Orlando Mortgage Blog

You applied for a mortgage and suddenly you're bombarded by solicitors and mailings for mortgage loan offers. We know why...do you?

When you apply for a mortgage (and other credit types by the way), your credit report is pulled through up to three main credit reporting agencies (repositories). They charge a fee to provide your report data and more often than not, turn around and sell your name as having applied for mortgage credit on lists of folks who also just applied for a mortgage, to other companies that are willing to pay the bureau for your information, so they can solicit you while the iron is hot! It's totally legal. It's an unauthorized invasion of your privacy you might think, but it's legal.

How do you put a stop to it? To opt out go to www.optoutprescreen.com and have your name removed from the list they can sell or contact, at least for a while. You will probably have to update the request since it's subject to expiration at least yearly. Plus, you will need to do it 30 to 45 days before it will become effective. So, if you are applying for a mortgage now, it won't help you immediately. You might want to do it now to get it started. I've taken myself off the list. Apparently governmental powers that be think the practice is OK. What do you think? Pass it on while change is a buzzword.

Bill Wilbanks www.orlandomortgagemasters.com

Short answer, they don't want to yet...and won't until they have a market to sell them through to profitably, are able to sell the securities to willing investors who are no longer afraid of early payoffs or loan loss issues or declining real estate values show signs of bottoming at some point. Why should they with the Fed programs available to them right now put in place to increase liquidity in the financial system and in theory eventually to free up lending to the consumer ($700 Billion dollar trickle down theory without requirements to lend, where's my piece?). 

For the time being the big guys have a bunch of our found future tax money and are buying the little fish with it. They're getting bigger with our tax dollars and full Fed support apparently. The yield curve could be getting more attractive depending on the FOMC cuts now or in the future for the lenders to branch out and actually make loans at rates meant to attract consumers. Long rates are normally influenced (in a normal market...remember those) by supply and demand. But if there is no one buying mortgages or the 7 year prepayment assumption, that 30 year buyers normally rationalize, no longer applies due to early payoffs expected in a declining rate market...

BILL WILBANKS  www.orlandomortgagemasters.com       

No matter what your credit scores have been in times past, there are a few things you may want to be aware of and monitor in relation to your current credit card accounts and even Home Equity Lines of Credit (HELOC).

Credit history and available credit are and have been major parts of all our credit score dynamics for quite a while. But trends are starting to happen that you need to watch on your monthly statements out there.

Revolving charge cards like VISA, MC, or whoever, are beginning to change the rules on us and many folks aren't paying attention. Many of these companies are reducing the billing cycles from 30+ days to 28 or even 26 days each month. Why does that matter? Well, you probably are not getting your statement until 3 to 5 days (if that many) before payment is due now and if you pay the statement by check the day you receive it, there's a reasonable chance it won't arrive in time one time or another and that's all that is needed nowadays to (1) bump your rate to as much as 28%, (2) increase your minimum payment requirement and/or (3) suddenly drop your card limit to the current balance. You may have paid perfectly for years. It doesn't matter. Yes you can pay electronically, but what if you miss seeing it or get busy by a couple days?

Ok, how can that effect you other than the rate bump issue? Simple the fact that your payment can suddenly increase is enough, but credit scores are heavily effected by the available credit on the line. Example, say you have had a $10,000 limit on the card. If the card provider finds a reason (and none needed) to cap your limit at the current balance let's say, you now have no available credit on the card and that is reviewed negatively by all the credit scoring systems out there and can lower your scores. Having available credit to access should you need it is looked upon positively of course. Though you may pay the balance monthly as many folks do, the report may be pulled showing a balance before your payment hits and the lower line can effect the score should it be pulled that particular month.

Same can be true on a HELOC. Most lenders have the capability to limit available credit lines midstream or close the line altogether if you have a zero balance and in today's declining value real estate markets in many states lenders are doing it. If they cap your line at your current balance or reduce it to a lower loan-to-value reducing their exposure, that can have the same effect as the credit card shown above on your credit scores. Why care? Next time you want to borrow on a auto loan or other major purchase, most rates of interest are heavily score oriented. Many examples apply. Just be aware we all need to monitor our finances and actually do it.

Bill Wilbanks  www.orlandomortgagemasters.com