Tag Archive for: fed

Uh Oh!! Fed Says No More Rate Cuts This Year!! Panic Time?

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Interest rates shot higher yesterday after the Fed signaled there would be no further interest rate cuts this year. And because 99% of Americans mistakenly believe the Fed is all-powerful when it comes to all interest rates, I am going to dispel the Fed myth one more time. We share these blogs with clients who insist on “waiting for the Fed to cut” before buying homes or locking in rates. SIDEBAR: This post explains that for every $1 rise in gas prices, the sitting president loses 6% of his support – meaning Trump has now lost 15% of his support. A) It is super interesting. B) You can be damned sure Mr. Trump is aware of this, so it will be interesting to see him pull out all the stops to push oil and gas prices lower. And that bodes well for rates.Read More

Fed Day! Should The Fed Cut Rates To Offset High Oil Prices?

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Today is “Fed Day” – when the Fed announces whether or not it will cut rates. And – given that PPI (Producer Price Inflation) came in hotter than expected today, the Fed will very likely not cut. PPI is from February too, BEFORE the Iran war and the run-up in oil prices, so we can expect an inflation-leery Fed to be very concerned.Read More

If AI Kills 50% Of White Collar Jobs – Interest Rates Will Plummet to 0%!

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Anthropic’s (Claude’s) CEO thinks AI will wipe out a full 50% of white-collar jobs. And terrifyingly, he’s not alone, as Elon Musk, Mark Benioff (Salesforce dude), Ford’s CEO, and Microsoft’s AI Chief all agree. If that happens, unemployment will shoot to over 30%! And NOTHING panics the Fed more than rising unemployment. Even a 10% rate would result in a 0% Fed Funds Rate, let alone 30%.Read More

Why Care About The Fed Chair? 4 Things Every Agent Needs To Know

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Renowned author Nassim Taleb hates Clinton’s former Treasury Secretary, Bob Rubin – or at least Taleb hates what Rubin was able to do at the expense of almost everyone else. Mr. Rubin earned $120 million working for Citigroup in the decade preceding the 2008 financial crisis.  He earned his money by encouraging the bank to take very risky bets on mortgage-backed securities, among other things. Read More

Unusual: The Fed Cut Rates & Rates Fell! Why Does Anyone Listen To The Fed?

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Something very odd happened in July of 2008 – only a few months before the biggest financial meltdown since 1929. Inflation was over 5% (double today's levels), the Fed was panicking, and the markets were predicting a Fed rate increase in August of 2008. What makes that so comical is that only a few months later in October of 2008, the Fed did an emergency rate cut of 50 bps, shortly after the Lehman collapse (and we saw “DEFLATION” set in).Read More

12-Month Bank Statement Loans! Cost Of Waiting To Lock A Rate; Trump Can’t Have It Both Ways

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We now have a loan that only requires 12 months of personal bank statements for income verification. This is such a big deal because it is another indication of how flexible the non-QM market is getting. This loan uses the aggregate of deposits into a personal account for income. Other bank statement loans require 24 months of statements, business statements, and/or expense ratio calculations (that limit income). This loan also allows for credit scores as low as 620 and down payments as small as 10%. It is an excellent loan for self-employed and gig-economy borrowers whose tax returns (or even W2s) don’t adequately reflect all of their income.Read More

Why Kids Not Drinking Is A Huge Threat To The Economy! Who Cares If The Fed Cuts? Investment Property Financing Is Insane!

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Per capita alcohol consumption amongst 18 to 34-year-olds has fallen by as much as 25% over the last 10 years. And even sadder, binge drinking has dropped off by as much as 40%! Let’s discuss why this is serious.Read More

Why You Don’t Want Appraisers To Push Values! Rate Cut Nazi: “No Cut For You!”

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We had an appraisal sliced to ribbons yesterday by a review appraiser, and that was the impetus for this blog. The appraiser thought he was doing us a favor by coming in at contract price, but unfortunately that was not the case. If the appraiser had come in a bit low to begin with, given the lack of adequate comparable sales to support the contract price, there likely would have been no call for an appraisal review – and we’d now have a much higher value to work with.Read More

Rates Fell – Delivering 6 Very Important Lessons! Which Bubble Will Pop First?

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An alarmingly bad “Challenger Job Cuts” surfaced today, and rates fell as a result. Among other things, we’re seeing a 22-year high in announced job cuts, and hiring plans are down a whopping 35% over last year. While this is bad for the economy and job seekers, it is great for this blog because it reveals 6 important lessons.Read More

Fed Cuts Rates – And Rates Shoot Higher (Again)

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The Fed cut the Fed Funds Rate by 0.25%, exactly as expected, and long-term rates shot higher shortly thereafter – and they are again higher today. Rates shot up largely in response to Mr. Powell’s “hawkish” comments during his follow-up press conference. He made it very clear that an additional rate cut in December is far from certain (despite betting markets implying otherwise).Read More

Why No Armageddons Yet? And What Happens When We Get One? Takeaways

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If the Book of Revelation in the Bible (about the coming of end times) were written by a mortgage guy, there would be entire chapters devoted to the impact on interest rates (which is why I am pretty sure nobody asked a mortgage guy to write that book). “…There was a great earthquake. The sun turned black like sackcloth made of goat hair, the whole moon turned blood red, and the stars in the sky fell to earth…and interest rates fell sharply as a result…” See? It just doesn’t sound right. Anyway – readers of this blog should understand this axiom by now: Apocalypses usually mean lower rates.Read More

Difference Between Points, Discount Points, & Origination Fees; Slimiest Thing I’ve Seen

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This is the slimiest thing I’ve seen in a long time. We quote most of our loans as “no points,” meaning that we truly don’t charge any points or discount points of any kind. But a borrower recently left us for another lender (temporarily) that offered a 1/8% lower rate and “no points” too. The problem was that the lender was also charging $10,000 in “origination fees,” and $10,000 MORE than what we were charging. Fortunately, the borrower shared his Loan Estimate with us, and we were able to illuminate the slime-factor and bring the borrower back to JVM.Read More

Will High Rates Bring Down The Cost of Hamburger?

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If aliens swooped down and stole 90% of the world’s cattle tonight, the cost of beef would likely increase at least tenfold. And the Fed’s response would be to raise interest rates to bring down the cost of beef. This is because in Fed land – all price increases are “inflation.” Comically and paradoxically, higher rates would likely increase the cost of beef.Read More

Rates Shoot Up Again; Do Fed Rate Cuts INCREASE Mortgage Rates? Will They Fall Again?

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Rates have done nothing but go up since the Fed cut the Fed Funds Rate last Wednesday. We saw another spike in rates this morning as the bond market reacted to much stronger-than-expected economic data (GDP/growth, employment, and durable goods reports).Read More