Mortgage Brokers Banned From Cold Calling

Prior to 2004 there was little regulation for mortgage brokers conducting business in the UK. Anybody could call themselves a mortgage broker, regardless of whether or not they held the necessary qualifications, and they could source clients and conduct their businesses in any way they chose to.

However the Financial Services Authority introduced a strict regime of regulation on 31 October 2004. Mortgage brokers were forced to obtain industry approved qualifications and conduct their business in accordance with the FSA’s rules and regulations.

One rule that was introduced on that date eliminated the ability of mortgage brokers to source clients through cold calling. Cold calling involves phoning people at random without any prior consent given by the individuals. It is a technique that was used by many mortgage brokers to find new customers prior to the new rules coming into effect.

This meant that mortgage brokers who relied on cold calling to expand their customer base were forced to invent new ways of finding clients. Because of this, lead generation companies began to emerge that generate leads for mortgage brokers who do not have the ability to do it themselves.

The lead generation companies are mostly internet based and gather leads through websites. This type of business activity is unregulated by the FSA as it is not the mortgage brokers themselves who are gathering the leads.

Despite this, lead generation is not considered to be cold calling and would therefore not endure the wrath of the industry regulator with regards to the ban on this activity.

However, mortgage brokers and the general public should be aware that a minority of lead generation companies have used unscrupulous means to obtain data for potential mortgage customers and have sold it to mortgage brokers disguised as qualified leads.

The mortgage brokers will then call the potential clients only to find that the leads are not genuine. This means that the mortgage broker has effectively made a cold call to that member of the public because they have not given prior approval for the mortgage broker to contact them.

Mortgage brokers should be careful to ensure that any mortgage leads they purchase are genuine.

Visit UK Mortgage Source to find an independent Mortgage Broker near you

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Hope For Homeowners (H4H) Mortgage Lending Program

FHA (Federal Housing Association) is assisting homeowners with the Hope for Homeowners Mortgage Lending Program (H4H). As a solid step toward helping homeowners in distress by having a difficult time keeping up on their mortgage payments. The program is intended to help homeowners who are struggling to make their mortgage payments to be able to refinance into an FHA-insured mortgage. Borrowers who are in a loan workout or some type of loan modification program because of having a hard time making their mortgage payments will be giving consideration under the H4H program. For those homeowners who have stopped making their mortgage payments due to advice of others or because they simply cannot make the payment in most cases would need to begin making the payment for at least 3 months and agree to a loan modification agreement before being considered for the H4H program. FHA-insured mortgages have qualifying guidelines. The guidelines for the H4H (Hope for Homeowners) program will include the borrowers long term ability to repay the mortgage. It is a 30 year fixed rate mortgage so the 1st and last payment will be the same. On FHA-insured mortgages only owner occupants may apply. Non-Owner occupants would not qualify.

Qualifying Guidelines: *The H4H program is voluntary and both the homeowner and lender must agree to participate.

*Primary Residence. May not own any other homes or rentals.

*Your current mortgage must have been originated before January 1, 2008 and you must have made at least 6 payments.

*Your ability to pay the existing mortgage has diminished and you need help to make your mortgage payment.

* As of March 2008 your PITI (principal, Interest, Tax, Insurance) payments exceeded 31% of your gross monthly income.

* You certify that you have not been convicted of fraud in the past 10 years, intentionally defaulted on debts; and did not knowingly or willingly provide material false information to obtain existing mortgage(s). H4H Rates, Fees and Terms:

* If approved for H4H program, all existing mortgages will no longer exist. You will not have to make any more payments to existing lenders as the debts will no longer exist.

* Your new loan would not be higher than 90% of the appraised value. Your lender must be willing to write down their payoff so that the new mortgage will not exceed 90% LTV. If they are not willing to write down your mortgage than you would not qualify for the H4H program.

* Equity Sharing. You must share the equity from the beginning of the new loan as well as a portion of future appreciation in the value of your home.

1st Year - 100% initial equity to FHA
2nd Year- 90% initial equity to FHA
3rd Year - 80% initial equity to FHA
4rh Year - 70% initial equity to FHA
5th Year - 60% initial equity to FHA
6th Year and beyond: 50% of initial equity to FHA

Appreciation: For all years when home is sold 50% of appreciation to FHA.

Mortgage Insurance: 3% Upfront MIP (mortgage insurance premium) and 1.5% annual mortgage insurance premiums included in your monthly payments.

Closing Costs: You will receive a good faith estimate of closing costs for the loan. You will need to pay the closing costs but may not have to pay them out of pocket.

Interest Rates: H4H will be current mortgage rates at the time of loan closing. You will be notified by the lender what the rate will be. Subordinate Financing: You cannot take out a second or equity loan for 5 years except for emergency repairs.

The Hope for Homeowners (H4H) program started on October 1st, 2008 and was re-affirmed with the Emergency Economic Stabilization Act of 2008. The program will continue until September 30th, 2011.

If you have any questions about this program you can contact your existing lender or contact a local mortgage broker / bank for more information.

Vancouver Washington Real Estate Information

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Mortgage Arrears Primer

Mortgage arrears are payments that are not made on time or late mortgage payments. Mortgage arrears are something a homeowner should try to avoid. Falling behind on a mortgage can be a very devastating thing. Falling too far behind can mean foreclosure and the loss of the home.

Dealing with mortgage arrears is the only way to protect a home from foreclosure. If a person falls behind on their mortgage there are some very specific things they should do.

One of the very first things is to speak with the lender. Keeping the lines of communication open is the best possible thing to do. In this situation many people tend to avoid their lender. They are embarrassed or afraid of what might happen. The truth is that lenders do not really want your home.

They want your money and if they have to take back the property they are also losing out, so they will do everything possible to ensure they get their money from you. Lenders are willing to work with you, but you have to contact them. Explain the situation and they may be able to work out something to make it easier for you to pay up the mortgage arrears.

When calling your lender it is best to have a plan. You should know what you financial situation is currently, why you fell behind and how you can handle the situation. You should have all of this information handy so you can fully explain your situation to your lender. Additionally, your lender may come up with their own options and ideas to help you.

If your lender seems to be unwilling to work with you then you should contact a financial specialist who may be able to work things out with the lender. They can help you put together a plan that will be beneficial to both you and your lender.

In order to get your mortgage arrears taken care of without falling further behind, you will have to pay as much as you can possibly afford. You have to be willing to do this even if your lender offers you a repayment plan. While the repayment plan will likely be reasonable, you will be racking up more interest and in the long run end up paying even more money.

The bottom line about mortgage arrears is that they are the homeowners responsibility. You owe the money and the lender has the right to the money. There is no getting out of it. However, if you act responsibly and fast you can get a handle on your mortgage arrears and clear up the situation with minimal hassle.

For the future, you may consider getting special insurance that would pay your bills, including your mortgage, for you should you become unable to work for a period of time or fall under financial hardship. This can help to avoid mortgage arrears in the future.

James Copper writes on all areas of finance and investment. He works for Any Loans who help people with mortgage arrears to get a fast remortgage.

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Private Mortgage Insurance (PMI) - the Mortgage Industry's Dirty Little Secret

Private Mortgage Insurance (PMI) has long been touted as a benefit that allows borrowers to purchase property with less than a 20% down. But who is the real beneficiary of PMI? We are told that PMI insurance pays the lender if we default on our mortgage. While true, it doesn't tell the whole story. There's a lot more you should know.

This is all the lender must disclose:

• 
  
  As part of a "good faith" estimate of closing costs, the lender must provide an estimate of the PMI premium.
  
  
  
  
  


• 
  
  At closing and annually thereafter, the lender must notify the borrower of available cancellation options. In most cases, PMI may be cancelled when the mortgage is paid down to 80% of the lower of the selling price or the original appraised value. It will usually be cancelled automatically when the amortization of the loan takes the mortgage balance down to 78%.
  
  
  
  

What you don't know and they don't tell you: 

• 
  
  The borrower is not a party to the mortgage insurance policy. The lender does not have to disclose either the name of the insurer or the amount of the insurance purchased. Yet the buyer typically is responsible for the premiums.
  
  
  
  
  


• 
  
  Lenders can purchase protection for up to 40% or more of the mortgage amount without disclosing to the buyer any more than the premium amount. For example, you buy a $200,000 home with a 10% down payment of $20,000, financing the balance with an $180,000 mortgage. The lender might protect 40%, or a total of $72,000, with mortgage insurance with you paying the premium.
  
  
  
  
  


• 
  
  Proceeds received by the lender from a PMI policy do not offset any deficiency judgment against you, the borrower. They can collect on the policy and still come after you.
  
  
  
  
  


• The PMI insurer can pay anyone along the transaction line for services rendered that either reduce the risk of the loan or reduce the insurance company's expenses. This implies that they can pay commissions to the lender. Understand that it comes out of your pocket.
  
  
  
  


• 
  
  The monthly premium for most PMI is fixed. In other words, as the balance of the mortgage declines, presumably along with the risk to the lender, the borrower continues to pay the same premium based on the risk assessment at the time the loan was originated.
  
  
  
  
  


• 
  
  While many lenders will consider allowing the buyer to cancel PMI when the value of the property rises so that the 80% loan to value ratio is achieved, they are under no obligation to do so. In my experience, the lender required that I pay for an appraisal done by an appraisal company selected by the them. Also, the borrower must usually provide proof there is no second mortgage on the property.
  
  
  
  
  


• 
  
  The lender can purchase PMI, for which they pay the premiums, without notifying the borrower. Funds for these premiums may come indirectly from the borrower through points paid at closing or from higher interest rates.
  
  
  
  

PMI premiums are not insignificant. I looked at a loan statement for one of my recent investment properties. On a loan of approximately $200,000, the monthly principal and interest payment was $1,124.93. The monthly PMI was $163.53, or 15% of the P&I. Yet I never knew how much insurance was purchased or from whom. Had I carried this property the 10 or so years requried to reduce the mortgage balance to 78% of the purchase price, I would have paid over $19,000 in PMI premiums (nearly 10% of the original loan amount).

In the many recent articles on foreclosures, borrowers are urged to contact their lenders immediately when they run into financial trouble or feel they will be unable to keep their mortgage payments current. They stress that working out an arrangement with your lender is far better than going through foreclosure. Even if foreclosure is inevitable, industry sages recommend working with the lender to facilitate a "short sale," where the selling price is less than the mortgage amount, thus avoiding the stigma of a foreclosure.

Wake up!!  If the lender is protected with a PMI policy, will they be more or less willing to work with the you? Why would they offer you extended or more favorable terms or allow a short sale when they need only to foreclose to collect their insurance? Isn't it ironic? You could pay thousands for coverage that helps pit your lender against your best interests. "A banker is someone who will loan you an umbrella, but who wants it back when it rains," said my father.

Toby Tobin is a real estate commentator and the Publisher of GoToby.com LLC, an on-line news source for the fast growing Palm Coast, FL residential and commercial real estate markets. GoToby.com http://www.GoToby.com is packed with news, incisive commentary, newsletters, articles, interesting rumors and property listings.

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First Residential Mortgage

One of the greatest needs for a loan is for purchase of home. This is therefore an area where many lenders are competing to offer the best deals to the customer. It is also an area where careful planning is required before choosing an option. It is advisable to seek loans from relatives and only take out a mortgage when no other option is available. This is because a mortgage is a long-term commitment to pay a certain amount of money, and one may or may not be able to do so.

Most home loans are standardized to comply with rules established by the Federal National Mortgage Association, which helps to compare the existing rates in the market. Since competition is high, lenders often offer perks, including low interest rates on the loan. There is also the option of government subsidized mortgages, which have very low or no down payment options.

Most loans are divided into four basic parts. The first part is the repayment of money that one has actually borrowed. Interest forms the second part of the loan, which is added to the principal sum for borrowing. The third part is meant to cover the property from natural disasters and other hazards. The final part is the taxes to be paid to the authorities.

One can also get information from newspapers and websites on the current rates. If you are still not able to decide, it is better to consult a mortgage broker who can advise you on all the options and help you choose the best. To begin with, one can calculate if one is eligible for a mortgage. In case the amount that one can afford is much less than the cost of that home you want, then you may have to wait.

If one has a questionable credit background one may be subjected to a higher down payment, or your request may even be denied. But one should not give up the search for a mortgage as many lenders offer attractive options for people with bad credit.

If one does not want to pay high initial payments, one can find mortgages which charge anywhere between 5 to 15 per cent. However, one will be paying more in the long-run with interest rates and loan fees than someone who has paid more initially.

Finally there is detail regarding closing costs. These costs include various fees and processing charges applied by the lender. You must be able to keep aside money to pay for these costs. Typically, this rate may be in the region of around three to four per cent of the cost of your home.

For acquiring homes, the government may also give loans. These are available for former military personnel and for citizens. These require very little or no down payment. In the long-run, fixed interest rates are better when compared to floating ones. This is only true if one gets into a mortgage agreement when the rates are low and one needs a long period of time to repay the mortgage. This allows one to take full advantage of the low entry rates and one need not worry about rates going up somewhere in the future.

There are several options for a first residential loan, including family and commercial and government subsidized mortgages; brokers are often useful to advise one on getting a first mortgage.

First Mortgage provides detailed information about first mortgage, first mortgage loans, first mortgage options, first mortgage rates and more. First Mortgage is the sister site of Home Owners Insurance Policies.

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Cut Your Monthly Mortgage by $250 Or More - Home Mortgage Modification

If you think back to your home buying experience you probably recall all of the documents you need to prepare and hoops you had to jump through to get everything in order prior to your closing. The bank required documentation for everything. With their firm deadlines and strict guidelines, you really had to work for your loan.

If you are one of the thousands of Americans who is now having trouble keeping up with their mortgage payments due to the poor economy, you might feel like you're on your own. But you may be surprised to learn that the same bank that had you spinning in circles when you bought your home can be flexible in these hard times.

Banks are feeling the effect of the economic downturn as well. They have already sustained significant losses, and they are looking to minimize any future losses. For that reason, your bank may be willing to work with you to help make your mortgage more affordable, allowing you to keep your home. By lowering your interest rate, extending the terms of you loan or even reducing the amount of principle you owe, home loan consolidation can provide you with the financial relief you need.

If you are having difficulty keeping up with your monthly expenses in these hard times, find out what options are available to you. Online resources can put you in touch with the right programs and let you know if you qualify for home loan consolidation. Find out more today.

See how a home loan modification can quickly allow you to reduce your payments and help you get out of debt. It's a simple strategy that is working for millions of people, and can allow you to save hundreds of dollars on monthly mortgage payments.

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Mortgage Default

Nobody plans to fall behind with the payments on their mortgage, but life has a funny way of throwing difficult times at us, whether it be unexpected medical bills, or loss of employment, these things have a way of coming up when we least expect them and normally we are not prepared for them! If we have no money stashed away for a rainy day, being able to afford these unexpected bills or expenses and keeping the daily running of our house up, including paying loans or mortgages, proves impossible. Bills go by unpaid, things that would seem urgent and important before, may now go down in their ranking of importance. This is where many people end up defaulting on their mortgage.

Default on a mortgage is where required payments are not made on time or not paid at all. It can also be not complying with certain rules and regulations that are set out before the contract is made.

It is really important to try and make all of your payments on your mortgage in time. We've all heard the warning "if repayments on your mortgage are not kept up, you run the risk of losing your home" Well, it's true! If, however, for whatever reason, it is not possible to keep up your payments, there is a Mortgage Default procedure that you must go through.

A default on the mortgage is where a payment is missed, and is more than thirty days late. It will be noted on the clients credit report and affects their credit score negatively. When a number of mortgage payments is missed, usually about three or four, the client is classed as being in default. If you are running behind on your payments, the best thing you should do is contact your mortgage provider and tell them the news. Many loan and mortgage companies will be happy enough to try and work out some sort of agreement with you in order to help you out of your difficult position. That is, however, if you do inform them and you don't bury your head in the sand! The longer you wait to inform them, the worse it will end up being for you, and the less likely they are to want to negotiate terms. Missing three or four payments, when you are referred to as being in default, most mortgage companies will need the complete payment of the missed payments in full as well as paying any late fees you may have accumulated.

If you are unable to pay the balance off in full, the mortgage company has rights to start foreclosure proceedings. There are some ways in which you can prevent or try to delay the foreclosure proceedings including selling your home, declaring yourself bankrupt or loan modification. Again, these things can only really be arranged if you talk to your mortgage provider early enough.

If there is no agreement reached, a foreclosure notice will be given, generally by mail. The letter will state a period of time in which you can pay off the missed payments and reinstate the mortgage. If this isn't done, you will then be given a notice of foreclosure sale, where your property will be put up for auction and bought by the highest bidder. You must then move out of your house within a set period of time or face being evicted!

Obviously, this isn't the most pleasant experience in the world, so if you do get yourself into this position, speak to your lender as soon as possible to see if there is away you can negotiate terms and not lose your house due to missing payments. The most important thing to remember is to try your very hardest to keep up repayments with your mortgage!

Jim Power is writer for the Mortgage Saving Website http://www.thesuperlucky.com/mortgage-default/ where there is more information to be found on Mortgage Default

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