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Making Sense of the Current Mortgage Market

What Recently Happened In The Market?

Wall Street firms created Subprime and ALT-A loans that significantly expanded the traditional loan qualification requirements, enabling borrowers with “scratched” credit to buy a home with little or no money down and in many cases without lender verification of income and assets. Many of these programs offered below market “Teaser Rates” to make it even easier for a borrower to afford a home during the first few years of the mortgage loan. The results of the increase in these types of non-traditional home loans over the last 10 years were:

  • Many borrowers could not make their payments because of job loss, unemployment and frequently increasing mortgage payments, which led to;
     
  • Higher than forecasted early payment default rates, which in turn led to;
     
  • Mortgage-backed securities being downgraded and Wall Street firms requiring the Mortgage lender buy back the defaulted loan, which led to the closure of many sub-prime mortgage lenders.

Why Cornerstone Mortgage Company Is Positioned Well

Cornerstone does NOT originate Subprime loan products or other products not suitable for our Customers. We pride ourselves in providing our Customers a loan program that meets the financial needs and repayment ability of our Customers.

Cornerstone does NOT have future Early Payment Default Risk that would require us to repurchase loans that have early payment defaults. Cornerstone has 41% more tangible net worth than our Warehouse Bank requires to support our $250 million warehouse line of credit. In fact, 90% of our tangible net worth is liquid (in cash) and we continue to generate higher than budgeted profitability this year.

Why Cornerstone Continues To Be Your Reliable Solution

Cornerstone is financially strong and will celebrate our 20th year in the mortgage loan business later this year.

Cornerstone’s online application technology provides easier, quicker loan approvals for your buyer.

Cornerstone has access to the loan products and pricing of more than 100 national investor sources.

Cornerstone’s Real-time comparitive Pricing Engine instantaneously compares the live pricing of our national investor sources, so we can give your Customer the very best interest rate quote and loan terms available.

Cornerstone treats each Customer as a “Customer for Life” staying in touch with our Customers a minimum of four times a year. And even if they can’t purchase a home today – we advise them on ways to improve their financial standing so they can become homeowners in the future.

Cornerstone is a more reliable solution than a loan broker because we control the in-house processing, underwriting, closing and funding functions in house with our employees; and we are a better solution than a bank because of our extensive offering of loan products at lower interest rates.

The Bottom Line

At Cornerstone we continue to help people purchase homes they can afford using loan programs that make sense for their specific financial situations. We continue to do business the Right way for the Right reasons. This simple, honorable business philosophy has made us incredibly successful for the past twenty years, and it will help us to continue Cornerstone’s success story for years to come.