Why are we one of only 8 states where mortgage people are not licensed??? Can you say LOBBYISTS??!!!!!!

Trust me, every mortgage professional I know wants licensing. They want it yesterday, and desire the licens-ing requirements to be difficult and meaningful.

Imagine that, a mortgage broker or banker who must provide fiduciary duty and put the borrower in a loan that is both “reasonable and prudent”. Fiduciary—Reasonable—Prudent. All words that Certified Financial Planners must adhere to.

So who are these lobbyists representing??? Could it be the Countrywide‟s / DiTechs / Quicken Loans of the world?? The answer is yes and then some. Add whoever has a stake in Internet and Call Center mortgage sales. Do you think these entities would want the expense to train their loan representatives, along with the liability for doling out imprudent loans?? Of course not. How can you stay in business by paying your people $200 a loan if they are professional?? You can‟t. So the victim is the consumer!!

How many people have needlessly paid for an appraisal (the call center mortgage people call it a non-refundable „application fee‟) for a loan that could never have been done?? How many people pay unnecessary points on a loan, just to get to the advertised teaser rates that are usually 1% higher than a more responsible loan with zero points or costs?

Did you know that DiTech‟s (GMAC Mortgage by the way) hiring criteria for mortgage professionals is the following:

** High School Diploma or GED Equivalent

** 6 months of public interaction experience on the job

In other words, a high school dropout who‟s worked 6 months at Burger King can do loans!!! No wonder we‟ve gone from one of the most respected industries to “scum of the earth”.

It is estimated that 1/3 of all loans done in Arizona are done by non-licensed mortgage companies. The majorty of which, a mortgage license bill, just killed, would have eliminated those. Bonding mortgage bro-kers, killed in the prior bill, would have cancelled out another 50%. So we go.

Write or call your local State Senator or Congressman and demand licensing, if it moves you to do so. In the meantime, the market is slowly chafing out the deadweight

 Why Your Credit Score Is So Important

The credit scoring model seeks to quantify the likelihood of a consumer to pay off debt without being more than 90 days late at any time in the future.  Credit scores can range between a low score of 350 and a high score of 850.  The higher the score, the better it is for the consumer, because a high credit score translates into a low interest rate.  This can save literally thousands of dollars in financing fees over the life of the loan.                                                                                                                                                             Only one out of 1,300  people in the United States have a credit score above 800.  These are people with a stellar credit rating that get the best interest rates.  On the other hand, one out of every eight prospective home buyers is faced with the possibility that they may not qualify for the home loan they want because they have a score falling between 500 and 600. 

The Five Factors of Credit Scoring

 Credit scores are comprised of five factors.  Points are awarded for each component, and a high score is most favorable.  The factors are listed below in order of importance.

1. PAYMENT HISTORY-35% IMPACT

Paying debt on time and in full has the greatest impact on your credit score.  Late payments, judgments, and charge-offs all have a negative impact.  Missing a high payment will have a more severe impact than missing a low payment and delinquencies that have occurred in the last two years carry more weight than older items.

2. OUTSTANDING CREDIT BALANCES-30%

IMPACT

This factor marks the difference between the outstanding balance and available credit.  Ideally, the consumer should make an effort to keep balances as close to zero as possible, and defiantly below 30% of the available credit limit when trying to purchase a home.

 3. CREDIT HISTORY-15% IMPACT

This portion of the credit score indicates the length of time since a particular credit line was established.  A seasoned borrower will always be stronger in this area.

 4. TYPE OF CREDIT-10% IMPACT

A mix of auto loans, credit cards and mortgages is more positive than a concentration of debt from credit cards only.

 5. INQUIRIES-10% IMPACT

This percentage of the credit score quantifies the number of inquiries made on a consumer’s credit within a six month period.  Each hard inquiry can cost from 2 to 25 points on a credit score, but the maximum number of inquiries that will reduce the credit score is ten.  In other words, 11 or more inquiries within a six month period will have no more impact on the borrower’s credit score.  Note that if you run a credit report on yourself, it will have no affect on your score.

Remember that the credit score is a computerized calculation.  Personal factors are not taken into consideration when a credit report is generated.  It is merely a snapshot of today’s credit profile for any given borrower, and it can fluctuate dramatically within the course of a week.