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With record numbers of individuals seeking home loans these days, it's no surprise that scam artists have developed new ways to separate borrowers from their money. Mortgage scams are on the rise and typically target people who are overextended, have bad credit, or are in need of financial relief. These scams can cost a lot in fact, they can result in the loss of your home. Guard yourself against con artists with a little background on common mortgage scams: Prof. Howell E. Jackson, Associate Dean for Research and Special Programs Harvard Law School, testified before the Senate Banking Committee on January 8, 2002, and testified to the following:...the vast majority of borrowers pay yield spread premiums - on the order of 85 to 90 percent of all transactions. Moreover, the average amount of yield spread premiums is quite substantial, on the order of $1,850 per transaction, making these payments the most important single source of revenue for mortgage brokers. In other words, contrary to the Departments assumptions, yield spread premiums are not an optional form of financing made available to a limited number of borrowers with special needs. Rather these payments constitute by far the largest source of compensation for mortgage brokers and are imposed on almost all borrowers who obtain mortgages or refinancings through this segment of the industry.If Professor Jackson testified on Service Release Premium that mortgage banks receive, I am sure his statments would echo the same as above.The Governments own numbers, which are grossly understated I might add, say this Yield Spread and Service Release premium overcharging costs American home owners $16,000,000,000 a year...each any every year!To beat these guys at their own game, you simply must learn how they price out a loan including this rip-off! Reading this article is a good start, however, the complete guide to eleminated Yield Spread and Service Release Premium overcharging is outlined in my ebook, Mortgage Secrets Exposed!. See the resource box at the bottom for more information. Understanding how to price out a loan by reading Mortgage Bank Rate Sheets is really quite easy though it may seem intimidating at first. It will all become clear as you read this narrative on how we do it at our company, Integrity First Mortgage, Inc. in Denver. So, settle in and take the 10 minutes to read this article and understand this practice.Doing so will save you 10s of $1,000 over your lifetime owning and financing houses. A small price to pay indeed!Here we go!All of mortgage lenders we work with at Integrity First Mortgage, Inc., furnish us with rate sheets on a daily basis via the internet or by fax. We follow the rates several times a day in order to properly quote the best available rate and term to our customers. When reviewing the rate sheet, we also determine which rate will NOT create a rebate from the lender known as a Yield Spread Premium. We believe upping your rate to make additional revenue over the 1% origination fee is deceptive, dishonest, and a bad business practice believe me, other companies do not hold that opinion.Let's use the rate sheet data below to demonstrate how we determine the rate that we quote to our borrowers. We will also show you using the corresponding HSH Survey data how other Brokers and Banks are making enormous undisclosed profits in the form of Yield Spread Premium. Lender Rate Sheet (see below ) data was collected from a real Wholesale Lender's (Ampro Mortgage ) Rate sheet dated 03/10/2006. You can confirm the HSH data is real as well by visiting HSH.com.30 Year FixedRate 15 Day 30 Day 45 Day5.750% 1.350 1.475 1.6005.875% 0.611 0.736 0.8616.000% 0.039 0.164 1.8266.125% (0.392) (0.267)(0.142)6.250% (0.773) (0.648) (0.523)6.375% (1.180) (1.055) (0.930)6.500% (1.623) (1.498) (1.373)6.625% (2.029) (1.904) (1.773)6..750% (2.280) (2.155)(2.030)HSH ASSOCIATES The Nations Largest Publisher of MortgageThe Nations Mortgage Market: Average Rates for Residential Mortgages Week ending March 10, 2006.Owner-occupied 1-4 Family and Condos: Previously Occupied Homes Source: HSH Associates.National Ave. SURVEY CONVENTIONAL MORTGAGES 30 Yr 6.51% The Reconveyance Racket;Say you're struggling with mortgage payments or in foreclosure. A business or individual offers to buy the property and sell it back to you, once you get your finances back in shape. The process is called "reconveyance," and there are legitimate companies offering these services. If you encounter a scammer, however, you could find yourself unable to repurchase your home.Target: Reverse Mortgages;If a member of your family is considering a reverse mortgage, they should protect themselves against scams specifically targeting reverse mortgages and speak with a HUD-approved counselor first. Make sure they get at least three separate offers in writing, and that they understand the terms and conditions before signing. Remember, borrowers generally have up to three business days in which they can cancel a loan document. Sub-Prime Wholesale Mortgage Lenders:These are lenders specializing in loan programs for those with less than perfect credit history. Sub-prime mortgages are usually written at a higher interest rates compared to ordinary mortgages. Because of the high cost, it can help in establishing or re-establishing a good credit record. Sub-prime mortgage lenders help credit-impaired borrowers obtain a mortgage. A sub-prime mortgage is for a short period compared to other programs. In order for a borrower to qualify for a sub-prime mortgage, a significant deposit amount towards the home is expected.
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