So what's the real story?  Does a crisis really exist? 

Clearly there is a "cleansing" going on in the industry.  For many years now the lure of low interest rates brought in more people to the mortgage industry than it can sustain long term.  So is there a need to downsize the business and regain control of guidelines and quality standards? Absolutely.

But back to the question - is there a crisis?  We believe the the media and politicians have taken advantage of this situation for their own gain.  With the number of 24 hour news outlets needing stories and politicians needing a reason to look good to voters - the mortgage industry has been an easy target.

What are the facts?

Fact - At this posting time mortgage money is readily available.  The main difference is that credit qualification has really tightened up.  There are still options available for 100% financing and low down payment options. 

Fact - Credit worthy borrowers are being rewarded.  Borrower’s should focus on their credit being paid on time and save some money for reserves as well as a down payment option.

Fact - The downturn in real estate is a natural cycle.  When you look at the big picture the real estate industry went through a historic growth cycle created by low interest rates.  As with any business cycle what goes up ultimately must come down.  And what we are seeing right now is the other side of the swing.

Fact - The mortgage industry needed to be downsized.  Estimates are that the number of mortgage professionals more than tripled since 2000.  Anytime an industry sees such an influx of new people you can expect the sort of issues we've seen in our business:

• lower levels of training and accountability
• less emphasis on long term relationships
• shrinking margins due to increased competition
• lower levels of professional standards

Fact - Mortgage guidelines had reached a risk level never seen before in history.  Some tightening of credit standards was inevitiable given where we were 2 years ago. 

The sub-prime market has taken alot of beating over loose guidelines but the facts are that the issue was industry wide.  Sub prime in particular was never a "bad" thing.  If credit or income standards were not up to conventional levels it makes sense that you should get a higher rate or lower loan to value than the conventional market.  The problem comes when the non-standard rates and LTVs are just as competitive as conforming products.

And don't think that the conforming lenders weren't pushing the limit.  In order to keep up with competition guidelines loosened for them just as quickly as everyone else and the mortgage insurance losses we are seeing today prove it.

So with all of these trends the downsizing of the mortgage industry should be seen as a good thing.  Those professionals staying in the mortgage business should be wiser and more professional than ever before.

All of these changes in the industry is what caused us to create this company.  With so much uncertainty, so many changes, and so many "bad faith" stories out there we believe there is a need for borrowers to get independent, third party mortgage advice.

Let us help you make sense of your next loan.  We can help you decide if you are getting a good rate or fair closing cots.  We will never try to steal your loan from a lender - so count on us to be your Trusted Mortgage Advisors.