Marc's Mortgage Matter's

I was looking around my house yesterday, checking out the record player, 8-track player, cassette cases, TV with rabbit ears, cable box, Beta tapes, DVD's, CD's...Can we all just agree to ignore whatever comes after Blue Ray? I don't want to have to restart my collection. Again.

The old joke goes, "What's the fastest way to a man's heart? Through his chest with a sharp knife." Joking aside, some companies name a woman as president, in spite of her potentially not necessarily running the company. Why would anyone do that? With a woman as president, the company easily falls into the category of a "Women-owned Business". It is not a bad thing at all, as companies defined as "WOB's" can potentially access funding, capital, and opportunities not typically accessible for male-owned companies. Sexist? Yes, but it can be a business  strategy.www.business.gov/industries/woman-owned/

Most borrowers are facing a much tougher mortgage environment than a few years ago, but for those who are self-employed or own small businesses, maneuvering through a loan application can be even more arduous.

Before 2008 these borrowers, many of whom have difficulty documenting their income, often used what are known as stated-income loans. Lenders focused on credit histories and earnings estimates, circumventing the need for pay stubs or W-2s. But during the mortgage crisis, stated-income loans became known as “liar’s loans,” because some borrowers falsely inflated their incomes, and qualified for more than they could afford.

Today, stated-income loans have nearly disappeared. Those still available through a very few come at a cost: interest rates around a half of a percentage point higher than conventional loans and down payments of at least 30 percent.

The self-employed borrower’s only choice, mortgage brokers say, is to submit two years’ tax returns and hope that they qualify for a conventional loan.

That would not be a problem, the brokers said, if all self-employed people filled out their tax returns conservatively. But in this economic climate, the self-employed have been more likely to lighten their tax liabilities by taking business deductions, thereby lowering their official income levels, as well as the likelihood of qualifying for a loan.

“You have to be more conservative about how you claim your deductions, or how you approach unnecessary purchases for the business,” said Robert Duquette, the president of the New York Association of Mortgage Brokers.

Mr. Duquette says that self-employed borrowers will have no trouble qualifying for loans if they have significant cash, as well as credit scores of at least 700, and stable and significant profit for the previous two years.

But many small-business owners, hit by the recession, are showing losses on their income tax statements. “Of course, a borrower can make an argument for extenuating circumstances, like reserve duty for a few months, or a temporary hospitalization,” said Regina Mincey-Garlin, the president of RCG Mortgage Solutions in Montclair, N.J.

Mr. Duquette of the New York Mortgage Brokers Association said the mortgage crisis had hurt small-business owners more than others. “Everyone who’s getting income from places other than salary and wages is getting hit harder than everyone else,” he said, “because they’re being scrutinized more carefully.”

And those who have only recently started a business — perhaps after a layoff — may face even greater difficulties, he added. During the recession, many companies laid off workers, hiring them back on a contractual basis. Because these people have no long-term history of stable earnings, Mr. Duquette said, lenders often reject their applications or impose higher rates.

Still, self-employed applicants shouldn’t give up hope, said Debra Killian, the president of Charter Oak Lending, a mortgage broker in Danbury, Conn. Many people wrongly assume they cannot qualify for a loan at all, she said, “but 30 percent of the time — maybe 40 — they’ll qualify. They may be frustrated at all the documentation we ask them to provide, but they can still qualify.”

Small-business owners considering whether to qualify a purchase as a business or personal expense on their taxes, Ms. Killian said, should do the math. If a business owner shows too little net income to qualify, say, for a $300,000 mortgage at 5 percent, and instead qualifies for a 5.25 percent loan, the monthly payments add up to an extra $5,520, roughly, for the first 10 years of the more expensive loan.

“If you save yourself a few thousand dollars in taxes in a year by taking those extra deductions,” Ms. Killian said, “how much will that cost you on your mortgage, or your ability to even get a loan?”

Rates were lower last week - call me for specific details if I asked you to wait abit for "lower rates" in the past 3 months!


A blonde gal decides to go shoe shopping, and stops in at many fashionable stores with no luck. No one seemed to have what she was looking for, which was a pair of alligator shoes.

After becoming very frustrated with the attitude of one of the shopkeepers, the young blonde declared, "Well, then, maybe I'll just go out and catch my own alligator and get a pair of alligator shoes for free!"

The shopkeeper replied with a sly smile, "Well, little lady, why don't you go on and give it a try?"

The blonde headed off to the swamp, determined to catch an alligator. Later in the day, as the shopkeeper was driving home, he spotted the same young woman standing waist deep in the murky water, shotgun in hand.
As he brought his car to a stop, he saw a huge 9-foot gator swimming rapidly toward her. With lightning reflexes, the blonde took aim, shot the creature, and hauled it up onto the slippery bank. Nearby were 7 more dead gators all lying belly up. The shopkeeper stood on the bank, watching in silent amazement as the blonde struggled mightily and barely managed to flip the
gator onto its back.
Then, rolling her eyes heavenward, she screamed in frustration, "Darn it! This one's barefoot too!"