NELA Live

2010 VA Jumbo Mortgage Limit Drops in Los Angeles County

Los Angeles VA jumbo loan limits will be reduced to $593,750, from the 2009 limit of $737,500, in response to the lower median home prices.  Los Angeles veterans looking for a VA home loan above that limit will be required to put down 25% of the difference between the new loan limit and the higher sales price.

EXAMPLE:

An eligible veteran, looking to purchase a home for $693,750, will need a down payment of $25,000 which equals the 25% of the $100,000 difference.

An eligible veteran, purchasing a home for $993,750 will be required to put down $100,000 which is 25% of the difference between the sales price and 2010 loan limit.

Median prices across Southern California stabilized in 2009 in response to the high balance loan program, foreclosure stays, and home buyer tax credits.  Los Angeles County's median price dropped from $355,000, in October, 2008 to $325,000, in October, 2009.  It is anticipated that the 2010 VA loan limit should facilitate approximately 75% of the sales prices for 2010.

2010 VA loan limits in Southern California:

San Diego ..................$437,500

Los Angeles................$593,750

Orange ......................$593,750

Riverside.....................$417,000

San Bernardino............$417,000

Imperial.......................$417,000

Short Sale Woes: First mortgage holder approves; second mortgage holder procrastinates

One of our associates is representing a buyer in a short sale where both a first and a second mortgage holder must approve the sale.  The existing first and second mortgages are held by different banks, and as sometimes happens, the first and the second are completely out of sync with each other.

The listing agent completed a thorough, detailed short sale package and submitted it to both mortgage holders. 

The first mortgage holder approved the package promptly.  The second mortgage holder, Bank of America (need I say more?!), just didn't get around to it. 

Bank of America procrastinated, and procrastinated, and by the time they finally got around to reviewing the file, the first mortgage holder said, "Oops, sorry, too long, we're closing our file, you guys will have to start over from square one."

Since, I suppose this is a fairly common problem, I'm wondering what strategies (if any!) other folks are using to keep two different short sale lenders in sync?

Our associate took a a "top-down" approach.   Here is a portion of the letter she sent to B of A's VP Customer Advocate, Nancy Condos, and B of A's Chairman, Kenneth Lewis, in an effort to shake the trees:

Dear Chairman Lewis and Vice President Condos:

  I am writing this letter to request your support on behalf of my Buyer - Buyer N.

Here is the timeline and dire circumstances that have lead me to ask for your immediate intervention.

• Offer written on behalf of Buyer N. for $275,000 - July 21, 2009
• Offer accepted; processed by Listing Realtor D. for submission to both lenders.
• Negotiator of the first trust deed is HomeEc Mortgage Servicing.
• September 16, 2009 HomeEc approves the short sale in writing.
• Buyer N. and Selling Agent's team jump into immediate action; obtains full, doc-ready, loan approval within 5 days following September 16.
• HomeEc's approval is subject to escrow closing by September 28, 2009.
• As the September 28 date loomed, Listing Realtor D. makes every effort to be in constant contact with B of A negotiator.  He is told that the written short sale approval necessary to order Buyer N.'s loan documents is forth coming "within 48 hours" - that commitment was made on and off for two weeks.
• September 28 passed and HomeEc told Listing Realtor D. that the file was being closed and if/when the second mortgage holder (B of A) issued the written approval the short sale process with them would have to begin from step one.
• On October 1, Listing Realtor D. spoke to the B of A negotiator, T. - who explained to Listing Realtor d. that the "process" was in phase two and she is allowed per B of A guidelines - 30 business days to issue a written approval/authorization.
• During this entire process, Listing Realtor D. has emailed and left voice messages for Negotiator T., and her Supervisor, S.;  Negotiator T. rarely returns calls or emails, and Supervisor S. has never returned a call or email.

The consequences of this mayhem are:

• Buyer N., a Los Angeles inner-city elementary school teacher remains in escrow limbo, if this escrow does not close by the end of November, Buyer N. will forfeit the opportunity to apply for the $8,000 first time buyers tax credit.  Buyer N. has done it all the right way.  Saved for the down payment (20%) plus reserves, has excellent credit scores and no debt.  A dream client for any Realtor.

 

Here is a partial list of the people that are financially impacted by the direct conduct of Negotiator T. and Supervisor S.:

• Two Real Estate companies, Realtors and support staff
• Escrow company, Officer and support staff
• Title Company Representative and Officer(s)
• Buyer's Mortgage Broker and support staff
• Buyer N. who has paid for the property appraisal
• Buyer N. who has paid for the physical inspection of the property
• Buyer N/'s actual lender via the Mortgage Broker
• Termite Company who has completed the remediation
• Home Warranty Representative and company
• Natural Hazards Disclosure Company
• Home Owners Association and staff
• Buyer N.'s homeowners insurance agent
• HomeEc Mortgage Servicing
• The current owner of the property
• and Bank of America

Due to the inability to formally issue the B of A written approval ($3,000 net) not one of these professionals and/or their companies will get ONE CENT ...not one - including B of A.  All of our time and hard work is deemed valueless because of the holdup of this final written authorization.

On behalf of my Buyer N. and my many professional colleagues - how long does it take to issue an approval in writing?

My plea to you - is to urge the issuance of the written approval immediately.  The impact on this one file is enormous - step back a moment and ask yourself - how many files are in this same limbo - how many Realtors and related professionals have worked - to be held off until their clients are forced to cancel - the homes are lost to Trustee's Sale.  A directive from your office will solve this one crisis - please take this action.  Think back to when you bought your first home - how proud and thrilled you were - don't deny Buyer N. this joy.

Sincerely,

 

 

Foreclosure Workshop

This is short notice:  A messenger just delivered flyers to our office a few minutes ago, but

Los Angeles Neighborhood Housing Services and the Los Angeles County Department of consumer Affairs are presenting a free foreclosure workshop tonight.

Wednesday April 29, at 6:30 PM

At The River Center, 570 West Avenue 26, Los Angeles, CA 90065

The workshop is sponsored by the Foreclosure Action Network, the Lincoln Heights Neighborhood Council and the Glassell Park Neighborhood Council.  For information please call:  323-600-3737

Rock Row Press Release

The good folks at Rock Row sent us their latest informative press release:

Rock Row Sets Example for Future of LA Housing – Affordability and Sustainability
 
Los Angeles – February 10, 2009 - In response to the realities of today’s real estate market such as increased mortgage qualification standards and higher down payment requirements, along with an aging housing stock, the Heyday Partnership is proud to build LEED certified quality housing for hard working Angelenos at Rock Row in Eagle Rock (www.leangreenlivingmachine.com).
 
Rock Row is the first LEED Certified subdivision in Los Angeles and the first LEED homes offered for less than $800k. Rock Row’s homes are 40% larger than Eagle Rock’s typical bungalow homes at similar prices. Of course the savings in ongoing energy costs due to solar panels, tankless hot water heaters, etc. compared to an older bungalow is also significant. Rock Row’s homes start at $463k, meaning a 10% down payment qualifies for a conforming loan.
 
With Los Angeles county median home prices down 45% since the peak in September 2007, it would seem anyone who wants a house would buy one now.  But brokers are reporting a growing number of homebuyers displeased with the market.  It seems the quality of the homes for sale is not respectful of the hard work many homebuyers make to save their down payment.
 
One client of Rock Row’s agent Christopher Furstenberg noted, “I thought with home prices down so much, it would be a good time to go out and finally invest that down payment I’ve been saving up over the years.  So I drove around looking at homes for sale, and was shocked to find that everything in my price range needed lots of work from age or an unfortunate remodel.  I am looking for a home that gives me investment value and reflects my ethics and style.”
 
That’s why Heyday is building Rock Row.  Home prices are down, true, but there is still a large discrepancy between the median home price and a nice home.  Rock Row bridges the gap, with prices of many floor-plans under $500k but quality features buyers have come to expect in much more expensive homes.
 
Heyday’s innovative business model creates the affordability working people need in today’s economy, without sacrificing quality or features. Together the partners fill the roles of architect, developer and builder creating a vertically integrated company which eliminates costly inefficiencies and allows for seamless communication, tighter overhead and a lower break-even point allowing the use of higher quality materials and design.
 
Some of the upper end amenities in Rock Row include formaldehyde free custom millwork and built in cabinetry throughout the homes; central vacuums; gourmet kitchens equipped with EuroCraft custom cabinetry, Ceasarstone countertops and stainless steel appliances; baths done in Gris Linen tile with low flow Grohe fixtures; doors with solid cores throughout; flooring of sustainable strand woven bamboo or Pebblestone (like Pinkberry!) with recessed reveal base molding; Energystar, yet high style lighting including the modern classic George Nelson Bubble Lamp and recessed lighting throughout with attractive cove lighting in bedrooms; built in stereo audio with individual volume control in every room (including baths!); fire sprinklers; and full two car garages with aluminum and satin glass doors.
 
Rock Row’s collection of 15 single family residences is also being constructed under the LA City Small Lot Subdivision Ordinance which promotes smart growth through allowing smaller lots to combat LA’s traditional suburban sprawl. To maximize outdoor space all of the homes have a series of decks and balconies arranged to guarantee privacy, while affording the residents abundant usable exterior space. In harmony with its neighbors, each home has its own character while fitting into the whole.
 
Designer Kevin Wronske notes, “we saw a desire among our Eastside neighbors for contemporary and ecologically sensitive homes, but the only available properties were well out of their price range.” He continues, “there is an opportunity to fill a need while exploring our own interest in housing solutions for 21st century issues such as sustainability, smart growth and affordability.”
 
Some of the green features that Heyday has incorporated into Rock Row include solar panels providing 85% of the electricity; low VOC paint; recycled framing and Trex decking; a water permeable grass pave system for the driveway and a rain filter preventing run off into the ocean; garage fans; tankless water heaters, low flow fixtures, and dual flush toilets; exteriors designed with cool roofs with radiant barriers, and succulent green roof gardens to maximize attractiveness while minimizing resource use and cost. The homes are planned for maximum energy efficiency including passive heating and cooling; a rooftop solar array, dual glazed low-E skylights, dual pane low-E windows, and central A/C with ultra-high energy efficiency.
 
The development half of the duo, Hardy Wronske adds, “We see the $496k median price as real money, so not only did we want to deliver on our green goals, we also wanted to provide residents with real luxury in quality design, construction and materials.” He adds, “our efficient business model allows us to construct homes for people like our friends, who are ready to move up in lifestyle but stay in the area, people who want more for their money in a new single family home, and expect higher quality than existing bungalows.”
 
Rock Row offers 15 homes ranging from a two story 2/2 at 1300 sq ft to a three story 3/3 at 1540 sq ft with prices from $463,000 to $529,000. The development offers discerning buyers the green features the desire along with the luxury they deserve, all in a single family home in a convenient location and at an affordable price. Rock Row, the right choice for today’s home buyers.

 

More commentary and discussion can be found:

http://www.jetsongreen.com/2008/12/rock-row-small.html

http://la.curbed.com/archives/2008/06/small_is_the_ne_1.php

http://qualifiedcondition.wordpress.com/2008/08/10/rock-row-in-eagle-rock/

http://www.treehugger.com/files/2008/12/rock-row-townhouses.php

 

Apartment Owner/Manager Mgr. Training, 7/30

You are invited to an Apartment Owner and Manager Training on July 30, 2008, 6pm, at the Glassell Park Community and Senior Center (in back of Public Storage) located at 3750 Verdugo Road, Parking available at first come first serve basis.

The event is free and open to the public. Speakers will include the City Attorney's Office, LAPD, the Apartment Association of Greater LA, and Council District 13. Hear about how to work with LAPD, access City resources, and prevent crime through environmental design.

Please direct reservations and questions to Armida Bayliff at 310-575-8548.

Donna Wong
Deputy City Attorney
Northeast Area Neighborhood Prosecutor

Living the American Dream

To some, if not most, part of living the American Dream entails owning a home! 
SPANISH: Para algunos, si no todos, parte de viviendo el Sueno Americano incluye ser dueño de una casa!

For those of you that know me, I work the area of North East Los Angeles; I have refinanced and financed various purchase transactions for my fellow neighbor.
SPANISH: Para los que me conocen, yo trabajo el área de North East Los Angeles; he refinanciado y e dado varios prestamos para compra de casa ha mi ser humano.

Recently I asked a neighbor in Cypress Park...
SPANISH: Recientemente, le pregunte a un vecino en Cypress Park...

What does it feel like to own a home?
SPANISH: Que se siente ser dueño de una casa?

How should I tell you? It feels beautiful...it feels prideful. A lot of people work very hard to barely afford to make a rent payment and that's a troublesome thing. To know that I work hard so that I can own my own home...that's something to have pride over!!!
I've accomplished something very big and today my property is worth half a million dollars.
SPANISH: Pues como te diré? Se siente bonito...se siente orgullo. Mucha gente trabaja muy duro y apenas tienen para pagar la renta, y eso es triste. Saber que yo trabajo duro y para ser yo...dueña de mi propia casa. Eso es orgullo!!!
He cumplido una cosa muy grande y hoy mi propiedad vale medio millón de dolares.

What words of advice do you have for someone thinking of owning a home?
SPANISH: Que palabras de consejo le tienes al alguien pensando en comprando casa?

To educate themselves as much as possible. At the time I bought my house I didn't have all of this Internet stuff. I had to confide in someone to help me. But today I know that a lot of information you can find online for free. I mean it's not wrong to confide in someone and shake their hand...but today, you have to start little by little. And the information concerning all of the process is right there.
Just remember, don't be afraid to ask questions!
Welcome to the pridefullness of home ownership!
SPANISH: Que guarden su dinero y que se educan lo mejor posible. En el tiempo que yo compre me casa no tuvimos todo esto del Internet. Yo me confié en alguien y ellos me ayudaron. Pero hoy también se que mucha información se pueda conseguir gratis en el Internet. Osea no es mal confiar en alguien y chocarles la mano...pero hay que empesar poco a poco. Y allí esta la información sobre todo lo que tienen que saber.
Y aquerdense, no tengan miedo de hacer preguntas!
Bienvenidos al orgullo de ser dueño de casa!

 

Americanos: Latino Life in the United States (La Vida Latina en los Estados Unidos) es un libro que ilumina la vida Latina. Si usted gusta una copia de este libro gratis, mande me un correo electronico (email) aqui.

Los Angeles Mortgage Rates Report: November 14, 2007

Goldman Sachs reiterated, for the eight time yesterday, that its exposure to the sub-prime mortgage crisis was limited; Wall Street responded by buying stocks:

Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''

Bear Stearns followed up with another positive forecast about its sub-prime loss this morning:

U.S. stocks were poised to rally for a second day after Bear Stearns Cos. eased concern that credit- market losses would deepen and retail sales topped economists' forecasts.                    Bear Stearns climbed after the fifth-largest U.S. securities firm said it is regaining hedge-fund customers and it would only write down $1.2 billion from subprime assets this quarter.

What does this mean for mortgage applicants?  The positive momentum for stocks, spurred by the somewhat positive news from the financial sector, should draw money away from mortgage bonds this week.  Economic reports were somewhat flat today and are expected to be flat tomorrow. While the majority of Wall Street believes that rates will be cut in the near future, we believe that may be priced into the market.  As money flows to stocks and away from bonds, it may cause rates to rise over the next couple of weeks.

We are changing our bias to locking loans at application.

Rates we offer today:

PROGRAM                RATE                APR

3/1 ARM                 5.625%        5.813%
5/1 ARM                5.875%        6.087%
30 Year Fix           6.125%        6.324%

Rates as of 11-14-2007 and are subject to qualification and  market fluctuation.

Equal Opportunity Lender

Goldman Sachs reiterated, for the eight time yesterday, that its exposure to the sub-prime mortgage crisis was limited; Wall Street responded by buying stocks:

Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''

Bear Stearns followed up with another positive forecast about its sub-prime loss this morning:

U.S. stocks were poised to rally for a second day after Bear Stearns Cos. eased concern that credit- market losses would deepen and retail sales topped economists' forecasts.                    Bear Stearns climbed after the fifth-largest U.S. securities firm said it is regaining hedge-fund customers and it would only write down $1.2 billion from subprime assets this quarter.

What does this mean for mortgage applicants?  The positive momentum for stocks, spurred by the somewhat positive news from the financial sector, should draw money away from mortgage bonds this week.  Economic reports were somewhat flat today and are expected to be flat tomorrow. While the majority of Wall Street believes that rates will be cut in the near future, we believe that may be priced into the market.  As money flows to stocks and away from bonds, it may cause rates to rise over the next couple of weeks.

We are changing our bias to locking loans at application.

Rates we offer today:

PROGRAM                RATE                APR

3/1 ARM                 5.625%        5.813%
5/1 ARM                5.875%        6.087%
30 Year Fix           6.125%        6.324%

Rates as of 11-14-2007 and are subject to qualification and  market fluctuation.

Equal Opportunity Lender

Hey, DUSTIN!

On the crazy, off-hand chance that Dustin Luther cruises by NELALive during his presentation Tuesday at the 2007 REALTORS® Conference & Expo,,, Hey, Dustin!  Whatssup?

Los Angeles Mortgage Rates Report: November 9, 2007- Who's Afraid of the Big Bad Reds?

Los Angeles mortgage rates were pretty much unchanged this week, exactly as we expected them to be. 

The Chinese said that our dollar was akin to a Latin American country's currency which gave us a minor scare in the mortgage-backed securities markets. We responded by saying that their toys are more dangerous than lead-based paint chips.

We are at war with China, an economic war but a war nonetheless.  It's a war based on cultural differences, like all wars. This war is not about a land grab it's about fair access to markets. The Chinese want to sell whatever they can to Americans, with a decided price advantage, without offering access to their markets.  Yahoo!  was the first American traitor when they aided and abetted the enemy for a few yuan.

What does China have to do with Los Angeles mortgage rates?

The answer will soon be "nothing".  We feared the ChiComs because of their ability to hoard US Treasuries- China became the 800 lb gorilla that could dump those bonds and drive our mortgage rates inLos Angeles up.  They did it and nothing happened.

The underlying theme, driving mortgage rates in Los Angeles, is the American economy.  Ben Bernanke is trying to balance the threat of higher oil prices with a collapsing real estate finance market. The former is  inflationary while the latter is deflationary.  Expect him to be biased against an economic depression.  This means lower rates in the next 6-18 months.  In the short term, a C-note for a barrel of crude oil, is keeping rates around the 6% range.

We think it makes sense to cautiously float your mortgage rate until we see what the numbers look like on Wednesday.

Los Angeles mortgage rates were pretty much unchanged this week, exactly as we expected them to be. 

The Chinese said that our dollar was akin to a Latin American country's currency which gave us a minor scare in the mortgage-backed securities markets. We responded by saying that their toys are more dangerous than lead-based paint chips.

We are at war with China, an economic war but a war nonetheless.  It's a war based on cultural differences, like all wars. This war is not about a land grab it's about fair access to markets. The Chinese want to sell whatever they can to Americans, with a decided price advantage, without offering access to their markets.  Yahoo!  was the first American traitor when they aided and abetted the enemy for a few yuan.

What does China have to do with Los Angeles mortgage rates?

The answer will soon be "nothing".  We feared the ChiComs because of their ability to hoard US Treasuries- China became the 800 lb gorilla that could dump those bonds and drive our mortgage rates inLos Angeles up.  They did it and nothing happened.

The underlying theme, driving mortgage rates in Los Angeles, is the American economy.  Ben Bernanke is trying to balance the threat of higher oil prices with a collapsing real estate finance market. The former is  inflationary while the latter is deflationary.  Expect him to be biased against an economic depression.  This means lower rates in the next 6-18 months.  In the short term, a C-note for a barrel of crude oil, is keeping rates around the 6% range.

We think it makes sense to cautiously float your mortgage rate until we see what the numbers look like on Wednesday.

Informe De las Tarifas De Hipoteca De Los Ángeles: El 1 De Noviembre Del 2007

El fed cortó el 'Fed Funds Rate' ayer y las tarifas de hipoteca en Los Ángeles fueron para arriba.

El crecimiento del GDP es el mejor que se e visto en 18 meses. Esto sugiere que la economía esté creciendo sin importar lo que nos estamos sintiendo con esta depresión de la cubierta en California.

Wall Street todavía piensa que las tarifas serán cortadas más lejos. Pero como puede ser si ayer anunciaron que esta sera la ultima vez? ¿Confuso?

Una comida feliz del cheeseburger en Mc Donalds y un galón del gas en el galón es casi dos veces más costosa que eran en 2003.  Los costos mensuales de la cubierta (pagos de hipoteca más altos incluyendo) son algunos 50% más altos que ellos eran en 2003.  Ésa puede apenas ser una medida de las mercancías de la grapa pero ése es dinero verdadero que sale del dinero suelto de los consumidores que se podría utilizar para comprar los coches, las computadoras, el etc. ¿No debe la reserva federal levantar tarifas en vez de cortar las?

No. Pienso que Ben Bernanke dibuja un paralelo entre la depresión de la cubierta de 1927 y la gran depresión de los años 30 (gracias el último a los trabajos de Milton Friedman).  Mientras que actuaba Bernanke como si no importara la depresión de la cubierta este verano, pienso que él reconoció siempre que hay un riesgo verdadero a la deflación. El miedo de una recesión profunda será la razón que él persigue éstos los cortes medidos de la tarifa.

Por supuesto, Wall Street intenta siempre a la segunda conjetura a fed (que es mudo).  Cuente con la compra continuada en el sector del enlace de hipoteca en anticipación de otro corte de la tarifa del 25%.  Esto significa que las tarifas de hipoteca en Los Ángeles serán más bajas en el futuro pero la pendiente mirará más como un perno del relámpago que una línea recta. Esto me decir que podemos reajustar nuestra recomendación de la cerradura que todos los préstamos a cautelosomente flotan.  Aquí está la estrategia para las semanas próximas:

Si usted puede conseguir un índice de hipoteca de el 6% o abajo, cerradura-en la tarifa.  Si la tarifa está sobre 6.125%, flote cautelosomente... para ahora.  Si su cierre del fideicomiso es en el plazo de 10 días, trabe la tarifa de hipoteca, sin importar qué está sucediendo.

El fed cortó el 'Fed Funds Rate' ayer y las tarifas de hipoteca en Los Ángeles fueron para arriba.

El crecimiento del GDP es el mejor que se e visto en 18 meses. Esto sugiere que la economía esté creciendo sin importar lo que nos estamos sintiendo con esta depresión de la cubierta en California.

Wall Street todavía piensa que las tarifas serán cortadas más lejos. Pero como puede ser si ayer anunciaron que esta sera la ultima vez? ¿Confuso?

Una comida feliz del cheeseburger en Mc Donalds y un galón del gas en el galón es casi dos veces más costosa que eran en 2003.  Los costos mensuales de la cubierta (pagos de hipoteca más altos incluyendo) son algunos 50% más altos que ellos eran en 2003.  Ésa puede apenas ser una medida de las mercancías de la grapa pero ése es dinero verdadero que sale del dinero suelto de los consumidores que se podría utilizar para comprar los coches, las computadoras, el etc. ¿No debe la reserva federal levantar tarifas en vez de cortar las?

No. Pienso que Ben Bernanke dibuja un paralelo entre la depresión de la cubierta de 1927 y la gran depresión de los años 30 (gracias el último a los trabajos de Milton Friedman).  Mientras que actuaba Bernanke como si no importara la depresión de la cubierta este verano, pienso que él reconoció siempre que hay un riesgo verdadero a la deflación. El miedo de una recesión profunda será la razón que él persigue éstos los cortes medidos de la tarifa.

Por supuesto, Wall Street intenta siempre a la segunda conjetura a fed (que es mudo).  Cuente con la compra continuada en el sector del enlace de hipoteca en anticipación de otro corte de la tarifa del 25%.  Esto significa que las tarifas de hipoteca en Los Ángeles serán más bajas en el futuro pero la pendiente mirará más como un perno del relámpago que una línea recta. Esto me decir que podemos reajustar nuestra recomendación de la cerradura que todos los préstamos a cautelosomente flotan.  Aquí está la estrategia para las semanas próximas:

Si usted puede conseguir un índice de hipoteca de el 6% o abajo, cerradura-en la tarifa.  Si la tarifa está sobre 6.125%, flote cautelosomente... para ahora.  Si su cierre del fideicomiso es en el plazo de 10 días, trabe la tarifa de hipoteca, sin importar qué está sucediendo.

Los Angeles Mortgage Rates Report: November 1, 2007

The Fed cut yesterday and mortgage rates in Los Angeles went up.

GDP growth is the best it's been in 18 months.  Inflation,excluding the costs of food and a gallon of gas, is tame.  This suggests that the economy is growing regardless of what we are feeling with this housing slump in California.

Wall Street still thinks rates will be cut further.  Confused?

A cheeseburger happy meal at Mc Donalds and a gallon of gas at Chevron are almost twice as expensive as they were in 2003.  Monthly housing expenses (including the higher mortgage payments) are some 50% higher than they were in 2003.  That may just be a measure of the staple goods but that is real money coming out of consumers' pockets- money that could be used to purchase cars, computers, etc.  Shouldn't the Federal Reserve be raising rates instead of cutting them?

Well...no.  I think that Ben Bernanke draws a parallel between the housing slump of 1927 and the Great Depression of the 1930's (thanks to the late Milton Friedman's works).  While Bernanke acted as if the housing slump didn't matter this summer, I think he always recognized that there is a real risk to widesperead asset deflation.  Fear of a deep recession will be the reason he pursues these measured rate cuts.

Of course, Wall Street always tries to second guess the Fed (which is dumb).  Expect continued buying in the mortgage bond sector in anticipation of yet another .25% rate cut.  This means that mortgage rates in Los Angeles will be lower in the future- but the descent will look more like a lightning bolt than a straight line. This leads me to beleieve that we can readjust our recommendation from lock all loans to cautiously float.  Here's the strategy for the next few weeks:

If you can get a mortgage rate of 6% or below, lock-in the rate.  If the rate is above 6.125%, cautiously float...for now.  If your close of escrow is within 10 days, lock the mortgage rate, regardless of what's happening.

Los Angeles Mortgage Rates Report: October 29, 2007

Lock all of your home loans at application.  We really saved a bunch of money these past two weeks by floating the mortgage rate. 

The mortgage bond market anticipates a Fed Funds cut this week.  While we don't think the Fed will cut rates again, we realized that the bond traders do.  The perception that the Fed will be lowering rates, this week, is disappearing. 

We didn't see the 30 year fixed rate loan fall below 6% but we did see the 5 and 7 year ARMs drop dramatically.  Lock your mortgage rate today.  If you're applying for a loan, lock at application.

Lock all of your home loans at application.  We really saved a bunch of money these past two weeks by floating the mortgage rate. 

The mortgage bond market anticipates a Fed Funds cut this week.  While we don't think the Fed will cut rates again, we realized that the bond traders do.  The perception that the Fed will be lowering rates, this week, is disappearing. 

We didn't see the 30 year fixed rate loan fall below 6% but we did see the 5 and 7 year ARMs drop dramatically.  Lock your mortgage rate today.  If you're applying for a loan, lock at application.

Los Angeles Mortgage Rates Report- October 25, 2007

We're still cautiously floating the rate in anticipation of mortgage rates below 6%.  The economic data being released suggests that we are in a recession; that would imply that the Fed will be lowering the Fed Fund rate again.  There really is no market moving data due out until the last day of the month.

If your loan in Los Angeles is due to close in the next 10 days, go ahead and lock the mortgage rate. Otherwise, continue to cautiously float that rate.

We had quite a scare, in Southern California,  earlier this week and we're not out of the woods yet.  My family was literally "on the move" as this wildfire threatened to move into our town. Laurie Manny and Jeff Brown kept most of youup to date about my family's evacuation; I'm grateful to both of them for that.

Today, it's back to the markets and the markets say float.  Keep checking in for updates.

We're still cautiously floating the rate in anticipation of mortgage rates below 6%.  The economic data being released suggests that we are in a recession; that would imply that the Fed will be lowering the Fed Fund rate again.  There really is no market moving data due out until the last day of the month.

If your loan in Los Angeles is due to close in the next 10 days, go ahead and lock the mortgage rate. Otherwise, continue to cautiously float that rate.

We had quite a scare, in Southern California,  earlier this week and we're not out of the woods yet.  My family was literally "on the move" as this wildfire threatened to move into our town. Laurie Manny and Jeff Brown kept most of youup to date about my family's evacuation; I'm grateful to both of them for that.

Today, it's back to the markets and the markets say float.  Keep checking in for updates.

Informe De las Tarifas De Hipoteca De Los Ángeles: El 19 De Octubre Del 2007

Hoy es el vigésimo aniversario de "lunes negro", cerca de la declinación del 23% en un solo dia la bolsa!

Los enlaces de hipoteca han aumentado enormemente puesto que mi recomendación de flotar el miércoles. Si usted tiene que cerrar un préstamo en menos de 10 días, y usted está flotando la tarifa, es tan bueno ahora como en caulquier momento trabarla.  Si usted tiene más de 10 días para cerrar el préstamo o apenas para haber hecho el uso en una hipoteca en Los Ángeles, todavía pienso que usted puede sostener hacia fuera y flotar la tarifa de hipoteca.

Ahora le deseo "flotar cautelosomente".  Esto significa que usted preste más atención.  Llame a su consejero del préstamo cada día antes de almorzar. No importa que lo este molesando...al contrario, es su trabajo. Si su consejero del préstamo no tiene acceso a las cotizaciones vivas del enlace de hipoteca, entonces usted está perdiendo su dinero.  Tomé una aplicacion de préstamo el miércoles, aconsejando les "para flotar" la tarifa en vez de trabar-en, y les he ahorrado cerca de $3,000 en fecha hoy.

Pienso que veremos el mercado de las obligaciones fuerte tener un efecto en las tarifas de hipoteca de lunes.  Espero que la tarifa fijada 30 años, documentación completa, préstamo debajo de $417.000, caiga abajo el 6%, la semana próxima temprana.

Hoy es el vigésimo aniversario de "lunes negro", cerca de la declinación del 23% en un solo dia la bolsa!

Los enlaces de hipoteca han aumentado enormemente puesto que mi recomendación de flotar el miércoles. Si usted tiene que cerrar un préstamo en menos de 10 días, y usted está flotando la tarifa, es tan bueno ahora como en caulquier momento trabarla.  Si usted tiene más de 10 días para cerrar el préstamo o apenas para haber hecho el uso en una hipoteca en Los Ángeles, todavía pienso que usted puede sostener hacia fuera y flotar la tarifa de hipoteca.

Ahora le deseo "flotar cautelosomente".  Esto significa que usted preste más atención.  Llame a su consejero del préstamo cada día antes de almorzar. No importa que lo este molesando...al contrario, es su trabajo. Si su consejero del préstamo no tiene acceso a las cotizaciones vivas del enlace de hipoteca, entonces usted está perdiendo su dinero.  Tomé una aplicacion de préstamo el miércoles, aconsejando les "para flotar" la tarifa en vez de trabar-en, y les he ahorrado cerca de $3,000 en fecha hoy.

Pienso que veremos el mercado de las obligaciones fuerte tener un efecto en las tarifas de hipoteca de lunes.  Espero que la tarifa fijada 30 años, documentación completa, préstamo debajo de $417.000, caiga abajo el 6%, la semana próxima temprana.

Los enlaces de hipoteca han aumentado enormemente puesto que mi recomendación de flotar el miércoles. Si usted tiene que cerrar un préstamo en menos de 10 días, y usted está flotando la tarifa, es tan bueno ahora como en caulquier momento trabarla.  Si usted tiene más de 10 días para cerrar el préstamo o apenas para haber hecho el uso en una hipoteca en Los Ángeles, todavía pienso que usted puede sostener hacia fuera y flotar la tarifa de hipoteca.

Ahora le deseo "flotar cautelosomente".  Esto significa que usted preste más atención.  Llame a su consejero del préstamo cada día antes de almorzar. No importa que lo este molesando...al contrario, es su trabajo. Si su consejero del préstamo no tiene acceso a las cotizaciones vivas del enlace de hipoteca, entonces usted está perdiendo su dinero.  Tomé una aplicacion de préstamo el miércoles, aconsejando les "para flotar" la tarifa en vez de trabar-en, y les he ahorrado cerca de $3,000 en fecha hoy.

Pienso que veremos el mercado de las obligaciones fuerte tener un efecto en las tarifas de hipoteca de lunes.  Espero que la tarifa fijada 30 años, documentación completa, préstamo debajo de $417.000, caiga abajo el 6%, la semana próxima temprana.

Los Angeles Mortgage Rates Report: October 19, 2007

Today is the 20th anniversary of "Black Monday", the close to 23% single-day decline in the stock market.

Mortgage bonds have increased tremendously since my recommendation to float on Wednesday. If you have to close a loan in less than 10 days, and you are floating the rate, now is as good as any time to lock it.  If you have more than 10 days to close the loan or have just made application on a mortgage in Los Angeles, I still think you can hold out and float the mortgage rate.

I now want you to "cautiously float". This means that you pay more attention.  Call your loan adviser every day, right before lunch.  If your loan adviser doesn't have access to live mortgage bond quotes, he/she is wasting your money.  I took a loan application on Wednesday, advised them to "float" the rate instead of locking-in, and it has saved them close to $3,000 as of today.

I think we'll see the strong bond market have an effect on Monday's mortgage rates.  I expect the 30 year fixed rate, full documentation, loan under $417,000, to drop below 6%, early next week.

Today is the 20th anniversary of "Black Monday", the close to 23% single-day decline in the stock market.

Mortgage bonds have increased tremendously since my recommendation to float on Wednesday. If you have to close a loan in less than 10 days, and you are floating the rate, now is as good as any time to lock it.  If you have more than 10 days to close the loan or have just made application on a mortgage in Los Angeles, I still think you can hold out and float the mortgage rate.

I now want you to "cautiously float". This means that you pay more attention.  Call your loan adviser every day, right before lunch.  If your loan adviser doesn't have access to live mortgage bond quotes, he/she is wasting your money.  I took a loan application on Wednesday, advised them to "float" the rate instead of locking-in, and it has saved them close to $3,000 as of today.

I think we'll see the strong bond market have an effect on Monday's mortgage rates.  I expect the 30 year fixed rate, full documentation, loan under $417,000, to drop below 6%, early next week.

Informe De las Tarifas De Hipoteca De Los Ángeles: El 17 De Octubre Del 2007

Cambio De la Recomendación: ¡Es hora de comenzar a flotar esos préstamos!  Debemos mirar tarifas de hipoteca en la gota de Los Ángeles más bajo los estos 3-7 días próximos.  No se trabe en su tarifa de hipoteca en el uso; tarifas más bajas pueden estar aquí la semana próxima.

Dos números grandes salieron hoy:

La inflación (CPI) era un pedacito más arriba que esperado; agradezca precios más altos del aceite y de alimento por ése.

Quite el corazón al CPI que es el número de la inflación sin los precios del aceite y de alimento calculados adentro, era más bajo que esperado.  Esto significa que los precios de mercancías y de servicios están sintiendo el sujetador de precios más altos del aceite y de alimento.  Eso no hace que usted siente ningún mejor si usted conduce un coche y come; los precios siguen siendo más altos.  Significa que los precios altos más elevados de las mercancías de la grapa podrían lanzarnos en una retardación económica.

El comienzo de cubierta era el más bajo que él ha sido en 14 años.   Esto significa que los constructores no están construyendo. Mientras que ésta es malas noticias para el mercado de cubierta HOY, significará que habrá menos hogares disponibles para la venta mañana.  Las figuras feas preceden a veces rebotes; apenas no se sentirá bien mientras que estamos pasando con él.

Esas figuras señalan más cortes del nivel de entrada y los enlaces de hipoteca aman eso. Espere trabarse en tarifas debajo del 6% la semana próxima para conformarse, préstamos lleno-doc..  ¡Permanezca ágil!  En esta economía, las noticias viajan como el relámpago.  Mientras que estoy razonablemente seguro que tarifas más bajas están en el horizonte a corto plazo, ésa podría cambiar rápidamente.

Siga visitando aqui para saber si hay más información.

Cambio De la Recomendación: ¡Es hora de comenzar a flotar esos préstamos!  Debemos mirar tarifas de hipoteca en la gota de Los Ángeles más bajo los estos 3-7 días próximos.  No se trabe en su tarifa de hipoteca en el uso; tarifas más bajas pueden estar aquí la semana próxima.

Dos números grandes salieron hoy:

La inflación (CPI) era un pedacito más arriba que esperado; agradezca precios más altos del aceite y de alimento por ése.

Quite el corazón al CPI que es el número de la inflación sin los precios del aceite y de alimento calculados adentro, era más bajo que esperado.  Esto significa que los precios de mercancías y de servicios están sintiendo el sujetador de precios más altos del aceite y de alimento.  Eso no hace que usted siente ningún mejor si usted conduce un coche y come; los precios siguen siendo más altos.  Significa que los precios altos más elevados de las mercancías de la grapa podrían lanzarnos en una retardación económica.

El comienzo de cubierta era el más bajo que él ha sido en 14 años.   Esto significa que los constructores no están construyendo. Mientras que ésta es malas noticias para el mercado de cubierta HOY, significará que habrá menos hogares disponibles para la venta mañana.  Las figuras feas preceden a veces rebotes; apenas no se sentirá bien mientras que estamos pasando con él.

Esas figuras señalan más cortes del nivel de entrada y los enlaces de hipoteca aman eso. Espere trabarse en tarifas debajo del 6% la semana próxima para conformarse, préstamos lleno-doc..  ¡Permanezca ágil!  En esta economía, las noticias viajan como el relámpago.  Mientras que estoy razonablemente seguro que tarifas más bajas están en el horizonte a corto plazo, ésa podría cambiar rápidamente.

Siga visitando aqui para saber si hay más información.

Dos números grandes salieron hoy:

La inflación (CPI) era un pedacito más arriba que esperado; agradezca precios más altos del aceite y de alimento por ése.

Quite el corazón al CPI que es el número de la inflación sin los precios del aceite y de alimento calculados adentro, era más bajo que esperado.  Esto significa que los precios de mercancías y de servicios están sintiendo el sujetador de precios más altos del aceite y de alimento.  Eso no hace que usted siente ningún mejor si usted conduce un coche y come; los precios siguen siendo más altos.  Significa que los precios altos más elevados de las mercancías de la grapa podrían lanzarnos en una retardación económica.

El comienzo de cubierta era el más bajo que él ha sido en 14 años.   Esto significa que los constructores no están construyendo. Mientras que ésta es malas noticias para el mercado de cubierta HOY, significará que habrá menos hogares disponibles para la venta mañana.  Las figuras feas preceden a veces rebotes; apenas no se sentirá bien mientras que estamos pasando con él.

Esas figuras señalan más cortes del nivel de entrada y los enlaces de hipoteca aman eso. Espere trabarse en tarifas debajo del 6% la semana próxima para conformarse, préstamos lleno-doc..  ¡Permanezca ágil!  En esta economía, las noticias viajan como el relámpago.  Mientras que estoy razonablemente seguro que tarifas más bajas están en el horizonte a corto plazo, ésa podría cambiar rápidamente.

Siga visitando aqui para saber si hay más información.

Los Angeles Mortgage Rates Report: October 17, 2007

Recommendation Change: It's time to start floating those loans! We should be watching mortgage rates in Los Angeles drop lower these next 3-7 days.  Do not lock in your mortgage rate at application; lower rates may be here next week.

Two big numbers came out today:

Inflation (CPI) was a bit higher than expected; thank higher oil and food prices for that.

Core CPI- That's the inflation number without the oil and food prices figured in, was lower than expected.  This means that prices of goods and services are feeling the pinch of higher oil and food prices.  That doesn't make you feel any better if you drive a car and eat; prices are still higher.  It does mean that the higher prices of staple goods could throw us into an economic slowdown.

Housing starts were the lowest they have been in 14 years.   This means that builders ain't building. While this is bad news for the housing market TODAY, it will mean that there will be less homes available for sale tomorrow.  Ugly figures sometimes precede rebounds; it just won't feel good while we're going through it.

Those figures signal more Fed rate cuts and mortgage bonds love that.  Expect to lock into rates below 6% next week for conforming, full-doc loans. Stay nimble!  In this economy, news travels like lightning.  While I'm reasonably certain that lower rates are on the near-term horizon, that could change quickly.

Keep checking back for more information.

Recommendation Change: It's time to start floating those loans! We should be watching mortgage rates in Los Angeles drop lower these next 3-7 days.  Do not lock in your mortgage rate at application; lower rates may be here next week.

Two big numbers came out today:

Inflation (CPI) was a bit higher than expected; thank higher oil and food prices for that.

Core CPI- That's the inflation number without the oil and food prices figured in, was lower than expected.  This means that prices of goods and services are feeling the pinch of higher oil and food prices.  That doesn't make you feel any better if you drive a car and eat; prices are still higher.  It does mean that the higher prices of staple goods could throw us into an economic slowdown.

Housing starts were the lowest they have been in 14 years.   This means that builders ain't building. While this is bad news for the housing market TODAY, it will mean that there will be less homes available for sale tomorrow.  Ugly figures sometimes precede rebounds; it just won't feel good while we're going through it.

Those figures signal more Fed rate cuts and mortgage bonds love that.  Expect to lock into rates below 6% next week for conforming, full-doc loans. Stay nimble!  In this economy, news travels like lightning.  While I'm reasonably certain that lower rates are on the near-term horizon, that could change quickly.

Keep checking back for more information.

Informe De las Tarifas De Hipoteca De Los Ángeles: De El 10 De Octubre Del 2007

A menudo me preguntan cómo vengo para arriba con mi consejo trabar o flotar la tarifa de hipoteca cuando los compradores caseros de Los Ángeles leen el informe de las tarifas de hipoteca de Los Ángeles.  Bien, leí mucho, eso estoy para seguro. Leo Bloomberg.com y la investigación de la guía del mercado de hipoteca que me da el acceso a las cotizaciones en tiempo real de seguridades mortgage-backed.  La revisión de las cartas I de los precios mortgage-backed de los securties me da una idea de lo que parece la tendencia a corto plazo.

Miremos la carta de hoy:   

 

Esta demostración de la carta los precios de seguridades mortgage-backed alto-negociadas.  La demuestro con el permiso de la guía del mercado de hipoteca.   

Hay dos cosas que se están preocupando me ahora:

1. mirada en la barra verde a la derecha; el precio para el enlace de hipoteca de FNMA 6.0 se cerró debajo de igualdad (o 100).  Eso significa que el enlace, publicado al principio del año, vale menos que el precio de edición original.  Mientras que ese los medios poco fundamental, él significan una porción entera psicologicamente.

2. el aviso ese el precio se cerró DEBAJO de la línea azul.  La línea azul es el promedio móvil de 200 días.  El significa que los precios se parecen tender más bajo que significa que las tarifas de hipoteca puede levantarse.

¿Pueden los precios despedir detrás?  Por supuesto pueden.  Viernes es un día grande, sin embargo.  Las figuras de las ventas al por menor se están lanzando viernes.  Conseguiremos una ojeada en el comportamiento del gasto del consumidor.  Si el consumidor ha estado ausente, la economía está ablandando que podría significar que más alimentaron los cortes que serían grandes para las tarifas de hipoteca.  Si ese número demuestra que no afectan al consumidor y ha estado comprando el plasma TV en Costco, es una apuesta segura que los cortes del tipo de interés habrán parado.

El afectar en el mercado de las obligaciones de hipoteca podía ser brutal.  Los enlaces de hipoteca son débiles (están debajo de la "igualdad" que tasa y debajo del promedio móvil de 200 días).  Un poco hiccup y nosotros podíamos considerar gota de los precios toda la manera abajo a la línea roja.  Que la gota en enlaces de hipoteca podría traducir a un alza completa del .25% o del .375% en tarifas de hipoteca.

¿Le confundí?  Espero no.  Ésta es materia aburrida bonita al no profesional.  ¿Los dueños caseros de Los Ángeles necesitan una hipoteca cada 3-4 años en la mayoría, derecho?  La cosa importante es que  usted trata de un consejero de la hipoteca que tenga acceso a estas herramientas y sabe interpretarlas.  Usted debe estar trabar-en su tarifa del mortage en el uso, por lo menos hasta que vemos lo que parecen los números el viernes.

¿Cómo sé esto?  ¡Mire la carta!  Éntreme en contacto con para una explicación mejor.  Me plazco demostrarle estas cartas en línea y hablarle con ella en el teléfono.

A menudo me preguntan cómo vengo para arriba con mi consejo trabar o flotar la tarifa de hipoteca cuando los compradores caseros de Los Ángeles leen el informe de las tarifas de hipoteca de Los Ángeles.  Bien, leí mucho, eso estoy para seguro. Leo Bloomberg.com y la investigación de la guía del mercado de hipoteca que me da el acceso a las cotizaciones en tiempo real de seguridades mortgage-backed.  La revisión de las cartas I de los precios mortgage-backed de los securties me da una idea de lo que parece la tendencia a corto plazo.

Miremos la carta de hoy:   

 

Esta demostración de la carta los precios de seguridades mortgage-backed alto-negociadas.  La demuestro con el permiso de la guía del mercado de hipoteca.   

Hay dos cosas que se están preocupando me ahora:

1. mirada en la barra verde a la derecha; el precio para el enlace de hipoteca de FNMA 6.0 se cerró debajo de igualdad (o 100).  Eso significa que el enlace, publicado al principio del año, vale menos que el precio de edición original.  Mientras que ese los medios poco fundamental, él significan una porción entera psicologicamente.

2. el aviso ese el precio se cerró DEBAJO de la línea azul.  La línea azul es el promedio móvil de 200 días.  El significa que los precios se parecen tender más bajo que significa que las tarifas de hipoteca puede levantarse.

¿Pueden los precios despedir detrás?  Por supuesto pueden.  Viernes es un día grande, sin embargo.  Las figuras de las ventas al por menor se están lanzando viernes.  Conseguiremos una ojeada en el comportamiento del gasto del consumidor.  Si el consumidor ha estado ausente, la economía está ablandando que podría significar que más alimentaron los cortes que serían grandes para las tarifas de hipoteca.  Si ese número demuestra que no afectan al consumidor y ha estado comprando el plasma TV en Costco, es una apuesta segura que los cortes del tipo de interés habrán parado.

El afectar en el mercado de las obligaciones de hipoteca podía ser brutal.  Los enlaces de hipoteca son débiles (están debajo de la "igualdad" que tasa y debajo del promedio móvil de 200 días).  Un poco hiccup y nosotros podíamos considerar gota de los precios toda la manera abajo a la línea roja.  Que la gota en enlaces de hipoteca podría traducir a un alza completa del .25% o del .375% en tarifas de hipoteca.

¿Le confundí?  Espero no.  Ésta es materia aburrida bonita al no profesional.  ¿Los dueños caseros de Los Ángeles necesitan una hipoteca cada 3-4 años en la mayoría, derecho?  La cosa importante es que  usted trata de un consejero de la hipoteca que tenga acceso a estas herramientas y sabe interpretarlas.  Usted debe estar trabar-en su tarifa del mortage en el uso, por lo menos hasta que vemos lo que parecen los números el viernes.

¿Cómo sé esto?  ¡Mire la carta!  Éntreme en contacto con para una explicación mejor.  Me plazco demostrarle estas cartas en línea y hablarle con ella en el teléfono.

Miremos la carta de hoy:   

 

Esta demostración de la carta los precios de seguridades mortgage-backed alto-negociadas.  La demuestro con el permiso de la guía del mercado de hipoteca.   

Hay dos cosas que se están preocupando me ahora:

1. mirada en la barra verde a la derecha; el precio para el enlace de hipoteca de FNMA 6.0 se cerró debajo de igualdad (o 100).  Eso significa que el enlace, publicado al principio del año, vale menos que el precio de edición original.  Mientras que ese los medios poco fundamental, él significan una porción entera psicologicamente.

2. el aviso ese el precio se cerró DEBAJO de la línea azul.  La línea azul es el promedio móvil de 200 días.  El significa que los precios se parecen tender más bajo que significa que las tarifas de hipoteca puede levantarse.

¿Pueden los precios despedir detrás?  Por supuesto pueden.  Viernes es un día grande, sin embargo.  Las figuras de las ventas al por menor se están lanzando viernes.  Conseguiremos una ojeada en el comportamiento del gasto del consumidor.  Si el consumidor ha estado ausente, la economía está ablandando que podría significar que más alimentaron los cortes que serían grandes para las tarifas de hipoteca.  Si ese número demuestra que no afectan al consumidor y ha estado comprando el plasma TV en Costco, es una apuesta segura que los cortes del tipo de interés habrán parado.

El afectar en el mercado de las obligaciones de hipoteca podía ser brutal.  Los enlaces de hipoteca son débiles (están debajo de la "igualdad" que tasa y debajo del promedio móvil de 200 días).  Un poco hiccup y nosotros podíamos considerar gota de los precios toda la manera abajo a la línea roja.  Que la gota en enlaces de hipoteca podría traducir a un alza completa del .25% o del .375% en tarifas de hipoteca.

¿Le confundí?  Espero no.  Ésta es materia aburrida bonita al no profesional.  ¿Los dueños caseros de Los Ángeles necesitan una hipoteca cada 3-4 años en la mayoría, derecho?  La cosa importante es que  usted trata de un consejero de la hipoteca que tenga acceso a estas herramientas y sabe interpretarlas.  Usted debe estar trabar-en su tarifa del mortage en el uso, por lo menos hasta que vemos lo que parecen los números el viernes.

¿Cómo sé esto?  ¡Mire la carta!  Éntreme en contacto con para una explicación mejor.  Me plazco demostrarle estas cartas en línea y hablarle con ella en el teléfono.

Los Angeles Mortgage Rates Report: October 10, 2007

I'm often asked how I come up with my advice to lock or float the mortgage rate when Los Angeles home buyers read the Los Angeles Mortgage Rates Report.  Well, I read a lot, that's for sure. I read Bloomberg.com and the Mortgage Market Guide research which gives me access to real-time quotes of mortgage-backed securities.  The charts I review of mortgage-backed securties prices give me an idea of what the short-term trend looks like.

Let's look at today's chart:

This chart show the prices of highly-traded mortgage-backed securities.  I show it with permission from the Mortgage Market Guide.

There are two things that are worrying me right now:

1- Look at the green bar on the right; the price for the FNMA 6.0 mortgage bond closed below par (or 100).  That means that the bond, issued at the beginning of the year, is worth less than the original issue price.  While that means little fundamentally, it means a whole lot psychologically.

2- Notice that the price closed BELOW the blue line.  The blue line is the 200 day moving average.  This means that prices seem to be trending lower which means mortgage rates can rise.

Can prices bounce back?  Of course they can.  Friday is a big day, however.  The retail sales' figures are being released Friday.  We'll get a glimpse into the consumer spending behavior.  If the consumer has been absent, the economy is softening which could mean more Fed cuts- that would be great for mortgage rates.  If that number demonstrates that the consumer isn't affected and has been buying plasma TVs at Costco, it's a safe bet that interest rate cuts will have stopped.

The affect on the mortgage bond market could be brutal.  Mortgage bonds are weak (they're below the "par" pricing and below the 200 day moving average).  One little hiccup and we could see prices drop all the way down to the red line.  That drop in mortgage bonds could translate to a full .25% or .375% hike in mortgage rates.

Did I confuse you?  I hope not.  This is pretty boring stuff to the non-professional.  Los Angeles home owners need a mortgage every 3-4 years at most, right?  The important thing is that  you deal with a mortgage adviser who has access to these tools and knows how to interpret them.  You should be locking-in your mortage rate at application, at least until we see what the numbers look like on Friday.

How do I know this?  Look at the chart !  Contact me for a better explanation.  I'm happy to show you these charts online and talk you through it on the telephone.

I'm often asked how I come up with my advice to lock or float the mortgage rate when Los Angeles home buyers read the Los Angeles Mortgage Rates Report.  Well, I read a lot, that's for sure. I read Bloomberg.com and the Mortgage Market Guide research which gives me access to real-time quotes of mortgage-backed securities.  The charts I review of mortgage-backed securties prices give me an idea of what the short-term trend looks like.

Let's look at today's chart:

This chart show the prices of highly-traded mortgage-backed securities.  I show it with permission from the Mortgage Market Guide.

There are two things that are worrying me right now:

1- Look at the green bar on the right; the price for the FNMA 6.0 mortgage bond closed below par (or 100).  That means that the bond, issued at the beginning of the year, is worth less than the original issue price.  While that means little fundamentally, it means a whole lot psychologically.

2- Notice that the price closed BELOW the blue line.  The blue line is the 200 day moving average.  This means that prices seem to be trending lower which means mortgage rates can rise.

Can prices bounce back?  Of course they can.  Friday is a big day, however.  The retail sales' figures are being released Friday.  We'll get a glimpse into the consumer spending behavior.  If the consumer has been absent, the economy is softening which could mean more Fed cuts- that would be great for mortgage rates.  If that number demonstrates that the consumer isn't affected and has been buying plasma TVs at Costco, it's a safe bet that interest rate cuts will have stopped.

The affect on the mortgage bond market could be brutal.  Mortgage bonds are weak (they're below the "par" pricing and below the 200 day moving average).  One little hiccup and we could see prices drop all the way down to the red line.  That drop in mortgage bonds could translate to a full .25% or .375% hike in mortgage rates.

Did I confuse you?  I hope not.  This is pretty boring stuff to the non-professional.  Los Angeles home owners need a mortgage every 3-4 years at most, right?  The important thing is that  you deal with a mortgage adviser who has access to these tools and knows how to interpret them.  You should be locking-in your mortage rate at application, at least until we see what the numbers look like on Friday.

How do I know this?  Look at the chart !  Contact me for a better explanation.  I'm happy to show you these charts online and talk you through it on the telephone.

Informe De las Tarifas De Hipoteca De Los Ángeles: De octubre el 5 de 2007

Nuestro miedo de miércoles fue justificado.  Espero que usted tomara nuestro consejo y que trabara su tarifa de hipoteca.

De Miércoles:

Sigo siendo el mantener mi cerradura-en en la recomendación del uso de préstamo.  Apenas no veo una enorme cantidad de upside a flotar la tarifa de hipoteca.  Hay un miedo subyacente del stagflation en los mercados.  El consumidor americano hizo la gripe, causar por el acceso arrestado al dinero fácil.  Precios del petróleo más altos crean materia-empujan el efecto de la inflación de que el fed (agradecidamente) no no hará caso.  Mientras que convengo con la gente de PIMCo que la gripe del consumidor podría lanzar nuestra economía en una recesión suave, me no convencen con su conclusión de que el fed corte agresivamente tarifas al bastón él apagado.

Tenemos cuatro informes económicos IMPORTANTES el venir fuera de viernes, todo el empleo relacionado.  Si son anémicos, las tarifas de hipoteca podrían caer dramáticamente; los prestamistas renegociarán las cerraduras de la tarifa  para reflejar esa gota.  Si aparecen inflacionista, le protegerán.

Nada ha cambiado para el término cercano; cerradura-en tarifas de hipoteca en el uso.

No veo tarifas el tirar encima de dramáticamente pero tenderán un pedacito más arriba.  Wall Street entiende que el fed no cortará tarifas en octubre. Hecho frente con opciones entre staving de una recesión y la inflación que lucha, Bernanke optará por la inflación que lucha cada día.  Si el riesgo de los supercedes de la inflación el riesgo de la recesión, el fed no corta tipos de interés.

Cerradura-en tarifas en el uso.  Cerradura-en tarifas en el uso.  Cerradura-en tarifas en el uso.

Si las cosas cambian, usted lo descubrirá aquí primero.

De Miércoles:

Sigo siendo el mantener mi cerradura-en en la recomendación del uso de préstamo.  Apenas no veo una enorme cantidad de upside a flotar la tarifa de hipoteca.  Hay un miedo subyacente del stagflation en los mercados.  El consumidor americano hizo la gripe, causar por el acceso arrestado al dinero fácil.  Precios del petróleo más altos crean materia-empujan el efecto de la inflación de que el fed (agradecidamente) no no hará caso.  Mientras que convengo con la gente de PIMCo que la gripe del consumidor podría lanzar nuestra economía en una recesión suave, me no convencen con su conclusión de que el fed corte agresivamente tarifas al bastón él apagado.

Tenemos cuatro informes económicos IMPORTANTES el venir fuera de viernes, todo el empleo relacionado.  Si son anémicos, las tarifas de hipoteca podrían caer dramáticamente; los prestamistas renegociarán las cerraduras de la tarifa  para reflejar esa gota.  Si aparecen inflacionista, le protegerán.

Nada ha cambiado para el término cercano; cerradura-en tarifas de hipoteca en el uso.

No veo tarifas el tirar encima de dramáticamente pero tenderán un pedacito más arriba.  Wall Street entiende que el fed no cortará tarifas en octubre. Hecho frente con opciones entre staving de una recesión y la inflación que lucha, Bernanke optará por la inflación que lucha cada día.  Si el riesgo de los supercedes de la inflación el riesgo de la recesión, el fed no corta tipos de interés.

Cerradura-en tarifas en el uso.  Cerradura-en tarifas en el uso.  Cerradura-en tarifas en el uso.

Si las cosas cambian, usted lo descubrirá aquí primero.

Los Angeles Mortgage Rates Report: October 5, 2007

Our fear from Wednesday was justified.  I hope you took our advice and locked your mortgage rate.

From Wednesday:

I'm still maintaining my lock-in at loan application recommendation.  I just don't see a tremendous amount of upside to floating the mortgage rate.  There is an underlying fear of stagflation in the markets.  The American consumer had the flu, caused by the arrested access to easy money.  Higher oil prices create a commodity-push inflation effect that The Fed (thankfully) won't ignore.  While I agree with the folks from PIMCo that the consumer's flu could throw our economy into a mild recession, I'm not convinced with their conclusion that the Fed will aggressively cut rates to stave it off.

We have four MAJOR economic reports coming out Friday, all employment related.  If they are anemic, mortgage rates could drop dramatically; lenders will renegotiate rate locks to  reflect that drop.  If they appear inflationary, you'll be protected.

Nothing has changed for the near term; lock-in mortgage rates at application.

I don't see rates shooting up dramatically but they will trend a bit higher.  Wall Street understands that the Fed won't cut rates in October. Faced with choices between staving off a recession and fighting inflation, Bernanke will opt for inflation fighting every day.  If the risk of inflation supercedes the risk of recession, the Fed won't cut interest rates.

Lock-in rates at application.  Lock-in rates at application.  Lock-in rates at application.

if things change, you'll find it out here first.

Why Experience Matters Less in the Mortgage Business

Who's the better loan adviser?  Ricardo or Brian?

Usual logic would dictate that my grey hair and 20 years experience in financial services make me the obvious choice.  Today, that just ain't so.

The mortgage industry went through a paradigm shift this summer.  Lending guidelines changed in 2003, changed again this summer, and have been continually evolving ,at the warp speed, since August 2, 2007.  Each week is a new experience as banks barrage us with e-mails about what they will or will not allow.  The well-coiffed, middle-aged lady, at the local bank, may be the absolute worst choice for you.  The spiky haired, tech savvy, and ambitious young mortgage broker may be the better choice.

Here are Five Reasons Why The Ricardos May be a Better Choice For You Than The Brians:

1- Brians are established.  That's a positive, right?  Maybe not.  Brians are dealing with past clients right now.  Many of those past clients "snuck a HELOC" on the home  and are running back to the Brians for help.  The Brians have to take care of their past clients.   Unaware of their clients' financial suicide, the Brians are scrambling to fix their problems amid declined values and tightened lending guidelines.

2- Brians are opinionated, which is a nice way of saying that they're "set in their ways".  They criticize the Fed, scoff at the 100% programs, and complain rather than do.  Their established client base feeds them enough business to keep them happy so the "fire in the belly" factor is absent.

3- Ricardos are more tech savvy than Brians.  Lending has completely moved to the goal of paperless transactions.  While Brians are trying to schedule you in for a loan application,  Ricardos are communicating with you via text on the cell phone, instant messaging, and e-mail.  It's no longer a matter of the big eating the small, it's the fast eating the slow in the mortgage origination business.

4- The Brians have no more experience than the Ricardos today.  Loan guidelines were completely reset this summer so both Brian and Ricardo need to "re-learn" the business.  The better originator is the one who commits himself to the principle of continued learning; the Ricardos are better suited for that because of their ambition.

5- The Ricardos are far less complicated with "life" than the Brians.  The Brians are running for office, chairing Chamber of Commerce committees, and raising money for their children's school.  They come into the office at 10AM and head out for a round of golf with a financial planner at 3PM.  The byproduct of their business success, responsibility, leaves them with less time for you, the aspiring home buyer.

Am I committing financial suicide here?  No.  I'm much more like a Ricardo than a Brian.  I have a team of young people who help keep the wheels turning at my practice.  I'm committed to technology and its utility to create a more seamless financing experience.  I spend a lot of time reading lending manuals to keep abreast of the ever changing guidelines.

So what's an aspiring homeowner to do?  Pick a lending guide carefully, like you would a doctor.  Establishing a relationship with a financial professional can make a significant difference on your wealth in twenty years. Comfort, confidence, and commitment are what you need when choosing that adviser.  If the silver-haired bank rep agrees to let you into her club, she may be the right choice.  The new club, being built by the purple tie wearing young man, may offer you VIP status.

Informe De Las Tarifas De Hipoteca De Los Ángeles: De Octubre El 3 De 2007

Quisiera comenzar el informe de esta mañana reconociendo a mi amigo Brian Brady y su esposa maravillosa, Debra. Yo tengo mucho orgullo sobre Brian Brady por la persona que es y por el poco tiempo que he conocido a su esposa, ella tambien es una person increible! Por favor tomen el tiemp con migo de mandarles un        Aniversario Feliz!

Brian y su esposa Debra se casaron en octubre el 3 de 1998 en Basilica en Phoenix, AZ del St. Maria.  Hoy le hace nueve años.  Debra balancea las demandas de la familia y del trabajo maravillosamente.  Su hija es un ejemplo del anterior y lo beneficioso del negocio es un testamento al último.   

"Recuerdo claramente el día que ella cambió mi vida con esos ojos azules hermosos.  Su sonrisa que seduce todavía me para en mis pistas hoy.  Te quiero, Debra." -- Brian Brady

 

Sigo siendo el mantener mi cerradura-en en la recomendación del uso de préstamo.  Apenas no veo una enorme cantidad de upside a flotar la tarifa de hipoteca.  Hay un miedo subyacente del stagflation en los mercados.  El consumidor americano hizo la gripe, causar por el acceso arrestado al dinero fácil.  Precios del petróleo más altos crean materia-empujan el efecto de la inflación de que el fed (agradecidamente) no no hará caso.  Mientras que convengo con la gente de PIMCo que la gripe del consumidor podría lanzar nuestra economía en una recesión suave, me no convencen con su conclusión de que el fed corte agresivamente tarifas al bastón él apagado.

 

Tenemos cuatro informes económicos IMPORTANTES el venir fuera de viernes, todo el empleo relacionado.  Si son anémicos, las tarifas de hipoteca podrían caer dramáticamente; los prestamistas renegociarán las cerraduras de la tarifa  para reflejar esa gota.  Si aparecen inflacionista, le protegerán. 

 

Voy a ofrecer tarifas de hipoteca ENORMES hoy ($417.000-$1.000.000):

 

TARIFA                ABRIL          DEL PROGRAMA

 

BRAZO Anual               6.250%      6.487%

 

5/1 BRAZO                    6.500%     6.697%

 

10/1 BRAZO                  6.750%     6.926%

 

30 Años Fijaron            6.875%     7.124%

 

Clasifica disponible en fecha de octubre el 3 de 2007.  Conforme a cambio y a la calificación.  Prestamista De la Oportunidad Igual.

 

Es importante observar que las tarifas de hipoteca enormes están comenzando a declinar.  Wall Street finalmente flinched y está comprando préstamos enormes otra vez.  La presión  de los prestamistas de la lista hizo a muchachos grandes reconocer eso  que apagaban el grifo les costaba el dinero.  La avaricia y el miedo son los dos motivadores en Wall Street; reconocieron que lanzaron a bebé hacia fuera con el bathwater y lo tienen dejaron la "avaricia" factor alcanzar el factor del miedo ".

 

Communicese con migo para una cotización personal de la tarifa. 

Los Angeles Mortgage Rates Report: October 3, 2007

I'd like to start off this morning's report by recognizing my wonderful wife, Debra.  We were married October 3, 1998 at St. Mary's Basilica in Phoenix, AZ.  Today makes it nine years.  Debra balances the demands of family and work beautifully.  Our daughter is an example of the former and our business profitability is a testament to the latter.

I clearly remember the day she changed my life with those beautiful blue eyes.  Her beguiling smile still stops me in my tracks today.  I love you, Debra.

I'm still maintaining my lock-in at loan application recommendation.  I just don't see a tremendous amount of upside to floating the mortgage rate.  There is an underlying fear of stagflation in the markets.  The American consumer had the flu, caused by the arrested access to easy money.  Higher oil prices create a commodity-push inflation effect that The Fed (thankfully) won't ignore.  While I agree with the folks from PIMCo that the consumer's flu could throw our economy into a mild recession, I'm not convinced with their conclusion that the Fed will aggressively cut rates to stave it off.

We have four MAJOR economic reports coming out Friday, all employment related.  If they are anemic, mortgage rates could drop dramatically; lenders will renegotiate rate locks to  reflect that drop.  If they appear inflationary, you'll be protected. 

I'm going to feature JUMBO mortgage rates today ($417,000-$1,000,000):

PROGRAM                RATE          APR

Annual ARM               6.250%      6.487%

5/1 ARM                    6.500%     6.697%

10/1 ARM                  6.750%     6.926%

30 Year Fixed            6.875%     7.124%

Rates available as of October 3, 2007.  Subject to change and qualification.  Equal Opportunity Lender.

It is important to note that Jumbo mortgage rates are starting to decline.  Wall Street has finally flinched and is buying jumbo loans again.  The pressure  from portfolio lenders caused the big boys to recognize that  shutting off the faucet was costing them money.  Greed and fear are the two motivators on Wall Street; they recognized that they threw the baby out with the bathwater and have let the "greed" factor overtake the fear factor" .

Contact me for a personal rate quote. 

Informe De las Tarifas De Hipoteca De Los Ángeles: De el 26 de Septiembre del 2007

¡Las tarifas de hipoteca enormes en Los Ángeles están mejorando!   Pero primero...

Aconsejamos a compradores caseros de Los Ángeles flotas cautelosomente sus prestamos la semana pasada; nada sucedió a las tarifas de hipoteca.  Todavía hay un miedo irracional en los mercados de las tarifas de hipoteca sobre la inflación que está haciendo a prestamistas seguir siendo obstinados sobre la tasación.  Estamos cambiando nuestra postura a un diagonal de fijación. Así pues, si usted no se ha trabado en su préstamo, y usted son menos de 21 días de su cierre del escrow, van a continuación y se traban.

Tarifas que estamos ofreciendo, para los préstamos debajo de $417.000, en fecha de septiembre el 26 de 2007:

Tarifa                    ABRIL                    Del Programa

BRAZO Anual             5.625%               5.693%

3/1 BRAZO                 6.000%              6.070%

5/1 BRAZO                 6.125%              6.217%

30 Años Fijaron         6.125%               6.217%

Tarifas conforme a condiciones de la calificación y de mercado.  Prestamista De la Oportunidad Igual.

Ahora, para un ciertas noticias REALMENTE buenas.  La tasación para las tarifas enormes en Los Ángeles está mejorando.  Las tarifas para los préstamos indicados de la renta en Los Ángeles están consiguiendo más bajo.  Si usted ha solicitado un préstamo que es mayor de $417.000 o no está documentando su renta, pensamos que usted puede flotar con seguridad la tarifa. Los inversionistas de Wall Street están sumergiendo su dedo del pie en el area de las tarifas enormes y los mercados indicados del préstamo de la renta y están comenzando a comprar esos préstamos. 

Los prestamistas de la lista que nos hicieron mal cuando los inversionistas de Wall Street pararon el comprar de préstamos enormes (prestamistas de la lista no venden a Wall Street; llevan a cabo los préstamos) ahora están tasando agresivamente sus préstamos enormes.    Las tarifas de hipoteca enormes todavía no son tan competitivas como eran de julio el 31 de 2007 sino que ESTÁN MEJORANDO.  Este movimiento agresivo de los prestamistas de la lista nos dice que los prestamistas del conducto, préstamos enormes de esa venta a Wall Street, estén consiguiendo buenas noticias.

Llámeme al (323)-810-2175 o mande me un E-mail para la tasación enorme de la tarifa de hipoteca.

En resumen, trabe los préstamos debajo de $417.000 y flote los préstamos sobre $417.000.  La crisis de la liquidez no es excedente pero el desierto que hemos vivido adentro desde de agosto el 2 de 2007 está comenzando a oler como la lluvia.  Ésa es buena noticia!

Aconsejamos a compradores caseros de Los Ángeles flotas cautelosomente sus prestamos la semana pasada; nada sucedió a las tarifas de hipoteca.  Todavía hay un miedo irracional en los mercados de las tarifas de hipoteca sobre la inflación que está haciendo a prestamistas seguir siendo obstinados sobre la tasación.  Estamos cambiando nuestra postura a un diagonal de fijación. Así pues, si usted no se ha trabado en su préstamo, y usted son menos de 21 días de su cierre del escrow, van a continuación y se traban.

Tarifas que estamos ofreciendo, para los préstamos debajo de $417.000, en fecha de septiembre el 26 de 2007:

Tarifa                    ABRIL                    Del Programa

BRAZO Anual             5.625%               5.693%

3/1 BRAZO                 6.000%              6.070%

5/1 BRAZO                 6.125%              6.217%

30 Años Fijaron         6.125%               6.217%

Tarifas conforme a condiciones de la calificación y de mercado.  Prestamista De la Oportunidad Igual.

Ahora, para un ciertas noticias REALMENTE buenas.  La tasación para las tarifas enormes en Los Ángeles está mejorando.  Las tarifas para los préstamos indicados de la renta en Los Ángeles están consiguiendo más bajo.  Si usted ha solicitado un préstamo que es mayor de $417.000 o no está documentando su renta, pensamos que usted puede flotar con seguridad la tarifa. Los inversionistas de Wall Street están sumergiendo su dedo del pie en el area de las tarifas enormes y los mercados indicados del préstamo de la renta y están comenzando a comprar esos préstamos. 

Los prestamistas de la lista que nos hicieron mal cuando los inversionistas de Wall Street pararon el comprar de préstamos enormes (prestamistas de la lista no venden a Wall Street; llevan a cabo los préstamos) ahora están tasando agresivamente sus préstamos enormes.    Las tarifas de hipoteca enormes todavía no son tan competitivas como eran de julio el 31 de 2007 sino que ESTÁN MEJORANDO.  Este movimiento agresivo de los prestamistas de la lista nos dice que los prestamistas del conducto, préstamos enormes de esa venta a Wall Street, estén consiguiendo buenas noticias.

Llámeme al (323)-810-2175 o mande me un E-mail para la tasación enorme de la tarifa de hipoteca.

En resumen, trabe los préstamos debajo de $417.000 y flote los préstamos sobre $417.000.  La crisis de la liquidez no es excedente pero el desierto que hemos vivido adentro desde de agosto el 2 de 2007 está comenzando a oler como la lluvia.  Ésa es buena noticia!

Aconsejamos a compradores caseros de Los Ángeles flotas cautelosomente sus prestamos la semana pasada; nada sucedió a las tarifas de hipoteca.  Todavía hay un miedo irracional en los mercados de las tarifas de hipoteca sobre la inflación que está haciendo a prestamistas seguir siendo obstinados sobre la tasación.  Estamos cambiando nuestra postura a un diagonal de fijación. Así pues, si usted no se ha trabado en su préstamo, y usted son menos de 21 días de su cierre del escrow, van a continuación y se traban.

Tarifas que estamos ofreciendo, para los préstamos debajo de $417.000, en fecha de septiembre el 26 de 2007:

Tarifa                    ABRIL                    Del Programa

BRAZO Anual             5.625%               5.693%

3/1 BRAZO                 6.000%              6.070%

5/1 BRAZO                 6.125%              6.217%

30 Años Fijaron         6.125%               6.217%

Tarifas conforme a condiciones de la calificación y de mercado.  Prestamista De la Oportunidad Igual.

Ahora, para un ciertas noticias REALMENTE buenas.  La tasación para las tarifas enormes en Los Ángeles está mejorando.  Las tarifas para los préstamos indicados de la renta en Los Ángeles están consiguiendo más bajo.  Si usted ha solicitado un préstamo que es mayor de $417.000 o no está documentando su renta, pensamos que usted puede flotar con seguridad la tarifa. Los inversionistas de Wall Street están sumergiendo su dedo del pie en el area de las tarifas enormes y los mercados indicados del préstamo de la renta y están comenzando a comprar esos préstamos. 

Los prestamistas de la lista que nos hicieron mal cuando los inversionistas de Wall Street pararon el comprar de préstamos enormes (prestamistas de la lista no venden a Wall Street; llevan a cabo los préstamos) ahora están tasando agresivamente sus préstamos enormes.    Las tarifas de hipoteca enormes todavía no son tan competitivas como eran de julio el 31 de 2007 sino que ESTÁN MEJORANDO.  Este movimiento agresivo de los prestamistas de la lista nos dice que los prestamistas del conducto, préstamos enormes de esa venta a Wall Street, estén consiguiendo buenas noticias.

Llámeme al (323)-810-2175 o mande me un E-mail para la tasación enorme de la tarifa de hipoteca.

En resumen, trabe los préstamos debajo de $417.000 y flote los préstamos sobre $417.000.  La crisis de la liquidez no es excedente pero el desierto que hemos vivido adentro desde de agosto el 2 de 2007 está comenzando a oler como la lluvia.  Ésa es buena noticia!

Los Angeles Mortgage Rates Report: September 26, 2007

Jumbo mortgage rates in Los Angeles are improving...Yeah, Baby !   But first...

We advised Los Angeles home buyers to cautiously float their loans last week; nothing happened to mortgage rates.  There is still an irrational fear in the mortgage rates markets about inflation which is causing the lenders to remain stubborn about pricing.  We are changing our stance to a locking bias.   So, if you haven't locked in your loan, and you're less than 21 days from your close of escrow, go ahead and lock.

Rates we're offering, for loans under $417,000, as of September 26, 2007:

Program                    Rate                    APR

Annual ARM            5.625%                5.693%

3/1 ARM                 6.000%               6.070%

5/1 ARM                 6.125%               6.217%

30 Year Fixed          6.125%               6.217%

Rates subject to qualification and market conditions.  Equal Opportunity Lender.

Now, for some REALLY good news.  Pricing for jumbo rates in Los Angeles is improving.  Rates for stated income loans in Los Angeles are getting lower.  If you have applied for a loan that is greater than $417,000 or are not documenting your income, we think you can safely float the rate.  Wall Street investors are dipping their toe in the jumbo and stated income loan markets and starting to buy those loans. 

The portfolio lenders that scalped us when the Wall Street investors stopped buying jumbo loans (portfolio lenders don't sell to Wall Street; they hold the loans) are now aggressively pricing their jumbo loans.  The  jumbo mortgage rates are still not as competitive as they were on July 31, 2007 but THEY ARE IMPROVING.  This aggressive move by the portfolio lenders tells us that the conduit lenders, that sell jumbo loans to Wall Street, are getting good news.

Call me at (858)-503-2318 for jumbo mortgage rate pricing or e-mail me.

In summary, lock loans under $417,000 and float loans over $417,000. The liquidity crisis ain't over but the desert we've lived in since August 2, 2007 is starting to smell like rain.  That's good news.

Jumbo mortgage rates in Los Angeles are improving...Yeah, Baby !   But first...

We advised Los Angeles home buyers to cautiously float their loans last week; nothing happened to mortgage rates.  There is still an irrational fear in the mortgage rates markets about inflation which is causing the lenders to remain stubborn about pricing.  We are changing our stance to a locking bias.   So, if you haven't locked in your loan, and you're less than 21 days from your close of escrow, go ahead and lock.

Rates we're offering, for loans under $417,000, as of September 26, 2007:

Program                    Rate                    APR

Annual ARM            5.625%                5.693%

3/1 ARM                 6.000%               6.070%

5/1 ARM                 6.125%               6.217%

30 Year Fixed          6.125%               6.217%

Rates subject to qualification and market conditions.  Equal Opportunity Lender.

Now, for some REALLY good news.  Pricing for jumbo rates in Los Angeles is improving.  Rates for stated income loans in Los Angeles are getting lower.  If you have applied for a loan that is greater than $417,000 or are not documenting your income, we think you can safely float the rate.  Wall Street investors are dipping their toe in the jumbo and stated income loan markets and starting to buy those loans. 

The portfolio lenders that scalped us when the Wall Street investors stopped buying jumbo loans (portfolio lenders don't sell to Wall Street; they hold the loans) are now aggressively pricing their jumbo loans.  The  jumbo mortgage rates are still not as competitive as they were on July 31, 2007 but THEY ARE IMPROVING.  This aggressive move by the portfolio lenders tells us that the conduit lenders, that sell jumbo loans to Wall Street, are getting good news.

Call me at (858)-503-2318 for jumbo mortgage rate pricing or e-mail me.

In summary, lock loans under $417,000 and float loans over $417,000. The liquidity crisis ain't over but the desert we've lived in since August 2, 2007 is starting to smell like rain.  That's good news.

Los Angeles Mortgage Rates Report: September 21, 2007

Los Angeles mortgage applicants and home buyers have had a roller coaster ride these past ten days.  We maintained our advice to lock-in loans at application, prior to and immediately after the Fed decision to cut rates .5%.  We felt there was irrational exuberance among the bond traders which artificially lowered yields. Those lower yields led to lower Los Angeles mortgage rates.

Now, we're reversing course. Irrational fear of inflation exists in the bond markets today.  Bond traders believe that Bernanke's cut may have overreached, paving the way for higher inflation.  We think Bernanke is a whole lot smarter than the bond traders believe him to be; we also think he's judicious in his approach. That irrational fear causes us to advice all Los Angeles mortgage applicants to cautiously float your rate. Cautiously floating means you check in with your mortgage adviser daily.  Markets can reverse quickly and we could reverse our recommendation to our locking stance.

Keep checking this report daily for updates.

Los Angeles mortgage applicants and home buyers have had a roller coaster ride these past ten days.  We maintained our advice to lock-in loans at application, prior to and immediately after the Fed decision to cut rates .5%.  We felt there was irrational exuberance among the bond traders which artificially lowered yields. Those lower yields led to lower Los Angeles mortgage rates.

Now, we're reversing course. Irrational fear of inflation exists in the bond markets today.  Bond traders believe that Bernanke's cut may have overreached, paving the way for higher inflation.  We think Bernanke is a whole lot smarter than the bond traders believe him to be; we also think he's judicious in his approach. That irrational fear causes us to advice all Los Angeles mortgage applicants to cautiously float your rate. Cautiously floating means you check in with your mortgage adviser daily.  Markets can reverse quickly and we could reverse our recommendation to our locking stance.

Keep checking this report daily for updates.

Los Angeles Mortgage Rates Report- September 19, 2007

The Federal Reserve cut both the discount rate and federal funds rate a full .5% yesterday.  This surprised us because we thought Ben Bernanke would be more judicious in his approach to easing money.

I guess you can't please everybody.  Pundits pleaded with Gentle Ben to aggressively cut to avoid a recession.  Ben gave them what they wanted and now they think he overreached.  Today, in a 180 degree turn, the markets are concerned about the prospect of inflation.  Treasury yields rose over .5% this morning while mortgage bonds seem to be flat.  It won't be long before the effect of this cut is seen in higher mortgage rates.  This conundrum is what we've been concerned about so we are maintaining our recommendation to lock-in all loans at application.

Are you confused?  How can the Fed cut rates and mortgage rates rise?  Markets are discounting mechanisms, continually taking into account the possibility of future events.  Bond traders have turned into riverboat gamblers, constantly trying to outguess the Fed.  We believe that the risk of higher rates outweighs the reward of waiting to see if you can get JUST A LITTLE lower rate.

In more positive news, the Office of Federal Housing Enterprise Oversight (OFHEO) allowed Fannie Mae and Freddie Mac to buy more loans. This may pave the way for higher lending limits next year.  We think that the conforming loan limits may be increased to a level that is closer to the $500,000 mark for 2008.  This would be a welcome move in states like California and New York where jumbo loans are the rule rather than the exception.

Rates for Wednesday, September 17, 2007:

Program                    Rate                    APR

Annual ARM            5.625%                5.693%

3/1 ARM                 6.000%               6.070%

5/1 ARM                 6.125%               6.217%

30 Year Fixed          6.125%               6.217%

Rates subject to qualification and market conditions.  Equal Opportunity Lender.

The Federal Reserve cut both the discount rate and federal funds rate a full .5% yesterday.  This surprised us because we thought Ben Bernanke would be more judicious in his approach to easing money.

I guess you can't please everybody.  Pundits pleaded with Gentle Ben to aggressively cut to avoid a recession.  Ben gave them what they wanted and now they think he overreached.  Today, in a 180 degree turn, the markets are concerned about the prospect of inflation.  Treasury yields rose over .5% this morning while mortgage bonds seem to be flat.  It won't be long before the effect of this cut is seen in higher mortgage rates.  This conundrum is what we've been concerned about so we are maintaining our recommendation to lock-in all loans at application.

Are you confused?  How can the Fed cut rates and mortgage rates rise?  Markets are discounting mechanisms, continually taking into account the possibility of future events.  Bond traders have turned into riverboat gamblers, constantly trying to outguess the Fed.  We believe that the risk of higher rates outweighs the reward of waiting to see if you can get JUST A LITTLE lower rate.

In more positive news, the Office of Federal Housing Enterprise Oversight (OFHEO) allowed Fannie Mae and Freddie Mac to buy more loans. This may pave the way for higher lending limits next year.  We think that the conforming loan limits may be increased to a level that is closer to the $500,000 mark for 2008.  This would be a welcome move in states like California and New York where jumbo loans are the rule rather than the exception.

Rates for Wednesday, September 17, 2007:

Program                    Rate                    APR

Annual ARM            5.625%                5.693%

3/1 ARM                 6.000%               6.070%

5/1 ARM                 6.125%               6.217%

30 Year Fixed          6.125%               6.217%

Rates subject to qualification and market conditions.  Equal Opportunity Lender.

Los Angeles Mortgage Rates Report- September 17, 2007

Los Angeles mortgage rates may rise when the Fed comes out of the Open Market Committee meeting, tomorrow. Lock-in all loans at application. Most pundits believe the Fed will cut rates .5% while a smaller number are looking for a .25% rate cut.  (I am in that smaller number). Here's why:

Bernanke recognizes that the economy is slowing.  He also recognizes that there is upwards pressure on prices from basic  commodities- oil, housing materials, and food.  That's called cost-push inflation.  Cost-push inflation, simultaneously existing with a declining gross domestic product, is the definition of stagflation.  Stagflation is the absolute worst of both worlds;  a recession with accelerating prices.

Stagflation is what gentle Ben is concerned about.  While the Wall Street traders believe he'll aggressively cut rates to save the economy, I think he's concerned about the potentially devastating effect of stagflation.  He'll tale some short-term heat for not cutting rates quickly but he'll make the right long-term decision by showing temperance.

That means that Los Angeles mortgage rates could rise tomorrow. Again, it's all about the risk.  We strongly suggest that Los Angeles home buyers lock-in interest rates at application.

Los Angeles mortgage rates may rise when the Fed comes out of the Open Market Committee meeting, tomorrow. Lock-in all loans at application. Most pundits believe the Fed will cut rates .5% while a smaller number are looking for a .25% rate cut.  (I am in that smaller number). Here's why:

Bernanke recognizes that the economy is slowing.  He also recognizes that there is upwards pressure on prices from basic  commodities- oil, housing materials, and food.  That's called cost-push inflation.  Cost-push inflation, simultaneously existing with a declining gross domestic product, is the definition of stagflation.  Stagflation is the absolute worst of both worlds;  a recession with accelerating prices.

Stagflation is what gentle Ben is concerned about.  While the Wall Street traders believe he'll aggressively cut rates to save the economy, I think he's concerned about the potentially devastating effect of stagflation.  He'll tale some short-term heat for not cutting rates quickly but he'll make the right long-term decision by showing temperance.

That means that Los Angeles mortgage rates could rise tomorrow. Again, it's all about the risk.  We strongly suggest that Los Angeles home buyers lock-in interest rates at application.

Los Angeles Mortgage Rates Report: September 10, 2007

The West Coast has a phenomenon called the green flash. It happens at sunset. The density of the air refracts the light... blah... blah... blah ...anyway...it's really cool.  While sunsets over the Pacific are gorgeous, you sometimes get a bonus of a green flash.  That's what the conforming mortgage markets feel like today.

I advised everybody to lock-in loans at application, before Labor Day, and rates got  a little bit better- I'm still advising clients to lock-in their loans at application.  We had a little "green flash" last week.  While the world believes that the Federal Reserve Bank will cut interest rates next week, optimists are starting the think that the cut may be as much as a half percent rather that the consensus quarter point.  That thought is the "green flash" or bonus.  Here's how it happened:

1- The sub-prime, Alt-A mortgage fiasco is infecting Europe-  Who knew the Germans and French owned Bobby Ray's loan?  This may curb foreign in investment in the mortgage-backed securities market.

2- More people are out of work than we expected.  The dreaded "R" word, recession, is starting to be bandied about.  That can mean much lower interest rates.

3- Barbie and Chairman Mao are doing battle.  Higher prices of cheap Chinese goods are threatening to steal Christmas from the kiddies.   Now, morally, I'm not so sure that's a bad thing.  Deemphasizing the materialistic nature of the holidays may cause us to rediscover the real meanings of Chanukah, Christmas, and Ramadan.  While it is ironic that a religion-free country may force that rediscovery on us, it is, apparently, an  economic mess.  If the Chinese dig in and refuse to trade with us, the R word may move from economic chat rooms to the marquis of CNBC.

There's your "green flash" if you're getting a loan- bad economic news leads to lower rates.  Why, then, am I so insistent upon locking loans at application?  It's a matter of risk.  I believe that the exuberance in the bond markets is irrational.  The traders believe the Fed will aggressively cut already.  Any cut less than a half a point will be met with disappointment and higher rates.  In short, the risk of mortgage rates that are .375% higher on September 20th is greater than the chance they may fall .125% by then.

Locking loans at application is still the prudent call.

Rates for Monday, September 10, 2007:

Program                    Rate                    APR

Annual ARM            5.625%                5.693%

3/1 ARM                 5.750%                5.866

5/1 ARM                 6.000%               6.070%

30 Year Fixed          6.000%               6.040%

Rates subject to qualification and market conditions.  Equal Opportunity Lender.

White House Statement

Just in case anyone was out of touch yesterday morning and missed it ...

"Today, President Bush Announced Steps At The Federal Level To Help Homeowners In Need Of Assistance Avoid Foreclosure. These steps will help homeowners having difficulty paying their mortgages and ensure that the problems now disrupting the housing industry do not happen again".

Here is a link to the text of the President's statement regarding "mortgage reform":

http://www.whitehouse.gov/news/releases/2007/08/20070831-5.html

Here is a link to the White House Fact Sheet:

http://www.whitehouse.gov/news/releases/2007/08/20070831-4.html

Los Angeles Mortgage Rates Report- August 28, 2007- Lock All Loans

Our Los Angeles Mortgage Rates Report from last week advised clients to float their loans.  We still maintained a lock-in stance for all non-conforming and jumbo loans as that market is changing daily.  Until Wall Street investors set the market for jumbo loans, we maintain that stance.

Los Angeles home buyers saved money by listening to that advice.  Rates decreased an average of .125% this past week.  Now, we think it's time to reap that reward and lock-in interest rates for all loans at application.  Mortgage bonds are trading near their 200-day moving average which means that the next 2-3 days may show the absolute best rates in 6 months on the fixed-rate mortgage side.  We think there is more risk to rates rising before the Fed meeting in September than there is opportunity for lower rates during that period.

One of our portfolio lenders is offering an annual ARM, interest only,  at 5.5% with an APR of 6.44%.  This means that the first year is locked in at 5.5%, the second year at 6.44%, and then the loan becomes a LIBOR-based ARM.  There is no pre-payment penalty associated with this loan.  We particularly like this loan product because we believe that interest rates are in a 12-24 month downward trend; we think there will be some opportunities to refinance to a fixed rate loan as low as 5.5% in the next two years.  Borrowers with a short-term horizon (meaning they may consider a move in 12-24 months) should ask for more information.  Admittedly, this is a teaser rate but sometimes teaser rates have the right application when the hold timeframe matches up to the interest rate term.

Mortgage Interest Rates*

Rates as of 08/27/2007:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 5-Yr. Interest Only 6.5% 6.572% $5.42 7.25% 7.350% $6.04 10 Yr Interest Only 6.625% 6.744% $5.52 7.25% 7.411% $6.04 7/! ARM 6.625% 6.697% $5.52 7.25% 7.350% $6.04 30 Year Fixed 6.125% 6.195% $6.08 7.5% 7.602% $6.99 Annual ARM 5.75% 5.819% $5.84 6.125% 6.219% $6.08 HELOC 8.25% 8.330% $6.88 8.25% 8.357% $6.88 5 Yr ARM- Amo 6.375% 6.446% $6.24 7.125% 7.225% $6.74

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Los Angeles Mortgage Rates Report- August 21, 2007

Los Angeles home buyers can take a breather.  Our advice to lock rates at application these past two weeks was sound.  Although treasury bond yields dropped, mortgage-backed securities yields rose in fear of more defaults.    It was understanding this conundrum that prompted our lock advice.

Today, we think it is safe for a Los Angeles mortgage applicant to float their mortgage rate; there may be some room for improvement this week.

The liquidity crisis extends past our borders:  A large British insurance company may have been forced to borrow from the Bank of England and a potential German banking crisis abounds.

Senator Dodd just met with Fed Chairman Bernanke.  He queried whether the Fed was willing to use any and all available resources to avert a mortgage liquidity crisis and seemed satisfied with the Fed Chairman's response.  That may have averted Congressional interference (we hope).  Senator Dodd is continuing to petition the President to raise the statutory limits of conforming loans ($417,000) as an emergency measure.  Californians would benefit from this prospect because conforming loans offer lower rates and more loan options than jumbo loans.

Rates as of 08/21/2007:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 5-Yr. Interest Only 6.625% 6.697% $5.52 7.25% 7.350% $6.04 10 Yr Interest Only 6.75% 6.869% $5.63 7.25% 7.411% $6.04 7/! ARM 6.625% 6.697% $5.52 7.25% 7.350% $6.04 30 Year Fixed 6.25% 6.321% $6.16 7.5% 7.602% $6.99 Annual ARM 5.75% 5.819% $5.84 6.125% 6.219% $6.08 HELOC 8.25% 8.330% $6.88 8.25% 8.357% $6.88 5 Yr ARM- Amo 6.5% 6.572% $6.32 7.125% 7.225% $6.74

*Rates are subject to change due to market fluctuations and borrower's eligibility

Los Angeles Mortgage Rates Report: August 15, 2007

Good news for interest rates was released today.  The Consumer Price Index, which is a measure of the prices for goods and services people buy, was moderate and in line with Wall Street's expectations. 

Los Angeles home buyers should be cautiously optimistic about the possibility of lower rates in the near future.  Optimistic because inflation appears to be tempering.  Cautious because the extent of mortgage delinquencies is still unknown.

It is because of that great unknown that we still advise Los Angeles home buyers to lock their interest rates at application.   

Good news for interest rates was released today.  The Consumer Price Index, which is a measure of the prices for goods and services people buy, was moderate and in line with Wall Street's expectations. 

Los Angeles home buyers should be cautiously optimistic about the possibility of lower rates in the near future.  Optimistic because inflation appears to be tempering.  Cautious because the extent of mortgage delinquencies is still unknown.

It is because of that great unknown that we still advise Los Angeles home buyers to lock their interest rates at application.   

Los Angeles Mortgage Rates Report- August 13, 2007

Los Angeles home buyers , should lock their loans at application. Tumultuous credit markets and a potential bounce in the stock market lead us to believe that, rates, for the near-term, may have bottomed. We think there is more risk to "holding out for the better rate" than there is in "accepting what you get and moving on".

This is Joe's analysis,  on his weblog:

The changing credit markets are putting some pressure on the Fed and stirring much debate on whether or not interest rates should be cut. There is an increase concern of inflation with this monetary injection into the markets; however, also an ongoing unease with the sub-prime mortgage problems throughout the economy. The debate falls as to whether or not a rate cut and ‘bailout’ for risky investors should take place. This leaves much to question and an anticipation for the Fed’s next move on September 18^th.

If you clicked over to Joe's weblog, you'll see that he spent the summer learning our business.  Joe's a Villanova Business School senior and neighbor in Solana Beach.  Coincidentally, we share the same last name- nope, no relation.

So...lock those loans up; Joe's correct on this one.

Los Angeles Mortgage Rates Report: August 8, 2007- Lock Loans

Los Angeles home buyers should lock-in their interest rates.  The mortgage-backed securities market is responding to two events and mortgage bonds are dropping.

The Federal Reserve Bank did not raise the Discount Rate yesterday (as expected).  Fed Chairman Ben Bernanke spent very little time discussing the mortgage liquidity crisis and talked about containing inflation more.  We see this as positive because it shows that we have a Fed Chairman who is calm, amidst a crisis.

Why change our posture from floating to locking? China is threatening to dump it's $1.3 Trillion in bond holdings as a response to our threat of trade sanctions.  It's a game of chicken being played by diplomats.  Their sale would hurt our markets for about 3-4 months; our trade sanctions would close their largest market. Regardless of which way the political winds blow, we think our customers should be forward locking in rates as soon as they apply for a loan.

Los Angeles home buyers should lock-in their interest rates.  The mortgage-backed securities market is responding to two events and mortgage bonds are dropping.

The Federal Reserve Bank did not raise the Discount Rate yesterday (as expected).  Fed Chairman Ben Bernanke spent very little time discussing the mortgage liquidity crisis and talked about containing inflation more.  We see this as positive because it shows that we have a Fed Chairman who is calm, amidst a crisis.

Why change our posture from floating to locking? China is threatening to dump it's $1.3 Trillion in bond holdings as a response to our threat of trade sanctions.  It's a game of chicken being played by diplomats.  Their sale would hurt our markets for about 3-4 months; our trade sanctions would close their largest market. Regardless of which way the political winds blow, we think our customers should be forward locking in rates as soon as they apply for a loan.

Los Angeles Mortgage Rates Report: August 3, 2007

"It was the best of times, it was the worst of times"- Rudyard Kipling

Wall Street has spoken.  They now say that stated income and no documentation loans are risky.  And they want to get paid for that risk. 

The mortgage markets have faced and will endure a liquidity crisis. It won't affect you if you are applying for a full-documentation loan that conforms to Fannie Mae or Freddie Mac guidelines. If you can't prove that you can make the payments, you won't be getting a free pass anymore.  It's 1999 all over again and that ain't all that bad.

Real opportunity will be available for a borrowers with good credit and verified income.  Zero down payment loans will still be available for those borrowers; it won't be for borrowers who have severe credit problems and can't provide proof of the ability to repay the loan.

Mortgage Interest Rates*

Rates as of 08/03/2007:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 5-Yr. Interest Only 6.25% 6.321% $5.21 6.5% 6.596% $5.42 10 Yr Interest Only 6.625% 6.744% $5.52 7.0% 7.160% $5.83 7/! ARM 6.375% 6.446% $5.31 6.625% 6.722% $5.52 30 Year Fixed 6.5% 6.572% $6.32 7.0% 7.099% $6.65 Annual ARM 5.6% 5.668% $5.74 6.125% 6.219% $6.08 HELOC 8.25% 8.330% $6.88 8.25% 8.357% $6.88 5 Yr ARM- Amo 6.25% 6.321% $6.16 6.375% 6.470% $6.24

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Los Angeles Mortgage Rates Report: July 30, 2007

Mortgage rates are essentially unchanged from Friday as is our recommendation to Cautiously Float your rate.

This week may be defining for the near-term future of Los Angeles mortgage rates.  The Core Personal Consumer Expenditures number will be out at 5:30AM, California time.   This report is the Fed's favorite gauge on inflation.   A stronger than expected number suggests that the American consumer has not slowed down his spending; this would cause the Fed to consider raising rates.

Wednesday, the ISM index reports.  This index is a market mover because it's a survey of purchasing executives' potential and actual spending on capital goods.  If these folks are spending money (big business) it is expected that they are optimistic about the economy.  It's considered the "KING" of all manufacturing indices by Wall Street.

Friday, we get bombarded with important data about employment.  More on that later this week.  I'll be speaking at Inman RE Connect in San Francisco so I'll be somewhat reactive in my reports.  Please check back daily for updates.

Mortgage rates are essentially unchanged from Friday as is our recommendation to Cautiously Float your rate.

This week may be defining for the near-term future of Los Angeles mortgage rates.  The Core Personal Consumer Expenditures number will be out at 5:30AM, California time.   This report is the Fed's favorite gauge on inflation.   A stronger than expected number suggests that the American consumer has not slowed down his spending; this would cause the Fed to consider raising rates.

Wednesday, the ISM index reports.  This index is a market mover because it's a survey of purchasing executives' potential and actual spending on capital goods.  If these folks are spending money (big business) it is expected that they are optimistic about the economy.  It's considered the "KING" of all manufacturing indices by Wall Street.

Friday, we get bombarded with important data about employment.  More on that later this week.  I'll be speaking at Inman RE Connect in San Francisco so I'll be somewhat reactive in my reports.  Please check back daily for updates.

Los Angeles Mortgage Rates Report: Cautiously Optimistic

We're cautiously optimistic for mortgage rates for the final days of July.  Rates have jumped up on fears of inflation and the greater fear that Federal Reserve Chairman, Ben Bernanke wasn't doing enough to fight inflation.

The booming stock market has stolen money, earmarked for bonds, into an investment in stocks.  When less money is invested in bonds, prices drop, and yields rise.  Mortgage loans are tied into bond yields so a weak bond market means higher mortgage rates.

Economic figures due out this week that may affect mortgage rates include Jobless Claims, New Home Sales, and the Gross Domestic Product.  The first measures the job market, the second the real estate market, and the latter measures the growth in our economy.  All figures due out this week are not expected to be market movers so we advise our clients to cautiously wait before they lock-in their mortgage rates.  Cautiously wait means watching the market daily with your loan adviser.

We think that Tuesday, the last day of the month will be a big day when three VERY IMPORTANT economic figures are due.  For now, hold on tight and I'll yell if the market changes and you need to lock-in.  Otherwise, lookfor my next report, Tuesday.

Tuesday, I'll be posting here, then jumping on a plane to Inman Connect in San Francisco.  I'll be meeting "Da Blogmother", CJ, for the first time on Wednesday. 

California Trust Deeds as a Lucrative Investment

Do you want to earn double digit returns from California real estate?  Let's see what I can tell you about investing in trust deeds in 3-4 paragraphs.  A more detailed explanation can be found here.

A trust deed is what we call a deed of trust or mortgage in California. When you "invest" in a trust deed, you are the bank (or the lender). We usually get you rates of 10-14% and 1-2 points on the deal.  Most loans are short-term in nature and have a term of one to five years, The average loan we make is paid off in less than eighteen months.  The rate and points you make usually yield you a 10-16% return on your money.  You can invest through your self-directed IRA.

We're pretty careful about lending money.  I like to pretend that I'm investing "my mother's money" which, in some cases, I am.  I never go above a 70% loan to value (meaning there is 30% equity in the property).  That means if you are stuck with a bad borrower, you can foreclose and sell the property with plenty of room to spare.  We also check the borrower's capacity to pay the debt.  We use unconventional ways of verifying the cash flow like bank statements, trailing spouses, roomate rent, off-payroll income, part-time income, etc.  Another thing we try to remember is that we are here to solve the borrower's problem, not perpetuate it.  Understand though, that 1 out of 10 of these deals may ultimately end up in foreclosure, which means, you have to understand the process.

We only lend in Southern California because that's what we know.  You should stick to properties you can see within a few hours' drive.

Trusr Deed Investing is part mortgage work and part real estate work.  We don't always trust appraisals so we get Broker's Price Opinions if we think the property is suspect.  We interview property managers, talk to local Realtors, drive-by the house to make sure it's really owner-occupied.  We ALWAYS have a valid exit strategy for the loan BEFORE we lend any money.  Finally, we also talk to the borrowers and have the "Dutch Uncle" talk to make sure that they know that if they don't stick to the plan to pay off the loan, they could lose the house. 

Trust Deeds offer an investment vehicle that is a more conservative real estate play.  You get the security of California real estate (at a really low price) and double-digit returns. 

Do you want to earn double digit returns from California real estate?  Let's see what I can tell you about investing in trust deeds in 3-4 paragraphs.  A more detailed explanation can be found here.

A trust deed is what we call a deed of trust or mortgage in California. When you "invest" in a trust deed, you are the bank (or the lender). We usually get you rates of 10-14% and 1-2 points on the deal.  Most loans are short-term in nature and have a term of one to five years, The average loan we make is paid off in less than eighteen months.  The rate and points you make usually yield you a 10-16% return on your money.  You can invest through your self-directed IRA.

We're pretty careful about lending money.  I like to pretend that I'm investing "my mother's money" which, in some cases, I am.  I never go above a 70% loan to value (meaning there is 30% equity in the property).  That means if you are stuck with a bad borrower, you can foreclose and sell the property with plenty of room to spare.  We also check the borrower's capacity to pay the debt.  We use unconventional ways of verifying the cash flow like bank statements, trailing spouses, roomate rent, off-payroll income, part-time income, etc.  Another thing we try to remember is that we are here to solve the borrower's problem, not perpetuate it.  Understand though, that 1 out of 10 of these deals may ultimately end up in foreclosure, which means, you have to understand the process.

We only lend in Southern California because that's what we know.  You should stick to properties you can see within a few hours' drive.

Trusr Deed Investing is part mortgage work and part real estate work.  We don't always trust appraisals so we get Broker's Price Opinions if we think the property is suspect.  We interview property managers, talk to local Realtors, drive-by the house to make sure it's really owner-occupied.  We ALWAYS have a valid exit strategy for the loan BEFORE we lend any money.  Finally, we also talk to the borrowers and have the "Dutch Uncle" talk to make sure that they know that if they don't stick to the plan to pay off the loan, they could lose the house. 

Trust Deeds offer an investment vehicle that is a more conservative real estate play.  You get the security of California real estate (at a really low price) and double-digit returns. 

Please...don't ask me to lie to you

I have had a number of would be borrowers call me up with "scenarios" demanding a good-faith-estimate for loan terms.  "Internet shoppers", cruising online for a mortgage loan, are bewildered when I decline to "compete for their business". 

THEY ARE ASKING ME TO LIE TO THEM and I won't do that.

Morgan Brown, a partner in the Orange County based New Day Mortgage, is a co-contributor to Bloodhound Blog.  He penned a great article called "The New Bait and Switch" which details the most recent shenanigans in mortgage marketing. Originators now offer loan terms based on unrealistic values which preys upon your ego.  Borrowers find out that the independent appraisal process doesn't agree with the originator who feigns surprise at the lower value.  The result?  Changed loan terms.

Don't ask me to lie to you.  I'll gladly prepare  a good faith estimate for you without pulling your credit if you can furnish me with:

1- A tri-merged credit report, dated within 30 days, showing the three credit scores reported by the major credit bureaus. 

2- Income documentation ( your past two years tax returns (fist two pages are fine for the quote)

3- The past two statements showing some liquidity (six payments worth)

My next post will show you how to prepare a "bid package" so you can legitimately shop for mortgage terms.

Is Your Neighbor Moving Inland?

Orange County, CA may be in trouble. The OC is home to the subprime lenders of America. The subprime mortgage market is collapsing like a bluff on a beach in a tsunami. Bubble bloggers dance on the graves of the fallen. What I find amusing is that nobody feels bad for a collapsed lender.  I mean, come on, everyone knows that it's just a bunch of rich people playing with the Wall Street's money, right?

Now Main Street's whitewashed windows and vacant stores
Seems like there ain't nobody wants to come down here no more
They're closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they ain't coming back to your
hometown
Your hometown
Your hometown
Your hometown

Lyrics from My Hometown by Bruce Springsteen

Well, let me tell you a story of the real estate industrial complex of Orange County.  It may not have a happy ending.  Most lending employees are not highly-paid.  Sure, I've mentioned that the subprime wholesale account executives were paid like starting pitchers for the Angels but the bulk of the folks who crank out the loans are the rank and file, clock-punching, lunch-box carrying, worker bees. These are folks who were tossed into an industry some five years ago, learned their jobs by their wits and excelled during booms.  They stayed late, worked on weekends, and sacrificed vacations, to get the job done.

Now they won't have jobs. "The Boss" opined in the mid '80s about industries leaving small towns and the effect on the local economy.  You have to wonder about the effect on the subprime mortgage capital of the country, Irvine in tony Orange County.  Most of the employees came from the Southern California counties of San Diego, Orange, and Los Angeles.  The subprime mortgages were not only originated there, they provided affordability for the starter homes in those counties.

Let's look at the ripple effect:

(1)- lending guidelines tighten so residential mortgage capital is becoming more scarce.

(2)- loans default in record proportions in a lighting-quick time frame

(3)- lenders announce massive layoffs or simply close the doors

(4)- home building starts drop

(5)- construction jobs become less plentiful

I think it's quite possible that we could see an exodus of young, non-college educated people from the coastal Southern California counties to areas like San Bernandino, Riverside, And Kern counties. The average family needs an income of close to $100,000 to afford a starter home in the coastal counties.  The inland counties provide housing options for a family with a $65,000 income.

I know most people won't shed a tear for the "worker bees" that worked for lenders.  I, however, thank you all for your hard work, dedication, and professionalism during a trying decade of lending.  I wish you the best of luck no matter what you pursue.

Orange County, CA may be in trouble. The OC is home to the subprime lenders of America. The subprime mortgage market is collapsing like a bluff on a beach in a tsunami. Bubble bloggers dance on the graves of the fallen. What I find amusing is that nobody feels bad for a collapsed lender.  I mean, come on, everyone knows that it's just a bunch of rich people playing with the Wall Street's money, right?

Now Main Street's whitewashed windows and vacant stores
Seems like there ain't nobody wants to come down here no more
They're closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they ain't coming back to your
hometown
Your hometown
Your hometown
Your hometown

Lyrics from My Hometown by Bruce Springsteen

Well, let me tell you a story of the real estate industrial complex of Orange County.  It may not have a happy ending.  Most lending employees are not highly-paid.  Sure, I've mentioned that the subprime wholesale account executives were paid like starting pitchers for the Angels but the bulk of the folks who crank out the loans are the rank and file, clock-punching, lunch-box carrying, worker bees. These are folks who were tossed into an industry some five years ago, learned their jobs by their wits and excelled during booms.  They stayed late, worked on weekends, and sacrificed vacations, to get the job done.

Now they won't have jobs. "The Boss" opined in the mid '80s about industries leaving small towns and the effect on the local economy.  You have to wonder about the effect on the subprime mortgage capital of the country, Irvine in tony Orange County.  Most of the employees came from the Southern California counties of San Diego, Orange, and Los Angeles.  The subprime mortgages were not only originated there, they provided affordability for the starter homes in those counties.

Let's look at the ripple effect:

(1)- lending guidelines tighten so residential mortgage capital is becoming more scarce.

(2)- loans default in record proportions in a lighting-quick time frame

(3)- lenders announce massive layoffs or simply close the doors

(4)- home building starts drop

(5)- construction jobs become less plentiful

I think it's quite possible that we could see an exodus of young, non-college educated people from the coastal Southern California counties to areas like San Bernandino, Riverside, And Kern counties. The average family needs an income of close to $100,000 to afford a starter home in the coastal counties.  The inland counties provide housing options for a family with a $65,000 income.

I know most people won't shed a tear for the "worker bees" that worked for lenders.  I, however, thank you all for your hard work, dedication, and professionalism during a trying decade of lending.  I wish you the best of luck no matter what you pursue.

Should English Be The Language of Business in America?

I attend various industry group meetings to learn about trends in lending.  One of the big hot buttons in California is the "suitability" of the newer loan programs.  Many borrowers obtained financing with terms that are difficult to understand.  The "teaser rates" of the early part of the decade are starting to adjust and borrowers are getting "trapped" with a higher payment.

Those borrowers are crying foul; they say that they didn't understand the loan disclosures.

Libertarian-leaning man that I am, I questioned whether those borrowers shouldn't have hired an attorney, CPA, financial advisor, etc, to explain the risks and rewards independently of the loan originator. 

"Caveat Emptor !" and all that libertarian-leaning mantra, right?

Well, it turns out that there is a sub-group of the financially clueless who actually may have a case; they didn't understand the loan paperwork because English is not their first language.  Their first language is Chinese, or Vietnamese, or Spanish, or Tagalog, or Russian.  In California, it can be a number of different languages because we are a land of immigrants.  It's one of our strengths in The Golden State.

Good loan originators have solutions to that.  We have an arsenal of already translated loan disclosures for all of the aforementioned languages except Russian.  The borrowers still need to execute their loan disclosures and loan documents in English but we'll give them a good translation if they want it.  I think that makes good business sense and offer it on every loan application now regardless of what their first language appears to be.

I don't want that practice legislated, though.  I'm against that kind of legislation; not for the reasons you might think.  I don't have an "ENGLISH ONLY" bumper sticker on my pick-up truck.  I don't even have a truck.  I'm against a legislative mandate because of we need to have uniformity in business dealings in this country.  It inspires confidence in our markets for investors. 

I've owned property in Puerto Penasco, Mexico.  The closing documents were in Spanish and the developer was wise enough to offer an English translation to them.  I  spent an extra $800 and had the closing documents translated by an independent source.  The translations were slightly different, different enough to cause me pause and clarify a few issues about  my loan.  That turned out to be a VERY good practice because I negotiated  some more favorable terms.

I'm not a xenophobe.  I find the "speak English only" movement in America laughable.  In Europe, people speak 2-3 languages and I think it's wise for Americans to do the same.  I'm moving in that direction at age 41 and pushing my five year old daughter to do so.  Our European cousins have it correct; American's should pursue more than one language in the spoken form.

Business, however, is moving to English as the official language world wide.   California should do the same.

Rent Control - Proposed Increase In Tenant Relocation Fees

Los Angeles Times reports that two Los Angeles City Council committees Tuesday approved an increase in the relocation fees for tenants who lose their apartments to condominium conversions.

The current fees are $3,450 for most tenants and $8,550 for so-called qualified tenants, those older than 62 or disabled. or families with minor children.

The new proposed fees would be:

• For tenants who have lived in their apartments less than five years: $6,810 ($14,850 if they are qualified tenants).

• For tenants who have lived in their apartments more than five years: $9,040 ($17,080 if qualified).

• For tenants whose income is less than 80% of the area median income as determined by the U.S. Department of Housing and Urban Development: $9,040 ($17,080 if they are qualified).

The full council must approve the new fees, but the matter probably won't come up until late March.

Full story at L A Times here

HARD MONEY: What is THAT?

Hard Money Lending is exactly what it sounds like; loans that are hard to do.  Many borrower's needs fall out of the mainstream loan guidelines and they often need a "short-term" fix. 

A private mortgage loan is essentially someone with a lot of money lending to someone who needs it and can't get it from banks or mortgage companies.  Most of my investors are older, retired, well-heeled, and smart.  Investors are sharp and know how to mitigate loss.  They are also quirky and their quirks tend to match up with their life experiences.

Let me give you some examples where hard money loans are appropriate and the type of investors I match up with the loan:

1- Multi-family: Most banks or commercial lenders will not lend over 55-60% on multi-family in Southern California.  The rents don't cover the monthly debt service and expenses.  I have three investors who made a living owning and managing apartment complexes.  They know the "secrets' to undervalued properties that are being leased at below-market rates. They'll lend up to 75% on those properties if they have a decent borrower. 

2- Investor Seconds:  Many investment properties have low fixed-rate loans on them and the owner does NOT want to refinance a 5.25% first just to get money out of the property.  Oftentimes, the investors are "stated-income" borrowers that couldn't get a second mortgage on the investment property.  Maybe they just need $50K for some repairs.  They'll pay 12-15% for that money.  I have seasoned investors that understand that challenge.

3- Small Builders: Small builders are taking it on the nose this year! Their materials costs skyrocketed. They have "runout of money" on their traditional construction loans and are 80-90% completed.  They need maybe $100K to get the over the hump, finish the property and get it sold.  I have retired builders that will look at the property, analyze the costs overrun and lend him the money for a year at 15% with no payments (interest accrues).

4- Small Business Owners: Many times the small business owner can't get a quick loan on his property because his credit scores have dropped (he's maxed out on credit) and he just needs the money for short-term. 

5- Recent Bankruptcy:  We loaned 70% to a physician who was 6 months out of BK.  The seller carried the 30% balance and the doctor got the house.  We knew the worst was behind him (with the BK) and thought he could refinance in a year.  The investor made 10% on his money, the seller got his price, and my borrower refinanced out of the loans in 18 months. The investor, a retired physician, understood how managed care wreaked havoc on general practitioners in San Diego.

Hard Money Lending is exactly what it sounds like; loans that are hard to do.  Many borrower's needs fall out of the mainstream loan guidelines and they often need a "short-term" fix. 

A private mortgage loan is essentially someone with a lot of money lending to someone who needs it and can't get it from banks or mortgage companies.  Most of my investors are older, retired, well-heeled, and smart.  Investors are sharp and know how to mitigate loss.  They are also quirky and their quirks tend to match up with their life experiences.

Let me give you some examples where hard money loans are appropriate and the type of investors I match up with the loan:

1- Multi-family: Most banks or commercial lenders will not lend over 55-60% on multi-family in Southern California.  The rents don't cover the monthly debt service and expenses.  I have three investors who made a living owning and managing apartment complexes.  They know the "secrets' to undervalued properties that are being leased at below-market rates. They'll lend up to 75% on those properties if they have a decent borrower. 

2- Investor Seconds:  Many investment properties have low fixed-rate loans on them and the owner does NOT want to refinance a 5.25% first just to get money out of the property.  Oftentimes, the investors are "stated-income" borrowers that couldn't get a second mortgage on the investment property.  Maybe they just need $50K for some repairs.  They'll pay 12-15% for that money.  I have seasoned investors that understand that challenge.

3- Small Builders: Small builders are taking it on the nose this year! Their materials costs skyrocketed. They have "runout of money" on their traditional construction loans and are 80-90% completed.  They need maybe $100K to get the over the hump, finish the property and get it sold.  I have retired builders that will look at the property, analyze the costs overrun and lend him the money for a year at 15% with no payments (interest accrues).

4- Small Business Owners: Many times the small business owner can't get a quick loan on his property because his credit scores have dropped (he's maxed out on credit) and he just needs the money for short-term. 

5- Recent Bankruptcy:  We loaned 70% to a physician who was 6 months out of BK.  The seller carried the 30% balance and the doctor got the house.  We knew the worst was behind him (with the BK) and thought he could refinance in a year.  The investor made 10% on his money, the seller got his price, and my borrower refinanced out of the loans in 18 months. The investor, a retired physician, understood how managed care wreaked havoc on general practitioners in San Diego.

Real Estate is a Crap Shoot

My hands were sweaty as I nervously darted my eyes around the craps table . I was the pariah because I was “betting on the don’t line“. This particular strategy can be extraordinarily frustrating when a table gets hot. It requires a bettor to double up his stake each time he is incorrect. It takes incredible faith in the mathematical probability of a negative result.

“Seven Out!” yelled the croupier.

Victory, while inevitable, doesn’t really feel that sweet. I risked $2500 to win five bucks. I proved my strategy to the reckless gamblers betting the other way. I yelped exuberantly, not for my intellectual superiority, but in relief that my bet, the family vacation money, hadn’t disappeared. While I was yelping, the players at my table were pocketing pink and black chips and cheering raucously. Confused, I learned that they were collecting chips every time those dice hit various numbers on the way to making ten straight points .

Now craps may seem like a poor analogy to the real estate market. It really isn’t.

I know that craps, a loaded game of chance, always favors the house no matter what strategy you employ. Real estate is a loaded game of chance; the best thing about it is that it is loaded in the owner’s favor. The “MySpace Generation” and the immigrant population are entering the housing market in the next 10 years. The demographics are astoundingly favorable, especially for the sunbelt states.

I think all the bubbleheads and doom pundits should yelp. You were absolutely correct this year. 2006, perhaps part of 2007, will be the year (s) of the bubbleheads. Gloat! Wipe your brow with confidence in your marked intelligence. I commend you for your prowess. You had to be correct one of these years; you had mathematics on your side. Take a look around. Your neighbor sold that rental property in Anaheim and lost $30,000. So why, like the gamblers betting on the come line, is he cheering ?. He is cheering because he still has rental properties in Albuquerque, Salt Lake City, and Bakersfield.

Now that I’ve commended you, I must warn you of something. You really don’t want a 30% decline in housing prices because every financial asset you have will be devalued . If you’re stashing your cash in the local bank, it will be gone because the bank will collapse. The FDIC will not weather a bailout without significant tax increases. Stocks will sink and mortgage-backed securities will be worthless setting your well-diversified, employer-sponsored 401(k) account back to it’s 1984 value. Think of the big picture bubbleheads. Isn’t that a huge price to pay for bragging rights?

2007 should be the year you stop gloating and start asking the tough questions about how YOU can profit off the changing markets. It is far more courageous to ask those questions than to post argumentum ad hominum under a pseudonym (although I secretly enjoy the mindless banter).

The real estate market, like a cold craps table, will quickly get hot.. History and demographics dictate that this table will have a lot of winners on it.

I hope you’ll get prepared for the big roll.

Hard Money: Apartment Loans

One arena where hard money can be helpful is to get a quick loan, in second lien position,  against a multi-family property. There is a tremendous need in California for that right now because so many multi-family property owners have low-rate first mortgages at 50-60% loan-to-value (LTV) that were made some years ago. There are two major reasons why the multi-family property owner is reluctant to refinance the first lien to a larger amount:

1- They have a great rate on the first mortgage.  Rates for buildings purchased in 2003 or 2004 were term loans with a note rate below 5.5%; today those rates are 6.5% or higher.

2- They have a very restrictive prepayment penalty on the first mortgage.  The more common prepayment penalty is offered as a declining penalty over 3-5 years.  Commercial Mortgage Backed Securities (CMBS) have a much more restrictive prepayment penalty referred to as yield maintenance or defeasance. Simply put, the borrower must guarantee the lender (who in turn guarantees the investor) a yield for a specific term; this can be much more costly than the declining penalty.  Why would someone borrow money with yield maintenance as a prepayment penalty?  They received a much lower rate. 

We recognize two things in the multi-family market in Southern California:

1- Multi-family properties are undervalued when analyzed on a per-unit basis.   High land costs and rising construction costs make existing properties that have utility as a potential conversion to condominiums valuable.  Condominiums can fetch as and average of $300,000 in San Diego County.  Many times we'll try to loan up to 60% of the future value of a conversion.

2- Multi-family properties have rising yield potential.  There still is a housing shortage in the lower end of the market in Southern California.  Vacancy rates are falling and average rents are rising. We'll try to extrapolate how an existing owner might "reset" the rents to reflect the market if the property is improved and deferred maintenance is performed.  We'll analyze the debt-service coverage ratio (DSCR) and lend on a 1.0 coverage using "market" rents or future value of rents.

READ: Multi-Family Lenders Are Liars ( or are they?)

Why would a borrower with good credit and equity borrow money at 13-14% ?

The answer is that nobody else funds second mortgages on multi-family properties; we will.  Many of our private lenders owned multi-family properties in their more aggressive investing years so they understand the property type. 

Sometimes, a multi-family property owner is looking for some quick money for 1-2 years.  The amount they need is not much in relation to the first lien and value.  Borrowers with a CMBS mortgage often find that the high costs and rates associated with our loans are actually quite a bargain when compared to a full refinance of the first lien.

READ:  "Hard Money" makes sense for good credit borrowers

One arena where hard money can be helpful is to get a quick loan, in second lien position,  against a multi-family property. There is a tremendous need in California for that right now because so many multi-family property owners have low-rate first mortgages at 50-60% loan-to-value (LTV) that were made some years ago. There are two major reasons why the multi-family property owner is reluctant to refinance the first lien to a larger amount:

1- They have a great rate on the first mortgage.  Rates for buildings purchased in 2003 or 2004 were term loans with a note rate below 5.5%; today those rates are 6.5% or higher.

2- They have a very restrictive prepayment penalty on the first mortgage.  The more common prepayment penalty is offered as a declining penalty over 3-5 years.  Commercial Mortgage Backed Securities (CMBS) have a much more restrictive prepayment penalty referred to as yield maintenance or defeasance. Simply put, the borrower must guarantee the lender (who in turn guarantees the investor) a yield for a specific term; this can be much more costly than the declining penalty.  Why would someone borrow money with yield maintenance as a prepayment penalty?  They received a much lower rate. 

We recognize two things in the multi-family market in Southern California:

1- Multi-family properties are undervalued when analyzed on a per-unit basis.   High land costs and rising construction costs make existing properties that have utility as a potential conversion to condominiums valuable.  Condominiums can fetch as and average of $300,000 in San Diego County.  Many times we'll try to loan up to 60% of the future value of a conversion.

2- Multi-family properties have rising yield potential.  There still is a housing shortage in the lower end of the market in Southern California.  Vacancy rates are falling and average rents are rising. We'll try to extrapolate how an existing owner might "reset" the rents to reflect the market if the property is improved and deferred maintenance is performed.  We'll analyze the debt-service coverage ratio (DSCR) and lend on a 1.0 coverage using "market" rents or future value of rents.

READ: Multi-Family Lenders Are Liars ( or are they?)

Why would a borrower with good credit and equity borrow money at 13-14% ?

The answer is that nobody else funds second mortgages on multi-family properties; we will.  Many of our private lenders owned multi-family properties in their more aggressive investing years so they understand the property type. 

Sometimes, a multi-family property owner is looking for some quick money for 1-2 years.  The amount they need is not much in relation to the first lien and value.  Borrowers with a CMBS mortgage often find that the high costs and rates associated with our loans are actually quite a bargain when compared to a full refinance of the first lien.

READ:  "Hard Money" makes sense for good credit borrowers

Borrow Money Like You Would Buy A Cell Phone

How is borrowing money like  buying a cell phone?

I'm going to share a funny personal story with you.  I just bought a cell phone the other day. Now,  read on because it has a LOT to do with how to get good mortgage terms.

This was a big thing for me because I bought a real bad-ass cell phone. It's the LG CU500, the first HSDPA compatible UMTS handset for the US, and probably the first to be offered by Cingular.

Now I have no idea what I just cut and pasted about my cell phone but I know the thing cooks.  The interesting part is I am a long-time cell phone user.  I go back to the days when you threatened to leave your carrier and they gave you a free phone.  PAYING for the handset was a never an option for me.  I've been a ATT Wireless (now Cingular) customer for years so I logged on to the website and started my search.  I found 2-3 phones I like,and marched into the Cingular store , prepared to do battle.  Guess what?  It costs about 50-$100 dollars more to buy the phone in the store than online.  And that's perfectly fine with me because it is definitely worth it.

The moral of the story is this: We don't buy products, We buy solutions.  Solutions are best provided by people and not a URL.

So how does this relate to the online versus in-person mortgage origination ?  It's actually quite simple.  You'll never get the rate/terms you think you will get online.  In fact, you might even get a better rate/terms.  I paid more for my cell phone but I am convinced that the VALUE I received far exceeds the dumb choice I made for myself. 

The mortgage industry, even when practiced with complete transparency, is not a simple choice anymore.  There are tons of mortgage programs available with various ways to get approved.  A seasoned mortgage professional is always going to deliver the better loan solution for you than an online purveyor of products will.  So why would you go online to shop for mortgage terms?

Online mortgage shopping gives you a reference point.  It gives you an education about what mortgage lenders look for when approving loans.  A seasoned mortgage professional loves educated consumers because they take up less of her valuable time.  If time equals money (it does) and you can save an originator time, you'll get a fair shake and pricing that is real similar to the "deals" being quoted. 

The "shenanigans" we hear so much about often come from unrealistic expectations and a lack of cooperation from borrowers.  When a borrower starts playing a cat and mouse game with originators, it results in a declined loan application.  We had this experience this past week.  The borrower didn't get us his rental payment check copies until 4 days before the closing date on his new home.  Why?  He was habitually late these past 12 months with his rent although he claimed to have a perfect rental history..  His loan was declined.  Can we approve him on another program for a higher rate?  Of course but the originator doesn't want to start all over again.  The Realtor requested that our originator charge the borrower more money to compensate him for his time. Presented with that option, our originator gladly started the SECOND loan package for the deceitful borrower.

Go to www.bankrate.com and be brutally honest with yourself as you enter the "compare local mortgage rates" function. Enter information that is similar to your financial status, the property type you are financing, and the type of loan product  you think you want.  Print it out and go to a local mortgage originator's office with the expected documentation.  Ask the broker about her compensation, and whether she can offer similar terms.  I think you'll find you get good advice, fair terms, and a better understanding of how the mortgage market works.

It worked for me and my new cell phone.

The Power of an Annual ARM

       Why should you ALWAYS get a one year ARM rather than "locking" into a 30 year fixed rate loan?  The easiest answer is that you will NEVER be able to accurately predict interest rates.  Did you know that Wall Street gurus are wrong over 60% of the time with their interest rate projections over a 3-5 year timeframe?  What makes you think you know better than them ?

Did you know that over a five year period of time, the one year ARM has always outperformed a 30-year fixed rate loan?   That statistic has held true for over 40 years. What that means is that your average interest cost for a five year period was less with a one year ARM, than with a traditional 30 year fixed-rate loan..  Let's look at the last five years and compare a LIBOR plus a 2.25% margin ARM to a 30 year fixed rate loan:

Let's assume a customer secured a 30 year fixed rate loan in October, 2001.  They would have gotten a rate of 6.75% for a $200,000 loan.  Now let's assume they refinanced in the summer of 2003 to a 5.5% rate and paid out $3,000 in closing costs.  How much interest (and costs) would they have paid until today? $1125/month times 20 months PLUS $3000 closing costs PLUS $916/month times 40 months.  A total of  $62140 in interest and costs.  Good thing they refinanced because if they hadn't that figure would be closer to $67,500.

Now, let's look at the one year ARM:  They would have had a rate for the first year at 5.0% or paid $10,000 in interest.  The second year, their interest rate would have jumped to 5.75% costing them $11,500.  The third year would have been nice, they would have been at 4.5% costing them $9,000 in interest.  The fourth year at 5.50% costing them $11,000.  Finally, this year, their rate would have climbed to 6.75% costing them $13,500 (the inverted yield curve, while temporary, was brutal this past year).  Total costs...$55,000.

Will this trend continue?  Absolutely.  Their rate will be set around 7% this year and that will be difficult.  Inverted yield curves don't last forever, in fact, they usually precede a period of rapidly declining interest rates of 2% or more in a 6-12 month period. This means we start the cycle all over again at a sub 5% rate next year.

How about for jumbo loans?  Here's where it gets even more advantageous to have a one year ARM. You see, ARMs favor big borrowers.  It is possible to get a LIBOR plus 1.75% margin loan for a jumbo where the 30 year fixed has a "jumbo premium" of .25% higher  to the rate.

Why don't people borrow with annual ARMs then?  People always compare the annual ARM rate to their last one year period; that context is unfair.  It makes sense to analyze a loan for the average holding period (3-7 years) rather than compare over a one year timeframe. Check with a local mortgage professional. He or she can show you the 40 year charts, explain how ARMs are priced, and give you some great advice.

Another lie from mortgage companies

I am continually amazed at the misrepresentations mortgage companies use when advertising.
It  is absolutely impossible to advertise best or lowest rates, truthfully.

Let me give you an example:

1- Go to google and enter in quotes:  "lowest mortgage rates"- 519,000 hits
2- Now enter in quotes: "lowest mortgage rates"+california- only 243,000 hits...that's better.
3- Finally, enter in quotes: "lowest mortgage rates"+san diego down to 109,000 hits..wunderbar!

Now let's shop for the lowest rate and call every one of the 109,000 entries and verify the terms of the "lowest mortgage rate".  It will take me 545 days to get through all of the entries for "lowest mortgage rate"+san diego. 

Do you think that the lowest rate might have changed in a year and a half?

So...advertising that claims the "best" or "lowest" rates has a 1 in 109,000 chance of being correct; the other 108,999 entries are published liars. Next week, I'll tell you how to "shop" for a mortgage.

I am continually amazed at the misrepresentations mortgage companies use when advertising.
It  is absolutely impossible to advertise best or lowest rates, truthfully.

Let me give you an example:

1- Go to google and enter in quotes:  "lowest mortgage rates"- 519,000 hits
2- Now enter in quotes: "lowest mortgage rates"+california- only 243,000 hits...that's better.
3- Finally, enter in quotes: "lowest mortgage rates"+san diego down to 109,000 hits..wunderbar!

Now let's shop for the lowest rate and call every one of the 109,000 entries and verify the terms of the "lowest mortgage rate".  It will take me 545 days to get through all of the entries for "lowest mortgage rate"+san diego. 

Do you think that the lowest rate might have changed in a year and a half?

So...advertising that claims the "best" or "lowest" rates has a 1 in 109,000 chance of being correct; the other 108,999 entries are published liars. Next week, I'll tell you how to "shop" for a mortgage.