14 Responses to “Why Can’t I Get That Low Mortgage Rate Advertised?”

1. lokka66
   January 5th, 2009 @ 8:09 am

   I have a good cr score and still cant get a loan

2. Mortgage Rates May Be Low, But That Doesn't Mean You'll Be Approved - Mortgage Rate News
   January 5th, 2009 @ 9:03 am

   [...] And mortgage lenders are stingy. The Subprime Blogger points out that one of the reasons that mortgage loans and refinancing are so hard to come by have to do with appraisals: Today, when the application is submitted and the appraisal and credit scores are analyzed, it is a [...]

3. John Ricelli
   January 5th, 2009 @ 2:33 pm

   I am from the Philly area and I feel that negative information like this has led to the so-called crisis we are having. I fix & flip rehabs in areas that was the sub-prime market. The sub-prime market collapsed because greedy lenders were lying and pushing through loans for the un-creditworthy. Then in some areas, like down at the Jersey Shore, speculators drove the price up when everyone was in a buying frenzy. Builders rushed in to supply the speculators causing an oversupply. Supply & demand market forces took over and prices fell. Perhaps, the worst offender, and I include this blog, is the fact-spinning media. You are neck and neck with the great conservative, Bush, who along with a complicit congress, passed TARP, the biggest ever socialistic corporate welfare law giveaway to those greedy lenders and other porkers. One of the more disturbing aspects of TARP is a provision for foreign banks to get money.

   Anyway, what about this blog & the media? They create self-fulfilling prophecies. For example, the media kept harping of when the real-estate bubble would pop. To help their predictions along, I remember reading of the alarming rates of foreclosures. They didn’t tell you the overwhelming majority where in 3 states, Florida, Calif., and I forget the other one right now. These states had many hot beds of speculators doing their thing.

   To make foreclosures sound nationwide, I remember one talking head that said foreclosures had doubled in I believe it was S. Dakota. I decided to check. Yes, it had doubled from 150 to 300 foreclosures. Hardly a need to yawn rather than making it sound as if the sky was caving.

   And about the real estate bubble. There is no such animal unless you believe in Sasquatch. Real estate sales are tied to interest rates which do not rise and fall bubble style. Outside of localized areas where there was speculation and builder’s frenzy, prices rise and fall slowly. But with you guys spinning facts, you are spooking people, which is having a deleterious effect on the whole economy.

   Ok, the two major points of your report. You can’t get 4.5% and appraisers are shooting down 80% of loans. This is a major spin on facts. Lenders are not in the business of advertising low rates and then aggressively shooting down borrowers. What’s the point of that? Nothing has changed. Lenders have always advertised their lowest rate to the most creditworthy. So the poor victimized borrower is lured in at 4.5% and jacked up to 5%. If the borrower is creditworthy to get the 4.5%, he gets 4.5%. If not, he pays higher. That’s the way it’s always been. And before you get the reader panties all twisted up in knot, the difference in a 4.5% – $250,00/30 yr. and 5% – $250,000/30 yr., is $75 per month. Wow! I guess that knocks most people out of the box.

   And what about appraiser’s shooting down 80% of all aps based on stated price? Since when have appraisers used stated price to base an appraisal? They use price comparables as their main criteria. If 80% of loan aps are being shot down because of what the seller is trying to sell for, then 80% of sellers are trying to get too much for what they have. Maybe they haven’t heard that the news that the real estate market peaked and is retreating because all the speculators, who were fueling the dramatic rise across the board, are all gone. Their properties overly benefited. Now there are price adjustments to be made. Of course, to each owner that means everyone else, not their 24K, solid gold property. They are clinging like Obama’s clinging to guns and religion.

   Cut all the obfuscation with double-talk about appraisers and short sales. Quit trying to make the half-full glass half-empty. You want some real basic facts. I have brokers where I can get my rehab buyers an FHA 97% LTV with a 580 score. Some stips are 2-yr. work history, verifiable income, 3% money out of a bank account, and 2 points (which I will pay if need be). All for a whopping 6%.

4. Doc Compton
   January 5th, 2009 @ 5:54 pm

   This is sooooo true, and very well explained… We see it all the time…

   Whereas, a little less than a year ago, a 580 credit score made you eligible for 100% financing, these days, that score will barely qualify you for lending in a few select programs.

   On the other end of the spectrum, it wasn’t that long ago when a 680 credit score would put you in position for rates that were well below the average. These days, that’s the minimum for some of the more ‘average’ rates out there…

   If you need any help improving your credit scores, regardless of which end of the spectrum you’re at, please feel free to contact me for help!

   -Doc Compton, president
   http://www.omegacreditrepair.com

5. Subprime Blogger » Mortgage Rates Will Continue Lower, But…
   January 5th, 2009 @ 6:10 pm

   [...] Why Can’t I Get that Low Mortgage Rate Advertised? [...]

6. Danny Thornton
   January 5th, 2009 @ 6:56 pm

   I have to agree with John that it is articles like this that keep people from even applying. As for Doc’s comment, that is so true. Show me an FHA that does not allow 96.5% financing and the credit score is not the deciding factor. People need to get their facts straight if they are going to talk about mortgages. I have yet to turned down a client that qualifies on an FHA loan and I have yet to have a purchase that the appraisal value has not came in.

7. John Ricelli
   January 6th, 2009 @ 4:06 pm

   To the designer of this site. It may look very artsy, but is not user friendly. The main problem is you have green type with a green background. Additionally, you use a very small font. It makes text very difficult to read. Make the type white and larger.

   I am always amazed at advertisers and web site designers who fall in love with their artiness and never consider for whom it is meant. Go look in the mirror if you want something to admire. Fix the site.

8. Subprime Blogger » Your Home May Not Be Worth the Appraised Value, Wait Until You Read This
   January 7th, 2009 @ 4:01 pm

   [...] Why Can’t I Get That Low Mortgage Rate Advertised? [...]

9. Subprime Blogger » Subprime Loans
   January 14th, 2009 @ 11:39 pm

   [...] knew that they would get a great deal of money up front with the fees and services so many became subprime lenders.  Giving out subprime loans to individuals who had credit scores well below 680.  It was almost [...]

10. Refinance Hard To Qualify Mortgages
    January 21st, 2009 @ 7:22 pm

    Hello webmaster, I found your blog via Google while searching for refinance hard to qualify mortgages and your post regarding looks very interesting for me

11. Subprime Blogger » Senator Dodd is Refinancing; What Rate Will HE Get?
    February 3rd, 2009 @ 6:22 pm

    [...] Why Can’t I Get that Low Mortgage Rate Advertised? [...]

12. John Ricelli
    February 4th, 2009 @ 7:05 am

    Update to my post of January 5,’09. FHA Credit score requirement has been lowered from 580 to 550.

13. John Ricelli
    February 4th, 2009 @ 7:19 am

    Subprime Blogger – Thanks for fixing the site. I can easily read it now.

14. Subprime Blogger » Will the Second Mortgage Crisis Directly Affect You?
    February 7th, 2009 @ 8:41 pm

    [...] Why Can’t I Get That Low Mortgage Rate Advertised? [...]

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