Why The Fed Probably Can Never Raise Interest Rates

Paul Volcker was the 6 foot, 7 inch tall Fed Chairman who raised the Fed Funds Rate to 20% in 1980 and shoved the United States into a massive recession. As a reminder, the Fed Funds Rate is the rate that banks charge each other to borrow “reserves” overnight, and it is currently 0% – […]Read More

In Defense Of Chaos (Why We Need It)

A GIANT VAT OF HONEY I came home last night to a giant vat full of honey – not just a lifetime’s supply, but several lifetimes. It turns out my wife Heejin ordered it when online shopping at Target and she was way too busy to vet honey sizes – so she just bought the […]Read More

Fed Speaks – Rates Up; Paying Off Student Loans With Mortgage; Interest-Only Loans

Fed Chair Powell spoke yesterday and sent the bond market into a tizzy, as investors sold off their bonds and pushed rates sharply higher. What crazy thing did Powell have the audacity to say? He acknowledged that the economy is strengthening and that there is an uptick in inflation. In addition, a statement by the […]Read More

Closing Fast! What Are The Hold-ups? Different Speeds For Different Loan Types

FURIOUS AGENT SCREAMS AT ME A furious agent called me a few months ago, screaming vitriol b/c we were closing his transaction one day late. He was livid b/c we promised we could close in 14 days, and the late closing was causing “enormous hardship for both the buyers and sellers.” The problem was that […]Read More

“I’m Having My Best Year Ever; Why Don’t I Qualify?” “What Are My Options?”

The title of this blog is a lament we hear all too often from self-employed borrowers, and last week was no exception, as we received an email that said exactly that. MOST RECENT TWO YEARS OF TAX RETURNS TO QUALIFY Most readers know that lenders usually use the last two years of tax returns to […]Read More

Inflation Way Up & Rates Down? What Does The Bond Market Know?

I blog about inflation over and over b/c its potential to send interest rates into the stratosphere and to disrupt our entire economy is so strong. The last time we saw significant inflation in the 1970s, the stock market tanked and didn’t recover for a decade and interest rates remained in double digits for years. […]Read More

Is The Housing Affordability Crisis A Myth?

We constantly hear horror stories about the housing affordability crisis, and how it will push too many buyers out of the market and foster a correction of sorts. CNBC’s Diana Olick is one pundit who frequently spreads concern about the issue, as she did in this recent article. And, here is another recent example from […]Read More

Your Home Just Appreciated 25% – Now What?

Home values in the U.S. increased an average of almost 12% over the last 12 months, according to Zillow. But, in some markets – like Austin, TX – we saw appreciation of over 25%! Dallas saw almost 11%, while Sacramento saw 15%. Poor San Francisco was the outlier with DEPRECIATION of almost 3%! So – […]Read More

Appraisal Reviews = Collateral Reviews = CDAs = DELAYS (Mostly For Jumbo)

APPRAISAL REVIEWS SLOW DOWN JUMBO FINANCING The appraisal review requirement is one of the reasons why jumbo loans take at least a week longer to close than conforming (Fannie/Freddie) loans. These appraisal reviews take anywhere from two to five days and can only be performed of course after the appraisal report is complete. This is […]Read More

The One Thing That Can CRASH The Housing Market!

I have repeatedly blogged about reasons why we are not in a housing bubble: Demographics & Demand: Homebuying demographics are peaking, as a surge of millennials is just now hitting peak homebuying age (early 30s). This is in sharp contrast to the 2008 housing meltdown when homebuying demographics hit all-time lows. Supply Issues: (A) Builders […]Read More

Do Some Loans And Lenders Require More Work From Borrowers?

MASSIVE TECH SPEND – FOR BORROWERS We spend about $750,000 per year on various technology applications with the primary goal of making the mortgage process as simple and as efficient as possible for our clients. This technology includes our point of sale/application system (Blend), our elaborate CRM buildout (Salesforce), our electronic document reading systems (Candor, […]Read More

5 Problems With Housing Grants And Down Payment Assistance Programs

Years ago, my wife Heejin and I drove to San Francisco for dim sum and a housing grant certification program. The dim sum was awesome, as it always is in San Francisco, but the grant certification went nowhere – and below are a few reasons why. I should first add that I take no issue […]Read More

Appraisal Problems – 5 Options When Appraisals Come In Low

Our Zillow rep told us yesterday that searches for new homes are down 25% from recent months, as buyers appear to be “fatigued” and are putting their searches on hold. Despite that fact, the market remains extraordinarily hot and we continue to see appraisals come in under contract price all too often. This should not […]Read More

Job Placement Disasters; Why I Love DISC (Personality) Tests

SKI BUM DISASTER JOB In 1985, I applied for a job at Copper Mountain Ski Resort in Colorado b/c I wanted to be a ski bum – and to ski for free, you had to have a job on the mountain. I applied to be a waiter b/c I just wanted to wait tables, ski, […]Read More

Costco Mortgage Horror Story

I have nothing against Costco at all, and am actually very impressed with their business model. I in fact shared this excellent “Business Breakdowns” podcast (about Costco) with several team members a few weeks ago b/c it is so interesting and inspiring (and I continue to highly recommend it). But, Costco may not be the […]Read More

Listing Agents Speak! (About Representing BOTH Buyers & Sellers/Dual Agency)

On Friday, I blogged about Buyers Working Directly with Listing Agents Instead of Using a Buyers Agent, and I received a surprising amount of feedback. What was even more surprising though was that most of the feedback was from listing agents as opposed to buyers agents – and all of them were opposed to dual […]Read More

Buyers Going Straight To Listing Agents – Does It Work?

CUT OUT THE BUYERS AGENT – OR NOT… I saw this tweet a few days ago from Nick Huber – whose Twitter account I typically enjoy. Here is the link to the full thread. When I read the tweet, I thought… “good gravy; what universe does he live in?” OUR MARKETING DIRECTOR BID 15% OVER […]Read More

Duplex vs. House + In-Law Unit (ADU)?

UNDERWRITER KILLS DEAL BY CALLING IN-LAW PROPERTY A DUPLEX A few months ago, we had a purchase with two units on one lot. It had two addresses and two electrical meters, and our underwriter insisted it was a duplex – effectively killing our deal. So, we called Fannie Mae and explained all the particulars and […]Read More

Homebuying Hell In 2021! A Real Homebuyer’s Story (It’s Motivational, I Promise)

GUEST BLOG FROM A HOMEBUYER & A JVM MANAGER Below is a guest blog by our long-time Marketing Director, Lindsey Hansen. She wanted to share what she went through to buy a home so frustrated buyers everywhere will know they are not alone. And, more importantly, so buyers know that they should hang in there. […]Read More

4 Must-Know Facts About INFLATION, Housing, And Mortgages

INFLATION, HOUSING & MORTGAGES With inflation here and only expected to get worse, many potential buyers are getting nervous and wondering what to do. As a result, I thought I’d address a few major considerations today. 1. HOUSING IS AN INFLATION HEDGE/PROTECTION AGAINST INFLATION As a hard asset, housing tends to appreciate with inflation like […]Read More

Buying As Primary Residence & Converting To Investment Property – Considerations

BUYERS BUSTED FOR “PRETEND” OWNER-OCCUPANCY We once had a buyer using vastly superior “owner-occupied” or “primary residence financing” to buy a home – only to see his financing fall through at the 11th hour. Our underwriter had checked a database called MERS (Mortgage Electronic Registration System) and found out that the borrower had just refinanced […]Read More

Inflation Is Here! Why Didn’t Rates Climb More?

Inflation numbers came in sharply higher today and rates increased – but only a little. Here is a brief summary of the numbers from the Bureau of Labor Statistics. Long story short: Inflation numbers are higher than expected and at their highest level since 2008. So, the question is why didn’t rates spike up further […]Read More

When To Drop Your Husband; W2 To 1099; Title Only; Other Key Reminders

I am repeating this 2019 blog b/c it includes some very important reminders. A while back, a savvy agent sent me the following text: “I received an offer on a property and it’s ‘wife only,’ stating ‘husband is starting a business and that’s why he isn’t on the loan.’ I didn’t just fall off the […]Read More

America Always Bounces Back; Sage Investment Advice! Good For Psyche Too

FOUNDER BUYS STOCKS AFTER BLACK MONDAY CRASH I was working for an investment bank on “Black Monday” in 1987 when the stock market crashed and fell 20% in a single day – a record drop. Everyone was literally freaking out. But the day after the crash, the founder of the firm, who was in his […]Read More

Divorces Continue To Surge! How They Impact Mortgages And Real Estate

COVID changed everything – including marriage, as many couples realized they didn’t like each other when they had to actually spend time together. 😊 Even Bill Gates is getting a divorce, as we learned recently. I am sure being cooped up in a 66,000 square foot house with another person is enough to drive any […]Read More

#1 Reason We’re NOT In A Housing Bubble – And It Is NOT What You Think

In this excellent YouTube video by investment/finance guru Raoul Pal, called The Exponential Age, Mr. Pal mentions that Koreans have a far better understanding of cryptocurrencies and blockchain technology than Americans do. This is of course the only reason I married a Korean, as I am sure it will give me a huge leg up […]Read More

There’s A HUGE GLUT OF WOOD, So Why’s Lumber So Expensive?

On Friday, I blogged about whether or not borrowers can roll their closing costs into their loans. Several savvy agents responded and pointed out that I forgot one more way borrowers can get credits for closing costs: agents can credit a portion of their commissions too if they so desire.  We never recommend that to […]Read More

Can Borrowers “Roll Closing Costs Into The Loan?” 1,000 Five-Star Reviews!

1,000 FIVE-STAR REVIEWS! Several years ago a mortgage bank with a very impressive software platform was recruiting us, but the firm had hundreds of horrible online reviews. We met with them because of their software, but we also brought up the reviews because online reputations are so important in this day and age. The owner […]Read More

13 Factors That Impact Your Mortgage Rate

We often have buyers or agents ask: “What is your 15-year rate today?” Or “What is today’s interest rate?” We always respond by explaining there is no single rate, because the market moves so often and because there are so many things that affect an individual borrower’s rate. Here are 13 factors that affect almost […]Read More

Why Loan Officers Don’t Use Their Own Company For Financing; No Loan Officer Models

OTHER LOAN OFFICERS CAME TO ME FOR MORTGAGES Prior to the 2008 Mortgage Meltdown, ironically, a major source of business was other loan officers coming to me for mortgage financing. They came to me back then for several reasons: 1) My rates were lower than theirs b/c of my model and the volume discounts I […]Read More

$120 For A Piece of Fruit? Capital Gains Changes Could Spark MORE Selling; Why You Can’t Catch An Uber

BIDDING WAR FOR AN APPLE This very short TikTok video went viral last week, as it well should have b/c it is both so illustrative and entertaining. I had to share it again just in case any readers have not seen it. The best line: “I’ll take it for $100 – I’m from California and […]Read More

Higher Capital Gains Taxes? 2 HUGE Effects On Real Estate & Mortgages

INVESTOR WITH 70 HOMES REFUSES TO SELL I know an investor who owns over 70 single-family homes in California that he accumulated in the 1980s. Almost all are rented at below-market rates** with minimal or no mortgages, and he refuses to sell any of them. **Pro Tip: In my 27-year mortgage career, I have observed […]Read More

Owing Income Taxes & Qualifying for Mortgages

OWING TAXES: BAD NEWS & GOOD NEWS Yesterday, I blogged about why borrowers should sometimes file extensions instead of tax returns and briefly touched on whether or not borrowers can obtain mortgages if they owe taxes. Today’s blog expands on that topic, as many borrowers have substantial tax liabilities that can threaten their ability to […]Read More

Please Don’t File Your Taxes – If…

TAX DEADLINE = MAY 17th B/c of COVID, the filing deadline for income taxes was extended from April 15th to May 17th this year, as most everyone knows. We typically send out this reminder in March, but I waited this year until now b/c of the deadline extension. WHEN BUYERS SHOULD NOT FILE TAXES We […]Read More

“Reserves” – Why & When They Are SO IMPORTANT!

WHY TWO NEARLY IDENTICAL BORROWERS GOT 1/2% DIFFERENT RATES We had two nearly identical borrowers get rate quotes that were 1/2% different on the same day last week – and this is why: I often blog about The 13 Factors That Influence A Borrower’s Mortgage Rate. And the above two borrowers were nearly identical for […]Read More

Nordstrom, Walmart, Or Both?; Millennials Demand Both

I was at a coaching event last year listening to an extremely successful loan officer, with a huge team, explaining how he maintains strong client relationships by offering much more than just mortgage services, e.g., moving services; contractor referrals; financial analyses; rate monitoring; house valuation and equity updates; etc. It resonated b/c we of course […]Read More

Offer Rent-Backs To Get Offers Accepted; ARMS Are Back!

ONE MORE REASON JUMBO RATES ARE LOWER THAN CONFORMING After reading this recent blog, a friend of mine who owns a mortgage bank reminded me of one more reason why jumbo rates are lower than conforming rates. Big banks will sometimes buy loans at a loss because they expect to make money by “cross-selling” other […]Read More

Why Are Jumbo Interest Rates So Much Lower Than Conforming?

Our jumbo rates are now sometimes as much as 1/2% lower than conforming (Fannie/Freddie) rates (and today is no exception). Today’s blog explains some of the reasons why. Stricter Qualifications. Jumbo loans are often much “safer” than conforming loans from a risk perspective b/c jumbo guidelines are often much stricter with respect to credit, reserve […]Read More

Jumbo Lending Explained – How We Target Jumbo “Investors” For Every Borrower

We had an appraisal come in low last week, and the agents seemed to believe that our choice of “jumbo investor” (PenFed) had something to do with the low appraisal when that was not the case. B/c the agents were smart and very seasoned, it occurred to me that I should explain the nature of […]Read More

6 Things I Learned From Boomers; Credit Inquiries; HOA Dues; In-Laws And Total Square Feet

Here are a few important reminders: CREDIT INQUIRIES AND CREDIT (45 DAYS) Borrowers can have an unlimited number of credit inquiries from mortgage lenders over a 45-day period, and the credit scoring models will treat it as a single inquiry. This is an extremely important reminder for our many borrowers who are very concerned about […]Read More

Buying A Home For Your Child – Options?

WHAT IS THE BEST WAY TO BUY A HOME FOR YOUR CHILD? This is a question we see quite often so I thought I’d list the options. No Mas “FHA Kiddie Condo” Loans. This used to be a very flexible option where FHA allowed parents to put down only 3.5% in order to help kids […]Read More

The Other Reason Housing Inventory Is So Low (Not What You Think)

In the 1970s, when inflation was out of control, the press was always looking for scapegoats to blame like “middlemen” and “greedy businessmen” when the cause was really at the feet of Fed and Government policy. That is largely the situation today with respect to housing, as Fed and Government Policy – intended to help […]Read More

Appraisal Woes Not Your Lender’s Fault; Blame Andrew Cuomo :)

One of the most frustrating and expensive aspects of our business is dealing with low appraisals. It is frustrating b/c borrowers invariably blame us for the problem – even though we have very little control over the issue. It is expensive b/c we often end up throwing money at the issue to assuage borrowers and […]Read More

Appraisers Can’t Push Values; Must Avoid Reviews/Cuts

APPRAISAL COMES IN LOW We had an appraisal come in slightly under contract price this week. What made it a surprise was the fact that there seemed to be ample comparable sales to support the value (unusual in this market, to say the least). So, when the appraisal came in low, both agents, the seller […]Read More

Cage Match Of The Century: Inflation vs. Deflation; Diversify!

WHY NO INFLATION AFTER 2008 After the 2008 mortgage meltdown, the Fed and congress stepped in with trillions of dollars of “Quantitative Easing” (buying of Treasuries and Mortgage-Backed Securities) and stimulus spending – and numerous market watchers and pundits, e.g. Arthur Laffer, predicted massive inflation. They were all wrong for several reasons, including the fact […]Read More

Refi Boom Over? Record Appreciation; Affordability Crisis? Not Here

PANICKED LISTING AGENT; PURCHASES HARDER THAN REFI’S I got this text last week from a panicked listing agent: “Jay, my listing is supposed to close Friday and the lender went MIA; how fast can you close?” I get texts and emails like that all the time, but have been getting them slightly more often lately, […]Read More

Why A Giant Stuck Ship (Suez Canal) Impacts Mortgages & Real Estate

YouTube gets me – and thank goodness for that b/c it sends me entertaining videos all day long, every day! This is why I know that Komodo dragons eat deer alive (Komodo saliva paralyzes the deer), why I know about the mating habits of cicadas (they only live a few weeks and come out every […]Read More

Why Refi Into A Higher Rate? Debt Consolidation!

BORROWER REFIS INTO HIGHER RATE We recently had a borrower who had over $110,000 of consumer debt (credit cards and personal loans). The borrower had a very low fixed-rate mortgage too that we could not match b/c rates have gone up and b/c the borrower’s credit score had dropped so much b/c of the consumer […]Read More

10 Myths About Mortgage Rates

In July of last year, I wrote a blog called “7 Myths About Mortgage Rates,” largely in response to so much confusion amongst our many clients. Since I wrote that blog, rates have risen almost 3/4% and misconceptions remain as prevalent as ever. So, I thought it was time to repeat the blog with the […]Read More

Tax Implications From Refinancing; Cash Out ≠ Income

Borrowers are often far too worried about tax implications from refinancing – b/c they are usually negligible.  APPRAISALS & PROPERTY TAXES No matter how high someone’s appraisal comes in (over the original purchase price), it will not affect their property taxes. This is b/c appraisals performed for purposes of obtaining financing are for lenders only […]Read More