Lenders / Banks passing the buck.

Well it’s 2012 and this year I promise, or at least one of my goals, is to update you all with the most recent financial and mortgage information with the Bear perspective. The first thing I’ll say is that, thank GOD 2011 is over. 2012 has to be and will be a much better year for all of us. I’m actually excited and encouraged about where the loan industry will go. I don’t think we’ll see to much of a growth or betterment of our economy but there are so many changes that are going on, I can’t help but think one or two might actually help the average consumer.

I can’t say that 2012 is starting off great as far as all you mortgage customers out there. Sure rates are low, and will continue to be low. But I’m going to show you the best example of “the banks will only do what the banks want to do”.

Attached is an actual email that is basically passing the buck to the consumer regarding fees for ALL mortgages. It’s funny that even though they say this increase to rates / fees are due to Fannie Mae and Freddie Mac new regulations, the lenders are continently applying this rate / rebate hike to ALL loans. I wonder who’ll pocket that money? HMMMMM?

The funny thing is that this email from Wells Fargo came out Monday and no other lender said anything. This led to may of my piers speculating that maybe this was just a Wells Fargo thing. Which very well could have been the case. But seeing how this is a copy cat business, I knew other lenders would follow suite. Especially since most “lenders” just sell their loans on money lines to Wells Fargo, Bank of America and Citibank (just to name some big ones). Sure enough today, Tuesday, I started to get the same emails from even the smallest lender that rates / fees would increase.

About two months ago Obama said in a speech that he was going to push for a loan program that would help everyone, even if they where upside down on what they owed, there would be a mortgage for you. I got call after call for about two weeks asking about the new “Obama” loans. Well, two months later and there still hasn’t been a new loan program that has come out yet.

See, Obama is a politician. Like him or hate him, he’s going to say what he wants to happen. All politicians do this and if a republican had said this, the result would be the same. No one will tell the banks what to do. Sure they’ll take our bailout money but they’re only going to do what they want and if by chance there is a regulation that they have to adhere to such as this increase in GFees, they’re just going to pass it along to the borrower. They’re not going to let something like this stop them from making the same money they’ve always made.

Not all that shines is Gold

I'm learning and reading about the new Freddie and Fannie programs and the biggest problem that I see with them is that they don't help the people that need help the most.

If your loan is currently owned or backed by Freddie or Fannie, refinancing could be very easy. But if you where someone who got a subprime or alt-A loan you probably aren't backed by either of these two companies. So for all the people who have ARMs coming up or where on 2 - 5 year subprime / alt-a loans, you can't capitalize on these great programs with great rates.

For instance I got a 5 year ARM. It is now coming to the adjustable period. Out of easy 5 years ago I went through a subprime lender for less documentation. I do not qualify for either of these lender's new programs because who knows who backs my loan. I'm probably one of a million good, always have made my payment, borrowers that would love to get a lower interest rate and a long term 30 year fixed loan. I can't for right now. maybe they'll change the guidelines but not tomorrow they aren't.

As I predicted there are going to be some good things that come out with these programs but there are also some drawbacks. It's going to be a long process to help so many people out. I suspect a lot of changes in the coming months.

Also, this is another sign that things are not going to get better anytime soon. A few good pieces of news last week and people are ready to proclaim the bottom is near. Not so fast my friends. We may be plateauing before another shoe drops.