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Citation Details
Title: Today’s mortgage market: an owner’s perspective. (Executive Essay).
Author: Robert S. Nelson
Publication: Mortgage Banking (Magazine/Journal)
Date: July 1, 2003
Publisher: Mortgage Bankers Association of America
Volume: 63 Issue: 10 Page: 83(2)

Distributed by Thomson Gale

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I’m purchasing a home and have resisted locking in the rate as long as possible. My mortgage consultant is insisting I lock in either today or Monday. Which would you do if it were you?

* I’m especially curious whether the Fed Chairman’s speech today would affect rates at all.

I realize no one knows for sure, but I would really appreciate you giving your best guess.

Lock in now, long term loan rates are going up.

I often get questions from potential investors about the basic functions of a mortgage fund (aka a mortgage pool). Therefore, I’ve decided to write about mortgage pools in general to clear up any misconceptions.

Mortgage pools are securities that are required by state and federal agencies to provide complete and full disclosure through an offering memorandum. A mortgage pool is a collection of capital contributions from many investors and is usually in the form of a limited liability company that sells shares. The investment pool of capital is then used to purchase a number of different loans, which are commonly called mortgages or trust deeds, and secured by real estate.

There are basically three ways to invest in mortgages, and regardless of a person’s real estate or investment acumen, there is a mortgage investment option available today that fits their investment portfolio. The three ways are: funding a mortgage directly, participating in a multi-lender or syndicated specific mortgage, or by investing in a mortgage pool.

The purpose of a mortgage pool is to create a long-term investment vehicle that provides for the fund’s management and a favorable rate of return to investors, while providing them with a diversification of risk and stability. Also, mortgage pools are redeemable on relatively short notice so they offer more liquidity than a direct mortgage or syndication.

For investors who don’t have the real estate expertise and don’t want to commit the time and energy to learn, the best route is to find a company that offers mortgage pools, like The Grace Fund LLC. These companies employ the services of a manager and administrator of the mortgage pool on the investor’s behalf who furnishes the investor with a monthly statement to keep them informed of their account balance, current yield and other details. The mortgage fund manager is paid a modest fee to research the proposal, make the lending decisions and handle all of the payments and administration. Fees earned by the manager are not paid by the investor, but rather a percentage of the income earned on the mortgages and servicing fees charged to the borrower.

These mortgage pools work through a four-step process: 1) investors purchase shares of a company; 2) the company purchases a number of qualified trust deed investments or mortgages; 3) the trust deeds and mortgages provide a return to the company and; 4) the company distributes a return to the investors from monthly cash flow, or growth through a Distribution Reinvestment Plan instead of taking a monthly payment.

Investing in the mortgage market can be a solid option for investors who want to benefit from the commercial real estate market without actually buying real property. In the past couple of years, returns of 10% to 12% or more in mortgage pools – compared to 3-4% for more mainstream investments – have been common. The pool is continuously managed with a primary objective of securing new mortgages to replace mortgages that mature, thus insuring investors a steady stream of passive income.

Monthly income from most mortgage pools usually varies as interest rates change or when mortgages are paid off. The returns to investors from the mortgage pool would follow market interest rate increases or decreases. The investor in a mortgage pool earns a blended rate of return on investment based on the interest earned from each respective mortgage. However, in the case of an investment in The Grace Fund, monthly distributions of 1.25% (15% annualized) are made to investors. To achieve the higher return, the Grace Fund mortgages are fixed at 15.5% annual interest to the borrower, an affiliate of Grace Realty Group. The higher rate reflects a premium to distinguish The Grace Fund from the many competitors vying for investor dollars in the marketplace.

I believe the most convenient, effortless and safest method for the average investor to invest in a debt instrument is through a mortgage pool. They pool their money by buying shares in the fund, and the interest earned from the mortgage payments received from the borrowers becomes income for the fund. All income earned is distributed to shareholders according to their proportional interest. Simple.

Similar to a mutual fund, a mortgage pool provides a vehicle to diversify a portfolio of investments – in this case, mortgages instead of stocks or bonds. Investing $50,000 in a mortgage pool consisting of 25 loans valued at $15 million provides better security through diversification than a $50,000 investment in a single loan secured by a single property.

Unlike a mutual fund, mortgage funds are secured by real estate and not subject to the same volatility as the stock market. Most mortgage pools are backed by well-underwritten and well-secured real estate loans. This is particularly true when the mortgages are secured by property that is financed at a very low loan-to-value ratio. To further mitigate risk, additional security is realized when the borrower purchases properties at a price far below their replacement cost with considerable value-added possibilities (buy low, fix up and sell strategy).

Another advantage to mortgage pools is that they are very suitable for most tax-deferred savings accounts including IRAs and 401ks, making them a good fit for future retirees or anybody else on a fixed income. An investment in a mortgage pool should be considered for inclusion in every serious investor’s portfolio.

Doug Mitchel
http://www.articlesbase.com/real-estate-articles/mortgage-pools-jump-in-the-waters-fine-695167.html

There are certain loans for all types of property. One particularly interesting type of loan is a commercial mortgage loan to the owner of the property occupied. An owner of the property occupied is defined by the financing of capital Griffin (national leader of commercial mortgage loan services) as:

A property owner where the company holds at least 51% of the property.

Many business owners prefer to own the property that your business is located, as it gives them the ability to control its costs and earn some fiscal balance write. People in search of these commercial mortgage loans can be any type of business you want to control where and costs about their location. Apartment complexes, farms and mines are considered related to the investor and the properties do not normally qualify as owner-occupied, even if the owner lives in the house.

Commercial mortgage loans are usually produced by terms ranging from 5 to 30 years. Applicants are required to have an initial payment of at least 25% of total loan closing costs. Closing costs typically include assessment, environment, and inspection points and can usually run between $ 6000 to $ 12,000. Unless the plaintiff has challenged credit or other problems to the credit institution, their homes or other assets as collateral are not required. Any commercial loan applicant must be willing to provide the documentation the bank could require, including personal and corporate taxes, as well as the financial statements and a credit report on the borrower.

The companies that are trying to get owner occupied commercial mortgage loans should contact a commercial mortgage lender described Griffin as capital funding to discuss their particular situation. Keep in mind that the rules and regulations as well as interest rates and other policies related to the loan vary by lender and state. Be sure to contact commercial mortgage loan experts and report to you before applying for a commercial mortgage loan.

There are a much smaller number of lenders that offer commercial mortgage loans at a reasonable price and the conditions that exist today even 6 months ago to do their due diligence and in contact with a company that has a good reputation in the market.

Pro Bargain Hunter
http://www.articlesbase.com/mortgage-articles/commercial-mortgage-loans-for-owner-occupied-properties-674570.html

Hi ,

A Colorado mortgage refinance loan is often a good choice that can allow you to meet a variety of needs. With a mortgage refinance loan you can reduce your monthly payments by reducing interest rates or extending the mortgage term. With a Colorado mortgage refinance loan you can convert from an adjustable-rate to a fixed-rate loan or to other loan products. Another popular benefits with a mortgage refinance loan, many free up cash for major expenses or to consolidate high interest debt. Colorado Mortgage refinancing refers to applying for a secured loan intended to replace an existing loan secured by the same assets. Get a Colorado Mortgage Refinance Loan Now . The most common refinancing is for a home mortgage refinancing. Certain types of loans contain penalty clauses triggered by an early payment of the loan, either in its entirety or a specified portion. If you’re only going to be in your home for a few more years, it may make sense not to refinance out of your ARM. If you’re going to be in your home longer than seven years, it might be a smart move to refinance to a fixed-rate mortgage.

The mortgage rates in the country are almost at their lowest ever, so don’t feel cheated on being locked into your present high interest mortgage scheme. With a Colorado mortgage refinance, you now have the chance of refinancing your present mortgage plan to take advantage of the falling interest rates. For More Information on Colorado Mortgage Refinance Loans For instance, if you have a 15-year mortgage, you can lengthen the term to 30 years. Since the balance of your mortgage is spread out over a longer period of time, your payment is lower. However, if you have a 30-year mortgage and one of your financial goals is long-term savings, you may want to consider shortening your term to 20 or even 15 years. With the advantage of the Colorado mortgage refinance loan, you can save thousands of dollars now and during the entire course of your loan period. Also, some refinanced loans, while having lower initial payments, may result in larger total interest costs over the life of the loan, or expose the borrower to greater risks than the existing loan. Calculating the up-front, ongoing, and potentially variable costs of refinancing is an important part of the decision on whether or not to refinance such as raising property tax after refinancing which varied by regions.

Request your competitive refinance quotes today with no cost and no obligation. From perfect to poor credit. When you refinance your mortgage, you usually pay off your original mortgage and sign a new loan. With a new loan, you again pay most of the same costs you paid to get your original mortgage. Traditionally, the decision on whether or not to refinance has meant balancing the savings of a lower monthly payment against the costs of refinancing. But in recent years, companies have introduced “no cost” and low cost refinancing packages that minimize or completely eliminate the out-of-pocket expenses of refinancing.

Compare free no obligation Colorado Mortgage Refinance
loan quotes from multiple Colorado lenders. Try to find you the best Colorado mortgage refinance loan rates available, even with less than perfect credit.

Renold
http://www.articlesbase.com/mortgage-articles/colorado-mortgage-refinance-loans-75195.html

I was once in your situation. Don’t worry, everything will work out for you =)

A year ago I found this organization that gives people up to $1500 in renter or mortagage assistance! They operate in most US cities, I highly suggest you try to get some of this money.

http://www.help-my-house-mortgage.org

Good Luck!

What should owners of homes know about dealing with today’s economy? The new words of “Short Sale”, “short refi”, “Loan Mods” and “Loan Mortgage Modification” are new terms that homeowners never thought they would need to hear or understand what they mean in order to possibly save their homes or their credit. No one planned for such a drop in home values and such a rise in costs.

With all the new terms and with all the sever changes in this economy, it is no wonder that homeowners fear doing anything when they are faced with financial hardship. Homeowners need not longer fear these terms and more importantly understand why loan modifications and short sale refinancing may make the difference between a homeowner keeping their home, avoiding bankruptcy and saving their credit.

We all heard about the great “bailout” of 2008 which congress passed that was to help control the foreclosure problem while encouraging new lending of home loans by banks and mortgage providers. We all heard both the pros and the cons with our government bailing out several banks, insurance companies, financial institutions and etc. However, the biggest pro for homeowners will come from this bailout. The pro is that mortgage companies are now starting to stop foreclosure sales, short sales and going back to the owners to modify their loans so to allow them to keep their home irrespective of their failure to pay their mortgage payments. Therefore, debtors will begin to see an order of process for homeowners to fight to keep their homes in these unprecedented times of financial suffering.

A loan modification will be likely the first step for homeowners to consider. A loan modification is simply a homeowner asking the mortgage company to modify the current terms of their mortgage. Homeowners will ask a mortgage company to modify their mortgage because of being late on payments, variable interest rates, too high of monthly mortgage payments and etc. Homeowners can seek this relief on their own directly with the mortgage company. However, the process is very time consuming and often frustrating for a homeowner. It recommended that you hire a law firm to help get you through the process.

If a homeowner cannot pay the loan modification that was negotiated with the mortgage company, a Short Sale may be the next option. A Short Sale is simply the sale of a home for less than the value of the mortgage owed on the property. It is no secret that most home values are much less than homeowners purchased their homes. Short Sales are a good option if the homeowner simply does not want to save their home and needs to get out from underneath the debt of the mortgage. The best part of a Short Sale for the homeowner is that any amount due owing to the mortgage due to the shortness of the sale the homeowner is released from liability coupled with a release of tax liability pursuant to the 2007 mortgage forgiveness relief act.

One very important point is that mortgage companies today are requiring that loan modifications be conducted first and attempted by the homeowner before they will even consider a Short Sale.

What is the gist of the forgoing? If you are struggling with debt; if you are inundated with creditors calling; if your home is in jeopardy of foreclosure, or simply feel overwhelmed by your financial responsibilities, there are a number of potential debt relief solutions at your fingertips.

As always, all situations relative to a strategy for bankruptcy and lien stripping should be discussed in detail with a bankruptcy attorney to understand all your avenues open to you.

Michael Goldstein, Esq.