Author Archive

Beware if your Adjustable Rate Mortgage is LIBOR Based!

May 26, 2010

Everyone has read it in the newspapers and heard it on the television, the debt and banking problems of Greece, Spain and Europe. Everyone wonders how it will affect the United States or more importantly, me! The affect has been positive on the United States mortgage rates because everyone is moving their money to US debt since it looks to be much more stable than European debt.

If you are a homeowner and enjoyed the wonderful low rate of an adjustable rate mortgage, be very careful. If your ARM is a LIBOR arm, all indications is your rate will be increasing very soon. The LIBOR is Europe’s equivalent of the Treasury. As the European banking system continues to struggle, the LIBOR will continue to increase to take into account the risk associated with the potential of default of debt. In the short-term, borrowing costs are climbing faster for European banks than American and the cost of insuring against default on debt issued by European financial firms is climbing.

The possibility exists this event could have significant upward pressure on the LIBOR rates which will result in you LIBOR based ARM to increase in the next adjustment period. If we have a catastrophic event occur in Europe’s banking system, it will significantly affect your LIBOR based ARM. Do miss out on the opportunity to refinance your home on a fixed rate mortgage while rates are low. A storm looks to be brewing in Europe that could affect your payment.

What is going on in the mortgage industry?

January 6, 2010

As many of you are aware the lending/mortgage industry has been going through a tremendous amount of change over the last year.  The changes have greatly affected all aspects of the mortgage industry and additional regulation is going to occur over the next 12 months.  Here is a brief recap of the last 15 months:

–          Fannie Mae and Freddie Mac tightened underwriting guidelines and increased fees (which increases interest rates for consumers) based on property type, credit score, loan type, and loan to value ratios.

–          Home Valuation Code of Conduct (HVCC) went in affect which requires a third party management company to manage the appraisal process.  This has actually increased the cost of the price of the appraisal to the consumer and has made it more difficult to get a house to appraise for a refinance or purchase.

–          Mortgage Disclosure Improvement Act (MDIA) went into affect and requires additional disclosure and an increased waiting period when a consumer wants to purchase a home or the loan scenario changes.

–          Safe Act will be implemented over the next few months by Federal and State mortgage agencies.  This will require loan originators to take 20 hours of education, pass a federal test, pass a state test, pass federal background check, and have good credit.  It is estimated this act could eliminate 25-40% of the mortgage originators in the industry.

–          FHA eliminated down payment assistance and requires home owners to put 3.5% down to purchase a home through the Federal Housing Authority.

–          The Real Estate Settlement Procedure Act (RESPA) will change at the beginning of 2010.  The government changed the act in hopes to make it less confusing for the consumer.  The changes include a new good faith estimate turning a one page document into a 3 page document.  The hopes by the government are the 3 page document will be less confusing then the current 1 page document (more on this topic from “the mortgage blog” coming this week!).

–          Congress just passed a new bill called the Consumer Financial Protection Agency which still has to pass the senate.  This bill will eliminate some of the changes discussed above but result in other changes which will require more regulation for this industry.

So what does all this mean?  Well, the pendulum has swung — we have gone from limited regulation to over regulation in a matter of 24 months.  Most in the industry are uncertain if the changes are good or bad for the industry.  I am certain in the future, it will be a smaller industry, with less competition, higher credit standards, and higher costs to the consumer.  So if you know somebody in the mortgage industry, give them a hug or a referral they sure could use it!  Better yet, if you are in Georgia, give us a call (hug is very optional).

Real Estate Crash or Opportunity?

July 21, 2009


Well, it is safe to say it has been an interesting year to say the least. Everyone working in the real estate market has most likely worked harder, spent more money to be successful and ultimately made less money. I cannot tell you how many times I hear people say, “I do not know what to do” or “I am not sure this is the right industry for me anymore”.

I feel this is the greatest opportunity that has ever existed in the real estate market in my lifetime for a real estate agent or mortgage professional. Competition is dwindling and the market is looking for someone to stand up and lead us to the future.

Well Dunwoody Mortgage Services is here to do just that!

First, we are going to bring nationally recognized speaker Dan Ervin to speak to real estate agents. Dan will share several compelling strategies to increase your business and succeed despite the adversity we all face. This is FREE. Yes we are bringing Dan to Atlanta to help you sell more homes, find more clients, and make more money.

Dan will be speaking on August 20, 2009.

The Piedmont Bank — 1035 Old Peachtree Road NW, Lawrenceville, GA 30043-3309

1:00 PM – 3:00 PM

Please RSVP to

Seating is limited so please respond soon.

Second, during our time on the 20th, Dunwoody Mortgage Services will spend ten minutes reviewing an information platform we are rolling out to real estate agents. This platform will keep real estate agents informed in real time as to the exact status of their clients’ loans via email. You will no longer have to spend time calling loan officers or processors to get an update!

Third, Dunwoody Mortgage will continue in our comittment to helping our Realtor partners be successful.  To be successful in down times it is important to remember what makes people excel in anyindustry — this GREAT advice is from Rick Neuheisel, head coach of the UCLA Bruins football team, who I had the pleasure of listening to and learning from this past week.

Advice to remember and to live by . . .

Ccommitment: you must be 100% committed and complete every detail so when someone else looks at your work, they say, “wow, this is someone on want to be associated with in the future”.

Attitude: the glass needs to always be half full and avoid the half empty people.

Responsibility: you must take responsibility for every action you perform and complete everything you promised to your clients.

Enthusiasm: have fun and let people know you are having fun.


Hope to see you on the 20th!