Preface to the Second Edition

During the past 10 to 12 months, the media have flooded us with news about the so-called mortgage meltdown, a doubling or tripling of delinquent mortgage loan payments, the dramatically increasing rate of property foreclosures, the tragic stories of people who now suffer payment shock, and more generally, the millions of borrowers who paid far more for their property loans than they would have paid had they shopped, compared, and negotiated wisely instead of merely relying on the supposed good faith of their loan representatives.

William Poole, president of the Federal Reserve Bank of St. Louis, was recently quoted in The New York Times (July 27, 2007) as saying, "Driven by the prospects of high fee income, mortgage originators have persuaded many borrowers to take out these [expensive and unsuitable] mortgages." Or, more bluntly, disaffected borrower Jennifer Hintz says, "I feel we got totally screwed" ("Nightmare Mortgages," BusinessWeek, September 11, 2006).

Isolated incidents? Hardly. The U.S. Congress and the attorneys general of more than a dozen states are holding hearings and conducting investigations that clearly reveal widespread fee gouging, unsuitable loan products, nondisclosures, deceptive advertising, bait-and-switch practices, and other malfeasance by loan reps and mortgage lenders.

So, it is within this context that my editor, Laurie Harting, suggested that we bring out an updated edition of 106 Mortgage Secrets All Borrowers Must Learn. Although any reader of the first edition would have been forewarned against the abuses that are now coming to light, this new edition sets out in more detail how borrowers go wrong—plus, it emphasizes how to make financing property one of the the most rewarding transactions of your life.

When you learn how to loan shop with savvy, explore alternatives, and stay alert for ill-advised borrowing, the United States offers the best mortgage system in the world. Many loan reps will work diligently to help you own your own home and build wealth through investment real estate. These loan reps and lenders deserve fair compensation for their help.

Nevertheless, as a borrower, you must assume nothing. You must question intelligently; you must know how to distinguish the fake from the genuine. You must understand that maybe you shouldn't even use a lender to originate a new mortgage; rather, you might ferret out seller financing or an assumable mortgage (yes, contrary to popular belief, lenders still write a million or more assumable mortgages every year), or you might consider a "subject to," a wraparound, a lease option, or a blended-rate refi. Or you might snag a bargain through buying a foreclosure or a lender REO.

The first edition of 106 Mortgage Secrets was widely praised by home-buyers, investors, and consumer advocates. It was often condemned by loan reps who want to keep you in the dark. One such reader trashed the book and claimed, "There are no secrets here; your lender has to tell you all of these things." The recent outpouring of media coverage firmly disposes of that nonsense. Lenders and loan reps—even those who display honesty and competence—try to get you to buy the product(s) they sell. Few, if any, will explain those many financing or buying opportunities that they do not offer.

That's where this new edition of 106 Mortgage Secrets comes to the rescue. Unlike any other book on property financing, this new edition of Mortgage Secrets steers you away from those loan choices that will lose you money—and shows you how to find, structure, and negotiate the lowest-cost financing that leads you to maximize your ownership and wealth-building possibilities.

I wish you the best in your quest for property ownership. Should you discover questions, insights, or anecdotes that you would like to share with me, please give me a call at 352-336-1366 or visit my website,

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