be sure you do your research before you decide to make a decision. Check the posts here for more information

“Greed is good.” That is the motto of Gordon Gekko, a major character in Oliver Stone’s movie, “Wall Street.” We all have experience with the benefits of this character trait, as well as the costs.

Before we entered into the new century, the mortgage industry was embargoed from making loans to borrowers with a poor credit history and lack of supportable income because we were all operating under the guidelines established by the consortium of Fannie Mae, Freddie Mac and the FHA. Together, they created the loan underwriting guidelines that were acceptable with the secondary market institutional investors, including Wall Street, insurnace firms, pension funds, and other investors in mortgage backed securities. The loan broakers and lenders who offered loans, whether for new purchases or refinances had to follow these underwriting regulations, unless they were able to hold them in their own portfolios as an asset.

Savings and Loans across the country also looked at mortgage lending products as either salable in the secondary market, therefore subject to the same basic guidelines, or produced their own products for their own portfolio. The now reviled “Option Arm,” “Interest Only,” and “Stated Income” loan products were initially developed by some major S&L’s and Commercial Banks as portfolio loan products. They had been used for over twenty years, and clients who fit the qualifications were able to take advantage of the benefits. The exception to these commonly used underwriting guidelines were those of the then-evolving Alternative-A paper lenders and “sub prime” lenders that became the 21st century dominant sources of mortgage capital to potential borrowers who had income documentation problems, credit issues and/or credit backgrounds that made them more challenging to the prime institutional lenders.

Throughout all this, the considerable rising of firms such as Option One, New Century, Ameriquest, and the other companies in that arena liberally were making these programs accessible to loan applicants that simply could not have qualified them in the ears earlier. Thus was started the slippery slope that enriched many people in the years from 1997 through 2005, which ultimately caused most of these participant companies to close their doors by the end of 2007.

Greed has many handmaidens. First off, you have the home buyers, who realized their fantasies of a bigger house by taking on more debt than they could handle.  There were mortgage brokers who didn’t live up to their professional responsibilities and mortgage lending companies that ignored many of the warnings that were there to be seen. Rating agencies like S&P, Moody’s, and Fitch hid behind financial structures that were truly halls of mirrors created by financial intermediaries that also paid their fees for the ratings they issued. There were also the institutional consolidators like the major Wall Street companies and the institutional investors who bought these products after they had been converted into Mortgage Backed Derivative financial instruments and given Investment Grade ratings.

As in most major screw ups, including financial upsets, every player had a role in its success – and failure. “A rolling loan gathers no loss,” was the way of business, and as these mortgages passed through many hands, no one saw a need to consider the implications of their actions – as long as they made their money. Because of this, no one can say that they are totally innocent in the global financial events of the past years.

“Back to the Future” was the title of a series of movies in the late 1980s and early 1990s that is also the vision of our collective financial near future in Mortgage Lending. By near future, I mean the next three to five years.We have taken a visit back to the time where the loans we made requiredunderwriting standards would be universally known and implemented. Home purchases would typically require a down payment, and borrowers could expect that their credit scores and histories would be reviewed, leaving them little chance of getting a loan they were unqualified for.

That seems to be the near future because fear and despair never last too long. Somewhere in the financial hemisphere, there will be a “great idea” to focus on short term money gains and let the future work itself out, not even considering the risks at hand.At this time, numberous banks and brokers will no doubt assure themselves that they are wiser this time around, know what mistakes to avoid, and can can deal with any hike in default risk, all in the name of a prettier balance sheet.

And so it will start again. Just wait and see.

The author of this article is a 43-year mortgage lending professional and legal mortgage expert witness providing professional consultation and expert witness testimony.  He is listed with Consolidated Consultants, an expert witness services company along with many other legal technical expert witnesses. Get their full C.V.’s online. This is a free service.

Of course refinancing could possibly be a great idea both in good and bad housing markets. It will be important to learn what is a part of re-financing, when it might be useful and what you need avoiding. This can be a somewhat challenging for anyone who is having their first go at it however the information and facts you will find below will assist.

Right now lots of individuals are considering doing something different with a mortage thanks to the trying times.

There are a lot of re-financing possibilities so be sure to do your research before you decide to make investments. Check the posts here for more information

“Greed is good.” That is the motto of Gordon Gekko, a major character in Oliver Stone’s movie, “Wall Street.” We all have experience with the benefits of this character trait, as well as the costs.

Before we entered into the new century, the mortgage industry was embargoed from making loans to borrowers with a poor credit history and lack of supportable income because we were all operating under the guidelines established by the consortium of Fannie Mae, Freddie Mac and the FHA. Together, they created the loan underwriting guidelines that were acceptable with the secondary market institutional investors, including Wall Street, insurnace firms, pension funds, and other investors in mortgage backed securities. The loan broakers and lenders who offered loans, whether for new purchases or refinances had to follow these underwriting regulations, unless they were able to hold them in their own portfolios as an asset.

Savings and Loans across the country also looked at mortgage lending products as either salable in the secondary market, therefore subject to the same basic guidelines, or produced their own products for their own portfolio. The now reviled “Option Arm,” “Interest Only,” and “Stated Income” loan products were initially developed by some major S&L’s and Commercial Banks as portfolio loan products. They had been used for over twenty years, and clients who fit the qualifications were able to take advantage of the benefits. The exception to these commonly used underwriting guidelines were those of the then-evolving Alternative-A paper lenders and “sub prime” lenders that became the 21st century dominant sources of mortgage capital to potential borrowers who had income documentation problems, credit issues and/or credit backgrounds that made them more challenging to the prime institutional lenders.

Throughout all this, the considerable rising of firms such as Option One, New Century, Ameriquest, and the other companies in that arena liberally were making these programs accessible to loan applicants that simply could not have qualified them in the ears earlier. Thus was started the slippery slope that enriched many people in the years from 1997 through 2005, which ultimately caused most of these participant companies to close their doors by the end of 2007.

Greed has many handmaidens. First off, you have the home buyers, who realized their fantasies of a bigger house by taking on more debt than they could handle.  There were mortgage brokers who didn’t live up to their professional responsibilities and mortgage lending companies that ignored many of the warnings that were there to be seen. Rating agencies like S&P, Moody’s, and Fitch hid behind financial structures that were truly halls of mirrors created by financial intermediaries that also paid their fees for the ratings they issued. There were also the institutional consolidators like the major Wall Street companies and the institutional investors who bought these products after they had been converted into Mortgage Backed Derivative financial instruments and given Investment Grade ratings.

As in most major screw ups, including financial upsets, every player had a role in its success – and failure. “A rolling loan gathers no loss,” was the way of business, and as these mortgages passed through many hands, no one saw a need to consider the implications of their actions – as long as they made their money. Because of this, no one can say that they are totally innocent in the global financial events of the past years.

“Back to the Future” was the title of a series of movies in the late 1980s and early 1990s that is also the vision of our collective financial near future in Mortgage Lending. By near future, I mean the next three to five years.We have taken a visit back to the time where the loans we made requiredunderwriting standards would be universally known and implemented. Home purchases would typically require a down payment, and borrowers could expect that their credit scores and histories would be reviewed, leaving them little chance of getting a loan they were unqualified for.

That seems to be the near future because fear and despair never last too long. Somewhere in the financial hemisphere, there will be a “great idea” to focus on short term money gains and let the future work itself out, not even considering the risks at hand.At this time, numberous banks and brokers will no doubt assure themselves that they are wiser this time around, know what mistakes to avoid, and can can deal with any hike in default risk, all in the name of a prettier balance sheet.

And so it will start again. Just wait and see.

The author of this article is a 43-year mortgage lending professional and legal mortgage expert witness providing professional consultation and expert witness testimony.  He is listed with Consolidated Consultants, an expert witness services company along with many other legal technical expert witnesses. Get their full C.V.’s online. This is a free service.

But bear in mind refinancing could be a good option in both bad and good real estate markets. It's important to be familiar with what's involved with refinancing, when it can be useful as well as all you need to avoid. This can be a little challenging if you're new to it however the particulars you'll find right here can certainly help.