You will soon feel quite popular if you’ve just bought a home or at least your mail box will be with tons of junk mail. Over the weekend I received an email from one of my clients who closed on their new home last month:
"As I’m sure is typical, we’re being deluged with mortgage junk mail. I see you have several highlights of particularly bad ones you’ve seen, but is there any way to stop the flood? I know there’s a marker you can put on your credit report that stops credit card offers – is there anything similar for mortgages?"
In a nutshell, your Deed and Deed of Trust are recorded at the county which become "public record". There are companies that research, buy and resale this information to those wanting to reach out to new homeowners. You’re more popular than you’ve ever wanted to be…it’s the welcome wagon of junk mail. What’s worse is that some companies will present the information as if they are a part of or teamed up with your lender.
Please check back with your original lender before taking up some of these offers to verify if they are indeed from your mortgage company–the trickery they will resort is amazing and sickening.
Here’s a great article that I read another local blog, A Generous People regarding getting rid of junk mail. I hope it helps! In the meantime, I recommend opening your mail over your recycle bin.
Rhonda Porter,
I just wanted to let you know that I enjoy your postings. I found this website while trying to search for comfort in this economic mess. I made some foolish financial mortgage decisions encouraged by our influential mortgage broker in Gig Harbor in the past 3 years. Our first home is on a deferred interest only 40 negative arm (first mistake) (and being rented at the moment). Second home is on a 30 year interest only 100% financed with the promise of being able to refinance it within a year (second mistake) (August 2007 destroyed that speculative dream).
All we wanted in the first place was to consolidate our loans into one while we were living in the first house. This means we just wanted a 30 year fix combining all our loans into one. Not to get carried away into this crazy lending exploitation. However, one thing leads to another with savvy influences from our broker that provided a sense of financial trust… we decided to take a chance that the broker may know something we don’t know about finances. We are still yet to see if he really knows what he is talking about while this whole mortgage and credit mess unfolds. Meanwhile, we suffer worse than ever before with high payments without hopes for refinancing out of this burden.
First home = 460k loan debt and climbing (deferred 1700.00 monthly), 50k Heloc maxed. Total debt 510K. Market Analysis estimate = 560-580K.
Second home = 720k loan debt (5300.00 monthly). Market Analysis estimate = 760k-800k. No hopes for refinance as Gig Harbor, Browns Point, and DuPont are the last cities for house price growth in the state of Washington… I am sure will see a downturn trickle effect soon despite the influx of increase population growth.
Lessons learned… when the dust settles and the economy is roaring… we are bailing out while everyone is celebrating. Downsizing and preparing for the next economic bubble will be first one our list.
Keep up your postings because it provides comfort in bad times.
Steve
Gig Harbor resident
Steve in GH,
You might want to try making interest only payments on your neg am ARM to stall it from recasting. Depending on what the cap is on your mortgage, it will eventually “recast” and reamortize at the total (including deferred balance) which will really put you in a horrible bind with your existing second mortgage. I don’t want to scare you–I do want you to dig out your note and do what you can to not make the “deferred interest payments”.
For example, if your neg am cap is 110% of your original balance (assuming) $460,000; this would mean that once you hit $506,000 (110% percent of 460k), your mortgage will be reamortized based on the remaining term with the higher balance of $506k.
If you are deferring $1700 monthly, this will take approx. 27 months to hit $506k (assuming your cap is 110 months). Your cap may be as high as 125% which would buy you more time…but you can see where I’m going with this. If you would like me to review your ARM, just fax me your Note.