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November 2008
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Will The 4.5% Mortgage Rate Craze Reach Los Angeles?

Last night, I speculated that Los Angeles mortgage rates would open in the 4.5% range because of the Fed’s post-market Press Release about its mortgage-backed securities market intervention:

Mortgage markets are responding with EXUBERANCE…joy…unbridled passion!  In post-market trading, the 4% coupons are trading at a premium, suggesting that  mortgage rates should open below 4.5% tomorrow.

That…didn’t quite happen. Mortgage-backed securities open higher, then fell off the table, then recovered, then fell again.  Lenders offered wholesale par rates (with no yield spread premium) at 4.625% and 4.75%, today.  My article moved over 20 people to call to find out about a potential refinance and most seemed frustrated that the 4.5% rate was not available, yet.

My hypothesis is that the mortgage traders were still on vacation, in Cabo, and didn’t see the Fed’s Press Release as sufficient cause to jump on a plane and get back to Wall Street.  I still think we’ll see a 4.5% mortgage rate…next week.  Here’s why most borowers will never get that rate for their refinance:

It won’t stay down at 4.5% for long. We saw this happen, for about three hours, about two weeks ago.  Borrowers who “had it tee-ed up” got that rate, with a 1% origination fee.  “Teeing it up” means you’re ready to lock your rate.  Lender require the following to lock a mortgage rate:

  • Credit report pulled
  • Loan application completed and entered into the system.
  • Documentation for income, and assets, ready to fax, email, or send via overnight mail.

Lenders are cracking down on lock commitments.  The rate locks are coming with conditions, meaning that the loan file needs to be submitted to underwriting within ten business days.  This means that a title report needs to be supplied (3-5 days) and an appraisal needs to be uploaded (7-8 days).  That leaves very litle time for deliberation, if Los Angeles mortgage rates “just touch” 4.5%.

As such, deposits for appraisals, condominium certifications, and/or credit reports need to be supplied at rate lock commitment.  What this means is that your originator will collect about 4 or 5 hundred bucks from you.  I have no doubt that some of the originators who comment on my articles will try to “sell you” with the comment that “upfront fees are evil” or “take your time and decide”.  Others will say that I’m using fear to intimidate you.

Okayfine.  I’ve worked in financial services, both trading mortgage-backed securities and originating mortgages, since 1989.  It is my professional advice that you need to be prepared if you choose to take advantage of this opportunity.  These are unusual times with extraordinary benefits for the swift.  Banks know that they hold the upper hand with these low mortgage rates; they’ll only reward the prepared.

Contact me if you have questions. The phone is the most efficient and reliable medium.

PS:  The requirements to get this “magical rate” will be steep.  You must have excellent credit, be refinancing the amount of the mortgage you had when you bought the home (meaning you didn’t take out any cash from the property), and have plenty of documentable income.  If you don’t meet those steep criteria, don’t fret.  While you may not qualify for that rate, you will still be offered an historical one.

PPS:  If you contacted me today, I’m still digging out from under.  I’ll be scanning and e-mailing promised documents on Friday.

PPPS:  I almost forgot; Happy New Year !


Real Estate Market activity in zip codes 90031, 90032, 90041, 90042, 90065 for the previous week as reported in I-Tech MLS:

New listings entered

Price reductions

Reported pending

Reported sold and closed 

These zip codes include the Northeast Los Angeles communities of Eagle Rock, Highland Park, Mount Washington, Glassell Park, Sycamore Grove, Garvanza, Montecito Heights, Cypress Park, Lincoln Heights, El Sereno, Monterey Hills, and Hermon


Real Estate Market activity in zip codes 90031, 90032, 90041, 90042, 90065 for the week of December 14 through December 20, 2008  as reported in I-Tech MLS:

New listings entered

Price reductions

Reported pending

Reported sold and closed 

These zip codes include the Northeast Los Angeles communities of Eagle Rock, Highland Park, Mount Washington, Glassell Park, Sycamore Grove, Garvanza, Montecito Heights, Cypress Park, Lincoln Heights, El Sereno, Monterey Hills, and Hermon 

"A New Year of Hope for Animals" contest

I just voted in's "A New Year of Hope for Animals" contest to help my local animal shelter, North Central Animal Care Center - Los Angeles Animal Services, win a grand prize of $10,000.

Think of the homeless pets that could be saved with $10,000!

We need your help to get enough votes to help North Central Animal Care Center - Los Angeles Animal Services win.

Please vote here:

Thank you for helping the animals!

Los Angeles Mortgage Rates Report: December 22, 2008

Conventional mortgage rates, in Los Angeles, are currently 4.75% and people are still waiting for them to drop that last quarter point...THAT IS CRAZY!

There is SO much risk of mortgage rates popping back up to the 5.5%-6% range, if the US TreasuryRebecca reverses course and stops buying mortgage-backed securities.  On a straight risk/reward analysis, holding out for that last quarter percent while the risk of a full percentage point spike is NUTS.

My partner, Sean Purcell, was busy writing the draft of our new book so I was the guest on Radio Mortgage.  Rebecca Levinson, a real estate marketing consultant in Milwaukee, hosted Radio Mortgage and asked me:

What do the posted rates REALLY mean to a consumer?

Listen to my answers in this 12 minute podcast, hosted by Rebecca.

PS:  Expect to hear Rebecca a whole bunch more on Radio Mortgage.

Operation Santa Paws

For the next few days, the office of Bob Taylor Properties will serve as a drop off point for Operation Santa Paws.

OPERATION SANTA PAWS seeks donated pet toys for shelters and rescues to improve the health and demeanor of those pets while reducing their stress to increase the animals' chances of being adopted. The simplest toys can make the animals much more comfortable. Cats enjoy rolling toys, such as small plastic balls or other "batting" toys that can be hung from cage doors, while dogs tend to prefer items like the heavy-duty Kong rubber chew toy.

NOTE Because of safety and/or housekeeping concerns, stuffed toys, tennis balls, rawhide items and pig ears can not be accepted.

Here is Santa Paw's Wish List:

· Durable puppy/dog toy, such as indestructible Ball, Nylabone, Kong, Booda, Gumabones, Velva    or Best Ball brand toys
· Pup-Peroni, soft Milk Bones or other soft jerky type dog treats
· Dog and cat shampoo
· Dry puppy food
· Dry and canned kitten food
· Large and medium food/water bowls
· Durable kitten/cat toys
· Cardboard serving trays for use as litter boxes (available for purchase at Smart & Final)
· Plug-in, or durable stand-alone electric or battery-operated scent/aromatherapy machines
· Heating pads for infant animals
· Cleaning/kitchen supplies and air freshener spray, kennel cleaning supplies
· Scrub brushes, rubber curry brushes, mops, brooms, heavy-duty water hoses
· Laundry detergent, dishwashing gloves, baking soda, bleach, paper towels
· Plastic aprons or smocks
· blankets, bath towels (used or new)
· 6' nylon dog leashes
· Flannel baby blankets for kittens
· Paper towels & bathroom tissue
· Top-loading cat carriers
· Pet supply and home improvement store gift cards
· Cardboard cat scratchers
· Ziplock food storage bags, all sizes
· 33 and 13 gallon trash bags
· Liquid hand soap
· Bleach
· Dish washing detergent
· Laundry detergent
· Polaroid 600 film
· Postage stamps
· Office supplies: dry erase board markers copy paper, envelopes, etc.
· Donations for our special needs and veterinary bills
· Dog and cat sponsorships
· Foster homes for adult cats
· Forever homes for cats and dogs

· gift cards to retail pet supply or home improvement stores (i.e. Petco, PetsMart, Target, Wal Mart, Rite Aid, Smart & Final

Drop off through December 19th - Bob Taylor Properties, Inc, 5526 North Figueroa Street, LA 90042.  

More info

Avenue 50 Studio The Fourth Annual Holiday Sale & Party!

Celebrating a wonderful year of art and community

Avenue 50 Studio and She Rides the Lion cordially invite you

The Fourth Annual Holiday Sale & Party!


Saturday, December 20, 2008 from 7-10 pm
Sunday, December 21, 2008 from 11-4 pm

Original and affordable prints, paintings, jewelry, scarves, etc. by the following artists:
Lalo Alcaraz
Carmen Argote
Jack Fenn
Roberto Gutierrez
Cidne Hart
Kevin Hass
Amy Inouye/Stuart Rapeport
Los De Abajo Printmaking Collective
Margaret Garcia
Leo Limon
Jose Lozano
Leora Lutz
Stephanie Mercado
Juan Sigala
Herbert Siguenza
Ulises Ramirez with "Food Not Bombs"
Romero Family:  Frank, Sharon, Nancy, Rosie and Sonia
J Michael Walker
and more!

Music, spiced eggnog, holiday refreshments and frivolity!

Festive Attire encouraged!

Avenue 50 Studio, Inc.
a 501(c)(3) non-profit art gallery
131 North Avenue 50
Highland Park, CA  90042


"A Little Piece of my Soul", Paula Banqueiro

Opening Reception, Saturday night, December 13, 2008 7 to 10 pm
The Avenue 50 Studio is proud to present Silent Testimonies - Contemporary Ex-Votos.  Artists and community members were asked to interpret the uniquely Mexican art form known as ex-votos with contemporary themes. The artists and community members are from various cultural and ethnic backgrounds. 
Artists Katrina Alexy, Paula Baqueiro, Barbara Carrasco, Ana Flores, Frank Gutierrez, Lucy Hagopian, Amy Inouye/Stuart Rapeport, Pola Lopez, Isabel Martinez, CCH Pounder, Joseph Sims, Cindy Suriyani, Eloy Torrez, Richard Valdes, Sergio Vasquez, along with Board Members Vanessa Acosta, Raoul De la Sota, Ulises Diaz, Kathy Mas-Gallegos, Poli Marichal, Lara Medina, Ricardo Muñoz, David Stowe, and J. Michael Walker were chosen because they had no history of painting such forms.

Ex-Votos historically were devotional visual offerings to the Catholic Church for a miraculous cure or for some intervention by a specific religious figure that prevented harm or death.  In 16th century Spain they were painted directly onto interior walls of churches and Cathedrals as murals depicting the miracle.  The paintings themselves were called Milagros or miracles. In 18th and 19th century Mexico they became the source of income for itinerant artists depicting in their paintings some sort of "miracle".  These artists, often academically untrained, created their works with oil on whatever small scraps of material was convenient and cheap, most often tin or wood. The works ranged from the charmingly rustic to the aesthetically profound. The works were then in turn donated to a nearby church as gratitude for its intervention. In the 20th century the craft continued but with less religiosity and more pleas for financial help or material goods. In all cases there was always a narrative painted onto the surface that described the event and the stated gratitude of the donor.  Frida Kahlo was a modern artist who admired and patterned some of her work after this art form.
Please join us in discovering a historic art form interpreted in new ways.

When:              Saturday, December 13, 2008 7-10 pm
Where:              Avenue 50 Studio, Inc., a 501(c)(3) non-profit art gallery, 131 No. Avenue 50, Los Angeles, CA  90042
Duration:            December 13, 2008 to January 17, 2009
Contact:                Kathy Gallegos, 323/258-1435

Second Saturday Gallery Night December 13

The second Saturday of every month is Gallery Night in Northeast Los Angeles:  Your opportunity to explore the Galleries, Shops, Restaurants and Nightlife in the historic and eclectic neighborhoods of Northeast Los Angeles.  Maybe even purchase art for your home or office.

Tour participating galleries this Saturday, December 13 from 7PM - 10 PM.   Wrap up the evening with food and drinks at Juanita's/La Casa Blue or Mr. T's Bowl.   

Los Angeles Mortgage Rates at 4.875%...IF... have LOTS of equity, in an owner-occupied property, stellar credit (over 750), documented income, and act quickly.

I locked a loan for a customer last night at 4.875%; no points, no origination fee.  It was for $417,000 and his home is worth $700,000 or more.  The third-party costs (appraisal, credit, lender fees, escrow, title, recording, etc) totaled about 1%.  This means that the cost to acquire that 4.875% rate was about $4,000, putting his APR around 5.199%.

No-cost loans, where the lender pays all the third-party costs, would be a FULL percentage point higher, at 5.875% for a 5.875% APR.  Mortgage markets are NOT rewarding higher rates.  This means that anyone with a conventional loan, with a loan amount under $417,000, and a rate over 6% should be considering a refinance to a no-cost loan, at the very least.

Rates are awesome and money is cheap...IF you don't really need it.

PS:  I'll be in a meeting until 1PM today.  There are SO many restrictions that come with the 4.875% rate that it's just plain silly but the money is available.  I caution you with the PS because you might not "fit completely in the box".  Nonetheless, if you don't get a 4.875% rate, you'll probably get one under 5.25%, if you have equity.  Call me after 1PM at (858)-777-9751- don't rely on e-mail