First Ohio Home Finance

Matt Berardi makes more loans than any other employee at First Ohio Home Finance, so sometimes we wonder how he gets it done. There’s always a secret somewhere when you have a salesperson out in front.

We received a piece of mail last week about Matt Berardi’s mortgage lending that really made an impression on nearly everyone at our branch of First Ohio Home Finance - and told part of the secret to the way he does business.

Like every loan we make, there was a little luck and a lot of caring communication and hard work involved in this story.

Dear Matt,
We can’t thank you enough for all the work that you did on our behalf for our recent refinance. Your expertise and patience cut our loan duration in half and we still can’t believe that low rate is really, really true! A huge weight has been lifted from our shoulders - thanks to you.
Warmly,
Carol L.

I couldn’t help but blog about this mortgage lending success. Thanks, Carol!

We love what we do here at First Ohio and work hard to find opportunities to help other Ohioans!

(HT to Alex Stenback)
We all know that most online mortgage aggregators are champions of selling and re-selling and re-selling any information you put online. They also have been linked in urban legend to unscrupulous lenders with varying degrees of bait-n-switch tactics.

A recent incident with LendingTree - which takes a short loan application and farms it out to national lenders - highlights the real problem with throwing your personally identifiable information online. Yes, even with recent innovations in “secure” protocols like SSL.

Apparently, LendingTree had employees who were re-selling borrower information to non-affiliated mortgage brokers (and maybe others).

“several former employees” may have shared confidential passwords with “a handful” of lenders that were not approved by the company. The lenders then used those passwords to access customer information files that contained mortgage request data such as name, address, e-mail address, phone number, Social Security number, income and employment information. The files did not contain credit card information, LendingTree said…. The company said it does not believe the disclosure led to identity theft or fraudulent financial activity, but recommended customers check their credit reports for suspicious activity.”

Needless to say, this underscores the benefit of dealing with a local or regional direct lender like First Ohio Home Finance. Nothing beats being able to look in the loan officer’s eye and personally seeing where they conduct business.

Don’t trust your information or your mortgage to just anyone - the result could be more than you bargained for!

Many people like you and me are hearing news of rate cuts but are uncertain about refinancing. If you are like most Ohioans, you bought a home with little down payment in the last few years and home prices don’t seem to have risen much. But mortgage rates are returning to 50-year lows…fixed rates this month touched 5.0%!

1. Now that the Fed has cut rates, you can lower my mortgage payment, right?
Actually, it’s not that easy. We often see mortgage rates rise when the Federal Reserve Bank cuts rates. The Fed adjusts the rate that banks borrow from each other, not consumer rates. Mortgage rates are directly tied to the bond market. But after 5 of the last 8 Fed rate cuts, mortgage rates have risen in the next three months.

2. So how can I take advantage of lower rates?
Most homeowners are angling to get into a fixed rate loan. That’s often a good idea when mortgage rates are low. Now the hot mortgage product is FHA loan. In the past, these programs were little used because of more favorable terms from subprime lenders. Now, the government has loosened its credit and appraisal guidelines to include more normal Americans and average homes. Also conventional loan rates are near 50-year lows!

3. What refinance options are available?
Many homeowners can save hundreds each month if they refinance. Usually it is getting out of an adjustable or second mortgage. With rates falling, this is a great time to do that. We have introduced programs to help no matter your equity position.

4. Can you help if I’m behind on my payments?
Most often we can. FHA has a special program now to help borrowers who have fallen behind on an adjustable rate mortgage (ARM). If you started missing payments after your ARM went up, we want to talk with you!

5. What if I bought from a builder and I owe more than my home is worth?

Many home buyers were sold on payment - without regard to historical price - and few saw the decline in home prices coming – hitting new subdivisions especially hard. We’ve helped a number of people who owe more than their home is worth. Call today!

6. I’d like to move but have heard stories of long times on market. What should I do?
People are still able to sell in this tough market. If you don’t have an exceptional home, it is taking longer and you may get less than you expect. The first step is to get preapproved. Next, you should find a builder or Realtor you trust. We have relationships with GREAT professionals in almost every market. We also know about innovative lease options and land contracts. We’ll steer you right - give us a shout.

7. What is a preapproval and why is it helpful?
Deciding how much you can and want to afford is a critical step to getting and keeping a home. Take a few minutes to discuss your situation with an officer at First Ohio Home Finance. We will explain the process and look over your income, asset and credit documents. You will get a Realtor referral and a preapproval certificate. You’ll also have confidence that offers you make will be able to close in a timely way.

8. Why would I work with First Ohio Home Finance instead of my local bank?
Unlike bank employees, mortgage companies in Ohio now have strict background checks, state testing and licensing, and thorough continuing education requirements. With 12 years in business and more than 6 years HUD-approved, First Ohio Home Finance has thousands of satisfied customers. We are the oldest mortgage company in each of our locations.

Congress and the Federal Reserve Bank are both hard at work in working to stem the tide of foreclosure in our country. They have proposed increased regulation and disclosure to attempt to persuade homeowners and home buyers from the current mortgage system.

On one front, the Federal Reserve governors have issued the most sweeping reforms of the HOEPA in decades in an attempt to reduce losses. These reforms speak ONLY to high-cost loans, although most of the media is translating that to ’subprime.’ The underlying change is re-defining high-cost as an APR 5% above a similar Treasury bill. For example, a 30-year fixed rate loan would fall in this category if the APR topped 9.6% today, or a 5/1 ARM topped 8.6%. Clearly these ARE high-cost loans, since conventional borrowers are finding APRs in the 6.5-7.5% range.

Essentially, the bankers want to end stated-income lending, mandate escrow of taxes and insurance, halt prepayment penalties before an adjustable loan resets, and disclose to borrowers dollar-specific compensation that would go from a lender to a broker. Furthermore, the lender would have to “consider” a borrower’s ability to repay.

Another important point consumers need to be aware of is more and more conventional borrowers are becoming subprime or non-conventional because of a decline in available mortgage products. This is b/c credit score requirements are being raised - you’ve probably already heard that 720 is the new 680. As you can imagine, this is EVEN more true for subprime and alternative credit loans.

So, what would these changes mean for the average conventional borrower? What would the changes mean for the average subprime borrower?

For conventional borrowers, the only change would be the upfront disclosure of compensation. Most of the controversy surrounding this issue is b/c most brokers have not chosen a lender or locked an interest rate at the time of initial disclosures. To require them to disclose is essentially a requirement to estimate and then re-disclose later in the process. Bottom line, more paperwork and more consumer eyes-glazed-over.

For subprime borrowers, there will be devastating consequences. As hundreds of lenders have hit the fan in the last 12 months, finding an appropriate, reasonably-priced subprime product is very difficult. When you kick out prepayment penalties, end stated income, and require escrows, there will be fewer loans available for those with bruised credit or unusual circumstances. That means fewer homeowners among those with low-income or not particularly financially savvy - the opposite of what the establishment wants.

All in all, the solution is not more government intrusion. Financial institutions have successfully facilitated American home ownership for decades.

The current web of crises are directly linked to the Federal Reserve keeping low short-term interest rates for TOO LONG following the dot-com bust of 2000, which led to a warping of the world economy. Ending the manipulation of financial markets is the ideal answer.

A rate lock is a contractual agreement between the lender and the buyer/borrower. There are four components to a rate lock: loan program, interest rate, points, and length of lock term. Read the rest of this entry »

This is a critical question because so many loan officers are NOT keeping up with the changing mortgage environment, but still issuing bland letters that indicate a borrower simply needs to come to closing. The pre-approval process is much more thorough than pre-qual. Read the rest of this entry »