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.
Thursday, May 27, 2010
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!
Monday, April 12, 2010
Be your own super hero
My four year old, Diego, asked me the other day " Mommy, are superheroes real?" . Hmmmm. What should I tell him? Do I keep the spirit alive as we do with Santa? Or do I tell him the truth, so he won’t go jumping off buildings thinking that his spider web will shoot out of his wrist? I chose the latter. Break it to him now.
There really are SUPER HEROES though! Every day, we deal with that super closer at title that goes the extra mile to keep our deal together, or in our case, our underwriters at Patriot! God love them. They stay late, they work Saturdays when needed, and they sign off on conditions just minutes before closing so we can fund on time. In my book, that qualifies as a super duper hero. But some days, they can also be villains, making our life hard with conditions and paperwork and this and that. Villains!!!!!!! Worse than the Green Goblin himself! But its not their fault. Its the Big Daddy Fannie Mae and HUD that make these regulations. Underwriters are just the messenger. WHO ARE these guys anyway? Is it a board of suits sitting around a conference table spitting out do's and don'ts for millions of potential homeowners to comply with? Probably. That sure is refreshing.
So that is my job description now, shielding my clients and realtors from the painstaking regulatory requirements that lenders force on us. Does this make me a super hero? (SMILE) Some food for thought: What can you do for your clients to make you their super hero? Its a catchy concept, and one that can improve the homebuyers experience in this crazy, villainous world! That is my motto for 2010- BE A SUPERHERO for my clients.
There really are SUPER HEROES though! Every day, we deal with that super closer at title that goes the extra mile to keep our deal together, or in our case, our underwriters at Patriot! God love them. They stay late, they work Saturdays when needed, and they sign off on conditions just minutes before closing so we can fund on time. In my book, that qualifies as a super duper hero. But some days, they can also be villains, making our life hard with conditions and paperwork and this and that. Villains!!!!!!! Worse than the Green Goblin himself! But its not their fault. Its the Big Daddy Fannie Mae and HUD that make these regulations. Underwriters are just the messenger. WHO ARE these guys anyway? Is it a board of suits sitting around a conference table spitting out do's and don'ts for millions of potential homeowners to comply with? Probably. That sure is refreshing.
So that is my job description now, shielding my clients and realtors from the painstaking regulatory requirements that lenders force on us. Does this make me a super hero? (SMILE) Some food for thought: What can you do for your clients to make you their super hero? Its a catchy concept, and one that can improve the homebuyers experience in this crazy, villainous world! That is my motto for 2010- BE A SUPERHERO for my clients.
Monday, April 5, 2010
A check-up on all things changing
Finally, the warm weather is here! We can play outside, wear less clothing (good if you are 6 months pregnant like me), and enjoy all Texas springtime has to offer! Spring is also a time for cleaning. You may want to keep reading……
FHA on April 5 (Monday) will increase the upfront mortgage insurance funding fee + .50%. That is $500 for every $100,000. Since it is rolled into the loan, and amortized, the payment increase is only $3.00/mo. Not too drastic. Also, the seller contribution allowable goes from 6% to 3%. This will most impact lower priced homes (example: under $150,000) where 3%, or $4500 will not cover all costs and escrows required. Any FHA case numbers that are obtained before the 5th will be covered, regardless of closing date.
There is a rumor that seller financing may go away. This is a topic I need to investigate more, but will surely keep you posted. That would truly put a dent in transactions. If any of you know anything about this, I would appreciate feedback.
Apparently buried deep within the Health Care Bill (Section 9015, p.2000) is language that would take effect on 1/1/2012, in which the Medicare tax (3.8%) would apply to capital gains, dividends, rents, royalties, interest, etc for those singles earning >$200,000 . TRANSLATION: a 3.8% tax on the capital gains from the sale of your home. Basically this confirms the rumor as we know it: those top earners will bear many of the brunt of mistakes from the past.
The Congress went on ‘break’ without passing the budget for FEMA! It was an oversight (????) and basically, if you are in a flood zone, and set to close before April 12 when Congress returns, you cannot close. Some lenders will allow closing, and some will not . So if you have a transaction in a flood zone, be sure to communicate with your lender quick, to see if this will affect you. At Patriot, we are covered on our transactions.
RATES ARE ON THE RISE- slowly but surely, as we anticipated, the Congress safety net for mortgage backed securities ended March 29. For the last week, rates have inched up slowly , about .25% total. What is more on the horizon to come? No one knows. Signals of recovery are still mixed (keeps rates low), while at the same time, it is obvious no one wants to buy our debt (tbill auction sales have been very weak- which is bad for the rates). We will continue to keep you posted.
One thing does remain the same among all this change! Patriot Bank Mortgage employs the best of the best loan officers and operations staff, and we strive every day to close on time, and even early! We can close in a min of 8 days (since we must allow 7 days for federal disclosures), and are very supportive of our local real estate community.
FHA on April 5 (Monday) will increase the upfront mortgage insurance funding fee + .50%. That is $500 for every $100,000. Since it is rolled into the loan, and amortized, the payment increase is only $3.00/mo. Not too drastic. Also, the seller contribution allowable goes from 6% to 3%. This will most impact lower priced homes (example: under $150,000) where 3%, or $4500 will not cover all costs and escrows required. Any FHA case numbers that are obtained before the 5th will be covered, regardless of closing date.
There is a rumor that seller financing may go away. This is a topic I need to investigate more, but will surely keep you posted. That would truly put a dent in transactions. If any of you know anything about this, I would appreciate feedback.
Apparently buried deep within the Health Care Bill (Section 9015, p.2000) is language that would take effect on 1/1/2012, in which the Medicare tax (3.8%) would apply to capital gains, dividends, rents, royalties, interest, etc for those singles earning >$200,000 . TRANSLATION: a 3.8% tax on the capital gains from the sale of your home. Basically this confirms the rumor as we know it: those top earners will bear many of the brunt of mistakes from the past.
The Congress went on ‘break’ without passing the budget for FEMA! It was an oversight (????) and basically, if you are in a flood zone, and set to close before April 12 when Congress returns, you cannot close. Some lenders will allow closing, and some will not . So if you have a transaction in a flood zone, be sure to communicate with your lender quick, to see if this will affect you. At Patriot, we are covered on our transactions.
RATES ARE ON THE RISE- slowly but surely, as we anticipated, the Congress safety net for mortgage backed securities ended March 29. For the last week, rates have inched up slowly , about .25% total. What is more on the horizon to come? No one knows. Signals of recovery are still mixed (keeps rates low), while at the same time, it is obvious no one wants to buy our debt (tbill auction sales have been very weak- which is bad for the rates). We will continue to keep you posted.
One thing does remain the same among all this change! Patriot Bank Mortgage employs the best of the best loan officers and operations staff, and we strive every day to close on time, and even early! We can close in a min of 8 days (since we must allow 7 days for federal disclosures), and are very supportive of our local real estate community.
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