Will You Default? New Technology Can Predict Future of Florida Home Loans

Harj Gill doesn’t hold anything back when talking about piggyback Florida home loans. Says the International Mortgage Reduction Expert and Consumer Advocate:

“We have a catastrophe about to hit millions of American homeowners.”

Such exotic mortgages were originally intended for financially astute, high- income borrowers. However, in the frenzy of the housing boom, they have been mass marketed to home buyers in high-cost, high-priced, metropolitan markets.

For example, piggybacks are cited. These Florida home loans have become a favorite among borrowers with little or no down payment.

According to SMR Research, by the first half of 2005, the proportion of borrowers using piggyback mortgages was 48.2%. The default rates on these loans, according to ratings agency Standard & Poors, is an overwhelming 43% - and rockets up to 50% for borrowers with FICO scores of less than 660.

Can you prepare for the Florida home loan future?

Consumer Advocate Gill contends that, “If you had a crystal ball that told you precisely what month you would lose your home and your family out on the street, you would do something about it.”
Of course you would. But what on earth is he talking about?

Such an invention for mortgages is exactly what Gil’s Financial Software Program is akin to. Users enter their Florida home loan details, as well as their income, regular expenses and any current debts they have, such as credit cards and car loans.

Once this is done, in the case of piggyback Florida home loans for instance, users are able to forecast the exact month (and year) they will go into default as interest rates rise and their cash flow is insufficient to meet the increased payments.

The most revolutionary aspect? Borrowers can then manipulate their finances to create any number of “what-if” scenarios to find one that will help them avoid going into default.

“Before we started using this software we knew, with rising [Florida home loan rates], that we would soon be in trouble,” said Peter & Shari W., a young couple with a piggyback mortgage from Bellevue, Washington, which has one of the highest concentrations of these loans in the country (51%).

“At first we were scared because we didn’t know what we would see with the results. But what we actually discovered was tremendous relief,” they said.

This feedback is quite common, as homeowners have been using this software for over 10 years. It’s an incredible step forward, as lenders can try to peer into the future of the housing market - but this technology can get it done in more accurate way.