Fall Mortgage News

Fall has finally arrived…after a long,hot summer which I thoroughly enjoyed!

MARKET UPDATE

We watched rates continue to drop throughout the year, and they hit bottom right around October 1st. Currently rates have moved just off their lows, but realistically are still extremely attractive whether you are buying or refinancing. As I write this the election is tomorrow, so we are unsure what effect the result may have on rates… only time will tell. They have to start marching up at some point though.

Loan approval is certainly attainable for most borrowers, as long as your credit is relatively good (no FICO scores in the 500’s please and over 680 is better, 740 is considered perfect) AND if you can document adequate income to qualify for a loan within standard debt-to-income ratios which are still running around 45%. There are some exceptions to this figure (HARP loans, or FHA loans will both go higher in the debt ratios) You just need to have the constitution to survive the process of handing over lots more paperwork than in the past, including divorce documents, trust documents, explanations for deposits to your accounts, etc….

I have handled more than a few transactions recently for clients who started out working with their bank or current lender, only to find out more than 60 days into the process that it was going to take another 30 to 60 days. I closed a purchase for a client who was told by the BofA that they could not close in less than 45 days. I had the loan approved in 14 days from the date of application. Whatever you do, don’t work with a big bank, use a mortgage banker or broker. The banks are too big to be efficient and are overwhelmed. My average refinance closes in 30 days depending on how responsive the client is to requests for documentation.

Boys & Girls Club of Tustin

As some of you may know, I was a member of the Board for the B&G Club in Tustin, and had the privilege of serving as President. I am deeply committed to these clubs that provide such a valuable service to children all over the US. I have heard more than one alum state that the club “saved my life.” Here in Tustin, our club provide free transportation to schools for homeless children among many other programs. Yes, they pick up children from shelters and hotels, and taxi them to school programs. I have made a commitment to donate $100 for every loan I close in the community served by our Tustin club and invite any refinance or purchase loans to that end. Plus, Catalyst is underwriting their newsletters!

NOW, FOR THE FUN STUFF and BABIES

MEXICO

In September I visited San Jose del Cabo for a quick trip with two girlfriends, for R&R. We stayed at the Hilton in a timeshare (2 bedrooms, 3 bathrooms) which was a lovely top-notch property with fabulous service.

Highlights were:

A visit to Mango Deck on El Medano, buying “stuff” from the beach vendors;

Dinner at Agua, the fine dining restaurant at the One and Only Palmilla… I hadn’t been there since 1978! Service and food were both outrageously good;

Dinner at my new favorite farm-to-table restaurant in San Jose, Flora Farms. Check out their website www.flora-farms.com/ or you can find them on Facebook.

DALLAS

I’ve had a couple of quick weekend trips to Dallas with Steve. I was luckily able to locate a Trojan Club there for game watching on Saturdays.

The new NYLO Dallas South Side hotel www.facebook.com/NYLODallasSouthSide?fref=ts just opened less than a block from Steve’s loft. It offers a fun bar and dining scene on the building roof- top complete with swimming pool , great views of downtown (the same as from Steve’s balcony) and great music. My last visit they had a fabulous jazz trio playing in the lobby bar and we danced.

Favorite eats this trip: Trulucks http://trulucks.com/pages/dallas-texas for seafood, and The Cedars Social, for down home eclectic cooking and marvelous cocktails. www.thecedarssocial.com/index.php

We attended opening events at the new Klyde Warren Park, which is built over a freeway, and bridges the Dallas Arts District to Uptown. The park is a true community gathering place offering a playground for children, a dog park, a reading area complete with periodicals and books, a game area, and a stage for productions and events. They have yoga classes, Zumba and more. Opening night had a free concert with great music including Trombone Shorty from New Orleans.

The weather was pretty strange, it went from 85 high to a 35 low over my four day visit. That’s Dallas!

THE BIG HOUSE

Steve and I visited my daughter Katie in Ann Arbor in October. We were able to watch a football game – for Homecoming-- in The Big House. The weather was a bit on the cold side and it rained most of the day! We were pretty bundled up, so we kept warm but maybe a little wet.

Best eats: Vinology on Main Street, with great wine selections www.vinowinebars.net/vinology/index.html and Pacific Rim for the Asian influence. http://pacificrimbykana.com/

Katie introduced me to her newest exercise class: Pure Barre, which was extremely difficult and left me hobbling around for a week or so afterwards. Yikes!

She is coaching water polo at a local high school and planning to begin a Master’s in Education program in the spring.

We also visited new friends we met in the Cayman Islands at their lovely home on a lake in West Bloomfield, and enjoyed a sunset cocktail cruise on their pontoon boat. It was a blast!

BABIES!

My grand niece Kentyn was born a few weeks ago in Fresno to my nephew John and his wife Paige. I can’t wait to see her at Thanksgiving. My son Drew and his wife MaryGrace are expecting to welcome baby Theodore, my very own grandson, on or about December 4th, and she is looking Very Ready! Finally, I got to hold my new 2nd cousin Benjamin at the shower for MaryGrace. He is beautiful, and it provided me a little early practice.

GREENHOUSE

Kenny's greenhouse has been completed, which he'd begun building at Marlboro College before he left for Germany. He spent many months and a lot of hard work to obtain permits, funding, donations, pouring the foundation etc. before he left for Germany. The building is beautiful and the College held a grand opening ceremony in October. He was present from Berlin via Skype. Here is a photo of the completed Greenhouse. Beautiful!

The holidays are quickly going to be upon us. Early Happy Thanksgiving to all!

Rates, Credit Score Hints, Sales Stats and Risk Factors

Interest rates continue to be very attractive…in the 4’s to low 5’s depending on loan amount, loan-to-value, purpose of loan, and credit scores. But they have nowhere to go but up, and the market reacted poorly this week to the news that the government is definitely ending the purchase program for mortgage-backed securities as of March 31, 2010.

Speaking of credit scores, I have seen a number of credit reports recently where my client’s scores were hurt because they had closed credit card accounts. They THOUGHT they were doing the right thing, but they inadvertently hurt themselves. If you pay off a credit card, it isn’t smart to close the account. Keep it open, with a zero balance, and use it once every few months for minimal purchases such as gas or food, and pay it off. In this fashion you are increasing the credit “available” to you, but not using it. The goal is to have all balances on revolving credit at or below 30% of total credit available. High balances to total credit available are the primary culprit in driving down FICO scores, right behind collections or delinquent payments.

Interest rates today are very sensitive to FICO scores, and you will pay a price for any score below 720, and in some cases with larger loan amounts, scores below 740. It is tough out there!

Sales stats for Orange County show that home sales at the “low end” of the housing market – below $500,000 – consisted primarily of foreclosures and short sales, and accounted for all of the sales gains (increases in volume) seen in the last year.

The median sale price for single family homes in Orange County was $496,070 in December. Newport Beach posted a median price of $938,500 and Laguna Beach was at $1.23 million. The sales at the higher end of the spectrum, although much lower in volume, still helped to push the median prices up.

DataQuick reported that 20% of homes sold are going to investors (vs. primary housing) and almost 25% of homes sold to all-cash buyers.

What’s The Risk?

The recent terrorist attempt on a Northwest flight bound for Detroit hit close to home for me. My daughter, who lives in Ann Arbor, Michigan, was in Europe at the time and heading for Amsterdam where the fateful flight originated. Further, she was flying home to Detroit after the holidays.

So, what are the real chances of being involved in a terrorist event on an airplane? In the decade of the 2000’s, the only American fatalities occurred on 9/11, and including those stats, only one passenger in every 25 million was killed in a terrorist attack on an American airplane during the past ten years.

Contrast that with the chance of being hit by lightening…one in 500,000 each year. Further, the stats show that these violent passenger incidents –bombing, hijacking or sabotage- were five times less common in the 2000’s than in any decade from the 40’s through the 80’s. Source: Nate Silver http://www.FiveThirtyEight.com.

Mr. Silver opines that we would be more rational to focus on prevention of a nuclear terrorist attack that could affect millions.

So the bottom line, as I always reminded my children, is to be far more worried and cautious when driving your car than flying. And don’t stand under trees in a lightening storm!