Archive for February, 2007
Are You Working With a Part-Time Lender?
I can’t talk right now, I’m at my day job…
…came the whisper from the other end of the phone.
Escrows are falling apart at an alarming rate these days. Most of the fallout, according to Realtors my agents is caused by incompetent lenders.
On a recent visit to Keller Williams, Chris DeMattei and his team shared a story with me. They had an escrow that was late in closing. Loan docs had not arrived in time, and they couldn’t get any information or a return call from the lender. Unsure how bad the problem was and totally in the dark, they were anxious and frustrated.
Like so often these days, the buyer had come with his own lender. This person was unknown to the team and felt no accountability to the relationship. When things got tough, she stopped returning calls. Elaina, the team’s buyer’s agent, had finally caught up to her late one morning… Read the rest of this entry »
read comments (7)Sacramento Mortgage Rate Update
The 30 year fixed rate closed the week unchanged at 6%.
Behind the Numbers
In a quiet week, largely devoid of significant economic reports, the main excitement was Wednesday’s CPI report which came in higher than expected at 0.2%.
The core CPI rate also rose more than expected at 0.3%, and the January year over year rose to 2.7%. This last little piece of data suggests a trend toward higher inflation that bothered both the stock and bond markets and temporarily pushed mortgage rates higher.
By week’s end however, declines in the stock market redirected some investor money back into bonds, pushing mortgage rates back down to last week’s levels For now, the Fed seems to be on hold, hoping that the recent series of rates hikes will slow the economy enough to ward off inflation without cooling things down too much.
Got a questions or need a rate quote? Give me a call or send an email
Most likely nothing!
He could care less right now, having just won Stage 5, the second time trial of the Tour. Levi also won the opening Prologue and holds the yellow jersey as the overall leader. Congratulations Levi!
So rather than trying to create a cheesy tie-in to explain this digression, let me just simply say:
THANK YOU SACRAMENTO!!
for your tremendous support of the AMGEN Tour of California! May Sacramento forever remain on the tour route. Think about this: the television coverage of this year’s event exceeds what ESPN use to give the Tour de France just a few short years ago. Thanks to Lance for that, (Lemond, just get over it).
As a recreational cyclist, I have the pleasure of riding some of the most beautiful country to be found outside of France and Italy. From the Sierra Century to the Markleeville Death Ride and the Davis Double, Northern California offers spectucular scenery, unbeatable weather, coastal terrain
as gorgeous as the Amalfi Coast and mountains to rival the Alps. I’m just happy that so many of the great European cyclists and team are here this enjoying it. How could they not want to return after experiencing this first hand.
Anyway, these great photos were taken by Randy Pench and Lezlie Sterling, and poached from the Sacramento Bee’s photo gallery. Please go check that out at: http://data.sacbee.com/photography/view/tour?&. Credit and thanks to the Sac Bee, Randy and Lezlie!
Have a wonderful weekend, and hey, about that subprime meltdown thing. Don’t worry about….at least until next week!
The way the real estate market has slowed, you would think lenders would be just waiting to pounce on and approve next loan that comes through. You’d think our “turn times” would be faster for underwriting, drawing loan docs, funding and recording. You’d think loans should virtually fly through the approval process. You’d think all that, and yet you’d be wrong.
So just exactly why are loans taking longer than they should right now? Here are 6 reasons that come to mind:
Reason #1: Layoffs
Like any business, when things slow down the mortgage industry lays people off. This slowdown started in late 2005. Companies have had plenty of time to wake up and smell the coffee. Wholesale lenders have laid off underwriters, doc drawers, and funders and attempted to restructure their processing centers. Most are now under-staffed and service is suffering.
Reason #2: Seasonal Factors
Thanksgiving, Christmas, New Years, and Presidents Day all punch holes in the work week. People leverage time off by combining vacation days and holidays, causing further staffing shortfalls during these times. As I cough and hack my way through the last few days, I am reminded of the toll that colds and flu can take on the remaining workforce.
Sacramento Mortgage Rate Update
The benchmark conforming 30 year fixed rate mortgage improved slightly to 6% this week on reports indicating a slowing economy and falling inflation.
Behind the Numbers
In a week chock full of economic news, January new home starts plunged 14.3%, oil prices lead the Producer Price Index lower, industrial production slowed, unemployment rose, and consumer sentiment weakened.
In testimoney before both the Senate and House Banking committees, Fed Chairman Ben Bernanke projected that inflation will moderate over the next two years, reinvigorating hopes of a Fed rate cut later this year.
States Weigh Mortgage Loan Suitability Standards
What’s next for the mortgage lending industry, beset by deepening accusations of predatory lending and mortgage fraud?
Well, several states are considering the creation of suitability standards, similar to what stock brokers and investment advisors live with in the securities industry. If this movement takes shape, mortgage lenders might be required to furnish evidence that the loan program recommended was suitable for the client’s needs, level of understanding, and sophistication.
However, Kurt Ptotenhaur, senior vice president of the government affairs for the Mortgage Bankers Association (MBA) argues that “Making the lender responsible for determining which loan is suitable for a borrower will limit consumer choice and could deepen the slowdown in the housing market,” and may result in discrimination at worst and subjected decisions made by the lender about who should have access to certain loan programs. See the MBA’s Policy Paper for more.
Appraisers Pressured to Falsify Findings
It’s an ugly fact of life in a declining real estate market. Real estate appraisers are under pressure from all sides. Here’s a recent article I saved.
Daily Real Estate News | February 2, 2007
Appraisers Get Pressured to Falsify Findings
The pressure is on property appraisers to come up with the right number, say 90 percent of appraisers surveyed by October Research Corp., which publishes Valuation Review, an industry newsletter.
That percentage is much higher than it was in 2003, the last time the survey was conducted, when only 55 percent of appraisers reported attempts by others to influence their findings.
The current survey found that 68 percent of appraisers lost the client when they…