Is Congress adding costs to your new mortgage?

Educate Yourself on Costs 
In today’s economy, it is important for consumers to be educated about any upcoming changes that could impact the Albuquerque area real estate market. One such concern is bill HR 6429 which was just passed by Congress. This bill is essentially an immigration reform bill, but in order to pay for the costs associated with the program GSE fees were attached to Fannie Mae and Freddie Mac mortgages.

“Basically what this means,” Ben Lucero of Indigo Mortgages states, “is American consumers buying or refinancing their homes will be paying for immigration reforms through higher interest rates and fees on mortgages.”

Because it takes money out of the pockets of people buying or refinancing their homes, the bill has not been favorably received by the mortgage industry. The National Mortgage Brokers Association, as well as the National Bankers Association, oppose the bill—not because of its implications for immigration reform—but because it calls for the use of housing to fund it. In an already shaky housing market, the extra fees are seen as potentially risky for the continued recovery of the housing market.

David Steven, president and CEO of the National Bankers Association was quoted in DSnews.com as saying: “Fannie and Freddie’s guarantee fees are supposed to be used to help offset the risk inherent in providing mortgages, and any increases to those fees should be used for that purpose,” Steven said. “Dipping back into the housing piggybank to pay for unrelated policy items on the backs of America’s homeowners sends the wrong message at a time when the housing market is starting to show signs of recovery.” He went on to say, “Increasing the cost of most mortgages will only add to the uncertainty that is plaguing the mortgage market and deferring a more a robust housing recovery.”

Fortunately, bill HR 6429 still has to pass the senate before it can be implemented.  Please check back because we will be posting the bill in the next few days for your review.

The Dangers of HELOC Loans

Be Aware of Heloc Advantages and Disadvantages
It is important to research your options before taking out a line of credit for a mortgage in the Albuquerque area because there are some significant disadvantages to Home Equity Lines of Credit (HELOC) mortgage loans. 

A HELOC loan differs in several potentially costly ways from a traditional home equity or refinancing loan. This is because a HELOC mortgage is a line of credit secured against the equity of your house while a Fixed Home Equity Loan is not a line of credit. A Fixed Home Equity Loan is a fixed term, fixed rate, fixed payment loan.

Here are some of the dangers of choosing a HELOC loan:

Foreclosure

The equity of your home is pledged as collateral when you take out a HELOC loan. If something happens and you can no longer make payments on the mortgage loan, the lender can foreclose on your home. To make matters worse, after your home has been foreclosed, you will probably still be held responsible for the balance of the HELOC loan.

Home value

If the value of your home decreases at some point while you have a HELOC loan, the balance on that loan could be greater than the value of the home or negative equity.

Termination fee

Terminating your HELOC loan before the due date could lead to a fee. The majority of HELOC loans contain a clause that states you will owe a fee for paying off the loan before a set time has passed. This period of time can be up to 5 years but is usually about 3 years. The fee itself can be a $100, or as much as 3% of the original HELOC mortgage amount.

Annual fees

As long as your HELOC account is open, you will probably incur an annual fee, even if you do not have a balance on your account. If the HELOC loan stays open with a zero balance, the bank may access a non-usage fee to make up for a lack of interest on the balance. This fee could amount to several hundred dollars! These types of fees are not possible on a fixed home equity loan because it is not a line of credit.

Variable rate

Interest rates on HELOC loans are usually variable—which means your rate can go up and increase your monthly payments. HELOC mortgages have no caps on rates so it could increase over time with no end in sight.

Does Education Matter when Choosing a Loan Officer?

Educated Professionals are Important 
A loan officer serves a very important role in the housing market for buyers, sellers, and mortgage lenders alike. They are the liaison between the institution that provides the mortgage loans and those applying for the loan. It is the loan officer’s job to find a loan arrangement that serves the best interests of the applicant and the financial institution offering the loan. Finding a good loan officer can significantly improve a buyer’s chances of securing favorable terms on their mortgage.


The state of New Mexico requires that loan officers be trained and licensed through the National Mortgage Licensing System. A high school diploma or GED is usually required in order to obtain a license while continuing education to keep the license current is also common. Some lenders and brokers will only hire loan officers with a bachelors degree in banking, economics or marketing. However, formal education in the mortgage industry is not a requirement.


Success in the field requires that the loan officer be competent in how mortgages work as well as be able to network with potential borrowers and real estate agents. A good loan officer will possess a working knowledge of the requirements and conditions necessary for applicants to qualify for each type of loan offered by the lending institution. Additionally, the loan officer will have up to date information on all promotional specials on loans and any special interest rates. When applicants are attempting to overcome adverse financial situations or just establishing a credit history, it is very important that the loan officer is knowledgeable about opportunities of interest to those in these circumstances.


For the reasons mentioned above, experience is the most important element for a loan officer’s success in the field. However, loan officers with an education related to the mortgage industry and experience will have an edge over all other loan officers. They will be proficient in business, accounting, financial statements, and cash flow analysis as well as the legal regulations, lending guidelines and interest rates, and be excellent assessors of a borrower’s ability to repay the requested loan. These loan officers will also provide the best services for buyers because they will have both the skillset and knowledge to offer the best terms for mortgage loans.

According to Ben Lucero, Owner of Indigo Mortgage “…All loan originators working at Indigo Mortgage including myself are all college graduates.” He further states, “I think the reason  Indigo Mortgage is growing is because borrowers are finding out first hand how important it is for their loan officers to be well educated and informed on the ever-changing mortgage market because in this environment it can be a moving target.”

What to Expect from Mortgage Loans in 2013

If you have an interest in the Albuquerque housing market, there may be good news for you this year. Low mortgage interest rates are expected to continue well into 2013, due in part to the Federal Reserve Bank’s efforts to promote an attractive market for buyers. In the Albuquerque area, it is likely that refinancing will continue to account for the majority of mortgage loan transactions into 2013, although some purchase loan increases for real estate are also forecast.

As Ben Lucero, Owner of Indigo Mortgage states, “We have already seen rates start out 2013 higher than we ended 2012. If housing does not make a dramatic turn around, experts say rates will stay at historical lows throughout the year.”

Market average rates for 30-year fixed mortgages have dropped steadily since February 2011 and 15-year fixed mortgages are also low. Many analysts predict rates to either continue at these lower rates or to decline somewhat through the beginning of 2013. The Albuquerque housing market should undergo significant improvements throughout the year, particularly for sellers as the availability of cheap foreclosed properties declines somewhat.

During the summer months of 2012, the home price index for residential homes increased by 6.9 percent over the first months of the year. Because the majority of these sales were with housing priced at the lower end of the market, analysts have been optimistic about the long-term health and continued recovery of the real estate market in the U.S. Moreover, the Federal Bank’s monetary policy is likely to help mitigate the effects of pressure on the housing market to raise fixed-rate mortgages and keep mortgage rates surprisingly low.

Albuquerque buyers should be able to take advantage of low interest rates for fixed-rate mortgages during the upcoming months, while homeowners will enjoy lower mortgage payments after refinancing. However, some homeowners may continue to struggle to get financing because of the slump in the U.S. economy. Also, it is likely that the economy would need to recover before being in favor of sellers again.

Analysts continue to recommend buying and refinancing during periods of time when mortgage rates are low and then selling during periods when real estate is in high demand. It is anticipated in the coming year that the housing market will recover enough to tolerate slight increases in mortgage rates while the supply and demand for affordable housing balances out.

Additional factors to consider that can influence the mortgage rates during the upcoming year include the overall demand for housing, the demand for low-cost housing, housing incentives for Fixed-Term Mortgages, and Federal inflation rates.