JVM Aligns With New Mortgage Bank; The Need For Speed & Jumbo!

We recently aligned with a new mortgage bank for three reasons: (1) to drastically shorten our closing periods; (2) to offer even lower rates; and (3) to access much better jumbo options. We have nothing against our former mortgage bank at all, as we simply were not a good fit for their model and we […]Read More

Innovating In Boom Times; 50 Companies That Died Because They Didn’t

We constantly get “recruited” by large mortgage banks that want JVM to affiliate with them (b/c they want our volume, reputation and/or trade secrets). The pitches always fascinate us b/c they often tout their nebulous “support” (something we don’t need) and growth, but who isn’t growing in this market? (all we ever want is extremely […]Read More

Why We Say A $2 Million Home Is Worth $999,000; Best Month Ever For Mortgage Rates

“PIWs” REIGN SUPREME “PIW” stands for Property Inspection Waiver or an Appraisal Waiver. We are getting more of them than ever before, making both refinances and purchases faster, easier and cheaper. We are getting them more often now b/c Fannie and Freddie loosened their guidelines in response to the COVID-19 crisis and b/c more and […]Read More

“The Next Housing Boom Is Closer Than You Think”

The title of this blog is taken directly from this blog by Stansberry Research. I have hit the topic of a strong housing market numerous times in recent months but am hitting it again for several reasons: (1) Stansberry Research normally touts stocks, so when they shift to touting housing it means something; (2) some […]Read More

“Stips;” Loan Salability; Facing Huge Losses; And Why A Competitor Went To Bat For Us

What is the scariest thing on the planet? For mortgage banks, it is an unsalable loan. Mortgage banks literally borrow money to fund mortgage loans – using what is called a “warehouse line.” Mortgage banks only make money if and when they sell those loans that are “sitting” on their warehouse lines. For example, when […]Read More

Refinancing After Forbearance; Credit Inquiries

Over 4 million borrowers went into mortgage payment “forbearance” during the COVID-19 crisis, and many are now starting to end their forbearance periods – and wondering if they can refinance. Here are some of the guidelines. AUTHORIZED FORBEARANCE – PAST BALANCES PAID If borrowers with a formally authorized (by their servicer) forbearance formally end their […]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

Examples of How Much Various “Factors” Affect Interest Rates

We constantly remind everyone that there is no “one interest rate,” b/c so many factors affect individual rates. I linked to those factors last week and set them out again below. We often get questions though in regard to how much each of those factors affects a borrower’s interest rate, so I am providing some […]Read More

When Appraisers Are Right (Which Is Often)

We have an excellent pool of hand-picked appraisers that I tout often as a competitive edge. I tout them often b/c we used to get burned all the time when we were forced to use giant Appraisal Management Companies (before setting up our own appraiser pool). Several months ago, one of our appraisers came in […]Read More

Purchase Applications Hit 11 Year High; Refis = 63% of Volume

The Mortgage Bankers Association surveys multiple mortgage banks every week and then releases all of the data. The most recent survey, discussed in this National Mortgage News article, is particularly interesting. Here is just some of the data: Purchase applications are at an 11 year high. Refi applications are 106% higher than last year at […]Read More

Interest Only Loans Vs. Fully Amortized Loans

Borrowers often ask for “Interest Only” (IO) loans b/c they want lower mortgage payments, and we discourage them for a variety of reasons. I am discussing the pros and cons today. REASONS TO WANT AN IO LOAN: Payment Flexibility: Borrowers with cyclical income want lower payments during slower times (assuming payments really are lower – […]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 Home Prices Did Not Crash With 15% Unemployment? Planet Money Explains

After the COVID-19 crisis was in full force, I wrote several blogs in March and April pointing out why I thought housing prices would not crash as a result of the crisis. In response, numerous agents emailed or called me to suggest that I was being too optimistic and potentially misleading people. So, was I […]Read More

“Fed Plans to Keep Rates at Low Levels for Years” What Are “Rates?”

This blog’s subject line is borrowed directly from this WSJ article. Fed Chairman Powell stated in early June that there are no rate increases in sight and that the Fed will do whatever it has to do to keep rates down through 2022. These actions include keeping the Fed Funds rate near 0% and massive […]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

In Defense of Cities & Large Offices

I once had a client who was a commercial airline pilot living in San Francisco. As a pilot, he could live anywhere in the U.S., so he decided to sell and use his equity “to pay cash for paradise” in Tennessee. He lasted two years. He moved back, at an enormous cost, b/c he missed […]Read More

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

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

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

Great Housing Migration; Credit Repair More Necessary Than Ever

Chris Drayer, the founder of the Predictive Analytics company (Revaluate) we often recommend, wrote a great blog a few weeks ago called The Great Housing Migration. His point: People will likely be moving to the suburbs in droves once again – for many reasons. They can work remotely. COVID-19 has shown us all that working […]Read More

Rates Hit Record Lows – Again; Forbearance Effect On Credit

FORBEARANCES, CREDIT, & ABILITY TO GET MORTGAGE FINANCING I recently blogged about how forbearances will affect credit and a borrower’s ability to obtain mortgages, pointing out how borrowers just out of forbearance will have to “season” their forbearance for 3 months before they can get new mortgage financing if they still have a past due […]Read More

Why “Now” Is Always The Best Time To Refi; Jumbo Returns :)

GREAT NEWS – JUMBO HAS RETURNED! As expected and hoped for, one of our best jumbo investors returned to the market today with far lower rates. We are now very close to where we were prior to the COVID-19 crisis. WHY “NOW” IS A GOOD TIME TO REFI – IT IS NOT JUST B/C WE […]Read More

10 Cent Beer Night in Cleveland in 1974; How It Relates to Our Economy Now – More Black Swans

In 1974, the Cleveland Indians baseball team promoted Ten Cent Beer Night for a game against the Texas Rangers. Fans showed up in droves for the cheap beer and drank it by the gallon. The inevitable result was an entire stadium full of drunken fans, bench clearing brawls, a 9th inning riot with all the […]Read More

Yoga Babble & Pizzas Under Cost – Heading Our Way Soon!

A prominent mortgage bank posted this employment ad last week in a very popular mortgage blog: The company culture at ****** Mortgage is a direct reflection of the lender’s vision to Inspire Hope, Deliver Dreams, and Build Prosperity. I laughed when I read that b/c I am pretty sure the company really just originates and […]Read More

Viewing Client/Borrower Status in Real Time – from Application to Close; Why People Love Uber

WHAT MAKES UBER SO POPULAR? Uber is popular for several reasons: (1) it allows people to call for a ride no matter where they are, without having to wait for a taxi to drive by; (2) there is no payment “friction” when the ride ends – passengers can just hop out of the car; and […]Read More

Why Are Refi Rates Higher Than Purchase Rates? Can Borrowers In Forbearance Refi – Yes & No

I blogged Monday about our Refinance FAQs, and it is already one of our most frequently viewed web pages – indicating how badly borrowers wanted this information. So, I once again recommend sharing this info with friends, family and clients. I received a lot of feedback from the blog too and am highlighting two questions […]Read More

Refinancing FAQs; Essential Info for EVERY Borrower

With rates this low, $4 to $5 trillion of mortgages are now eligible for refinancing. This is more than twice the mortgage industry’s annual capacity and rates look to stay low for some time. Because refis are now such a hot topic and will continue to be for months (if not years), we recently added […]Read More

Home Values – This Ain’t 2008! WHY? Inventory and Demographics

I was interviewed yesterday by a prominent financial reporter who is, for obvious reasons, mired in the very “news” I suggested avoiding in my Wednesday Blog. B/c she is so caught up in all of the negative news, she seems convinced that the housing market could easily see a repeat of 2008 when values dropped […]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

Purchases Surge! Avoiding Herd Mentality; Don’t Watch the News! North Korea Too

Our purchase volume is up 600% over last month, and this is why: We and our top agents didn’t get the memo that said the purchase market is dying. Yes, it slowed down but we all kept going full speed as if nothing had changed, knowing that the overall market remained huge. DON’T WATCH THE […]Read More

“Non-Bank” Mortgage Lenders vs. Banks; Who Are The Players? Why It Matters

Most Americans have never heard of PennyMac, United Wholesale Mortgage, loanDepot, and Freedom Mortgage. These are just a few of the huge “non-bank” mortgage lenders that funded almost 60% of all mortgages last year. The only “non-bank” player that most Americans have heard of is Quicken Loans, and that is b/c of its massive amount […]Read More

Obtaining Mortgage Financing After A Forbearance

RULES FOR QUALIFYING POST-FORBEARANCE With millions of future borrowers in either mortgage or rental forbearance, many people are wondering how forbearances will impact a borrower’s ability to qualify for mortgage financing down the road (when they are out of forbearance). Credit: The jury is still out on this, as borrowers with authorized forbearances were not […]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

How Low Can Rates Go? Not Waiting To Refi

One of the most interesting aspects of the COVID-19 crisis is its effect on interest rates. In “normal” times, mortgage rates correlate closely with the 10 Year Treasury Bond. In other words, when the 10 Year moves higher so do mortgage rates, and vice versa. Also, “the spread” or the difference between the 10 Year […]Read More

Mortgage Banks Don’t Make Enough Money for Introlend/Referral Fees

DONUT SHOPS ARE LIKE MORTGAGE BANKS Years ago, I helped a couple that owned a donut shop refinance – and I was shocked by how thin their margins were; they were working 75 hours per week and making very little money. BUT, if I had offered to somehow refer them 50% more customers in exchange […]Read More

Jumbo Financing Lives! Appraisals Getting Done; Bridge Loans; Interest Rate Update

JUMBO FINANCING STILL AVAILABLE Agents continue to ask us if we are still offering jumbo financing – and the answer is emphatically yes! Rates remain in the mid-3% range for strong borrowers with 20% down and ample reserves. Weaker borrowers (with less than 20% down, limited reserves and/or lower credit scores) in the jumbo price […]Read More

Please Share Our Content; How Fast Will The Economy Recover?

We love it when readers share our content – so please feel free to continue doing so. We only ask for a credit and a “linkback” to our website whenever content is shared – something like the below: Content Source: Jay Voorhees of JVM Lending – “#1 Reason We’re Not In A Housing Bubble; Life […]Read More

Interest Rates/Mortgage Industry Update; When NOT to File Taxes

Interest rates have come back down but they are still about 1/4% to 3/8% higher than where they were when they bottomed out on March 9th. This is because the mortgage industry is still trying to fend off excess volume brought on by low rates and a surge of refis. And – it is also […]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

Goldman Sachs Loves Housing Still; COVID-19 Will Push People Away From Cities

In October, I blogged about my millennial nephew paying $4,250 per month in rent in San Francisco. I pointed out that the property he was renting was worth about $2 million and that he was probably better off renting – IF he stayed in San Francisco. His financial planner and I, however, both told him […]Read More

Borrowers In Forbearance See Credit Whacked! Purchase Market Lives: Texas Re-opens

FORBEARANCE IMPAIRS CREDIT – DESPITE “CARES ACT” On Saturday, David Stevens, former President of the Mortgage Bankers Association and the current CEO of Mountain Lake Consulting, posted a notice on LinkedIn stating that some creditors and credit bureaus are in fact showing mortgages in forbearance as “late” and “in forbearance” on credit reports. According to […]Read More

Elephant In Room: Housing Prices; HELOCs Too

Chase stopped accepting applications for home equity lines of credit (HELOCs). I mentioned this previously, but in 2008, HELOC lenders not only stopped taking applications but they also froze existing HELOCs. Given the trends, HELOC borrowers in need of cash might consider drawing on their HELOCs now before they are frozen (as I mentioned in a […]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

The “No Out of Pocket” Scam; Worst Advice Ever!

Borrowers often send us refinance proposals from other lenders to review so we can either beat the proposal or give our blessing. One of the things that always scares us the most is this phrase: “there will be no out of pocket costs…” This often means the loan officer is charging outrageous fees and just […]Read More

Jumbo Market Lives; Inflation = Windfall; Why Lenders Are Terrified of Forbearances

I am repeating this b/c I am still getting so many questions: The Jumbo Market Definitely Lives. Jumbo buyers with 20% down can buy up to $1.6 million in CA and up to $1.4 million in Texas with 1st/2nd Combo Financing. I recently blogged about combo financing here. Traditional jumbo lenders remain in the marketplace […]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

COVID-19 Mortgage Updates; Interest Rates; Jumbo; Guidelines; Appraisals

Below are a series of important COVID-19 updates as they relate to the mortgage industry. INTEREST RATES Jumbo interest rates are now about 1% higher than conforming rates. This is in sharp contrast to the previous few years when jumbo rates were almost always lower than conforming rates for strong borrowers. Low balance (under $510,400) […]Read More

5 Bold Predictions For The Post COVID-19 World; COVID-19 Updates; Reason to Refi

Forbes Publisher, Rich Karlgaard, published 5 Bold Predictions for the Post COVID-19 World. He imagined what we might see by the Spring of 2021 and predicted the following: A rebounding world economy with a fantastic global growth rate of 4%. Fully resumed global travel b/c human nature makes people want to travel no matter what. […]Read More