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

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

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

Where Are Americans Moving & Why?

My son and I were out mountain biking in the East Bay hills yesterday, when we stopped to admire the view (pictured at the bottom of this blog). The view was stunning and the day was perfect (light breeze, 70 degree temp, blue skies), and the topic of moving came up. I mentioned that an […]Read More

Returning To Work After COVID Layoffs; Job Seasoning

One of our clients just returned to work after a six-month-layoff and her agent asked if and when she could qualify for mortgage financing. In light of that, I thought I’d repeat this blog from April: EMPLOYMENT GAP UNDER SIX MONTHS If the layoff or furlough lasted less than six months, lenders will be able […]Read More

6 More Reasons Why Inventory Is Low; Not What You Think

I recently blogged about the coming “Nuclear Winter” for housing, focusing primarily on a massive pending inventory shortage. I am beating that dead horse one final time for several reasons: (1) it is a major issue that will impact us all; (2) this is excellent info for buyers to know when home shopping so they […]Read More

“Nuclear Winter” For Housing Coming To Your Neighborhood Soon

Winter Is Coming. Chris Drayer is the CEO and co-founder of the Predictive Analytics company, Revaluate, that we tout often. Revaluate employs extremely sophisticated AI to analyze databases to see who is most likely to move. They focus on the “D’s”: Death, Diamonds (weddings), Divorce, Diapers, Diplomas, and the Daily Grind (employment). In any case, […]Read More

3 Reasons Why COVID Made Housing A Far Better Bet! Ain’t No Bubble Here!

Market-Pundit-Extraordinaire – Barry Habib – was on The National Real Estate Post again today – screaming that the media is wrong! (again). I love quoting Habib b/c his predictions prove accurate far more often than those of any other pundit that I follow (and I follow many). NO BUBBLE HERE – ELDERLY PEOPLE STAYING PUT […]Read More

How Much Can I Borrow For A Home Loan

It is crucial for a homebuyer to understand how much you can borrow when you applying for a loan. This question is one of the biggest on every potential homebuyer’s mind. The answer will determine where you will look for homes, what you can offer, and how much you’ll have to save. We’ve put together […]Read More

Can You Be Too Old For a 30-Year Mortgage? Cheap PMI; Mortgage Calculators

A 90-year-old woman can still qualify for a 30-year mortgage even though it is very unlikely that she will be around to pay off the loan. This is because mortgage discrimination laws preclude lenders from using age to deny credit. The only criteria lenders can consider are income, assets, credit, down payment (equity), and collateral […]Read More

When Getting A Loan Is As Easy As Buying A Fridge At Best Buy

In 1999, I needed a new car. Not being particularly into cars, I asked a buddy, who was into cars, what kind of car he recommended. At that time, he said the best buy on the market was a Lexus GS400, and he gave me a detailed list of options and specs I should look […]Read More

Death Of NYC; Life After Bandwidth; Trends We’re Already Seeing

LIFE AFTER BANDWIDTH – HIGH-END HOUSING SURGE There is a property near my home that was recently listed for $2.1 million; it immediately got multiple offers and will sell for well over asking. Interestingly, it was purchased for under $700,000 in the late 90s, showing what a great retirement investment real estate can be. But, […]Read More

Why Low Rates Are BAD For Homebuyers

Rates are about 1% lower than where they were last year at this time, as most people know. This enormous rate-reduction appears to be a huge boon for homebuyers, as low rates reduce payments and increase buying power. A 1% reduction in rates reduces the payment on a $500,000 loan by almost $300 per month. […]Read More

HELOCs For Bridge Loans; Online Lender Horror Stories

MORE ONLINE LENDING HORROR STORIES In response to my blog about Quicken’s pending IPO on Friday, I received several reminders of online lending/call-center horror stories. With every instance, the call-center loan-officer did a perfunctory “pre-qualification” without doing a full pre-approval, and transactions blew up as a result. The call-center loan officers are trained largely for […]Read More

Pre-Approval #s DOUBLE Year Over Year; Gift Of Equity In Lieu Of Down Payment

JVM formally pre-approved 268 borrowers for the purchase of a home in June. This was an all-time record for us and up over 100% from last June, when we only pre-approved 124 borrowers. I share this b/c agents ask all the time if our pre-approval numbers are up year over year, and the answer is […]Read More

Rapid Re-Scores; We Can’t Charge Borrowers

RAPID RE-SCORES We often do a “rapid re-score” to repair a borrower’s credit for a variety of reasons: (1) to raise a borrower’s score above a minimum requirement, such as 700 for a HELOC or for Jumbo financing (more important than ever in this post-COVID lending environment); (2) to improve a borrower’s interest rate, as […]Read More

Condition Issues; What’s “Lendable”; Don’t Disclose in MLS if “As Is”

We recently had an “as is” purchase almost blow up again b/c condition issues were disclosed in the MLS. This is another reminder to make sure the MLS references no significant condition issues if a transaction is “as is.” Both appraisers and underwriters review MLS and neither can turn a blind eye to condition issues […]Read More

Why Borrowers Should Not Pay Points to Buy Down Interest Rates

This is a topic I touch on or repeat at least once per year b/c borrowers continue to ask us if they “should buy down their rate,” and our answer is almost always “no.” EVERYONE WHO PAID POINTS IN 2009 WASTED THEIR MONEY In 2009, when rates fell below 5% we refinanced our entire database […]Read More

Yes, We Have Inflation Now – ASSET Inflation; Real Estate = Inflation Hedge

When I tout real estate as an inflation hedge, I often get comments like this: “Dude, we are seeing DEFLATION now; INFLATION is the least of our concerns….” I then get examples of items that are far less expensive now such as gasoline, cars (way cheaper now for all the tech, speed and safety we […]Read More

Loans Just Got Tougher For the Self-Employed; Low Supply Keeping Prices Up

LOW SUPPLY/PENT UP DEMAND KEEPING PRICES UP Keith Robinson, Chief Strategy Officer of NextHome, pointed out in a post last week that there are about 30% fewer listings on the market this year, relative to last year. B/c there is plenty of pent up demand right now facing this decreased supply, home prices are remaining […]Read More

Habib’s Optimistic Housing Market Predictions; What About Agents Who Are Unable to Leave Home?

Everyone is asking and wondering what will happen to the housing market as a result of the COVID-19 crisis. And fortunately one of the most accurate prognosticators weighed in on the topic in this recent Housing News Podcast. The prognosticator is Barry Habib, CEO of MBS Highway. I quote him often b/c he is apolitical […]Read More

Why People Remain Bullish On The Housing Market; Foreign Buyers

There are numerous signs that the purchase market is coming back to life. Anecdotally, the number of pre-approval requests in our office are up over 50% from our March and April averages. The number of ratified contracts rolling in has surged to levels not seen since last spring, with 13 coming in last Monday alone. […]Read More

HELOCs Fading; Jumbo Rates Way Higher; FAQs

Two of the nation’s largest banks announced that they will no longer originate new Home Equity Lines of Credit (HELOCs). This is of course in response to the COVID-19 crisis. We still offer HELOCs but only to 90% Combined Loan to Value (95% CLTV no longer exists) and only for purchase money financing. In Texas, […]Read More

Qualifying The Self-Employed – The Good, The Bad, & The Ugly

Self-employed borrowers can still qualify for mortgage financing, and in some ways they actually have advantages. THE GOOD Self-employed borrowers qualify with previous years’ tax returns, which fortunately will not reflect any slowdowns which might have occurred b/c of the COVID-19 crisis. Self-employed borrowers can qualify with 2018 and 2019 tax returns, or with 2017 […]Read More

Qualifying After Returning to Work

Many people are wondering how soon laid off and furloughed borrowers will qualify for mortgage financing once they return to work. EMPLOYMENT GAP UNDER SIX MONTHS If the layoff or furlough lasts less than six months, lenders will be able to fund most loans as soon as borrowers return to work (for conforming, FHA and […]Read More

What Your Clients Want to Know; Wage Inflation Too

All of our clients – past and present – want to know two things right now: (1) what is really happening to mortgage interest rates; and (2) what is happening to home values – particularly their own. I know this b/c we are getting so many inquiries from clients, and, more significantly, b/c so many […]Read More

New Reasons to Buy Now; Conforming Loan Limit Reminders

THE CRAZIEST THING HAPPENED LAST WEEK… A seller in an extremely hot market agreed to $15,000 of credits and concessions after the inspection reports came back. We are still seeing a lot of purchase activity and the above is one of the reasons why – sellers are suddenly much more flexible. In today’s fast-changing market, […]Read More

1st/2nd Combos Instead of Jumbo; Backup Offers; Temporary Loans; Self-Employed Borrowers

1ST/2ND COMBOS INSTEAD OF JUMBO This is a reminder that 1st/2nd combo financing remains a great alternative to jumbo.  CA 2nd liens are Home Equity Lines of Credit (HELOCS) while Texas 2nd liens are fixed-rate 2nd mortgages; HELOC lenders tie their loans to Prime Rate (3.25% currently); and most accept revised appraisal guidelines (exterior only […]Read More

Jumbo Market Gets Even Tighter as Wells Fargo Pulls Out; Forbearances Again

WELLS FARGO PULLS OUT OF JUMBO MARKET Wells Fargo announced yesterday that it is pulling out of the jumbo mortgage market, sending shock waves through the industry (b/c Wells is such a force). Many other jumbo lenders and investors (that buy jumbo loans) are following suit or tightening up their own internal policies in response […]Read More

Interest Rates Hit Record Low; Closing Cost Tricks Big Banks Play

CLOSING COSTS ARE ALMOST THE SAME FOR ALL LENDERS A buyer said this to me yesterday: “Both of the banks I visited offered to match your rate and give me $4,000 less in closing costs; I only went with you b/c you could close on time and the banks could not…” Both of those banks […]Read More

Appraisal Waivers; Appraisal Contingency Waivers; & DANGER!

Many lenders are again touting “Appraisal Waivers” as something unique that only they offer. Appraisal or “Property Inspection Waivers” are, however, available to every borrower obtaining a “conforming” loan (that conforms to Fannie Mae and Freddie Mac guidelines). Fannie and Freddie simply use an algorithm that decides when to grant appraisal waivers. If we get […]Read More

More HOA Dues = Less House; Personal Litigation

HOA DUES = LESS HOUSE This is another reminder that HOA dues can significantly offset purchasing power, as HOA dues are a payment that affects debt ratios like every other monthly payment. In this low-rate environment, $100 of HOA dues can offset purchasing power by as much as $20,000. In other words, a buyer looking […]Read More

The “Mother” of All Testimonials :) (Winnie the Pooh Too!)

I try very hard to keep this blog as informative as possible, without inserting too much “Rah, Rah JVM!” material. But sometimes, I can’t resist – especially when even the “Rah Rah” stuff is informative. We work extremely hard to cultivate relationships with real estate agents, primarily by pointing out all we can do for […]Read More

5 Key Credit Reminders & Misconceptions

#1 – Consumer credit scores are not the same as mortgage credit scores. Borrowers often share their credit scores with us, as if those scores are set in stone. Those scores, however, are often generated by online “consumer” oriented scoring models that are much less stringent than the scoring models mortgage lenders employ. As a […]Read More

#1 Reason We’re Not In A Housing Bubble; Life Events & Housing

I am asked every week by friends, family, team members and clients if I think “now is still a good time to buy” and “do I think we are in a housing bubble.” Even though I blog about this often, everyone still wants reassurance. And some of the strongest reassurance I have yet to see […]Read More

Condition/Foundation Issues – How To Handle?

Agents often ask us about properties with condition issues and last week was no exception when an agent was looking at a property with major foundation problems. In light of this, I thought it was time to set out some of the options once again. I. DON’T TELL US 😊 (NON-DISCLOSURE) If lenders/underwriters are made […]Read More

4 Options for Buying Homes for Parents

We are often asked if buyers can purchase a property with “owner occupied” financing for their parents. Our answer is “it depends,” but the frequency of the question prompted me to set out four options below. I. SECOND HOME “Second home” financing is almost as favorable as owner-occupied financing, so this is a great option […]Read More

Why Now Is The Best Time to Buy – Again; Home Prices 8.45% LOWER In January

We beat this dead horse all too often but am beating it again because it is excellent information to share with potential buyers who may be on the homebuying sidelines for a variety of reasons. Mansion Global recently published a column titled With Recession Fears Diminished, January Is a Smart Time to Buy. Here are […]Read More

10% Down to $1.24 Million; 5% Down to $1.07 Million

“High Balance” Conforming Loan Limits are now $765,600 in “High Cost” areas, which include much of coastal California including the Bay Area. These much higher conforming limits now allow buyers to purchase homes in the $1 million+ range with much smaller down payments – if they couple their first mortgage with a “piggyback” Home-Equity-Line-of-Credit (HELOC) […]Read More

When You Should Drop Your Husband

Yesterday, I received the following text from a savvy agent we have worked with for years: “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 turnip truck. Does this mean the husband has […]Read More