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.
Monday, June 14, 2010
Thursday, June 10, 2010
The Oil controversy and more
Should I dare mention the oil spill? Its on everyone's topic of conversation, just like the OJ simpson trial, or Monica Lewinsky, or....I don't know, just about anything the press can get their hands on. The fact is that this oil spill will affect our Houston economy. Somehow, someway.
A few topics for today:
There is another reason why you should claim all your income on your taxes and not fudge write offs! (other than the obvious, it’s the right thing to do). (1) You need to show income to get a mortgage loan (2) if you want BP to reimburse you for lost wages, like they are doing in Florida to realtors that have claimed lost wages on beach rental. You see, BP is reimbursing fisherman, restaurants, realtors, just about anybody. So to prove wages, if you are self employed, many of them have to shore up tax returns to show income. Uh oh, you say! Where is the income? Good for BP, bad for the person wanting the handout.
Boy these RATES are nice. I am not sure if they are going anywhere soon. Between the European crisis, the oil spill, and unemployment tanking the stock market today, seems that troubled times and uncertain times are ahead. Making investors skiddish, and looking for the safe haven of bonds to put their cash. Remember, when the stock market is not doing well, bonds are, so that pushes mortgage rates down.
If you have a closing at the end of June that is NOT expecting the tax credit, beware! Lenders and title companies are swamped trying to meet deadlines for the flood of business that needs to make the deadline of June 30. Would you want your buyer to miss the credit? So when push goes to shove, look for lenders and underwriters to choose the tax credit files over yours to push to the head of the line. TALK WITH THE BUYERS LENDER NOW. Be on top of them on the timeline. Most of all, prep the buyers and sellers that there may be delays. Hopefully you thought ahead and did not schedule your closing for June 30 anyway.
Flood insurance is temporarily unavailable - AGAIN! Until Congress reconvenes next week, there are no approved funds. Many lenders (like Patriot) are allowing closings where the application and premium have been paid. Hopefully your transactions are not affected. My only lingering question is (1) How could Congress leave session without approving funds AGAIN! and (2) Why did they only approve flood for 45 days the last time this happened? Will we be going through this every 60 days? What a dilemma. Once again, we are powerless against these forces which we cannot change (in the short term). As I have mentioned before, get involved with your lobby, or the topics you believe in. It’s the only way we will change things. If we don’t get involved, than can we ever expect change?
A few topics for today:
There is another reason why you should claim all your income on your taxes and not fudge write offs! (other than the obvious, it’s the right thing to do). (1) You need to show income to get a mortgage loan (2) if you want BP to reimburse you for lost wages, like they are doing in Florida to realtors that have claimed lost wages on beach rental. You see, BP is reimbursing fisherman, restaurants, realtors, just about anybody. So to prove wages, if you are self employed, many of them have to shore up tax returns to show income. Uh oh, you say! Where is the income? Good for BP, bad for the person wanting the handout.
Boy these RATES are nice. I am not sure if they are going anywhere soon. Between the European crisis, the oil spill, and unemployment tanking the stock market today, seems that troubled times and uncertain times are ahead. Making investors skiddish, and looking for the safe haven of bonds to put their cash. Remember, when the stock market is not doing well, bonds are, so that pushes mortgage rates down.
If you have a closing at the end of June that is NOT expecting the tax credit, beware! Lenders and title companies are swamped trying to meet deadlines for the flood of business that needs to make the deadline of June 30. Would you want your buyer to miss the credit? So when push goes to shove, look for lenders and underwriters to choose the tax credit files over yours to push to the head of the line. TALK WITH THE BUYERS LENDER NOW. Be on top of them on the timeline. Most of all, prep the buyers and sellers that there may be delays. Hopefully you thought ahead and did not schedule your closing for June 30 anyway.
Flood insurance is temporarily unavailable - AGAIN! Until Congress reconvenes next week, there are no approved funds. Many lenders (like Patriot) are allowing closings where the application and premium have been paid. Hopefully your transactions are not affected. My only lingering question is (1) How could Congress leave session without approving funds AGAIN! and (2) Why did they only approve flood for 45 days the last time this happened? Will we be going through this every 60 days? What a dilemma. Once again, we are powerless against these forces which we cannot change (in the short term). As I have mentioned before, get involved with your lobby, or the topics you believe in. It’s the only way we will change things. If we don’t get involved, than can we ever expect change?
Thursday, May 27, 2010
Define your purpose
My coach assigned homework this week of ‘what is my purpose? Well gee, I don’t know. To make money? No…besides that (he said). What is the reason you get out of bed in the morning, and what are the things that motivate you to do what you do? Is it to support family? Contribute to the world via charity? Is it to support a family member? Or all of the above? So he challenged us to come up with specific, concrete items. I have 2 weeks. Thank goodness. This will require some thought. What is your purpose? Have you defined that lately?
In the market news:
· Stocks are down 10% from their peak, and has eased mortgage bonds (interest rates) a bit. We expect more correction, so keep an eye out
· This week the Senate passed sweeping legislation on financial reform to correct the 2008 crisis. Many of these items, if passed will have negative impacts on not only mortgage companies (so look for our margins/yields to increase) but also the consumer. Increased regulation and change means (a) more paperwork (b) more cost to mortgage companies, ie, to the consumer, and (c) mass confusion – nothing new these days! As things are approved, I will educate you on the changes. Of the 326 proposals, we don’t know which ones will survive in their current form.
· As of June 1, Fannie Mae is requiring MORE screening for lenders to perform in their QC. We must repull the credit report within 24 hours of closing, to verify no new debt has been obtained, or , if credit scores are lower. If there are changes, this could DELAY the closing, while additional conditions may have to be obtained by the borrower. In addition, we have to verify additional verifications of the borrowers occupancy plans for the property, as well as the social security number directly with the SS office. Oh yes, also, the W-2 transcripts for all borrowers, employed or self employed (used to be self employed only). Oh, and business tax returns. We used to only need those on Jumbo borrowers, but now, need them on conventional too. And….get IRS transcripts on those too. Do you have a headache yet?
· All this extra compliance sums up to one thing: Cost. The consumers will end up paying some how, for the increased legislation and regulatory requirements.
Bottom line: hang in there. Patriot Bank Mortgage is here to see you through all the changes, and continue to make things streamlined for your borrowers with our in house processing, underwriting and closing- we get the job done , accurately and on time.
In the market news:
· Stocks are down 10% from their peak, and has eased mortgage bonds (interest rates) a bit. We expect more correction, so keep an eye out
· This week the Senate passed sweeping legislation on financial reform to correct the 2008 crisis. Many of these items, if passed will have negative impacts on not only mortgage companies (so look for our margins/yields to increase) but also the consumer. Increased regulation and change means (a) more paperwork (b) more cost to mortgage companies, ie, to the consumer, and (c) mass confusion – nothing new these days! As things are approved, I will educate you on the changes. Of the 326 proposals, we don’t know which ones will survive in their current form.
· As of June 1, Fannie Mae is requiring MORE screening for lenders to perform in their QC. We must repull the credit report within 24 hours of closing, to verify no new debt has been obtained, or , if credit scores are lower. If there are changes, this could DELAY the closing, while additional conditions may have to be obtained by the borrower. In addition, we have to verify additional verifications of the borrowers occupancy plans for the property, as well as the social security number directly with the SS office. Oh yes, also, the W-2 transcripts for all borrowers, employed or self employed (used to be self employed only). Oh, and business tax returns. We used to only need those on Jumbo borrowers, but now, need them on conventional too. And….get IRS transcripts on those too. Do you have a headache yet?
· All this extra compliance sums up to one thing: Cost. The consumers will end up paying some how, for the increased legislation and regulatory requirements.
Bottom line: hang in there. Patriot Bank Mortgage is here to see you through all the changes, and continue to make things streamlined for your borrowers with our in house processing, underwriting and closing- we get the job done , accurately and on time.
Monday, May 10, 2010
Drama abounds
Drama ensued this past week. I don't mean the Citi broker that "accidentally" sold 1 billion shares of Proctor and Gamble on Thursday, sending stocks tumbling (that’s the story I heard)- but my 4 year old pushed a girl at school. That is real drama! The crying went on and on when I would not let him watch Dinosaur Train while I cooked dinner. That’s the punishment. He acts up at school, I take things away that he likes. He said I was mean and he didn't love me anymore. Poor thing. Doesn't he know that crying does not fix the punishment? So we sat and hugged, and talked about what he did, and not being a bully, etc... And ended the night with his favorite dinner: peanut butter and jelly. That made everything ok. He took it like a champ, and hopefully will not push, shove, bite, hit or pinch at school ever again. Can I only dream?
So back to the stocks. The Dow lost 900 points in 5 minutes last week, then began to rebound Thursday only ending down 348 points. Rates eased (went down) (stocks down, bond prices up, bond yields (rates) down). Today, we feared rates would go back up, as news of better jobs was expected. That IS what we got (better than expected payroll numbers), however, stocks remained low, as the fear and uncertainty of the Greek economy still looms over the market and the European Union.
Oh, and to top it off, Freddie Mac needs another few billion (yes, BILLION) to recover from losses. They lost 8 billion the first quarter of 2010. Now that doesn't sound good does it? But wait.....Freddie Mac's CEO assures investors and the government that things are turning around. That could be true, as we are seeing business increase month by month as consumer confidence returns to the market. Not to mention jobs. But, do we think they can keep rates low if they (Freddie Mac) are losing money every month? Its called ' padding the margin'. That is my theory and pure speculation on my part. What do I know? We may see the investors wanting higher margins (profit) for the loans that they do make. Only time will tell, but do enjoy these low rates while they last.
So back to the stocks. The Dow lost 900 points in 5 minutes last week, then began to rebound Thursday only ending down 348 points. Rates eased (went down) (stocks down, bond prices up, bond yields (rates) down). Today, we feared rates would go back up, as news of better jobs was expected. That IS what we got (better than expected payroll numbers), however, stocks remained low, as the fear and uncertainty of the Greek economy still looms over the market and the European Union.
Oh, and to top it off, Freddie Mac needs another few billion (yes, BILLION) to recover from losses. They lost 8 billion the first quarter of 2010. Now that doesn't sound good does it? But wait.....Freddie Mac's CEO assures investors and the government that things are turning around. That could be true, as we are seeing business increase month by month as consumer confidence returns to the market. Not to mention jobs. But, do we think they can keep rates low if they (Freddie Mac) are losing money every month? Its called ' padding the margin'. That is my theory and pure speculation on my part. What do I know? We may see the investors wanting higher margins (profit) for the loans that they do make. Only time will tell, but do enjoy these low rates while they last.
Monday, May 3, 2010
The urgency of business
"Drive Now, Text/Phone Later". That is what the marquis on 610 said today. I saw it twice. So I tried it for about 10 minutes. Pure silence. I did not even have the radio on. It was grueling! Is there such a thing as talkers anonymous? I sadly admit that I am one of them, that drives down the freeway with (at least) BOTH hands on the wheel (and I use a headset). But I must say, I know I need to stop. Its dangerous. So far I have been lucky, but do not want to learn my lesson the hard way. What is it about our society that demands such instant gratification that we must talk and respond to email immediately? We just cannot wait to reply. Its good customer service, right? But is it really if you are risking the lives of others at the same time? Just something for you to think about over the weekend.........
Speaking of instant gratification, what about in the stock market? I remember the days (15 years ago) when I began originating loans, rates changed only 2-3 times a week. Also, Credit reports still took 4 hours to generate, and came printed out on the glossy, scroll fax paper! Now rates change 2-3 times a day! Depending what investors see on CNN the last hour (literally). Information is changing at warp speed. This makes it even more difficult to quote rates, lock loans, and execute anything! You need to be sure your loan officers are skilled and knowledgeable. Your clients experience depends on it!
Rates were pretty flat this week. Monday will be interesting (possibly lower rates?), as the results of today were that the stock market fell from the news of Goldman Sachs credit downgrade and criminal investigation became official. Also the continuing bad news of the oil spill in the Gulf. Galveston beach anyone?
Speaking of instant gratification, what about in the stock market? I remember the days (15 years ago) when I began originating loans, rates changed only 2-3 times a week. Also, Credit reports still took 4 hours to generate, and came printed out on the glossy, scroll fax paper! Now rates change 2-3 times a day! Depending what investors see on CNN the last hour (literally). Information is changing at warp speed. This makes it even more difficult to quote rates, lock loans, and execute anything! You need to be sure your loan officers are skilled and knowledgeable. Your clients experience depends on it!
Rates were pretty flat this week. Monday will be interesting (possibly lower rates?), as the results of today were that the stock market fell from the news of Goldman Sachs credit downgrade and criminal investigation became official. Also the continuing bad news of the oil spill in the Gulf. Galveston beach anyone?
Thursday, April 29, 2010
interest rates and credit scores and the economy, oh my!
As usual, this week was jam packed with news.
Rates are steady, and I have seen some revised forecasts for rates that anticipate 5.5% by year end. That is revised downward from the 6.5% I had previously heard. The reason? (1) Problems in Greece, Portugal, Spain, and Italy (2) the EU issues have caused a 'flight to quality' for investors that now are once again considering the US stock market a sound investment (3) Continued unemployment issues and stalled recovery (4) For the first time in history, mortgage backed securities are showing signs of written policies and procedures on how to trade them. This means regulation and oversight just may be working, as investors begin to regain confidence in our market.
***You can find out more about forecast of interest rates on www.financialforecast.org
Today's news (www.cnnmoney.com) was plagued with articles on the unemployment debate (99 weeks and counting) and new home sales regaining ground at the fastest pace in 47 years. Its catchy headlines like this that catch investors 'already challenged' attention spans. Read further, and you will be confused! Mixed signals from recovery in the housing market, to unemployed persons for 2 years and counting. In the end, the big picture is that we may enjoy these steady rates a bit longer. Who really knows though? That is my official disclaimer by the way.
Did you know.......................Fair Isaac (inventor if the FICO score) released a bit of the curtain this week and actually gave some insight to credit scores and how they may be affected by a foreclosure or short sale. 85-160 points. A bankruptcy is 130-240 points. All depends, of course, on your overall credit, and did furthermore say that those with an 800 score (one of the best) are the most at risk when an event like this happens (foreclosure, short sale, bankruptcy). You can read the article on www.cnnmoney.com
Quote from Jim Rohn: “Success is no more than a few disciplines practiced every single day”.
Monday, April 19, 2010
Discipline
The MS 150 was this weekend (watch the traffic on I-10 West!). My husband, Fernando, is riding for the first time. He has been training like a madman, working out 2 hours a day. Also, next weekend he is competing in his 4th sprint triathlon in Galveston! Am I married to a crazy man?! It’s quite interesting living with someone that can be so disciplined and driven. Having 2 of us in the household that are focused can be challenging at times. But all joking aside (really I am not)....good luck to you Fernando! You are my superhero.
Just like athletes, realtors and loan officers need discipline, training and focus. If not, what good would we be to our clients? What are you doing to improve your discipline? Personally, I have implemented in the last 6 months new tracking forms, daily disciplines, hired an additional assistant and hired a coach that coaches realtors and lenders specifically (The Core Training). We have already seen an increase in business as a direct result. Our goal is to create ‘Raving Fans’ of our clients and realtors! I know it’s working!
Quote from Jim Rohn: “Success is no more than a few disciplines practiced every single day”.
News You Can Use:
Rates: Ended the week on a great note with the announcement of the Goldman Sachs fraud charge. Bonds love scandal and bad news. The stock market took a nose dive, and ‘chaching!’ bond prices increased, leaving mortgage rates at nice levels for a Friday.
Is the Cap and Trade Energy Bill really true? This is HR 2454 that requires existing homes must meet new energy standards before they can be resold. According to Snopes.com : FALSE! The bill (not even passed by Senate yet) offers financial incentives for homeowners that do so, but does not mandate any such thing.
Will FHA go to 5% down minimum? No concrete approval of this yet. There are rumors, but I am not sure that HUD would be that daring. Would they? What REALLY is the difference between 3.5% and 5.0% anyway?
Can you get a FHA loan with a 580 min. score? Technically: YES. FHA publishes this is their ‘minimum credit score’. In REALITY: NO. Investors have what are called overlays. They chop and amend guidelines as they see fit. In this case, 99% of the investors require 620 score. But ask yourself, does a 580 credit score really deserve to buy a home right now?
Can the homebuyer credit be used at closing toward down payment? Again, Technically, Yes. Obama’s feel good plan at work. REALITY: no. There needs to be a local government agency to implement /advance the money. To date, I have heard of not one lender that has closed one. Have you? We encourage our clients to file an amended tax return immediately after closing, and they get the money in 4-6 weeks. That is what we call ‘sweet!’
Is HVCC really going away? It is supposed to ‘sunset’ in October 2010. However, most investors will probably keep the practice, just ‘because’. There are legislators trying to end the practice (ex: Congressman Childers), but nothing has been set in stone. (At Patriot, we have our own ‘short list’ and we rotate from that- we DO NOT use appraisal management companies! This is just one of the benefits of using us for your mortgage needs!)
Now….the million dollar question: Will the Tax Credit be Extended?……………drumroll……………ONLY for military personel that have served at least 90 days out of the US in the last year. The credit is extended 1 year. How is that for a specific demographic?
Hope you had a fantastic weekend! It was raining, so maybe you had time to get some projects done around the house. Stay disciplined!
Just like athletes, realtors and loan officers need discipline, training and focus. If not, what good would we be to our clients? What are you doing to improve your discipline? Personally, I have implemented in the last 6 months new tracking forms, daily disciplines, hired an additional assistant and hired a coach that coaches realtors and lenders specifically (The Core Training). We have already seen an increase in business as a direct result. Our goal is to create ‘Raving Fans’ of our clients and realtors! I know it’s working!
Quote from Jim Rohn: “Success is no more than a few disciplines practiced every single day”.
News You Can Use:
Rates: Ended the week on a great note with the announcement of the Goldman Sachs fraud charge. Bonds love scandal and bad news. The stock market took a nose dive, and ‘chaching!’ bond prices increased, leaving mortgage rates at nice levels for a Friday.
Is the Cap and Trade Energy Bill really true? This is HR 2454 that requires existing homes must meet new energy standards before they can be resold. According to Snopes.com : FALSE! The bill (not even passed by Senate yet) offers financial incentives for homeowners that do so, but does not mandate any such thing.
Will FHA go to 5% down minimum? No concrete approval of this yet. There are rumors, but I am not sure that HUD would be that daring. Would they? What REALLY is the difference between 3.5% and 5.0% anyway?
Can you get a FHA loan with a 580 min. score? Technically: YES. FHA publishes this is their ‘minimum credit score’. In REALITY: NO. Investors have what are called overlays. They chop and amend guidelines as they see fit. In this case, 99% of the investors require 620 score. But ask yourself, does a 580 credit score really deserve to buy a home right now?
Can the homebuyer credit be used at closing toward down payment? Again, Technically, Yes. Obama’s feel good plan at work. REALITY: no. There needs to be a local government agency to implement /advance the money. To date, I have heard of not one lender that has closed one. Have you? We encourage our clients to file an amended tax return immediately after closing, and they get the money in 4-6 weeks. That is what we call ‘sweet!’
Is HVCC really going away? It is supposed to ‘sunset’ in October 2010. However, most investors will probably keep the practice, just ‘because’. There are legislators trying to end the practice (ex: Congressman Childers), but nothing has been set in stone. (At Patriot, we have our own ‘short list’ and we rotate from that- we DO NOT use appraisal management companies! This is just one of the benefits of using us for your mortgage needs!)
Now….the million dollar question: Will the Tax Credit be Extended?……………drumroll……………ONLY for military personel that have served at least 90 days out of the US in the last year. The credit is extended 1 year. How is that for a specific demographic?
Hope you had a fantastic weekend! It was raining, so maybe you had time to get some projects done around the house. Stay disciplined!
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