The Mortgage Loan Process

If you are a first time home buyer or even if it has just been a long time since you were in the market to get a mortgage, the process can seem intimidating. The news is filled with doom and gloom about the mortgage and housing markets. So many companies that were here last year have gone out of business or been sold. And, who can you really trust anyway?

I'll give you several ways to ease your mind about this decision. First, you must understand that, in this world of 24 hour news, sensationalism is key for news organizations to survive. If a story doesn't grab attention immediately than it is more than likely going to be lost in cacophony of all the other "news" stories. So, when the housing market slows (like it inevitably would) and investors lose some of the enthusiasm for high risk loans (like they inevitably would) the only way to make the story last is to blow it completely out of proportion to how it affects normal everyday people's lives. And if some companies pay the price by going out of business or get hurt by unfounded rumors that the media itself starts, so much the better for the news outlets.

I'll give you two clear examples: 1) Countrywide was faced with confidence questions mearly on a media rumor that it had extreme liquidity issues. This was incorrect information blared out by many media outlets and thank goodness that other large lenders stepped in to reaffirm the public's confidence in a major mortgage lender before permanent damage was done. 2) Stories have gotten so ridiculous that I saw an article blaming the sub prime crisis for slow auto sales. If you can figure that one out, please let me know...especially since the auto market has been slowing for the past 4 years! So, take your hysterical news with quite a few grains of salt.

Next, where did all the mortgage companies go? In this free market the strong companies survive and the weak or dishonest companies disappear when the market slows down. This is actually a good thing. It is better for the consumer and it is better for the strong companies. We are here because we are good at what we do.

And that brings me to the final point of who you can trust. You should ALWAYS work with a reputable company. A reputable company should be able to produce statements and names of satisfied customers. A reputable company should come highly recommended by people in the real estate industry like Realtors and title companies. And finally, a reputable company should be able to answer your questions competently and in such a way that you understand the whole transaction.

You will find the process easier and more enjoyable if you keep your ears closed to doom and gloom reporting, understand that strong companies survive market downturns and do business with someone you can trust.

Your comments are welcome!

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