Mortgage secrets from a real estate insider

If you are a home buyer, homeowner or residential real estate sales agent, there should be a law requiring you to read David Reed's new mortgage insider secrets book, "Who Says You Can't Buy a Home?" Written by an experienced mortgage banker, this new book reveals facts most mortgage lenders don't want borrowers to know because such secrets harm lender profits.

Reed is on the side of home loan borrowers as he shares how mortgage lenders view home loan originations. The book's theme is, "Anyone with steady income, no matter how bad the credit rating, or even with no credit, can find a mortgage to buy a home."

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The author then over-delivers on his promise by explaining virtually every mortgage lender trick that can hurt borrowers, along with explanations of how to overcome borrower obstacles.

A book reviewer is supposed to remain unenthusiastic about books reviewed, but that is impossible after reading this superb new "tell all" book. Reed explains virtually every home loan topic that beginner home buyers, experienced homeowners and residential real estate sales agents can possibly raise.

The author anticipates issues that most home buyers might not even consider, such as how to borrow from their 401k, IRA and other assets to buy a home.

The heavy emphasis is on buying a home with little or no cash from the borrower's pocket. If the home buyer can pay a 5 percent down payment, Reed then explains how to get better terms and even how to avoid the dreaded private mortgage insurance (PMI) expensive premiums.

Toward the book's conclusion, the chapters delve into credit reports, Fair Isaac Corp. (FICO) credit scores, and how to overcome credit blemishes. The author explains what is important to mortgage lenders and what is unimportant, such as recent credit inquiries. He also places considerable emphasis on how to overcome bankruptcy, foreclosure, late pay, and other credit problems.

Throughout the book, Reed uses many examples from his extensive mortgage lending experiences. To illustrate, he tells of an inquirer who refused to let him check her credit report because she feared she had bad credit. Finally, when she found a house she really wanted to buy, she let Reed check her credit report and all he found was a few late payments and an excellent credit score.

The big problem with this book is that the format sometimes makes for tough reading, especially when there are lots of boring numbers used to illustrate topics. The publisher could have used a more creative design to make for easier reading to format the important topics the author explains. There's no problem with the valuable content, just the dull way it is presented.

The book's best and most profitable chapter reveals mortgage lender "junk" or "garbage" fees. Frankly, I was shocked a mortgage banker would be so honest.

Reed explains which fees are non-negotiable and which can easily be negotiated away by borrowers. Then he reveals the high income the best mortgage lenders earn and why when a borrower questions a junk or garbage fee it hurts the lender's annual income.

Chapter topics include: "Where to Find Mortgages"; "The Key People in Your Approval Process"; "Types of Mortgage Loans"; "The Mortgage Application Process"; "Debt Ratios and How They're Calculated"; "Loan Documentation: Proving Your Income"; "Loan Fraud"; "Buying with No Money Down"; "Government Programs with Zero Money Down"; "Conventional Zero-Down Loan Programs"; "Borrowing from a 401k, an IRA, or Other Assets"; "Seller Carry, Lease-Purchase, Wraps, and Land Contracts"; "What's in a Credit Report?" "Finding the Best Subprime Loan"; and "Closing Costs."

Rarely do I encounter a real estate book that cannot be recommended too highly. This is one of those gems. Author Reed will probably be banned for life from mortgage lender meetings for revealing home loan secrets. But readers of his new book will benefit by saving on their home loans and obtaining the best possible terms. On my scale of one to 10, this superb new book rates an off-the-chart 12.

"Who Says You Can't Buy a Home?" by David Reed (AMACOM, New York), 2006, $17.95, 182 pages; available in stock or by special order at local bookstores, public libraries, and www.Amazon.com.

(For more information on Bob Bruss publications, visit his
Real Estate Center).

Copyright 2006 Inman News