When Rich Borrowers Can’t Get Loans; “Salability” Once Again

SUCCESSFUL COMMERCIAL LOAN OFFICER DOESN’T UNDERSTAND RESIDENTIAL LENDING We recently had a very successful commercial banker apply for low down payment financing b/c he wanted to preserve his cash for improvements and other projects. He, however, had side businesses with losses on his tax returns, he wanted to use a business bank account for his […]Read More

Beware of False Marketers

“Beware of false marketers, who come to you in 2018 clothing, but inwardly are stuck in 1990.” Matthew 7:15 I should note that Matthew is my neighbor, and he said that to me last night at 7:15 when I was getting the mail. 😊 I love Matt’s warning though b/c there are so many marketers offering […]Read More

Recession News – Not So Bad; How Chinese Buyers Affect CA Real Estate; Bullish On Real Estate

The National Real Estate Post had a great video today with information I thought was well worth sharing. Marketing commentator Barry Habib discusses margin compression, the coming 2020 recession, why he is bullish on real estate even if a recession hits, and why Chinese buyers influence California real estate so much. MARGIN COMPRESSION This is […]Read More

“Don’t Just Dive Into Action: Stop to Think First”

“We prefer to be seen doing something rather than nothing, but our bias for busyness keeps us from learning.” I stole the above subject line and phrase from another excellent WSJ article that you can find here. (as always, we are happy to send key excerpts) GOALIES MISSING PENALTY KICKS The article sites a famous […]Read More

Early Payoff Penalties – Six Months Is All We Ask :)

A borrower with substantial funds recently requested an $8,000 lender credit from us to cover his closing costs. In order to give him the large credit, we had to increase his rate substantially. Knowing all this, we asked the borrower why he wanted the large credit and he told us it was b/c he had […]Read More

Why We No Longer See Prepayment Penalties

PREPAYMENT PENALTIES EXPLAINED Prior to the mortgage meltdown of 2008, mortgage prepayment penalties were common. These were penalties that borrowers had to pay if they paid off all or a portion of their mortgages. Lenders imposed the penalties b/c they wanted to be able to recoup the cost of the loan before the borrower refinanced […]Read More

Bump Clauses For Contingent Offers

I have blogged several times about options for buying a new home before selling an existing home. An example is here. Buyers often don’t want to sell first b/c they don’t want to end up homeless while they search for a new home, and in hot markets sellers won’t accept an offer that is contingent […]Read More

TRID – Closing Disclosures & “3 Day Review” Period Explained

This blog is one of the most viewed pages on our website, so I thought I’d update it and send it out again b/c there is clearly a lot of interest. People always want to know the exact day we can close when we prepare a Closing Disclosure (CD) and send loan documents to title. […]Read More

Why Are Rates Going Down When They’re Supposed to Be Climbing?

This is the year when rates were finally going to increase. So why have mortgage rates stopped rising even though the Fed keeps increasing short-term rates? (Short answer: b/c of tariffs and the Fed) And – will mortgage rates start to increase again? (Short answer: probably 😊) These are the questions a lot of people […]Read More

Fake Reviews, The Power of Reviews, & “The Shed”

APPRECIATING YELP’S FILTERS The next time Yelp filters a positive review of yours, don’t complain. Even though Yelp’s algorithms often frustratingly filter authentic reviews, they do a great job of filtering fake reviews. As a company that relies heavily on review sites to authenticate our marketing claims and service levels, we remain big fans of […]Read More

Stick to Your Knitting

HOWARD SCHULTZ’S DISASTROUS NBA TENURE I recently came across some stories about Howard Schultz and the NBA’s Seattle Supersonics that were so interesting I had to blog about them. Howard Schultz is one of America’s “celebrity CEOs,” as the founder and former Chairman and CEO of Starbucks. He is currently worth $2.5 Billion. Mr. Schultz […]Read More

Housing Correction – When? Could Be Now, 2020, 2024, 2027, or ….

I blogged yesterday about how much house prices might correct should a downturn come. Today I am going to share some views on when a possible downturn will come. Hedge Fund Dudes – 2020? Some prominent fund managers think a recession that will tank both stocks and real estate will come sooner rather than later. […]Read More

Housing Correction – When & How Much? WAY LESS Than in 2008

Whenever I blog about housing bubbles, agents invariably ask me when and by how much housing prices will correct. I am no expert, but I am happy to share some observations. I will discuss “How Much” today, and “When” tomorrow. HOW MUCH WILL PRICES CORRECT, IF THEY CORRECT? Here’s the best answer: Nobody has a […]Read More

The Best Way to Stay In Touch With Past Clients

NO MÁS MAGAZINES, CANDLES & CHIP-CLIPS! One of our agent-partners recently mentioned she was going to pay for expensive magazine subscriptions to send to all of her past clients so she would remain top of mind after their transactions closed. And I screamed: “NOOOOOOOOO, DON’T DO IT!!!” OK – I didn’t scream, but I did […]Read More

Scariest Guy In Business? The “Get Lucky Genius”

YOUNG LOAN OFFICER TELLS ME HE’S GOING TO BUY JVM About a year ago, a young loan officer/branch manager asked one of our business development officers if he could visit our office to meet me and the team. He seemed like a nice guy, he said he was doing well, and I always like to […]Read More

To Pay Points, or Not to Pay Points

To pay points or not to pay points, that is the question – so said Hamlet when he bought his first house. 🙂 (He only contemplated “to be or not to be” after he found out he paid two points for a horrible ARM with a 5 year prepay penalty.) Anyway – Hamlet probably should […]Read More

The Tricks Lenders Use When Quoting Rates

We recently had a borrower go into contract after she had been pre-approved by both us and one of America’s largest mortgage banks, via an online portal. The borrower was shopping us against the online lender, making for some very good blog fodder. Here are a few observations: 1. She used JVM’s pre-approval letter when […]Read More

Why We Have to Pull Credit, and Why Buyers Don’t Need to Worry About “Inquiries”

We frequently have borrowers ask us to provide pre-approvals without pulling credit b/c they are concerned about too many “inquiries” on their credit reports. It is, however, impossible to provide a pre-approval without pulling credit. WHY WE HAVE TO PULL CREDIT The below is from the FAQ Section of our website. “Along with your income, […]Read More

Cost Cutting to Prosperity? Not So Much

MAJOR LENDER CUTS COSTS – GOES OUT OF BUSINESS In 2011 when we were in the broker channel, we sent almost all of our loans to a single lender (a major bank) b/c their rates and service were so good. But then in an effort to increase profits, the lender laid off staff and cut […]Read More

Wasting Rent Payments? Another Appraisal Horror Story

APPRAISAL HORROR STORY PART 297 Because we want to always do what is best for our borrowers, we recently switched a borrower from our internal banking channel to the “broker channel” to take advantage of a specific loan product that a wholesale lender was offering. Even though we already had an appraisal in at $512,000, […]Read More

How Do Higher Rates Affect Qualifying? Potentially A Lot.

RATES ARE GOING UP, REST ASSURED We’ve said that at least a hundred times over the years but this time it is a reality b/c the Fed is no longer buying bonds to push rates down, and b/c the Fed is very determined to push rates up in general. We saw a slight dip in […]Read More

A Few Things to Know When It Comes to Condo Financing

Fannie Mae recently loosened their condo guidelines. So, we thought this was a good excuse to share a few condo reminders: A FEW THINGS TO KNOW WHEN IT COMES TO CONDO FINANCING 1. Concentration Rule. No single entity can own over 20% of the units in the complex. It used to be limited to 10%. […]Read More

How to Succeed Like the Simpsons!

I love stories about successful organizations b/c there is so much to learn that can be emulated and blogged about. So, I was extra excited when this story popped up in the WSJ: How To Succeed Like the Simpsons. (As always, if you don’t subscribe to the WSJ, we’ll happily send you key excerpts.) The […]Read More

What to Say To Appraisers? A Lot – But In the Right Way

Ryan Lundquist is a Sacramento appraiser who writes an excellent blog about appraising. It is called the Sacramento Appraisal Blog, and it is chock full of invaluable info. I am sharing a portion of one of his excellent blogs with a great tip below (with permission and full attribution of course). A “cheat sheet” for agents […]Read More

Mortgage Industry Shakeout Is Coming; What It Means for You?

“It’s a brutally competitive market right now,” Weinbach said. “Typically the way this ends up is a shakeout, and the sooner the better.” That is a quote by the CEO of Chase Home Lending at the recent Mortgage Bankers Association conference in NYC. Every mortgage industry executive is predicting a shakeout, and humorously, they all […]Read More

“External Influences” (Busy Streets, BART, Cemeteries, etc.) Can Significantly Impact Values

Real estate agents involved in transactions with external influences sometimes under-estimate their effect and get frustrated when appraisers have difficulty supporting value. The most common problem involves properties on busy through-streets. A loud or busy street near a property can shave as much as $50,000 to $100,000 off the appraised value, depending on the price […]Read More

Leave Money On The Table – If You Want to Be Successful

When I was around seven years old, I loved my oldest brother’s microscope and was constantly sneaking into his room to play with it. My brother did not want me in his room nor did he want me to play with his microscope, so he decided to sell it to me. I can’t remember the […]Read More

The Scary Thing About FHA Interest Rates

WHY WE LOVE FHA I blog often about why we love FHA financing so much: (1) Speed – we can close in 14 days. (2) Flexibility – in regard to credit and debt ratios. (3) Low down payment – 3.5%. (4) Condition – properties can be purchased “as is, and no Section I clearance is […]Read More

Comparable Sales We Can’t Use In Appraisals

Realtors often send our Appraisal Manager comparable sales (comps) that they want our appraisers to use in their appraisals. The problem is that we often cannot use them b/c they are so far outside of appraisal guidelines. Last week was no exception, when we received comps that were in different cities than the subject, 25% […]Read More

Down Payment Assistance (CALhfa) Explained

We offer several Down Payment Assistance programs, even though they have limitations that include higher rates, slower closing times, higher fees, and income caps. Down Payment Assistance programs are, however, sometimes absolutely necessary for borrowers who cannot access enough cash to buy a home. One of the best programs for borrowers with limited cash is […]Read More

Integrity Stories – Extreme Integrity Always Pays Off

STORY #1: GIVING BACK MONEY WHEN NOBODY WOULD KNOW When I closed my first mortgage loan in 1994, the commission check from the wholesale lender was $1,500 too high. Everyone told me to just keep the money b/c lenders were unable to catch errors back then. I needed the money badly but I still sent […]Read More

What Could Bring House Prices (and Rates) Down? The Elephant In The Room

DUDE SELLS TOO SOON! I was at a graduation party yesterday and the host told me how his law partner sold his Silicon Valley home two years ago b/c he was convinced the market had peaked. It hadn’t. The poor guy’s former home has gone up another 20% (several hundred thousand dollars) since he sold, […]Read More

Why Higher Rates Don’t Hurt Home Prices

“When rates go up, home prices will crash!” We have all heard similar statements numerous times, but they are not true. This was addressed recently in another short Planet Money Indicator podcast: Rising Rates Vs. Housing Market. While higher rates increase mortgage payments and decrease qualifying amounts, they do not depress house prices according to […]Read More

If Appraisal Comes In Low, Buyer Not Overpaying; Realtors Buying Properties

When Appraised Value Does Not Equal Market Value We have a buyer who was convinced she was “overpaying” for her property b/c her appraisal came in low. But, there were multiple offers for her property that were very close in price to hers, and there are nearby pending sales that are also similar in price. […]Read More

Buyer Gives Us $360 of Chocolate; Speed, Systems, Appraisals, Teams & Other Stories

SYSTEMS AND INTERNAL APPRAISERS – CLOSED IN 13 DAYS! A buyer recently gave us $360 of specialty chocolate b/c she thought we were getting too skinny. OK – actually, she gave us the chocolates b/c we saved her deal that had blown up at another lender. Her contract price was $720,000, but her appraisal came […]Read More

Rates Hit 7 Year High; The Cost of Waiting

COST OF WAITING IN 2012 In 2012 and 2013, we had a borrower looking to buy in Oakland and she was obsessed with getting the absolute lowest possible price. As a result, she kept walking away from transactions, b/c of $5,000 to $10,000 price discrepancies, even though she was shopping in the $650,000 range in […]Read More

Biggest Cause of Housing Shortage? Your Neighbor!

I am typing this blog from my home office and watching our two Corgis play and hunt in our backyard. Kevin (our male Corgi) in fact just caught a lizard and he is proudly strutting around the yard with the poor thing hanging out of his mouth. (And yes, it is as disgusting as it […]Read More

Friction & Middlemen – No Mas!

The primary reason Uber is so successful is not b/c it has nicer cars, or b/c it is cheaper than cabs. It is successful b/c they removed friction from the transaction. You get to just hop in an out of the car. Amazon is so successful not b/c it has a big selection or low […]Read More

Are We In A Housing Bubble?

The four most dangerous words in real estate: “This time it’s different” 😊 I stole that from a recent Planet Money Indicator Podcast about a potential housing bubble (it’s only 8 minutes long, so I highly recommend it). I blogged about a potential bubble in late 2015 here, and highlighted three potential “Bubble Indicators” from […]Read More

Wanna Get Rich? Get Bad Grades

Heejin and I attended a Strategic Coach event last week, and what I love most about these events is meeting so many successful entrepreneurs who closely follow Dan Sullivan’s teachings and get rich doing so. Most recently, however, there was one success story that really stood out. It involved a young man named Charles. I […]Read More

“Appraisal Management Companies” Explained. Why It’s So Important!

Every mortgage lender is required by law to order every appraisal through an Appraisal Management Company (AMC). AMCs maintain large pools of licensed appraisers who are randomly chosen to appraise properties when appraisal orders are received by the AMC. No loan officer is ever allowed to speak with an appraiser in regard to a particular […]Read More

WSJ: “Facing a Bidding War?” LOCAL is Better; Concerns About Double App’ing

The WSJ recently featured an article called Facing a Bidding War? Why a Local Mortgage Lender May Offer an Edge. (If you’re not a WSJ subscriber, we are happy to email pertinent excerpts upon request) Andrea Gordon, from Red Oak Realty, was quoted extensively. And what I loved is that she sounded like a marketing […]Read More

How To Lower Debt Ratios To Qualify For More

I explained what debt ratios are and how they work in a recent blog. But, I did not explain what borrowers can do to lower them. Here are a few ideas for lowering debt ratios and qualifying for a larger purchase: 1. Put less money down, and use down payment funds to pay off consumer […]Read More

Fast Closes In Slow Markets; Internal Appraisal Panels; We’re VERY Multilingual!

FAST CLOSE IN SLOW MARKET, WITH RENT-BACK One of our most successful buyer’s agents recently got her offer accepted by offering our 14 day close, even though the seller wanted a 30 day escrow. The agent offered our 14 day close with minimal contingencies and a 16 day rent-back, making her offer “as good as […]Read More

“No Points” “No Cost” “No Fees” = Higher Rates – ALWAYS

NO FREE LUNCH IN LENDING Real estate firms are constantly trying to get into the mortgage arena b/c they think it is easy money, and b/c they already have a captured market with their pool of agents. They, however, invariably underestimate how difficult it is to run a mortgage company profitably and compliantly. They also […]Read More

The High Risk of False Assumptions

WONDERFUL STORY FROM TWITTER I read a wonderful story on Twitter last week. The author of the series of tweets was a grad student named Thomas who sat in the front row of his class every day. A gentleman with a thick foreign accent, who Thomas did not know, sat next to him and always […]Read More

Your Lender Is A Reflection On You; Multiple Credit Inquiries OK!

A Few Important Reminders: We were speaking at a Realtor training seminar this week and the leader of the group told a story about losing a valuable client and tens of thousands of dollars of commission money. The reason? He referred his client to a lender with a two-star Yelp average. The client read the […]Read More

Minimum Income To Qualify For Various Price Points; Realistic Goals

Realistic Goals Based on Income and Down Payment Parameters One of the primary jobs of our Mortgage Analysts is to ensure borrowers have realistic home-buying goals. For example, a buyer with $6,000 of monthly income should not be looking to buy in a $700,000 neighborhood unless she has over $300,000 of down payment funds. Realistic […]Read More

Just Make Biscuits

I wrote this blog last July and recently came across it. With so much going on right now in the tech, real estate, mortgage and geo-political realms, I think it is an excellent reminder and message. I was listening to The Investors Podcast recently when I heard an investment guru give excellent advice in response […]Read More

Higher Paid Staff = More Freedom, Better Team, Better Company

MOTORCYCLE TRIPS AND FREEDOM My brothers, sons, nephews and I take a motorcycle trip every summer. As an aside, my three brothers and I all own and run our own businesses. My Mom (who reads this blog) thinks it is b/c she raised fearless entrepreneurs. But, the rest of us realize it is probably b/c […]Read More