There is good news amid the housing sales slump, as mortgage interest rates are declining and loan availability is improving.

For the savvy buyer, this market can net a good deal. On the other hand, what about those buyers who don’t know how to negotiate with a lender or loan officer?

Part of the reason the mortgage industry is in such a mess is that borrowers were steered into bad loans by greedy and in some cases unethical lenders, loan officers and mortgage brokers.

It’s more likely that people need an outside coach with inside information.

And that’s the role author David Reed plays in “Mortgage Confidential: What You Need to Know That Your Lender Won’t Tell You” (American Management Association, $16.95). It’s why I’ve chosen the book as my October selection for the Color of Money Book Club.

In a survey by Bankrate.com this year, homeowners with mortgages were asked what type of loan they had. It doesn’t surprise Reed that an unbelievable 34 percent of the respondents had no clue.

As a former mortgage banker and senior loan officer, Reed said he’s seen it all.

“I’ve seen people attempt to commit loan fraud – consumers and loan officers alike,” he said. “I’ve watched the interest rate market shake, rattle and roll through various rate hikes and rate cuts.”

Throughout the book Reed stresses the need to understand certain mortgage terms.

For example, if you’re applying for an adjustable rate mortgage, you should know what a margin is.

“ARMs can get lost in a sea of vocabulary,” Reed writes. “Start rates, LIBOR, annual caps, lifetime caps, fully indexed – it can get confusing. It’s the margin that you need to concentrate on.”

The margin is the number, expressed as a percentage, that is part of what is used to determine the rate a borrower will pay, Reed explains. Let’s say for instance your loan is based on a six-month CD at 4 percent and the margin is 2 percent. You may have been attracted to the loan by that 4 percent teaser or starter interest rate. But your fully indexed rate is that 4 percent teaser plus the 2 percent margin for a combined rate of 6 percent.

“It’s not uncommon for lenders who offer lower start rates to offset that with a higher margin,” Reed says.

A common margin is 2.75 percent. “Anything above that is nothing more than a lender’s attempt to get more interest from you faster,” he writes.

Reed covers everything from where the money for mortgage loans really comes from to closing costs (I found the tips in this chapter particularly enlightening) to refinancing to the various loan choices now available.

The greatest service Reed provides is acting as an interpreter.

“Mortgage Confidential” is like reading the CliffsNotes for Shakespeare’s “Hamlet.” You shouldn’t substitute the notes for actually reading the play, but reading the notes beforehand can help you understand the language. You feel less intimidated.

Reed breaks down the lingo and provides good, unbiased information that will help you ask the right questions and avoid getting snookered.

If you don’t want to be like a third of homeowners who don’t know what type of loan they have, get a copy of this book.