First of Summer Update

Rates are moving south again! We’ve officially hit the lows of the 2011 on poor economic and employment reports. If you’ve been putting off a refinance, don’t wait. And, it is better than ever for home buyers with home values at a five-year low.

3% down, no Mortgage Insurance

Fannie Mae has a program for home buyers called Homepath, offering minimum down payments of 3% with no mortgage insurance, and no appraisal! This is for a new primary residence only, but they also allow 15% down for a rental property purchase. The program only applies to homes owned by Fannie Mae. Find out more at www.homepath.com

Reverse Mortgage News

Reverse loans aren’t only for refinancing…they are becoming a more popular way for seniors to buy a “retirement” home or new primary residence. I actually closed a reverse mortgage purchase loan for a client a few years ago, and I was told it was the first in California.

Depending on the buyers’ ages (and they must be 62) these loans will provide anywhere from 60% to 75% of the purchase price in a reverse loan. The buyer must provide the balance of purchase price in cash, typically from the sale of their existing residence. Assuming they own their home outright, or have a low-balance mortgage, this frees up cash for investment/liquidity, and eliminates the need to “qualify” for the payments associated with a new mortgage.
Best of all, the rates are as low as 4% fixed.

Bezerkeley

I visited my son Kenny in early May in Berkeley. He was there to present a paper at a conference in the School of Architecture. We had only a few days together, but we had a great time, and glorious weather. I’d forgotten how beautiful the UC Berkeley campus is, with the creek running through it, rolling lawns, huge old trees, and expansive views down to the Bay and beyond, to the skyline of downtown San Francisco.

Our first stop Sunday was the outdoor deck of the Paragon Café at the Claremont Resort for an afternoon cocktail and a view of San Francisco in the distance. Afterwards, we took a stroll at the Cesar Chavez State Park on the Bay. During our time Monday, Kenny preferred to hang out in coffee houses, studying and talking to students.



We had dinner Monday evening at an old favorite, ẦCộté, a charming tapas restaurant in the Oakland Rockridge district, on College Avenue. It felt a little like old home week for me, since I had visited Berkeley so often while Katie was in school there.

This was my first sighting of Kenny since last September, when he left for Europe for his graduate program. So far, he’s been to Cottbus and Berlin, Germany; Tallinn, Estonia; Lisbon, Portugal; Wroclaw, Poland, and London in-between. He’s been in each location for at least six weeks studying architecture at various universities participating in his program. He won’t be home until this September for his brother Drew’s wedding! Best Man...

Claremont Colleges

I’ve seen my daughter Katie, who lives in Ann Arbor, a number of times this spring around her visits here to Cali, most notably on her 27th birthday in April while she was out here with her team for water polo games in San Diego and Claremont. The Claremont campuses were wonderful to visit on a warm April Sunday. You sort of feel like you’re back East on an Ivy campus. Katie’s also been out to visit for Mothers’ Day and Memorial weekend. What a treat!

Local News


Sunset’s is still our favorite local haunt in Capo Beach. As the name implies, it has great sunset views and offers music and dancing every Thursday through Sunday. Walking distance from our home, we frequent it for happy hour, or after dinner and almost always run into friends there! They are hosting a special event this Saturday with music and dancing all day, a live band starting at 6:00 p.m. and a caribbean themed buffet with mojito and sangria bar. Join us! www.sunsetsbar.com

The California Wine festival at Doheny State Beach, held the end of April, was a great time as usual. They hosted even more wineries than last year’s event, more breweries, and the food selections were fantastic! We found a new local restaurant that was serving a killer salmon ceviche…the Next Door. Steve and I visited the restaurant last week and sampled the ceviche, and bacon wrapped dates stuffed with blue cheese. Yummy!

Steve continues to commute to Dallas regularly for consulting on Museum Tower, a high-rise luxury residential development. I’m planning to visit again soon, but in the meantime we have a camping trip planned to our favorite Beach campsite at El Capitan overlooking the Pacific with panoramic views. We take our kayak and bikes, and fill our days with exercise, reading, relaxing…and Steve paints. We are hoping for warm weather!

Hope your Memorial holiday weekend was wonderful! Happy June!

Reverse Financing Update and The Big Short

I am very excited to be able to provide Reverse mortgage financing to my clients with increased loan limits up to $625,500.

There are fabulous new programs to benefit seniors, including some with NO upfront costs to the clients. Reverse loans are all FHA loans, which carry the typical FHA mortgage insurance premium that increases the up-front costs. Now, clients can choose a program where they don't pay any of the costs.

New products include fixed rates as low as 5%. These fixed rate loans require that all cash is withdrawn at the time of loan closing. In many cases a Line of Credit makes more sense for clients, although the rate is floating vs. fixed. The interest rate is just over 2% on the line of credit, vs. 5% to 5.5%. for fixed rate loans.

Remember, Reverse loans improve cash flow since there are no payments during the loan term and all interest due accrues to the note, and is paid the end of the loan term. Funds can be accessed up front in a lump sum, monthly payments, or a line of credit--just like a HELOC--or a combination of these.


THE BIG SHORT

I’d like to highly recommend The Big Short by Michael Lewis. This author, who also wrote The Blind Side, has written a number of exposés on Wall Street and the financial industry, but none as damning as this…which was just published in March.

Recently cited by Bill Gross, Managing Partner of PIMCO, in his monthly newsletter, this book clearly lays the blame for the world-wide financial crisis at the doorstep of greedy Wall Street Bond traders who operated in secret, setting up transactions most people, even in their own companies, didn’t understand..or were unaware of.

Very interesting reading…I couldn’t put it down. The next time someone tells me the meltdown was all the government’s fault (yes they hold blame for encouraging more lenient lending guidelines) or subprime lenders’ fault for making fraudulent loans (which they certainly did, along with the knowledge of their clients) be advised nothing of this magnitude could or would have happened without the secondary market provided by Wall Street; faulty securities ratings; and the facilitation of "shorting" these instruments (Investment Banks, AIG and others) which exponentially increased the risk of every single layer (tranche) inside the securities backed by subprime loans.