My Way Lending

Here are some questions you need to ask first 

As explained last week, a reverse mortgage is a way for cash-poor seniors age 60 and over to turn the equity in their house into spending money. The equity value is the current market value less any mortgage debt still owing.

Great, you say. Where do I sign?

Hold your horses. If you don’t ask the right questions, you can get into something painfully different from what you were expecting.

Remember, this is a loan that will eventually have to be paid back, with interest, by somebody - you, if you move or sell, or your heirs when you die. That’s fine if your ambition is to die on the day you spend your last dollar, but not if you would like to leave something to the next generation or two.

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According to our account resources, Countrywide Home Loans will eliminate all subprime ARM loan products tomorrow for their wholesale partners; leaving only the 15, 20 and 30-year fixed mortgage products available for brokers. This follows on the heals of Angelo Mozilo’s statement that Countrywide is “out of subprime” and marks a massive 180 from an industry built on short-term adjustable rate mortgages for people with less-than-perfect credit histories.

This change eliminates the remaining ARM products such as the 5-year, 7-year and 10-year fixed ARMs that were available after the company moved (along with the rest of the industry) a couple of months ago to eliminate the short-term 2-year and 3-year ARMs that made up the majority of loans written in the subprime market for 2005 & 2006.

This change affects the wholesale channel on the subprime side only - no word if it affects the Full Spectrum retail arm of Countrywide. It’s just another sign of the ongoing atrophy of the wholesale origination market and a clear symptom of capital markets investors fear of short-term subprime mortgages.

This is just a wild guess - but those 30-year rates are going to suck, big time.

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In this edition of the Blownmortgage.com interview series we speak with Patrick, the founder of Patrick.net. Patrick.net is one of the original housing web sites that decided to stop listening to the spin-doctors in the NAR and started looking for truth in the over-valued housing market of San Francisco. The site took off and now receives thousands of visits a day by people looking for news on the housing and mortgage market outside of the mainstream media.

In this interview we discuss the humble beginnings of Patrick.net as well as where housing prices are going, why you can’t trust the NAR, and what impact fraud will have when combined with the upcoming wave of ARM resets. We also talk about Patrick’s unique

Music licensed under the Creative Commons license, The Streets of Miami performed by Dokapi.

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