Florida Mortgage : Learning Center

In an interview with CNN’s Robin Meade, Stephen Gandel, a MONEY Magazine senior writer, expressed his opinion regarding Mortgage Brokers. Apparently he knows every mortgage broker in the entire United States, because differentiations weren’t mentioned. That is Mortgage Brokers have no responsibility to the consumer. Well Mr. Gandel let me help with your interesting view of Mortgage Brokers.

I agree there are problems with some Mortgage Brokers in our industry, but not all.  True, there are those who are more concerned with closing the loan and getting paid than taking care of clients needs; disregarding the thought that the consumer may not know how a particular mortgage may later affect them.  A great example are the issues surrounding the notorious option ARM mortgage. I have listened to consumers over the years requesting this type of low payment mortgage, the one you see advertised all over the Internet as a gimmick to get people to call. The problem is when they called some Mortgage Brokers weren’t explaining any of the very important disclosures that must be discussed.  When I inform these consumers of the risks involved including, negative amortization, payment rate vs. interest rate, higher fixed margins, and recasting features; you can rest assured these home buyer inquisitors, instead, asked for safer mortgage program choices.

It pays to call a Mortgage Professional who does have a responsibility to it’s clients.  Not because they have to; but because it’s right.

Mr. Gandel, maybe you meant to say that all Mortgage Brokers are not created equal.  And that while shopping for a Mortgage Broker, make sure you are considering an experienced, reputable, trustworthy and respected Mortgage Broker Professional.  I have been in the mortgage origination business for over 11 years and opened my own company, BeechTree Mortgage, Inc. just over 5 years ago.  Most of our business is from repeat clients or their numerous referrals and its due to our consistent dedication to consumer knowledge of mortgage program specifics as well as upfront full disclosure. Our clients should know their mortgage program inside and out, their rate, and have been fully informed of disclosures secific to the mortgage itself; all prior to getting to the closing table.  

I truly believe Mortgage Brokers should have a fiduciary responsibility to each and every consumer. I will help change the view of Mortgage Brokers while hopefully ridding the world of the ones who shouldn’t even be licensed.

BeechTree Mortgage has grown into a remarkable volume based Florida Mortgage Company.  We owe it to our consistent and ever growing referral and repeat client base. In fact, it’s our repeat clients who enlighten us on our ever growing source of success.  We are genuinely concerned with our first priority of building consumer confidence in this out-of-hand mortgage industry.  Homeowners should know or learn the many conventional mortgage financing programs available. Low rates and low costs must be considered a”given”. My personal goal is to reach more clients; homeowners or first time buyers who don’t know us and rebuild consumer confidence with our mortgage professionals and highly trusted upfront philosophy.

After 11 years in this mortgage origination business I have learned what separates BeechTree Mortgage from the competition.  We are trusted mortgage professionals who put client needs ahead of our financial gain.  Client needs seem concentrated in a specific are here at BeechTree Mortgage.  That is, since we live and breathe home loan financing and mortgage loan programs from VA to FHLMC, to FNMA; our clients depend on our knowledge and professional advice in helping to decide which mortgage program suits them and why. The greatest compliment we receive from home mortgage shoppers is that they have learned more in 5 minutes with BeechTree Mortgage than they have with several other companies combined. 

BeechTree Mortgage, Inc. remains one of the best mortgage learning centers for first time home buyers, seasoned homeowners, or even other mortgage brokers abroad with mortgage scenario questions. It’s a matter of trust and BeechTree Mortgage is here to serve a greater purpose than any other mortgage company.  Email us anytime with questions on mortgage matters; we are here to help.

At BeechTree Mortgage, about 26% of our new mortgage loan business is generated from our high ranking web site www.beechtreemortgage.com.  If you want to get serious about how we do it, the Google ranking that is, please stop reading this and go to the most sought after group of Internet geniuses I know; On Target Web Solutions, Inc.  Or search on Google for Florida search engine optimization; guess who you’ll find?  On Target Web Solutions.  Can’t say anymore other than I could not have reached so many clients over the past 5 years without there dedication to excellence in search engine optimization. 

As a matter of fact, I talked to another client yesterday, who called in with questions on his construction to permanent financing.   I asked how he found us and he revealed that when he searched the terms Florida construction perm; we came up twice in the top ten!  Thank you Thomas Jelneck and his superior staff at On Target Web Solutions.

As many people know, FNMA’s (Fannie Mae) provides great first time home buyer programs.  The FLEX 80/20 and the FLEX 75/25 scenarios have helped new home buyers live the dream of owning their own home with no down payments.  Most first time buyers choose the stability of a 30Yr fixed rate mortgage in respect to the 1st mortgage.  Well, now they also have the option of choosing a principal and interest payment or interest-only payments! 

The interest only feature allows first time home owners to enjoy a fixed rate for 30Yrs and pay the interest only portion during the 1st 10Yrs.  This feature provides a lower monthly payment of course, and allows you to prepay the principal whenever you decide.  Keep in mind, after the initial 10Yrs, the rate remains the same and the loan re-amortizes over a 20Yr period based on the outstanding balance.  The key is that you are in control of the outstanding balance.  And what will you be doing with the monthly savings by paying the interest only.  Have a plan! 

If you still have questions or concerns, please feel free to email me anytime at firsttimebuyer@beechtreemortgage.com, or learn more at http://www.beechtreemortgage.com/florida_1st_time_homebuyer.shtml. 

I truly believe that mortgage brokers, bankers, and lenders should have a fiduciary responsibility to their clients, especially concerning first time home buyers.  It makes sense that the person who is assisting with your long term mortgage financing needs is placing your best interest ahead of their financial gain.

There are great rewards that come with huge responsibilities when working in the mortgage finance industry.  In fact, with respect to financial rewards, there are two kinds of people that get into this business.  There are those who are in it solely for the money.  They charge as much as they can in origination fees, discount points, application fees, etc.  Some even change numbers at closing to make even more money.  Fortunately, these mortgage misers are now leaving the business because the mortgage market has slowed down.  They have made as much as they can from uninformed first time buyers and others and have earned no referral business.  These mortgage misfits usually show up in the mortgage industry when rates are falling and everyone wants to refinance. 

There are others however; Mortgage Professionals, ones who joined the myriad of mortgage complexities with hopes of gaining their rewards with long term relationships from first time home buyers and their almost infinite referrals.  They are always working to develop stable financial careers by placing the needs of first time buyers first.  They not only provide reduced cost mortgages, they have earned repeat and referral business lasting a lifetime by simply ensuring that their clients understand every aspect of their particular first time mortgage program. 

Mortgage brokers, bankers, and lenders, should shoulder the responsibility of educating the consumer, especially the first time home buyer, with as much information as possible.  Only with this information can a consumer make a well informed decision regarding their mortgage financing choices.  Of course if you are buying in Florida I hope you add me to your list of trusted mortgage professionals.  My name is Stephen Thaggard and I’ve been helping first time home buyers for over 11 years.  Please contact me at my company web address www.beechtreemortgage.com or call 888-399-0520.

I was talking to yet another victim of the infamous “Option ARM” mortgage. You know the mortgage that inevitably pops up as an in-your-face advertisement while shopping for home loan financing on the web. The ad usually reads; “Buy a home for $650,000 with a payment of only $1,672.53 per month”.Curiously I asked why they chose that particular type of mortgage program over all other home loan opportunities. The response remains; “I wanted a low rate and no one explained all of the terms associated with this loan”.Keep in mind the Option ARM mortgage loan allows homeowners the “option” of paying 4 different monthly payments. A typical 30 year amortized payment, a 15 year amortized payment, interest only payments, and of course the ridiculously low minimum payment. The low payment is based a rate as low as 1%. But is there a catch? There should be and there is…

· If you pay the lowest allowed payment; the difference you owe is added on top of the principal. This is called negative amortization. Because you are only paying a payment rate, not the interest rate. Every day you owe more money than the day before and you also owe additional interest on that growing principal amount..· The prepayment penalties last as long as 3 years.

· The “Recast” feature. This never gets mentioned, but you sign the disclosure. Usually, once you have added 10% to your original loan amount, or 5 years have passed; the loan is set to recast. You realize you must now pay principal and interest payments based on the actual rate (The Index plus the Margin) at the remaining term. In other words, your payment increases dramatically.Option ARM’s are extremely high risk type mortgage programs suited for few home buyers or homeowners. This can only be realized when you are being informed, upfront, by a mortgage professional. Be informed and ask questions.

In today’s Mortgage Market most lenders, bankers, brokers, etc are facing hard times.  On the other hand, some of us are enjoying increased production especially new home purchases.  I am concerned about the mortgage industry fall-out but I remain focused on why we are doing so well. 

Consumers often ask us why we keep getting new referrals year after year.  I finally have had time to reflect and found a specific yet unique approach.  We have enjoyed sharing our mortgage knowledge with each and every borrower or homeowner.  After 11 years I realize that most other mortgage competitors are focused on getting the “deal”.  Once they get the “Deal” then their focus is to close, close, close.  So they can get paid; I guess.  Very little attention is placed on the consumer and the mortgage program choice or choices presented. 

The Federal Government recently posed this question.  “Who should be responsible for educating consumers on the many mortgage program choices available”?  Imagine that! 

This is like asking: who should be responsible for educating consumers on medical choices to fight a sickness.  How about their licensed Doctor or health care provider? 

Or, who should be responsible for educating consumers on electrical wiring upgrades for their home?  How about an experienced, licensed, electrician?

I know the answer to the government’s question.  The responsibility is on every licensed mortgage loan officer/consultant/banker.  We are the ones who spend our daily lives delving into new mortgage products as well as keeping current with mortgage program updates.  As long as we share our knowledge of mortgage loan product availabilities, consumers can effectively choose the right program. 

Nearly every day we hear from consumers who apparently didn’t know what mortgage program they were getting into.  Especially those infamous Option ARM’s (with negative amortization and shocking recasting features).  After 12 years of business here in Florida, I have found 2 clients that fit perfectly into that type of program.  It is definitely for the savvy investor only. 

Educating consumers in the mortgage arena is the most important service we can provide new home buyers and current homeowners.  We are busier than we ever have been and we owe it all to the satisfied consumers we have educated along the way in the ever-changing mortgage industry.

Stephen Thaggard
http://www.beechtreemortgage.com