Mortgage Mayhem

[Pua'i Mana'o]

Re: Mortgage Mayhem

Pua'i,
If a client decides they want to prepay their mortgage, there are no negative consequences for me. I actually advise my clients that they can reap significant interest savings by making extra payments toward principal, especially in the early stages of their mortgages. Although prepaying a mortgage reduces the interest one can deduct from their income taxes, many find the prospect of paying off their mortgage sooner the more attractive option.

then why the disparaging comments about tardus? Using the very same mathematical principles and available LOC that the geniuses of the banking industries came up with against those very same industries is a very noble, heck quite American thing to do--yay for the little guy! Your original rant against whatsherface was about minutiae; who cares what she did for a living? But the math, the sweet Jesus math of suppressing principal is brilliant, and one doesn't need to pay for the services of companies like tardus to do it.

Yet here we are, several pages into this, and not a peep.

(on the larger scale, as a woman who lived through negative equity horrors of the real estate bust of the late 80s/early 90s, I am so averse to debt that my own attitudes fall squarely in line with Kamuelakea).

If a person is disciplined and numerate, mortgage acceleration programs are very powerful tools. For those who aren't disciplined and won't sit still long enough to grasp the mathematical concepts, it wouldn't work, but let's be honest--those types wouldn't be the ones to run a MAP anyway.

[MixedPlateBroker]

Re: Mortgage Mayhem

then why the disparaging comments about tardus? Using the very same mathematical principles and available LOC that the geniuses of the banking industries came up with against those very same industries is a very noble, heck quite American thing to do--yay for the little guy! Your original rant against whatsherface was about minutiae; who cares what she did for a living? But the math, the sweet Jesus math of suppressing principal is brilliant, and one doesn't need to pay for the services of companies like tardus to do it.

Yet here we are, several pages into this, and not a peep.

(on the larger scale, as a woman who lived through negative equity horrors of the real estate bust of the late 80s/early 90s, I am so averse to debt that my own attitudes fall squarely in line with Kamuelakea).

If a person is disciplined and numerate, mortgage acceleration programs are very powerful tools. For those who aren't disciplined and won't sit still long enough to grasp the mathematical concepts, it wouldn't work, but let's be honest--those types wouldn't be the ones to run a MAP anyway.

Pua'i,
My thread starter wasn't an indictment of Tardus, it was simply a rebuttal of three statements Ms. Souza made which were wholly untrue (refer to my original post to see which statements these were and my response as to why they were wrong).

If Ms. Souza sat with Andy and made her pitch according to the original Tardus principles (she only addressed prospective homebuyers with bad credit; Tardus' system is only useful for existing homeowners), then I wouldn't have posted at all. Unfortunately, she made broad, misleading generalizations about the mortgage market. I was surprised, given her background as an attorney, that she would even consider making the statements she did, which I evinced were outside the scope of her business and expertise.

[Pua'i Mana'o]

Re: Mortgage Mayhem

Pua'i,
My thread starter wasn't an indictment of Tardus, it was simply a rebuttal of three statements Ms. Souza made which were wholly untrue (refer to my original post to see which statements these were and my response as to why they were wrong).

If Ms. Souza sat with Andy and made her pitch according to the original Tardus principles (she only addressed prospective homebuyers with bad credit; Tardus' system is only useful for existing homeowners), then I wouldn't have posted at all. Unfortunately, she made broad, misleading generalizations about the mortgage market. I was surprised, given her background as an attorney, that she would even consider making the statements she did, which I evinced were outside the scope of her business and expertise.

Having never seen that interview, I'll take your word on it. I thought you made your three points quite clearly. But let's look again at the paragraphs I quoted above from you:

I have been to a Tardus presentation and I know people who've worked for the company. Tardus' original mission was to provide homeowners a system, utilizing credit cards and a HELOC, to front-load their mortgage -- theoretically paying down the principal more quickly. Ms. Souza now seems to be positioning them as a credit repair shop. They don't broker or lend money. You might find their Hawaii BBB report here interesting. Although their multiple complaints are mostly resolved, it's very odd that the company's principal is an administrative assistant.

Oh, and I apologize for the slightly inflammatory title, but I already spend hours everyday educating and advising my clients about mortgages. I could not stand idly by while Ms. Souza spreads potentially harmful misinformation in order to steer more business to her own company. Hopefully, Andy will attract other sponsors with some ethics and who won't demand seat time. Best of luck to him.

You moved your sights off of Ms Souza and onto the company in these last two paragraphs. The language you employ very much intends to make Tardus' work suspect, when it is a sound, reputable, and proven method of accelerated mortgage reduction.

[MixedPlateBroker]

Re: Mortgage Mayhem

PM,
If, by the language of my initial post, I made Tardus "seem suspect," let me point out no Tardus executive or employee -- Tanisha Souza included -- can deny with veracity anything I've said.

You've already agreed with me that three things Souza said regarding the mortgage market -- in her capacity as a representative of Tardus, and while appearing on "Late Night with Andy Bumatai" to give advice -- were not factual. Therefore Tardus -- with Souza as its representative in a public forum -- was giving out bad advice.

I stand by the facts I've stated, whether in my initial or subsequent posts, as they remain facts.

[Pua'i Mana'o]

Re: Mortgage Mayhem

If, by the language of my initial post, I made Tardus "seem suspect," let me point out no Tardus executive or employee -- Tanisha Souza included -- can deny with veracity anything I've said.

You appear to co-mingle your points and evade mine. Let's review:

I have been to a Tardus presentation and I know people who've worked for the company. Tardus' original mission was to provide homeowners a system, utilizing credit cards and a HELOC, to front-load their mortgage -- theoretically paying down the principal more quickly. Ms. Souza now seems to be positioning them as a credit repair shop. They don't broker or lend money. You might find their Hawaii BBB report here interesting. Although their multiple complaints are mostly resolved, it's very odd that the company's principal is an administrative assistant.

1. You use the term theoretical when it is based upon sound mathematical principles.
   
2. You disparage the corporation by making their product look suspicious (without bothering to describe it) and offer a link to the BBB with a warning of its oddity, when the link shows that the corporation is in good standing.

You've already agreed with me that three things Souza said regarding the mortgage market -- in her capacity as a representative of Tardus, and while appearing on "Late Night with Andy Bumatai" to give advice -- were not factual. Therefore Tardus -- with Souza as its representative in a public forum -- was giving out bad advice.

I never agreed; I took your word for it and believed you were quite clear in making your points. In the now three times I have commented on this thread, that in fact was never my point.

I stand by the facts I've stated, whether in my initial or subsequent posts, as they remain facts.

I do appreciate your interest in rebutting Souza's comments, but find you to be avoiding an actual discussion on what is really the most fascinating aspect of this conversation, that is how out-of-the-box MAPs are, what Tardus actually is, and why their product is actually weak (my quick pov: it is hard to make a buck on quadratic equations that are in the public domain, especially when folks like my just figured it out and set it up for ourselves)--even though the premise is quite sound, provided people understand the math.

[MixedPlateBroker]

Re: Mortgage Mayhem

PM,
My intent was not to evade your questions, I was simply trying to point out that my thread-starter is factually sound and that my focus was on what Ms. Souza said. Everything mentioned in that post about Tardus was meant to show that Ms. Souza was neither qualified nor credible in making those specific three statements. I will further clarify my position since there seems to be a bit of a misunderstanding.

You use the term theoretical when it is based upon sound mathematical principles.

I say "theoretical" because I've spoken to many people who failed in the practical application of the Tardus system, which is no fault of Tardus. As far as I'm concerned, there's nothing wrong with the math. I assumed we were on the same wavelength when you said, "If a person is disciplined and numerate, mortgage acceleration programs are very powerful tools." If being the operative word.

You disparage the corporation by making their product look suspicious (without bothering to describe it) and offer a link to the BBB with a warning of its oddity, when the link shows that the corporation is in good standing.

OK. Now that we've established that I did not disparage Tardus or its product, please refer to the section of my post that reads "it's very odd that the company's principal is an administrative assistant." I never questioned the company's good standing on BBB, I simply noted what was out of the ordinary on their report. How many companies have you seen that list an administrative assistant as their principal? Again, this is simply a commentary on Souza's credibility and not a swipe at the company, especially considering it's a franchise.

I never agreed; I took your word for it and believed you were quite clear in making your points. In the now three times I have commented on this thread, that in fact was never my point.

So here's where I misunderstood you. I thought you literally took my word for it, not figuratively. You're entitled to your own opinion. Although you do contradict what you said previously in your second post, "Your original rant against whatsherface was about minutiae ..."

I do appreciate your interest in rebutting Souza's comments, but find you to be avoiding an actual discussion on what is really the most fascinating aspect of this conversation, that is how out-of-the-box MAPs are, what Tardus actually is, and why their product is actually weak (my quick pov: it is hard to make a buck on quadratic equations that are in the public domain, especially when folks like my just figured it out and set it up for ourselves)--even though the premise is quite sound, provided people understand the math.

Actually, you've only been asking me why I've been disparaging Tardus (which I've shown I haven't) up til this point. I think you've already answered most of your own questions, although I don't think it's their product that's weak -- it's that most people would balk at paying $3,500 for the product. But I agree with you on your other points. As far as going into detail about what the Tardus system is, I'd be hesitant to put it all down in an open forum considering Souza is an attorney and I'm sure Tardus would like to protect their financial interests.

[808shooter]

Re: Mortgage Mayhem

The language you employ very much intends to make Tardus' work suspect, when it is a sound, reputable, and proven method of accelerated mortgage reduction.

To make it real simple. The idea of using a Heloc to finance your mortgage is a great idea with two BIG assumptions.

1. Low, Stable Short term interest rate environment. Totally at the mercy of the Fed who controls short term rates.

2. Clients need to have lots and lots of discipline. It is not easy to live 100% on credit with all funds going to pay off your huge loan financed on volatile short term rates.

There is lots of opportunity for abuse and if the client's profile isn't suitable, they could get themselves into a lot of trouble. I feel like I'm pretty smart, know exactly what the deal is but when I thought about doing what Tardus is proposing a few years ago, I decided it wasn't worth the risk? Why, it takes too much energy and discipline to watch your finances that closely. I like the guaranz 30 year fixed. Low stress, sleep at night kind of security.

(and btw Braddah K, long term rates are all based on the value of the 30 year treasury note. That is the debt that is issued by the Federal Govt. Backed in full by the US Govt - the safest investment in the world. The safest. That is the debt Japan & China have been been aggressively purchasing for the last 8 years. And the reason isn't a sinister tinfoil hat type plot. It is to maintain a favorable currency valuation for the yen and the yuan. If the yen and yuan appreciate too much vs the dollar, bad for Chinese and Japanese exports to the US. The yuan was unpegged from the dollar in 2005 so the Chinese are forced to use their dollar surplus to buy yet more dollars in the form of US treasurys on the open market. When the long bond price goes up, yield (long term rates) go down. The US Treasury market drives long terms rates, not the secondary mortgage market. And braddah, that is why we have enjoyed low long term rates for a while. )

No charge foa da privete skoo edumakashen. heha jes joking.

[Pua'i Mana'o]

Re: Mortgage Mayhem

It works if the person understands the math and lives within her means. If she is responsible and disciplined enough that the total sum of monthly expenses are equal to or less than her net wages, then it works, regardless of what the interest rates are.

She must get into a lifestyle of Habits:
•put her checks consistently on the mortgage, which suppresses the principal
•keep as minimal amount of cash as possible, paying as many bills as possible with her credit card--this offers a month of interest-free float
•pay off that CC the following month by drawing on the heloc.

Habits are these:
-the entire sum charged on the CCs must be equal to/less than her net monthly income minus whatever cash was kept on hand (some bills do not allow for CC payment).
-the CC must get paid on time.
-the paychecks must get put towards the mortgage on payday

for many this is so far out there and intimidating to wrap one's mind around. But it can be done, and one doesn't need to pay someone else to set it up.

[kamuelakea]

Re: Mortgage Mayhem

(and btw Braddah K, long term rates are all based on the value of the 30 year treasury note. That is the debt that is issued by the Federal Govt. Backed in full by the US Govt - the safest investment in the world. The safest. That is the debt Japan & China have been been aggressively purchasing for the last 8 years. No charge foa da privete skoo edumakashen. heha jes joking.

808shooter,

You might want to google around a little more. Fannie Mae and Freddie Mac are backed by the U.S. Government. Those are only for loans with very specific and stringent requirements. Those mortages are sold to investors as Ginnie Maes, according to their own website www.ginniemae.gov "The ONLY mortgage backed security back by the full faith and credit of the U.S. Government". By the way, both FMs are in trouble right now for cooking their own books so even the U.S. Government "Mortgage CDO" organizations are crooked.

But the subprime liar loans etc being purchased by investors such as the Chinese are NOT backed by the U.S. government. They are essentially like a stock and if they go to zero, nobody's bailing them out. That is why the U.S. government didn't have to care about the funding of the housing bubble. Its the Chinese etc who will appear to the average numbskull to "lose".

Of course as I explained, the Chinese etc don't care if they lose on the mortgages because they will have won by creating millions of 30 year indentured servants who will pay their "rent" to the Chinese every month and buy Chinese made crap to fill their homes with.

Americans will be laughing at the "dumb Chinese" for funding our home buying but it is the Chinese who will be laughing at the "dumb Americans" for getting themselves into a lifetime of debt.

Whose dumber?

Check it out 808SHooter.

[808shooter]

Re: Mortgage Mayhem

808shooter,

You might want to google around a little more. Fannie Mae and Freddie Mac are backed by the U.S. Government. Those are only for loans with very specific and stringent requirements. Those mortages are sold to investors as Ginnie Maes, according to their own website www.ginniemae.gov "The ONLY mortgage backed security back by the full faith and credit of the U.S. Government". By the way, both FMs are in trouble right now for cooking their own books so even the U.S. Government "Mortgage CDO" organizations are crooked.

But the subprime liar loans etc being purchased by investors such as the Chinese are NOT backed by the U.S. government. They are essentially like a stock and if they go to zero, nobody's bailing them out. That is why the U.S. government didn't have to care about the funding of the housing bubble. Its the Chinese etc who will appear to the average numbskull to "lose".

Of course as I explained, the Chinese etc don't care if they lose on the mortgages because they will have won by creating millions of 30 year indentured servants who will pay their "rent" to the Chinese every month and buy Chinese made crap to fill their homes with.

Americans will be laughing at the "dumb Chinese" for funding our home buying but it is the Chinese who will be laughing at the "dumb Americans" for getting themselves into a lifetime of debt.

Whose dumber?

Check it out 808SHooter.

I don't doubt that the subprime mortgage securities are more risky. Kinda surprising that the Chinese were buying them aggressively. I did google that for info. Bank of China owns about 11 bil in subprime mortgages. A lot of money but immaterial in the big scheme of things.

http://www.mutual-funds.biz/2007/08/...ion=2007082417

THe US treasury market is the 1/2 of the total national debt. That is over 4trillion in treasurys. Of the treasuries on the market, about 1 trillion are owned by the Japanese and the Chinese.

So you might be right about the Chinese buying our bad mortgages but they probably could care less. What has really fueled the housing boom was the low long term rates which have been a result of the aggressive accumulation of US Treasuries by China and Japan. The subprime paper is probably just "diversification"

Anyways, you did edumacate me on something I didn't know about before. We just don't agree on what it means. Take it easy boo.

[GeckoGeek]

Re: Mortgage Mayhem

The Chinese have to do something with all those dollars they get from the trade imbalance. If they buy tangible things like companies we tend to get upset.

Still, perhaps we should be concerned with the long term plan.

[MixedPlateBroker]

Re: Mortgage Mayhem

Caveat emptor. If there's a simple lesson we can take from the subprime mortgage mess, it's that critical thinking and healthy skepticism are classic looks that should always have a place in our mental wardrobes.

Even as children many of us were told that if something sounds too good to be true, it probably is. I wondered aloud how certain corporate executives could sleep at night the other week as I paused a random Ditech.com TV commercial and read the fine print to discover their advertised rate was based on pricing only five years old. Small wonder they surrendered their mortgage license in the state of Virginia (page three).

So how does one avoid the mistake of getting into a mortgage they'll regret later? I've put together a few tips that might come in handy.

Don't buy more house than you can comfortably afford. If your annual gross household income < $60k, you shouldn't be shopping for homes in the $400k+ range. As simple as this sounds, I've gotten calls from dozens of people who've found themselves prisoners of their own homes. Laboring at multiple jobs just to pay the mortgage and bills and not having any disposable income gets old in a heartbeat.

Be cautious who you do business with. When it comes to choosing a realtor or mortgage loan officer to work with, it's easy enough to check to make sure their credentials are in order. You should also be checking out their company on the BBB, here and even here. Then there are the qualified recommendations from family and friends. I avoid using the word "advice" as I have seen too many people get waylaid by bum advice from mostly well-meaning friends or family who have no experience either purchasing or refinancing a home.

Lastly, don't be afraid to ask questions. If someone pulls your credit report, ask to see all the accounts listed therein to verify the report's accuracy. If they price a loan for you using your credit report, ask for a copy of your Good Faith Estimate. When they lock in your interest rate, ask for an updated copy of your Good Faith Estimate reflecting your locked pricing. When you sign your final loan documents, ask for a complete duplicate package for your own records and an original color appraisal report.

And in case anyone was wondering, "dunce cap" is not a classic look.

[kamuelakea]

Re: Mortgage Mayhem

Don't buy more house than you can comfortably afford. If your annual gross household income < $60k, you shouldn't be shopping for homes in the $400k+ range.

Hahah, then you may as well close up shop and leave town MixedPlateBroker because if anyone applies your "common sense" and affordability rules, then ALMOST NO ONE IN HAWAII could purchase a home.

September 2007 Honolulu Median sales price was $650,000.

If 3 or maybe 4 times your annual income is still as good of a common sense rule of thumb, then the household who buys the MEDIAN home in Hawaii right now should be making between 162,500 and 216,667. That's for a tiny 70 year old shack on 4000 sq ft of land in kapahulu which needs some work. Hawaii's median income in 2005 was $58,112 which suggests a more appropriate median home price range of 175,000 to 232,000.

By your suggestion, I declare Hawaii economically non-viable. There are no more loans to make. You have made a good arguement for you not having any more customers. What are you going to do? Only sell to rich mainlanders? Last one who leaves, please turn out the lights.

You're kind of late to the "use common sense" and "if its too good to be true" parade Mixedplatebroker. Mortgage bORKers across the nation had too much rotten food on their mixed plates over the past 3 or 4 years. Not you of course.

[sinjin]

Re: Mortgage Mayhem

When real estate "professionals" are holding up cardboard signs on off-ramps I'll start looking to buy. Could be soon.

[alohacandy]

Mortgage Nightmare and a Plea for Help

I am not even sure where to put this right now but it makes me sick to think that a good friend of mine stands a good chance of losing her home, her career and her life in the near future and she hasn't gotten anyone to help her in any way that looks promising. I won't get into the career issue here because it will give out too much info about her. Several years ago she got into a mortgage that was passed from one company on to the next and to another (not sure how many by now) and was making her payments faithfully, HOWEVER, she hadn't been told that her mortgage was being passed on until after the fact and therefore one company kept her payment and didn't pass it on to the next therefore making her late on one of the payments. She had great difficulty trying to talk by phone with these 2 companies trying to get this mess straightened out and before she knew it, she was in foreclosure. She got an attorney who ended up not knowing diddly squat about mortgage law and started a lawsuit against several of the companies involved and ended up getting sued herself by one of the companies for attorney's fees...so now owes $40,000+ plus to one of the companies no longer involved ...and STILL isn't out of the foreclosure process. She's called FDIC and Legal Aid for help to no avail (Legal Aid put her on a waiting list). She has a court date coming up in July where she is trying to appeal the $40,000 that she owes to the one mortgage co. but doesn't trust that her lawyer will win this for her because he botched up so much for her already and nobody else that she's called will take her case now. In the meantime, she's had workplace issues and stands to lose her income and benefits by the end of the year. Her health has deteriorated to the point where she is losing her teeth, she's had to go on pain meds, she hardly eats, her arthritis is flaring up, she has suicidal thoughts, and she is giving away all of her belongings a little at a time. Her friends are at a loss as to what to do to help her. The only thing I can think of is to get the media involved in her case because there is a LOT more to her story that if someone would want to expose what has happened to her to the public, they would see that she has been victimized on many levels (not just the mortgage companies, believe me!!). If you are interested in more info, please email me at alohacandy51@yahoo.com, identify who you are with and I will arrange to meet with you to discuss this further. Mahalo and God bless.