When Great Economic News Is Actually Bad News

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I Was Slapped in the Face With Very Good Economic News! For months now, I have been explaining how weak our overall economy is and why that portends much lower interest rates in the near future – no matter what the Fed does. I of course was just repeating what Jim Rickards, Jim Rogers, Stephanie […]Read More

2023 Conforming Loan Limits Surge To Over $1 MILLION! Some Interesting Perspective

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1994’s Limit Was $203,150 When I got into the mortgage business in 1994, the conforming loan limit was $203,150. Adjusting for inflation, that is about $408,000 today (almost exactly 2x the 1994 amount) The median house price in 1994 was about $130,000, while it is about $455,000 today (about 3.5x the 1994 number). Today’s maximum […]Read More

How To Read a “Loan Estimate” (LE); Where and How To Look

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MORTGAGE RATES ARE IMPROVING AS I AM TYPING THIS BLOG – DESPITE THE FED’S RATE HIKE – showing once again that mortgage rates often do not move in unison with the short-term Fed Funds Rate (the rate the Fed increases). I recently blogged about the tricks lenders play when providing loan estimates to help lure […]Read More

SHOCKING: Huge Lender Exits Business; JVM Here To Stay; JVM Rate Drop Free-Fi®; Opting Out Too

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Please Don’t Get Pummeled With Phone Calls (Opt Out) I blogged a few weeks ago about borrowers getting pummeled (literally) with phone calls after they apply for mortgages. This is because credit bureaus sell borrower info. Online lenders then buy that info as “leads” and go after those borrowers with reckless abandon. I bring this […]Read More

Why Would a Mortgage Bank BROKER Loans?

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There Are Three Primary Channels In Which Consumers Can Garner Mortgage Loans Commercials banks and credit unions (they do commercial loans, offer checking & savings accounts, and do mortgage loans) Mortgage banks (they only underwrite and fund mortgage loans, and do nothing else) Brokers (they only “originate” loans, and then submit them to unaffiliated lenders) […]Read More

Lenders Pushing “Stated Income” & 100% Financing; Return of 2008?

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A Few More Notes On Rates Dropping By March I got a bit of pushback from yesterday’s blog (Why I Am Convinced Rates Will FALL By March) and I wanted to touch on it quickly before hitting my main blog points today. The Fed Is No Longer Buying Mortgage-Backed Securities (MBS). Yes, the Fed is […]Read More

Why ARM Rates Are So Close to 30-Year Rates

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Apparently, in 2002, it was “Hot In Herre” – or at least it was according to Nelly. I, however, had no idea because I had never heard the song, and I probably wouldn’t have trusted Nelly’s assessment in any case, given his inability to spell. I bring that up though because yesterday’s rates hit 2002 […]Read More

Inflation RED HOT! Rates WAY UP! Relief On The Way?

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Today’s inflation report (Consumer Price Index/CPI) came in much hotter than expected and rates shot through the roof in response. BUT – as Barry Habib (of MBS Highway fame) has been explaining again and again – this was expected – and should not be alarming. In addition, Mr. Habib carefully explains WHY future inflation reports […]Read More

Why Are Banks Not Paying Higher Rates for Deposits? Why Did Rates Plummet Today Too?

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Why Interest Rates Are Rising Everywhere – Except Your Savings Account That was the headline from this recent WSJ article. Back in the 1980s, a general lack of savings in America was one of the many reasons why America was going to collapse, and we were all going to die… This was ostensibly because Japan […]Read More

U.S. Dollar at Record Highs & Twitter Is Panicking! Why?

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The U.S. dollar is again hitting record highs, and it is much stronger than it was even a few months ago when I last blogged about it: Why a Strong U.S. Dollar Is Terrifying! My favorite way to gauge the dollar’s strength is by watching the DXY Index. The chart at the bottom of this […]Read More

Where’s the Inventory Glut? A VW at 3% vs. A Porsche at 6%

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I shamelessly stole my headline from Brian Stevens in his most recent The National Real Estate Post video. His point of course was that yes, rates are way up, but buyers in many markets can get way more house for their money in light of all the price reductions (something we are definitely seeing in […]Read More

This Ain’t 2008 – Again

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I COULD ROTATE MY FOOT 270 DEGREES – SO NATURALLY, I PANICKED About 15 years ago, I turned my entire knee into butter while I was skiing at Squaw Valley (now Palisades Tahoe). I was skiing with a bunch of way-too-cautious boomers that day, so I escaped during lunch to do one fast run. Wanting […]Read More

LoanDepot Stock Fell From $32 to $2; SO MUCH TO LEARN

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COVID caused rates to plummet – which in turn ushered in the mother of all refi booms. Several large mortgage banks had initial public offerings at the height of the refi boom – with valuations that were based largely on revenues from refis.Read More

Homebuyers: Be Aware of Fraudulent Mailers!

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Desperate Mortgage Bankers Resort To Fraud After the 2008 meltdown, a prominent mortgage banker, who was accustomed to living very extravagantly, started a “Loan Modification Consulting” business as a way to bolster his company’s waning revenues. The only small problem was that it was 100% illegal, as his firm was collecting large fees (thousands of […]Read More

China’s Banking System Collapse Is Terrifying; Why It Matters

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EVERYONE IS FOCUSED ON “FED DAY” – which is the day of the month (today) on which the Fed announces its latest increase in the Fed Funds Rate (expected to be 0.75%, and the market has “priced it in” already). BUT – there is an economic issue brewing overseas that is 100x more momentous and […]Read More

Car Shortages to Surpluses Overnight; Things Change VERY QUICKLY

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I saw this tweet over the weekend: “The auto industry collapse has just begun and this would be one of the worst times for you to buy a vehicle. In a normal market (pre-2020), Auto Loan delinquencies hovered at 2 to 3%. Today, that number is exploding with nearly 1 in every 4 loans in default in Washington DC.” The author of the tweet is Graham Stephan, a young investor and car enthusiast, and he may or may not be right.Read More

A Tale Of Two Businesses; One Rising and One DYING!

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I had experiences recently at two different businesses that were so contrasting and so fascinating that I had to blog about them. And yes – this much applies to mortgages and real estate! The Good Business I took my mountain bike to a bike shop that I had not been to for almost 9 months, […]Read More

Mortgage Companies Imploding Again! When to Worry

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In 2006, the infamous Implode-O-Meter was established to predict and announce all of the mortgage companies that were going belly up. It was both fascinating and extremely helpful because it warned people to avoid lenders or investors (that buy loans) that were on the verge of bankruptcy.Read More

Good News! Recession Coming Soon; Rates Continue to Fall After Fed Raises “The Rate”

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A week ago, I pointed out how the recent 0.75% increase in the Fed Funds rate resulted in LOWER long-term rates. I highlighted three reasons for this: (1) The markets perceived the news as effective inflation fighting; (2) the markets expected the news and had priced it in already; and (3) the Fed Funds rate […]Read More

No Building + Growing Population = Strong Housing Market EVEN IF RATES ARE AT 6%!

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There were about 2.3 million new homes constructed in 1973 – a number we have not seen since. This is not that big of a deal until you remember that the entire population of the U.S. was only about 211 million (compared to 332 million now). Over the last year, we have built about 1.3 million homes, when, again, the U.S. population was over 330 million!Read More

High Rates; Softer Market; ARMs; Housing Shortages; Recessions; Refis

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Highest Mortgage Rates Since 2009 Last week’s sky-high inflation numbers have pushed 10-Year Treasury rates to levels we have not seen since 2018. While mortgage rates are at levels we have not seen since 2009. Beating A Dead Horse – Again The fast-climbing rates and media rumblings continue to spook buyers – so I am […]Read More

Why We’re Seeing Fraud Claims Now & Will See A Lot More

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I knew and worked with a bunch of hard money lenders (who loaned money based strictly on equity) prior to the 2008 meltdown. Even though they were a bit cocky with their success and they lived like rockstars, they were all nice and honest guys for the most part. They solicited pools of funds from friends, family members, and outside investors – and then loaned out that money to homeowners and homebuyers who could not qualify for better financing.Read More

What Every Homebuyer Must Know About Hazard Insurance & Mortgages

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Here are a few tidbits about Hazard Insurance, something that is required with every mortgage. Hazard insurance is also known as fire insurance and homeowners insurance, and it should not be confused with mortgage insurance, which only covers the mortgage and not the dwelling. Lenders require the “Dwelling Coverage” to match or exceed the lower of the loan amount, or the replacement cost estimate.Read More

Media Lies About Housing Market; Slower Market ≠ Depreciation

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Agents are telling me that some of their clients are getting cold feet about buying right now for a variety of reasons, including: 1) Concerns about higher rates and payments; 2) Concerns about depleted investment accounts; 3) Concerns about an overheated housing market; and 4) Misleading media reports that are scaring the heck out of everyone!Read More

What If Rates Don’t Fall? WRAP-AROUND MORTGAGES

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“… I remember my first mortgage back in 1982, when my rate was 15%!” said every boomer ever… “… I remember my first mortgage back in 1982, when my rate was 10%!” said my law school professor… The above two comments are huge reminders that homes still sell in even the highest of interest rate […]Read More

California Giving Away Down Payment Funds For Free!

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We have received a ton of questions recently regarding the California Housing Finance Agency's (CalHFA) new program that offers a 10%, forgivable, interest-free loan to first-time homebuyers. So, we want to clarify the program's guidelines and touch on some serious tradeoffs buyers should consider.Read More

Pyramid Lending = Death of Mortgage Banks

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During boom times, when there is excess business and margins are fat, “pyramid lending” can work. But – when business slows and margins compress like what has been happening this year – pyramid lending not only does not work, it will kill off many mortgage banks. This is because borrowers can shop for rates and apply for loans more easily than ever nowRead More

Who’s To Blame For High Gas Prices & Why It Matters?

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There are 150,000 gas stations in America, and most of them are independent “mom and pop” stations. Similarly, there are 9,000 oil companies in America. So – it is comical to hear politicians accuse the oil and gas industry of “colluding” to create higher gas prices – when it would be impossible. Gas prices are […]Read More

Why Heejin & I Turned Down $10 Million

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We know a loan officer with a large team who does about half of JVM’s volume – and he was offered a $6 million “signing bonus” to move to another mortgage bank. He turned it down, however, and remained where he was (I will explain why below). With higher rates and refis all but dead, […]Read More

#1 Reason Fintech Firms Fail In The Mortgage Space

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Mortgage Industry Is Reeling With mortgage rates 2% higher than where they were in 2021, much of the mortgage industry is struggling for survival now that refis are all but dead. Many mortgage companies relied so heavily on refis that they are all but out of business now. But – the companies that always seem […]Read More

Cold Feet In The Face of Uncertainty (Take The Money & Run)

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In the early months after COVID hit in 2020, I wrote numerous blogs about the strong likelihood of the economy and the housing market bouncing back. My reasoning was based on strong demographic demand, a shortage of inventory, the press’s propensity to make crises seem worse than they are, and America’s overall resilience in general (as we had bounced back from many other crises amazingly fast).Read More

Watching A Company Implode; Ego, Hubris, INABILITY TO LISTEN OR ADJUST

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“As if things couldn’t get more ridiculous at the online mortgage lender Better Mortgage, where 900 people were laid off over a Zoom call this past December, the company reportedly issued another wave of layoffs by inadvertently notifying employees via its payroll app.” This is a quote from The Verge in an article posted yesterday. […]Read More

Cryptocurrency & Mortgage Financing – Things To Be Aware Of

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We recently had a borrower liquidate funds after a flurry of trades – resulting in demands for YEARS of bank statements by the underwriter (because she’s required to “source” every dollar that goes into a transaction)Read More

Why Russia/Ukraine War Drums Impact Mortgages & Real Estate So Much!

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Interest rates were trending upward before news surfaced that NATO believes Russia is still likely to invade Ukraine (because so many Russian troops are amassed at the border). When the news surfaced, rates dropped sharply in response.Read More

Why The NASDAQ Impacts Homebuying So Much

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After the 2008 meltdown, a borrower told me how sad she and her husband were because they lost $250,000. They bought their home in the 1990s for $300,000 and watched it appreciate to $1 million by 2006ish. Interestingly, they pulled cash out every 18 months to buy boats, jet skis, new cars, and vacations.Read More

Fed Comments Push Rates Up; Re-Casting Problems!

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Interest rates shot up again yesterday, as the Fed indicated that it may increase the Fed Funds rate faster (as much as 1% this year) than previously anticipated. The Fed also implied that it would stop buying mortgages and bonds (via “Quantitative Easing”) which would put further upward pressure on rates. Read More

5 Misleading Rate Quote Tricks To Watch Out For!

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This is a surprisingly common occurrence: A buyer comes to us with a ridiculously low rate quote from another lender and insists that we match it. We then ask to see the Loan Estimate (LE) that sets out all the fees. And – invariably, we find $10,000 of points or origination fees buried in the loan. The confused buyer, however, thought she was getting a “no cost” loan. Read More

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

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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

Are “No Doc” Loans Back? Misleading Lender Games

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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

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

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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

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

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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

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

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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

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

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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

Why We Don’t Align With UWM/Broker Channel

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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

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

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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

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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