With the dawn of 2010, just about everyone I know committed to smarter, savvier, more strategic decision-making — especially in the realm of personal finances. When it comes to mortgages, though, all the resolve in the world won’t create smart decision-making if you don’t understand the rules: insider secrets and all.

In his new book, "Decoding the New Mortgage Market: Insider Secretes for Getting the Best Loan Without Getting Ripped Off," mortgage loan officer David Reed offers to help you crack the code.

Like similar "new rules of the mortgage market" titles, Reed begins with the now-ubiquitous breakdown of the housing crisis and how it came to be: subprime, secondary markets and stated income, oh my. Moving on, though, Reed distinguishes "Decoding the New Mortgage Market" by providing new, useful tidbit of information after new, useful tidbit of information.

Book Review
Title: "Decoding the New Mortgage Market"
Author: David Reed
Publisher: AMACOM, 2009; 256 pages; $17.95

With the dawn of 2010, just about everyone I know committed to smarter, savvier, more strategic decision-making — especially in the realm of personal finances. When it comes to mortgages, though, all the resolve in the world won’t create smart decision-making if you don’t understand the rules: insider secrets and all.

In his new book, "Decoding the New Mortgage Market: Insider Secretes for Getting the Best Loan Without Getting Ripped Off," mortgage loan officer David Reed offers to help you crack the code.

Like similar "new rules of the mortgage market" titles, Reed begins with the now-ubiquitous breakdown of the housing crisis and how it came to be: subprime, secondary markets and stated income, oh my. Moving on, though, Reed distinguishes "Decoding the New Mortgage Market" by providing new, useful tidbit of information after new, useful tidbit of information.

First off, Reed displays a deep knowledge of the federally backed loan programs, from FHA and VA loans, to Fannie- and Freddie-backed conventional loans, and even USDA loans — the latter of which turn out to be potentially much more widely applicable and available than you would think.

He painstakingly hunts down and nails for readers what is now the Holy Grail of loan programs: the very rare zero-down loan. (It does still exist, in the VA and USDA programs.)

Unlike similar titles, which barely touch on these loans (if they mention them at all), Reed details these programs at just the optimal level of detail: enough nitty-gritty to know if you might be a good candidate, but just short of the minutiae that numbs the minds and glazes the eyes of the average borrower.

This is good, since between FHA/VA and (who knew?) USDA loans and conventional loans that will be resold under Fannie Mae and Freddie Mac, these loans will comprise the vast majority of the mortgage loans available to buyers in 2010. …CONTINUED

Secondly, Reed goes deep when it comes to the back-office inner workings of the mortgage industry — again, not deep enough to make you curl up into a fetal position, just deep enough for you to more fundamentally understand how to operate in this market.

This is especially true when it comes to recent and upcoming federally insured loan program underwriting changes and automated underwriting systems — both have huge impacts for buyers/borrowers, but their rules have lots of arcane, trickety twists that have the potential to confuse even the most logical, clear-headed buyer.

I’ve seen first-hand the crazy-making that occurs when an honest, ethical, transparent mortgage broker tries to illuminate these underwriting guidelines and systems to a buyer via e-mail, on the phone or in person. It’s far better to have them in print, where you can consult as needed and read repeatedly.

Plus — I think readers will find Reed, who the book’s jacket hails as having done 2,000 loans himself — to be that unbiased, cards-on-the-table insider they can turn to for a second (or third) opinion when their own loan officer’s explanations don’t sit well or are unclear.

And that doesn’t mean he always says what buyers and borrowers want to hear — many of his lessons explain the valid reasons mortgage brokers do things that seem inexplicable to consumers.

Reed walks buyers through the entire cycle of obtaining a loan — from selecting a loan program to applying and qualifying, reviewing their good faith estimate (the new one), locking an interest rate and closing (including negotiating and financing closing costs).

He also offers a great set of off-the-grid ideas for sources for downpayment money and closing costs, as well as some strategies for what happens if your loan goes south after closing and you need to consider a short sale or loan modification.

From that perspective, Reed is all over the place — if "the place" is the mortgage market in 2010. In fact, many of his resources are so up-to-date in such a rapidly changing market I almost wondered at how the book got into print so quickly.

The book is not as basic or step-by-step as some others are; rather, it drills down into each of the phases of obtaining a loan and offers readers a deep understanding of what’s going on behind the quotes and papers, as well as some smart strategies for getting the best deal on their mortgages.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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