Posts

Is The Fed The Wizard Of Oz (Powerless)? Why It Matters

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In the iconic movie The Wizard of Oz, all of the characters thought the Wizard was an all-powerful being who controlled everything and everyone. But, in the end, we found out that the infamous Wizard was really just an old man behind a curtain playing tricks with loudspeakers, smoke and mirrors. RENOWNED RESEARCH ANALYST SAYS […]Read More

BEST NEWS EVER! Fannie And Freddie Eliminate “Adverse Market Fee;” Reduce Rates By 1/4%!

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I can think of many examples of things that would constitute “the best news ever.” Hearing “snow day/school canceled” announced on the radio when I was a kid on Western Minnesota’s prairie is definitely up there. And, so is the time my friend’s older brother scored us not one but TWO kegs of beer for […]Read More

Why The Fed Probably Can Never Raise Interest Rates

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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

Nordstrom, Walmart, Or Both?; Millennials Demand Both

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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

Rates Climb Again; Panic Time? Paying Points? Affect On Buying Power

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PANIC TIME? Interest rates climbed again yesterday, primarily in response to inflation fears – so we are now officially back to pre-pandemic interest rate levels. It is not time to panic, however, as rates seem to be following the trajectory I outlined in this recent blog: 4% by June. In that blog, I referenced Barry […]Read More

2021 Predictions: Rates, Inflation, Housing & Affordability

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I often point out how difficult, impossible and/or ineffective it is to make predictions for anything nowadays. This is because we are in uncharted waters when it comes to this much Fed and government involvement in our economy, making it impossible for anyone to predict accurately b/c there are no precedents to rely on. BUT […]Read More

Rates Up Again! Why Nervous Appraisers Sometimes Appraise Lower Than We Expect

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RATES 3/8% HIGHER NOW Interest rates continue to climb in response to positive economic reports (strong retail and home sales numbers), inflation concerns relating to both price signals and massive increases in the money supply, and President Biden’s $1.9 trillion COVID Relief package. Rates are now a solid 3/8% higher than where they were in […]Read More

Mortgage Rates Way UP; Refi Now… Or Forever Hold Your Peace

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Remember last year when I said rates could either go up, go down or stay the same? Well, I was right. 😊 OK – I was actually right about the rates going up part. And I was just repeating what Barry Habib was saying. Habib thought rates would go up early this year and then […]Read More

Shopping For A Mortgage With JVM Lending

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Whether you’re purchasing a home or refinancing an existing mortgage, it’s crucial to get the best deal possible. At JVM Lending, we make it easy with our Mortgage Calculator. Enter the details of your loan to receive rates and closing costs instantly and specific to your situation. We’re a local, unique, and experienced mortgage firm […]Read More

Fannie Mae Re-Slams Mortgage Industry With 1/2 Point Refi Fee

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In August, I blogged about Fannie Mae Slamming Refi Borrowers With A New 1/2 Point Fee. And then later in August, I blogged about Fannie Mae Yanking Its 1/2 Point Fee In Response to Industry Pressure. But, Fannie only postponed its refi fee until December 1st. So all refinance loans sold to Fannie Mae and/or […]Read More

Should I Lock My Rate Before The Election? “Uncertainty” and Low Rates

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Yesterday, I was asked “should I lock my rate before the election just to be safe?”   My response was that I think people are safe not to lock b/c the election is likely to be contested.   And this is why. The polls are generally in favor of Mr. Biden, but they are constantly moving and […]Read More

Trump or Biden – Who’s Better for Rates & Mortgages?

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We recently had a client who urgently wanted to refi “before Biden gets elected and causes rates to shoot way up.” She was convinced Biden would immediately improve the economy so much that rates would increase sharply as a result. I hear comments like that so often that I wanted to address the topic again […]Read More

10% Down Jumbo Options; 80/10/10s; Rates Hit All-Time Lows – Yawn

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RATES HIGHER THAN IN JULY DESPITE “RECORD LOWS” Housing Wire was reporting that mortgage rates hit all-time lows again last week – and I yawned again last week. This is why. Until the mortgage industry comes to grips with its capacity issues, the actual mortgage rates that most lenders offer will not fall further. We […]Read More

Fannie Mae’s New 50 Basis Point Fee Slams Refinance Borrowers

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As I mentioned yesterday, Fannie Mae and Freddie Mac imposed a new fee of 1/2 point, or 50 basis points, on all refinance loans – catching the entire mortgage world completely off guard. What the new fee means in reality is that all refinance borrowers will now face 1/8 to 1/4 percent higher rates when […]Read More

Why I Love And Hate Freddie Mac’s Mortgage Interest Rate Surveys

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Here is the link to Freddie Mac’s Mortgage Interest Survey Data. I recommend sharing this link often b/c it is one of the best sources available to see where interest rates really are. You might, however, also remind clients that Freddie Mac shows “average rates” only and that there are as many as 12 Factors […]Read More

Rates Edge Higher Again; Normality? Will Rates Fall Further?

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Mortgage interest rates edged higher again today, and the 10 Year Treasury is at its highest level since late March. Rates edged higher largely in response to a stronger than expected employment report; unemployment was expected to hit 20% but was instead at 13.3%. So, we are back to “normal” to some extent b/c mortgage […]Read More

Rates Keep Falling; 15-Year vs. 30-Year Fixed-Rate Mortgages

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Rates continue to fall in response to coronavirus concerns. They hit all-time record lows again today, as the entire mortgage industry scrambles to handle the influx of refinances. Don’t take the 15-Year Fixed! Take the 30-Year Fixed – Please! When rates move this low, borrowers often ask if they should opt for a 15-year mortgage […]Read More

Why Does Coronavirus Affect Rates So Much? Will It Last?

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Rates remain near all-time record lows and Coronavirus concerns are the primary reason why. REASONS FOR CONCERN Spanish Flu: The Spanish Flu epidemic from 1918 – 1920 infected 27% of the world’s population (or 500 million people). It ended up killing between 50 million and 100 million people, making it the deadliest epidemic of the […]Read More

When Can Borrowers Lock Their Rate? Rate Volatility

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BORROWERS OFTEN WANT TO LOCK PRIOR TO GETTING INTO CONTRACT Borrowers often want to lock in their interest rates prior to going into contract (they typically want to take advantage of low rates before they go up). We are unfortunately unable to do so b/c we need to identify a property address before we can […]Read More

Are Low Rates The “New Normal?” The Fed Is Irrelevant

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For years I have been repeating the predictions of various market experts about how interest rates have to go up at some point. And for years, I have been dead wrong! My wrongness was only illuminated again with the recent dramatic drop in rates. All this only makes me think that low rates may now […]Read More

Some Rate Reminders for California Borrowers

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  Rates are a hot topic for California borrowers. Everyone wants to get the best mortgage rate possible when they’re getting ready to take out a loan for their home purchase. Here a few helpful reminders to keep in mind about mortgage rates in California: California rates will vary depending on the loan type. There […]Read More

The “Yield Curve”; What It Is, and Why It Matters

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After the 2008 meltdown, almost all of our borrowers insisted on only 30 year fixed rate mortgages b/c so many had heard horror stories about adjustable-rate mortgages, or ARMs. The ARMs that earned the bad rap, however, were primarily subprime adjustable-rate loans with short 2 year fixed periods and very steep adjustments. The A Paper […]Read More

Rate Shopping Concerns; Avoiding Pain for All

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We sometimes lose pre-approved “rate shopping” borrowers long before they are even in contract. This is frustrating for us b/c our full pre-approvals take two to three hours of time, and b/c we have not even formally quoted rates yet (we only estimate rates when we send out payment scenarios). In any case, we like […]Read More

Rates Up Again; Is Good News Bad News or Good News? (It’s Both); Historic Rates

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“When the trough gets smaller, the pigs get meaner.”  This is a Dan Sullivan quote Heejin and I both love, and it is a great reminder for us all when markets contract. We’re not getting “meaner” at JVM, but we’re certainly getting more competitive. And we love the competition. Rates shot up again today in […]Read More

Higher Rates Won’t Hurt Housing Prices Per Fannie Mae Economist

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Several Realtors have asked us recently about the effect of higher rates on housing prices. This is b/c their own clients are concerned about buying now and risking a decline in values. According to Fannie Mae’s Chief Economist, Doug Duncan, rate increases usually do not portend a decrease in values for several reasons. 1. If […]Read More

What Does Trump’s Win Mean for Mortgages and Markets?

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As we mentioned in “State of Rates,” rates increased sharply after Mr. Trump was elected. In the shorter run, we can expect rates to remain where they are or to continue to edge higher, unless significant negative economic news surfaces. Longer term, rates are expected to rise, but we have seen this prediction dashed time […]Read More

What Does Trump’s Win Mean for Mortgages and Markets?

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Rates went up with news of Trump’s victory. The markets believe that a GOP controlled White House and congress will foster a more hawkish Fed (more willing to raise rates) and a tighter fiscal policy (less government spending and quantitative easing). This contrasts with what we mentioned in previous blogs. It was thought that the uncertainty created by […]Read More

Rates Way Down, When They Are Supposed To Be Up? What Is Going On?

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Rates have dropped precipitously in recent days b/c of the global sell-off in stocks. Once again, weak economies worldwide are spooking investors and causing them to sell stocks and move to bonds en masse. When investors move to bonds, the price of bonds increases b/c of increased demand, and this pushes yields and rates down. […]Read More

Elections Don’t Affect Rates; CFPB Maybe

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Elections (either pending or completed) usually do not move interest rates, or at least in the way people might expect. Rates historically move either up or down prior to Presidential elections (they do not always go down, as many think). And last night’s Republican victories did not affect the market significantly either. One hopeful outcome […]Read More

FHA – Mortgage Insurance No Matter What the LTV IS

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Starting in June, FHA will require Mortgage Insurance (MI) no matter how low the loan-to-value ratio (or how big the down payment) is.  This applies to both 30 year and 15 year mortgages. Many borrowers have to take FHA financing because they have issues that preclude them from obtaining conventional financing.  When this is the case, they […]Read More

“Rate Quotes” Are Worthless/Waste of Time Prior to Pre-Approval

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We sometimes have buyers who insist on getting rate quotes before getting “pre-approved”, or before they give us any information. We strongly discourage rate quotes at the front of the approval process for a variety of reasons. First and foremost, markets change often. Lenders can quote very aggressively when they know borrowers are not even […]Read More

FHA Turn Times = Conventional; Rate “Roll Downs”

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Two Realtors asked us yesterday if we could close an FHA transaction in under 30 days. We of course said “yes” becuase it takes no more time to close an FHA transaction than it does to close a Conventional transaction. We are not sure why people think FHA transactions take longer. The appraisal and underwriting […]Read More

Trying to “Time the Bottom” and Getting Burned

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All of our borrowers wish or expect us to “time the bottom” of the market with respect to interest rates. And as a result, they are often reluctant to lock in a rate or are reluctant to get us the necessary paperwork after we do lock. This is because they read accounts in the press […]Read More