Beware the Buzzwords.
I had a recent experience with my current mortgage holder that makes me wonder if consumers are accepting "deals" from banks that are not "deals" at all.
First, to be clear: I have equity in my home and I don't need a loan modification. I'm just in the market to refinance because rates are pretty good right now.
- I called to get a payoff on my existing loan.
- I got transferred to a loan retention department where they had a "special deal" for me if I stayed with them. I think it was something like 1/8 less than my current rate. AND I had to pay origination fee and other junk closing costs...
- I told them that their retention rate was terrible. It was 7/8 higher than another option with no points or fees.
- They told me I might qualify for a loan modification under Obama's plan.
- I told them I likely wouldn't go for that even if I did qualify, but I would listen to their sales pitch just to see how low my special government "bailout" rate could be.
- Turns out the Obama "special deal" was only 1/8 better than the lender's deal. Still about 3/4 higher than the rate I had locked in elsewhere with no points or fees. I even pointed that out and asked what was up with that? The rep just said that some people thought it was a good deal and that the program wasn't meant for everybody.
Beware. Not all of the "deals" out there are deals at all.
I just KNOW someone somewhere would be laughing all the way to the bank (pun intended) if I bought into either of those deals.
I'm not saying there aren't a select few out there who cannot benefit from some of the programs out there. But most have to live in an area where no depreciation has taken place in the past 2 years...
Some in the real estate and lending industries feel the most touted "programs" are merely publicity stunts. They wouldn't be surprised to find out some conglomeration of lenders lobbied for such programs. The main benefactors of many programs are not really homeowners, but lenders... "Just follow the money," they say.
I certainly don't even know if the "Obama" program being pitched by my loan servicer was really tied to the "stimulus package". It could just be that lenders are trying to find the "some people" out there who will think the offer is a good deal because they used certain buzzwords in the sales pitch.
If you hear "Bailout" "Obama" or "Stimulus Package" watch out. Slow down. Do your homework.
The lender could just be trying to stimulate their own bottom line...
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Demand for rental homes and units in many parts of the country is on the rise as many homeowners who are unable to refinance their mortgages to today's lower rates because their property values have declined have sold their homes "short" or left them altogether after foreclosure. Increased restrictions for obtaining mortgage financing (high credit scores and larger down payments) have also reduced the pool of renters who "qualify" for homeownership.
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