HomeLoans Blog

It seems to me that one of the most important aspects of the recent changes in the mortgage industry is the return to lending fundamentals. The key question in underwriting has been whether the loan could be sold to an end investor. This is still the key question, but now the answer more requires the borrower have sound fundamentals in the 3 C's (Character, Collateral, Capacity).

It is no longer the case that higher rates will justify lending to a borrower with poor credit characteristics. A low LTV is not even a guarantee of a loan. Some hard money lenders are not real free with their money. Neither does a good credit profile justify ignoring other factors in evaluating willingness and ability.

Even in this "mortgage crisis," most home owners are paying their mortgages. They are credit worthy, but for this majority of credit worthy home owners, even when they qualify for a loan, the final loan terms will based on credit tiers.

Consumers need to understand this. Conventional loan rates, and probably soon also government loan rates, vary according to the credit score level. MI rates have a credit score component in pricing.

Borrowers must understand this credit scoring system and they must manage their credit. It is more important now than it has ever been. It truly requires the assistance of a credit expert.

But beware of seeking help from the wrong credit counselor, who may charge a large fee and produce no results, or worse negative results.

A good place to begin is with the free annual credit report -   https://www.annualcreditreport.com/cra/index.jsp .

But going it alone can be time consuming and frustrating, and can actually produce negative results (a drop in the score). I highly recommend that consumers get competent professional help.

To improve a mortgage score, my suggestion is to see an experience mortgage professional.

Recently I have been pleased to become more involved with the Chattanooga Chamber of Commerce.This is a great organization that is truly active in promoting Chattanooga and its businesses, especially new businesses.

The full time staff and the volunteer ambassadors provide invaluable service to the business community by coordinating networking opportunities, promotional avenues, and training programs. This is in addition to the activities of each separate area chamber meeting.

Weekly the chamber has Ribbon Cutting ceremonies that provide exposure for new businesses. Each month the chamber has a morning networking opportunity that is sponsored by a local business. Ambassadors are encouraged to reach out to new and existing members to engage their participation.

Monthly the chamber sponsors a morning session to build management and entrepreneurial skills. This event is conducted by John Riddell, Jr who is the director for Entrepreneurial Growth in Hamilton County. His weekly articles for the Times Free Press can be found at http://www.timesfreepress.com/staff/john-riddell-jr/.

The sessions are excellent both for their content and for the participation and exchanges among the attendees.

Recently the Chamber held its Annual Spirit of Innovation awards. These awards are given to "celebrate business innovation". The Chamber honored TR Automation with the Kruesi Award for Innovation.

Mayors Ramsey and Littlefield helped make the presentations. Gov Bredesen gave some remarks, and Roger Staubach gave the keynote address.

The celebration included announcement of Cushion by Design as the Early Innovator Award. The Chamber partners with the Chattanooga Technology Council, which has as its goal to promote the growth of technology in the Chattanooga region. Their website is http://www.chatc.org/.

The Chattanooga Chamber’s website is http://www.chattanoogachamber.com/.

More information about the Spirit of Innovation luncheon and the award winners can be found at http://www.chattanoogachamber.com/newsandvideo/041608_spiritofinnovationawardrecipientsannounced.asp.

This activity is part of the vitality of Chattanooga, which makes it a great place to live, and to own a home. The Chamber is responsible to a large degree for bringing and sustaining this vitality. I hope to post updates about Chamber events periodically.

I am excited to start this new website and blog. It will of course be geared primarily to topics of consumer interest relating to the mortgage industry. So much is happening right now in the mortgage and housing industry, it is vital that consumers have access to current and accurate information. My hope is to be such a source.

Thanks Richard Smith