Happy New Year!

I wanted to take the time to wish everyone a Happy New Year! Hopefully 2007' proved to be a great year for your and your family. We at Professional Mortgage Group hope 2008' boasts promising things again for you! Be careful this evening, "watch out" should you be traveling, please do not drink and drive and be safe out there!

We will see you again in the new year!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Does your pre-approval sound too good to be true?

Recently I dealt with a couple customers that were shopping around for a pre-approval. These customers were dealing with a hand full of lenders, some of whom were not shooting them straight. It is my opinion this was just done out of laziness! The borrower came to them, gave them their information verbally, and then lender issued either a verbal or written pre-approval. After shopping around she found that this particular lender had a much lower rate and a much higher approved purchase price. I took a look at her situation and this pre-approval she was counting on as her best deal just didn't seem right. It seemed too good to be true! I told this customer that if this deal is what she says it is, then she needs to take it! I would love to have your business and would value it, however I cannot offer you a better deal. Sure enough, this lender wasn't thorough enough in the pre-approval process and they were off base on the approval. She came back to us and we got the deal done. It wasn't the deal she initially thought she could get, but it was the best loan out there for her! Always remember, most lenders have the same basic products. The difference comes in the manner these products are delivered to the borrower!

This scenario happens quite often. If you really read the pre-approvals, you can see where there is room to wiggle out of them if some piece of the puzzle doesn't come back as expected. Unfortunately when a lender is lazy and issues a pre-approval letter like this, it wastes peoples time. In their eyes I guess they feel they will be able to lock down first dibs on their business. Worst case scenario for them is that they can't do the loan. However, worst case scenario for the buyer is that they are out the time and money it cost them to find this out the hard way instead of finding it out initially.

You can take what you want from this short scenario. Just use a little common sense in comparing quotes from lenders. If one is drastically different, do a little extra homework on the lender. Hammer down all the details to make sure everyone is on the same page! If you do this, it could and probably will save you some unnecessary hassle!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, Missouri Mortgage Broker"

Mortgage Applications Drop!

Despite a significant drop in mortgage rates during the week ending December 21st; mortgage application volume actually fell 7.6%. The Mortgage Bankers Association reported an index rating of 603.8 from 653.8 in the previous week. What does this mean? MBA started tracking application volume on March 16, 1990 at an index value of 100; so a rating of 603.8 simply means that mortgage application volume is 6.038 times higher than it was when the MBA first started tracking this statistic.

This particular index was at its peak on May 30, 2003 with a rating of 1,856.7 when the housing boom was in full force. This survey simply provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. Keep in mind this only covers about 50% of all residential mortgage lending activity. Of the mortgage activity surveyed 50% were refinance applications; this could mean an increase in credit usage as many homeowners are "tapping" their equity to rid themselves of dangerous credit card debt.

Why would this index be down when rates were relatively lower? That is the question that is puzzling wall street this morning. Many believe this is a sign that the housing problems are not on the decline as money may still be harder to come by. My personal explanation is simple. Most people have their minds on other items this time of year rather than worrying about their mortgage or purchasing a home. The holidays are a time for family, reflection, and relaxation; mortgages do not seem to slither there way in there during this time of year.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Professional Mortgage Group, Inc.

I hope everyone had a very merry Christmas! I wanted to highlight some tangible benefits that our clients and business partners receive on a daily basis. Professional Mortgage Group, Inc. is truly committed to being the most professional and ethical lender in Mid-Missouri and the below attributes simply back what we are trying to build!

Buyer’s Guides: A “tell all” book about the lending process, programs and what can be expected when purchasing a home.

Educational Daily Blog: A daily dialogue on market news, lending news, local news and personal perspective on key items affecting real estate.

Continuing Education: A member of the Freedman Report (#1 market source for knowing when to float or lock your clients loans to ensure that they get the best possible rate), member NAMB (National Association of Mortgage Brokers), member of Mortgage Originator Magazine and many other “on-line” classes.

Ethical Disclosures: We were the first to roll out additional disclosures above and beyond our competition and our lenders to help educate and inform your clients of key mortgage components. (i.e. Net Tangible Benefit, Customer Copy & Certification, Home buyer’s Certification Course, etc.)

On-line Loan Status: Helps eliminate phone calls regarding the status of a particular client or property; updated “real time”!

Testimonials: I challenge you to find another local lender with the credentials and testimonials we have! WE BACK WHAT WE SELL!

Yard Signs & Financing Flyer's: We want to help move your inventory and have developed and unique way to do so.

Featured Realtor Page: We want to help you get recognized and sell properties, this “unique” tool helps us accomplish that!

Service Guarantee’s: We take these VERY seriously and back them up!

Brought to you by Professional Mortgage Group, Inc.

Your Columbia Missouri Mortgage Broker!

Merry Christmas!

PMG would like to wish everyone a Merry Christmas and Happy New Year! We thank all of our customers and referral partners for making 2007 a solid year! We wish everyone nothing but the best in 2008!

P.S. - We will resume our blog on December 27th.

Happy Holidays!

Professional Mortgage Group, Inc.

Underwriting Changes

Just when you think the mortgage mess is idling down and coming to some normalcy again yesterday comes along and hits you like a ton of bricks. I received an e-mail from a prominent lender in the Mid-West region yesterday around 3:41pm CST announcing a wholesale list of changes to ALL programs and we literally had an hour and fifteen minutes to "lock" our files or risk losing the ability to close the loan. Now this is nothing new to the mortgage broker, banking representative or any other lending institution, however it had been a period of time before anything like this had been seen. We are seeing even more strict guidelines on the Fannie Mae and Freddie Mac side, changes to Loan Prospector and Desktop Originator (decision engines for Fannie and Freddie), loan-to-value changes, debt-to-income changes, risk assessment changes and many many others.

So just when you think the mortgage market may settle down something like this hits and you must react in a timely, efficient and effective fashion for both your livelihood and your clients well being; although I must admit at times is extremely difficult! It is a very stressful time for me right now as I truly take my clients mortgage process very seriously and do not / will not jeopardize my reputation or ethical standards as a result of "last minute" guideline changes. What does this mean? Well simply put at times I must open my pocket book and lose money to fulfill my word and my clients expectations! Are others doing the same?

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

20% Down Payment

In today's volatile mortgage market, some are thinking that it is best to go with the old fashioned way of buying a home. This is by putting 20% down. This avoids mortgage insurance and lowers your payment. The lender bears much less risk on an 80% loan, therefore a lower interest rate is given. With the way things have been lately, I definitely understand the logic behind such a view. However, I do not agree it is a wise choice. If you are very liquid and have the cash, it is no big deal. The reality is that most people are not in this situation! I read a very good article on Yahoo Finance today and I wanted to post the link below. I think this brings up some great points while keeping it short and to the point. Please read and feel free to post any comments you have on the subject.

Here is the link to the article.

http://finance.yahoo.com/loans/article/104047/Skip-the-20-Down-Payment

If this link doesn't work, just copy and paste it into your internet browser.

I hope this helps!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Stated Income Financing

The Federal Reserve has acknowledged it's idea of "limiting" stated income loans. According to published reports Ben Bernanke will make his plans public before enacting it. With this breaking news coming forward I at least wanted to give my two cents worth in regards to "stated income" financing.

First, stated income financing HAS it's place in the housing and mortgage market. With that being said there has to be certain guidelines that must be met in order to qualify. For instance, a minimum score of 680, at least 5% down, at least 3-6 months reserves, and a good and established credit history.

Stated program financing is extremely helpful for someone who does not claim all their income, however has "justification" for qualifying for a "stated" loan; (i.e. 680 score, reserves, low dti etc.) There is a needed niche for this type of financing in the market place as I see it everyday. Should there be the type of loose guidelines seen in the past? No. But to completely eliminate this program is a complete disregard to a substantial niche of clients that both qualify and have verified the "means" of repayment.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Mortgages and Commission Income

I've been faced with an unusually high amount of applications involving commissioned income clients lately; having been able to provide financing for some but not all I thought I would take a moment to discuss some features of being all or semi-commissioned as a means of deriving your income.

First, Fannie Mae and Freddie Mac state that if a portion of your income (typically 20% or more) is derived from commission then the most recent 2 year's taxes must be provided. Why? Because they will want to average your "commissioned" income over the last 24 months, this will give them a better indication for a "basis" in deriving an average monthly salary.

Second, if you have been in a field that has commission income for less than 2 years they (Fannie & Freddie) will not allow you to use your commission money. Fannie Mae and Freddie Mac will want to see a two year history. Now if you have worked for your current employer for 8 months but your previous employer (who also paid you commission) for 2 years then Fannie and Freddie will allow to average your 2 years commissioned income. Simply put they want to see a 2 year history of being paid commission.

Just like everything else in the lending world there are always "exceptions to the rule" or guideline changes depending on loan-to-value, credit score, assets etc. but this should give you the general idea behind underwriting commissioned income clients.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Cash Reserves

I want to take a moment to discuss a trend that I see too often. More and more I see mortgage applications from prospective buyer's that do not have enough cash reserves. In some cases people have none! While you can still be approved for a loan with little reserves, I feel it is a recipe for disaster. This is the same for someone that depletes their life savings for a down payment on a house. Not a wise decision! Don't get me wrong. There are always exceptions to the rule. Maybe you know you will be getting a promotion or large raise. Maybe you will receive a gift or inheritance. With these things, you can easily build or replenish your savings account. Unfortunately not everyone is so lucky! Home ownership is great, but it does come with added responsibility. Your landlord will no longer fix that leak or replace the furnace. These are on you now and can be very expensive! This is where cash reserves come into play. Mortgage lenders only want to verify 2 months worth of mortgage payments, but you should be focused on saving much more. Not only can something happen maintenance wise on your home, what if you lose your job? You definitely will need an emergency fund for that!

I think you get my point. Life is full of surprises and emergencies. Just don't let them get the best of you where you could run the risk of losing your new home!

By no means do I want to scare you away from purchasing a home. It is a great time to buy right now! Just before you jump into it, do a little bit of planning and make an effort to put some money away for a rainy day!

Trust me you will be happy you did!

Brought to you by:

Professional Mortgage Group, Inc.

"Your Columbia, MO Mortgage Broker"

Real Estate News Part II

Well as stated in the previous post the Fed's will meet tomorrow to decide whether to cut key rates "discount rate" to help free up market liquidity. I have watched the market rather closely the last couple of days and noticed a couple of things.

First, "mortgage rates" once at 2.5 year lows are now rising and rising fast! The market is anticipating or "building-in" the Fed's predicted cut and the 10-year treasury is suffering from it. The 10-Year Treasury Bond is a key predictor in determining mortgage rates.

Second, the market is also reacting in a similar of positive fashion to the "Sub prime Aid Plan" the Bush administration has enacted. This administrative plan puts a rate "freeze" on some sub prime loans set to be reset in the coming months.

Third, today a "trade group" representing realtor's said it is predicting increased sales in 2008 and more stable home prices. Although many economist are not so optimistic, with many stating this is just a "ploy" to down play the negativity surrounding the housing debacle.

In summary the market is reacting positively to all of the above and in essence has impacted "mortgage rates" in a negative way. Hopefully, we will see the 10-Year Treasury Bond go down in the coming days.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Real Estate News

Well let's see how far the fox hole goes. Home foreclosures are at record levels according to the Mortgage Bankers Association and The Bush Administration as launched it's sub prime mortgage aid package, which among other things freezes all sub prime rates for the next 5 years.

Foreclosures from the July-September period hit .78 percent during this period surpassing the previous high of .65 percent set the previous quarter. My assumption is that during the 4th quarter 2007 a new record will be set. To help ease the pain of the "mortgage meltdown" The Bush Administration as launched it's "aid package". A new innovative and ground breaking financial package to help aid the over 500,000 borrowers who will face rate resets during the upcoming months. This was said to be a critical component in helping the slumping economy and in particular the housing slump; which was rumored to face a high risk of a recession and a significant drain on the broader global economy.

The market is really reacting and fairly fast considering the government and many other "high-end" businesses are involved. Hopefully the changes that the government, banks, servicing companies, the U.S. Treasury, and others have made will help better prepare us for 2008' and moving forward.

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

Fed Meeting

Some of you may or may not know that the Federal Reserve Board and in particular Ben Bernanke and his colleagues are meeting December 11th to decide whether or not they should reduce the discount rate and the federal funds rate. It was rumored that they could reduce the discount rate prior to this meeting should the lending guidelines remain tight. The discount rate or the rate at which banks lend money to each other is a key component in market liquidity. The federal funds rate or the rate at which banks can borrower money directly from the Federal Government is also a critical "safe guard" to keep liquidity in the economy. I have spoken about these indicators in previous blogs however thought I would remind everyone that on December 11, 2007 we could see additional cuts should economic data; such as home sales, unemployment filings, job growth, oil and inflation remain unchanged or stagnant.

Ben Bernanke has said numerous times that they are willing to do everything necessary to keep the economy from a recession, however warn that they will closely monitor inflation although that indicator has taken a close "back seat" to the broader problem of market liquidity, the "mortgage meltdown" and slumping housing sales. I must say that I feel more comfortable about the market place, housing data and the governments response than I did 90 days ago. Hopefully we will continue to see the necessary changes from the government, servicing companies and banks to help the economy crawl out of this hole.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Gimmick Pricing?

I receive calls everyday regarding mortgage interest rates. A common question is asked quite often. It usually goes like this. I saw online somewhere rates were 4.5-5.%, is this accurate?
Or, I heard on the radio that rates have dropped to 5%, can you lock me in at this rate?

Are these rates real or are they too good to be true! I cannot speak for every lender and every product out there, but the majority of the time the answer is "YES, it is too good to be true"!

Keep in mind advertisements always pitch the best case scenario. They feel that if they get you involved and you realize you can get 6% instead of 5.5%, you will still go with them. There are numerous "outs" to the company on the rates they advertise. How could they know your credit, income, equity position,and assets. They don't and this is why advertised rates are only good for 1 thing. That is a gauge of what the rate market.

I call rates like this "Gimmick Rates". This is because they look pretty, but you are paying for them one way or another. To get a rate of 4.5%, one of the following situations is probably taking place.

1. You are paying a high amount of points and fees in order to obtain this rate.
2. You are being offered an interest only product or an ARM. In other words, some kind of catch and not a fixed note.
3. The lender is paying out of their pocket to get you this rate.

Lets see a the number of hands of people that think the lender is paying the expense for you and losing money on your loan? Nobody? That's right. It isn't going to happen.

Great rates are out there, but the lender must make money or they will not do the loan.

This is simply a way of advertising a great deal and to make the phones ring. They will then take the person with 6.5% that is looking for 4.5% and give them 5.75%. Still a great deal for the customer, but not what was advertised.

I am sure you all see my point. Just don't get to wrapped up in the crazy rates you see posted. Do you homework, work with a good lender, and you will wind up with a great product and rate!

Brought to you by Professional Mortgage Group, Inc.

"Your Columbia, MO Mortgage Broker"

Mortgage Rates What Determines Mine?

Mortgage rates are falling and falling in a big way! Take for example today's 30 year fixed rate of 5.75%; pretty incredible right? You bet it is, however I thought I would educate this audience on what factors help determine your potential mortgage rate.

First, your overall credit score is critical in getting the best possible rate. Keep in mind that on a joint application Fannie Mae and Freddie Mac will use the lower of the two middle scores. For example; borrower A has scores of 708, 804, and 790 but the co-borrower has scores of 620, 608 and 595. Fannie Mae will use the 608 score for qualifying purposes. It is crucial to structure the loan the "right way" from the beginning to ensure you get the best possible product and rate.

Second, the loan-to value or (ltv) is also an important factor in determining your rate. For instance, a borrower putting 20% down will get a better rate than someone who is requesting a 100% loan or no money down. To add to this putting as little as 5% down will heighten your ability to get a better rate!

Third, your overall "financial portfolio" will help determine whether or not you get the best possible rate. What do I mean by this? Individuals who have savings accounts, investment accounts, 401K money and a low debt-to-income ratio or (dti) are putting themselves in a better position to qualify for a lower rate than someone who does not have the above.

What does all of this mean? Simple; the lenders risk will determine your rate. That is why someone putting 20% down, who has 800 credit and money in reserves will get a better rate than someone who is putting 0% down, has 610 credit and only $500.00 in reserves. The risk is greater on the later individual and therefore will get a higher rate than the first borrower. This does not mean that the later borrower will not get a great rate, it simply means that they will not get the best rate possible given their current financial situation and credit portfolio.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Dropping Mortgage Rates!

Mortgage interest rates have been slowly declining for some time now and this week has been the lowest they have been in quite some time! With that being said, we are getting more calls regarding refinancing. (NOTE: Please refer to another recent post that touches on what to consider when contemplating a refinance. ) Most of these calls are from people that either need to withdraw cash from their home or people who need to get locked into a fixed rate and escape from their ARM.

When considering cash out make sure you look at the deal from all angles. What are your goals? Will this new loan help me meet that goal? Do I really want to amortize a particular debt over 15, 20, even 30 years? Will my situation be different if I consolidate or are the same variables still in place for me to run up the debt again? These are all crucial things to think about, especially in this market. People who have been using their home as a piggy bank are finding out the hard way that it isn't as easy anymore!

ARM's are the hottest topic right now. Many are resetting now and others have a few years left. It is a no brainer to refinance into a fixed loan if yours is resetting now, but what do you do if you have a couple years left? This is a tougher question. You can do 1 of 2 things. Hold tight and take advantage of the super low rate for the remainder of the term or refinance and take the low rates that are available NOW! Neither option is wrong. Your situation will dictate what is right for you. If you are unsure, just think about what rates are now and how much lower you think they could get? Lower rates are possible, but I can't imagine any drastic rate cuts.
You will be sick if you get burned with raising interest rates in 2 years when you could have locked in at 6% or 5.875% now! All because you waited to take advantage of your 5% ARM rate. Rates could be the same in 2 years or they could be higher! Nobody knows. By no means do I pretend to be someone who can forecast rates. These are just things to consider while you are trying to decide what action is best.

Just realize that regardless of all the negative press out there, the mortgage market is still alive and kicking. Rates are good and there are numerous products to fit your specific need. While the industry has had a bumpy ride and has tightened up this past year, don't get the impression that you cannot get a loan! As long as you are working with a lender that you trust and is known for doing quality work, you will be taken care of and placed with a great product!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Columbia Missouri Market Statistics 3rd Quarter

Well the 3rd Quarter Sales Numbers are in for Boone County Missouri and the figures are a little surprising for one area and not so much for the other. First, sales of existing homes are VERY good and sales of NEW/NOT LIVED IN are not so good. I will highlight some of the key statistics below for you to look at and ponder over.

3rd Quarter 2007' vs 2006'

• Sales of new construction homes were down 33 units and $6.667M in volume from 2006'
• Sales of existing homes were up 32 units and $6.630M in volume from 2006'
• Total 3rd quarter units were only down 1 unit from 2006 and only $36,937 in volume

Additional Comments:

The Southwest area continues to be the "hot" area and has been for quite some time followed by the Northeast which continues to be a viable section for growth. As per past posts regarding this subject my opinion has not changed; Existing sales are really carrying this market and new construction is hurting Boone County and in a big way! Although it seems prices are beginning to stabilize (given YTD prices of $175,390 vs. $175,814 for 2006') there is still a plethora of new construction homes on the market. However the market is still down significantly from the "hay day" of 2004' and 2005'.

YTD 2007' vs. 2006'

• New construction numbers are down 150 units and $30.1K in volume from 2006'
• Existing home numbers are up 20 units and $6.52M in volume from 2006'
• Total YTD numbers are down 130 units and $23.6M in volume from 2006'

Additional Comments:

Of the three 3rd quarter months August proved to be the best and July the worst, so if you take those figures to heart and apply a little logic perhaps Boone County and in particular Columbia may see us coming out of this "slump" in 2008'? Only time will tell but the numbers are leading me to think this way although I still predict the "new construction" figures to be hurting but hopefully not to the extent they have the past two years.

NOTE: All figures were supplied by the Columbia Board of Realtors (Residential Single-Family Sales By Month)

Brought to you by Professional Mortgage Group

Your Columbia Missouri Mortgage Broker

Go Tigers!

We at Professional Mortgage Group, Inc. want to congratulate the University of Missouri Tiger Football Team for their vicorty over KU and their Big 12 North Division Title! Good luck in the Big 12 Championship versus Oklahoma and we hope to see you in New Orleans playing for the BCS National Championship!
Also good luck to Chase Daniel in his quest for the Heisman Trophy! Please go to
http://mutigers.cstv.com/sports/m-footbl/daniel/index.html
and vote for Chase. Every little bit helps!

Go Tigers!
PMG, Inc.

Your credit score. Are you on top of it?

We all know that your credit score is vital to your home loan process. With this being the case we have touched on this topic several times in our daily blog. I don't want to beat a dead horse, but after working with a few customers recently this topic is fresh on my mind.

Do not take your credit lightly. How your credit score is computed is very complicated and nobody really knows the exact formula. Everyone's report is different and it is tough to predict how a given event will specifically impact your report. With this being the case, all we can do is give you a few pointers. By no means is this the gospel when it comes to credit reports, but it should get you on the right track. Aside from the items I am about to list, it is a good idea to go to www.myfico.com, www.annualcreditreport.com, and other valuable sites to read about credit and check your report free of charge once a year!

1. Make all your payments on time or within the given grace period. Always be aware when you are nearing a 30 day late. If you are getting close, don't risk it. Call and pay by phone, online, or FEDEX. Whatever it takes so that you don't have a 30 day late. It just isn't worth it!

2. Absolutely take all precautions when the above rule applies to your mortgage! DO NOT miss this payment. This will devastate your score and the products you will qualify for. 1 30 day late can really hurt!

3. If you receive a collection call, get on top of it. I'm sure everyone has had at least 1 medical bill slip through the cracks. Many people are stubborn thinking, insurance should have paid that and just ignore it. Don't do this. Get on the horn with insurance and the collector! Take the time to figure it out. If you owe it, just pay it because they will not let it go. It will eventually end up on your report as a collection and it is best to nip it in the bud early! Always make sure you get a paid receipt on company letterhead to show this is paid and has a zero balance. This can really come in handy if you find out down the road it never was updated on your credit report.

4. I never recommend co-signing for a loan, but if you do be careful. Always stay on top of this. If you get a divorce, make arrangements to get off any notes since it will be tough to monitor. I see these situation go bad all the time and it can really hurt!

5. Never go over limit on your credit cards! Even if you pay on time every month, an over the limit account hurts your score.

6. Try to stay at no more than 50% useage on your credit cards. This means if you have a $5000 limit, don't carry over $2500 on the card. This is a highly over looked part of the credit scoring process. They want to see that you are not maxed out or close to it!

7. Tax liens or judgments. Obviously you don't want these and if they come about, they are many times the result of a crisis. However, take the appropriate measures with the IRS or collector who placed the judgment to wipe them out as fast as possible. These must be paid off in many loan scenarios and of course damage your credit. Tax liens also come with hefty interest and penalties!

8. Try to avoid the credit counseling services that offer to reduce your monthly payments etc.. I have not seen where these help and they report on your credit report that you are working with a company like this. This is also not good.

9. If you do file bankruptcy, make sure you follow up with all your creditors afterwards and make sure your accounts are reporting properly. If it was included in your bankruptcy, make sure it shows as such. I always seem to see accounts linger on peoples reports that are inaccurate. By doing this, it is much harder to rebuild your score!

These are just a few tips for the most common blips we see on credit reports every day!
If you are trying to repair your credit right now, I know it is a painful process! Nobody seems to be willing to help and it can be grueling! Once you are in a hole, it is easier said than done to payoff these items! Just stay focused and follow up repeatedly with creditors to make sure they report your account properly!

Brought to you by
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Adapting to Change

The "mortgage meltdown" has made it's dent in the housing community from mortgage lenders, banks, title companies, realtor's, appraisers, home store retailers and others it certainly has left a mark. Has I stated in a previous post H.R. 3915 is a good thing! To the individual or lender that does not do things the right way; then look out you will have to adapt or be out of business. But to those of us that continue to educate the market, our partners and clients now is our time to shine and grow! With that being said I thought I would talk about things we (Professional Mortgage Group) will implement January 1, 2008 to help educate potential home buyer's and refinance individuals.

1) Net Tangible Benefit Worksheet: I personally believe you will have a hard time finding a "broker" with this type of "screening" in place. Many of the direct lenders already do this and have for quite some time (years). However, PMG will make sure that their clients continue to receive the benefit they deserve from their refinance or purchase transaction and this is just another step to stay ahead of the curve.

2) Customer Copies Certification: Professional Mortgage Group has and will continue to do this, however we will now require the client to sign a form stating that they have been explained all documents in there entirety and been given a copy of those documents.

3) HUD Guide: This is a pamphlet that is given out or mailed to clients by the actual lender. However, PMG will now give this directly to the client as well. Just another way to educate the borrower and help do things the "right way".

4) Home Buyer's Education Course: Any first time home buyers will be required to take an on-line education course, regardless of whether the lender requires it. We have found these to be VERY informative to the client and will make this a mandatory feature moving forward in 2008'.

5) A "Unknown" Certification Sheet: Unfortunately when purchasing a home or refinancing there are some "unknowns" going into the transaction; for instance, what is the insurance premium, what are the pro-rated taxes, cash-to-close, recording fee, etc. By having the client sign this "informative" form they will be better prepared for the closing. Professional Mortgage Group currently does something similar, however will now implement a certification sheet to solidify their professionalism.

Hopefully you will see PMG as an innovator of professionalism in an industry that desperately lacks this. Thanks for your continued support and we will keep you updated on any future changes!

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

Mortgage Loan Process

The mortgage loan process is something we are asked about everyday and many of you already are aware of. However, I wanted to post this as a reminder to those that do have questions. Remember all of this is available in PMG's "Buyer's Guide" available at http://www.pmg-inc.net/.

Mortgage Loan Process (Purchases)

Step 1. Getting prequalified for a loan with PMG

A. Application – this document will have you provide your financial information to PMG for processing your request
I. Full Name
II. Current Address (and previous if in current for less than 2 years)
III. Date of Birth
IV. Employment information
V. Income information
VI. All assets owned by you
VII. All debts owed

B. Credit report is pulled by one of our brokers and examined for loan programs for which you qualify

C. You supply documentation (as discussed later) for statements in application

D. We receive pre-approval from a lender and let you and your realtor know immediately the price range at which you qualify

E. Pre-approval letter is then created by us and given to your realtor for leverage in your negotiations with potential sellers


Step 2. Work with your Realtor to find a home in your price
range.

Step 3. Sign preliminary disclosures with your broker

A. Good Faith Estimate – This document will give you a good idea of the costs from all parties involved to get you into your new home


B. Lender Servicing Statement – This document lets you know the likelihood of your loan being sold to another lender after closing

C. Disclosure Notices – Various disclosures required by law to be give to potential borrowers outlining rights and responsibilities of the various parties

D. Truth-In-Lending – This document gives you an idea how much the credit will cost you as you pay it back to the lender

E. Borrower’s Certification & Authorization – This document has you certify that you are who you say you are and authorizes PMG and the lender to receive financial information from others who do business with you, i.e. to get bank statements, verifications of employment, etc.

F. Tax Return Request – This document allows the lender to request a copy of your tax returns to verify income if they are ever audited

G. Mortgage Loan Origination Agreement – This document explains your broker’s part in the transaction and lets you know how PMG makes it’s income


Step 4. Getting to closing

A. PMG Orders An Appraisal – These are required by lenders to verify that the property is worth the amount you are paying for it

B. PMG Orders Title Insurance – This is to insure that clear title to the property is given to you and the company is usually chosen by the seller as they traditionally are the ones paying for it

C. You Provide Property Insurance – You need to insure the property against loss and provide proof of doing so prior to closing

D. Your Realtor Orders Home/Pest Inspection – This should be done for your peace of mind regardless of whether or not required by the lender

E. The Lender Orders A Flood Plain Determination – This is required of all home loans to determine if you need to purchase flood insurance.


Step 5. At a Closing with a PMG Broker

A. All parties, both sellers and buyers, sign documents transferring property ownership to you – your PMG broker will be there with you to explain any process on which you have questions

B. All loans the sellers have against the property are paid in full

C. The warranty deed and deed of trust are recorded to notify the general public that you now own the property

D. CONGRATULATIONS! You now own your new home!

Brought to you by Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

HR 3915 Bill

In light of the recent mortgage "meltdown" and the emergence of H.R. Bill 3915 I thought I would give my thoughts on several issues. First, I have read Bill H.R. 3915 in it's entirety and have also viewed the amendments and the actions taken. This bill brings to light, in my opinion what should have been done long ago, a mortgage broker registration process (Kansas already adopts this philosophy) and continuing education for mortgage originators. These of course are the major additions and again in my opinion the "smarts" of the bill. There are of course many other concepts behind this bill most of which are just added paperwork to an already paper ridden process. For instance, adding additional verbage to the Truth-In-Lending (TIL) statement. With this being said I will know educate you on what Professional Mortgage Group has adopted from day one to aid the borrower in making an educated decision concerning their mortgage loan.

1) Professional Mortgage Group brokers already participate in an "in-house" continuing education course. This includes some but not limited to the following; ethics and training courses via virtual teleconferences, publications (i.e. Mortgage Originator, Scottsman Guide, NAMB, MAMB, and others), and courses by Mortgage News Daily and Todd Duncan ( a well known mortgage ambassador and educator).

2) 99.9% of our clients meet with us in person to review loan programs (including the advantages and disadvantages of each) and to sign "initial" disclosure papers. Our clients are completely aware from day on the mortgage process, the "unknowns" (i.e. homeowners insurance), and receive a copy of their disclosures in case any future questions arise.

3) Our clients are also given a "Buyer's Guide" to further educate them on the mortgage process and what to expect when buying a home. This material includes FAQ's as well as some of the documents requested and potential loan programs, just another way PMG, Inc. is staying ahead of the curve and H.R. Bill 3915.

4) Our clients are also given "service guarantee's" which outlines what they should expect from PMG, Inc. and what is expected from them. Again, all expectations are set at the initial appointment.

5) We have creditability; meaning 99% of our business is from realtor's, financial planners, past clients, and attorneys. We have testimonials and surveys to back our claim that we do our job "the right way"; no surprises, fair fees, market rates, honest advice, an ethical and unwavering customer service! We return phone calls, we deliver bad news, we help people understand their credit and help them through the process of becoming homeowners. IN GENERAL WE EDUCATE AND CONSULT OUR CLIENTS ON WHAT'S BEST FOR THEM; NOT WHAT'S BEST FOR US!!!!

H.R. Bill 3915 bring it on, we already go above and beyond what our legislators say we need to do. We are one step ahead of them and will continue to be ahead of the curve on delivering a quality mortgage experience!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Refinancing

In light of the recent activity we have received concerning refinancing I thought I would shed some light on things you should consider when refinancing your home. I have spoken on this subject before but it has been some time ago and felt the need to address it again.

First, what are you looking to accomplish by refinancing? Are you wanting to lower your overall payment, payoff outstanding creditors (debt consolidation), hoping to shorten your term (i.e. 30 year to 20 year), do you need cash for home improvements or college tuition? You need to be honest with yourself on what your ULTIMATE goal is! Assume "the sky is the limit" and let the mortgage professional cater to what you are trying to accomplish. Unfortunately in our industry we have guidelines to follow, however if you are with the right mortgage professional they should be able to provide you a quality home loan product that meets your needs and goals.

Another question you should have thought about when considering a refinance is; how long do you plan on staying in the property? This plays a major role in the product and type of loan we put you in. Are you planning on retiring in this home, do you want to sell and move in 1 year, 2 or 5? You need to have a realistic idea of what your tenure will be in this property.

Again there are other things to consider but I thought I would address a couple of the more serious one's first.

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

Homeowners Insurance Part II. Lower your premium!

In a post last month we discussed Homeowners Insurance. We focused on the parts of the home insurance policy and how it works. Today's post is part 2 of this segment. As we mentioned last time, you get what you pay for so don't focus solely on price. While this is true, there are ways to keep your premiums as low as possible. Everybody wants to keep their house payment low and escrowing your insurance premium plays a part in this.Some people bounce around from company to company searching for the lowest price at their renewal date. I am not a big fan of this. You don't develop any loyalty here and this could come back to haunt you if you have a large claim. Many times there is a reason why 1 company is drastically cheaper that all the others. State Farm, Allstate, etc. have been pricing their business for a very long time and have it figured out. You'll find a company that comes out with a super low price one year and then they run into financial trouble. You want your insurance company to be financially sound. After all, you are counting on them to be there for you. With this being said it is ok to shop occasionally, especially if you think your price is getting out of hand. This will keep them honest.Here are some tips on keeping your home premiums down:

1. Multi-Policy Discount - Insure your auto, home, and life insurance together. By doing this you will earn a multi-policy discount.

2. Raise your Deductible. - Go with a $1000 deductible. This keeps your premium down. Just make sure you are comfortable with the $1000. Also see what a $500 deductible costs .The larger the home the more difference it makes, therefore a higher deductible may not always make sense. Home claims are fairly rare and usually if something is claimed , it is a high dollar amount. Therefore, the $1000 is small relative to the damage.

3. Home security system - By having an alarm you are eligible for a discount. It is best to have a full-reporting alarm to maximize the discount you receive. Keep in mind the cost of the alarm is more than what the discount will save you. If you already want an alarm, just realize this helps justify the price you pay for it.

4. Affinity Marketing Discounts - Ask your insurance company if they offer any Affinity Marketing discounts. Liberty Mutual is the leader in this field as they offer over 8500 different group discounts. In Columbia The University of MO Alumni Association and Missouri Credit Union are big ones. BMW and Onstar are a couple others. If your are a member or affiliated with these companies you can get a discount through Liberty Mutual. Met Life is another company that does this and there may be others, just ask. This can save you up to 15% on top of any other discounts you already receive!

5. Loyalty counts - I mentioned loyalty earlier. Some companies offer loyalty discounts or loss forgiveness programs for your years of continued coverage. Ask what programs they have in place.

Keep all of these things in mind when looking to improve your premium. If you are looking to buy a new home, here are a couple things to be aware of that can potentially cost you money and give you a headache!

1. Location of the nearest fire hydrant and fire station. - If you are in the city limits this won't be an issue. If you are not, then pay attention. If you are over 1000 feet from a hydrant or over 5 miles from a station, you will pay significantly more for home insurance! Some companies won't even insure you!

2.Dogs - If you own a Pit Bull, Doberman, German Shepard, or other dangerous breed you may have some issues obtaining home insurance.

3. Prior claims on the residence - If the home has a history of water problems or claims,you will want to know. If it does have a history, you should make sure it has been corrected. You will need special approval and with some companies this can affect your future rates. Insurance companies have different rating policies, so get all the information available to help avoid surprises in this area. Hope all of this information helps!

Your comments are welcomed!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

For Sale By Owner

I thought I would share with you "For Sale By Owner" individuals or otherwise known in the lending world as "FSBO" what Professional Mortgage Group can bring to the table in helping you sell your home. Although we (PMG) recommend using a real estate agent at least you can see that you are not alone in helping market your home.

1) ADVERTISING?
We will provide a PMG yard sign with colored flyer's. These flyer's include payment options, possible financing incentives (i.e. city assistance or down payment assistance) and all the information about your home. AT NO COST TO YOU!!!!

2) WHAT LOANS ARE BEST SUITED FOR YOUR HOME?
What loan product does your home qualify for? Which are best to advertise? What will the buyers closings costs/down payment be? Should you use this to negotiate?

3) AND MOST IMPORTANTLY....... DOES THE BUYER QUALIFY?
It only takes about 30 minutes for us to determine if a buyer can qualify for a mortgage loan. Many realtor's refuse to work with borrowers that have not begun the "pre-approval" process. Why should you be any different? Don't wast a lot of time on a contract with a buyer that cannot qualify because of credit issues.

4) ALSO.........................
- Post your listing on our company website / blog ...... free!
- Sample purchase contracts and legal documents ...... free!
- Contacts to appraisers, homeowners insurance agent's, title offices, etc. ..... free!
- Excellent referral program and continuing education from our staff!
AND ......... IT'S FREE!!!!!

"So, what's in it for PMG?"
Well, this is truly a win-win situation for you and me. I'm willing to provide these services in order to attract qualified buyers that I can work with. By combining our resources you and I can reach our goals.

There's no contract to be signed, no fee to pay, and no obligation to either party. I'll supply you with a handful of business cards for your potential buyers. They can contact me for their pre-approval and I'll return them to you as a qualified buyer ready to make a formal offer on your home.

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

Home Buying Seminars

Home buying seminars are a great way to get in front of potential buyers and educate them about the process they will go through in order to purchase a home. Professional Mortgage Group, Inc. have done these in the past and have recently been approached by 2 different real estate agents to assist in their upcoming seminars. This can definitely benefit all parties involved. The agent and lender can gain business they may not normally get and the buyer learns valuable information!

Professional Mortgage Groups staff will have a booth with business cards, flyer's, promotional items, applications and most importantly our "Buyer's Guides" on hand (you can download a copy of this from our homepage www.pmg-inc.net\. These guides outline the entire process, what to expect, and answers to many Frequently Asked Questions! We have had a great reponse to these guides and they bring an added bonus to any home buying seminar we help with.

Our next seminar:
Host : Peak, Dye & Assoc., Inc. in Mexico, MO
Location: Mexico United Methodist Church Fellowship Hall.
Date & Time: November 13th @ 7pm Appetizers start @ 6:30pm
To Sign up: 573-581-1363

If you are an agent and thinking about putting one of these on, let PMG know. We would be happy to assist in putting on a great event for potential buyers!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Great Time To Be A Homebuyer!

I thought in light of all the negativity surrounding the housing market I would elaborate on why potential and future homeowners need to buy in this market. Most of the "stigma" surrounding the housing slump is completely media generated; and to some extent rightfully so. Housing inventories are at all time highs, mortgage delinquencies are rising, foreclosures are up and in some areas over 300%, and sub-prime ARM resets are not at there peak yet. However, with all of this being said now is a great time to buy a home and the following paragraphs will explain why.

Interest rates are still at ridiculously low levels; yes historic lows! I know we have all heard this time and again but it is rare to get a 30 year fixed rate mortgage for 6.125%. I believe most people take these GREAT rates for granted. Your buying power from a mortgage standpoint cannot get much better.

Housing inventories are at all time highs! You have a plethora of homes to choose from; want a 3 bedroom 2 bath range on an unfinished basement on the north side of town, here you go! The market is flooded with first time home buyer options, middle-end homes and high end homes with differing styles, sizes and concepts in each area. You should be able to find a home you love at a price you can afford.

The best part about being a buyer in this market are the prices that have been associated with purchasing real estate! Builders are sitting on more inventory than they are accustomed to and therefore have been slashing prices to unload their homes. For instance, in Columbia Missouri and more specifically Boone County Missouri "new" homes sales are down an average of $27K. Sellers of "existing" homes are also extremely motivated as the marketing/sale time of these homes has dramatically increased and to counteract this they have been cutting prices.

What are the three key items that effect whether or not it's a time to be in the home buying stage? Interest rates, Inventory and prices; hopefully this has shed some light on how these factors are aligned for you to become a homeowner.

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

Standard Lending Practices

In light of all the turbulent times in the mortgage market, I want to talk about some standard lending practices Professional Mortgage Group, Inc. (PMG) puts into action each and every day. Mortgage Broker's have caught a lot of flack recently for the actions of a few unethical brokers out there. With this being the case, it just makes PMG's set of standard lending practices stand out rather than these practices being the norm for the industry!

PMG's Standard Lending Practices include:

1. We take your application in 1 of 3 ways. Online through our secure application, in person, or over the phone.
2. We promptly process the application and get back with you to discuss options and figures. If for some reason we cannot loan to you, we discuss why and give you pointers on what you need to work on to get where you want to be.
3. A PMG introduction letter and business card are mailed to the prospective borrower.
4. If our customer wants to use PMG, we personally meet with every client and sign disclosures for the loan. All product features, fees, rate, and possible hurdles to overcome during the loan process are discussed in detail. PMG wants no surprises for our borrower!
5. Once you have chosen PMG, a service guarantee is given to the borrower and an real estate agents. This lets you know what to expect form PMG!
6. Your loan is updated on www.pmg-inc.net where you are given a login and password to track your loan. As updates are made, you are emailed the change in status.
7. Phone calls are also placed to the borrower and their real estate agent (if applicable) to keep everyone up to speed.
8. Once the loan is ready to close and we have the HUD, we call and discuss all the details of the loan and what to expect at closing. This way the closing is just a formality! Nobody wants MAJOR questions or issues to be arise at the closing table. This is something to get out of the way prior!
9. PMG makes every effort to attend your closing. If it is a purchase transaction, please know we will be present (unless it is a long distance closing). This makes for a better closing for everyone! If there is a question that comes up or wasn't addressed prior, we are there!
10. Lastly, PMG tracks your loan. We will contact you if it is ideal to refinance or if your ARM is expiring. If only all lenders did this, the problems of ARM's resetting now would not be so severe!

Our goal in implementing these practices is to obtain a "Client for Life"! It is just unacceptable to conduct business in any other way than putting your client first!

It is our hope that these tough times in the industry will weed out anyone who doesn't conduct themselves properly. The ones left standing will then be there to reap the rewards!

Brought to you by:

Professional Mortgage Group, Inc.

"Your Columbia, MO Mortgage Broker"

Fed Action

In light of the Federal Reserve slashing the Federal Funds Rate and Discount Rate 75 basis points in less than 60 days, I thought I would dispel the myth that mortgage rates are dropping as well. The Federal Reserve acknowledges the need for "liquidity" in the market place. Why? They know that unless banks, wholesale lenders, retail lenders and others have the funds to lend then regardless of what mortgage rates are there is no chance of a housing recovery! The government is trying to give lenders "money to lend". The largest factor behind the "credit crunch" is the fact that lenders had little to no money to lend to qualified borrowers. Typically, wholesale lenders use mortgage lines of credit to fund certain loans and when the "credit crunch" hit these lenders had their lines pulled. Therefore, the Federal Reserve is trying to push money back into the financial market place for lenders to lend, for buyer's to access and the end result would be for the housing inventory to decline thus bring values back in line.

Don't get me wrong mortgage rates are GREAT! However, do not be fooled that The Federal Reserves actions are to ultimately lower mortgage rates. The problem is not that rates are high, they are just the opposite and it's not like there are no homes to choose from again it's quite the opposite as inventory of unsold homes have never been higher. The financial market's have a "credit crunch" and they (Feds) are trying to reverse this. In fact, it's a great time to be a home buyer right now you have a plethora of homes to choose from at discounted prices and unbelievable rates to boot!

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

FED Update

As previously reported the FED cut the Federal Funds rate and the discount rate by .25%. The stock market shot up and back down again upon this and some other financial news. Mortgage rates have not really changed, nor do I expect them to adjust significantly either way. Rates are already very low. Buyer's just lack confidence in the market and are holding steady, taking a wait and see approach. Unless "prime" is adjusted, don't expect and big changes. These changes are all done to help improve liquidity for the large banks/lenders. While this may be a bummer if you were waiting for a big rate drop, don't worry. All steps are good steps toward bringing stability back to the market!

Be sure to check back for any updates.

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Another Rate Cut?

The FED starts day 1 of a 2 day meeting today and one item on their agenda will be to look at interest rates. Many expect the FED to make a quarter point rate cut, but there are also rumors that there may be no cut at all. If a cut is made it is in an effort to help curb the liquidity problem that lenders are experiencing. The FED cannot afford to have the credit crunch continue on for too long, but there is always the looming problem of inflation on their minds.
Rates have been slowing declining recently and are amazingly low! Don't expect any cut they make to immediately impact these already low rates (we saw this on their last cut), but a cut will be a good thing for the market. We have pounded the condition of the market into the ground lately and it goes without saying that whatever steps are taken to help this crisis, it will still be a long road back. There is simply no quick fix!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

What a Mortgage Broker Should Do!

Amidst the negativity surrounding the credit crunch and housing market I thought I would shed some light on the "mortgage broker" and what a GREAT one does and does not do. First, let me say that a mortgage broker has his or her spot in the mortgage community and the good ones truly do add value to ANY mortgage transaction. I have been delivering mortgage products for over 10 years and have seen a bank, credit union, and retail lender in action. If the later had the best products and motivation to deliver them believe me I would be present at one of those institutions. The raw reality of the market is that GOOD mortgage brokers have a distinct advantage over all of those institutions. Why then do some mortgage brokers get a bad reputation? Simple, they do not and will not put the client first! There is a right way and a wrong way to deliver solid lending advice and I would like to summarize just a few of these below.

A good broker will put the client first regardless of the loan, loan size, and background of the client. I have done financing for loans $23,000 and I have done some as high as $1.7M and one thing remains true in both of these examples; I put the client first! A true mortgage lender will do what is right for the client, whether that is recommending a different loan program, suggesting they wait to buy a home, or helping them with credit issue when no monetary value will come of it we need to do what is right!

A good broker will also make the client aware of the "unknowns" in any mortgage transaction. Why would there be any "unknowns"? Most of the time we are unaware of what the homeowners premium will be, what the real estate taxes are, the exact dollar amount needed to close etc. A good lender will shed light to the client exactly what "unknowns" are and how they play a part in the lending transaction.

A good broker will know and understand what mortgage product fits the needs of the client. Whether that's a USDA loan, an ARM loan, a fixed loan, a VA or FHA product and yes at times perhaps even a product that a bank specifically has access to, for instance the Bank of America ACORN program or First National Bank's physician program. We must know what is out there and what is the best fit given the clients needs. A good broker knows his trade and takes pride in educating himself or herself daily on the market trends and changes to key products that might affect his clients loan.

My final point really should not need mentioning but you'd be surprised what goes on out there. A good broker is honest, ethical and morally forthcoming regardless of how this affects their pocket book. A good broker does the right thing, says the right thing, and lives the right thing with every phone call, every client, and every closed file! Now there are numerous other characteristics I could point out but the above are just a few key points that I would like to make.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

September Home Sale Data

New reports have come out for the month of September on new and existing home sales. Keep in mind this data is comprised of homes that closed in September. This means that they were deals that were struck in August when it was the height of the credit crunch! These are all national figures.

Existing Home Sales

Existing home sales dipped again in September. They were down 8% to a seasonally adjusted annual rate of 5.04 million units from an August figure of 5.48 million units. They are also down 19.1% from a year ago. The median price for all housing types also dropped by 4.2%. The area of most concern is inventory! Inventory crept up again to 4.4 million existing homes for sale. This is a 10.5 month supply! This is up from a 9.6 month supply just last month.

In the Midwest, existing-home sales were down 7.0 % and are 16.2 % below September 2006. The median price rose 1.4 % from one year ago to $170,700.
Here is how the Midwest stacks up against the other regions. South -6% decline, West- 9.9% decline, and Northeast - 10% decline.

New Home Sales

Sales of new homes posted an unexpected gain last month! Sales of new homes rose 4.8% to a seasonally adjusted annual rate of 770,000 units. While it is great to see improvement, keep in mind this is 23.3% below what it was last year at this time.
This rise in new home sales was led by a 37.7 % surge in the West. The South rose .05%, but sales fell 6.6% in the Northeast, and a whopping 19.5 % in the Midwest!

So while this data is a slight improvement, we have a long way to go. It is good that new home sales rose nationally even though these deals were struck during the height of the credit crunch (August). It is also good that the mortgage market is slowly improving. What is bad is that existing home sales are down and that the inventory for new and existing homes remains a major problem! One Chief Economist stated that he sees the existing home problem lasting though 2008 and the new home problem lasting through 2009!
Some would think that this seems strange because existing homes are already there and builders can just pull back on the new construction. While this seems logical, it is not happening. Yes new construction is slower than in the recent past, but builders are still building at an alarming pace across the county! Since this trend seems to be continuing, he has projected 2009 to be the target date.

For all you people reading this from the Midwest, you can relate to these numbers. The market has been very rough and the 19.5% drop in new home sales seems very accurate! What a swing from the 37.7% surge in the West from our 19.5% drop! At the same time we all know too well about our over abundance of inventory. The reports on inventory make it very clear what must happen.

After all this being said, I do believe we are slowing heading in the right direction. The mortgage market is starting to rebound a bit. More regulation to help strenghten the lending industry is sure to come down the pipeline eventually. Interest rates have been declining. Some large lenders are implementing strategies to curb the foreclosure epidemic. At the same time realtors are fighting hard and getting creative to rid Columbia of its inventory problem.

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Will The Fed Act Again?

Well, the Federal Reserve Committee will meet once again on Wednesday October 31st. What will they do; keep rates unchanged, 1/4 point reduction, 1/2 point reduction? Time will tell but most analyst (80%) are predicting at least a .25% reduction and some think perhaps another half .50% will be taken and needed.

For the first time in a long time the continued housing slump and credit crunch is really making an adverse impact on our overall economic market. Just today Merrill Lynch announced that it would be forced to "write-down" over $7.9B; most of which was due to the housing crisis and the delinquency attached to it. Also, announced today was the "national" existing home sales report which reflected the lowest level in almost 8 years.

Add to the above the dilemma concerning record gas prices, increased unemployment, higher utility costs and this does not make for a healthy economy. It seems even the market is expecting further Federal help has today's 30 year mortgage rates are 6.125% down over .25% from a week ago. However, the problem is not mortgage rates or our nationally high inventory of homes. Rates could be at 3.0% but if buyer's cannot access the money to utilize the rate, what difference does it make! The credit crunch needs to be addressed, loans that could be done 1-2 years ago are now no longer available. Now with that being said, I am not a proponent of opening the flood gates of Sub-Prime and Alt-A products like we saw toward the late 90's. However, there are "tweaks" we can do to our product offerings that I believe will help "qualified" borrowers. For example; stated income loans with some verified assets, good scores and some reserves should be made available again. Also, some sub-prime (i.e. 600+ fico's, full-doc, 95% ltv) there is a need and market for this product. The problem with the above is that investors of these types of loans have gotten burned and pulled out of the market. What is needed to get them back?

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

Professional Mortgage Group, Inc.

Times are tough for the Columbia, Missouri real estate community, every where I turn I stumble across staggering statistics which indicate to me that a different approach to marketing real estate must be taken. Our local realtors are critical to helping this fine and dedicated community emerge from the housing bubble that seems to have submerged us into record lows of housing sales. I have spoken to many “seasoned” realtor professionals and they have all stated that this market is the worst they have encountered in their tenure of selling real estate in Columbia, Missouri. We are not your ordinary lender who simply “milks the cow” we want to give back and help you develop your business, service your clients, and move your inventory. With this in mind I wanted to remind you of what Professional Mortgage Group (PMG) has done and will continue to do to help you and others move listings and help improve market conditions.


· Yard Signs w/ flyer box & flyers: This truly helps the buyer understand what programs the property qualifies for and the corresponding payments attached to those programs. “Can the payment really be that low?” YES.
· Educational Daily Blogs: This was originally intended to educate local real estate individuals (i.e. realtors, buyers, sellers, title co’s, appraisers, etc.) about changes emerging in the real estate market. However, it has really taken off and now receives hits throughout the country and is broadcasted to over 400 relevant sites. This is real and useful information to anyone involved in real estate.
· Buyer’s Guides: These were developed to help educate home buyers about the loan process and the “in’s & out’s” of purchasing real estate. Buyer’s guides are handed out to any of our/your buyers to help reduce myths about purchasing real estate and closing fall-outs.
· Featured Realtor Page: We highlight one realtor a month on our site by dedicating an entire page of information on them. We just launched this and so far have had over 378 hits on this page. Hopefully this will be a way to “give back” to our referral partners by linking qualified buyers to them.
· On-line Loan Status: This was developed to “streamline” the process for the listing agent, buyer’s agent, and the client. This tool is updated “real time” and has really been met with good response. This feature helps eliminate the time it takes to place phone calls regarding loan status!
· Service Guarantee: This completely sets the stage for both the buyer and realtor as to what can be expected of PMG. Should they fail to receive our guaranteed service, it lists who to contact. This legitimizes our dedication to providing a quality product and service as well as makes everyone aware of what to expect.
· Current Columbia, Missouri Climate: We have and will continue to provide the Columbia Missouri real estate community with pertinent and timely market statistics as seen recently in our daily blogs. We believe it is critical for a lender to know what is going on in their marketplace and how to adapt. By keeping up on this information, we are poised to help our referral partners succeed!!!


Again, we are a dedicated and highly knowledgeable staff here to help you! Our entire business model revolves around the realtor. The manner in which we deliver our products sets us apart from our competition and our surveys and testimonials prove it!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia, Missouri Mortgage Broker

Columbia Missouri Market Statistics Part III

Part II of this post isolated July of 2007' against July of 2006'. The following information will expand a little bit and encompass the first half of 2007 vs. the first half of 2006' in Columbia, Missouri and more specifically Boone County. Like past posts the targeting of this subject will include an abundance of statistics followed by some commentary.

EXISTING HOME SALES (First half of 2007' vs. 2006')

• Volume: Down $1,931,275 or (.6%)
• Units Sold: Down 24 units or (1.3%)
• Average Price: Up $2,087 or (.6%)

NEW HOME SALES (First half of 2007' vs. 2006')

Volume: Down $23,755,300 or (20.3%)

Units Sold: Down 118 units or (20.4%)

Average Price: Up $1,116 or (.3%)

TOTAL COMBINED SEGMENTS (First half of 2007' vs. 2006')

Volume: Down $25,686,574 or (5.2%)

Units Sold: Down 142 units or (5.7%)

Average Price: Up $2,087 or (.6%)

Just as I stated in the previous post, existing home sales are at least steady and holding their own. However, just the opposite can be said of the new home market. All three areas (volume, units sold, and average price) have been hit hard. This is especially true for the amount of homes being sold (down 118) over last year. The total picture is less bleak than I originally thought, however we are still down over $25M in volume and 142 homes which is a lot for this market!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia, Missouri Mortgage Broker

How ARM resets are calculated

With all the news out there of the coming deluge of ARM (Adjustable Rate Mortgage) resets on both conforming and non-conforming loans, I thought it might be a good time to explain how a lender comes up with a new payment when an interest rate adjusts.

First, some terms that you should become familiar with:

Index: This is the base rate to which the new adjusted rate will be based upon.

Some common indexes to base rates on are the U.S. Treasury's and the LIBOR. These indexes change as the markets go up and down.

Margin: This is a fixed amount to be added to the index to calculate the new rate.

In your loan documents this is stated as a number (i.e. 3.00% or 2.50%)
to be added to a specific index. It will also state when the index will be examined for purposes of calculating your new rate, usually 30 to 45 days before the adjustment date.

Caps: These refer to the maximum amount a rate can adjust at any one adjustment and over the course of the loan.

Some common caps are 1/5 (change a maximum of 1% up or down from the current rate during any one change and a maximum of 5% from the original rate), and the 2/6 (change a maximum of 2% up or down from the current rate during any one change and a maximum of 6% up or down from the original rate).

Let me show you an example:

Original Terms of 3 Year ARM

Loan Rate = 7.00%
Margin = 3.00% over the current LIBOR 45 days prior to change date
Cap = 2/6

*Note: That means that at the time of the loan the LIBOR had to be 4.00%
(7.00%-3.00%=4.00%)

Now let's say three years are almost up. 45 days before the new rate will go into effect the LIBOR is at 5.50%

To calculate the new rate you must add the margin to the index
5.50%(LIBOR) + 3.00%(Margin) = 8.50%

But, what would happen if the index had gone up to 6.50% instead.

6.5%(LIBOR) + 3.00%(Margin) = 9.50%
But that is not the new rate.
The loan had a cap of 2/6 so the most the loan rate could increase would be to 9.00%
(7.00% + 2.00% = 9.00%)

What would the highest rate be that this loan can ever have?

7.00% (original rate) + 6.00% (maximum rate per cap) = 13.00%

The same applies when the index falls. What would the new rate be if the LIBOR fell to 1.50%?

1.50%(LIBOR) + 3.00%(Margin) = 4.50%
Again the caps apply. The most the rate can go down in any one adjustment is 2.00% from the previous rate. So the new rate could not be any less than 5.00%
(7.00%(Current rate) - 2.00%(Margin) = 5.00%).

As you can see the calculation is fairly easy addition or subtraction. Hopefully this has taken some of the mystery out of how your new rate is calculated when you have an ARM.

Any questions or comments are always welcome!

Brought to you by Professional Mortgage Group, Inc. in Columbia, Missouri.

Columbia Missouri Market Statistics Part II

Well, I have done some research and would like to elaborate on some analysis of the July 2007' housing numbers for Columbia Missouri. As per part I of this commentary this blog will be mostly comprised of statistics.

Existing Home Sales July 2007' vs. July 2006'

• Volume: Up $2,992,554 or (4.2%)
• Units Sold: Up 32 units or (7.6%)
• Average Price: Down $11,258 or (3.4%)

New Home Sales July 2007' vs. July 2006'

• Volume: Down $5,033,238 or (23.4%)
• Units Sold: Down 18 units or (17%)
• Average Price: Down $26,872 or (6.7%)

Total Homes Sales July 2007' vs. July 2006'

• Volume: Down $2,040,684 or (2.2%)
• Units Sold: Up 14 units or (2.6%)
• Average Price: Down $16,993 or (4.9%)

What does all of this mean?

Well, to summarize the numbers, it seems existing home sales in Columbia Missouri are holding strong. However, the price of the homes selling is down an average of over $11,000 or 3.4% from a year ago. New construction sales are really suffering. Volume, units sold, and average price are all down an average of 15.7% over last year. This is especially true for the sales price. Can you believe these homes are selling almost $27,000 less than July of 2006'? This shows the eagerness of builders wanting to unload their inventory.

Overall the market is down, but this is somewhat skewed as the majority of our issues lie in the "new construction" area which has simply been over built for the community. With the majority of the homes being over $200,000, there seems to be no "quick fix" to rid us of these problems. Time is the answer. Over time the Columbia market should rebound nicely!

I am sure I speak for most of us in the real estate community, the sooner the better!!

Brought to you by Professional Mortgage Group, Inc.

Your Columbia, Missouri Mortgage Broker

Helpful Links

The whole purpose for Professional Mortgage Group, Inc. to publish this blog on www.pmg-inc.net is to provide useful information to visitors. Each day we provide valuable information and insight into the current market in Columbia, MO and sometimes Nationwide. It has been quite awhile since we did a refresher on some of the valuable websites out there that can be of assistance to you. I will just give a quick rundown of several sites that may be useful to you.

www.pmg-inc.net - Our website of course!
www.google.com - You can find anything on this powerful search engine.
www.gocolumbiamo.com - The City of Columbia website.
www.missouri.edu - The University of Missouri
www.zillow.com - Real Estate Valuations
www.bankrate.com - Rate and Lending comparison site.
www.realtor.com - Search for home for sale.
www.fanniemae.com - They are the largest buyer of securitized mortgage paper.
www.freddiemac.com - Another large buyer of mortgage paper.
www.bloomberg.com/markets/rates - Check Mortgage and Bond rates.
www.countrywide.com - Large Nationwide Lender
www.wellsfargo.com - Large Nationwide Lender
www.bankofamerica.com - Large Nationwide Lender and Bank with local branches.
www.realestatebook.com - Another site for home listings.
www.boonebank.com - Boone County National Bank Website. Largest local bank.
www.fnb-columbia.com - First National Bank. Another large local bank.
www.pisinspections.com - Local Respected Home Inspector.
www.myfico.com - Information about credit scores.
www.annualcreditreport.com - Obtain a free credit report once a year.


Here are some links to Local Real Estate Companies

Re-max Boone Realty
House of Brokers
Plaza Real Estate Services
Central Missouri Real Estate LLC
Weichert Realtors (First Tier)
3D Realty
Reece and Nichols
Gaslight Properties
Century 21 Advantage

These are several links to browse for information.
PMG hopes this information can be useful to you.

If you have a link that you think should be on this list, please post a comment and we can add it.

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Selling Your Home

In today's market where the inventory of homes is at an all time high and buyer's are not in abundance what can you "the seller" do to help make your home "stand-out" and thus have the best possible chance for a quick and painless transaction.

There are several components to this discussion but I will mention just a few of the major items you will want to address. First, your home must be in the best possible shape in order for you to maximize both your profits and your sale time. By this I mean making any necessary repairs that potential buyers will find issues with. For example; repairing any leaky faucets, the drywall crack by the window sill that has bugged you for years, the garage door opener that only works half the time, or the kitchen cabinet by the dishwasher that has cracked. These are just a few examples, but you get my point. Also, a clean house obviously looks better than a filthy one. All things considered equal, the home that has been kept clean, looks orderly, and smells fresh will sell faster than it's opposite. If you follow this simple rule, you will be on the right track.

Second, choosing the right realtor is crucial for a professional and optimal sale. Realtors are valuable tools and they have access to the MLS (Multiple Listing System). This advertises your home to other realtor's and buyers who may be looking for a home like your property. They understand what potential buyers are looking for and how to reach them whether that be print advertising, radio, word of mouth, or a combination of the three . Also, you need a realtor that will put the time and effort it takes to market your home in the best possible scenario for "you" whether that's something they have used in the past (i.e. The Real Estate Book) or some new more expensive medium. Finding the right realtor is no art but using references and referrals is key!

Third, you need the right lender involved from the beginning. More times than not your realtor will know who to use but the lender is a vital part of closing a successful escrow transaction. The last thing you want is to get a contract and at closing find out the lender has "miss-represented" the transaction and now you cannot close. How much time, money, energy, and other potential buyers have you missed out on? The right lender can help ease the stress of the transaction by helping your realtor market your home (i.e. Internet links, flyer's, yard signs, potential buyers, etc.) while at the same time "pre-screen" any potential buyers for your home so you do not have the former scenario happen to you.

I hope this helps and should you have any questions or comments as usual they are welcomed!

Brought to you by Professional Mortgage Group
Your Columbia, Missouri mortgage broker

Featured Listing

4804 Cody Court, Columbia Missouri 65203

MLS# 301783

$425,000

This week's "Featured Listing" is from Carissa Neimeyer

Office: 573-489-8469

Cell 573-489-8469

Call Today for your private tour!!!

Property Details:

Custom built walkout ranch home on quiet cul de sac with wooded back yard, hardwood floors on main level, stained concrete flooring in basement with wet bar. Extras: Stone Fireplace, jetted tubs,screened in porch, extra storage with excavation under garage!!

Square Footage: Main level: 2,390 Sq.Ft.

Basement: 1,640 Sq.Ft.

Total: 4,030 Sq.Ft.

Garage: 3 Car Attached

Year Built: 2004

Builder: Kidwell

Subdivision: Thornbrook

Virtual Tour

For all our realtor referral partners and others who check our site from time to time, I wanted to mention a great new tool that is being introduced as you read this. Alex Aslanidis of G&D Steakhouse fame is someone you no doubt know in Columbia, MO. Their family restaurant is enormously popular! What you may not know is that Alex is very talented when it comes to video, pictures, and computers. He has recently begun using his talents to produce "Virtual Tours" for realtors and sellers who are in need of marketing ideas to help sell a particular piece of property! We all know the market is down and any new tool is welcomed.

Alex produced his first tour with Aaron Rose of Remax Boone Realty and I am extremely impressed. I was fortunate to see the full "HD" version and it was really well done. He is still in the process of improving a few minor details and these productions will no doubt improve even more in the days to come.
I'm sure everyone has seen a "Virtual Tour", but Alex has raised the bar to another level. These are done where you can see the agent and it is produced as if you are there and the agent is giving you a personal tour. Alex uses video, still images, music, and voice overs to make his tour. His editing skills are what sets him apart!

Not only does he give you the file to use on your website, but he can upload it to http://www.youtube.com/. This is a site that is heavily visited everyday and your property can be viewed all over the world. You get all of this for a very reasonable price!

Here is a quick example of what he can do
http://www.youtube.com/watch?v=tS0hFEOhVCo

I am by no means an authority on what he is doing, but I wanted to put it out there in case one of you realtors could find it useful. If you have any interest stop by G&D Steakhouse next to Best Buy or email me @ eric.hemmer@pmg-inc.net and I can get you in touch with Alex.

As this takes off, I will no doubt update our blog with more information.

Brought to you by:
Professional Mortgage Group, Inc.
"Your Missouri Mortgage Broker"