March 5th, 2014
The TRUTH is mortgage lending is tougher now than it has ever been. Underwriting guidelines have never been more complicated, there are more documentation requirements than I can ever remember, and now unlike any time in our nation’s history, we have legal restrictions and disclosure requirements coming from a half dozen government bureaucracies. It’s enough to drive you insane!
Today clients face more red tape than ever before and it can cause the customer experience to be often less than desirable and for some, down right miserable. That’s the norm for our industry today and many of the big banks are pulling back from mortgage originating because of it. Why do you think Chase, CITI, B of A and Wells have all raked in huge record profits over the last year but are simultaneously announcing they are scaling back their mortgage departments? Red tape, regulation and doing a great job originating loans in this climate is incredibly difficult.
Keep reading and to see our Report Card
February 27th, 2014
Here is some great news to share with your clients:
CoreLogic® … today released its December National Foreclosure Report, which provides data on completed U.S. foreclosures and the national foreclosure inventory. According to CoreLogic, there were 620,111 completed foreclosures across the country in 2013 compared to 820,498 in 2012, a decrease of 24 percent.
“The foreclosure inventory fell by more than 30 percent in December on a year-over-year basis, twice the decline from a year ago,” said Mark Fleming, chief economist for CoreLogic. “The decline indicates that the distressed foreclosure inventory is healing at an accelerating rate heading into 2014.”
Thanks to Calculated Risk blog for this post. Be sure and click on the link to read the whole post on Calculated Risk.
February 21st, 2014
My Clients are asking- “Where is the housing market headed?” And I thought you might want to share these thoughts with your clients.
I believe we are leveling out; I don’t believe we are entering another pullback like we saw 2006-2008.
Reason #1: Inventory is less than 6 months in most of the Western US. That means there are a shortage of homes with more buyers entering the market than good homes. Supply and demand says: More demand than supply = price increases.
Reason #2: Foreclosures are at a 6 year low. Most bank/shadow inventory has either been cleared or is selling at market prices, not the fire sale prices that were killing values in years past.
Reason #3: Rates are RIDICULOUSLY low at 4.5%, as compared to historical average near 8%.
I predict and welcome a much more stable and healthy market ahead.
February 20th, 2014
It is projected that if the Fed continues to cut back on bond purchases that long term mortgage rates would start to climb. Many experts felt that Janet Yellen, who replaced Ben Bernanke as Fed Chair, was going to be less inclined to continue tapering bond purchases at the level established.
However, in her testimony in front of the Financial Services Committee last week, Yellen made it quite clear that she will in fact continue the current pace of tapering:
“In December, the Committee judged that the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions warranted a modest reduction in the pace of purchases, from $45 billion to $40 billion per month of longer-term Treasury securities and from $40 billion to $35 billion per month of agency mortgage-backed securities. At its January meeting, the Committee decided to make additional reductions of the same magnitude. If incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings.”
What does that mean to a prospective purchaser? Currently, Freddie Mac’s 30 year rate is at 4.28%. Here are the projected interest rates for this time next year:
Thanks to our friends at KCM blog for this post.