Platinum Funding Offers Insider Tips for Navigating the Treacherous Mortgage Loan Market

Irvine, CA (PRWEB) July 16, 2008 -- With the subprime lending crisis wreaking havoc throughout the mortgage loan (http://www.platinumfundinginc.com/request/quote.php) industry, consumers need a guide. Platinum Funding, a California-based mortgage lender, offers these tips for any American looking to buy, sell, or refinance a home. It's a very different market from the one that existed just 6-12 months ago.

First, some grim facts - subprime loans have now been credited with bankrupting well over 200 mortgage lenders and seriously damaging operations at many major mortgage loan firms. They've reportedly wiped out five hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. As if that weren't enough, subprime loans are also responsible for massive volatility in the stock, bond, credit, futures, and real estate markets both here in the US and all around the globe. Some analysts say losses in the mortgage securities market could reach hundreds of billions of dollars this year alone.

Is it any wonder then that people need help navigating these rough waters? Platinum Funding is ready to show the way.

From boom to bust: how did this happen?

The recent real estate boom was fueled by a record period of home appreciation and historically low interest rates. Mortgage lenders (http://www.platinumfundinginc.com/), in order to compete, loosened lending guidelines and began offering funding to more and more borrowers through riskier, non-conforming or "exotic" mortgage loans.

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.

But, 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. 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 a credit/liquidity domino effect.

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 percent - 100 percent when their loans reset in the next 2 to 18 months. These loans make up less than 40 percent of the total mortgage market, but the negative effects of increased foreclosure activity can have a ripple effect on mortgage lenders throughout the industry and on financial markets around the globe.

What does this mean to you and your mortgage? Platinum Funding offers the following advice.

* 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 loan products could knock out as many as 15 percent - 30 percent 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. With experience buying/selling transactions in your area, she can help you price your home realistically. She can also help ensure that potential buyers begin 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, the amount you qualify for today could change tomorrow in a volatile market. If you are looking to refinance, 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, 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 sneak up on you. Did you know that your monthly payments can increase anywhere from 30 percent to 100 percent 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 mortgage 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. Borrowers with credit issues need to see a loan expert. While it can be increasingly challenging, 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 - while it seems harsh and could get much worse - is natural and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.

Tiffany Taylor is the President of Platinum Funding, a mortgage lender (http://www.platinumfundinginc.com/) and Licensed Broker, California Department of Real Estate. For a free consultation or more information about the mortgage loan market, contact Tiffany Taylor at 888-537-7007

Mortgage Market (http://www.platinumfundinginc.com)

###