You can imagine my surprise when in the morning's mail there arrived a note which said I was late on my mortgage payment.
"Several attempts to contact you by phone and mail regarding a delinquency of your mortgage account have elicited no satisfactory response on your part to remedy this situation," said the letter, ominously.
"At this time your mortgage is PAST DUE in the amount of $xxxx.xx. This amount represents your 05/05/07- 06/05/07 installments of $xxxx.xx plus $xxx.xx in late fees and/or insufficient funds charges." And more.
"THIS ACCOUNT WILL BE REPORTED AS DELINQUENT TO THE NATIONAL CREDIT BUREAUS IN TEN DAYS."
Oh my, whatever to do?
What made this letter especially interesting is that I have no account with this lender. Mind you, I would be okay sending them a check had they provided me with a loan, but that's not the case. I have never heard of the lender, their mortgage or the glorious property which presumably secures someone else's financing.
Given that the country is awash in a growing number of foreclosures and delinquencies -- and not wishing to join such ranks -- you can bet this letter caught my attention.
When receiving such missives, whether correct or not, it's imperative to immediately respond. I called the handy 800-number and spoke with a very nice person who was both helpful and puzzled.
As much as it's good to promptly respond, it's also good to respond cautiously. For instance, I did not provide a Social Security number or any other information over the phone. Since the lender has the account they should have such information on hand. If they want me to confirm a number they have that's fine -- but they won't get any information from me.
After looking through a variety of forms and folders -- and asking if I was sure I didn't own property at beautiful Landfill Meadows or whatever it was called -- the mortgage rep determined that there was indeed a mix-up of some sort.
So far, so good. Problem almost solved -- but not quite.
The promise to contact "national credit bureaus" if the bill is unpaid is significant. The cost to borrow money depends on good credit and a negative report is not something to take lightly.
These days when financial mistakes are made it's a good idea to check and see if the problem is identity theft. Did the lender's records show that someone with my name and address had actually obtained a loan from them? If yes, we then have a serious matter.
If you have an identity theft concern you're entitled to take a number of steps to protect your name and credit. The Federal Trade Commission has excellent material online that discusses identity theft, plus they show your rights under FACTA -- the Fair and Accurate Credit Transactions Act.
At my request, the good folks at the mortgage company are sending a letter to confirm that I am not, in fact, late on any payment -- indeed, I don't owe them a dime and have no account with them.
And as much I have faith in the lender's administrative process, you can bet that in a few weeks I will check my credit report on AnnualCreditReport.com, the credit information site created under FACTA.
There I will retrieve a free copy of my credit report without any requirement to buy a credit "protection" plan or otherwise spend a dime.
I do, however, have some belief that the lender will follow through. The reason is that the dunning letter was actually quite reasonable.
"In order to return your mortgage account to a current status, prevent the accrual of additional late charges, a default or foreclosure report to the national credit bureaus, the referral of your account to a collection agency and any future legal action we offer various payment options," said their missive.
The recipient was then offered the opportunity to pay the bill over a period of several months.
This makes a lot of sense. The lender will lose if the property is foreclosed -- for a single-family home a typical loss is on the order of $40,000 -- thus everyone is best served by figuring out a way to modify the loan.
And repaying a mortgage, after all, is not unfair. Borrowed money should be repaid -- especially by the person who actually did the borrowing....
For more articles by Peter G. Miller, please press here
Thursday, August 2, 2007
Sunday, July 22, 2007
Loan Brokers Lose Share, But Still Rule the Market
The mortgage brokerage share of loan originations dipped to 58 percent in 2006, according to a preliminary tabulation of last year's production activity by Wholesale Access Mortgage Research and Consulting of Columbia, Md.
The small decline in market share from 63 percent of total loan volume in 2005 "could change" by the time Wholesale Access releases its final tabulation, depending on the size of firms yet to be counted in the annual survey, the firm's Larry Pearl said.
But it seems highly unlikely that the share could jump back to the 69 percent benchmark that was recorded by the firm as recently as 2004.
Nevertheless, Wholesale Access founder David Olsen said brokers "still dominate" the market, largely because they "do a better job for less."
"Brokers do it cheaper and they do it better," Olsen said at the National Association of Mortgage Brokers annual convention in Seattle, where the preliminary results of the study of 2006 loan production were released.
Borrowers "continue to go to mortgage brokers because they do a better job," he said. Their "customers are happier with them."
The preliminary reading is based on 791 of the 1,000 long-form surveys Wholesale Access intends to collect from brokers.
Based on a total loan volume of $2.8 trillion, as estimated by the Mortgage Bankers Association, brokers accounted for $1.64 trillion worth of mortgages last year, with the retail side of the business accounting for the other $1.17 trillion.
Olsen said his company now counts 53,000 brokerage firms, down from 54,000 in 2005 but the same number as in 2004.
The count includes 3,500 net branches, or 6.5 percent of the total. That number has "increased considerably" in the last two years, Olsen told a convention session, and is likely to continue to grow -- "possibly at a faster rate" -- because government regulations continue to become more and more restrictive.
One of the problems Wholesale Access has with its survey is defining when a broker has gone out of business. Lots of firms "go into hibernation" when refinancing start drying up, Olsen said. "A lot of them are refi specialists; they know no other game."
But if a broker answers his phone or does at least one loan a year, the company counts it as being in business.
The typical firm has seven employees, according to Pearl -- one manager, five loan officers and a processor. The median age of the company is 6.5 years, but generally there is only one office.
The mean volume per firm last year was $32.4 million, according to the preliminary figures. That's down from $34.5 million in 2004 and $38 million in 2002.
"Firms are getting smaller," Olsen said. "Brokers are working longer hours and doing a lot more work."
The survey also found that there are fewer new firms in the business, and more and more brokers are working full time at the trade. It also shows more brokers with higher educations, including many with masters degrees.
"That's a good trend," Olsen commented. "They are no longer selling cars one day and mortgages the next."
The small decline in market share from 63 percent of total loan volume in 2005 "could change" by the time Wholesale Access releases its final tabulation, depending on the size of firms yet to be counted in the annual survey, the firm's Larry Pearl said.
But it seems highly unlikely that the share could jump back to the 69 percent benchmark that was recorded by the firm as recently as 2004.
Nevertheless, Wholesale Access founder David Olsen said brokers "still dominate" the market, largely because they "do a better job for less."
"Brokers do it cheaper and they do it better," Olsen said at the National Association of Mortgage Brokers annual convention in Seattle, where the preliminary results of the study of 2006 loan production were released.
Borrowers "continue to go to mortgage brokers because they do a better job," he said. Their "customers are happier with them."
The preliminary reading is based on 791 of the 1,000 long-form surveys Wholesale Access intends to collect from brokers.
Based on a total loan volume of $2.8 trillion, as estimated by the Mortgage Bankers Association, brokers accounted for $1.64 trillion worth of mortgages last year, with the retail side of the business accounting for the other $1.17 trillion.
Olsen said his company now counts 53,000 brokerage firms, down from 54,000 in 2005 but the same number as in 2004.
The count includes 3,500 net branches, or 6.5 percent of the total. That number has "increased considerably" in the last two years, Olsen told a convention session, and is likely to continue to grow -- "possibly at a faster rate" -- because government regulations continue to become more and more restrictive.
One of the problems Wholesale Access has with its survey is defining when a broker has gone out of business. Lots of firms "go into hibernation" when refinancing start drying up, Olsen said. "A lot of them are refi specialists; they know no other game."
But if a broker answers his phone or does at least one loan a year, the company counts it as being in business.
The typical firm has seven employees, according to Pearl -- one manager, five loan officers and a processor. The median age of the company is 6.5 years, but generally there is only one office.
The mean volume per firm last year was $32.4 million, according to the preliminary figures. That's down from $34.5 million in 2004 and $38 million in 2002.
"Firms are getting smaller," Olsen said. "Brokers are working longer hours and doing a lot more work."
The survey also found that there are fewer new firms in the business, and more and more brokers are working full time at the trade. It also shows more brokers with higher educations, including many with masters degrees.
"That's a good trend," Olsen commented. "They are no longer selling cars one day and mortgages the next."
Monday, July 16, 2007
REAL ESTATE news
Real estate or immovable property is a legal term (in some jurisdictions) that encompasses land along with anything permanently affixed to the land, such as buildings. Real estate (immovable property) is often considered synonymous with real property (also sometimes called realty), in contrast with personal property (also sometimes called chattel or personalty). However, for technical purposes, some people prefer to distinguish real estate, referring to the land and fixtures themselves, from real property, referring to ownership rights over real estate.The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.In law, the word real means relating to a thing (from Latin res/rei, thing), as distinguished from a person. Thus the law broadly distinguishes between "real" property (land and anything affixed to it) and "personal" property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to. (The word is not derived from the notion of land having historically been "royal" property. The word royal — and its Castilian cognate real — come from the related Latin word rex-regis, meaning king.)
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