Berk Akman asked:


Size of the Turkish Mortgage Market

The Turkish mortgage market has shown promising growth in the last few years. While the existing mortgage loans had a share of only 0.6 percent of the GDP in 2004, the share jumped to 2.6 percent in 2005, and then to 4 percent in 2006. Currently the existing mortgage loans are about 31 billion YTL, which is about 5 percent of GDP.

These statistics clearly show that mortgage market has been growing faster than the rest of the economy. As described below we expect that it will likely to continue this trend in the near future too. The rapid growth has been fueled by primarily by economic factors such as falling interest rates and improving economic stability but also by characteristic factors for Turkey such as solid population growth and strong ownership culture.

For 2008 we anticipate that the fast growth in the mortgage market will continue amid the continued decrease in the interest rates. Assuming that inflation will move towards targeted 4 percent and Turkey’s macroeconomic indicators will not get weaker in 2008, we expect that the interest rates will continue to fall in 2008. In addition, when the secondary mortgage market starts, capital markets will start to share the risk of mortgages and the cost of getting a mortgage loan will likely decrease further.

Based on these conjectures, we anticipate that the annualized growth in the mortgage market in the beginning of 2008 will average about 40 percent and then will accelerate to about 50 percent as long run interest rates decrease to 1 percent in the second half of 2008. Based on these predictions, we find that by the end of 2008, the mortgage loans will be about 47 billion YTL, making about 6.5 percent of the GDP then.

Looking even further, based on the assumption of continued decrease in the interest rates, and recently announced plan of inflation falling to 4 percent as planned in 2008, 2009, and 2010, our models predict that by end of 2012 the mortgage loans can be as large as 15 to 18 percent of the GDP.

Let’s also note that we believe that there two major risks to our forecasts for 2008: The first is a turmoil in the global economy and especially world’s financial markets driven by a recession in the USA. The second one is a domestic financial crisis probably caused by a current account imbalance. In either case, it would be very hard to predict the growth of the mortgage market for 2008.

Predictions on the Structure of the Mortgage Market

We believe that in 2008, the Turkish mortgage market structure will start to see several important changes:

1) Increase in refinance activity: Currently the majority of the new mortgage agreements are issuances of new mortgages and refinancing of mortgages does not take a large share in the market, however, we believe that starting in 2008, the refinancing will start to take a significant share in the market amid the decreasing interest rates. If the interest rates continue to decrease, the share of refinance activity can be even more than half of the total mortgage applications in a very short time.

2) Variable rate mortgages: Currently 99.9 percent of all mortgages are fixed rate mortgages. This is not surprising as variable rate instruments are very new in Turkey and the risk and benefits of these new instruments are not very understood yet. In addition, the very large movements in the interest rates and exchange rates in early 2000s and accompanying bankruptcies are still fresh in the memories of Turkish people and created a crisis-awaiting culture. However, we believe that the advantages of the variable rate mortgages will start to draw more people and its share will start to increase slowly in 2008. But for this, banks should reduce the interest rates of the variable rate mortgages, which did not happen so far because of the lack of competition in this type of products. We anticipate that as the competition among mortgage lenders increase, we will start to see more favorable variable rate mortgage instruments soon.

3) Lending institutions: Currently all mortgages are offered by banks; however, in 2008 consumer funding companies that are allowed to invest in capital markets to create funds for the home loans will start to offer mortgages. These new lenders will start to change the market structure as they may be less structured and flexible than the banks.

4) Secondary mortgage market: Secondary mortgage market is expected to start in 2008. We expect that at the beginning, the secondary market will be experimental without causing a significant immediate change in the interest rates, however, as the market matures, it will be one of the most important pillars of the mortgage market. It is hard to predict the role of the secondary market right now, but it is worth noting that secondary mortgage markets tend to play an important role in a few years after it started. For example, in the USA, mortgages trades in the secondary market started in 1970, and in 1972 it represented 4 percent of the total mortgage debt, the share increased to 9 percent in 1979, and then to 16 percent in 1982. In order to see comparable growth in the Turkish secondary mortgage market, corporations such as Freddie Mac should be founded, otherwise, the growth will be much slower.

The benefits of the securitization are reduced interest rates for the borrower, increase in the credit availability, liquidity increase for the lenders, and increased efficiency in the mortgage markets.

When mortgage markets merge with the capital markets through securitized mortgage loans, the market interest rates will quickly impact the mortgage interest rates.

Briefly, we expect that in 2008, growth of the mortgage market will continue its pace and in addition it will continue going through important structural changes that will cause even more growth in the coming years.



Mildred

Chris Borthwick asked:


House prices have fallen, mortgage costs for lenders have increased so fixed rate prices are increasing and will the economy start to recover soon?. All these factors will affect how the mortgage market will perform and if you are trying to decide when to buy your first home you will be thinking about how things will likely go in the near future. The best advice is to ask the professionals that would be going to an established mortgage broker who will understand trends and will be watching the market closely. They can give you their view of how the current market is as well as be able to answer any questions that you may have about the market. There are some brokers that have decided to charge a fee for their services; more have joined this bandwagon especially since the credit crunch however you can find a mortgage broker that will offer you a great service without the need to pay them an upfront fee. If you can afford a mortgage it may be the best time to go for a mortgage as house prices are unlikely to fall much further and it is predicted mortgage costs are going to rise for lenders so mortgage rates are only going to go up so any lower price is going to be offset by higher costs. Mortgage brokers have many benefits, not only can they assess your personal circumstances and suggest the best options for you, finding a whole of market broker means they will search every deal available for you so you know you will be getting the best mortgage available to suit you. Local brokers will have the added benefit of knowing a bit more about the market for the area, house values and will have contacts with local branches of financial institutions to give that added relationship that can help when you apply for the mortgage. Even if you are unsure if now is the time for you to buy your first home or your unsure what lenders will offer you then using a broker mortgage for applications will not only save you lots of leg work but can be done without paying a penny so if you don’t find what you are after then there is no obligation to proceed.



Douglas

Shane Brooks asked:


Marketing your mortgage business to For Sale By Owners (FSBOs) is like having multiple gold mining strikes coming up in a number of places all at once. It is great. When it comes right down to it, once you know how to work with FSBOs, they are the quickest way out there to have a successful mortgage business.

If you are new to mortgages, you should know going in that FSBO’s are not really all that fun. To tap the market, you have to be diligent, stubborn, and really have the perseverance to make sure you succeed. Most newcomers get one good “no”‘, and they’re done with FSBOs forever. The truth is that they are worth the effort.

Why do so many mortgage people fall short on FSBO markets? There are actually a number of reasons. One of the biggest reasons is that they are not determined enough. Another, though, is that they simply do not have a good plan for how to handle it.

Here are a few ways to get started in working with FSBOs: First of all, stake out your territory. Figure out where or what type of FSBOs you are going to target. Once you set that goal, go ahead and make it a little more: say that you are going to work with all the FSBO’s in that area.

Secondly, don’t get carried away. Sharpen your skills with a smaller area before advancing to a larger one. By starting small you’ll save time and money. When you get better, then you can expand and use the newly learned efficiency.

Next, make sure you are continually checking for new FSBOs. This is something you need to be doing all the time. In fact, it should be a part of your daily routine so that you never miss one. This is imperative.

Fourth, you should document your FSBO findings. Record the information for each FSBO in your computer, on cards, or even just on a board. No matter what, keep good records. This will help you down the road when you want to do more. Also, don’t wait until you have every bit of information; instead, try to add information as you get more.

Fifth, make sure you come up with a plan of action to go with each FSBO. You need to start thinking strategy for each one as soon as you get the information. Have an idea of when you are going to call and what you are going to say so that your approach is right.

Next, make sure you are performing your duties on the plan every single day. This strategy is not for those wanting a 9-5 ob. This is going to take time. Really serious FSBOs want to know that you are going to work for them. You need to show that you are going to get the job done whether it takes nights and weekends or mid-afternoons.

Finally, make sure you contact your FSBOs. You may think of dropping a note, but really you should just go ahead and make a call early. On the phone you’re better able to cater your message to the particular customer. You can refer to your notes, approach them more softly, and contact a number of FSBOs in a short amount of time. You can even make contact by stopping by the home. A face to face encounter can do a lot for your chances. You can also make sure they understand what you can and will do for them. So when you can, meet face to face. When that won’t work, you need to make a call, and then if you have to you can drop a note or a letter to the FSBO’s in the territory you have defined as part of your goal.

IN addition to all of these plans you make to attack the FSBO market, there are alternatives. If you are not the FSBO shopping type, you can always find ways to join in on the realtor partnership and referral market. With the right program, you can get plenty of free referrals to buyers who are moving from rentals. These are the crown jewels of the mortgage industry and can offer a lot of help to you in terms of making your life easier as a mortgage originator.

So whether you pursue FSBO’s, another niche, or choose to enter into a partnership, the mortgage business is one in which you are going to need a plan. Just make sure yours is a good one.



Susan

Tom Domin asked:


Yes, I love bulletin boards. Now, just so you know…I’m not talking about “electronic bulletin boards” found on the Internet. That’s a different topic for another day. I’m referring to those old fashion “cork boards” that in order to post notices require the use of push pins, thumb tacks or even staples (a bulletin board no no).

Today in some cities, bulletin board marketing is so hot that there are companies that exist for the sole purpose of providing this service to people who want their signs posted on bulletin boards. These service companies also distribute your fliers in stores and shops and post them in windows and hand them out at concerts and events. In some cases they’ll help design and plan your promotion and even write and distribute a press release for you.

If a service like this is not available, the bulletin board idea is still a winner. Just do it yourself! The cost is extremely low and your investment is only your time and energy. This is still one of the all time great origination ideas for Mortgage Professionals and the returns are great.

Here are a few things to think about if you’re considering about implementing your bulletin board marketing program:

1. Every townhouse and condominium complex has a bulletin board. Your job, should you wish to accept it, is to find the location of that bulletin board and gain access to it. You may find it in a common laundry area or even located within the clubhouse or pool area. If so, you may need permission to gain access and post your notice. Have no fear…you’ll find that this is rarely denied.Remember, you’re providing a valuable financial service to the residents and the complex itself.

2. Apartment complexes also have bulletin boards. Unfortunately, you probably won’t be welcomed with open arms since you’re really trying to help qualified renters move out of the complex. But, I have on occasion found a forward thinking property manager that allowed my notices to be posted. Their logic: They can’t prevent qualified renters from looking at home ownership as an option…so, why not allow the postings. Don’t forget to remind the property manager that you track your leads and that you never forget the source of where those mortgage leads come from. I’m continually amazed at the good things that can happen when you just ask.

3. Bulletin boards can be found in hospitals, fire and police stations, Laundromats, supermarkets, local building supply stores (Are there any left?), plumbing supply, electrical supply, bookstores, company employee lounges, waiting areas, your local Dunkin Donuts (mine has a great one), and a myriad of other locations where people happen to congregate.

4. Every business has a bulletin board and it may be accessible by employees only. Should that be the case, ask an employee or the manager to post for you. Remember, you’re providing a valuable service not only to their employees but to the company as well. All companies want to retain their good employees and home ownership and/or good financing guarantees they’ll stay in the area for the foreseeable future.

5. The notice that you post needs to be on the small side. A full page flier is usually too big as it over powers and dominates the bulletin board. You’ll probably find full page fliers removed within minutes of their placement, so don’t even go there. Half page fliers are better and postcard size fliers (Avery postcards 4.25″ X 5.5″) are the ideal size. You could thumb tack multiple business cards or cards especially designed with your message however, your message size is severally restricted and your response will be low using this size.

6. The best responses come from fliers that have a multiple “tear offs” at the bottom. You’ve seen them and probably torn one off and placed it in your wallet or purse as a reminder to call. This extends the life of your little flier as it won’t disappear with the first person interested in your offer.Yes, it’s a pain to set up initially, but once it’s done, it’s done forever. Your little flier is ready to work for you for many months and years to come.

7. Lastly, visit your bulletin boards on a regular basis and treat them well. Replace notices that show wear (and tear and those with only a couple tear offs remaining with brand new ones.

You’ve worked hard to gain access to your bulletin boards…maintain them well…and, you’ll be surprised at how well they will reward you and your mortgage business with good solid mortgage leads.



Patrick

Chris Borthwick asked:


and gloom as the average price of a UK home has fallen to levels last seen in August 2004.

 

We have seen house prices fall by 16.2% in 2008 which is said to the biggest annual drop since records began.

The average UK price fell by a further 2.2% in December, to bring the average cost down to £159,896.So good news for some people who can afford the larger deposits required to get a mortgage in the current climate but for most it won’t be welcome news as many watch the value of their homes falls and for some slipping into negative equity.

There are many different predictions as to how long the recession will last and as we progress the predictions seem to point towards a longer recession (ok not technically yet). House prices are also predicted to fall further and not likely to recover until at least the second half of this year. I’ve heard predictions of a further 15% fall in house prices in 2009.

Although stability is returning to the mortgage market, mortgage lending has risen in November, there are still too many negative factors affecting the market from rising unemployment, widespread expectations of further house price drops and tightened credit conditions – despite the rising lending it is still only 10% of the 2007 level.

For first time buyers whether you want a Falkirk mortgage or Fulham mortgage my advice would be to save! While house prices continue to fall and mortgages are difficult to obtain my advice would be to work on saving for a deposit so when the market does improve, you are maximising your options to ensure you pay a good price but also get a mortgage at a good rate.

If you want to see what is available to you, a good mortgage broker can search the whole market to give you an idea of what to expect, it is even worth doing so you can compare this to a mortgage quote in six months time. Even if you do have a mortgage it is still worth using the services of a mortgage broker to ensure you are getting the best deal, especially if you are on a standard variable rate which can often be a higher rate than fixed rate mortgages.

About a week after the first Thursday of the month would be an ideal time to search as this is when the Bank of England’s Monetary Policy Committee meet to decide on whether to keep, cut or increase interest rates. In January its widely predicted interest rates will again be cut.



Paul

sannok asked:


Ever wonder how many advertising messages we are exposed to in any single day?

Here are my search results: Each of one of us is exposed to an average of 3,000 advertising impressions per day. To tell you the truth…there are some days when I feel that I’ve received that many advertising messages by noon time. But that’s a subject for another day.

The point here is…How do you make your mortgage advertising and mortgage message standout from this never ending unrelenting horde? And, specifically, how can you make your mortgage information so totally different and so appealing than the mortgage folks down the street (or on the internet) just don’t stand a chance?

Advertising and marketing “gurus” have long promoted the idea that certain words such as “guarantee,” “free,” or “limited time” act as physiological triggers that cause us to take pause and closely evaluate the offer before us.

If you have been in the mortgage business (or any business) for any length of time, you probably already know that there are no magic mortgage systems, no magic mortgage origination techniques, and more to the point…no magic advertising words or phrases that will drive countless prospects and customers to your mortgage business.

There are however, a few words that you shouldn’t use at all in your mortgage marketing:

1. Service - Have you looked closely at mortgage advertising and websites? Everyone is touting “service.” Have you ever seen anyone promising “terrible service” in their ads? Of course not, and that’s why advertising “good service” today, really has no effect on our consumers’ senses. Most consumers today are intelligent enough to know that promising “good service” doesn’t necessarily make it happen.

2. Quality - Another one of those meaningless over used words! Is it quality service, or quality information, or a quality loan program you’re promoting? Everything has quality. It’s what you compare it too that determines its quality.

3. Value - Value has been over used just as much as service and quality have. Is a Cadillac or a Volkswagen the better automobile value? It’s the buyer that makes that decision and not the advertiser or marketer. The buyer makes that determination by evaluating the features and benefits of the product coupled with their economic position at the time of the purchase.

4. Integrity - Integrity means honesty. Most people recognize the fact that you and your company are honest. Otherwise, you would be writing your advertising material from mortgage jail. If you feel a need to advertise integrity, folks will think you’re either covering up the fact you’ve got a problem…or you’re implying your competitors do.

5. Rate - Today everyone is promoting low rates, and I mean everyone. In fact, so much so that our mortgage prospects and customers now ignore this approach and just move on.

All five of our words (service, quality, value, integrity, and rate) fail miserably today in mortgage advertising and promotion. They have become overused and totally abused.

It’s admirable that you would want your mortgage prospects and customers to view you and your company as having quality service…exceptional quality…tremendous value…strong integrity…and, low rates. But, so does everyone else in the mortgage business.

The next time you’re tempted to use one of these words, stop, and ask yourself if there isn’t a better way to provide the information that your prospect/customer truly needs? Remember, your prospect/customer is exposed to some 3,000 advertising messages each and everyday. To get your message through that maze, your mortgage marketing really needs to be different.



Jacob

Florida Mortgage asked:


Is an FHA Home loan Mortgage Right for You?

The days of putting just  little money down to buy a home are not over

After many years of risky home loans backed up by small down payments, most lenders aren’t underwriting mortgages without a large sum money for a  down payment and a high credit score. But a loophole can still put home buyers in a Florida home for little or no money down. FHA Mortgages insured by the Federal Housing Administration (FHA) allow Florida mortgage applicants  to get approved with a low down?payment as small as 3.5% of the purchase price and you  don’t require a high credit score.

Florida home buyers should know the many advantages of the FHA mortgage loan programs. FHA loans were created to help increase home ownership. For the Florida home buyer the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

Down payment less than 3% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs.

 

Easier Credit Qualifying Guidelines such as:

  No minimum FICO score or credit score requirements. FHA will allow a home purchase 1 year after a Bankruptcy. FHA will allow a home purchase2 years after a Foreclosure.

To take advantage of the FHA program in Florida, give us a call 1-954-667-9110 or use our quick application to find out more about the many FL mortgage programs we can make available. Or Apply now for a FL FHA home loan.

www.FHAmortgageFHAloan.com

As millions of Florida homebuyers have come to realize, getting into a Florida home for little money down has its disadvantages. Borrowers who’ve invested little money down on their home are often more willing to walk away from it during tough times rather than struggle with tough payments; this risk is further elevated when Florida home values are declining and troubled Florida mortgage applicants are unable to refinance or sell their Florida  home at a price that covers their losses.

Still, FHA home loans are far less risky than a subprime?or hard money loan that lenders originated before the housing bubble. FHA-insured mortgage loans require documentation and verifiable proof that the borrower is capable of making their mortgage payments. (In the past lenders didn’t require such proof.)

The looser terms of FHA home loans have helped make them more for Florida homebuyers. Today, FHA home loans  make up about 30% of the mortgage Florida mortgage market, up from 5% in 2005, The FHA commissioner David Stevens said in a speech earlier this month. In June, of  FHA insured over 200,000 FHA home loans – the highest monthly total in the agency’s history, according to Stevens. For fiscal year 2009, the dollar amount of FHA home loans  are likely to reach 30% of mortgage originations, up from around 5% in 2005 and 2006, says Stu Feldstein, the president of SMR Research, a mortgage-data tracking firm.

“FHA-insured?home loans  are one of the only games in town, especially if you can’t qualify for a traditional Florida mortgage,” says Thomas Martin, the chairman of the which trains and certifies mortgage lenders and brokers. “Now that the subprime market is gone, the FHA home loan is filling the void.

Here’s how to determine if an FHA-insured mortgage is right for you.

Do you meet the FHA home loan qualifications?

Most Florida mortgage applicants of FHA-insured mortgages have stable predicable income likely to continue with their credit history and debt load than a conventional mortgage loan might allow,

“When analyzing an FHA mortgage applicants  credit, we expect FHA mortgage lenders to examine the overall pattern of credit behavior rather than isolated occurrences of poor performance or relying solely on a credit score, This includes a borrower’s rental or mortgage payment history, debts, collections, previous foreclosures and bankruptcies. Borrowers with a credit score less than 500 must make a 10% down payment to  qualify.

Today, over 80% of FHA-insured purchase-mortgages belong to first-time Florida home buyers, thanks to looser requirements and the comparatively small 3.5% down payment, (Another perk is that borrowers are permitted gift assistance for the down payment from their friends, a family, employer or a government entity, but not the seller.)

Can you afford the costs?

Now, FHA mortgage  interest rates  and non-FHA mortgages aren’t much different. A 30-year fixed-rate FHA-insured mortgage had an average rate of 5.25% for the week ending Aug. 20, compared to an average rate of 5.44% for a 30-year fixed rate non-FHA mortgage,

However, there are unique fees that accompany an FHA mortgage. A mortgage applicant is required to pay 1.75% of the loan amount upfront, or that fee can be financed into the mortgage. FHA-insured mortgages also require a 0.55% annual premium based on the outstanding FHA  loan balance and financed into the mortgage. These fees pay for the FHA insurance that makes the loan possible,

A borrower who has a high credit score – typically a minimum of 720 – and a 20% down payment is often better off with a traditional non-FHA mortgage, which includes fewer fees. However, the math gets tricky when a borrower has a high credit score but a down payment less than 20%; in those cases, the borrower will have to pay for private mortgage insurance (PMI). Depending on your situation, PMI can cost less, the same or more than FHA mortgage fees.

What protections are in place for the FHA mortgage lender?

FHA mortgage Lenders are comfortable providing FHA mortgages because they don’t bear the loss if a mortgage applicant defaults on their payments and goes into foreclosure – the FHA does.

In such a scenario, the FHA pays the lender an insurance claim equal to the sum of the unpaid principal balance of the loan, foregone interest and a portion of the foreclosure expenses, The FHA pays for these losses by dipping into its insurance fund, which holds the insurance fees borrowers pay.



Raul

Mark Aucamp asked:


Mortgage resuscitation required urgently!

The UK housing market will not recover until the mortgage market is fixed and expert advice at the Bank of England says, print more money in the hope of saving our economy from a long and drawn out recession is the answer. The Council of Mortgage Lenders says the number of UK households with mortgages is 11.7 million and has a value of over £1.2 trillion of these approximately 51% are fixed rate mortgages; 40% are on tracker, discounted or variable rate mortgages and less than 8% are on their lenders standard variable interest rate scheme. The mortgage market needs urgent resuscitation and repair to restore the banks lending confidence. We may have green shoots appearing across our economy but they don’t seem to have any roots yet.

A recent poll of 539 professional mortgage brokers by Exact Mortgage Expert suggested that house prices were likely to continue falling for the next six to twelve months and the housing market had not bottomed out yet. Many housing commentators feel that the market still has a further 6% to 7% to fall before we reach this illusive bottom is found. Lloyds Banking Group say that the decline in property prices this year is around17.7% with the average home now valued at £154,716. In the last year the average property value has plummeted by £33,264.

Sub-Prime borrower in Limbo

According to the latest Mintel, one third of the UK mortgage borrowers are facing financial difficulties and 1.5 million have fallen behind with their monthly mortgage payments. Those borrowers that have fallen behind with their repayments are considered by future lenders as sub-prime borrowers and they are offered less than favourable interest rates when they come to remortgage. There are now only two lenders remaining that will consider sub-prime or non-standard mortgages compared with the non-standard or sub-prime industry prior to August 2007 when the ‘Credit Crunch’ started. Whilst the lenders have disappeared the sub-prime borrowers have remained in limbo not knowing where to go or what to do and the number new recruits has swelled.

Since the rescue of the banking system by the Government last year and the sharp drop in the base rate by the Bank of England it seems that all the lenders have lost their appetite to lend money to homeowners and potential new borrowers. Lenders are nervous about incurring further losses and have drastically tightened their lending criteria. This means that borrowers are unable to refinance their homes easily and first-time borrowers now require a deposit of around 25% just to get on the property ladder. As a result of this large deposit being required many have turned to the bank of mum and dad for help in raising a deposit. The lenders have now become very choosy who they lend money to.

Finding a Mortgage

Borrowers looking for a new mortgage will find it impossible if they have suffered any adverse credit history within the last six years like:

A default issued by a lender, an Individual Voluntary Arrangement or a bankruptcy order.

1.Any missed credit card and any loan payments.

2.Any missed mortgage and secured loan payments.

3.Need to borrow more than 90% of the value of your home.

4.Falling house price

5.In sufficient deposit to buy new home

Placing a mortgage is like riding in the Grand National

Mortgage brokers report that they are at their wits end trying to place mortgages with lenders in the current market. They liken the placement of a mortgage to being a jockey in the Grand National with all the steeple jumps needing to be jumped over to complete a mortgage application. Most lenders are inundated with mortgage applications which have slowed down their processing time. When finally they do look at the application three weeks later the payslips and bank statements are out of date and need to be updated. Then the valuers down value the property and the loan-to-value percentages changes and finally interest rates are pulled without notice. It’s a nightmare! To submit a mortgage and have it complete is a ‘rare occurrence’ and that’s assuming that you have jumped through all the hoops and met the lenders criteria.

Seek a Debt Solution if you are struggling!

For those borrowers that require a non-standard or sub-prime mortgage it may finally be worth looking at a debt solution as debt consolidation is no longer an option open for reducing your debt by using your home as a ‘Cash Machine.’ If you are struggling to pay your credit card debts and unsecured loans then it may be time to get out of debt and seek advice and help. You need to seriously consider a Debt Management, Individual Voluntary Arrangement or possible bankruptcy proceedings. Don’t be rushed and think carefully about what you are doing. Always speak to your credit card and loan providers to see what they can do to help you first.



Louis

michael sterios asked:


As the majority of people are aware, the entire world began to feel a financial crisis in the summer of 2008. While some people claim to have predicted it to happen, and those of us working within the mortgage industry knew eventually the bottom would fall out, I do not think the world was ready for the rapid decline that happened.

To make matters worse, the press and the media continue to harp on the Credit Crunch. The media continues to print gloom and doom stories that do nothing more than paint the bleakest picture imaginable, no matter if they are factually true or not. The worst part of the situation is that consumer confidence is based around what is read in the newspapers and what is seen on TV. The media is one of the only ways that people not directly involved in the credit crisis gets information on the state of the economy. Misleading information can be the route of serious consumer doubt, which only hurts the economy more.

It is a proven fact that banks are not lending money to individuals for mortgages at the level they were a year ago. In addition to a lack of lending, there are also fewer products available in the consumer mortgage market. The positive news for the short term is that those people who have a variable rate mortgage have seen their mortgage bill drop, as the Bank of England has currently set the rate at an all time low of 0.5%. While this is bad news for those hoping to earn interest from savings, it is positive news for those with a variable rate mortgage.

The media continues to report on the declining housing market by claiming that the values of houses are down over 25% in some parts of the country. What they media do not show is the amount that people are willing to pay for a house, if they had the financing available to them. This is a chicken and egg scenario, unfortunately. Until the banks start lending money to people who are looking to purchase a house, housing prices will remain stagnant or drop because there is a very limited supply of people available to buy them.

The media and newspapers have the ability to help the UK out of the credit crunch, out of the financial misery the world is currently in. Unfortunately, the good stories do not sell as many newspapers as the expenses scandals and the “fat cat banker” bonus announcements. It is important to understand the full truth of the situation. If you ignore the reasons that the UK is in the mess, it will certainly end up here again, but the media should be willing to promote some of the positives, some of the green shoots that are being seen.

It is going to take more than a few happy newspaper articles to raise consumer confidence and to start to turn this mess around. However, the media understands the extensive role they play in the information they give to the public and they should be critiqued more heavily and punished if they continue to print false and misleading information. The UK will survive this recession, but it would be much easier if everyone would begin working together for a better tomorrow.



Tracy

Berk Akman asked:


Since the new Turkish mortgage law passed on March 2007, the mortgage and real estate markets have continued their growing trends that are mainly driven by lower interest rates; however, this growth is probably just the tip of the iceberg.

The Turkish mortgage law that passed on March 2007 has two important properties that are expected to boom the mortgage and real estate markets in Turkey:

1) New mortgage products :

With the inclusion of the adjustable rate mortgage products, banks are able to transfer some of the economy related risks in their balance sheets to borrowers. In adjustable rate mortgage products, the interest rate is a sum of a fixed margin that is determined by the lender and a benchmark index that is set by Central Bank of Turkey. In May 2007, central bank decided that Consumer Price Index should be the benchmark index for the variable interest rate calculation. In summer of 2007, some banks started to offer various adjustable rate mortgages and these loans, as expected have lower APRs. However, as Central bank’s current records show there is almost no interest in these variable interest loans right now. This lack of interest is probably due to several factors such as: i) the lack of trust in Turkish economy and the fear of a substantial increase in the interest rates even though the economy has been performing fine in the last 5 years without any major crisis; ii) the recent mortgage crisis in the USA, and particularly, the rise in mortgage default rates in the USA and the fact that most of the increases in the defaults were in the sub prime market and adjustable rate mortgages; and, iii) the lack of understanding of the benefits and risks of these new products. We believe that these three reasons are temporary and in the near future, as people are educated about the risks and benefits of these new products and mortgage brokers fill the necessary knowledge gap, the interest in the products will increase.

2) Securitization of Loans :

About six months after the new mortgage law passed, Capital Markets Board of Turkey completed secondary legislations on mortgage covered bonds and mortgage backed securities. With this addition to the law, banks are now able to bundle the loans into securities and take them off their balance sheets. Covered mortgage bonds and mortgage backed securities are debt instruments secured by a covered pool of mortgage loans (or public-sector debt) to which investors have a preferential claim in case of default. These instruments are among the most liquid fixed income securities after the government bonds in Europe. While it is not expected to see the first securitization until early 2008, reduced risk for the banks will cause a significant and sustainable growth in the mortgage market in the coming years.

Expectations for the future

a)The secondary mortgage market will probably trigger a decrease in the interest rates as banks will be able to transfer their risks off their balance sheets and the ratings of the deals in the secondary mortgage market could be higher than Turkey’s sub-investment grade sovereign rating (this has been the case in similar cases).

b)With the secondary mortgage market’s effects, the banks’ competition growth will fuel an already booming housing market. Especially, when the monthly interest rates get closer to 1 percent per month, the volumes will be substantial, as they were earlier. Expected growth in the mortgage market is expected to mimic those in Spain and South Korea as these countries have followed similar paths as Turkey. Sizes of the mortgage market in Spain and South Korea GDP are 50 and 25 percent of the GDP respectively. So it is not inconceivable to expect that Turkey’s mortgage market may grow up to 30% to %40 percent of the GDP from its current share of less than 10%. Note that since Turkey has a very strong ownership culture, the ratio can be even higher.

c)Turkey’s new long term mortgage laws will increase the investment in Turkey. The new instruments that will be introduced with the securitized mortgages will increase the stability and depth of the financial system probably creating a natural cushion for any unexpected events and decreasing the volatility and avoiding the episodes of financial crises that were observed in 2001 and 1994.

d) Enhanced foreign investment in the property market will cause a boom in the property market. Also in addition to real estate market, as mortgages will need associated insurance, it is expected that insurance sector will be a big beneficiary of the new mortgage law.

e) The central bank will have more dominant place in the economy similar to the developed countries.

f)New law will help strengthen Turkey’s EU bid. The Turkish mortgage law will bring Turkey into line with the standards and practices expected from worldwide property purchasers and investors.

In addition to the tangible effects listed above, we expect that there will be very important intangible effects too. For example, in a country like Turkey where ‘future planning’ is measured with months (mostly because of the economic, financial and political crises), just the fact that people are now able to get a loan up to 30 years is an encouraging incident that will probably change the way people plan, invest, spend and save in the future. Since being able to plan for the future is one of the most important requirements of economic development, the additional foresight produced by the new mortgage law may be one of the biggest impacts of the new mortgage law in the long run.



Aaron