Mortgage woes? Tell it to them!

Well, now you have a place to complain, gripe, and deal with all your mortgage issues and woes.  Developed by the Obama administration, the Consumer Financial Protection Bureau is now open for business.  And they want to hear all about your mortgage problems.  This government agency has been mostly dealing with credit card complaints (talk to them about that, too) but now want to hear about mortgages.  

When you get to their page, you can easily submit your complaint, watch a YouTube video from their director, and connect with them via Facebook or Twitter.  According to this Chicago Tribune article, when they initially opened up to hear credit card complaints, they received over 5,000 and were able to resolve over 3,100!  They’re hoping to handle complaints through the end of this year.  

As I mentioned, the easiest way to contact them is via their Web site.  However, they’re also reachable via postal mail at P.O. Box 4503, Iowa City, IA 52244, fax 855-237-2392, or telephone 855-411-2372.  Please be aware that it is not a toll-free number.  But they did mention that they’re hoping for virtually no wait time to speak to a representative.

You can also create an account through the site and visit often to check the status.  You can also view correspondence between CFPB officials and members of Congress as well as recent press releases regarding the bureau.  

I’d love to hear if anyone has submitted a complaint through you and whether they were successful in resolving it or not.  I hope that this is another avenue the government has established to take care of those underwater and remove some of the excess inventory we’re seeing on the market.  Please post your story if you have one in the comments!

Mistakes you can make with a lowball offer

Yes, yes, I know.  It’s a buyers’ market.  So much inventory, low housing prices, so the buyer gets their pick at the price they want.  But not so fast.  Yes, lots of inventory, lower housing prices.  However, there is still power to negotiating.  And you don’t want to insult the seller with a lowball offer and lose your dream home because of it.  Here are some mistakes that can be made with a lowball offer:

1. Not knowing the market.  And each one is different.  What may be a more acceptable offer in one market won’t be the same in another.  There could be an area where sellers are pricing homes more aggressively; therefore, they’re sticking close to their asking price.  Another neighborhood might be mostly made up of foreclosures and short sales, so the bank wants to get rid of the home ASAP and are willing to accept less.  So you’ll need to do your research with the help of a qualified Realtor (see #2)

2. Not picking the right Realtor.  They have the experience and the background and know the area you’re looking to purchase, so they’re your best asset going into a negotiation.  But you have to make sure they’re solid negotiators, since they are working on your behalf.  They’re not going to tell you not to present a really low offer, but they might say the sellers will reject it offhand so you might want to consider raising it by X amount or offering to waive one of your contingencies.  Trust their advice.  You’re working as a team and you want to make sure your agent also has your best interests at heart.

3. Not knowing what you’re willing to pay.  A lot of people these days in this market are focused on getting the best price.  But you have to be careful.  You have to know what your limit is so you don’t overpay.  And sellers will know what they need to walk away from the closing table or they won’t be able to make the sale.  No matter how wonderful the home is and how perfect your furniture will look in it and that you can see yourself having your morning coffee on the deck overlooking the pond, there comes a point where no deal is worth it at a certain price. Know that before you start negotiating or you’ll let your emotions get the better of you.  

You can also lose your positioning power by being too hard a negotiator at the beginning.  Don’t make your first offer your final offer and then start negotiating.  The seller will know that you aren’t serious and has the ball back in their court.  Make your offer one that you’re willing to negotiate and have your Realtor tell the seller you want to work with them and make the deal happen.

This MSN article has a few more mistakes that can be made and how to avoid them.  My Web site has some other great articles and tips for buyers.  Have a great week!

New homeowners’ fees to increase

Let’s start with the good news first.  If you are in a home, paying a regular mortgage, nothing’s changed, you don’t have to worry.  No added fees for you.  

However, those that are purchasing a new home at the beginning of this year or planning to refinance, you’ll be paying an additional fee in your mortgage to help fund the payroll tax cut bill that the Senate passed over the weekend.

A quick review.  Originally planning to expire on January 1 (Sunday), a payroll tax cut and long-term unemployment benefits were extended two months when the Senate voted this weekend.  It should go through the House this week.  With this extension comes a $33 billion price tag.  So who pays for it?  Yep, you guessed it.  New homeowners and those refinancing.  That fee rises about a tenth of 1 percentage point and, therefore, increases the fee that Freddie Mac and Fannie Mae charge to insure home mortgages.  It will also increase if your loan is backed by the Federal Housing Administration.

So on a $200,000 mortgage, your rate will increase approximately $17 a month.  Nothing huge but still considerable in the scheme of things.  Obviously, for a higher mortgage it goes up and a lower mortgage will have a smaller fee.  About 9 in 10 mortgages are backed by Freddie Mac, Fannie Mae, or the Federal Housing Administration.

So my question is, is this fair?  Is it the homeowners’ responsibility to pay for this?  Looking at the large picture, I’m sure many people are thrilled that these benefits have been extended, given the state of the current economy.  And if it’s not covered this way, I would think Congress would tax us higher on something else, such as gasoline, income tax, or property tax.  They’ll get their money some way.  I’m curious to hear if you think this is right or if you have a better solution.  Please leave me a comment!  You can also reach me via my Web site.