Why Humor Is Necessary To Advance Your Career & Life

DOGS NAMED STEVE & MIKE I have a dog named Steve, and we just got a friend for him that we are going to name “Mike.” We are naming our new dog “Mike” b/c I think it is hilarious to give dogs people names, particularly middle-aged boomer names. I can’t wait to be at the […]Read More

DANGER! Don’t Waive Contingencies For Condo Purchases! 12 Condo Considerations

We sometimes have very strong buyers waive contingencies when they make offers on condos. But, no matter how strong a buyer might be from a credit, asset, and income perspective, deals can still readily die if the condo or the Homeowners’ Associations don’t pass muster. For example, litigation, too much commercial use, ownership concentrations, and […]Read More

Correlating to Borrower With Lower Score; Paying Over Appraised Value; Not Referencing Inspections

Here are a few quick reminders. CORRELATING TO BORROWER WITH THE LOWEST CREDIT SCORE We received negative feedback from a frustrated borrower last week b/c we correlated our interest rate quote to her husband’s lower credit score (low 600s) when her score was in the 800s. We of course had no choice, as almost all […]Read More

Why CA Is So “Hot;” Median Home Prices

MEDIAN HOME PRICES If the CA housing market was not appreciating at all, but every buyer suddenly decided they would only buy 4,000 square foot, $1 million homes in 2021 after only buying 2,000 square foot, $500,000 homes in 2020, the median home price would double. And this would lead many people to mistakenly believe […]Read More

2021 Predictions: Rates, Inflation, Housing & Affordability

I often point out how difficult, impossible and/or ineffective it is to make predictions for anything nowadays. This is because we are in uncharted waters when it comes to this much Fed and government involvement in our economy, making it impossible for anyone to predict accurately b/c there are no precedents to rely on. BUT […]Read More

How Do Higher Rates Affect Buying Power?

RATES BACK TO PRE-PANDEMIC LEVELS We are officially back to pre-pandemic rate-levels, and it looks like rates will continue to climb in the short run at least. Whether or not they ever come back remains to be seen. HOW DO 1/2% HIGHER RATES AFFECT BUYING POWER? The answer is “not that much,” but because so […]Read More

Pre-Qual Letter vs. Pre-Approval Letter; Difference, When & Why

TEXAS DISASTER CERTIFICATIONS This is a brief notice to all of our Texas clients that many lenders are now requiring a Disaster Certificate before they will fund a loan.  This usually entails another interior inspection by an appraiser – to certify that properties are free of storm-related damage on a Form 1004D. PRE-QUAL vs. PRE-APPROVAL […]Read More

Rates Up Again! Why Nervous Appraisers Sometimes Appraise Lower Than We Expect

RATES 3/8% HIGHER NOW Interest rates continue to climb in response to positive economic reports (strong retail and home sales numbers), inflation concerns relating to both price signals and massive increases in the money supply, and President Biden’s $1.9 trillion COVID Relief package. Rates are now a solid 3/8% higher than where they were in […]Read More

5 Key Credit Reminders & Misconceptions; Albert Einstein On Interest Rates!

Albert Einstein On Predicting Interest Rates (true story) When Einstein died and went to heaven, the doorman told him his room was not ready, and that he had to wait in a dormitory with others. So, he was led to a dorm and introduced to his roommates. The doorman said, “Here is your first roommate. […]Read More

Will Mortgage Rates Fall Again? What Are The Variables?

I received numerous questions in regard to mortgage rates yesterday, e.g. Will they come down again? Should I lock now or wait? What do I think will happen? As always, my answer was don’t wait to lock in your rate b/c nobody has a clue what will happen. VARIABLES AT PLAY I responded that way […]Read More

Mortgage Rates Way UP; Refi Now… Or Forever Hold Your Peace

Remember last year when I said rates could either go up, go down or stay the same? Well, I was right. 😊 OK – I was actually right about the rates going up part. And I was just repeating what Barry Habib was saying. Habib thought rates would go up early this year and then […]Read More

How Long Does It Take To Get Pre-Approved And Apply For A Mortgage?

Agents frequently ask us how long it takes to apply for a loan, and how long it takes to get pre-approved (so they can share the info with their clients). Our answer is always that “it depends” b/c there are so many variables, but that it takes much less time than it did in the […]Read More

New “URLA” (Loan Application) & Why It Matters; Compliance, Salability & Delays

Agents and brokers alike have been asking me about the new Uniform Residential Loan Application or “URLA” and how it might affect them and their clients. This surprised me b/c I didn’t think agents paid that much attention to the mortgage side of the equation, but they should b/c these things definitely affect everyone. In […]Read More

Borrowers Can’t W2/Pay Themselves To Qualify; Complexity of Loan Process

If the owner of a company pays himself $300,000 per year while the company itself is losing $300,000 per year, that owner effectively has no income. I am oversimplifying this somewhat to illuminate a situation we see often. Borrowers will tell us that they make $300,000 per year and “qualify easily,” but then when we […]Read More

5 Business-Related Super Bowl Observations

Super Bowls are always interesting for reasons not having to do with football, such as high stakes, enormous hype, antics of the players, enormous ad costs, and much else. Yesterday’s game was no exception, and I have to share a few observations that I found particularly interesting. 1. LEADERS SHOULD NOT TAKE TOO MUCH CREDIT […]Read More

Domino’s $8 Pizzas & Reduced Commissions; The Future of Real Estate & Mortgages

DOMINO’S PIZZA REIGNS SUPREME When I was in college almost 40 years ago, Domino’s Pizza was a lifesaver b/c poor college kids could get large pizzas delivered for only $6!! What is truly amazing though is that Domino’s is still going strong with the same model, and pizzas only cost $2 more than they did […]Read More

Point Of Sale Or Online Loan Application Systems; Why They Matter

I have an acquaintance who sometimes refers to individuals he really disdains as “POSs,” and I always find it odd that he would call someone a “Point of Sale” b/c that is all that POS means to those of us in the mortgage industry. 😊 While the first POS system goes back to 1879 with […]Read More

Appraiser Shortage Makes 14 Day Close Impossible; “Exterior Only” And “Desktop” Does Not Help

The shortage of qualified appraisers is worse than ever for several reasons: Demand exceeds supply. The continued surge in both refinance and purchase transactions has created a situation where the demand for appraisers far exceeds the supply. COVID concerns. B/c of COVID concerns, many appraisers are justifiably reluctant to accept orders requiring physical (interior) inspections. […]Read More

Closing Cost Credits; Agent Credits Allowed; Reminders

I frequently blog about using “Lender Credits” to help cover closing costs, including this blog from September.  Closing cost credits are often necessary to help cash-starved borrowers close transactions, as total closing costs can easily exceed $10,000 for even inexpensive homes, depending on transfer taxes and other fees local to a particular county. AGENT CREDITS […]Read More

Mortgages For DACA Status Recipients (FHA & Conforming); Honey vs. Vinegar

FHA now allows DACA recipients to obtain FHA mortgages. DACA stands for Deferred Action for Childhood Arrivals. You can read more about DACA here, but it mostly refers to people who immigrated to the United States as children without legal immigration status. As adults, these DACA status recipients can now obtain both FHA and CONFORMING […]Read More

Success Bias; Dunning-Kruger; Luck & Self-Awareness

MY DOG STEVE HOSTS SEMINARS My dog Steve breaks records every month, as he eats more dog food than ever before every month. The problem is that it makes him super cocky, and he now hosts seminars to tell other dogs how to eat more food. The neighbor’s dog, Buttercup, is on to him though, […]Read More

VA Interest Rates 3/4% Lower Than Jumbo; No VA Loan Limits; Cash Out to 100%

There are about 20 million veterans in the United States. Almost all of them are eligible for VA financing, and, unfortunately, many have no idea of just how advantageous it is. So, it is our job to make sure every veteran does understand that VA financing is often the most competitive option available. I blogged […]Read More

2.7 Million Borrowers Still In Forbearance; Foreclosure Crisis Coming?

The WSJ reported recently that 2.7 million borrowers are still in forbearance. That is about 5.5% of all borrowers, down from about 8.5% in June, but the number of borrowers in forbearance is no longer falling and many market-watchers are nervous. A weakening economy is exacerbating concerns, as retail sales have been falling, employers have […]Read More

14 Day Close Only For Conforming & FHA; VA Loans Not Just For First-Time Buyers; VA Explained

Here are a few quick but very important reminders. 14 DAY CLOSES: CONFORMING & FHA ONLY We can and do close transactions in 14 calendar (not business) days all the time now. But, we can only do so for conforming (Fannie/Freddie) and FHA transactions. I should add, however, that there are still instances where we […]Read More

Low Appraisals – 5 Options When Appraisals Come In Low

Whenever an appraisal comes in under contract price, we work quickly to consider all options with both agents and buyers, and we can usually resolve appraisal issues within a day if everyone is responsive. Below are five of the options available when an appraisal comes in under contract price. 1. Rebut the appraisal. This approach […]Read More

Appraisers Can’t Ignore Low Comparable Sales; Agents Should Not Either

APPRAISALS COMING IN UNDER CONTRACT PRICE B/C MARKET’S SO HOT We are seeing appraisals come in under contract price more frequently than normal again b/c the market is so hot and buyers are bidding so aggressively. This is not b/c our appraisers are not trying to support contract price; it is b/c appraisers simply lack […]Read More

How To Finance A Fixer-Upper

Many homebuyers are interested in the possibility of purchasing a fixer-upper property. Fixer-uppers typically have competitively low sale prices that require renovations and repairs that can quickly add up. Below are seven options and considerations for any homebuyer thinking about buying a fixer-upper. FHA FINANCING IS VIABLE Several years ago, we helped a wealthy investment […]Read More

Mortgage Rates Climbing As Predicted; “Average Rates” Are Often Very Misleading

RATES UP 1/4% Yesterday, we were quoting rates a full 1/4% higher than what we quoted as recently as last week. Rates have been climbing despite negative economic news – which normally pushes rates down. This is partially b/c investors expect the negative news to spark more stimulus from Congress which could trigger more growth […]Read More

Manufactured Homes – Guidelines, Confusion, Tough Appraisals, Higher Rates

With truly affordable homes getting harder and harder to find, many buyers (and agents) are looking at manufactured homes as lower-cost alternatives. But, manufactured homes are not as easy to finance as many might hope. Here are just a few considerations. DEFINITION OF A MANUFACTURED HOME Per our mortgage bank: “any dwelling unit built on […]Read More

Why 13% Interest Rates In 1980 Were Effectively LOWER Than Today’s; Real Rates vs. Nominal Rates

Mortgage interest rates were just under 19% in the early 1980s, as shown in this table by Freddie Mac, going back to 1971. BUT, “real rates” were sometimes LOWER than where they are today. This was a point that an inflation hawk made on a podcast I listened to recently. He borrowed money to finance […]Read More

Why Rates Went Up After Democrats Took Senate; Affect On Mortgages & Housing

10 YEAR TREASURY EXCEEDS 1% FOR FIRST TIME SINCE MARCH As soon as it became apparent that the two Democratic Senatorial candidates would win in Georgia, rates started to edge higher. As most readers know, mortgage rates tend to correlate to the 10 Year Treasury Bond – although this year that correlation has not been […]Read More

Valuing An In-Law Unit Or An ADU (Accessory Dwelling Unit)

I touched on this last year a few times but am getting questions again because so many people have built Accessory Dwelling Units (ADUs) as a result of the COVID crisis. HOW MUCH IS MY ADU WORTH? An ADU or in-law or granny flat or outside cottage (or whatever you want to call it) is […]Read More

Janitor Changes Entire Company; Listening To People In The Trenches

ARROGANT WASHINGTON MUTUAL EXECUTIVE SHUTS ME DOWN Prior to the 2008 meltdown, I sent more loans to Washington Mutual (WAMU) than any other broker. As a result, I had the “privilege” of meeting one of WAMU’s senior executives. Our brief conversation drifted to the types of loans that WAMU offered, and I mentioned that I […]Read More

Teddy Roosevelt’s Greatest Quote; Happy New Year Too

B/c we are all essentially in “sales” one way or another, I am always inspired by exceptionally effective salespeople. However, many of us forget that the most effective salespeople in history are often activists or politicians. Abraham Lincoln, for example, had to convince an entire nation to sacrifice its youth to keep that nation together […]Read More

Mobsters, Blind Men, Elephants, Narcos: Mexico, and The Big Picture

MOWING LAWNS FOR MOBSTERS When I was in high school in AZ, I did yard work every week for a neighbor who also happened to be our local mobster. I didn’t know he was a mobster until several years later, but the prevalence of new luxury cars, expensive toys, and boats did make me wonder. […]Read More

Nostalgia Ain’t What It’s Cracked Up To Be; Future Looks Good

LOTS OF HORSE MANURE When I was a kid my older brother was a “declamatory speaking champion” b/c that was actually a thing in the Midwest where high school kids competed to give the best speeches. Fortunately or unfortunately, I missed the opportunity to compete in the exciting, fast-paced world of declamatory speaking b/c my […]Read More

Automation for Survival; Korean Restaurants In El Paso

Every time my wife Heejin and I are in El Paso, Texas we eat at a Korean restaurant. And our most recent trip was no exception. (OK – it might have been our only trip to El Paso, but don’t let that detract from this story 😊.) In all seriousness, Heejin and I really do […]Read More

Points & Origination Fees – And Why We Discourage Them

I recently blogged about 5 Misleading Rate Quote Tricks that everyone should be leery of and received some questions from our readers. WHAT ARE POINTS? Some readers asked about the $9,000 of “points” that another lender had tried to hide in the borrower’s new and larger loan. I touched on this last year and am […]Read More

5 Misleading Rate Quote Tricks!

We recently had a borrower come to us with a ridiculously low rate quote for a “no cost” loan from one of America’s largest mortgage banks. The borrower insisted it was legitimate and asked us to match it, so we asked to see the other lender’s Loan Estimate or “LE.” And sure enough – there […]Read More

When Too Much Optimism Is Bad; Learning to Expect the Worst; Stockdale Paradox

Almost everyone I meet lately in both the mortgage and real estate industries is riding an unprecedented wave of success. They invariably have unbridled optimism that is often coupled with very ambitious plans for growth. JVM of course is no exception to this – but we are also planning for the worst. This is b/c […]Read More

Why Refi Interest Rates Are Higher Than Purchase Rates

Every day in my blog I quote an interest rate for a “no points” purchase money mortgage, and today is no exception (at the bottom of the blog). This, however, sometimes fosters confusion when borrowers read my blog and then come to us for a refinance b/c the rates we (and all lenders) quote for […]Read More

FHA Financing – Why & When Listing Agents Should Not Be Leery

INTRODUCING JVM’S BLOG PODCAST We have turned our blog posts into podcast episodes – perfect for listening on the go. You can listen to this blog as well as some of our most popular blog posts in podcast form for free HERE. We’ll be posting new blogs in audible format every week so stay tuned! […]Read More

Jumbo Mortgages – Why Are They So Much Less Profitable?

We are great at funding jumbo loans – which is a blessing and a curse. “Jumbo loans” are any loans that exceed conforming (Fannie/Freddie) loan limits for a given area. Our jumbo skill is a blessing b/c it enables us to service our many jumbo clients and maintain relationships with our many agent partners in […]Read More

Mortgage Rate Rules Out The Window; Confirmation Bias; Kool-Aid Mustaches, Sting-Rays & Snakes

In the pre-internet days of the mid-1990s, we would call the “Bond Market Hotline” on the telephone (with a cord 😊) several times per day to see how the 10 Year Treasury was performing. This is b/c the 10 Year correlated so closely to mortgage rates. If the 10 Year prices were falling, for example, […]Read More

2021 FHA Loan Limits Don’t Always Match Conforming Limits; Beware!

FHA recently announced its conforming loan limits for 2021. The “High Cost” limits mostly match conforming (Fannie and Freddie) loan limits, but the low cost limits are much lower than Fannie’s and Freddie’s. So, here are FHA’s 2021 maximum high cost and low cost loan limits: 2021 FHA LOAN LIMITS CONFORMING LOAN LIMITS DO NOT […]Read More

Why Rocket/Quicken Did Not Disclose Percentage of Purchases vs Refis

I read yesterday that Rocket (parent company of Quicken) did not disclose its percentage of purchases (relative to refis) in its earnings release for Q3. I found that fascinating b/c it was probably intentional and it speaks to what I have been alluding to all year – with so many mortgage companies going public or […]Read More

What Will Happen To Mortgage Rates in 2021

Here is my bold prediction for mortgage rates in 2021: They will go up and down. You can take that to the bank! OK – here’s a more specific prediction – they will edge up about 1/2 percent before coming down again to where they are now or even lower. This is from rate-guru, Barry […]Read More

JVM Is A “Direct Lender” – Does It Matter?

A few weeks ago, we had an appraisal come in under contract price for the usual reason – the total absence of bracketing comparable sales in a very hot market. Despite the lack of comps, the borrowers were upset with JVM and wanted to take their loan to another loan officer who had explained that […]Read More

Stocks Way Up & Rates Way Down – Very Unusual! Why?

The stock market has been on a tear lately, with the Dow Jones index flirting with 30,000. This is amazing b/c the Dow dropped down to close to 19,000 as recently as March when COVID-concerns peaked. What makes the sharp rise in stock prices particularly interesting to those of us in the mortgage industry is […]Read More