patrick.net

The safest thing to do is to have no debt at all.

Then you avoid all those problems.

Especially if it costs less to rent a place to live than rent money for a place to live. Renting money = paying interest.

Which means you don't have to pay it back! Until the robo-signing re-starts.

Try zillow.com, and search their mortgage section. They have reviews for all the lenders on the site.

RedStar says

Try zillow.com, and search their mortgage section. They have reviews for all the lenders on the site.

Like the reviews may not be cooked. RE industry is rigged. :)

Credit unions (which are not for profit) often retain ownership of the loans they write.

My current loan is owned and serviced by the CU which originated it; and one before this was owned by the credit union although they farmed out servicing to some other organization.

There's generally some affiliation requirement for membership, although it can just be living or working in a certain area. For instance Provident is open to people in most if not all of the SF Bay Area, LA city, Sacramento county, and a few other places in California. In Colorado I belonged to the CU (University of Colorado) credit union originally open to students/faculty/employee but later opened to people in the surrounding counties plus a few other cities.

Cut out all the middle men and just drive up to the discount window at the Federal Reserve where they print all money that exists(or ever will) into existance.

There will be a line at the drive through so make sure to peek inside as you approach the building to see if the inside line is shorter than the drive through line (if so park and walk inside to save a min or two of waiting for the free money).

They are lending it at .025% or maybe zero (depends on the day of week). Make sure to pay this money back with even larger 'loans' you get from them in the future - if you dont you might accidentally pay for something with earned income.

I am going through the same process. Its been a few years since I last bought in the good ol days before the bubble, but it seems the whole housing industry is filled with more sharks and middle-men than I remember.

Just think from the moment you decide you want a house, all the people who you may meet, all of whom want to provide some shitty service to intercept some of your money:

2 Realtors, attorney, escrow company, title company, mortgage brokers, banker, inspectors, surveyors, appraiser, insurance agents....the list is never ending. And god forbid you want to do some improvement and open yourself up to that sub-industry.

Anyway, any of these are potential leeches....to answer your post though, there are good books explaining the game. A great one for the mortgage mess i found "Mortgage Rip-offs" I highly recommend, but there are others.

Good luck

Having no debt is the safest path is saying that all the capital markets are dumb and you are the smartest person in the world! Debt is a good thing if used wisely. Do not over leverage yourself and try to get a good rate. Right now you can get a home loan for 4.0% and inflation is around 3.0%. Combine this with a mortgage interest deduction, you will at least be getting a free loan or making money on your debt.

Having no debt is obviously safe. Your house cannot be repossessed by the bank if you don't owe the bank.

Yes, sometimes it makes sense to borrow money, but even if you get a loan for 4%, you still lose big time if you overpay for the house.

Compare the cost of owning (renting money) to the cost of renting the house. Then you'll know what to do, at least from the financial perspective.

Disclaimer: I'm in the business.

Low or no debt preferred.

Credit unions are great, but make sure the credit union is lending their funds. Some CU "in house lenders" are really mortgage bankers that have nested within the CU because the CU doesn't have the knowledge base to fund and service loans made from their asset base.

Ask around. Someone can give you the name of a mortgage professional out there who treats the business as a career, not as a pathway to temporary wealth. That person may shepherd you well through the mortgage maze as they did for the person who referred them to you.

Current Yelp! reviews are another good resource. Plenty of lenders on Yelp! but their last review was 3 years ago which gives them an "A" rating - "A" for "Avoid".

My .02c

SGIP

Having no debt is obviously safe. Your house cannot be repossessed by the bank if you don't owe the bank.

Yes, sometimes it makes sense to borrow money, but even if you get a loan for 4%, you still lose big time if you overpay for the house.

Compare the cost of owning (renting money) to the cost of renting the house. Then you'll know what to do, at least from the financial perspective.

Well, renting a 3bdrm 2 ba house right now in silicon valley costs about $2700. A monthly payment on a similar home (including interest, principal, tax and insurance) is about the same.
I'm less worried about buying the home more so about being another victim to these lenders.

Thanks for all the advice everyone.

nspiratn says

Well, renting a 3bdrm 2 ba house right now in silicon valley costs about $2700. A monthly payment on a similar home (including interest, principal, tax and insurance) is about the same.

I don't see them being close to equal at all. Only if you forget about the 20% downpayment, the upkeep, the property tax, insurance, and then over-inflate the tax deduction. I guess, then you can get close to equal. ;)

Saga continue. Home or house is a place to live, raise family and live a retired life. However, this concept has chnaged to buy a home, it in ATM, tap it for equity, sell it for retirement and make profit any time. lets do the math.
No matter which time you buy or sell home, if you paid the house by 30 year mortgage, the price you paid is double the amount you thought I mean 100,000 is 200,000. Now add property tax about 2000 x30= 60,000 over thirty years. Add tax, insurance and others may be add another 40, 000. So you pay, 3 times over the thirty year.
Are you still thinking it is brighest idea to but home?
So lets all plan it as a place to live, raise family and pass it to next generation.
However, for all those who stand to lose from this concept, have poured more money into let us think otherwise.
Ever, wondered, what is average price for home in NY . Average is 500,000 to 700,000 for a home. To qualify, you need 150,000 income. Question is,? everybody is making more than 150,000 in NY or I am dreaming????

The safest thing to do is to have no debt at all.

Then you avoid all those problems.

That is what we did, no regrets either. Never paid a dime in interest for our place.

nspiratn says

Is there a site somewhere that can tell me which mortgage lenders are the safest to go with?
With all the horror stories that I've heard around robo-signing and lenders selling loans to secondary lenders and scary fine-print scams, I've become really skeptical about ALL lenders.

This may be the MOST IMPORTANT question on PATRICK.NET. The banks ARE the gubmint. They make the rules. We may never trust either ever again.

Whether or not you bought real property during the bubble....

suny74 says

Ever, wondered, what is average price for home in NY . Average is 500,000 to 700,000 for a home. To qualify, you need 150,000 income. Question is,? everybody is making more than 150,000 in NY or I am dreaming????

When I was living in Santa Rosa, CA in 2006 I was wondering the exact same thing. It turns out there was a lot of "creative" financing going on at the time.

drew_eckhardt says

Credit unions (which are not for profit) often retain ownership of the loans they write.

My current loan is owned and serviced by the CU which originated it; and one before this was owned by the credit union although they farmed out servicing to some other organization.

There's generally some affiliation requirement for membership, although it can just be living or working in a certain area. For instance Provident is open to people in most if not all of the SF Bay Area, LA city, Sacramento county, and a few other places in California. In Colorado I belonged to the CU (University of Colorado) credit union originally open to students/faculty/employee but later opened to people in the surrounding counties plus a few other cities.

My CU said they sold the notes right away though.

Any of the big banks are "safe" from the standpoint that they've all corrected their messes. And "robo-signing" didn't really impact anyone who wasn't in foreclosure. I'm assuming you are going for a standard FHA or Fannie-Freddie loan, so it doesn't really matter what bank you use, they are all selling you the same product.

There are some mortgage brokerages that survived who can be very good and could possibly get you lower rates.

Are you in the Bay Area?

APOCALYPSEFUCK is Tony Manero says

gregpfielding says

they've all corrected their messes

Hahahahahahahahahahahahahahahahahahahahahahahahahahahaha!

And Charles Manson has found Jesus!

Hahahahahahahahahahahahahahahahahahahahahahahahahahahaha!

ROTFLMAO.

bubblesitter says

APOCALYPSEFUCK is Tony Manero says

gregpfielding says

they've all corrected their messes

Hahahahahahahahahahahahahahahahahahahahahahahahahahahaha!

And Charles Manson has found Jesus!

Hahahahahahahahahahahahahahahahahahahahahahahahahahahaha!

ROTFLMAO.

LOL!

APOCALYPSEFUCK is Price Less.

Hmmmm.... $10,957 closing cost for a $440,000 loan?!

Origination charge $3,195.00 - Is this normal?

Appraisal Fee $500.00
Credit Report $55.00
Flood Certification $12.25
Tax Service Fee $65.00
Wire Fee $20.00

Title insurance - Do we need both a lender's AND an owner's title insurance?
Title services and lender's title insurance $1,757.80
Owner's title insurance $629.00

Transfer taxes $2,420.00
Daily interest charges (2 days at 49.7260 per day) $99.45 - I assume this will change depending on the closing date

Homeowners insurance (Hazard Insurance Premium) $1,374.96 - Seems high? Isn't this usually around $800?

Thoughts anyone?

nspiratn says

Hmmmm.... $10,957 closing cost for a $440,000 loan?!

Origination charge $3,195.00 - Is this normal?

Appraisal Fee $500.00

Credit Report $55.00

Flood Certification $12.25

Tax Service Fee $65.00

Wire Fee $20.00

Title insurance - Do we need both a lender's AND an owner's title insurance?

Title services and lender's title insurance $1,757.80

Owner's title insurance $629.00

Transfer taxes $2,420.00

Daily interest charges (2 days at 49.7260 per day) $99.45 - I assume this will change depending on the closing date

Homeowners insurance (Hazard Insurance Premium) $1,374.96 - Seems high? Isn't this usually around $800?

Thoughts anyone?

Whatever quote you are getting now before you sit down for that closing meeting will not mean one red cent. All the quotes will go up, and the descriptions of the services will be changed. This is done so you can't compare and complain.

You will see additional items like:

Copy fees
Documentation fees
Courier fees
application fees
IjustScrewedYou fees
etc. etc.

Go ahead, try to bring in your quotes to the meeting and see what happens. I once has the closing agent tell me that $2000 over the quote I was given to close was actually really good.

Bunch of crooks.

Don't forget the fee-processing fee...

Here's are a couple of more kicks in the gut that i found out about today -

From what I understand, if a buyer is putting down MORE than 20% down, but LESS than 25% (so between 20-25%), mortgage lenders add a "risk fee" which is a 0.25% of your loan amount. Why exactly do they do this?! What risk do you have from an owner that has stellar credit, is responsible enough to put 20% down and actually has the income to comfortably afford the monthly mortgage payment?

Also, I learned about negative/rebate points today - Basically cash back to use for your closing costs - and that lenders are not legally required to disclose this to the buyer. BUT, mortgage brokers are required to disclose these negative points to the buyer. So if I don't want to be screwed over by the lender, my only choice is to work with a broker (and pay broker fees). How is that fair?!

So overwhelming! The more i learn the more I dislike this mortgage lending business.

RentingForHalfTheCost says

Whatever quote you are getting now before you sit down for that closing meeting will not mean one red cent. All the quotes will go up, and the descriptions of the services will be changed. This is done so you can't compare and complain.

Oh really?! The lender I talked to said that the costs will be LOWER than this estimate I got... just lovely!

nspiratn says

RentingForHalfTheCost says

Whatever quote you are getting now before you sit down for that closing meeting will not mean one red cent. All the quotes will go up, and the descriptions of the services will be changed. This is done so you can't compare and complain.

Oh really?! The lender I talked to said that the costs will be LOWER than this estimate I got... just lovely!

If you go through it and it comes out less, then please report back. I was told by my manager at the time in 2003 to take a few shots of whiskey to dull the pain. It definitely helped after seeing the shady practices of all the players. They know you are emotionally attached to the asset already and try to play you like a deck of cards.

My next closing meeting I attend (not until around 2014-2015) I will make sure I have the mindset to walk out if things don't appear like they were quoted. I think my wife will actually walk out before me, which is good to know.

nspiratn says

Hmmmm.... $10,957 closing cost for a $440,000 loan?!

Origination charge $3,195.00 - Is this normal?

Appraisal Fee $500.00

Credit Report $55.00

Flood Certification $12.25

Tax Service Fee $65.00

Wire Fee $20.00

Title insurance - Do we need both a lender's AND an owner's title insurance?

Title services and lender's title insurance $1,757.80

Owner's title insurance $629.00

Transfer taxes $2,420.00

Daily interest charges (2 days at 49.7260 per day) $99.45 - I assume this will change depending on the closing date

Homeowners insurance (Hazard Insurance Premium) $1,374.96 - Seems high? Isn't this usually around $800?

Thoughts anyone?

That quote sounds like you are paying the sellers fees as well. Transfer, title, title insurance... most of that is sellers responsibility.

Origination fee that sounds high too, why pay someone so much for filing paper work?

You should come back and tell the seller to pay both his and your closing costs.

RentingForHalfTheCost says

Whatever quote you are getting now before you sit down for that closing meeting will not mean one red cent. All the quotes will go up, and the descriptions of the services will be changed. This is done so you can't compare and complain.

This is false. Read up on RESPA rules for HUD Good Faith Estimates. The fees listed will not go up and are the max that will be charged - often they will be lower at closing.

I bought and sold in 2010 and my GFE was much higher than actual cash required at closing.

eclipxe says

RentingForHalfTheCost says

Whatever quote you are getting now before you sit down for that closing meeting will not mean one red cent. All the quotes will go up, and the descriptions of the services will be changed. This is done so you can't compare and complain.

This is false. Read up on RESPA rules for HUD Good Faith Estimates. The fees listed will not go up and are the max that will be charged - often they will be lower at closing.

I bought and sold in 2010 and my GFE was much higher than actual cash required at closing.

Not false in the sense it happens to me everytime I purchase a house (5 so far in my life). False in the sense it should not happen, I agree. That is why I call them crooks.

So, am I the only one that gets closing cost shock? Eclipxe seems to imply that all is good in the closing meetings and you might actually get a rebate. I have all the records of the quotes I received and the final closing costs and they never match. You can never even compare them because they change the names. I'd love to hear from other that had similar experiences as mine. I'm guessing Eclipxe is on the take in this business and after commission rather than speak any real life truth.

Maybe the issue with my false estimate is that I have never bought through HUD. I never took out a mortgage for more than 50% of the cost, so that probably immediately puts me in a class of "people we love to screw over with inflated closing costs". I have literally sat in the closing meeting from 9am to 5pm refusing to sign because the prices were adjusted up from the quotes I got just days before.

RentingForHalfTheCost says

I'm guessing Eclipxe is on the take in this business and after commission rather than speak any real life truth.

Nope, just an engineer.

RentingForHalfTheCost says

Maybe the issue with my false estimate is that I have never bought through HUD. I never took out a mortgage for more than 50% of the cost, so that probably immediately puts me in a class of "people we love to screw over with inflated closing costs". I have literally sat in the closing meeting from 9am to 5pm refusing to sign because the prices were adjusted up from the quotes I got just days before.

Maybe. Maybe it was timing. I'm guessing you didn't buy in 2010 or after, right? I don't doubt that you experienced inflated costs, and that is exactly what RESPA rules put in place to prevent. They went in place in 2010. Your buying experience now should be better.

I could be wrong though!

APOCALYPSEFUCK is Tony Manero says

Hahahahahahahahahaha! Hahahahahahahahahaha!

What about all the people who were mistakenly foreclosed?

And what about people who get struck by lightning or attacked by sharks? Does it happen? Of course. But it isn't going to.

nspiratn says

Thoughts anyone?

It looks like you are paying a lot of costs that they seller would typically pay. Maybe that's how you negotiated your deal.

The "transfer taxes" seem really high... is the property in Berkeley?

eclipxe says

RentingForHalfTheCost says

Whatever quote you are getting now before you sit down for that closing meeting will not mean one red cent. All the quotes will go up, and the descriptions of the services will be changed. This is done so you can't compare and complain.

This is false. Read up on RESPA rules for HUD Good Faith Estimates. The fees listed will not go up and are the max that will be charged - often they will be lower at closing.

I bought and sold in 2010 and my GFE was much higher than actual cash required at closing.

I have closed 3 mortgages in the last year and this is correct. On all three I got big rebate checks after closing. The lenders pad the quotes because under the new RESPA rules they can not jack up the fees at the closing table.

Walter says

I have closed 3 mortgages in the last year and this is correct. On all three I got big rebate checks after closing. The lenders pad the quotes because under the new RESPA rules they can not jack up the fees at the closing table.

Thanks Walter! It's hard coming on here and presenting facts only to be called a shill for the industry.

RentingForHalfTheCost: "I'm guessing Eclipxe is on the take in this business and after commission rather than speak any real life truth."

eclipxe says

RentingForHalfTheCost says

Maybe the issue with my false estimate is that I have never bought through HUD. I never took out a mortgage for more than 50% of the cost, so that probably immediately puts me in a class of "people we love to screw over with inflated closing costs". I have literally sat in the closing meeting from 9am to 5pm refusing to sign because the prices were adjusted up from the quotes I got just days before.

Maybe. Maybe it was timing. I'm guessing you didn't buy in 2010 or after, right? I don't doubt that you experienced inflated costs, and that is exactly what RESPA rules put in place to prevent. They went in place in 2010. Your buying experience now should be better.

I could be wrong though!

Correct, I bought houses during 1997 to 2003. Glad to see the abusive system that was in place then has now been improved. I still don't understand why you need to get estimates at all. Why not have the actual real values before the meeting. Is it that hard to have real guaranteed quotes? I'm sure they are better from what has been said here, but still, like buying any large purchase, can't they give you the real numbers? Stupid if you ask me. What changes tomorrow verses today?

And sorry for the accusation of your being in the business. There are many wolves in sheep's clothing around here, so sometimes I get it wrong. My apologies.

Walter says

The "transfer taxes" seem really high... is the property in Berkeley?

Nope. San Jose.