Appleton Wisconsin Mortgage & Real Estate Resources: October 2008

For immediate release October 18, 2008

The Truth About the Mortgage Market

By Gwenn Tanvas, Certified Mortgage Planner, Patriot Mortgage Services, Inc.

Appleton, WI - Subprime mortgages have now been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US and around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year.

This means that, for any Americans looking to buy, sell, or refinance a home, they are confronting a very different market from the one that existed just 6-12 months ago.

How did this happen?
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or "exotic" mortgages.

These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street.

Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing.

Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe.

What does this mean to you and your mortgage?

Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your real estate agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.

Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.

ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be.

Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.

Finally, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now - while it seems harsh and could get much worse - is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.

Gwenn Tanvas, an advocate for credit restoration is affiliated with Patriot Mortgage Services, Inc., a Licensed Broker, Wisconsin Department of Finance. For a free consultation the truth about credit restoration or more information about the mortgage market, contact Gwenn Tanvas at 920-560-5606 x 103. http://www.valleyloanpros.com or email her at gtanvas@patriotms.com

State and Local Wisconsin VA Home Loans
Appleton, Green Bay, Oshkosh, Wausau, Waupaca, FondDuLac

To our Military Heros!

If you're among the 26 million U.S Veterans and Service Personnel who are eligible for a VA Mortgage Home Loan, then isn't time you used your full benefits?

We are your local Wisconsin source for State and Federal VA home loans and bring you the very best in VA Mortgage Loan Services.

What are you waiting for? We offer no obligation pre-qualifications and consultations. All you have to do is pick up the phone or fill out the secure online application.

We will show you how the VA Mortgage Home Loan Benefit Program can get you into a home with no down payment and the least amount of paperwork. You can use your VA Mortgage Home Loan benefit to buy a new home or refinance an existing home with no down payment.

Our knowledgeable Veteran Mortgage Home Loan Specialists are waiting to answer all of your questions and help you with the entire mortgage loan approval process.

Call or go directly to the local website for more information - 920-858-1203 or www.valleyloanpros.com

Apply Online for a VA Home Loan Now!

"I served two tours in Iraq and had no time to build a credit file. We wanted a house, but needed help. We were referred to Gwenn Tanvas by some friends and got pre-approved for a VA loan through the State VA with in days of our first appointment. From start to finish it took less than 30 days! My family is now enjoying our new home thanks to you Gwennie". Marcus, Megan and family - Waupaca

I NEED YOUR HELP In Getting The Word Out to the Families and Friends of our Active Military Serving Abroad -

Appleton, Green Bay, Oshkosh and surrounding areas of Wisconsin -

In honor of our troops, Patriot Mortgage, together with Camera Corner and Evans Title of Green Bay, are offering you a chance to send a video postcard to your loved one overseas.

On Veterans Day, Tuesday, November 11^th we are setting up a video studio in each Patriot Mortgage Office to record a Free video postcard to be sent showing your love and support for a family member or friend overseas.

I invite you to come to my office on Tuesday November 11th and record a three to five minute "Message to our Military" video. The video will be sent to your loved one overseas via an email. With a click of the mouse, it can be  viewed over and over again!  

Call one of our offices today to schedule your appointment for VETERANS DAY, Tuesday, November 11, 2008 -

Appleton - 920-560-5606

Green Bay - 920-965-0700

Oshkosh - 920-385-7364

If there are any questions, please feel free to call me in the Appleton Office, or email me at gtanvas@patriotms.com

How to Successfully Build Your Credit Score by Gwenn Tanvas

How to Successfully Build your Credit Score

By Gwenn Tanvas, Certified Mortgage Planning Specialists and Consumer Advocate - Wisconsin

It is vitally important to have good credit today.  Not only does it determine the interest rate you will pay when you buy a car or a home, but a good credit history is also a factor when you are applying for a job, renting an apartment, obtaining car insurance rates or applying for a credit card.  What may seem like a tiny mistake to you, can actually drag you down for many years.  One late payment, maxed out credit cards, or taking out several loans at the same time all appear to be minor mishaps, however, the credit bureaus view them as a black mark on your credit report and creditors respond accordingly. 

It is not that hard to establish and keep good credit, especially if you are just starting out.  Follow these simple rules, and your credit will sparkle.

Check your credit report

Before anything else, you want to see what creditors are saying about you.  Do this by checking with the three major bureaus: Equifax, Experian and Trans Union.   Credit reports are used to create a credit score, which is a three-digit number lenders typically used to gauge your creditworthiness. Scores range from 350 to 850 and lenders respond best when the score is over 720.  Lenders also may look at the report itself, as may the landlords, employers and insurance companies who use credit to evaluate applicants.

Establish checking and savings accounts

Lenders view checking and savings accounts as signs of stability, yet many people overlook this simple thing.  Opening an account is also one of the few things you can do as a minor to start building a financial history. While you can't get a credit card in your own name until you're 18 and can be legally held to a contract, many banks have no problem letting you open a bank account.

Understand the basics of credit scoring

A basic knowledge of credit scoring will help you build your score.  Two of the most important factors in building your score are:

• Whether you pay your bills on time.
• How much of your available credit you actually use.

It's absolutely essential that you pay all your bills on time. All it takes is a single missed payment to trash your credit score -- and it can take seven years for the effects to completely disappear.

 You also don't want to max out any of your credit cards, or even get close. You will get the best possible credit score and prevent yourself from getting over your head in debt if you keep your credit balances to less than 30% of your credit limits.  (This means if you have a $3,000 limit your balance should stay below $1,000.)

And remember, you don't need to carry a balance on a credit card to have a good credit score. Paying your bill off in full is the best way to keep your finances in shape and build your credit at the same time.

 Piggyback on someone else's good credit

The fastest way to establish a credit history can be to "borrow" another's record, either by being added to a credit card as an "authorized" or joint user or by getting someone to co-sign a loan for you.  Keep in mind though it is a two edged sword.  You can gain good credit, however if either of you default, both parties suffer. (The co-signer has basically promised to make good on this account, so any delinquencies will show up on her credit report as well.)

Keep in mind that even if you get added to someone's credit card, you may not be able to piggyback on his or her credit. Some credit issuers won't report authorized users to the credit bureaus, particularly if the user is not married to the original card holder. If the point is to give you a credit history, the person who's adding you as an authorized user should call the issuer and ask how (or if) your status as a user will be reported.

 Apply for a secured credit card

If you can't get a regular credit card, apply for the secured version. These require you to deposit money with a lender and your credit limit is usually equal to the deposit.

You'll want to screen your card issuer carefully because there are a lot of bad guys in this particular niche of the credit world. Some charge outrageous application or annual fees and really high interest rates.

The first place you should look is your credit union if you belong to one. You can also check at www.bankrate.com for a list of secured credit card issuers.  You may also call my office for a list of cards I recommend.  Ideally, the card you pick would:

• Have no application fee and a low annual fee

• Convert to a regular, unsecured credit card after 12 to 18 months of on-time payments

• Be reported to all three credit bureaus.

If the issuer doesn't report to the credit bureaus, the card won't help build your credit history.

Get a finance company card

Gas companies and department stores usually use finance companies, rather than major banks, to handle their credit transactions. These cards don't do as much for your credit score as a bank card (Visa, MasterCard, Discover, etc.), but they're usually easier to get.

Again, don't go overboard. One or two of these cards is enough. If you get many more, you may find that later in your life these accounts could prevent you from getting the highest possible credit score. That's not a reason to avoid them completely, because right now they'll do you some good. Just don't apply for half a dozen.

 Get an installment loan

To get the best credit score, you need a mix of different credit types including revolving accounts (credit cards, lines of credit) and installment accounts (auto loans, personal loans, mortgages).

Once you've used plastic responsibly for a year or so, consider applying for a small installment loan from your credit union or bank. Keeping the duration short -- no more than a year or two -- will help you build credit while limiting the amount of interest you pay.

 Apply for credit while you're a college student

There's no easier time to get a card than while you're a college student.  Lenders are willing to take risks with you that they won't once you graduate, probably because they know that your parents' willingness to bail you out will end once you get your diploma.

Be careful, though. Look for a card with a low or nonexistent annual fee and low interest rates. For now, just get one: Opening a slew of credit accounts in a short period of time can make you look like a risky customer.

Use revolving accounts lightly but regularly

For a credit score to be generated, you have to have had credit for at least six months, with at least one of your accounts updated in the past six months.

Using your cards regularly should ensure that your report is updated regularly. It also will keep the lender interested in you as a customer. If you get a credit card and never use it, the issuer could cancel the account. Just remember the credit tips mentioned earlier:

• Don't charge more than 30% of the card's limit.

• Don't charge more than you can pay off in a month. Keep in mind, you don't have to pay interest on a credit card to get a good credit score, and it's a smart financial habit to pay off your credit cards in full each month.

• Make sure you pay the bill, and all your other bills, on time.

Gwenn Tanvas, Mortgage Planner and Consumer Advocate of Patriot Mortgage Services, is a nationally recognized expert specializing in helping release his clients from the "credit prison" that too many people find themselves in.  When you or one of your friends find yourself needing real answers and real solutions to credit issues, you can confidentially contact her at 920-858-1203 or at gwennt@centurytel.net - Also visit her website http://www.wisconsinloantips.com for more information on credit and how you can get the assistance needed to make the Deals in your life work for you.

Originally Posted: Jun 23, 2008 at 9:52 AM
Last Updated: Jun 23, 2008 at 9:52 AM