Mortgage Credit Tight?

Watching CNBC today and it amazes me that the press is talking about tight mortgage credit.
OK if you compare credit guidelines today versus 2005-2006 yes, it's tighter.

If you write off all your income and try to hide from the tax man, access to credit is limited. But you and I both know if you aren't paying ALL your taxes, you don't deserve the lowest rates available.
Those rates are always going to be for those who can document their income.

But the fact is Roughly 69% of American homeowners with mortgages at the end of the second quarter had rates of 5% or higher and about 33% of them had rates above 6%, according to detailed mortgage data provided to The Times by Santa Ana research firm CoreLogic."

So why haven't these people refinanced? Most likely, valuation, credit score or credit issues, or, and I hear this a lot. They want to wait for lower rates! Really? With the G- Fee increase and QEIII coming to fruition, don't bet on it. The banks and large lenders are just going to take the increased profits.

In 24 years I've never seen rates this low, and that's becuase they've never been this low.

So if you haven't looked at refinancing, take a look today, even if you refinanced over the last 18 months.

Shocked

I had a meeting today with my financial advisor. I needed to get some things in order for my family and my retirement. Anyway, while I'm in the meeting my advisor's boss asks me what's new in lending, you know products, rates, etc. I tell him business is good, rates are ridiculous, and the HARP program has really helped keep lending going.

Like it or not, the government intervention has keep the real estate market from completely imploding (Yes, it could have been worse). The low rates provided by our Fed along with the HARP program have really helped millions of families lower their housing costs.

He asked? "What's HARP" After being surprised that a senior financial advisor doesn't know, I realized that with all the marketing out there, many still have not heard about this program.

So here are the basics. HARP II allows for underwater homeowners to take advantage of today's low rates by providing the liquidity in today's residential mortgage market for lenders to fund these types of transactions. This program is for not only for primary residences, but second homes and investment properties qualify too.

In some cases the program HARP II will allow unlimited loan to value. And what does loan to value mean? Well if your home is worth $300,000 and you owe $600,000 your loan to value is 200%. If you home is worth 100,000 and you owe $80,000 your loan to value is 80%. Pretty simple right?

With HARP, homeowners that are underwater AND want to hold onto their properties have the opportunity to lower their overall mortgage payments on these properties. This helps keep homes out of foreclosure and ultimately keeps property values higher as reduced inventory creates limited options to today's home buyers who have begun bidding up properties in many areas.

You need to make sure your mortgage is owned by Fannie Mae or Freddie Mac and needs to have been funded prior to June 2009. But these rules may change soon too.

Although we are not out of the woods. A recent study shows 50% of Nevada homeowners are still underwater. But the private market has begun to come back into lending with unique programs for self-employed borrowers and borrowers with less than perfect credit or who may not be able to show as much income as needed on their tax returns.

The bottom line, it makes sense to talk with your mortgage advisor (like me www.michaelfoote.com) about ALL the options that are available for you and what is best for your short and long term homeownership goals.

So give me a call or email me today.

What a Loan Officer shouldn't tell you...

I had an interesting call from a client. I lost the loan to another loan officer because Bait and Switch is still alive and well. It is always my policy to "l.eave the door" open. I figure if I lost your loan to a competitor, its my fault, not yours. Anyway, I followed up with the client to see how they were doing and sure enough the loan officer changes the story AFTER the appraisal fee was paid. So I quoted the rate and cost again and told him the rates would probably settle down. Of course, the other lender told the client that they HAD TO LOCK today since the appraisal was done. I told the client if he came with me I would pay his appraisal fee and he ASSURED me he was going with me and he was only talking with myself and the other company but since they tried to raise the rate on him, he was going with me. Great! And off we go.

We get all the disclosures done and we are ready to order the appraisal and the client writes me back saying he was going with his old mortgage guy from 10 years ago. What probably happened was he went back to the other lender since rates settled down and they were probably able to get close to the original quote.

The moral to my story is this, mortgage people AS WELL AS BORROWERS are capable of lying and being deceitful. So when you ask why all these fees or the higher rate, its becuase the consumer has been trained to not trust anyone when dealing with mortgages or any other financial products and because there is little loyalaty between mortgage companies and consumers fall-out if higher and therefore costs per closed loan are higher. 

This particular borrower, had he gone with me, would have saved even more money since the market continue to move to the better after he went to the first person that had lied to him- undoubtedly he was in a rush to close (which never makes sense) unless you are a purchase transaction.
This deal isn't funded yet....so let's see if the story changes again.

So save yourself the grief and trust your mortgage advisor.

For My Loan Originator Brethren

Not too long ago, I decided that recruiters were all pretty much full of crap and for that matter NON-PRODUCING BRANCH MANAGERS too. Their sole job is to get you into a seat and if they were on retainer it really didn't matter too much about if you performed. If they were pay to play....the performance of the "recruited" mattered a little more. But still the recruiter is typically short sighted. Or the non producing branch managers were trying to justify their guarantees by throwing bodies up to the altar of production for slaughter.

It became apparent to me, that the only way to know what you are getting into with a new company was to put a loan through and see for yourself, know someone inside that would tell you the truth, or never take the chance. The other option is to process everything yourself. Which works great and you'll never know a file better, but you can forget about doing any real volume. Processing is once again critical.

I've kissed a few frogs (mortgage companies) lately, trying to find the right mix of product, culture, leadership, low rates, and compensation. Then I realized, it wasn't about the lender or their lack of experience, it was about me.

Once I decided I would never be help accountable for a lenders horrible service, operation errors, and mistakes, I noticed my production improved.

Now I offer this security to you. All you need to do is contact me and I will share the details of my success and the tricks to never having your production get screwed up again.

There once was a reason we called ourselves, "Loan OFFICERS" because we mattered, and we do again.
You should feel this way, and if you don't, please reach out today.

I'm very happy to announce I have been retained by a mid size direct lender, Citywide Home Loans, to expand to the Southern California region

CHL Mortgage has the culture, desire, and execution to deliver results for like minded loan originators and branch managers. There are many companies out there looking to grow and they talk a good game. I know because I am an originator. But it ultimately comes down to can you deliver hot food or cold food.

I am very excited about the prospects of Citywide in Southern California and encourage you to contact me if you are an industry professional looking at new options for you loan production.

Everyone is making money today, but are you happy and being supported in the manner you know if right?

Call me today to discuss.

Michael Foote
949 584 4600
michael.foote@chl.cc

So glad Barclay's, a reputable company, bought Lehman

The mortage broker ruined the globalo economy. I got tired of hearing that over the last several years. As we all learn from the economic diasaster that was 2007-present, it is clear to me that some things will never change. And somethings are the insatiable greed of our best and brightest in the financial world. Whether it's a $50 billion dollar ponzi scheme or trillions of dollars of loans that should never have been made. You can be sure that where there is a will there will be someone making the way. In today's case of greed and corruption - I give you pure cost of money manipulation....And huge settlements, err I mean payoffs to the government. I can guarantee you the banks made more with the fraud than with the penalties and fines they paid. So was this a good business decision? And is a business decision always good when it makes money?

http://finance.yahoo.com/news/barclays-pay-400m-plus-settle-130159247.html

What does it mean rates will stay low for the near-term

I swear the ubersmart financial prognosticators of the world have a way of stating opinions with out every being specific. A client commented to me yesterday that he was going to wait a little and try to improve his credit scores, as he said, "I think rates will stay low for a long time, so I am in no rush". It is true that rates will probably stay low for a good amount of time (see I did it there too).

The real question of course is, what is "low"?  Well everything I read means low rates are considered lower than 5%. Around 29 million people still have mortgages over 5%. Big number. So clearly many have not, or been unable to, take advantage of today's super-duper-duper low rates. These rates are artificially low, and as such, any delay in taking advantage could be foolish and just a plain bad decision financially.

The government is buying the vast majority or mortgage production and they are continued to be involved. But big changes to banking rules and the projected devaluing of residential servicing for the depositories could spell big increases in the cost of mortgages going forward. Any increased incosts for banks and non-depositories will be directly reflected in the rate and price of mortgages.

I've sold double digit mortgage rates. I've seen rates rise 4% in a year. Don't think it can't or won't happen again. I can promise you, that by the time you realize mortgage rates have risen dramtaically, you will already be too late.

A bird in the hand is worth two in the bush.

Summer Lending...happened so fast...

The beach was perfect this weekend. These are the weekends you really have to wonder why everyone doesn't live in California. Rates continue to stay low and the Fed recently announced continuation of the Operation Twist, which is basically providing funding for all you guys refiancing your mortgages. I find it ironic. Twist, implies to me, to manipulate, and I think that everyone would agree the markets are manipulated. So you want your piece of the government cheese? Then refinance your mortgage that is underwater or purchase a new primary residence with 1% down. Or buy a investor property with 10% down. Financing is out there, and the market is being manipulated to keep that borriwing as cheap as possible. Take advantage.

A real estate bottom?

Harvard Study: Bottom Has Been Reached It's one thing when special interests declare "the end" of the housing debacle, but it's another when such an august organization as the Joint Center for Housing Studies at Harvard University calls the bottom.

QEIII...doesn't look like it yet..rates are still lower today...amazing.

The U.S. economic recovery faces significant risks, including from the European sovereign debt crisis and uncertain U.S. fiscal policy, Fed Chairman Ben Bernanke said in testimony prepared for a congressional hearing on Thursday.

The Fed chairman stopped short of signaling Fed action to combat these risks, other than to say that the Fed remained “prepared to take action” to protect the U.S. economy and financial system if stresses on the financial system escalate.

HARP refinances

Very specialized. Apply on my website today. Www.michaelfoote.com ....also QEIII comments coming shortly.

HARP refinances topped 180,000 in the first quarter of this year compared to approximately 93,000 in the fourth quarter of 2011. Last fall, of course, was when several changes took place: the removal of the LTV ceiling and the elimination/lowering of fees for certain Fannie or Freddie borrowers. Per the FHFA, one in seven refinanced loans during the quarter was through HARP - in March alone, there were nearly 80,000 HARP refinances, a quarter of them on loans with LTVs greater than 105 percent. More than 4,400 loans with LTVs greater than 125% were refinanced since the beginning of the year; over half these loans were refinanced in the states of California, Florida and Arizona.

June Gloom? Not really.

Will the Fed lower rates further? Are we in a recession... again? Is Europe screwed? The answer is probably yes to all three. Rates are just ridiculous, programs are extremely liberal. Believe me, the news talks about it being hard to get a loan done, and it's not. And while it can be a slow process, there are amazing programs available today, and many of these programs can't be offered by the big banks and large direct lenders. Your mortgage broker again, can provide the best value. FHA, Conventional, Super Jumbo, VA, Portfolio, Investor Purchase and Refinance, HomePath, HomeStyle, 203K, HUD $100 down....Heck we even have a bank statements as income documentation program these days. 

Want to check out a great CPA, vist www.hayniecpa.com and ask for Mike Zurovski, a great guy and very talented.

On to personal news. The CrossFit/Paleo diet combo is starting to take hold. New record weight of 219 down from 250 two years ago, and now the weight drop is starting to pick-up speed. I have to say dieting is the hardest part. Just this morning we had donuts for Dad's day and I obtained from my free Crispy Creme deliciousness... No heart burn and wasted calories, but passing on a donut, let's be honest, is just sad.  And going out with the family for dinner and special occasions makes it hard to not "give in". Last week was a bit choppy with ball games and dinners...Definitely paying for it this week. But we are committed and staying on track, are you?

Looking for a great Real Estate firm, try California Property Resources, serving selected California markets.
Specializing in distressed situations. They like the tough stuff!

Borrrrring...but still an amazing time.

Mortgage rates haven't changed much lately. The good news of course, is rates are still incredibly low.
Purchase activity seems to be picking up in Orange County and many of the areas in California especially in the lowest priced home markets.

Nothing really new latly, except the expansion of the HARP refinance program and increased FHA mortgage insurance premiums.  If you need a lower rate and haven't applied recently or been turned down over the last two-three years. Now is a great time to have someone check your individual situation (like me of course).

There are a few jumbo programs coming to the market and we are seeing some increases to LTV requirements - which is just higher leverage. Many programs are available with 85-90% leverage for high net worth individuals requiring financing for luxury properties. 

I love closing loans for new buyers and new realtors in the same transaction. We had a few of those last week and if you are new to real estate or require a very high level of interaction with your lender/broker. Then consider this company.

Please Mother May I...talk about what's happening in the mortgage and real estate industries

Well to start a new month, I've decided to start a Paleo diet. Wish me luck and I apologize in advance if my blog reads a bit cranky...But you eliminate your cream and sugar from your coffee, starches, legumes, dairy and see how you feel...it changes you... ;)

Did you know reverse mortgages can be used to finance the purchase of owner occupied residential property? Click on the link above to see how the reverse mortgage structure works.

Home prices are still falling, albeit much slower that in previous years. Buyers of some residential properties purchase from 2009-2010 are already underwater. This isn't true for all neighborhoods and you should remember to consult a local Realtor when you want specific market information click here to find our if you are in the black or in the red.

Recently we've been doing a number of purchase transactions and if you are a Realtor or a Buyer/Borrower, work with a licensed mortgage banker who specializes in purchase transactions. Your refinance chop chops out there do not have the experience necessary to faciliate a purchase mortgage or have knowledge of all the additional moving parts. Work with a mortgage banker WITH a real estate brokers license. I don't do Real Estate, but understand the Realtor and Buyer needs better than most.

OK, as we close out the month end and head into May, it's always good to note the big changes out there and the good news bad news going forward. The good news is rates are still fantastic and look to remain near these levels for the near term certainly. And mortgage companies are making good money along the way. So why when money is cheap and profits high would MetLife exit forward mortgage originations and reverse mortgage origination last week. Clearly, the Dodd Frank Act is making those "too large" to fail institutions just too interconnected with the government. And in MetLifes case, why originate when its only 1-2% of their earnings AND have the governement up your craw making decision with and maybe even for you.



So why do I bring this up? The reality is it can be tough for many people to find consistent service, rates, programs. With so many companies going out of business or closing business divisions, the borrower needs to find a single person, licensed, educated, experienced that udnerstands the industry, products, and the details. Today, mortgages are technicall and demand expertise to makes closings smooth.

California DRE warns of property deed scams

A serious warning from the State of California. Last week the California Department of Real Estate (DRE) issued a warning about property deed scams, which are apparently on the rise thanks to the depressed economic climate.  The Consumer Alert that DRE released notified homeowners of a number of red flags that indicate fraud: changes made to a recorded document after signing ("Is that my signature?"), recorded documents signed by a deceased person ("Look - Marilyn Monroe's autograph!"), documents indicating that the a portion of the property was sold without the homeowner's knowledge ("Who's living in our front yard?"), receipt of documents for a mysterious loan or transaction ("We owe how much to who?"), or receipt of a Notice of Default or Trustee's Sale when the property is owned outright ("What happened on the courthouse steps?") are all tip-offs. Seriously, the California DRE encourages homeowners that experience any of the above to notify the County Recorder's Office and their insurance company if their title policy covers forged deeds.  It's also worth contacting local law enforcement, as the District Attorney offices in several counties now have real estate fraud divisions, and, if the real estate broker or salesperson is the likely culprit, filing a complaint with DRE itself.  Employing an attorney familiar with real estate law is advisable, as they can help with annulling or voiding bogus deeds.