Post Election Market Update -- Don't Postpone the Refi

Now that the dust has settled, so to speak, it’s time to turn our attention back to interest rates before the holidays arrive.

Mortgage-backed securities are still moving up and down in a tight trading range…so interest rates follow, and are just off the record lows of the year.

However most of the data/market info suggests that with the Fed trying to stimulate the economy, inflation will soon kick in and rates will move up. No one thinks it will happen next week, but maybe by next month or the first quarter….so don’t delay!

NO COST / NO POINT RATES:
4.375% for a 30 YR fixed under $417,000;
4.625% for a 30 YR fixed from $418,000 to $729,000

Obviously you can obtain a lower rate if you want to pay for the closing costs and /or origination fees. Rates for adjustable loans are even lower. They can be difficult to qualify for, however, since they use a higher interest rate to underwrite due to the higher assumed risk of a shorter term loan.

I can’t believe it is already November, and Thanksgiving will be here before we know it! Hope everyone had a Happy Halloween!

Market Update...& The Battle of the Paddle

Rates are still hovering right around their record lows. If you can qualify, and your property appraises out, you can get a rate in the 3’s to low 4’s depending on your loan size and the term. Money is cheap, but is still relatively hard to qualify for in terms of documentation required!

Underwriting guidelines continue to contract, and seem to take the heaviest toll on self-employeds – for whom two years’ tax returns and YTD P& L’s are the norm. Investors don’t want to take any chances on any file, lest they be forced to “buy back” the loan at a later date…which is happening right now with hundreds of thousands of loans that went into default. Oftentimes these defaults aren’t the fault of the original mortgage lender, but are due to loss of income or other related effects from the economy, but banks as well as Fannie and Freddie are enforcing their “buy back” provisions in the contracts they have with mortgage bankers. This is why so many mortgage banks are out of business – the tremendous liability they face to buy back defaulted loans.

Battle of the Paddle

We rode our bikes down to Doheny State Beach a few Sundays ago, before the onset of rainy weather. We often jump on our bikes for a little “road riding” on weekends. Last month we rode down to San Onofre State Beach to check out the sharks we’d read about at Trail One. Alas we saw none!

This trip we planned to witness day two of the Battle of the Paddle, the largest SUP (Stand Up Paddle) competition in the world. In case you haven’t heard of this, the sport involves standing up on a large surf-type board--while using a paddle to move forward. Lots of people are doing it in harbors and in the ocean for exercise, to surf, or just to “get around.”

We hoped to watch our friend Jerry Meador. He is an old friend of mine from high school. I literally hadn’t seen him for about 40 years, YIKES!

Jerry was competing in a couple of different events, and we watched the “relay” event which was really fun. Each team had four members --with at least one woman. They had to paddle out through the surf, rounding two buoys, ride waves and/or paddle back in, and run up the sand to a spot on the beach where their teammate waited to take off next. They all had to paddle the route twice, and there were some pretty funny crashes, near misses, etc. since there were competitors both coming in and heading out at the same time --after the start of the race.

The waves got bigger in the middle of the event with some pretty nice sets coming in. Some paddlers handled the waves well and others…well, wiped out! It definitely separated the surfers from the non-surfers, albeit on super large SUP boards.

I learned there are all different kinds of SUP boards…some are more like regular long surfboards. I also found out that people of all ages can do this.

The oldest participant, who won for his age class, was on my friend Jerry’s team and is 72. They also had a team member who is a pro surfer—Leah Dawson—who is ranked as one of the top female long boarders in the world. She was fun to meet…friendly and down-to-earth. When I met her I asked her where she was from, and she replied, “Heaven. I live in Hawaii…” with a big smile on her face! Jerry had sort of arranged for a ringer on his team since his daughter Kassia is also a pro surfer.

Steve and I can’t wait to try it next, in the Harbor where there are no waves!

Rates Are Still Hot...To Match Last Week's Weather

Last Monday evening we had to sleep in our living room under the ceiling fan, with the French doors open to the ocean breeze to escape the heat! I really enjoyed the rest of the heat last week though. This morning I woke up to rain…what is going on with our weather?

Thankfully at least interest rates are still hot! Rates are still hovering at/near record lows… these are quotes for 45 day locks:

Up to $417,000
Ranging from 3% for 5/1 ARM to 4.25% 30 year fixed

$418,000 to $729,000
Ranging from 3.375% for 5/1 ARM to 4.375% for 30 yr fixed

True Jumbo loans (over $729,000)Ranging from 3.875% for 5/1 ARM to 5.375% for 30 yr fixed

Remember rates and fees/costs depend on occupancy, property type, loan-to-value and credit scores. The rates shown above all assume a one point origination fee plus costs, but may be more or less depending on loan size.



GERMANY

I had to bid adieu to my son Kenny who left Saturday afternoon for the Brandenburg University of Technology to study Architecture in a Graduate school program. His program is located in Cottbus, but they will be traveling to a number of different locations in Europe during his two years there! He was accepted less than two weeks ago, so it was a hectic time for him to say the least. He drove cross-country with all his belongings from Vermont, stopping to visit his sister Katie in Ann Arbor, and in Boulder to see old friends on his way.

After a brief two days here in the OC, he flew to Berlin and arrived Sunday evening, when he took a train to meet new university friends. His biggest packing challenges were whether to bring his tripod for his video camera, and which books to discard.

I hope he enjoys the food there…I was expecting Kenny on a trip through Germany in 1986, and to this day just the thought, much less the smell of sausage and sauerkraut makes me nauseous.


I learned of his university acceptance while on a Mexican Riviera cruise with my mother, who celebrated her 85th birthday on-board. We had a wonderful and relaxing trip complete with lovely dinners, and made new friends from Great Britain who sat at our dining table. We really enjoyed the Salsa & Salsa excursion in Mazatlan where we learned to make authentic Mexican salsas, guacamole, and margaritas AND learned to dance the salsa. (Well, mom didn’t dance, but I took a brief lesson) You can find out more about the classes with Two Dancing Chefs on www.salsaandsalsa.com . They have just opened classes at another venue in Cozumel. They are also on Facebook under Salsa Mazatlan Mexico.

Our Cruise was with Carnival and they did a great job, so I’d highly recommend them. Waiting until September we didn’t have many children on-board, but there were adults of all ages-- which was nice. My mother played in a bridge tournament during our days at sea which kept her busy and I kept her busy in-port at Puerto Vallarta and Mazatlan.

More next time on the Battle of the Paddles...

Rate Snapshot--Edging Up

Rates are edging up the last week. It hasn't been dramatic, so not time to panic yet...if you haven't taken advantage. Here goes:

Up to $417,000

Ranging from 3.125% for 5/1 ARM to 4.25% 30 year fixed

$418,000 to $729,000

Ranging from 3.375% for 5/1 ARM to 4.5% for 30 yr fixed

True Jumbo loans (over $729,000)

Ranging from 4% for 5/1 ARM to 5.375% for 30 yr fixed

All rates quoted assume a one point origination fee plus closing costs, and are dependent on FICO scores, loan-to-value, loan amount, property type, and occupancy.

I am going to be out of the office next week on a cruise down the coast to Mexico with my mother. We are celebrating her 85th birthday! If you want to take advantage of these rates before my departure, please contact me prior to Saturday evening the 18th as I will leave Sunday the 19th.

Viva la Mexico Y mi Mama!

End of the Heat Wave for Rates -- and Summer Too!

We are still seeing rates in the low 3’s to low 4’s depending on program, loan term, FICO score, etc.

Last week delivered extreme volatility in the fixed income markets. Translation: interest rates have been up and down. By Friday, we'd seen prices drop and rates had eroded as of the week's end.

Mortgage loan rates traditionally move in tandem with the pricing of Mortgage Backed Securities. Friday’s better than expected job and unemployment news sparked improvement in the stock market and pushed rates up a bit as a result.

Although the long term view is that rates will hold fairly steady at lows through year-end, the short term outlook is for increased volatility. Remember, any “good” economic news will cause funds to flow into the stock market and out of bonds, causing rates to rise.

Catching the wave and timing your rate lock will be more important in the next few months. I don't recommend waiting any longer to start a refi process, if you are still considering it.

Underwriting guidelines continue to contract. Some of the latest news is that we are required to pull a 2nd credit report at funding…and there had better not be any new inquiries on that report, or evidence must be provided that no new debt has been established. This is just another move to prevent loan fraud. It can slow down or prevent closing altogether.

Another new twist is any deposit to checking or savings accounts over $500 must be documented, unless it is an auto-deposit from employer. Also, we need all income and asset documentation to be dated within 30 days of closing, e.g. paystubs, bank statements, etc.

I like to joke that the loan process is now similar to giving birth. Possibly even more painful!

Rate Snaptshot - HEAT WAVE

We’re having a heat wave here in Orange County, both in terms of weather and rates!

Here goes:

Up to $417,000
30 yr fixed—4. 25%
20 yr fixed—4.0%
15 yr fixed—3.75%
5/1 Arm—3.125%
10/1 arm—3.625%

$418,000 to $729,000
30 yr fixed—4.375%
15 yr fixed—3.875%
5/1 Arm—3.375%

True Jumbo loans (over $729,000)
30 yr fixed—5.375%
5/1 arm—4.0%
10/1 arm—5.0%

All rates quoted assume a one point origination fee plus closing costs, and are subject to FICO scores, loan-to-value, loan amount, property type, and occupancy.

HEAT WAVE

Summer has finally arrived in Orange County--now that it’s almost over! The rest of the country has been sweltering for some time, while we were still wearing sweaters. Hopefully temperatures will remain warm at the beach through September. I was awakened last week by the fog horn in Dana Point Harbor which was a first for the summer months!

We’ve experienced a bigger than usual swell though, which is supposed to get even bigger. I noted it kept most of the swimmers out of the water this weekend—at least where I was watching at Doheny, Capo Beach and Table Rock in Laguna. Lifeguards were out in full force keeping most swimmers out of the water.

My daughter Katie has been visiting most of this month, and we stopped at Sunsets in Capo Beach on PCH on our way home Sunday. They have live music playing on their outdoor patio--with a front seat view of the ocean--every Sunday afternoon, which adds a lot of fun. This is my new favorite haunt for Sunday afternoons in South County. They usually host a big crowd of locals on Friday and Saturday nights though, complete with DJ and dancing-- for all ages. www.sunsetsbar.com

I spent five days mid-month at Rock Creek Lake in the Eastern High Sierra. (elevation 10,000 feet) My mother, who began visiting Rock Creek Canyon around 1949 joined me, along with my daughter and sister. Girls’ trip! We hiked, fished (yes we caught and ate trout) and played a lot of cards. One night we ventured out to dinner at the Convict Lake Restaurant outside Mammoth, and had a fabulous meal. Rock Creek is a very special place that I’ve been visiting since I was 3 or thereabouts (my mother claims I went there the first time when she was pregnant with me). This is where I learned to ride horses and fish. I’ve joined the pack station in the past for the fall horse drive which is a four-day endurance event driving stock down the Owens’ River Valley to Independence. For more information go to: www.rockcreeklake.com or www.rockcreekpackstation.com

Dinosaur Dash XX

This November 7th is the 20th anniversary of the Dinosaur Dash, a running event and fundraiser for the Tustin Public Schools Foundation (TPSF). It is held annually at the Tustin MarketPlace. More than 10,000 people attend each year, including volunteers and participants. This year’s Dino Dash has added a cycling tour in addition to the 10K, 5K and 2K “fun run.” Each year the logo is selected in a contest among Tustin student entries.

Last year’s Dash earned $125,000 for the District’s student and teacher support through event registrations and sponsorships. The prior year, in a better economic environment, they raised $170,000. To give some perspective, TPSF has donated over $2.3 million to the school district over the past twenty years--from all income sources—including the Dinosaur Dash.

TPSF is seeking residents who participated in the inaugural Dash to share their memories, so here goes!

I was a founding Board Member of the Foundation, and was Chair of the Inaugural Dino Dash. As Fundraiser chair on the Board, I was given the responsibility by the Board to create an annual event that would involve the entire community in an effort to support our schools.

We decided on a running event, interviewed race directors, and hired Herb Massinger of Race Pace. Hence the Dino Dash was born. I remember how hard it was initially to obtain the Board’s approval to proceed…I practically had to twist their arms and stand on my head…but finally received the go-ahead.

We held weekly meetings for what seemed months at my home with the race director and race volunteers to organize the event. The first year was tough going, and we finished with something like a meager $5000 net profit. We had big goals though, and were optimistic that the event would build over time. Of course optimism is my middle name!

I remember that Linda Jennings and I met with the General manager of Tustin Lexus, who agreed to be our Major Sponsor… and we were off and running! The first year ALMOST everything on the day of the event came off without a hitch, although the weather was cold and windy that first Sunday. I have photos of my children, who were quite young then, wearing ear muffs and jackets.

Every Board member worked the event…and we also had lots of community and school volunteers. We decided to invite local Olympians to sign autographs for young and old athletes, with the help of our own home-grown Olympians who had children in our school district. My good friend Dana Schoenfeld Reyes (Breastroke, Silver, Munich ’72) put us in touch with most of them including a number of swimmers, triathletes, runners, and more.

The event has morphed and changed over the years with all kinds of related activities: A food court, games, community booths, costume contests, contests between schools for registration, and more.

The Foundation offers grants to teachers throughout the district, sponsors a Teacher of the Year event, teacher training, scholarships for college-bound students, books, technology, a Go Green Initiative, and tutoring.

To this day one of my most treasured possessions is the baby dinosaur hatching from an egg that was presented to me for “hatching” the Dinosaur Dash. It was a difficult birth but well worth it!

for more information on Dino Dash XX or to register, go to: http://www.tpsf.net/dash.htm