The Mortgage Reform and Anti-Predatory Lending Act of 2007

An important issue is happening right now regarding the mortgage industry and the restrictions on borrowers qualifying for home loans.If you are a loan officer or a mortgage originator, this new bill introduced, may affect the way you will get paid or cause extinction in the future. It will also limit the choices consumers have in finding a residential mortgage loan to strictly large financial institutions.

In attempts to start regulating our industry, restoring ethics and responsibility within the mortgage origination industry, The Mortgage Reform and Anit-Predatory Lending Act of 2007 has been established.

To view the Complete Bill (HR3915) go HERE

After reading this new bill, you can show your disagreement by signing the petition by going HERE

What are your thoughts about this new bill? and, will this new Bill affect YOU?

Is Your Mortgage Resetting?

About $50 billion in adjustable mortgages are resetting this month. The interest rates will be going up for many borrowers.

What can borrowers do at this time? Most will have to find a way to pay the higher expenses, but are they prepared for this? Many are not even aware of how much their new payment will be.

If you have an ARM mortgage, you should be concerned and become aware of your options. Mortgages that will default will be at an all time high. A loan modification can be helpful and an option before going into default. Seek the help of your lender. Inquire about refinancing to a fixed rate.

Should the blame be put on poor underwriting standards? The subprime crisis came to a head in July and August of this year. By March 2008, there could be $100 billion in resetting loans.

I have read that servicers might give ARM borrowers an extra three to five years of payments at low rates, giving them the help they need until home prices rebound. Unpaid interest could then be rolled back into principals and loans refinanced.

Become aware of your mortgage terms, learn how your mortgage resets and become aware of all your options. Get yourself prepared, so you are not caught in a situation that you will default.

Definitions of Mortgage Terms and Mortgage Loans

Purchasing your first home can be an overwhelming experience. This is the biggest investment you will make and a huge financial commitment.

Once you find the perfect home for you, you will then need to find a mortgage loan. With so many options out there, do you know which loan is right for you?

Is there such a thing as cheap mortgages? It would certainly be in your best interest to take some time and compare mortgages. There are many ways you can search for the mortgage that best suits your needs. Check with your realtor, your attorney, use the Internet, ask your friends or relatives. I have included a mortgage rate widget on the sidebar of this blog,so you can see the latest interest rates for various types of loans.

Understanding mortgage terms and loan types can make this process easier for you:

Fixed Rate Mortgage: (10,15, 20, 40 or 50 yrs)
The interest rate and monthly payment remain the same over the entire life of the loan

10/1 year Adjustable:
The interest rate and monthly payment will remain the same for 10 years. At the beginning of the 11th year, the interest rate will adjust and the payment may change every year for the remainder of the loan

7/1 Adjustable:
Same as the 10/1 year Adjustable, but this mortgage will adjust beginning in the 8th year

Having an adjustable mortgage allows you to enjoy the initial lowest interest possible and the lower payment, but if you want the stability of a 'fixed' payment, this will force you to refinance (also described as remortgages the loan)

5 or 7 Year Balloon:
The interest and monthly payment will remain the same for 7 years, but at the end of that 5th or 7th year, the borrower must refinance into a new loan at the current interest rate.


Amortization Schedule- A month-by-month breakdown of principle and
interest to be paid on a note, as well as the balance after payment is made.

Balloon Payment- A lump sum payment that pays off a note in full.

Debt Ratio- An individual's total debt to relation to their income.

Equity--The difference between what a property is worth and how much is owed on it.

Loan to Value- Referred to as LTV. This is the ratio of the loan amount to
the value of the property.

Mortgagee- The person or investor who receives the payments from a
mortgage.

Mortgagor- The person who owes money (makes payment) on a mortgage.

Title Insurance- Insures that a piece of property is free and clear of any
liens