As the US economy continues to struggle to emerge from one of the most costly recessions in modern times, those of us in the mortgage industry find ourselves more challenged then ever before in our careers. As the founder and CEO of Superior Mortgage Corp., a privately held mortgage banking company with over 22 years experience, I have a unique view of what is happening (not to mention sometimes a little cynical). Many of the changes and new regulations are certainly justified but much of the effort to correct what went wrong in the past is misguided. These days it seems every politician, state, or federal regulator is looking to make a difference and correct the ills of the past. That is admirable but the problems are not easily corrected, especially in a manner that will actually help the consumer and not do major damage to the thousands of mortgage professionals that have always done their job in an honest and professional manner and the millions of consumers that have always borrowed responsibly.

Here is some of what is happening with my opinion of the true affect on correcting the problems that got us in to this mess.

1. We have experienced many underwriting changes all of which have made borrowing money more challenging and supposedly safer for lenders. Let's face it, major change was needed. Underwriting guidelines had become a joke. Large bank lenders and Wall Street firms drove lending volume by pretty much doing away with all the common sense guidelines that we followed successfully as an industry for years. But now just like a pendulum, the changes are going too far. Fannie Mae and Freddie Mac are in government conservatorship and want out. In the meantime it appears good business logic is absent in the recent changes. My fear: if they keep taking away the ability to lend to good borrowers, they are negatively affecting supply and demand and continuing the downward pressure on home values. Simple economics. The fewer the number of people that qualify for loans the less demand to buy the lower prices have to go. Do you know who suffers more losses when this happens? Us, the taxpayer, since we now own the largest source of mortgage money in the world, Fannie Mae and Freddie Mac. Not to mention Fannie Mae and Freddie Mac increase their own losses when values continue to trend down.

2. We have a new rule in lending called Home Valuation Code of Conduct or HVCC. The idea of the HVCC is great. It requires lenders to remove the influence anyone in loan production may have from the appraisal process. You see, over valuation was blamed for much of our current crisis and in fact it certainly contributed. The problems our customer service has suffered as companies struggle to be compliant are forced to use "Appraisal Management Companies" that often lack local real estate knowledge and take much longer to complete appraisals. These Management companies are often owned or influenced by big banks which figured out how to use this new federal law to create a profit center at the expense of hard working, honest professional appraisers. Maybe in the end this will turn out to be a good control.Right now the jury is out.At Superior we built an internal system with all the processes and controls required to meet the letter of the new law while still providing the best and most accurate appraisal service we can provide.

3. Another new law requires even more accuracy in what is known as the "Truth in Lending" regulations. The annual percentage rate (APR) that is disclosed to consumers for over 20 years (and never really helped them shop the way the government envisioned) now has to be accurate to within 1/8 of 1 percent. When any of the loan terms change that affect the APR by more then 1/8 of 1 percent the lender must re-disclose in writing and prove the consumer received the new disclosure. Then the transaction can not close for 3 business days. Get this, even if the APR goes down in favor of the consumer this new Federal Government regulation is there to protect you by not allowing you to close your loan for 3 business days. This regulation has great intentions and will probably help a few consumers while frustrating many more. The problem comes down to trust and working with trustworthy individuals. Unfortunately the mortgage industry has no credibility because of 10% or 20% of the people that abused the system for their own benefit. That leaves the honest professionals and our honest consumers to meet the challenge of the new regulations. My suggestion, work with one of our professionals and understand before you start the process that new regulations designed to protect you may add a few extra days to the process.

4. More education required. Well it is about time. Imagine trusting your largest financial debt transaction to be handled by someone with NO formal education in mortgage banking. Bye, bye part timers and in it for a quick buck loan officers and welcome to dedicated professionals. Of course we just like the underwriting pendulum swinging too far and some of the education requirements appear they will be onerous but that is okay if it helps police out those individuals that are not dedicated to helping people borrow the right way with loans they understand and can afford.

5. On the bright side the Federal Government has certainly taken some consumer friendly actions. The Fed has been buying Mortgage Backed Securities to the tune of $20 billion or more per week for most of this year. That has helped keep rates really low. Historically low fixed rates in the fours and fives. In addition anyone buying their first home has had a good shot at getting an $8,000 tax credit (speak to your tax professional ASAP). Now when we thought this great tax break may be over the new bill is passed extending the credit through the first quarter of next year and adding a $6,500 tax credit for anyone who has owned and lived in a primary home for at least five years and wishes to buy another home. You can contact a Superior representative for details and remember to always check with your own tax preparer for confirmation of your ability to qualify for these credits.

6. Other good news: Home sales have picked up considerably in most parts of the country from this time last year. Values are thought to be stable in most markets and even starting to increase in the best markets. Inventories are still large so interested buyers have a lot to choose from and are still able to drive great bargains. So are we out of the woods yet? Maybe not but at Superior we are optimistic about the future of housing and the economy.

We are ready and dedicated to help you understand how to borrow responsibly so you will be able to enjoy your home for years to come. We are the mortgage banker you can trust!

Steve Cors

CEO

Superior Mortgage Corp.

With national home sales up 2% in February, we are optimistic that new and existing home sales will continue to increase in the coming months due to historically low interest rates, affordable homes, and the first time homebuyer $8000 tax credit. Fixed rates from 4.5% to 5.25% are incredible. All across America consumers are realizing how low rates really are and are taking advantage of them.

Our refinance activity is very robust and while realtors may not see a direct benefit from refinance, they absolutely will see an indirect benefit. When thousands of homeowners get great low rates, it lowers their monthly bills which stabilize housing by making it more affordable. This helps put a floor under housing prices. These same homeowners are also now able to spend the money they save on mortgage payments, anywhere from $100 to $800 on average, on other goods and services which helps to stimulate the economy.

How important is your Interest Rate?

Very Important! But I am sure you knew that.

Obviously this is what your monthly payment is based on so you want the best Interest Rate you can get. But how do you make sure you are getting the Best Rate?

Well, First you need to have an accepted Offer to Purchase a Property before you can even consider "Locking in" an Interest Rate;

Next you would have to call all the people on your list within the same 30 minute time frame to be able to compare, Interest Rates can change each hour depending on what is happening on Wall Street.

The Problem with that is you first need a Pre-Approval to make an Offer to Purchase a Home & your Realtor needs to state who you are using for your Financing which means you have to make a decision about who your mortgage banker is. You should be able to sit down face to face with your mortgage banker so they know you & what program will best fit your needs.

The Banks vary a bit on the Rates that they receive, but all in all we purchase the rates at the same price, the key is, does the person you are dealing with have access to all the low rate investors?

A Mortgage Banker will be your best bet because they are able to take all that goes into determining a rate... your Credit Score, Debt vs your Income, how much money you are putting down on the property and shop around to all the Investors for the best rate! They also have the ability to do this with little cost to you! Yes there are minimal fees, they do have to pay the underwriting staff and pay fees to the investor but it is worth it for the lower Interest Rate.

Always remember that if a Rate looks too good to be true...it probably is. That is why it's important to work with a Mortgage Banker you were referred too. We all have different degrees of experience with getting your transaction done smoothly...or not. So when being "referred" it does make that difference you need to make sure you not only receive the best Rate but also get the Best Service for a smooth & easy transaction!

An Underwriter on site is one of the Best scenario's a Mortgage Banker can have. This underwriter is the determining factor of you getting the Loan you are applying for or not. If your representative works closely with one it will help tremendously.

No surprises is key! When you go to settlement you know what to expect at the table & a good Mortgage Banker will be with you along with the money & the Rate they promised you!

The First Time Home Buyer Credit is stating to be available to those New Home Buyers who never purchsed a home before OR have not purchased a home in the past 3 years....

"…The tax credit is a zero-interest loan that you will repay to the government over 15 years, starting 2 years after the credit is claimed, at $500 per year.

If you sell the house, you repay the entire amount if there was enough profit to do so. If not, the amount that you don't is forgiven.

The $7500 tax credit is available to 1^st Time Buyers (not having owned a home within the past 3 years) of a primary residence who close between 04/09/2008 and 07/01/2009.

Max credit of $7500 available to single tax payers with "modified" adjusted gross income up to $75,000 (married filing jointly up to $150,000).

If income exceeds limit, partial credit may be available.

You can buy in 2009 and claim it against 2008 or 2009, whichever is more advantageous.

Economist William Wheaton has said "The feature saves the buyer at most just a few hundred dollars a year – the annual value of the forgone interest."

Please copy & paste the link below where you can read more.

 http://www.federalhousingtaxcredit.com./

Overseeing the Details....

How important is it when choosing a Mortgage Advisor when it comes to processing your Mortgage?

There are over 100 items to pay attention too when a mortgage is in process. So who is overseeing all this detail? It should be someone you can trust to do it!

The first question you need to ask yourself is the person I have chosen to handle my mortgage going to pay attention to and oversee my Loan or will it be left to chance after the initial application is taken?

One scenario that has occurred recently where this comes into play went like this....

I received an application for the purchase of a home from a young women who was purchasing for the first time. We processed her loan, obtained a mortgage commitment subject to a qualified appraisal.

We were all set to go to the settlement table except for one item. The appraisal was completed & sent in to our department for final review. There were some questions that required a few comments for the underwriter to sign off on. I contacted the appraiser to let them know what we needed & they explained how they did not understand why we needed those items addressed but would get it done.

When we received the information it was sent to us in a "memo" fashion, not as requested, and with some disgruntled language to go along with it. Well this triggered some serious questions about the overall appraisal.

Now, to make sure we covered & protected Superior's interests, we needed another opinion, this meant ordering another Appraisal! The settlement is in 3 days! I only have 24 hours to get a brand new appraisal with a new Appraiser!

How am I going to get a new appraisal done....I contact the Real estate agent who goes to his broker who gets a favor done. They stated they could do it!

We received the new Appraisal by 1:00 the next day; it is signed off on by 2:00 & the loan is in our closing department by 3:00.

Did I mention this a Friday afternoon & settlement is on Monday morning at 9:00 am and the money we provide for settlement is taking "extra" long to get there?

The Title company received the papers & money by the time settlement occurred & I now have a yet another Happy Client!!

The "details" are just as important if not More than the interest rate you receive on your mortgage. This is just one sample of many things that can happen. It pays to work with someone who "Can get the job done" even under seemingly impossible situations!

Call me to represent you in your next mortgage transaction!