Hello All At Active Rain
The letter was sent to me from my friend and advisor , Hank, who is a senior loan officer at Wachovia Bank. I have been writing some blogs on various sites about the current situation, and she sent me this very informative letter. I am sure she sent it to others as well, so I am going to help this very nice person get her message out.
She is a actually a woman, but her name is Hank!! I encourage anyone wanting straight forward advice on banking and mortgage info to give her a call.
Here is her letter in entirety.........
I am so glad you brought this up.
No few loan programs caused the fall out of the sub-prime market which lead the market we are in today. I am actually thrilled to be in this "purging" season in our industry. I agree; something went astray but please do not blame the loan programs. There are many players in real estate industry. Our current state of affairs is a combination of short supply of homes, over-zealous investors in the secondary markets, unseasoned/inexperienced persons who became real estate investors overnight, greedy buyers, buyers who were keeping up with the Joneses, and greedy and unscrupulous loan originators/realtors/title companies. And I'm sure I can think of more parties if it weren't getting so close to my bedtime.
There are many loan programs offered to our borrowers which should always be based on their needs and goals and with education. Without a thought to these, you guide many to failure. The Pick a Pay is a loan program that is about 25 years old. It is prime, portfolio loan program not a band-aid loan. More people do not qualify for this loan than do. It is a tool many of our wealthy have used to build and grow their wealth. Wachovia bought the savings and loan (Golden West) which developed the Pick a Pay and offered it to their clients for $24 billion last year. The Pick a Pay has the lowest default rate in the industry; we have the lowest problem loans among the top 10 banks. Now you can't blame our mortgage crisis on the Pick a Pay. The Pick a Pay is actually holding up the average!! Wachovia and specifically the Pick a Pay were featured in an article published in the Wall Street Journal on August 23, 2007. I sent it to you. It shows the true colors of our portfolio loan.
Let me give you a simple scenario which we can all relate: most of us, no matter how long we've been in the industry have suffered a substantial loss of income over the last 6-12 months. Did your mortgage payment go down, too? Would you have enjoyed a lower payment a time or two? Many of us refinanced our homes or are considering it; either to cash out, rolling in our credit card debts, or to have cash on hand to live comfortably during this tough time. The bottom line is you took the equity from your home and converted it to cash. Your mortgage balance went up if you did a cash out refinance. And it probably went up some tens of thousands of dollars, right? You had closing costs. You had to bring income docs, bank statements, asset statements; you had your credit pulled. You had to endure an appraisal after you spent hours, perhaps, days cleaning your house. Then you had to wait....and wait...and wait, until the underwriter came back with an answer. Why go thru all this when all you need is a few months of relief from your monthly expenses because of this temporary situation? You would have added less to your mortgage, hundreds of dollars per month compared to tens of thousands per cash out refinance.
And when times get better, why not continue to make smaller payments on your home loan and invest the rest in investments of your choice. Remember the concept of compounding interest....start with $100 today and see what it does in 10 years, 20 years or 30. To experience growth in an investment, there has to be a start. Many folks are living pay check to pay check, trying to pay off debt. But anyone in the financial industry will tell you, it's not just paying off debt that is important but saving and growing your wealth. Why do you think Financial Planners and financial advisers are paid so well? They get paid when their clients wealth grows. Nothing substitute time when it comes to growing your wealth.
The Pick a Pay offers our borrowers control of their finances so they can reach their goals whatever they may be. It offers flexibility to our clients because 'life' happens to all of us, multiple times, and in some instances, all at once. I ask you to keep an open mind because you have to. If your mind is closed, nothing comes out and nothing goes in. In our current market, those of us who succeed will go back to basics like educating our clients, offering top notch customer service, and educating ourselves. But more importantly, we will succeed if we learn how our life has changed and is changing our future.
I would like the opportunity to show you how the Pick a Pay works. I closed 2 Pick a Pays this week; a third tomorrow. Two are purchases. One, I closed in less than 2 weeks from the time I received the fully executed contract. The second was approved with appraisal pending title and insurance in less than 2 weeks; the property is in Hilton Head Beach, SC.
I invite you to contact me. We can set up a time to discuss how Wachovia and our portfolio loan, the Pick a Pay, can help our clients reach their dreams. I will show you how it can work for you! Thank you for your time.
Make it a great day!
Hank Nicholson
Mortgage Consultant
4005 West Lake Mary Blvd
Lake Mary, Florida 32746
407.330.2014 office
407.330.7226 fax
321.438.1431 mobile
email: hank.nicholson@wachovia.com
apply on-line: http://hnicholson.wachovialoans.com
