Mixed Signals

Another week survived in the mortgage industry! Actually, its not that hard to survive. You just do the right thing, return calls ALWAYS, and give bad news early. Communicate. That can’t be that hard, can it? At Patriot Bank Mortgage, we like to think we do that exceptionally well. My team and I proactively call /email borrowers and both agents on the transaction once per week, to update them on the progress. If you could use that kind of service from your mortgage lender, call us, we are happy to talk to you about how best to work together.

I had lunch with Mike Inselmann this week. A rare treat to have one on one time with the most well known Houston economists (in my opinion a pure genius). We talked of course about the business (after kids and grandkids). He was very interested to hear a lenders story on what we go through, and I naturally got his take on things. Bottom line, we concluded that the pendulum has swung in the complete opposite direction, BUT ….things will lax. It may take a few years, but shouldn’t lenders have cared about proving income years ago? I mean really, does it make much sense to say to a borrower ‘OK, we are just going to take your word for it that you make xxx dollars and have xxx in the bank’. Where did we as a society think that was ever fair to take a ‘just because you said so’ attitude?

Congress passed an increase in the FHA monthly premium this week from .55% to .9%. On a $170,000 transaction, that will cost a borrower $42/month. For some borrowers, that will make the difference between qualifying and not qualifying. The increase is due to the fact that FHA needs revenue. They are losing money due to foreclosures, and this is one way to get it. Make the innocent consumers to pay. I think I will stop here, because being 35 weeks pregnant, I can’t get all riled up on this issue. Don’t get me started.

Retail sales came out today the lowest in 8 months (1.2% decline). However consumer sentiment has improved. Once again, mixed signals. Time will only tell how the stock market and bond market will react. For now, rates remain low, and if your buyers are sitting on the fence, they might want to consider buying now while rates are still low. They most surely will eventually go up. That is for sure….like taxes.