If there isn't thick skin and don't want to know the truth, you won't want to learn this.

As a relocation specialist I get asked questions concerning the housing slump daily. In reality I have been interviewed 10 times yesteryear 2 months. It irritates me how facts can be manipulated. Again, if there isn't thick skin and don't want to know the truth, you won't want to learn this. My research is dependant on a lot of time of pouring through real-estate sales, foreclosures and interviewing many professionals related to the true estate industry. Although most professionals won't state the obvious and prefer to give some long winded explanation that doesn't make sense, I'm planning to provide you with the good, bad and ugly. I'm annoyed at all the ridiculous explanations why the united states is facing a housing slump and I'm going to tell the truth. Although there are some minor reasons inducing the housing slump, among the major reasons for the housing slump is abusive lenders. I will explain abusive lender have an enormous part in the down turn in the true estate market.

To begin, in the 80's a mortgage professional probably worked for a bank had an extensive educational background and had many years of mortgage experience. The laws didn't require experience and an education; the banks required their employees to own experience and an education. When the true estate market turned around in the early 90's, a mortgage company opened up on every other street corner. In some cases, they opened up in garages and basements. Not all the mortgage companies were bad and in fact some offered good mortgage products with good service. The abusive lenders hired employees with no mortgage financing experience. These types of employees were lured into the easy money of the mortgage industry from their low paying sales job. An ideal employee for a violent lender was a salesman who could sell ice to an Eskimo. The typical mortgage professional went from having 15 years of experience in the 80's to 1.5 years in early 2001. With how many loan programs offered going from 20 to thousands and how many wholesale lenders going from less than 50 to hundreds in the same time period, most mortgage professionals lacked the education to provide consumers the correct loan programs or the very best advice. It had been nothing for a greater risk borrower to be charged 6 points (1 point is corresponding to 1%) on a loan. In reality one lender bragged that they jammed a borrower at closing and charged 20 points on the loan. They said that they knew they would close because they certainly were in a pinch. Borrowers looking for the best rate would settle for the lender who quoted the cheapest rate being unsure of that that lender will make up the rate elsewhere in the loan or change the rate at closing.

Abusive lenders knew that each of them they'd to do were advertise the cheapest interest rate, if it was true or not. They ran TV ads, radio commercials and sent junk mail. These types of abusive lenders only cared about profit and the turnover making use of their employees was high inside their offices. Most of them folded within a couple of years and opened up under a fresh name the next day. In the late 90's, the abusive lenders had to alter their lending practices when real-estate brokers started educating their real-estate agents concerning the abusive lending practices. Property agents representing buyers changed the abusive lenders marketing. Right after, many of these abusive lenders left the true estate purchase market and started pursuing the refinance business.


Published by Whitney Morgan