Mortgage Rates under 3%!

Calling all mortgages with rates over 5.25%! 30 year fixed at 4.5% …

Today rates are below 3% for a 5-year ARM loan; and as low as 3.5% on a 7-year ARM, depending on loan size. It is harder to qualify for the 5-year loan than the 7-year, since the rates is bumped up for underwriting purposes.

Quick Rate Update for April

Rates have steadily improved during the month of April, and are hovering just on this year’s lows, while property values are also at their lows in most areas. Great time to buy, and also to refi!

Up to $417,000

5/1 ARM – 3.125%
15 YR FIXED – 4%
30 YR FIXED – 4.75%

$417,000 to $729,000

5/1 ARM – 3.5%
15 YR FIXED – 4.125%
30 YR FIXED – 4.75%

True Jumbo loans (over $729,500)

5/1 ARM – 3.875%
15 YR FIXED – 5%
30 YR FIXED – 5.5%

FHA rates are a bit lower, but they come with mortgage insurance which increases the monthly payment. That said, it is still possible to make a purchase up to $729,000 with as little as 3.5% down. WOW!

Rates, Industry Updates, and Dallas Arts District

The mortgage market closed up yesterday by 52 bps, which is a nice improvement on news of the increased danger in Japan and an overall weaker economic outlook. Bad economic news = good news for interest rates.

Mortgage rates are currently running in the 4.75% to 5.125% range for 30 year fixed rate loans up to $729,000, depending on loan size, FICO score, loan to value and occupancy. Rates are lower for shorter terms, i.e. five, seven, and 15 year fixed terms.

The “conforming jumbo” program allowing lower rates for loans over $417,000 and up to $729,000 is scheduled to sunset this September 30th. The government could extend the deadline again, but it is unlikely given the fact that the government wants to get out of the business of guaranteeing mortgages. This is also a precursor for a sunset of the 30 year fixed rate loan. So, if you want one, get it now while they are still available. Rates will rise for those loans over the current conforming limit of $417,000 and it is possible that the limit could drop due to average home values having dropped since the limit went into place.

Dallas and the Arts



I visited Dallas last week to attend various events revolving around the Dallas Art Fair. Steve has been handling the marketing of a high rise luxury home project called “Museum Tower” that is closely aligned with the arts--both fine and performing-- in downtown Dallas.




We toured individual galleries; attended the Gala preceding the opening of the Art Fair; attended a private event at the Trammel Crow Asian Art Museum; had a private tour in the Dallas Museum of Art with the curator of the Gustav Stickley exhibit (think Craftsman home movement); and attended an event for the unveiling of a new sculpture at the Nasher Sculpture Garden. Amazing works of art and sculpture were all around us! I was floored by the sight of many famous pieces I’ve only seen in books.

All of the above were attended by lots of waiters offering food, champagne, wines, etc. Also attending were lots of beautiful and fascinating people. All I could say was WOW.

Dallas seems to have more trendy restaurants and bars within walking distance of the “Uptown” area and the “arts district” than anywhere I’ve been. And, those people love to party! I even had a glass of wine on the terrace of the fabled Mansion on Turtle Creek.

I can’t wait to go back to visit, and will follow up with more in-depth reports on hotels, museums, restaurants, the Katy Trail, etc. I even found a great 24 Hour Fitness downtown with a great Zumba class on Saturday morning…what could be better?

Springtime Mortgage News...and International Travel!

Spring is almost here, and I can’t tell you how happy I was to move the clock forward to enjoy more daylight! Rates are enjoying a little down-spring…due to market conditions following the tragedy in Japan. The stock market is off, so we are currently seeing improvement in interest rates across the board.

Please call me for specifics, as rates are all subject to adjustments for loan-to-value, loan purpose, FICO scores etc.

I have a number of clients who are planning remodels and/or upgrades to their homes. We are refinancing their current mortgages at lower or equivalent rates, to pull some cash out of their homes for completion of their home projects. Now is the time to move while rates are so attractive! Current fixed rates are lower than the rates for most HELOCs (Home Equity Lines of Credit) that adjust monthly and only have one way to go…up!

The other big news for loans is this: Although we don’t know exactly how it will look, or if it will go into effect on April 1st, loan officer compensation is scheduled to change. This will have an effect on the competitive pricing of your loan and ultimately is not in the best interest of the consumer.

Finally, the future of the 30 year fixed rate loan may be relatively short…so get it while you can. Projections of changes to the entire mortgage industry, and complete privatization of same (to get it off the taxpayer’s back) will mean a complete switch over to ARM loans. Banks don’t like to portfolio long term fixed rate loans. Period.

From Russia and Portugal…with love

Thanks to modern technology, I’ve had the unique experience of speaking via live video chat with Steve, who is currently in Russia on business, and with my son Kenny, who is in Lisbon with his graduate Architecture program. Yesterday I actually had both of them on my Gmail chat at the same time. Wow! One on video chat and the other on e-chat…

Steve is in Russia meeting with the developers of a luxury residential resort development in St. Petersburg, and had the opportunity to tour The State Hermitage museum among other historical sites.

Kenny is in Lisbon for six weeks and then off to Poland with his traveling school program. In the middle, he will be flying to UC Berkeley to present a paper at a conference entitled “The Death + Life of Social Factors,” A Conference Reexamining Behavioral and Cultural Research in Environmental Design. The conference is sponsored by the Berkeley Architecture Department and the College of Environmental Design. http://arch.ced.berkeley.edu/events/conf/deathandlife

He’s also writing articles for publication in a few international design magazines. He doesn’t let much grass grow under his feet!

I have been keeping the home fires going, working at my office and working out at the gym. My latest discovery is BT-Fitness, a new gym in San Clemente. The owners/trainers Adam and Kimberly are passionate about their work and expert trainers offering classes with TRX/Kettlebell and SPX/Proformer systems. Check them out at www.bt-fit.com. Great workouts!

Dana Point Whale Festival

I attended the beach concert in the Harbor last Sunday afternoon with friends. The close of the annual Whale Festival, this is always a super fun and casual event. Families and groups of friends hang out on the sand, and there is dancing both in and out of the water. Lots of smaller water craft float around the barge where the bands play at Baby Beach.

After the concert my friends and I walked over to the island in the Harbor to check out the new Island Bar at Aventura. www.dpislanderbar.com
The restaurant is located above the Aventura Sailing Club with nice views of the Harbor and the ocean. They have live music Thursday through Sunday. We listened to the Flock of 80’s, a favorite of mine and a local San Clemente group who play around South County regularly.

Rates Have Improved!

Interest rates have slowly improved since February 10th…here are the details:

Loan amounts of $150,000 to $729,500

30 YR fixed - 4.75 to 4.875%
15 YR fixed – 4.125% to 4.375% depending on loan size
5/1 ARM - 3.375% to 3.625% depending on loan size

Jumbo loan amounts – over $729,500

30 YR fixed - 5.625%
5/1 ARM - 4.25%

Rates are down and so are home prices…what are you waiting for?

I’m looking forward to the Oscars…who are you rooting for? Hmmm-- The Social Network, The King’s Speech, or the Black Swan to name a few?

New Year's State of the Union for the Mortgage Industry

I survived January with only a short bout with the flu. Unfortunately I’m not sure how the mortgage industry is going to survive the continuing wave of regulation from Washington. To quote my market research source, at www.TBWSratealert.com

“After the collapse of the mortgage and housing markets there is a push to make changes based on beliefs that servicers have not done their job well, and are responsible for extending the housing recovery. A long stretch, but that is what the industry has dealt with for the last three years; beat up the lenders but don’t tread on Wall Street as the fuel for the housing market disaster . Blame it on brokers, blame it on servicers, blame it on anyone and don’t let the smoke clear. We don’t really have to say it for our audience; originators didn’t make an Alt A loan or most of the junk originated unless they had an upstream market to sell it to.”

So, who is ultimately taking the fall for all this? The consumer, of course. It is much harder to qualify for a loan. Even if you are qualified! You’d better have perfect credit or you’ll be paying a lot more in interest rate for that new loan. You’d better have adequate equity, or refinancing is more difficult, and more costly in rate, if not impossible; your tax returns need to reflect adequate income, and it had better not be declining.

Your loan modification chances are next to nil, even though the erosion of your property value was completely out of your control and you’ve made all your payments in a timely fashion (almost worse!) but you can’t qualify for a normal refinance due to lack of equity.

I could go on and on…the government programs that were forced onto the banks (after paying them lots of bail-out $$) are parsed out in a very limited basis, and only those who scream loudest are heard, and oftentimes not even then.

Some surmise that only a few mega banks will survive… which doesn’t make for a better deal for the consumer. Who is the real winner in all this? The banks. They pay less, and their agents don’t need the licensing etc. the rest of us brokers/mortgage bankers do. Their profits are rising.

Enough whining today! Enjoy Superbowl. Go Black Eyed Peas!

Interest Rates, Napa Valley and Private Planes

Quick Rate Update:

Not much change, but the markets didn’t react favorably to the State of the Union so rates were slightly worse yesterday, with slight improvement today.
30 Yr fixed rates range from 4.75% to 5% depending on loan size; 15 year rates are slightly lower, and 5-yr arms still hovering in the 3.25% to 3.5% range. All rates and programs are sensitive to FICO score, loan-to-value, reason for financing (purchase, refinance, cash-out) and occupancy type. Underwriting guidelines continue to contract and become more conservative. (!)

Napa Valley Report

We flew to the Bay area for a weekend of wine tasting with Steve’s sisters and their spouses over the Martin Luther King Holiday, which happens to coincide with Steve’s birthday. The most exciting part was flying up and back in a private plane owned by Steve’s younger sister and her husband, who is a pilot. Our “ride” was a four seater and my first comment upon seeing it was “we’re flying in that?” Everyone laughed. Although I’d flown in private planes in the past, nothing quite this small. They all assured me size doesn’t matter! The flight from Carlsbad took two and ½ hours, and was pretty amazing. The weather was clear and we could see forever. We hit a couple of bumpy sports over the grapevine but nothing major.

We took off in a van the next morning for Napa. First stop was Clos Pegase, where we tasted and bought a few bottles for our picnic on their lovely grounds. They have an amazing art collection, and offer tours twice a day. I heartily recommend visiting them. Next stop: Cuvaison, home of a favorite chardonnay. We then headed up into the hills for a private tour and tasting at the O’Shaughnessy Winery, which was a real treat. They offer really “big” reds and an enormous cave build into the hill, including a private dining room and private wine collection to boot.

Afterwards we drove up to our friends’ home on the hill above Calistoga for a glimpse of sunset accompanied by more wine and cheese before heading off to dinner at Brannan’s Grill downtown Calistoga. We had a lovely dinner and enjoyed listening to live jazz. I found out the restaurant is named for the founder of Calistoga, who named the city for its springs, e.g. the “Saratoga Springs” of California, hence Calistoga! www.brannansgrill.com

Sunday morning we visited Rombauer – our favorite Chardonnay – and then lunched at Frank Family Vineyards. Our final stop of the day was a tour and tasting at Schramsburg. Their sparkling wines are the best! www.schramsberg.com



Back in Palo Alto, we dined at Trader Vic’s, which is an institution there. Our return Monday was delayed due to heavy fog, and we finally took off after 2:00 in the afternoon. Luckily our pilot Chuck is instrument-rated, so we could have left earlier-- but we waited for better viz. Our flight home was entirely beautiful and uneventful and we arrived to witness a fabulous sunset just behind Catalina before landing. What Fun!