Comment from jt
Time April 4, 2010 at 4:33 am

You can’t go too long these days without hearing about the housing mess America is mired in today. The media is rife with an endless deluge of information (or perhaps more appropriately labeled infomercuials) tauting government and private programs to help people stay in their homes and lower their mortgage payments. So just how did we get into this predicament? Well according to Carolyn Warren, author of Homebuyers Beware, a big part of the blame can be attributed to unscrupulous loan agents. Warren is a mortgage industry veteran with over 20 years of experience – working in retail and wholesale lending at large well known firms before becoming an author and adviser to the masses in need of help understanding the complicated process of financing a new home purchase or refinancing their current mortgage.

Based on Warren’s telling, it seems that loan agent rip-offs are commonplace. Buyer beware. She tells stories of loan agents who brag about pilfering tens of thousands of dollars on a single loan from unsuspecting (and unfortunately misinformed) victims. Only worse is the fact that many of these victims later find themselves anchored to a mortgae too heavy to lift because of they did not fully understand all the terms of their loan when they originally closed. In this book, Warren explains to the reader how to look for the signs of a scam or a loan agent who is more interest in his/her own interests and not working as an advocate for your needs. She takes you through the loan process and explains the intricacies from different types of loans to credit scoring to how to make the best of and even recover from forclosure and short sale situations. She really takes you from A through Z of all you could want or need to know about finding a loan for a new purchase or refinancing your current mortage. Throughout the book, she also highlights best practices in each of the sections as well as poor practices which should be avoided.

Without doubt, many of the anecdotes were eye opening to say the least. For the first time home buyer, this book offers a helping hand to steer you clear of the many traps waiting to be sprung by the loan agents’ avarice and mis-guided moral compass. At last, all is not to despair as Warren assures that there are honest and commendable loan agents out there to be found. And if all of her advice could be summed up in just one golden rule, it would be that the single most important factor that determines success or failure is finding the this person, no matter how long it takes. Not unlike the effort you’ve made in finding just right home, you will not regret spending equal effort in finding the right loan agent for you. Not a small feat but one you will appreciate all the more with time, just like your dream home.
Rating: 2 / 5

Comment from E. Byers
Time April 4, 2010 at 4:51 am

I got this book because we’re planning on buying a house soon. The title is a bit sensationalized, and while this book was written fairly recent, it seems to contain a lot of common sense items.

There are some chapters that talk about fee’s and where to go to look for a mortgage, but unless you live in a crazy real estate area (think Southern California, Las Vegas, etc) your chance of a lender completely ripping you off is a lot lower. Granted you still want to be prepard, and know what you’re facing. She also offers good advice on how to get the loan, how to not pester your loan officer, etc.

Some of the things seem a bit smug. She details a story where she goes and purchases a car, and the lender offers her a high interest rate. She explains that her credit score is above 800, so she should get a better rate. He doesn’t rerun any numbers, and automatically knocks 2% off. She gives this story as an illustration of why a high credit score is important. However, that’s just a classic scam of lenders at a car dealership, more than likely they would have knocked the 2% off for anyone, plus she should have followed her own advice and shopped around, not going only with the lender at her dealership.

She also seems to promote her own websites, and own services a bit much, nearly once a chapter.

It’s still worth it to pick up a few nuggets of good information, however you could probably be better serviced by reading a good mortgage advice site/forum/etc.
Rating: 3 / 5

Comment from D. A. L.
Time April 4, 2010 at 6:37 am

YOU’RE TO BE COMMENDED FOR KEEPING US AWARE OF WHAT GOES ON IN THE MORTGAGE

BUSINESS BEHIND CLOSED DOORS.

ANYONE HEEDING THIS KNOWLEDGE IN YOUR BOOK WON’T BE CAUGHT UNAWARES
Rating: 5 / 5

Comment from ichor
Time April 4, 2010 at 9:23 am

While this book is a great “primer course” for the potential home buyer…buyer beware with the book itself. There is a plethora of information regarding the loans, fees, terms, etc. However, some of it is just plain incorrect.

For example:

1. Page 77, where the author describes if you’re ready to buy a home. Point #5, explaining why it might not be a good time to buy a house: “The only zero-down loan is for U.S. Veterans. Everyone else will need at least 3.5 percent (of the purchase price) to put down.”

This is wrong. There is no requirement that lenders have to abide by, telling them the minimum is 3.5%. That’s just for FHA loans anyway. In fact, there is a “rural” homebuyer program, called the USDA loan that features 0% down. And, if you take a look at credit unions, many of them do not require ANYTHING down. Of course, the interest rate will be higher since it’s a higher risk, but researching a local community credit union – they offer a 0% down that also does not require mortgage insurance. Is that the recommended way to go? It depends on your finances and scenario, but “the only zero-down loan is for U.S. Veterans” is absolutely wrong.

2. Page 79, under the “Folly of Procrastination”: “Owning is better than renting in the long run. People who own their homes free and clear in their retirement years are taking Mediterranean cruises and enjoying life. By contract, people who are renting in their retirement years are paying more than ever and are taking supplemental jobs slinging hot fries and sweeping greasy floors to try to make ends meet.”

This may be tongue in cheek, but it’s also wrong. Many elderly are choosing to rent – many for financial reasons. You never really “own” your house – you merely rent it from the government due to property taxes. And, with owning, you get all the pleasures of upkeep. There are numerous reasons, personal and financial to rent rather than own. Here, the author comes off as an over-zealous real estate agent. (You know, part of the National Association of Realtors, who, each quarter, tell us that “Housing prices are on the rebound.” It’s December 2009, and I’ve heard that for over a year now, folks. They’re still dropping.)

3. Page 82, “The Loan Process in Ten Easy Steps”: “Don’t make the colossal mistake of getting out on limb with a signed purchase and sale agreement without having solid financial backing to close the deal.”

Another blanket statement that could be entirely wrong. Get your pre-qualification (your credit won’t be run), make an offer, have an inspection, and THEN go back for the preapproval. Why? If you’re actually looking for “THE” house – a tidy 1800sqft house with man-cave sitting on 2 acres with a couple large bedrooms and the third one can be small since it’ll be an office, etc… The chances of you finding your perfect house are pretty narrow. And when you do find the house, if the home inspection turns up all kinds of stuff you’d rather not deal with (by renegotiating price or fixing yourself)…then 3 months from then when you find the “replacement” perfect house, you can do the same steps. Otherwise, every 3 months that go by, you get your credit run…and your score drops each time. (On the other hand, if you’re looking for “a box to call your own, something with 3 bedrooms, bathroom, and a kitchen,” then there are plenty out there – shouldn’t be too hard to find one in 3 months.)

4. Page 82: “Don’t even think about presenting an offer without having a preapproval letter to accompany it.”

I’ve done this 3 times. Each time, the offer was accepted. A good real estate agent knows that in the Purchase & Sale, to put a “Contingent on Financing” clause. If somebody wants to sell their house, and you have a good offer, they can conditionally approve the offer – stating that you have 5 days to produce a PreApproval letter. This isn’t 2003-2007 when people were lining up to bid on overpriced, cheaply built homes.

5. Page 83: “If you’re buying a bank-owned property, it takes longer because you’re dealing with a committee or bank negotiator who is busy with other matters.”

Another glossy smooth-over by the author. Just recently I made an offer on a bank-owned property. My real estate agent had the offer in at 7am on Monday. The offer was approved at 4pm…THE SAME DAY.

6. Page 100: “What about Credit Unions?”

Here, the author basically says to use banks and not credit unions…but more directly, she states to choose your loan based on the individual loan officer rather than lending institution.

Well, first off, there are a nationwide survey of mortgages originated in the past couple years (I believe it was performed by BankRate.) Credit unions routinely not only had better rates, but their customers were happier with their service. But…the authors bit here is two-fold: dismissing credit unions and choosing a loan individual…

7. Page 106-108. “How to find a mortgage star.”

This part is just downright worthless. Basically, the author says to pick a great mortgage individual, do the following: (1) Pick somebody, anybody. (2) Call them up and ask for a GFE (good faith estimate.) (3) If they want to run your credit, they’re bad. If they say the GFE doesn’t mean much, they’re bad. (4) “Then go one step further and ask about their experience and ability to handle challenges, should something unexpected come up.”

Based off that, you’ve found your mortgage star. Seems a little iffy to me…

8. Chapter 14. The author continuously talks about the people who are “shoplifting” the knowledge of a loan officer. “It’s sad, but they [loan officers] get so many people asking for quotes and GFEs and asking ten stupid questions before they even have a loan approved that take up their whole day and then these rude time shoplifters never get back to them, disappearing into the silent void without so much as a thank you, so the loan officers end up working hours and hours for free every week.”

Excuse me…but that’s called CUSTOMER SERVICE. Do you pay the dude at Best Buy (or Amazon) to ask about the latest BluRay player? Are you shoplifting if you don’t buy one? No – if you were happy with the experience (ie, the customer service), you get your questions answered, and when ready, you buy from them.

Overall, there’s a lot to both like and dislike about this book. The best thing about it: there’s a lot of good information all bound into a single source. The worst things: some things stated as facts that aren’t true, and, quite frankly, you could skip the narrative and get all the info for free online. Just do your own homework.
Rating: 3 / 5

Comment from Mr. Fred
Time April 4, 2010 at 11:55 am

(Note: the word ‘expose’ should have an acute accent mark placed on the last ‘e’ but I was unable to do so for this online review. )

The recent real-estate meltdown has lead to a lot of paper and ink being expended on guidance and how-to books with questionable value. In this case, with a title like “Homebuyers Beware — Who’s Ripping You Off Now?” one would expect some sort of lurid, juicy expose about the mortgage and real estate industries, and little in terms of factual or practical guidance.

Author Carolyn Warren is an experienced insider, having worked in many roles in the home loan business, placing her in a position to offer a lot of good advice and insights. Fortunately, she all but ignores the title of her book— one is lead to wonder if some marketeer chose the title for her— and simply provides practical guidance for the home buyer seeking a loan on fair terms.

To be sure, the book discusses sharp and shady practices, many of which have been around for a long time, and few of which are new. No one who has ever applied for a mortgage loan will fail to find something familiar here in the form of an unpleasant memory. But the main point of the book isn’t merely to rip into mortgage brokers and bankers simply for the sake of getting attention.

Instead, the book talks in plain language about credit and credit scores; how to determine where you stand in the credit market, and what to do if your credit rating isn’t the best. You’ll learn positive steps to take to repair marred credit, to recover from previous problems such as foreclosures, and to put yourself in the best possible position to get the best possible mortgage. Of course, miracles don’t happen, but the advice given seems quite actionable and sensible.

Then, you will learn all about mortgages and how they are put together. You’ll be told about how to shop for the best rates and terms, and the advice here is rather surprising: rather than shopping around endlessly and responding to misleading advertisements, find an honest broker or banker and work intensely with that person. This alone is worth the price of the book.

The book continues to discuss the need for a good real estate agent (you ignore this advice at your own financial peril), and the many aspects of refinancing an existing home.

The final part of the book is as close to an “expose” that the book gets: a long array of shady and dubious deals are described, but the general advice is simple enough— stay away.

The book is not perfect; some of the writing is a little obscure and would have benefited from more, and more careful editing. During tough times such as presently exist (late 2009), there is more emphasis on getting a book like this one onto the shelves for quick sale than there is on editorial quality. That’s too bad, because a couple of more weeks of work would have improved the readability of the book substantially.

Still, I have no problem giving this book a high recommendation to prospective home buyers, regardless of experience level. I’ve myself done a long list of real estate deals, but I learned a great deal of useful information from the book, information that I’ll surely put to use on my next deal. And if you’re a novice home buyer, the book can’t help but save you time, frustration, and money.
Rating: 4 / 5