Online Resource Guides Mortgage Seekers

By Anna Minkowski

Baltimore Examiner Staff Writer

Paul Krueger has been in the mortgage business for more than 15 years. “I have personally originated more than 3,000 mortgages myself and have facilitated 10,000 in my lifetime,” he said of his experience. In 1996, Krueger founded Advocate Mortgage and has recently launched US-Mortgage Shop, Inc., an online portal to connect mortgage shoppers with lenders. He hopes that the Internet’s promises of easy automation will change his industry for the better, giving homebuyers more information and more options for loans.

With offices in Baltimore City’s Canton neighborhood, his 25-employee company is ready to turn these shoppers into owners.

Q: What is US Mortgage Shop and how did it come about?

A: US Mortgage Shop was really started as a marketing vehicle for my other company, Advocate Mortgage. Through the website, we started having some search engine success. We then started selling and sharing leads to other companies. Through USMortgageshop.com and Mortgageclass.com, we work with many lenders-more than 110-and also a credit restoration company.

Q: What are some of the questions you field from mortgage seekers?

A: I get a lot of credit-related questions. On our website www.mortgageclass.com, we have a link for questions, and we get some from people who are on disability income and want to know how to buy a house.

Q: What are some tips for improving one’s credit score?

A: For starters, you can improve your credit score by paying bills on time. If you are young and trying to buy your first house, pay your bills on time, try and get a loan that is an installment loan with regular monthly payments – like a car loan – and also limit the amount of credit cards you open up. Then, make sure you have a good rental history, those are the ways that will help you get ready to buy a house. Other than that, you can consult with a credit restoration company (not debt management) to write letters and use the credit bureau’s own system to delete negative information.

Q: What are some effective mortgage products for first-time home buyers?

A: The major issue for first-time homebuyers is always the down payment. These buyers want to find something like 100% financing. The Federal Housing Administration has loans that are also good for first time home buyers. I like interest only products and the cash flow elements of interest only. I am not a big fan of negatively amortizing loans because that is where you have a minimum payment every month, you don’t pay all the interest each month, it gets stacked up on you balance.

Q: What about the effective products for the luxury home buyer?

A: These buyers are looking at shorter term fixed-rate period loans. It’s all about cash flow for people at that market. Finding a minimum payment that also allows them to free up their cash is always a good idea.

Q: What are your thoughts on reverse mortgage?

A: Reverse mortgages are where the lender take the equity out of the house and then doles it to the home owner over time, ultimately it’s only [a good idea] if you are elderly and planning on being out of the house within 20 years.

Q: Are there any new mortgage or loan products being introduced into the marketplace?

A: It’s interesting because the interest only and negatively amortizing loans were not invented 20 years ago – they are not a new product even though there is the perception that they are. The only [new] thing that they are doing now, which got the sub-prime market into trouble, is being too lenient in the credit guidelines and loosening credit standards. There is not a big proliferation of new products in the private market, but in terms of the government and the FHA, they could have some new products, possibly meeting the needs in the sub-prime niche.

Q: What are your thoughts about Baltimore’s housing stock?

A: I think that there is a pecking order in Baltimore that radiates from around the Inner Harbor. Essentially, Canton and Federal Hill, and Inner Harbor East are seeing prices stabilize, but the outer areas are going to stay soft for anyone looking to rehab and flip properties. There is still too much inventory out there for the buyers, but these homes will get soaked up over time and prices will start appreciating at a slower pace than it has in recent memory.

Q: How would you advise a homeowner who had recently come into a surplus of cash?

A: If they just plunk it down on their mortgage – if it is a fixed mortgage – the loan is going to be paid off 10 years sooner, but it’s still the same payment amount. I would suggest trying to refinance the home, take the money and then plunk it down on the new mortgage, so to have a smaller note and then a smaller payment.

Q: Describe the most unique loan situation you’ve seen in your professional career?

A: A lot of unique situations come up with self-employed people who don’t have a traditionally documented income. With those people, who have a tax return where they have been losing money for two years, we still get the deal done through bank statements and verifying income through nontraditional means.

Q: Should the mortgage lending industry refocus on customer service?

A: It definitely should be a customer service industry. I try to take into account a client’s total situation and their total debt load and work the loan around their whole financial situation. Some lenders don’t look at that and I think that is where there is a giant disconnect. As the market shakes out a lot of these fly-by-night mortgage companies, you’ll see the quality of the mortgage companies go up.

Q: Where do you see the mortgage industry going in the next 10 to 20 years?

A: Hopefully, we will see the promise of the internet and automation come true. It hasn’t come true yet, in terms of making things more efficient for a better online consumer experience. The internet has got a good back bone but it is still a very arduous process that needs a lot of streamlining. We are trying to make the whole lender shopping experience a lot easier at US Mortgage Shop.