If I get a tea bag every time someone call me in a panic about their mortgage rate after some press conference held by the Federal Reserve, I’d have probably opened my own tea house by now.

The primary task that the Federal Reserve do (at least in the eyes of the public) is to set the rate in which banks borrow from one another. The organization also controls the rate at which the Federal Reserve Banks lend short terms loans to commercial banks.

It does not mandate, order or set the interest rates that consumers have to pay for their home loans. read more

A dry mortgage is a home loan whereby the lender’s only avenue of getting back the outstanding balance should the borrower default, is via the foreclosure of the property.

Also known as a nonrecourse mortgage, this means that the lender will not have to legal right to sue the borrower for a deficiency judgment to recover any amount of unsettled debt.

This can happen when the home foreclosed is valued less than the loan balance due plus the costs of foreclosure. read more

Mike was becoming desperate in his predicament.

He has been sending mortgage applications to every lender he could find online, on mainstream newspapers, and any banking branch that he has passed when out and about.

It was during this hectic and unfruitful process that he learned that he had a credit score hovering around the 500 mark. read more

When there is a waiver of escrows, it basically means that a lender has agreed to allow a borrower to pay for insurance and taxes directly without needing to open an escrow account with them.

When an escrow account is a requirement deemed necessary by a lender, it is not often that they would allow a waiver of escrows.

This is because the very purpose of such accounts are meant minimize the risks of borrower not paying for those expenses which could jeopardize the lender’s position on the loan. read more