Market Update
As Of
October 11, 2007

So today, we received a significant amount of incoming calls. The majority of these calls were individuals who are in adjustable rate mortgages, and whose mortgages are adjusting or are on the brink of adjusting.

One borrower told my loan officer she is currently with Countrywide; they put her in the negative amortization loan she is currently in. They did not tell her how the loan works. Countrywide simply told her "it is a deferred mortgage plan" and "all you will pay now is interest." In essence, this is somewhat true. However, with a loan that potential eats equity, full disclosure of these facts must be disclosed.

The sad part of this is that she told my loan officer she has called Countrywide 20 times and they repeatedly tell her "nothing can be done...sorry!" and also "that she has no equity." Sadly enough, after a review of comparable sales, this borrower has about 20% equity remaining. I am confused as to why Countrywide would not redo the loan.

But the truth of the matter is these lenders do not necessarily care. They know there are hefty prepayment penalties associated with these loans and that they can not waive them. These loans have already been sold off on Wall Street.

A lot of borrowers are going through this type of mess. Thankfully, this borrower has equity and can seize a beautiful rate and a fixed rate altogether. My candid advice to most borrowers is: do not necessarily trust these big companies. Imagine the fact that Countrywide has nice, huge, expensive offices. They need to make money to support such overhead. A company like mine, where I have a medium size firm, and nothing extravagent, we can actually keep borrowers' best interests in mind. We do NOT have to pay for our high-rise office by charging excessive fees and duping clients into BS loans.

This industry has been pawned off to the greedy and the selfish. These people have created turmoil and have caused a devastation into the very foundation of our economy. It is a sad and old song we are witnessing: America's corporate moguls conning their way with money. Why did Enron screw so many individuals lives and futures, and get away with it? Why are these big banks like Countrywide causing an economic turmoil and getting away with it? Why is Angelo Mozilo selling off all his Countrywide shares and getting away with it, knowing that his company is going to be scrutinized, yet cashing in millions?

It is a sad sad day to know that these homeowners who wake up at 6:00am in the morning and work until the sun fades simply to pay their mortgage are now the victims of their own good will. Again, the theme here is greed and selfishness.

I am educated enough to know that most Americans do not even realize what is going on with our economy. My simple advice: trust who you work with, don't let yourself be sold by the idiots who have invaded this industry--the people with no education or foundation in finance, economics, or simple logic.

Until next time, have a great day!

Sincerely,

Cyrus Khadivi
Managing Partner

Freedom Lending Group, Inc.
www.freedomLG.com