Mortgage Reminders: My Inconsistent Fed Comments; Rent Backs; Owner Occ Ratios; Attached PUDs/Townhomes; 12 Condo Considerations

Here are a few random reminders. Powerless Fed Vs. Inflation-Causing Fed. In response to my recent blog about the Fed being “Powerless,” I got this comical point from an agent I really enjoy hearing from: “I know they say that great minds can hold contrary thoughts with ease, but how do you square a powerless Fed […]Read More

Still No Housing Bubble – B/c Rates Are 3% Lower Than In 2006!

MBS HIGHWAY HITS HOUSING BUBBLE AGAIN Barry Habib, Founder of the MBS Highway, hates it when the media spreads irrational fear about a housing bubble. He also shares marketing materials that subscribers to his content are allowed to share without attribution to him, but that is anathema to me. Below is a script he recently […]Read More

Proving Taxes Are Real & Filed; IRS Form 4506-C

Mortgage lenders are required to get the last two years of tax returns for almost every borrower – and then prove that the tax returns are authentic and actually filed with the IRS. IRS FORM 4506-C This is why every borrower has to sign an IRS Form 4506-C (formerly called a 4506-T) as part of […]Read More

The #1 Reason Renters Want To Buy A Home

FIXED HOUSING PAYMENT IS NOT THE BIGGEST INCENTIVE TO BUY In August I blogged about Rent Vs. Buy Comparisons In the Age of Inflation, pointing out how comforting it is to buy a home and lock in a fixed housing payment when rents have been climbing as much as 30% per year in some markets. […]Read More

Change Jobs, Lose Bonus Income & LOSE HOUSE!

It is usually 100% OK to change jobs at any time IF … borrowers are NOT dependent upon bonus, overtime or commission income to qualify. If, however, borrowers are dependent upon bonus, overtime or commission income to qualify for a loan (very common in today’s world), changing jobs can be a deal killer! This is […]Read More

Rent Payments & Rental Income To Qualify

Here is some important info about using rental payment history and rental income to qualify. GREAT NEWS: “DU” USES RENT PAYMENTS NOW On the good news front, Fannie Mae announced last month that its automated underwriting system (DU) will now take into account rental-payment-histories, to make it easier for renters to become homeowners. Here is […]Read More

Rent Vs. Buy Comparison – Follow Up To Responses; ADU Follow Up Too

Yesterday, I blogged about Rent Vs. Buy Comparisons In The Age of Inflation, and I got a surprising amount of feedback, including the following: “I put 5% down, and my housing payment is $500 lower than my Mom’s rent.” “You are not accounting for maintenance costs!” “Do you guys do ITIN Loans?” “Unsubscribe” 😊 5% […]Read More

Rent Vs. Buy Comparisons In The Age Of Inflation

$500,000 HOME APPRECIATES $200,000 IN 9 MONTHS My wife Heejin bought a house in Plano, TX, in November for $519,000. We put down 20%, and our PITI is $2,725. The house was rented for $3,700 per month when we bought it, so we could have cash flowed nicely from the start. The tenants moved out […]Read More

Using PMI To WAIVE Appraisal Contingencies

I am beating the Private Mortgage Insurance (PMI) dead horse again, at the suggestion of an agent who inspires a lot of my blogs (thank you, Jeff Weissman). In any case, he suggested explaining PMI options up front to clients who might want to make offers with no appraisal contingencies. This of course is a […]Read More

Why Housing Is Actually More Affordable Today Than In 1980!

WHY HOMES ARE MORE AFFORDABLE TODAY In the midst of my daily excursion into the bowels of Twitter, I saw a great tweet from the Center for Human Progress. It had a link to this excellent article, titled U.S. Housing Became Much More Affordable Over The Last 40 Years. It was fascinating to say the […]Read More

How To Use Single Premium/Lump Sum PMI To Cover Appraisal Shortfalls

Recently, I blogged about why Private Mortgage Insurance is “Awesome,” pointing out why its stigma from the 1990s is so underserved. One of the many benefits of PMI is using it to help cover appraisal shortfalls, and I wanted to elaborate on that in this blog. $900,000 PURCHASE APPRAISES $100,000 UNDER Assume the following: Purchase […]Read More

No Housing Bubble Here Part XXII; 12 Million More Households Than In 2007!

17% ANNUAL APPRECIATION SCARES PUNDITS Housing appreciated 16.6% from May of 2020 to May of 2021. This is a record and it is again sparking media concerns that we are in a housing bubble. So, I am hitting the issue again to allay concerns, and I am again relying on our friend Barry Habib, founder […]Read More

Cash Buyers & “Scary” Signs Of The Times; False Mailers; Selling Info

OVERHEATED MARKET AWASH IN CASH – OR SIGN OF THE TIMES? A close friend of mine bought a home in Scottsdale, AZ, in November for less than $1.1mm. She visited the home a couple of times, played a bit of golf, swept the patio, made a few improvements – and listed the home for sale […]Read More

Nothing Makes Things More Unaffordable Than Affordability Subsidies!

FOGGING THE MIRROR People often make fun of my alma mater (The University of Arizona) by saying that “kids only need to fog a mirror to get in.” And that makes me so mad b/c it is so misleading. And, this is why: The kids that could fog a mirror were the smart kids! No […]Read More

Is Co-Signing By Non-Occupant Co-Borrowers Overrated? Blended Ratios Explained

“MY MOM MAKES $25,000 PER MONTH AND WILL CO-SIGN TO HELP ME QUALIFY” A young borrower told us that b/c his Mom was a successful CFO who wanted to help him buy a home. BUT, Mom had a $6,500 housing payment of her own, a $1,500 Range Rover payment, $3,000 of support payments to her […]Read More

When 5% Down Scares Away Sellers – What To Do?

Half of all homebuyers getting a mortgage in April put down over 20%.  In the past ten years, the percentage of homebuyers putting 20% down has exceeded 50% three times. That is a big deal b/c all three times were relatively recent. In addition, over 25% of purchases in April were all cash. This data […]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

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

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

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

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

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

#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

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

How To Qualify For A Mortgage If You Owe Taxes

OWING TAXES: BAD NEWS & GOOD NEWS I recently 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. This 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

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

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

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

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

When The Ultra-Wealthy Don’t Qualify For Mortgages

WHY GO THROUGH HELL IF I CAN JUST WRITE A CHECK FOR THE ENTIRE PROPERTY? I had dinner last night with an extraordinarily successful woman who made this comment about getting a mortgage to finance a house: “why would I go through the hell and humiliation of qualifying for a mortgage when I can just […]Read More

8 Tips For Getting Offers Accepted

Yesterday, I listened to my wife Heejin talk a listing agent into accepting our client’s offer – even though there were four higher-priced offers (out of 13 in total). The seller accepted our offer because Heejin touted the strength of our pre-approval, our guarantee to close on time, and how awesome our client (an extraordinarily […]Read More

Inflation Makes Mortgages An Asset; DON’T Prepay Your Mortgage

Dave Ramsey is a financial guru who encourages paying off all debts, including our mortgages. Here are Ramsey’s 7 Steps for taking control of our finances. A lot of other finance “gurus” of sorts take serious issue with Ramsey though b/c his advice only works in a world with minimal or falling inflation – a […]Read More

Owner Occupancy Requirements In A Post-COVID World; Second Home Rates Higher Now

“Owner-Occupied” is a big deal in the mortgage world for several reasons: Interest rates are more than a 1/2 percent lower than they are for investment properties b/c there is less risk lending to an owner-occupant who will take better care of the property and be much less likely to let it go into foreclosure. […]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

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

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

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

Can DACA Recipients Get a Mortgage? 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 […]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

JVM’s “Fast 14” Returns! 14 Calendar-Day Close: Why And How?

We are bringing back our 14-Day Closes! And yes, that is Calendar Days and NOT Business Days. And yes, this is from the day the contract is signed to the day the transaction records. THE WHY Despite record volumes and a continued onslaught of refis, we nonetheless felt obligated to bring back our fast closes […]Read More

7 Ways Parents Can Help Kids Buy Homes

Parents frequently ask about the best options for helping their kids buy homes, so I thought I’d set out a few in this blog. 1) Gift of Funds. If kids have sufficient income to qualify themselves and only need cash, a willing parent should simply “gift” the necessary funds for the down payment and closing […]Read More

Minimum Tradelines/Credit Accounts For Jumbo Borrowers

In 2015, I blogged about the need for borrowers to have at least 3 tradelines or credit accounts. That was b/c we used to see first-time-buyers with no credit established at all, so we would suggest obtaining secured cards (credit cards with cash collateral), retail-store credit cards and/or small car loans. Insufficient credit is less […]Read More

4 Reasons NOT to Fear “The Coming Tsunami of Foreclosures”

Forbes.com recently published The Serious Disconnect Between A Hot Residential Real Estate Market And The Coming Tsunami of Foreclosures. And I thought, here we go again… The author expresses serious concerns about the frothy housing market, with both sales volume and prices increasing at double-digit rates. The market may in fact be overheating, BUT the […]Read More

How Do Elections Affect The Housing Market?

The best blogs come from plywood companies. I always say that. Or at least today I do b/c I found this excellent blog, titled “Presidents and Plywood – How Elections Affect the Housing Market.” I have blogged numerous times about how the election might impact interest rates, but I have not focused on how it […]Read More