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That made what we were about to see as we entered their home that Christmas season, a bit of a shock. There, in the corner of their living room stood, not the familiar green pine that we were used to, but in its place stood a six foot "tree" made of aluminum. To add to our confusion, on the floor next to the tree, stood a rotating color wheel with a light that beamed colors on the tree, turning it different shades of green, red and blue. It was a truly a sight to behold. Now, I must admit that while it took a little time to get used to, there was a part of me that got to like that tree. I got used to the fact that there was no piney scent. I got used to the fact that you could not hang lights on the tree for fear of a short circuit. I got used to the fact that real Christmas Trees did not turn red, blue and green with the turning of a wheel. After a while however, the novelty of that aluminum tree wore off and the Greens returned to a more traditional display. I think that is kind of how it has been in the mortgage market these past few years. The market had its time with their own version of the "aluminum tree". For example, first it was Stated Income Loans, then No Doc Loans then No Doc Loans with poor credit. The problem is, no matter how much you tried to make the loans look like traditional loans, they were not and no amount of colored light could make them so. After a while it made sense to return to the traditions of lending. With that in mind I thought I might share with you some insight into what "traditional lending" looks like as we draw to a close here in 2009. Enjoy! |
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Fact #1: If you have 5% down you will likely want to use an FHA loan. FHA lending currently accounts for approximately 25% of the loans made in our local market. The main advantage is that you can purchase or refinance a home with a limited amount of equity. The down side is a little more paperwork and additional upfront costs. Fact #2: If you have at least 20% down you will likely want a Fannie Mae type loan. Fannie Mae loans currently account for the great majority of other loans being made in today's market. With reasonable credit and verified income, these loans are readily available. Fannie Mae's loan limit will remain $729,750 for 2010 in Los Angeles County. Fact #3: If you have between 5% and 20% down we should talk. There are nuances that should be explored. Additionally, if someone has credit issues, or just wants to know what might (or might not) be possible in today's world it is a good time to sit down with a professional and get caught up to date. |
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I hope this information is useful. If I can be of assistance in any manner, large or small, let me know. In the mean time, I hope you enjoy time with your friends and family this Holiday Season. Floyd |
December 11, 2009
At Christmas time the community would put up a giant lighted star on the side of "B" Mountain. The star was basically a string of large lights, placed on the ground in the shape of a 5-pointed star. The lights were so bright and the pattern so large that you could see the star from many, many miles away.
One year, as a boy, I remember returning from a trip late one night during the Holiday season. As
we made the turn off Highway 395 and started our descent into the
valley where our little community was located, there, off in the
distance was the star on B Mountain. Like an old friend welcoming us home, there was something comforting and familiar about that star. There was something promising about the familiar warmth of home and the hope that star represented to our community.
It has been a long and hard year for many. I
don't know about you but there are days when I long for the comfort of
"home" and some renewed hope for common sense and reason in a
challenging world. In the mortgage market things will never be "the way they were" and frankly in a lot of ways that is a good thing. What
I hope will happen is that wise leadership will emerge and we will be
able to return "home" where good loans are made to good people who work
hard, save their money, and pay their bills.
With that in mind here are a few mortgage facts this week that remind me of "home".
In the small community where I grew up, one of our most recognizable landmarks was "B" Mountain. The
mountain was called "B" Mountain because every spring, the seniors from
the local High School ("B"urroughs H.S.) would trek up that rocky
hillside with gallons of white paint and paint the large rocks so that
a giant "B" could be seen for miles around.
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Fact #1: Fannie Mae will be changing its guidelines this weekend. Most borrowers will now have a maximum allowable debt to income ratio of 45% with some exceptions up to 50%. When you think about it, if 50% of our gross income is going out to meet your mortgage payment and other installment debt, typically you have stretched your finances a bit to meet your payments. Fact #2: There is a rumor that the House of Representatives may pass legislation today calling for the repeal of the HVCC appraisal process. If that happens that is a great move in the right direction but before we storm the Bastille please keep in mind that the Senate would also have to pass the same legislation and then the President would have to sign it, so this is a long way from being done but it does provide some hope. Fact #3: I know that I have mentioned this for the past few weeks but I do so because I think this is a real window of opportunity. Rates remain historically low and in my opinion have much more upside potential than down side. If anyone is thinking of purchasing a home or refinancing one, now is the time to explore options before rates move up. Today a 30 year fixed rate is quoted at 4.875%+.50 point in some cases. Lowest rates in 50 years! |
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I hope you are enjoying some quality time with friends and family this Holiday Season. We will be here working with Santa and his elves throughout December to make a little magic in the world of finance, so if you need us just give us a call! Floyd |
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I couldn't have been more than 7 or 8 years old. I was
practicing the art of whipping a belt, holding the buckle tightly in my
right hand, raising my left arm high and stretching the belt taught. I
would then release the end held in my left hand, creating a tremendous
"snapping" of the belt. Done correctly, at just the right distance, you
could send an unsuspecting fly to meet his maker. But even at this
young age, one must use the power he has acquired carefully and this
was a lesson I was about to learn.
Fast-forward a few days. My skills were being perfected almost on an hourly basis. I was now, in my adolescent mind, near perfect in my skills. Then it happened, my good mother bent over to pick up something on the floor. Just as I drew back the light end of the belt I closed one of my eyes like a sniper and I remember thinking to myself "wouldn't it be funny if..." and then, reason returned to my head, "don't let go of the belt" but my hand was not listening to my mind at that moment and "snap" a perfect shot. My good mother came straight up out of her bent over position and well, it all goes black from that point for me but I do remember my young life flashing before my eyes. Sorry mom. My tie in this week is this. Government is trying the "solve" a lot of issues in the lending industry by passing new laws and changing rules. The problem is that many government officials do not understand the first thing about how the lending process works, much less how it should work. Almost every law and rule change (think HVCC) they have made, has hurt the consumer (much like I hurt my poor mother) in some fashion. That being said, for the time being we, the consumers, just have to "deal with it". And deal with it we will. On a positive note so here are some fun facts for this week, enjoy. |
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Fact #1: Thirty eight years ago, in October 1981
Mortgage Rates hit a high of 18.45%. I know because I purchased my
first home in 1981 (gulp). Today we have the lowest mortgage rates in
the last 50 years with a 30 year fixed loan in the 4.75%+1.00 point
range! Good Times!
Fact #2: Thirty Year Fixed Rate Mortgages for the 10 year period ending December 2008 averaged 6.53% with rates touching as high as 8.52% as recently as May of 2000. Makes our current situation look pretty good! Fact #3: The bank's Prime Rate of Interest (the rate many Home Equity Lines of Credit is tied to) in that same period ending December 2008 was as high as 9.5% as recently as January 2001. Today the Prime Rate of Interest is just 3.25%. Fact #4: While I won't say we have seen it all, we most certainly have weathered a lot of storms and the challenges of today are just one more in a series of storms we need to deal with. We will get through this and every day, challenges are being met and loans are being closed! |
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That's
it for this week. If I can help in any way with a mortgage question or
need, please give me a call. In the mean time have a great week!
All the best, Floyd |
November 13, 2009
Sometimes
the funniest thing will bring back a memory. For example, I was just
crossing the street to get a sandwich and there coming my way was a
1950s style Chevy pickup truck with a burlap water bag hung
strategically in front of the radiator.
It reminded me of how
it seems that people used to prepare a lot more for the unexpected. Or
maybe it was the expected. For example, if you were driving across 50
miles of desert in an old pickup truck there was a pretty good
possibility you might need some water to add to an overheated radiator
along the way or maybe you might need a swallow or two for yourself.
The burlap and the placement of the bag in front to catch all the
breezes of a moving vehicle kept the water relatively cool.
We
used to carry duct tape to repair any leaky hoses, a tool box with
crescent wrenches, pliers and screw drivers in case anything broker or
came loose. You kept nickels in the glove compartment in case you had
to use a pay phone, as well as some matches, extra fuses, road flares,
interstate road maps of the entire United States and anything else that
might come in handy if you were stranded. That's just the way it was.
There
were no cell phones, no GPS, you were on your own, or so it seemed, and
it called for a little more planning on our part. With that in mind
today's lending environment reminds me that now, more than ever,
planning is in order. Whatever your goal is, knowing the landscape can
help you plan for your trip.
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Fact #1: Mortgage Rates, at some point, will move
higher and by time you hear that they have moved higher it will have
already happened. We have had a pretty good run with rates as low as
they have ever been in the past 50 years. If someone has been
"waiting" for lower rates I would say, "now is the time!" 30 Year
Fixed today as low as 4.75%+1.00 point or a 5/1 ARM at 3.625%+1.00
point !!!
Fact #3: As crazy as it is out there in the mortgage
business, and as busy as most lenders are, last month the mortgage
industry still eliminated 2000 jobs. Now that is wild to me. Hopefully
those 2000 are the guys that didn't know what they're doing but as
labor intensive as putting a loan together is today you would think
lenders would be hiring. Plan in advance to allow for the time you
will need to complete your loan.
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That's
it for this week. I hope you find this information useful. If there
is anything I can help you with or any questions, large or small,
relating to the world of mortgages, please give me a call. In the mean
time,
All the best, Floyd |
November 6, 2009
27
years ago on this day, at about 2 pm, I was standing in the foyer of
our little church here in La Canada, waiting for my bride-to-be to
arrive for our wedding. I must admit I was getting a little nervous as
first 10, then 20, then 30, then 40 minutes past the time we were
scheduled to be wed came and went.
My concern of course was that she had wised up and was on her
way out of town to an undisclosed location but as I would learn many
times in the years to come, patience is a virtue well sought. Shortly
thereafter my beautiful bride-to-be arrived.
I have learned a lot in 27 years. My wife has patiently
molded me into a better person. I, on the other hand, am not a patient
person and while she has never said anything, I am sure that she knows
her example of patience with me has benefitted me greatly. I am still
a work in progress, but patience is a virtue I aspire to have one day.
With that in mind, Congress has rewarded our patience this
week so I thought I would share some mortgage facts that I think you,
or someone you know, may like. Enjoy!
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Fact #1 Congress has passed an extension and an increase in the Income Tax Credit for Homebuyers. The new credits will be available if you are in escrow by April 30th, 2010 and close by June 30th, 2010. The President has promised to sign the legislation very soon! |
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I
hope you find this information useful. If you know anyone considering
purchasing a home that would like to talk with a lender about the
options available in today's market I would be happy to help.
All the best,
Floyd |
October 30, 2009
When
I was first married my wife and I were invited to a friend's house for
a casual barbeque. There were going to be several other couples there
and I had volunteered for us to bring a hors d'oeuvre. Problem was I
had forgotten to inform my good wife of this fact until a few minutes
before we were to leave for the event.
I told her not to worry that I had given it some thought and on
the way home I had stopped at the corner market and gotten what was
essentially a can of Cheese Whiz and some Ritz crackers. She stood
there for a moment, looking at me with that "did I really marry this
clown" look and proceeded to "share" with me that she was not going to
embarrass the two of us by showing up with Cheese Whiz and crackers (I
even offered to cut up some green olives to put on top but that did not
seem to impress her!)
Now I must explain that I was well into my 20's by the time I met
my wife and prior to that time most of my weekends consisted of hanging
out with the guys, playing sports with the guys, playing poker with the
guys, and if we wanted to make it fancy we put Cheese Whiz on crackers.
Needless to say, my good wife took care of the problem and
continues to this day to help bail me out when I get in trouble. I
guess my point is that even when things look a little bleak, there is
often help just around the corner.
This week congress and the market are making sounds like they are
going to help us out a little so I thought I would share some news you
may need. Enjoy!
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After remaining relatively quiet on the issue, this week the Obama
Administration endorsed the idea of extending the $8000 First Time Home
Buyer's Tax Credit. As of today, while not a done deal yet, the credit
looks likely to be extended until April 30th of 2010. There is a
proposal to even extend this to more than just first time homebuyers.
We will see, as congress must still pass legislation but we will keep
you informed.
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Hope
this information is useful. If I can help you or someone you know
through the maze of finding loan solutions in today's market, just give
me a call. In the mean time, All the Best!'
Floyd |
October 23, 2009
It's hard to believe, but this week's newsletter is our 100th
weekly newsletter. It has been nearly two years since we started our
little endeavor. My goal was to try give back just a little and at the
same time to try and do a better job of staying in touch, while keeping
you informed about what is going on in the mortgage market.
Needless
to say, in the mortgage business there has been a lot to write about
these past two years. Some of it good news, much of it simply
exploring challenges and solutions, a lot of it entirely new territory
for all of us so we have explored it together!
I want to thank you all for your kind comments and your support. I want to let you know that I enjoy your insight and I especially enjoy when you share your personal learning experiences with me.
With that in mind, I would love to celebrate our 100th weekly newsletter by inviting you to share with me.
Whether it is how a certain story reminded you about playing marbles on
the streets of New York, or how Father _____ banged you on the head for
letting the air out of your teacher's tires, or how you used to twirl
the baton in so many parades you lost count, or how you were scared to
death when the hamster's cage fell off the ledge one dark night while
you and your friend were babysitting and watching "I saw what you did
and I know who you are". These and many more comments have been shared
with me and to be honest, those kinds of stories make me smile and
couldn't we all use a few more smiles?
Would you like a certain
rule explained or a rumor clarified? I want to give you information
that is useful to you in the real world! With that in mind, let me
clarify a few items in this week's mortgage facts. Enjoy!
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| Fact #1:
The stories I have shared with you each week are true. The names have
not been changed to protect the innocent, though my memory certainly
could have accomplished some slight revisions. Fact #2: I do love your feedback! Whether is it some aspect of lending that you would like a little more information on or clarification of a new rule or even the elimination of a rumor. In this market, information and facts are very helpful! Fact #3: We still love what we do at BWA Mortgage. For over 25 years now we have enjoyed arranging loans for those who want someone to listen to their needs and help them find solutions to whatever challenges they face. Fact #4: We are very grateful that virtually all of our business is from repeat and referral clients. Our goal is to have clients so satisfied that we are the first one they think of for any needs they have personally, or for any family or friends they know. Fact #5: "Important ~ Hot off the Press!!" There is a bill in front of the house, HR 3126, which would eliminate the HVCC Appraisal process. The bill seems to have some good support and may pass. It is not a done deal yet but getting this out of committee was a big victory and we are hopeful that HVCC will become just a bad memory soon. We will keep you posted! |
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I
hope you enjoy the beautiful weather this weekend. If there is
anything I can help you with please let me know. In the mean time, All
the Best!
Floyd |
October 16, 2009
It
was just after sunrise Tuesday morning. It was cold and drizzly and I
was not looking forward to filling more sandbags. As I arrived at the
location where the city had delivered sand and empty sandbags for our
little corner of the community, there was only one other soul already
at it.
I did not recognize this gentleman and since I know, at least
by sight, most of the people in our neighborhood I introduced myself
and asked him his name. He told me his name was Rocky. When I
inquired which street he lived on he said he was not from our area. He
lived in Lakeview Terrace but he had seen a report on the TV about
homeowner's in our area, too old or feeble to fill their own bags, so
he had come up, on his own, with his truck and he was filling bags and
was going to deliver those bags to any residents who wanted them.
He must have had 30 bags done by time I got there (as I said,
it was first light) and he worked there, steadily, quietly, for several
hours, filling sandbag after sandbag. I thanked him for his service
and walked away with a renewed sense of faith in mankind. I think
there are a lot of Rocky's out there, making a difference, one sandbag
at a time.
In honor of Rocky, and those like him, I wanted to share some
homeowner information that may be useful to you or someone you know.
Enjoy.
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Fact #1: If you have California Fair Plan
Insurance (typically if you are up against a brush area) you might be
able to have your premium lowered by having a new site inspection
done. We recently did that and were informed yesterday that we will
have a substantial reduction (over $2k) in our premium because our
hillside was now cleared by the fires (you're right mom, there is often
a silver lining).
Fact #2: If you are in or below a burn area, you
may now be in danger of flooding. Since most every homeowner's
insurance DOES NOT cover flood damage, FEMA's flood insurance program
may be just to ticket for you. FEMA's program has a 30 day waiting
period from time of application so now would be a good time to call
your insurance agent and check this out, before the rains. I called
and I applied.
Fact #3: There is a great service the county of
Los Angeles provides called 211. Simply dial 211 and a helpful soul
will direct you to county services that will help you find out about
potential mud slides, storm drain maintenance, and frankly most any
service you can think of within the county, even those that have
nothing to do with the fire or floods. Keep this number handy, it is a
great resource! I used it and was very pleasantly surprised by its
effectiveness. Check it out on the web at 211 LA County.
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I
hope through these challenging times that you might think of me as a
resource you can turn to if you have any questions related to
homeownership or financing or any ancillary issue you might need help
with. I will do my best to help you find solutions to your challenges,
one sandbag at a time.
All the Best,
Floyd |
We lend in California
