The Riverside’s escrows explain that the guidelines are the rules and regulations that an underwriter of a mortgage loan has to abide by in order for the loan to be approved. Additionally, these guidelines are based on what investors that buy and hold mortgages will allow. The popular investors that the average consumer is aware of are companies such as Fannie Mae and Freddie Mac who normally buy what they call ‘vanilla’ or conventional loans.
But, according to Riverside’s professionals, these companies are only two companies out of hundreds that actually purchase mortgages to hold. The more aggressive companies have designed their guidelines around today’s average consumer which is the consumer with a few credit dings such as collections, medical bills, judgments or charge-offs on their credit report and/or an unconventional possibly unverifiable household income. The companies that have allowed these unconventional mortgage loan guidelines do take a higher risk on their foreclosure rate although, in their eyes, they have securitized these loans against assets (residential homes) that are in appreciating markets.
From Riverside Abstract say that these companies are REIT (real estate investment trusts) groups that purchase mortgages privately and for trade on Wall Street. They are regulated by the local state banking regulations protecting us from unfair or fraudulent loans and we also have the infamous FED (Federal Reserve Board) with Alan Greenspan determining how the market will directly affect the country's economy. The FED and Wall Street have actually frowned on some of these aggressive mortgages due to the high foreclosure rates with most of this 100 %, Zero down or Zero closing costs loans.
In Riverside CEO’s opinion, we all have an opportunity to purchase real estate in the youngest and greatest country on the planet where an Island like Manhattan was once purchased for only ten cents! I have no idea how many BILLIONS of dollars it would cost to purchase the island of Manhattan today. So, from Riverside office based in Brooklyn suggest buying as much as you can while you can even if you think the interest rate is too high because the programs available to consumers today are unlike any in the past.
First time home buyers are able to purchase homes with little to no income or asset documentation on residential owner-occupied homes, second homes and even up to 4 unit homes for investment purposes. There are consumers out there that have reviewed these programs and thought that at the higher interest rates of 7-8.50%, these lenient programs are too expensive and it just doesn't seem worth it.
Frankly, the reality of it is these consumers were spoiled for a short period of time when we were able to purchase homes at what were 40-year low-interest rates!
So, when the market's interest rates have decided to fix itself most of us are scared to purchase homes in areas where home values are in the 400k-600k range.
“For those consumers that have not seen the relevance of purchasing a home due to the now rising interest rates I beg you to think again. Your financial future depends on it! Either way, you look at it, your home is going to appreciate (increase in value) no matter where you purchase in the United States.”
According to Riverside Abstract home prices increased 12.02% year over year from the third quarter of 2004 through the third quarter of 2005. Even with expert acknowledge and advice in investment techniques you may not be able to get that type of ROI (return on investment) anywhere. So, it doesn't take a genius to know that if there are lenders out there that are willing to give you credit towards purchasing a home with little to no documentation and less than perfect credit at a higher interest rate you had better jump on it as if you were one of the board members sitting in the 1st meeting about investing in the Microsoft Corporation!
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