Tml-mortgages asked:


Refused credit mortgages set to “grow and grow”

14/08/2006 16:25:00

The sub-prime and near-prime mortgage market is tipped to grow and grow following new research.

A survey commissioned by Alliance & Leicester indicates greater demand for refused credit mortgages could be forthcoming, with four in five brokers expecting the market to grow.

The top reasons for borrowers to seek out a sub-prime or near-prime market are defaulting on debts or credit cards payments or simply having a bad credit rating, the research found.

Figures indicate that Britons are increasingly struggling to manager existing debts, suggesting that the potential market for sub-prime mortgages could swell.

Around two lenders in five report that the typical sub-prime customer is likely to be struggling financially, with many on a low income.

More than 85 per cent of brokers also report that customers are now realising that a sub or near prime mortgage can help rebuild a poor credit score.

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: This market is becoming increasingly competitive with more lenders offering these specialised mortgages.

It is encouraging to see that brokers say their clients know the value of these type of mortgages and that it is a good way of getting potential buyers on the housing ladder while enabling them to repair their credit history by maintaining regular payments on their financial commitments.

Datamonitor estimates that 9.1 million people were refused credit by mainstream lenders in 2005, further indicative of potential growth in the refused credit mortgage market.

Personal debt has already crossed the £1 trillion barrier and the rising insolvency rate suggests that borrowers are struggling to cope, indicating a growing demand for refused-credit mortgages in the future.

As traditional lenders were tightening their criteria, the refused credit market could prove ever more attractive and other high street lenders were also likely to start catering for those with a ’slightly lower credit profile’.

As more lenders capitalise on this growing market, the increased competition could see better deals for mortgage holders.



Troy

anonymous asked:


How do you build a marketing strategy that can have real estate agents hunting for your services? Realtors® are bombarded everyday with a continuous stream of marketing messages from loan officers. They cope with this information-overload by ignoring most of them. So how do you stand out in an over-communicated environment? You’ll change the dynamics of your marketing when you understand the importance of positioning. Positioning is a communication tool to reach agents in a crowded marketplace.

Positioning means, you position your services in the prospect’s mind.

A position is a place, a place in the mind of the prospect - a perceptual location. When you market your services, you’re competing for this space. If your position is similar in nature to your competitor’s, you’re competing in an overcrowded place in the prospect’s mind.

Take a moment and consider your current position. Look at your communication pieces, which is commonly how agents position your services in their mind, if it’s their primary exposure to your business. Your website, flyers, postcards, newsletters, brochures, advertisements, and business card are often the first communication an agent comes across regarding your services. What position are you communicating?

Not sure? Visit your competitor’s website, if you switched your company logo with their company logo, how much difference would there actually be in the content or message? For most mortgage companies the answer is simple…very little.

Positioning means, a simple and singular message.

To improve your position, you need to narrow your focus. A position that seeks to be everything to everyone will end up being nothing to everyone. For example, does your messages appeal with the promises’ of loans closing on time, rendering superior service, high approval rates, etc.? This position doesn’t work. First, it’s competing with too many others; secondly, it isn’t simple and doesn’t focus on a single thing.

Look at examples in other service industries to understand the power of a narrow focus. When Federal Express began, they focused on a single position, a position that hadn’t been dominated by other shippers yet. They communicated a single position through every medium - “When it absolutely, positively has to be there overnight.” This intense focus helped them build a brand identity that associated them with being the best at overnight shipping. And when people had packages that had to be delivered overnight and they weren’t going to risk their decision - they chose Federal Express.

Southwest Airlines is another example. Their position of the “low-fare, no frills airline,” helped them dominate and achieve prosperity in one of the toughest and most competitive service industries. They went as far as linking the image of peanuts to their brand identity to associate with the position of low cost. This connected successfully with budget conscious travelers.

Positioning means, setting yourself apart from competitors.

Since most loan officers have positioned themselves identical, realtors see them as all the same. Mortgage services are indistinguishable. So how do you separate yourself?

The more similar the mortgage services, the more important the details. When realtors have to select a loan officer, they look for differences upon which to base their decision. This means the more identical mortgage services are, the more important each difference becomes. For you to separate yourself, accentuate the trivial.

For years, Domino’s never stressed quality, price or value. Instead they relentlessly promoted, “Delivered in 30 minutes, or it’s on us.” Over the time of this campaign, they owned the position of speed. Consumers’ perceived Domino’s as fast and reliable.

Find a niche that is unoccupied in the realtor’s mind and fill it first. There are numerous opportunities to specialize your services and occupy niches.

You can position around unique products:

Jumbo Loan expert HUD expert Interest Only Specialist

You can position around trivial details of processes:

Loans closed 5 days ahead of COE Loan approvals within an hour or less Daily file update alerts for realtors

You can position around gender, ethnicity, or geography:

Specialized in exclusively serving single professionals Specialized in exclusively serving the Hispanic community Specialized in exclusively serving Town & Country Ranch

Positioning is your competitive strategy for getting noticed. It is an outward expression of how you want to be perceived. It allows you to create a place for your services in an Agent’s mind, where the competition isn’t.



Andrew

Phil asked:


Government efforts to ease the financial strain on the mortgage market were ignored by building society Nationwide, as they announced plans severely tighten its lending criteria for new customers.

Despite a £50 billion cash injection from the Bank of England to help the tension surrounding the money markets, Nationwide declared that mortgage borrowers would have to double their minimum deposit to 10 per cent for them to be considered for most of their products.

Nationwide spokeswoman, Zoë Stevens said, “The mortgage market will no transform overnight and we need to be able to manage our business in a prudent way while the Special Liquidity Scheme takes effect. These changes will allow us to maintain control of the volume of business the Society is attracting, while enabling us to continue offering our full range of mortgages to our existing members in a controlled way.”

The Special Liquidity Scheme (SLS) was a rescue package set up to try and prevent lenders from having to cut their maximum loan amounts on offer to new customers. However, Nationwide only considered mortgage applications from people if the funding was for 90 per cent or less of the property value, on all but two of their products. They also reduced their £1 million maximum loan amount by half, to £500,000 for all new customers.

Nationwide weren’t the only firm squeezing their lending criteria as Abbey introduced a rule where interest only loans would be available up to a value of 50 per cent unless the customer had a linked repayment channel such as an ISA. They also said that borrowers of more than 90 per cent loans of their property value would be required to produce one month’s bank statements in addition to the usual credit checks.

Financial experts had hoped that the Special Liquidity Scheme would cause a drop in the rate at which banks lend to one another, which would result in an easing of rates and conditions for customers.

This government move though seemed to have failed with borrowers being warned that their greatest worry now is actually being accepted for a mortgage, rather than being bale to afford one.

A spokesman for money comparison site Moneyexpert.com, Sean Gardner said, “Availability is the biggest hurdle despite all the Government efforts to get lenders lending. If you don’t have a substantial deposit or equity in your house, then your choices are now severely limited. When disposable income is already at breaking point for many, it is frankly impossible to see how those with limited savings will find a way to get a foothold on the property ladder.”

The Royal Institute of Chartered Surveyors March 2008 survey revealed that the rate at which house prices had fallen during this month had been the lowest on record. Their figures showed that 78.5 per cent more chartered surveyors had seen a fall in house prices rather than a rise. This was an increase from 65.7 per cent for February 2008.

A Royal Institution of Chartered Surveyors (Rics) spokesman, Jeremy Leaf said, “Settlement is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight. The slowdown in prices is directly attributable to a lack of available finance which has hit demand.”



Susan

Robert Griffin asked:


Many homeowners are concerned that the declines in the housing market will adversely affect the reverse mortgage market. Since home equity has dropped substantially and will continue to into the unforeseeable future, concerns about new reverse mortgages and existing one have arisen.

In a reverse mortgage, the bank makes payments to the homeowner instead of the homeowner making payments to a bank. To qualify for such a mortgage, a senior must be at least 62 years old and have equity in the home. Retirement savings diminished by stock-market declines are a big reason for renewed interest in reverse mortgages. It gives seniors some breathing room while their retirement holdings become available.

Those who already have a reverse mortgage should not worry about being poorly affected by the housing slump. The terms of a reverse mortgage remain the same through the life of the loan. A line of credit or monthly payments will continue to be available according to the terms of the loan. However, if for those who have not yet taken out a Reverse Mortgage, the declining home values could adversely affect their options. Borrowers may find that their homes are worth much less than they believed, and they may be unable to qualify.

A federally insured reverse mortgage is a good option right now, as it enables senior citizens to take money out of their homes. The number of reverse mortgages backed by the government in March and April rose from nearly 20% since last year. In April alone, the government insured 11,660 reverse mortgages, the highest monthly total since the government-backed program began in 1990. By contrast, the number of new home-equity loans, which similarly allow homeowners to tap the equity in their homes, fell around 70% in the first quarter from the prior-year period, according to Inside Mortgage Finance.

Increasingly, seniors are using reverse mortgages to supplement their retirement savings, which have been decimated by stock-market losses. At the same time, more seniors now qualify for a reverse mortgage since Congress in February raised the maximum home value that seniors can borrow against to $625,500 from $417,000. The bill also capped reverse-mortgage origination fees at 2% on the first $200,000 and 1% on any amount over that, not to exceed $6,000.

Though the FHA doesn’t make any loans, it insures lenders against any losses on federally insured loans, called Home Equity Conversion Mortgages. No one can fully predict the full extent of loss in the reverse mortgage business, but the Department of Housing and Urban Development recently asked for nearly $800 million in taxpayer money next year to counter deteriorating home prices. It is the first taxpayer subsidy in the 20-year history of the program.

Since a tough housing market has made it harder for seniors to sell their homes, a reverse mortgage may be an ideal solution.  If you would like an information packet or would like to set up an appointment with one of our Reverse Mortgage Specialists, Please call (866) 683-3690 or view our online Reverse Mortgage Information.



Phillip

Gregory van Duyse asked:


There are three kinds of mortgage consultants:

• The representative of the local bank branch: They only offer loans, and have many other duties besides mortgage loans, are salaried, with a possibility of an annual bonus.

Traditionally, it is the local bank branch representative who acts as the mortgage consultant. He is the only one who is able to make a mortgage application for clients - taux hypothecaire. The world of mortgage financing has changed and almost all lending institutions offer their mortgage products through mortgage brokers and, in some cases, through mortgage marketers. The bank representatives continue to offer mortgage loans (as well as other financial products) but only for the bank they work for.)

• The mortgage marketer: He only handles loans, with a specialty in mortgage loans. He is compensated by the bank that he originates the loans for.

A recent trend is for banks to hire local reps in order to give better service to the client. A mortgage marketer (taux hypothecaire) will go to the client, but he works for the bank that hires him. He is paid a commission on the amount of the loans he originates.

• The mortgage broker: The broker offers the loan products of many lenders. He specializes in mortgages and is paid a commission. This commission is paid by the lender that the loan is placed with.

Mortgage brokers have been dealing with mortgages for more than thirty years but have only become an import part of the mortgage market (taux hypothecaire) recently. A mortgage broker works with many lenders, usually 30 or more and can pick the best one for each client. Today, more than 12,000 mortgage brokers operate in Canada, with 27% of the mortgage market.)

(Please note that, although I try to be neutral on this topic, I am a mortgage broker - taux hypothecaire. I want to advise you that I believe working with a mortgage broker is the best way to go when you are shopping for a mortgage for your home.)

One thing is certain. It is the expertise and integrity of the consultant that will make the difference. There are excellent local bank branch representatives, excellent mortgage marketers and excellent mortgage brokers. However, the opposite is also true.

The service of the person with whom you will work is most critical.

Of this you can be sure: the expertise and integrity of whatever consultant - taux hypothecaire you work with will make a critical difference. Yes, there are expert local bank branch representatives, expert mortgage marketers and expert mortgage brokers. And then, there are those who do not fully understand this field.

It is the person in the position that is most important.

Mortgage brokering has become more popular

The CMHC did a survey that indicated that in 2004 more than 26% of the home loans in Canada were financed with the help of a mortgage broker. Even so, it is the individual and his integrity and expertise that will matter most (taux hypothecaire).



Patricia

michael sterios asked:


The Bank of England has slashed the Base Rate in previous months to an all time low. The reasoning behind this was to alleviate some pressure on current home owners and to help rejuvenate the financial economy hoping the banks would begin to lend money again. It is still too early to tell if the drastic measures of the Bank of England were necessary, but the short term effect show okay results.

For those individuals that have a variable, or floating, rate mortgage, the reduction in base rate will increase their cash flow significantly. If you have a £500,000 mortgage and were paying 1% above the Base Rate, your mortgage payment in September 2008 would have been £2997. In June 2009, your mortgage payment would be £1,725. The change in base rate will save you £1,272 per month in mortgage payments.

The Bank of England was hoping that the savings in mortgages would help consumers spend the saved money in other areas, such as the automobile industry or the retail industry. Unfortunately, statistics have not shown a considerable increase as of yet. Most experts believe that it is because people are concerned about the future and are saving their money. Unfortunately, the low base rate means that savings accounts are paying practically nothing in the way of interest.

While the base rate has helped those on a variable rate, it has made those people with a fixed rate mortgage look into remortgaging their property. Fixed rate mortgages, while safer in a time of rising rates, are not nearly as attractive looking right now, in this time of decline. As mentioned previously, with a savings of potentially over £1,000 per month, it is worth it for those on a fixed rate mortgage to seriously consider looking into remortgaging.

It is an uncertain time and the economy is still struggling, but no one knows how low the Bank of England is willing to cut the Base Rate. As of June 2009, it can not go much lower. Even more caution is given to thinking about when the Bank of England will raise rates. This is more concerning to individuals with variable rate mortgages. The unknown nature of the rates market is what makes it so frustrating, yet so exciting.

Once the rates begin to rise, more people will want to obtain a fixed rate mortgage, so that their mortgage payments do not start to increase every month. It is knowing when to make the change that is the big gamble. If you make it too early, you lose out on taking advantage of extremely low rates. If you make the switch too late, your fixed rate will be higher.

Currently the low base rate is affecting the remortgage area of the UK mortgage market the most. It is allowing those on a fixed rate to take advantage of a lower variable rate. Until banks begin to lend significant amounts in the consumer market arena, the effect on new mortgages will not be seen.



Wilma

William King asked:


In 2002 the government of Dubai created freehold property zones in the city. For the first time foreign individuals could own property in the freehold areas of Dubai. This has resulted in an unprecedented boost in the real estate market leading to massive construction projects that are among the best in the world. The new law was established in order to enhance the confidence of property buyers in the legal system. The legislation was intended to attract foreign investment through international developers that always prefer to work in countries where the laws are straightforward and keeps things simple. Before the law was passed foreign nationals could only get a 99 year lease at a maximum but it was only since 2002 that they could actually own property in the freehold areas of Dubai. Another good thing about the legislation is that it helps to support 80 of Dubai’s population, made of non citizens, to rent out the property and lead better lives. Freehold property owners in Dubai can rent out their property on 99 year leases of their own.

According to the new laws people looking for buying property in Dubai will now have outright ownership of the construction as well as the land below it. There will no going back between freehold and leasehold. The new Dubai property law means that you can register the property under your own name with the Dubai Land Department. The best part of all this is that the Dubai Land Department uses the latest technology to manage everything so there is no need to worry about endless paper work and fussy rules and regulations. Everything is designed to work smoothly for everyone. Before 2002 the buyers kept a contract of the sale from the developer that allowed them to transfer the ownership only through the developer. The contract included an agreement that the freehold property would be granted as the freehold title as soon as it was ready. The new law says that the title deeds can be handed over the owners a lot sooner.

A huge impact of all this can be seen in the mortgage market because of the high rate of construction and property trading going on in Dubai. The resale market is boiling hot and international banks, especially Standard Chartered Bank, are vying to enter the market to offer financial loan options. Hitherto the same institutions were unwilling to enter the market because of legal uncertainties. It is now fully expected that many banks are going to aggressively enter the market and lower the mortgage cost and offer highly competitive prices and several new services. Introductory discounts are going to make a huge difference to the mortgage market. It has generally been noted that the lower the cost of the money the higher the price of property. One of the reasons for high rates of property in the world is the low cost of money.

The new law will make it sure that there will be many new buyers because of financing available and there will be a lot of movement in the mortgage market with people switching to better lenders.



Julie

Caitlina Fuller asked:


Every business benefits from marketing and the mortgage industry has long known this fact. Mortgage companies actively participate in marketing campaigns through the use of seminars,  press releases, advertisements in the media, cold calling, various lead generation tactics and by word of mouth (WOM).

The internet is widely used in mortgage marketing, most notably through the use of a mortgage website. Mortgage companies can take many different approaches to marketing, ranging from advertising early mortgage approvals, short-term loan  processing, low interest rates, or bad credit mortgages.

Mortgage marketing is probably most commonly done via telemarketing. Telemarketers are employed which call people from a random list. If the person contacted is interested in a mortgage, the lead is send on to the mortgage company itself. Using what is called a hot transfer method, a call can be transferred directly to a representative of the mortgage company.

 

Mortgage marketing services can take many forms. Many mortgage firms hold seminars for a select group of people who are most usually real estate agents and prospective home buyers. The mortgage companies will put on a series of presentations wherein they provide an incentive for people who purchase their mortgages on the spot or within a limited number of days. This method is quite effective but of course it can only be used periodically.

 

Professional mortgage brokers play an important role in the world of mortgage marketing. Since banks cannot address or accept problem loans themselves in a direct manner, they allow the brokers to do the job for them. Banks maintain friendly relationships with mortgage brokers as they are their best source for marketing mortgages. The brokers take on the task of initiating and processing the loan before they turn it over to the bank. Most brokers are capable and trained to deal with all types of loans, including government mortgages. It is estimated that fifty percent of all mortgages are initiated through mortgage brokers.

 

 Home buyers are turning to the internet more and more these days and using mortgage websites. There are many benefits to borrowers who choose use a mortgage website. The borrower gets a very quick response using the website compared to what they would get by contacting a bank directly. These websites give the customer multiple interest rate quotes from which they can review and compare rates, fees and the pros and cons of each offer. 



Judith

Mortagerates asked:


Trends On The American Mortgage Market

Most recently, Freddie Mac, second biggest and influential funder of American mortgage loans announced that its current agreement to purchase various mortgages gradually reached its highest level after the specialized USA regulator eased most capital limitations. This significant diminution of the constraining measures is executed as a final attempt to provide further stability to the continuously worsening American real estate markets by increasing total purchasing power of both government sponsored enterprises by extra $200 billion.

A bit later Freddie Mac entered several new contracts to buy loans worth $43,5 billion, suddenly increasing compared with only $14,8 billion for the previous month. Finally total portfolio of this leading financial company as well increased to $712,5 billion. In the similar way, at common annualized rate, total home mortgage investing assets has increased up to remarkable 9,9%. Despite all these unquestionable positives, unfortunately, general delinquency rate as well rose up to 0,74 percent of the loans.

Similarly, current rates on 30-year mortgages climbed up to 6 percent for the first time in 6 weeks, because of the increasing ubiquitous anxiety of the financial markets about quickly rising inflation pressures. In this reason, it will be exceptionally reasonable for you to consider in advance that most popular 30-year fixed mortgage rates currently seem quite steady on ordinary market levels of about 6,03 percent. However, these rates still remain extremely below their common year-ago levels, when 30-year mortgage rates easily averaged 6,16 percent, 15-year mortgages - 5,87 percent and 1 year ARM - 5,43 percent. Other disturbing news on the global market basically include that most frequently searched interest rates for fixed-rate mortgages rise, while actual prices for 1-year adjustable-rate mortgages continuously decrease. As a consequnce from this general decline, the total volume of applications goes down to 3,2%, in comparison with 2007.



Angela

Steve Smith asked:


Copyright (c) 2008 Steve Smith

The UK mortgage market is beginning to return to a state of normality after an extended period of high prices and easy access to property purchase loans, Your Mortgage has claimed.

While many homeowners may be worried about tumbling house prices and first-home buyers may be struggling to get their foot on the first rung of the property ladder, the market has for some time been inflated beyond realistic levels, presenting people with a home sales environment that was “too good to be true”.

For those who are having difficulty securing finance for a property in this unfavourable climate, taking out a personal loan may be an effective way to boost the amount of cash that can be put down as a deposit, thereby encouraging lenders to extend finance.

Meanwhile, Your Mortgage said that both buyers and sellers should brace themselves for an extended period of adverse property conditions, with a recovery not expected for at least 12 months.

Commenting recently, Barney McCarthy, editor of the independent advice website, said that the recent falls in house prices would not necessarily help first-time buyers enter the market.

“While house prices are lower than they have been for a long time - so it looks more affordable - the actual lenders themselves are more reticent to actually lend the money and are actually requiring much larger deposits than before,” he said.

However, Mr McCarthy went on to remind people that the current situation is not as dire as it could be.

“The situation at the moment isnt as bad as people make out; over the last couple of years it has almost been too good to be true and now it is returning to something more approaching normality,” he commented.

However, he did say that the days of easy access to loans and credit had been resigned to history, suggesting that many Britons will have to work harder to secure finance for the foreseeable future.

For those who have found themselves shut out by banks as the financial woes have rumbled on, taking out a bad credit loan may prove an effective way to begin to repair damage done to their finances. In applying for this type of loan, people could find they are able to begin to make regular payments on items outstanding in a bid to present a more positive image of their financial position to banks and other lenders.

Meanwhile, Mr McCarthy concluded by suggesting that while some would struggle as cheap mortgage lending began to dry up, he said that this could soon pave the way for a more measured approach to borrowing where consumers are less likely to struggle to keep up with mortgage repayments. In such a scenario, consumers could find that it becomes easier to put money aside each month. According to research carried out by Nationwide, a quarter of Britons currently feel that they are not saving enough money, although more than half (52 per cent) said they are hopeful they will be doing so in six months time.



Beverly