JohnsBlog (articles, news, thoughts, advice)

Just a quick note.  I have structured and implemented a Credit Repair program through Stonebridge.  With access to credit bureau's, collection agencies, and attorneys among other professionals, I look forward to obtaining financing for those with lackluster credit histories.  I've spent many, many hours on the education necessary to implement this program, and will work just as hard to help restore credit to the point where a lender will offer a housing loan at a desirable rate as I do on each client's mortgage loan and consultation.  Please contact me for more information on the matter.

PS...I will NOT be in the business of harrassing the bureau's to clear accurate, negative credit simply because people don't enjoy paying their bills, however I understand that sometimes there are circumstances where financial debts cannot be met, and to those  people who have encountered these circumstances, I will gladly speak with and assist in pursuing a loan no matter how long it may take.

Hello All,

I have recently been introduced and partnered with a real estate group focusing on investment properties in Florida.  Panama City Beach, FL has been rated by money magazine and CNN among others as the best place to invest right now.  With a new international airport project underway and set to open in 2010, along with giant land purchases by disney and busch gardens, this is surely a great opportunity to purchase land which is expected to skyrocket in the near future.

I have access to land lots without construction, residential lots with homes already built and in many cases occupied (instant rental income, no monthly loss), and as a mortgage professional, I can assist you in obtaining a great mortgage, whether you finance the entire project (lot purchase, construction, or home purchase).

There is a full management company in place, meaning no matter where you are, you WILL have tenants if you choose (this is guaranteed), the land and home will be fully cared for, so you don't have to worry about your out of state investment becoming a hassle...you just sit back, and let your investment gain wealth.

While there are high risk investors in the market buying cheap properties in Miami and other rapidly depreciating areas, Panama City beach is not even close to depreciation, it is simply underpriced and underdeveloped (but not for long!).  Many of this companies properties are within 3 blocks from the beach (and for a little more cost, I have beach front properties available), and they are NOT in a hurricane zone.  Though there have been many catastrophic hurricanes in FL and its surrounding states, Panama city's topography deters hurricanes west towards Pensacola and Louisiana, and is sheltered by the rest of Florida from Hurricanes to the south effecting miami, daytona and other southern beach spots.

This is a GREAT investment opportunity for everyone and does NOT require a lot of money, but WILL offer a great return and is something anyone looking to invest over the long term should look into.  Imagine buying cheap New Jersey beach property 20 years ago.  This is that type of opportunity, but rather than being on the brown-watered Atlantic coast, you have the blue hued Gulf of Mexico just a short walk from your property.  E-mail or call me for more information or an info pack to be sent out.

We will also fly serious investors down to the area to check out the scene and observe first hand what a great investment opportunity this is.

Here is an article that is up for consideration in the fall business progress report of chester county's daily local newspaper.  If published, it will be released next monday or tuesday.

Inside the Meltdown

An insider’s glimpse of the real estate market

By John Meussner

Over the past 10 months, there has been a deluge of information concerning the drastic changes in the real estate market. I’ve seen criticism of lenders, brokers, borrowers, and the government in an attempt to point the finger and figure out why and how this happened; a market at a historical apex reduced to rubble in just a few short months. How and why this market collapse has occurred is a subject large enough to fill several books, and when all is said and done, probably will. Everyone has an idea and opinion, but few seem to realize that it will be a combination of forces that result in either a resurgence of real estate, or a complete market collapse.

In a recent government intervention, the Fed funds rate was reduced to 4.75%, a substantial decrease from the 5.25% rate that had not been touched in over 3 years. This does not mean consumers can get a mortgage today for a half percent less than you could yesterday, but is the rate at which banks borrow money, and does affect the prime rate (which has also dropped, to 7.75%). While many financial gurus expected a rate cut, few expected a full half percent. These lower rates will fuel liquidity into a starved market, and hopefully invigorate some investing which will turn the tide on this decline. Unfortunately, the other possible outcome is a huge decrease in the value of the dollar, which hit a very low point in comparison with the Euro on the announcement, and raises serious inflationary concerns. Solution? Maybe. Likely? No. What is certain is that this rate cut will not help bail out any homeowners already feeling the pain this mortgage meltdown has induced.

With investors backing out from risky mortgage programs, more than 150 major US lenders (and thousands of their employees) have been put out of business, and more than a rate cut is needed to save the mortgage market. The major problem I see is that adjustable rate mortgages written 2 years ago or longer are starting to adjust, and the products designed to refinance them have been abolished to meet investor demand. Consumers cannot keep up with rising monthly payments, and foreclosures continue to mount. While many lenders are trying to assist people and prevent foreclosure, the pressure from market circumstances is proving to be a formidable foe.

Those with loans higher than $417,000 (FNMA limits) are also feeling the pain, privy to sky-high interest rates based on the collapse of sub-prime lending, and are suffering with unaffordable programs. Those with less than perfect credit are forced into FHA programs since the sub-prime industry has all but disappeared. FHA has a current loan insurance cap of just under $363,000. The likely solution will be increased loan limits to accommodate those with expensive homes financed with adjustable rates over the past few years. Sadly, the limits will likely not be raised enough to have a drastically beneficial result.

Also, as borrowers find it harder to obtain loans, sellers find it more difficult to sell homes. With record-high inventories, home appreciation has come to a halt, causing those who financed 100% of their home to be in trouble, especially if coupled with an adjustable rate mortgage. The 100% financing program is all but gone, so these people have nowhere to refinance. Lenders need to regress, again including more diverse loan products to balance their past 5 years undoing of the market. Someone needs to accept a potential monetary loss on risky loans to get everyone affected by this market into a fixed rate, stable situation.

To avoid the impending recession many analysts are forecasting, I believe it’s going to take a perfect plan from lenders, investors, and our government coming together with new programs, and applying their focus more towards educating borrowers and helping people in need than making the almighty (but losing strength after the rate cut!) dollar.

So the Fed has cut rates.  The stock market has taken off (as expected), and mortgage bonds have surprisingly held steady for the time being.  So what does this really mean to consumers and the overall mortgage market?  Well, to start with, the prime rate has gone down, which should lower everyone's credit card rate, in addition to the rate on home equity credit lines.  That should offer some relief to consumers, but I don't expect consumers to see an extremely great benefit to this move.

The Fed cut the rate at which banks borrow money, not consumers.  Oftentimes, this causes a surge in stocks, which steals traders away from the mortgage bond market, negatively impacting the price of mortgage bonds and raising interest rates.  Another negative aspect of the rate cut is the increased worry of inflation.  With money cheaper, the dollar is at an all-time low compared to its European counterpart, and has lost some ground to the Yen as well.  With cheaper money and more of it available, the Fed needs to carefully monitor the economy for signs of inflation.  While doing nothing would have likely led to a recession sooner than later for the country, the economic landslide may continue regardless of this rate cut, as jobless rates are sky high and continuing to grow, due in large part to the housing market (which I'll discuss in depth in a future blog, when I have A LOT of time to sit down and write). 

Foreclosure numbers are going to continue to rise, as adjustable rate mortgages' rates continue to go up, up, up, there are no available programs for borrowers to refinance into.  There have been over 37,000 foreclosures this year in just PA alone, which is a small chunk, considering there were about 247,000 nationwide reported just in August.  It really is a sad, vicious cycle that will probably continue for a while.  It looks a little bit like this....Investors making good money on a historically great housing market---->they extend more risky programs to more risky borrowers to get more people into homes and more money in their pockets--->low initial interest rate adjustable mortgages are issued in abundanc, even to those with poor credit---->these loans begin to perform poorly and scare investors away--->investor fallout and foreclosure rates put many lenders out of business--->the remaining lenders eliminate high-equity lending programs and raise interest rates to satisfy investors--->borrowers from the past few years cannot refinance when their rates adjust due to the lack of programs available---->unable to cope with rising payments, they foreclose--->lenders continue to lose money, while investors refuse to once again put stock in helping those with shaky credit histories or those with little or no equity in their homes. 

Until fixed rate mortgages are the predominant program in America, this will unfortunately continue, and this is the very base of the mortgage meltdown.  It has caused job losses, decreased economic revenue (as the housing sector is a huuuuge producer...or at least has been in the recent past), home depreciation, and a market which has completely crumbled in less than a years time.

So while the Fed has cut rates, the market roller coaster ride is far from over, and it could even prove to have a negative ripple effect if in fact inflation becomes a concern.  For now, bankers and investors should take advantage of the new found liquidity, and consumers should NOT take this as an opportunity to accumulate more, lower interest, debt.

Where we go from here, we shall see

This article recently appeared in the Fall Real Estate Section of the Daily Local (Published 9/13) and Addresses the recent credit crunch while offering advice to both buyers and sellers in todays tough market:

Weathering the Perfect Storm

John Meussner, Mortgage Loan Consultant

Take one part home foreclosures, a pinch of home depreciation, a ton of unsafe lending practices, and 1 quick hitting credit crunch, then blend together with more than 3.6 million homes on the market, and a historically large builder inventory, and you’ve got the perfect recipe for a market storm that could shake even the strongest countries economy. This recipe has only recently been mastered, and for the first time in history, has resulted in a real estate market collapse being felt by millions of people around the world. Both buyers and sellers have been left looking for answers to not only cope with, but profit in this shaky real estate marketplace.

For those looking to buy a home, all seems well. Home prices are declining, and this means getting a good deal and spending less money on more home. Unfortunately, getting any money to buy a home is becoming more and more difficult due to a recent credit crunch in the mortgage industry. If you are a buyer with great credit, money for a down payment, easy to prove income, assets, and steady employment, then you should be in great shape to purchase a home at a great rate with little trouble. If you fall into any other demographic of borrower (which more than 50% of people do), it may not be so simple. One thing you cannot afford to do is wait. With programs disappearing from lender portfolios daily, it is becoming more difficult for homebuyers to be qualified. If you’re qualified and stating your income, do whatever it takes to buy quickly. The risk of taking your time is not one worth taking.

One other must-do for buyers is a credit check. Buyers should make sure there are no mistakes, or speak with a credit expert about ways to ensure they’re in the best position to get a loan. Once your credit is in order, have your documents ready to go. This means 2 years of W-2’s or tax returns, in addition to recent pay stubs, and asset documents. Once in order, ensure you’re qualified for a loan, and find your perfect home at a great price. There may be little competition from other qualified buyers with the real estate season coming to an end (summer and spring are the busy times of year), so you’ll have more leverage in bargaining on things such as price and sellers assistance. Having a seller pay a portion of closing fees or paying for appraisal, inspections, etc. is one advantage that a buyers market offers and should be taken advantage of.

In such a buyers market, there are things sellers can do to make life easier and get what they want from their home. First and foremost, realize that you’re probably not going to get 10% more than what your home is worth. Asking this price is fine, but leave plenty of bargaining room. Research sales of comparable homes in your area or have an appraisal, and price accordingly.

In addition to price, one thing many wish for is a quick sale. This can be accomplished more effectively by speaking only to qualified candidates. Don’t waste time showing your home to people who aren’t qualified, and save the time and headache of taking your home off the market only to realize your “buyer” was turned down for financing. Using a qualified realtor who will work hard for you is another time saver and may improve your chances of getting a qualified person in the door. Also, if you plan to make a purchase after your sale, make sure you’re a prepared buyer before selling!

Remember, people are still buying homes, and sellers don’t have to give their homes away. With proper bargaining, fair pricing, and using pre-qualifications, the process can be stress-free and easy going. If you have any questions, contact a professional for assistance, or look for information online. There are wonderful free online tools, and these coupled with the tips above can help buyers and sellers succeed through the perfect market storm.

Hey folks.  Time to address something that is on everyone's mind when shopping for a mortgage.  Fees, closing costs, and rates.  It seems these days few people understand how the mortgage business works, and many people seem to want the exact same thing...great service, the lowest rate, and no closing costs.

Before I get started, if you are one of my valued clients (and if I've done a loan for you, or have worked with you, chances are that you fit into this group!!) please dont worry about this blog.  Chances are you either understand the business, understand the term "value", or have clearly seen the difference between doing business with the lowest bidder compared with a true mortgage professional.

So here goes.  There are HUGE companies out there.  I mean GIANTS.  You see their advertisements everywhere-- online, on billboards, on TV, in the mail--and you probably see at least one of them everyday.  A little enlightenment on how these companies operate (for the most part)....they generally hire inexperienced individuals, run them through a pre-set training schedule, then put them out there to handle your financial future.  Often times, these are appealing lenders simply because of name recognition or the fact that they have low rates and low fees.  Often times, you sacrifice service and the knowledge a true mortgage professional can offer, and the few hundred dollars you save up front gives you headache for years, and whats worse, can cost you more in the long run.  Also, banks...banks dont charge points...whats with that?  Well, as of right now I can offer a 6.5% and the lender will pay me almost a full point...without a client ever seeing this point, except for in very small print on their final HUD.  A bank I was competing with tonight offered a potential client a 7.125% with NO origination fee!!!! AMAZING!!!!  A 7.125% I give today pays 2.6 points on the same loan.  On a $325,000 loan, thats $8,450...looks like closing costs to me.  And if this loan were to be held onto for a long time, you can assure yourself you'll be paying MUCH more than the "closing costs" you saved on in the higher interest rate.

When you pay a fair price up front for the lowest available rate on the market, you save in interest over time, or if you plan on your loan being short-term, take a slightly higher rate to save up front costs.  A true mortgage professional will know what will benefit you the most for both the short and long-term.  Also, please dont ever, ever, ever take the "low rate, no closing cost" lender.  If it sounds too good to be true in this business...it is.  I've had so many clients return to me after going to a cheaper competitor and wasting a month of their time and a ton of paperwork to be turned down, losing money on an appraisal, and sometimes even hurting their credit in the process.  There is no such thing as a free mortgage...there are always 3rd party fees (Uncle Sam has got to make something!), and a real mortgage professional who is putting in time and the best possible effort to ensure a bright financial future for you...isn't going to do it for free.  I may not be the cheapest mortgage professional to use, but I can guarantee you get a great deal on what you get.  I provide the best product I can for each client's individual situation, help plan for future goals, whether it be investments or retirement or kids going to college, and Im very (sometimes brutally) honest about programs available and whats going on with every step of the process.  For those of you who have had a question at 7am on a Sunday or 11pm on a Wednesday evening also know that I'm available 24/7 to my clients, if no immediately, within a few hours at most. 

This may seem like a rant, but Ive gotten a few calls tonight for people looking for the 6% 30-year fixed rate mortgage with no points and extremely low closing costs, and it dawned on me that many people may not realize that they're asking, unfairly, for the impossible, and not giving anyone a chance to help them, save the unethical professional who will quote lower than they can give in order to bait and switch someone.  There is no such thing as perfect deal without spending a penny.  What there IS readily available through myself and Stonebridge mortgage, is great mortgage products with service from professionals who know and follow the industry, at a very fair price.  If thats not what you're looking for....I wish you the best of luck with whoever you choose.