How Will The Stock Market Crash Impact Real Estate?

I ❤ Real Estate I frequently tout real estate as an excellent investment for the following reasons: (1) it is a great inflation hedge; (2) there is an inventory shortage due to a lack of building, and not due to excess demand; (3) homebuying demographics are surging in sharp contrast to 2008; (4) buying is […]Read More

China’s Massive Housing Bubble? Will It Affect Us?

160 Million Units For Sale In China (vs. 3 Million In The U.S.) China has somewhere between 55 to 65 million unoccupied properties, depending on the source, and an additional 93 million units under construction. Famous financier, Hugh Hendry, was on this Rebel Capitalist Podcast in December discussing China’s extremely precarious property market – and […]Read More

Will We See Negative Interest Rates In America? (Hint: We Already Are)

Today’s Rates Are More Of A Gift Than Ever! I often write that today’s very low interest rates are a gift because they are so low by historical standards! (and it’s true) And today, they are more of a gift than ever before, despite the fact they have risen by 1/2% since last summer, and […]Read More

Why You Can’t Get Yesterday’s Rate, Stock Price, or Bitcoin Price

My Angry Phone Call With Jeff Bezos! I recently called up Jeff Bezos last week and that he sell me Amazon stock for $6 per share because that was the price in October of 2001, when I wanted to buy 10,000 shares … but didn’t. I then explained to him that my $60,000 investment at […]Read More

Are “No Doc” Loans Back? Misleading Lender Games

GIVE ‘EM THE OLD RAZZLE DAZZLE! I have an acquaintance who heavily touts his down payment assistance programs in order to lure in first-time buyers – only to then aggressively push those buyers into FHA loans with high rates (and high profits for my acquaintance). My acquaintance says: “down payment assistance loans don’t work for […]Read More

How Much Do Higher Rates Affect Payments?

Recently, I facetiously wrote a blog about why rising rates would crash the housing market, pointing out that they actually won’t 😊. So – because of yesterday’s blog and because rates shot up again this morning – I wanted to remind everyone of just how little rate increases of less than 1% affect someone’s payment. […]Read More

Why Rising Rates Will Not Crash The Housing Market!

Rates rose another 1/8 to 1/4 percent over the last few weeks and are now almost 1% higher than 2020’s lows. (as a sidebar, they are about where they were last March…so they are not THAT high) But, whenever rates do start to rise in a hurry, I invariably see pundits explaining how rising rates […]Read More

2022 Predictions: Fed, Inflation, Stocks, Interest Rates, Housing, & Rents

Happy New Year! Here are some predictions for 2022 – even though I implored everyone to ignore all predictions in this recent blog. 😊 I am sharing these predictions, however, for two reasons: (1) they are from Barry Habib and he has been more accurate than anyone over the last several years; and (2) they […]Read More

Planning Vs. Acting (Learning How to Fish)

BEST TWEET EVER? I recently saw this excellent tweet by a man named “Dickie Bush” (I can’t think of a better name to take advice from 😊). Anyway, Dickie used to be addicted to “planning” – of all things. To quote Dickie: “My brain loved the cheap dopamine of gathering books to read, tasks to […]Read More

Credit Scores Affect Mortgage Rates A LOT!

Agent Was Furious Because Her Client’s Interest Rate Was Too High! We recently had an agent scream at us (yes, scream) because of the rate we quoted to her client. Our rates of course are notoriously low and we also are not allowed to quote different rates to different clients. So, sadly, the only thing […]Read More

Insanely WRONG CATASTROPHIC Predictions

Surprisingly, I got more positive feedback from this recent blog, Insanely WRONG Predictions, than from almost any other I wrote this year. That prompted me to write another blog along the same vein – but to instead focus on all the insanely wrong catastrophes that have been predicted in my lifetime (and that frankly scared […]Read More

We Humans Are Social Creatures – Time To Return To The Office?

A Very Happy Carpet Man We had a carpet repairman come to our home this week. He was almost 70 and still putting in 8 hour days – because he wants to, not because he has to. He was very chatty too and he told me that he just joined a kayak club because his […]Read More

Insanely WRONG Predictions! More Coming Soon; Please Ignore Them :)

CoreLogic predicted home prices would decline by 6.6% in 2021 – and they were off a little. Home prices appreciated by almost 20% in 2021! What makes this enormous error so fascinating is the fact that CoreLogic is considered to be the granddaddy of data collection and analytics when it comes to the housing market. […]Read More

Credit Inquiries – Way Too Much Concern

On Friday, I blogged about the difference between consumer credit scores and mortgage credit scores: Does Credit Karma Lie To You? In that blog I pointed out why we need to run credit for every borrower and why we can never rely on the credit scores that borrowers give us verbally. In response, several agents […]Read More

Does Credit Karma Lie To You?

After my wife Heejin and I moved to Texas, Credit Karma sent me an email with this subject line: “You’re making moves, Jay. Literally.” It reminded me of the Police song in which Sting croons: “With every step you take, I’ll be watching you,” because I definitely felt stalked. And yes, I had to work […]Read More

Fed Announces 3 Rate Hikes… And Rates Dropped! WHY?

The Fed sent the markets into a tizzy recently, finally admitting that inflation is now a serious problem and that there would likely be as many as THREE RATE HIKES in 2022. The bond and mortgage-backed securities (MBS) markets reacted negatively, and every lender announced a series of mortgage interest rate increases as a result. […]Read More

How Millennials Power The Housing Market – 6 Conclusions

“Millennials Are Super Charging The Housing Market” This was a front page headline in the WSJ recently. The millennial surge is something we have all seen coming – but there are some fascinating conclusions, nonetheless. Millennials consist of the generation born from 1981 – 1996, and they surpassed baby boomers as the largest generation alive […]Read More

Jumbo Loan Rates 3/4% LOWER In California and Texas

The Jumbo vs. Conforming Difference Widens! Recently, the rate for a $1 million jumbo loan at a 1/2 point cost is 2.5%. And recently, the rate for an $800,000 “high balance conforming loan” at 1/2 point cost is about 3.25% today. These quotes are for pristine borrowers (800 FICO, etc.) but the fact remains that […]Read More

5 Reasons Why The New FHA Loan Limits Will DESTROY Our Economy!

A first-time homebuyer can now buy a $1 million home with only 3.5% down! This is because the FHA just released its new loan limits for 2022: (1) Low Balance Limit (for most of Texas): $420,680; (2) High Balance Limit (for most of coastal California): $970,800. This is great news for many buyers with limited […]Read More

Mortgage Rates Do Not Equal 10-Year Treasury Rates

The 10-Year Treasury Yield dropped almost 4/10% recently – so why didn’t mortgage rates drop that much? The 10-Year Treasury yield (interest rate) is a reflection of what it costs the government to borrow money and is perhaps the most influential interest rate/yield in the world. Hence, when the 10-Year yield drops, the media will […]Read More

Housing Inventory Crisis! How Bad Is It?

Picture yourself walking into your local Whole Foods and seeing 2/3 of the shelves entirely empty. That is exactly the state of the single-family residential real estate market today, according to Jason Hartman, a true expert when it comes to residential real estate. Mr. Hartman was recently on the Rebel Capitalist YouTube show making this […]Read More

6 Things That Terrify Appraisers

Here are a few things that really scare appraisers. 1. Unusual Properties. Unusual properties include those with acreages, odd structures (e.g. a round house), multiple dwellings on one lot, adverse influences such as a nearby freeway, easements that clearly affect value, income properties (two to four units), over-improvements, unfinished structures, significant deferred maintenance, and unclear […]Read More

When Lofty Missions Meet Reality

SUCCESS GOES TO MORTGAGE BROKER’S HEAD Prior to the 2008 mortgage meltdown, I knew of a moderately successful owner of a mortgage broker shop who had ridden a couple good years, and it went to his head. As a result, he was convinced he could change the world (because what mortgage broker can’t?) and he […]Read More

3 Biggest Reasons To Buy Real Estate

The 3 biggest reasons to buy real estate now are: Increasing Rents: Rents are skyrocketing and will only continue to shoot up with inflation. Buying now allows homeowners to permanently fix their housing payments. Locking In a Low Rate: Rates remain extremely low but will inevitably climb as inflation signals get stronger and stronger. Buying […]Read More

2022 Conforming Loan Limits Announced – Up By $100,000; Good or Bad?

As we all learned on TikTok recently, the FHFA announced the new Conforming Loan Limits for Fannie Mae and Freddie Mac. I mention TikTok because that is where one of our superb marketing managers heard about it – and that was a reminder to me that TikTok isn’t only about bad dancing and lip-syncing. 😊 […]Read More

When Interest-Only Loans Are A Good Idea

INTEREST-ONLY “STIGMA” An “interest-only mortgage,” as the name implies, is a loan where the payments include only accrued interest – and no principal paydowns or amortization. Such loans had an enormous stigma for years because interest-only (I/O) loans were far more common prior to the 2008 meltdown and because so many of the loans ended […]Read More

How Do Teams Benefit Clients?

We have eight people on our pre-approval team who are far more diligent and academic than I ever was, who know lending guidelines 100x better than I ever did, and who are simply smarter than I am in many ways. I share that because numerous agents replied to my blog Monday about Big Teams Reigning […]Read More

Big Teams Reign Supreme Over Brokerages; Go Team Go!

In Friday’s blog about company names (and JVM’s new name), I mentioned I had a very sweet deal with a mortgage firm that was set up just like a real estate brokerage (which was legal at the time). They only charged me a flat fee of $2,500 per month and I kept every penny of […]Read More

What’s In A Company Name? (A Lot It Turns Out)

JVM LENDING’S NAME About 15 years ago during my loan officer days, I was affiliated with a brokerage with an extraordinarily sweet deal that I never would have abandoned but for one reason. I was tipped off that the broker of record was experiencing severe financial and emotional issues that were putting the entire brokerage […]Read More

Why We Don’t Align With UWM/Broker Channel

MOST INNOVATIVE COMPANY IN MORTGAGE One of the most innovative companies in the mortgage space is also the largest wholesale lender. As a reminder, there are Three Primary Channels For Mortgages: (1) Banks & Credit Unions; (2) Mortgage Banks; and (3) Brokers. Banks perform many other functions (checking, savings, commercial lending) besides offering mortgages; mortgage […]Read More

This Is Why Every Renter Should Consider Buying Now

WHY OUR CONDO IS THE PERFECT INFLATION HEDGE My wife Heejin and I own a rental condo in Scottsdale – with a small, fixed-rate mortgage and quickly increasing rent, as Scottsdale is one of the hottest markets in the country. It is a perfect example of why real estate is such a great inflation hedge. […]Read More

Alternative Financing Options: Interest Only; Rental Income Only; Asset Depletion; Bank Statements

“ALT A” LOANS In the 1990s, a lender called Headlands Mortgage pioneered what were then called “Alt A” mortgages. The loans allowed borrowers to qualify for competitive mortgages without having to go through the rigmarole of a “full documentation” qualification. In that high-rate era, “Alt A” interest rates were very close to the rates associated […]Read More

How Likely Are You to Get an Appraisal Waiver? Hint: Not Very :)

WHY WE REFUSED REFINANCES IN 2020 This is a quick aside but a reminder that we stopped accepting refinance applications in 2020. It cost us millions in lost revenue but we did so anyway because we wanted to make sure we could maintain our service levels for purchase business. This is because we knew that […]Read More

Why Are Rates Not HIGHER – With Inflation, Fed Tightening, & Economy Improving?

HORRIFIC SPACE SHUTTLE CRASH On January 28th, 1986, the entire world watched the Space Shuttle Challenger explode and crash to the earth – on live TV. Seven people lost their lives, including school teacher Christa McAuliffe, right in front of our eyes and – everyone wondered what the hell happened? The talking heads in the […]Read More

Jack Dorsey’s Case for Hyperinflation (There Isn’t One)

JACK DORSEY = PARIS HILTON 😊 A few weeks ago, Twitter CEO, Jack Dorsey, tweeted this: “Hyperinflation is going to change everything. It’s happening.” And sadly, some of the talking heads on the various cable news networks seemed to agree. But, fortunately, cooler and better-educated heads are prevailing here and one of them is Erik […]Read More

How Monkeys Close Loans in 10 Days; Purchases? Not So Much…

30-MINUTE LOANS Closing a conforming (Fannie/Freddie) refinance for a W2’d employee with good credit can take less than 30 minutes of effort on the part of a lender. This is because lenders can now use artificial intelligence to underwrite clean files, and verifications of employment and assets are pulled automatically via the lender’s loan application […]Read More

Qualifying For Mortgages With Assets Only – No Income Necessary

WHOM ARE ASSET BASED LOANS GOOD FOR? Asset based loans are perfect for two types of borrowers: (1) wealthy borrowers with very complex financial pictures that would make qualifying in the traditional manner a nightmare; and (2) borrowers with ample assets but too little income to qualify. HOW DO ASSET BASED LOANS WORK? INCOME: Income […]Read More

Zillow Exits iBuying & Proves ALL Is Right With the World

BETTING ON CANADA! In the 2010 Olympics, Canada played the U.S. for the gold medal in hockey – and I upset a hockey fan and friend by betting on Canada. My bet on Canada was really a bet on “efficient markets” because Canada’s team had a larger aggregate payroll in the NHL. So, efficient markets […]Read More

Richest Man in Germany Got Rich FROM INFLATION; You Can Too!

A LOAF OF BREAD COST $200 BILLION! A loaf of bread in Berlin that cost around 160 deutschmarks (the German currency unit at the time) at the end of 1922 cost 200 Billion (with a “B”) deutschmarks by late 1923. By November 1923, one US dollar was worth 4,210,500,000,000 deutschmarks. Prior to the German hyperinflation, […]Read More

Inflation; Mercedes S-Class Cars; Here To Stay? Does It Matter?

MERCEDES S-CLASS SEDANS COST 1/2 OF WHAT THEY COST IN 1979 Leonard Steinberg wrote this in his excellent blog last week: “In 1979 a Mercedes S-Class cost about $34,000. Today about four decades later, an S-Class Mercedes sells for around $111,000, more than triple.” He was illuminating just how much inflation there already has been […]Read More

Don’t Stop Believin’ – Great Lessons From a Journey Song :)

My blogs have been too serious lately, so I am touching on a lighter topic – a Journey song that has proven to be far more enduring than anyone ever could have imagined. WHY JOURNEY? Because there is so much to learn from how the song, Don’t Stop Believin’, came to be. The WSJ had […]Read More

No Income Verification Loans: DSCR

I’ve mentioned this “horror story” a few times in my blogs. In 2005, I was at a Christmas party where a wholesale rep from SunTrust Bank was bragging about his “no down payment” (100% LTV) “NINA” Loans for investors. NINA stood for “No Income/No Asset” verification. Borrowers only needed a 680-credit-score and they could buy […]Read More

Rates Have Not Been This High Since… 2021

RATES HAVE NOT BEEN THIS HIGH SINCE 2021! I thought I would put interest rates in perspective again, given that they have risen so much (1/4% to 3/8%) since last summer and that there is so much concern! But – they are still slightly lower than where they were on April 1st of THIS YEAR! […]Read More

Our Massive Jumbo Niche & How It Benefits You!

The median home value in many of our core markets is well in excess of $1 million! As a result – we were FORCED to become “Jumbo Financing Experts” because conforming (Fannie/Freddie) loans in coastal California are about as rare as California Condors. And – IT WAS PAINFUL! It was painful because every jumbo investor […]Read More

2 Reasons the Current Realtor/Agent Model Is Here to Stay (And Won’t Be Replaced by Tech)

BOUGHT CAR ON INTERNET IN MINUTES – IN 1999 (BUT NOT NOW) In 1999, I needed a new car and a friend of mine (a “car guy”) suggested I buy a Lexus GS400 – and he gave me all of the specs. I typed all of the specs into a car-buying website that was available […]Read More

The Real Reason Zillow Stopped Buying Homes & Why It’s Good For Housing

Zillow announced yesterday that they are no longer buying homes (through the end of the year). It was all over the headlines, and numerous people sent me links to the announcement. At first, I thought: “oh, no… I wonder if their algorithms are predicting a softer housing market…” But then I started to see links […]Read More

What Happened to ALL Those Borrowers in “Forbearance?”

There were approximately 4.5 million mortgages in forbearance when the number peaked during the COVID crisis in 2020. This scared the bejeebers out of a lot of market-watchers, as they feared it portended another massive foreclosure crisis (like we saw after the 2008 meltdown, which collapsed the market). BUT – not so much. WHAT IS […]Read More

DANGER! Home Equity Lines & Inflation

A borrower reached out to me for a Home Equity Line of Credit (HELOC) recently, and I referred her to a local bank that we work with that offers the best service and rates. She came back to me the next day and said: “my friends say I should consider a cash-out refi instead…” And […]Read More

4 Reasons Why Real Estate Is One of The Best Inflation Hedges!

INFLATION ON THE HORIZON Major inflation seems all but inevitable in light of our burgeoning supply chain issues, massive government spending, enormous money supply infusions (printing), climbing CPI numbers, and skyrocketing PPI numbers. Because of this, I want to remind everyone why real estate is one of the best inflation hedges available. By “inflation hedge” […]Read More

Appraisers Ain’t A.M.C’s (Explained); Subjective vs. Objective Too

“Hey Rich, I need a $500,000 appraisal to make this refi work; there’s an extra $300 for you if you can push the value to $500,000…” That was the entire schtick of a loan officer I knew back in the day (prior to the 2008 meltdown). He was friends with an appraiser who would push […]Read More