In this interview we speak with Hollie Boswell, a borrower with multiple real estate investments, about her experiences in the mortgage market.

The mortgage market has certainly taken a beating over the summer, and it continues to change on a daily basis. This means mortgage professionals need to be attuned to market changes, and mortgage applicants, now more than ever. With mortgage companies going belly up and many mortgage professionals winding up without a job, the market is certainly volatile. However, hundreds of employees let go by American Home Mortgage have now found new jobs with Indy Mac, which looks promising for the rebound of the mortgage market as a whole. And, while the market is going through a rough patch, to say the least, it could be worse.

According to the seasonal adjustment, loan applications were only down four percent. Sure, that is a big drop, but it is not quite as low as some industry professionals had anticipated. The mortgage market is tighter than ever and that is the reason for the big drop. Mortgage bankers are forced to be pickier than in the past when it comes to loan applicants because not being so choosy is what created this mortgage mess to begin with.

The Average Mortgage Borrower

What does all this mean for the average borrower? It depends completely on that applicant's financial portfolio. Take Hollie Boswell, for example. She is in her early 30s, married, and has a great job. Her credit score is above average; she has other real estate holdings, and recently applied for a new home loan. She was approved with very little questions asked, despite the current state of the mortgage market. She believes this is because she has never missed, or been late, on a mortgage payment and owns two other rental homes. "I have always been very conscientious of making all payments on time, credit cards, mortgages, car payments, everything. I believe by always making payments on time I have created a great credit history that shows creditors I'm a good credit risk," Boswell explained.

By creating an excellent financial portfolio and showing she always made her payments on time it was no problem for Boswell to receive approval for an additional loan. Many professionals reading the financial status of the applicant probably agree at first glance with the loan approval. However, mortgage applicants need more investigation these days as the mortgage market proved earlier in the summer. In fact, Boswell was quite surprised she was approved for the additional home loan so easily considering the current market. "I thought I would be approved for the loan, but I thought I would need to provide more information and that it would take longer for approval considering the market situation." 

Did the Mortgage Banker Make the Right Decision?

While Boswell appears to be a perfect candidate, and one that should have received approval, mortgage lenders should look a little deeper, especially during a volatile market. Approving the additional loan means she is stretched very thin, too thin many industry professionals would say, should she have to make the mortgage payments on all her properties without the assistance of rental income. It is not just the low income, bad credit crowd that should be scrutinized and put under a microscope when applying for a mortgage loan these days. It is every single applicant that should be analyzed based on his/her personal situation and ability to repay the mortgage loan.

Look Out for Potential Mortgage Problems

One of Boswell's tenants is currently being evicted. This means the Boswells will need to make the additional $800 mortgage payment on their own until the situation is resolved and a new tenant is found. What if the other rental home was under the same situation and the Boswells had three mortgages to pay out of their own pocket? According to Mrs. Boswell, they might not be able to make the payments more than a couple months before they would be in a big bind.

This is part of the problem with the mortgage industry and something mortgage professionals should keep an eye on. One's credit score and income should not be the only factors considered in whether a mortgage loan is approved or not. Instead, the entire picture should be evaluated based on the applicant's situation. This will take more time and more resources, but industry professionals will make better loan decisions and be able to avoid debacles like the current market meltdown in the future.

In this interview we speak with Hollie Boswell, a borrower with multiple real estate investments, about her experiences in the mortgage market.

The mortgage market has certainly taken a beating over the summer, and it continues to change on a daily basis. This means mortgage professionals need to be attuned to market changes, and mortgage applicants, now more than ever. With mortgage companies going belly up and many mortgage professionals winding up without a job, the market is certainly volatile. However, hundreds of employees let go by American Home Mortgage have now found new jobs with Indy Mac, which looks promising for the rebound of the mortgage market as a whole. And, while the market is going through a rough patch, to say the least, it could be worse.

According to the seasonal adjustment, loan applications were only down four percent. Sure, that is a big drop, but it is not quite as low as some industry professionals had anticipated. The mortgage market is tighter than ever and that is the reason for the big drop. Mortgage bankers are forced to be pickier than in the past when it comes to loan applicants because not being so choosy is what created this mortgage mess to begin with.

The Average Mortgage Borrower

What does all this mean for the average borrower? It depends completely on that applicant's financial portfolio. Take Hollie Boswell, for example. She is in her early 30s, married, and has a great job. Her credit score is above average; she has other real estate holdings, and recently applied for a new home loan. She was approved with very little questions asked, despite the current state of the mortgage market. She believes this is because she has never missed, or been late, on a mortgage payment and owns two other rental homes. "I have always been very conscientious of making all payments on time, credit cards, mortgages, car payments, everything. I believe by always making payments on time I have created a great credit history that shows creditors I'm a good credit risk," Boswell explained.

By creating an excellent financial portfolio and showing she always made her payments on time it was no problem for Boswell to receive approval for an additional loan. Many professionals reading the financial status of the applicant probably agree at first glance with the loan approval. However, mortgage applicants need more investigation these days as the mortgage market proved earlier in the summer. In fact, Boswell was quite surprised she was approved for the additional home loan so easily considering the current market. "I thought I would be approved for the loan, but I thought I would need to provide more information and that it would take longer for approval considering the market situation." 

Did the Mortgage Banker Make the Right Decision?

While Boswell appears to be a perfect candidate, and one that should have received approval, mortgage lenders should look a little deeper, especially during a volatile market. Approving the additional loan means she is stretched very thin, too thin many industry professionals would say, should she have to make the mortgage payments on all her properties without the assistance of rental income. It is not just the low income, bad credit crowd that should be scrutinized and put under a microscope when applying for a mortgage loan these days. It is every single applicant that should be analyzed based on his/her personal situation and ability to repay the mortgage loan.

Look Out for Potential Mortgage Problems

One of Boswell's tenants is currently being evicted. This means the Boswells will need to make the additional $800 mortgage payment on their own until the situation is resolved and a new tenant is found. What if the other rental home was under the same situation and the Boswells had three mortgages to pay out of their own pocket? According to Mrs. Boswell, they might not be able to make the payments more than a couple months before they would be in a big bind.

This is part of the problem with the mortgage industry and something mortgage professionals should keep an eye on. One's credit score and income should not be the only factors considered in whether a mortgage loan is approved or not. Instead, the entire picture should be evaluated based on the applicant's situation. This will take more time and more resources, but industry professionals will make better loan decisions and be able to avoid debacles like the current market meltdown in the future.