Rich Sweum's Blog

Golf Savings Bank, Everett Home Loan Center Grand Opening

Rich Sweum (Golf Savings Bank) — Fri, 30 Oct 2009 10:20:43 -0500

Golf Savings Bank, Everett Branch will be celebrating their new location with an Open House on Thursday, November 12th, from 4-7pm. Food, Drinks and Prizes! For more info, give me a call...

2917 Pacific Ave. Everett, WA 98201

Mortgage Market Forcast: Feb-Mar-April 2009...

Rich Sweum (Golf Savings Bank) — Sun, 18 Jan 2009 13:54:47 -0600

The US Treasury, Federal Reserve, Congressional leadership as well as private industry groups that represent home builders, realtors and mortgage bankers have all stated that they would like to see interest rates on 30 year fixed rate mortgages stabilize in low 4% range in an effort to stimulate home buying, selling, and refinance activity.

The Federal Reserve allocated $500 billion to purchase fixed rate mortgage backed securities at the lower 3.5, 4.0 and 4.5 bond coupons to drive "up their price" thereby allowing mortgage rates tied to those bond coupons to be available to home owners and home buyers. This buying program began in early January and the Fed's authorized buying representatives have purchased an average of almost $4.5 billion in mortgage backed security purchases per day. At this pace, the Fed will burn through the $500 billion allocated for this program in early June.

Unintended Consequences: the usual buyers of mortgage backed securities have reduced their volume of purchases because of the artificially inflated "demand pool" created by the Fed buying program, and while the lower rate coupon prices have risen, the interest rates and the cost of those rates have not benefited consumers. The reasons are:

Banks and investors holding mortgage notes at higher rates are losing tremendous amounts of money as borrowers are refinancing out of those higher rates and into lower rate mortgages.
Banks and investors are losing billions of dollars as foreclosures and losses from sales of foreclosed properties mount, and are taking increased profits.
During the slowdown of 2007 and 2008, many banks and mortgage facilities reduced their warehouse capacities to temporarily store mortgage bundles prior to securitization, reduced their staffs, etc and cannot handle the increased volume. As a result, they have "raised" the rates and increased their profit margins on rates offered to their public in an effort to slow down incoming new mortgages.

Based on historical margins made by investors and banks, lower interest rates "should" be available to consumers, as well as the ability for lenders to offer "low" cost refinances. However, because of the previously mentioned factors, it is not likely that rates in the low 4% range will be available to consumers without additional government spending or regulatory action.

Additionally, because of increased lending requirements, appraisal valuation restrictions, and declining market restrictions, many homeowners are not able to refinance into these lower interest mortgages. In May, the Home Valuation Code of Conduct governing home appraisals will go into effect, which could further restrict some homeowners from refinancing due to lower home valuation. Moreover, bank owned properties are being added to the inventory of homes for sale in Snohomish County and at fire-sale prices, which drives values of homes in those neighborhoods lower and lower with every month. Lastly, credit card companies will be reducing the credit limits on credit cards of consumers by "trillions" of dollars over the next several months, which will have an adverse impact on many cardholders' credit scores--further making it difficult for some consumers to refinance.

Government and regulatory officials have discussed the possibility of allowing "rate and term" refinances to occur without appraisal valuation, but this would have a negative impact on the purchase of mortgage backed securities because investors will demand increased yield on their money because of the tremendous risk associated with "high" loan to value mortgages.

Homeowners considering refinancing should act now while there still might be enough appraisable value in their home, and rates are currently in the high 4% to low 5% range.

Waffle House Fixation

Rich Sweum (Golf Savings Bank) — Fri, 05 Dec 2008 12:09:53 -0600

I have had one, and only one visit to a Waffle House, an East Coast / Old south breakfast joint franchise. It wasn't just a waffle, it was a 3am in the morning "zen like" experience. I was with some friends at a conference at a YL camp in Georgia, roundabout where the classic movie "Deliverance" was filmed. There were many highlights to the trip...the Tate Mansion tour where I smelled ghosts and our tour guide who assured us that there was "God fearin' Klan" still in these parts. But the highlight was the Waffle House!

The waitress was missing some teef, and making passes at each one of us...offering us "xtre butter 'n such." The other customers displayed the best of americana...the dude sitting at the counter with enough crack showing to be noticed by cars passing by, yet none of the locals seemed to notice. The old lady wolfing down a waffle over in the corner with a Camel hanging out her mouth...not removing it to take another bite or chew, that was skill!

Waffles at 3am...why? Because the Waffle House is open 24/7 in many locations and when people want waffles, they gotta have them and the Waffle House is ready to provide. You can have your "moons over myhammy" but I will forever feel that I have been to the mountain top when it comes to waffles. Savory, buttery, cooked right in front of you and "real Americans" --black, white, hicks, meth heads, and ordained ministers all sharing a common appreciation for waffles. It was almost like church. Surely, were there a Waffle House in Samaria, Bethlehem, Jerusalem, Jesus and the Disciples would have been there. Mixing it up with real folks eatin' waffles.

Am I going a little crazy...yea, but if you don't understand...you probably haven't been to a Waffle House.

Today, having discovered that WH does not open itself to independent franchises, I am going out on my own! Waffle Busses! A whole fleet of them, covering the I-5 Corridor from Vancouver to Bellingham.

Where Did the Rebate go??? Price Compression

Rich Sweum (Golf Savings Bank) — Fri, 05 Dec 2008 11:23:13 -0600

I was frustrated last night, looking at the evaporation of higher end rebate...so why is this happening, govies, conventional-everything.

There is an economic concept that I had to refresh myself on from my old econ text books called "price compression". (Larry Betag brought this up in a post). When talking about convertible securities/callable bonds, which MBS's are, in a declining interest rate environment the issuer of the security feels that there is no appreciation potential for the instrument and that it will be redeemed at the call price. So they offload the instrument and issue NEW bonds at lower rates which have greater appreciation potential. So, the MBS market is in an adjustment phase for the next few days, structuring itself for a "new bond price environment."

One take on this phenomenon of "rebate evaporation" is that the market "technicals" are truly pointing toward lower rates in the near future. That is good news for us. The wild card, is that there is soooo much volatility and so many other factors in play that bonds could lose their allure even with the Government becoming an investor in mortgage backed securities.

Anyway, just some thoughts.

Scams Emerging From the Housing Crisis...it never fails! What are you seeing?

Rich Sweum (Golf Savings Bank) — Tue, 02 Dec 2008 10:16:08 -0600

Every economic crisis creates an opportunity for scams as well as some legitimate businesses. A gal I know who has been in and around the Real Estate / Mortgage business for over 20 years is a remarkable opportunist and imaginative to say the least! Whenever there is some change, some economic tremor or new "law" restricting a formerly acceptable business practice, she is on it like white on rice, a veritable life insurance salesman with business cards and a display table at a funeral reception.

I won't expose her particular scam in this post, I'll save it for later this week (got to check with my attorney to make sure I don't write something that she can make some money on!)

These types of "entrepreneurs" are gifted...and they surface 2 steps ahead of everyone else and capitalize on confusion, the void of real information, and desparation. Is the housing crisis fertile enough ground for their lemonade stands to start appearing? You bet, large and small.

If you don't feel like you can post what you are seeing, please send me an email.

Economic Indicator-schmindicator...a recession? Really? Who would have thought!

Rich Sweum (Golf Savings Bank) — Mon, 01 Dec 2008 15:58:42 -0600

The U.S. economy entered a recession in December 2007, a committee of economists at the private National Bureau of Economic Research said. I chuckled as I read it. Chuckled more as I reviewed the housing data! I remember GW saying "Who says gas is going to hit $3 a gallon?" last year. How information gets offloaded to us via the media is truly laughable. All economic data and analysis is "rear view mirror" oriented. They do a great job commenting on what happened, but haven't a clue as to how to describe where we currently are and what is five feet in front of us.

Imagine if a sports team's PR department issued data on there team based on last seasons results. It's official, after reviewing our 0-10 record last season, we are definitely in a rebuilding mode. BUT...while we haven't played any games for the upcoming season, we are likely to have 10 opportunities to win, and could possibly improve upon our record because it's impossible to have a worse record than we had last year.

Brilliant. I love the "data" that is trickling in on the big shopping weekend of late. The poor dead Walmart worker who was trampled was used by one news agency as evidence that there is "pent up consumer demand" and "numbers should be better than expected."

Hey, let's get real for a moment. We are in the first innings of an economic cluster screw. Deny reality all you want, but it is going to take some years to plow through this mess! If you sit down at a poker game, and you can't identify the sucker...grab a mirror!

Dumb Real Estate Non-Professional Of the Week...

Rich Sweum (Golf Savings Bank) — Wed, 19 Nov 2008 00:22:30 -0600

This is classic:

At 7:30am this morning, I get a frantic phone call from an agent that I worked with on a transaction about a year ago. I never pursued a referral relationship with him because I felt like he was pushing our mutual client into making a quick decision and wasn't really trying to understand their goals. Upon confronting him about this, he emphatically stated that "Clients are craving to be told what to do, and I'm helping them to be decisive."

Well, whether you buy that line of bull or not, he wasn't my cup of tea. So anyway, back to this morning. He said that he knew that I could close a deal quickly and that time was critical. "Why is time so critical?" I asked.

Here comes the "lunacy"... The agent said, "Well, he is going to be unemployed in 3 weeks but his boss said that he would verify his employment as a favor."

And I would want this loan on my warehouse line? I didn't even bother explaining to him why he is a complete idiot, waste of a real estate license, loser--I hung up the phone.

There are some great agents and LO's out there...but not many.

Modified Loans Less Than 50% Effective In Preventing Subsequent Default: WHY???

Rich Sweum (Golf Savings Bank) — Tue, 18 Nov 2008 16:29:03 -0600

Why is interest rate modification not making house payments affordable? Hmmmmm...let's think, they are going from a 6% interest only payment on a $300k loan ($1500 monthly) to a 5% Fully amortized over 30 years payment on the $300k loan ($1610)...hmmmm a payment increase even after loan modification. Or, the ARM rate adjusted from 6% i/o ($1500) to a fully amortized rate of 6% at 25 years ($1932 monthly) and they got their rate modified to 6% fully ammed at 30 years, ($1798)...still a $298 per month increase on what they were used to paying.

Let's say this guy was a stated income, whose TRUE back end DTI was 70%...He could barely make payments at 6% interest only. For the guy to actually be able to make the payment, he would need an interest rate of 4%, ammed over 30 years. So far, I have heard of NO loan modifications that are taking clients below the start rate, and no modifications that extend the interest only period, or re-institute the interest only period, or even apply an interest only period that didn't previously exist.

Borrowers are "re-defaulting" on modified loans because there isn't enough latitude to do what is necessary to put the payment within reach of the borrower.

How about this...2% fully amortized over 40 years for everyone!

SAN FRANCISCO (MarketWatch) -- Sheila Bair, chairman of the Federal Deposit Insurance Corp., has proposed modifying millions of mortgages to prevent foreclosure. However, changing home loans like this doesn't always prevent problems, according to Lender Processing Services, which processes mortgage payments and tracks roughly 39 million of the 50 million outstanding home loans in the market. Bair said the FDIC's modification plan would cost $24.4 billion and proposed that some of the Treasury's $700 billion Troubled Asset Relief Program be used to pay for it.

Lender Processing Services told analysts at Keefe, Bruyette & Woods that the results of such modification are often uninspiring. "Industry evidence indicates that in a majority of instances loan modifications simply delay the timeline from default to foreclosure but don't prevent them from taking place," Nathaniel Otis and William Clark, analysts at KBW, wrote in a note to investors on Tuesday. For the industry in general, after mortgages are modified roughly 25% go delinquent again after just one post-modification payment and more than half end up delinquent after several post-modification payments, Lender Processing Services told the analysts.

Snake Oil Salesmen..."Many people have been helped out of bad mortgages."

Rich Sweum (Golf Savings Bank) — Tue, 18 Nov 2008 12:17:51 -0600

I can't remember how many times I heard the bozo's testifying before the House today say that many people have been helped and many more will be helped in months to come by the measures already taken by the GSE's (GOE's--government owned enterprises) and HUD. Those that have been helped include...people in ARMS that refinanced and weren't subject to possible foreclosure; those people whose LTV's were low enough to actually refi; and those folks who have had their loan modified by servicers but 40% of whom are back in trouble because the modification was inadequate.

I would pay money to see at least one person testify that this is a fuster-cluck beyond imagination and that most people who need help can't get it, and people who don't need help right now, will be needing help 3 months from now. One person testify that the bailout has done nothing more than stave off the inevitable for another 3 months, and that it would have been just as effective to give every household in the U.S. $50k.

These people are either in massive denial, mentally ill, studid, OR pathological liars.

I believe that they would do very well in the 1800's, selling Lydia Pinkham's Miracle Tonic...cure all for feminine complaints, frigidity, nervousness, gout, digestion, and bubonic plague.

Fork in the Road: everyone gets bailed out, OR, no one gets bailed out!

Rich Sweum (Golf Savings Bank) — Mon, 17 Nov 2008 09:00:50 -0600

Talk about "moral hazard!" We crossed that line a long time ago...the whole concern about rewarding people for their stupidity, rewarding corporations for preying upon stupidity and gambling with profits. The "risk" part of the capitalistic equation has been removed...and as such, there is no more capitalism. As we stare down the barrel that holds a bullet with the names of GM, Ford, Intel, Macy's, Nordstroms, Citi, HSBC, Amazon, et al, written on it...we have to quickly realize that we either bailout no one or bailout everyone.

We have already committed ourselves to a "U" shaped recovery in all markets because of the massive (although it will get even more massive) government intervention that is preventing a hard-bottom. This will take years to work through, not months. I firmly believe that it is not too late to take a huge dose of "Volcker" medicine and do what is right for our country, rather than continuing to do what is easiest. In the early 80's, confidence in us Treasuries was faltering because of Carter's unwillingness to deal with inflation. No one was buying our debt, in fact, countries that had been our lenders were dumping US Treasuries like a never before. THE ONLY solution, was to jack rates through the roof to entice some investors back to the table. It had devastating consequences that was painful for the economy in the short term, but ultimately saved our economy from a world confidence perspective.

The painful medicine that we now face, will be one that forces our economy to be less dependent on consumption and more focused on production, exportation, and infrastructure development and maintenance. Companies must fail. We no longer have a thriving buggy-whip industry because the Government did not prop up an extinct business category. Many good folks lost their jobs...they had to find other work. They had to learn other skills. Life's tough, it's a lot tougher if you are stupid.

Simply, from a consumption level, consumer "need" level, we have no use for 3 automakers making a product that is ill-suited for the world we now live in. Other companies supply vehicles that are better, cheaper, and more fuel efficient. Redundancy is not economically viable.

Housing prices will fall to 1996 levels and more banks will fail as a result. More hedge funds will implode, and median incomes will fall as well. But the quicker we get there, the quicker we can recover. Pain cannot be avoided.

OR we can bailout everyone, billions and billions, yea...trillions...and we will never recover. It will be an "L" shaped non recovery. Forget about a "U" shaped recovery.

FHA YSP...BYE BYE... except for credit to borrowers closing costs 2010.

Rich Sweum (Golf Savings Bank) — Fri, 14 Nov 2008 10:36:54 -0600

Won't be enforced to 2010, and at this point is only refers to brokers (the hits hits just keep coming), but based upon the new disclosures for FHA loans being required in 2010, any and all YSP will have to be used to pay for closing costs, etc.

Now, 2010 is a long way away...but given what has happened with Fannie/Freddie with DTI ratios, etc, documentation, etc, it's just another thing that will make it harder for LO's who are out there in Broker land to make a buck.

OH YEA...I forgot, the REVCC (new appraisal stuff) coming in 2009 is sure to make it even more problematic for all of us, not just brokers. It almost seems like it's a conspiracy against wholesale and I would have to entertain the possibility that something like that really does exist.

The First Time Homebuyer Non-Incentive Incentive...the proof is in the pudding.

Rich Sweum (Golf Savings Bank) — Tue, 11 Nov 2008 15:20:13 -0600

Personally, I feel that the Tax incentive is a plus, but this article in Marketwatch confirms that the general consensus is that it isn't enough to get buyers off the fence. If they are already buying, it is a nice bonus, but no one is out there buying because of the incentive. Think about your kids...

"If you clean your room like we asked you to, next spring we'll buy you a bicycle, and you can pay us back over the next 15 years! By the way, you have to keep cleaning up your room on time!"

Yea, I know it's a weak analogy, but delayed incentives don't work, ask any dog trainer.

First-time home buyers snub tax credit: NAR

By Amy Hoak, MarketWatch

ORLANDO, Fla.(MarketWatch) -- Over the summer, many in the housing industry applauded the temporary first-time home buyer tax credits written into the Housing and Economic Recovery Act of 2008. But apparently buyers weren't as impressed.

The tax credit gives first-time home buyers up to a $7,500 credit for buying a home between April 8, 2008, and July 1, 2009. Realtors say it hasn't been effective in getting people to buy homes, which would reduce the excessive inventory on the market.

The problem, they say, is that buyers are turned off by the repayment requirement of the credit. The credit needs to be paid back over a 15-year period, beginning on a buyer's 2010 tax return. In effect, it's really an interest-free loan.

"For the economist, even with the repayment feature, it was a clear benefit. Money today is better than money tomorrow. You receive the money today, put the money in the bank, earn interest, and pay it off over time," said Lawrence Yun, chief economist for the National Association of Realtors.

"It was a clear benefit, but nonetheless, the average Joe Homebuyer does not see it that way," he said, speaking at NAR's annual conference, held in Orlando over the weekend. The conference concludes on Monday.

Another Great Reason To Call...Veteran's Day! Pick up the phone!!!

Rich Sweum (Golf Savings Bank) — Tue, 11 Nov 2008 09:41:27 -0600

I am so grateful for all those who have served and are currently in service in our armed forces. Our greatness as a nation is highlighted by those who have stood in the gap to help protect us. As I think of what I have, what I do, and how I am able to live, I owe a debt to their service--to respect, admire, and acknowledge their gift to me and our country.

For the past 3 years, I have called a past client who his a vet, one of many, who has said that I am the only one who has thanked him for his service. I encourage you to skim your database and give a heartfelt call of appreciation to those who have served. It might take 5 minutes, it might take a couple of hours, but it will be time well spent. It is the best kind of call to make...not expecting anything in return, just a gift of your time and thoughts.

Don't put it off...make the call!

Snohomish County Home Sales and Prices October 2008

Rich Sweum (Golf Savings Bank) — Fri, 07 Nov 2008 13:44:34 -0600

From the Everett Herald

Home prices fall, but sales down as well

Tight credit and low consumer confidence are keeping many away from the hunt for houses.

Yoshiaki Nohara and Mike Benbow (11/7/2008)
Herald Writers

Home sales fell hard in Western Washington during October as concerns about a worldwide recession stopped many potential buyers in their tracks.

Nathan Gorton, director of the Snohomish County Camano Board of Realtors, said the industry was slammed with a slew of bad news last month. October saw pending sales drop nearly 30 percent and closed sales fall by 27 percent in comparison with last year.

"I think consumer confidence was very low, the market now is one where credit can be difficult to come by and it's almost the kickoff of the dead season in the real estate business," Gorton said. "What usually is kind of a slow month was influenced by all these other factors."

Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University in Pullman, expressed similar thoughts.

"We were focusing on the financial market and what's happening with stocks," he said. "It didn't surprise me that people were not engaged in buying houses in the month of October."

The county's median home prices also fell by about 10 percent, similar to the drop in September. That's comparable to other counties in the region. In King County, median prices dropped 7.48 percent; in Pierce County, prices dropped 9.45 percent and in Kitsap County, they fell 12.28 percent.

"Price weakness will continue, and prices will go down," Crellin said. "I don't know how long. My crystal ball isn't that clear."

Bob Maple, broker and owner of John L. Scott Real Estate Office in Everett, said that the new data was predictable.

"It was disappointing, but not surprising," Maple said.

October saw a combination of historic events such as the financial crisis and the U.S. presidential race, Maple said. Those factors caused uncertainty, he added.

"It's going to take some time to rebuild consumer confidence," he said. "I don't know how long. I'm very optimistic."

Maple noted that the housing market in the Puget Sound region is still faring OK.

"Each market is different, just like weather," he said. "We are a little bit better than other parts of the nation. Our inventory is dwindling. And Boeing workers are back to work."

Crellin also said that shrinking inventory is a good sign. He said it's proof that the market is restoring some balance after excessive supply has driven down home prices.

"My expectations are that conditions will be improving," he said. "It will take some time."

Rich Sweum, a branch manager and senior consultant for Homestead Mortgage in Everett, noted that lenders have tightened the guidelines for borrowers, which has also whittled demand for mortgages.

The market continues to suffer from what had been lax lending standards that inflated demand and created bad loans, he said, adding that it will take some time before the market becomes steady.

Sweum noted that while the headlines have focused on some of the major financial institutions needing government bailouts, local lenders are faring better.

"We haven't run out of money," he said. "Most lenders in Washington have plenty money to lend," he said.

WSU's Crellin said mortgage rates remain low, around 6 percent.

That could help people buy houses, he said, adding that government entities are putting pressure on lenders to renegotiate loans with homeowners to keep them out of foreclosure. The fewer foreclosures happen, the more stable the market will be, he said.

"I am more optimistic than I was a month ago," he added.

Red Counties / Blue Counties...where is "Real America" Anyway???

Rich Sweum (Golf Savings Bank) — Thu, 06 Nov 2008 10:05:09 -0600

I've been getting emails from my "gun totin'" and "tongue talkin'/snake handlin'" buddies talking about how "Real America" voted for McCain/Palin en mass. Hey, we've always had at least 30% of folks who were generally pissed-off after election day...and probably 5% who felt like the country was going to implode because the other candidate won. Welcome to democracy, enjoy it, embrace it, and if you want to live someplace where everyone thinks like you...buy an island with a 1-bedroom house on it!

The only folks who are "originals" or non-immigrants are the Native Americans (even they immigrated via the land bridge from Asia--I wonder if Sarah Palin can see the bridge from her back yard?) So, "Real Americans" in my simple way of thinking are people who are citizens of this country, and whether it is a city, a suburb or a rural area that they live in, it is "Real America."

The photo below shows our country (minus AK and HI) represented by red counties (GOP) and blue counties (D). The representation on the left seems to show that "most" of Real America voted for McCain Palin. But the photo on the right, shows counties represented by population. Sure, we are still a divided nation, but Real America is not quite as Red. Just some food for thought.

Crimson Tide / 2008 Presidential Election Comparisons...did you notice...

Rich Sweum (Golf Savings Bank) — Wed, 05 Nov 2008 10:37:14 -0600

Did you notice...

If you watched John McCains concession speech, as he was walking off the stage the music that was playing was the same music that played in the movie "Crimson Tide" at the end of the movie as Gene Hackman realizes he was wrong, Denzel was right, and hands over the "conning tower" to him. Not sure that the McCain campaign intended that, but it was poetic.

Gene Hackman...the old dog, who had served his country well, but was trained to "push a button" and see all situations as black/white, good/evil, yes/no. This training served him and the country well until the world got a little more complex than simple binary answers and responses. He reacted with anger, fear, and desperation.

Denzel...the new dog, inexperienced but loves his country, trained to think, consider, reflect, and respond to a world whose situations are complex, multi-faceted, and nuanced. He reacted with restraint, respect, determination and resolve.

Both men are good, have good intentions, but one was suited for a season that had passed, the other suited for the future.

Oh yea... one more...the "old dog' was white; the "new dog" was black.

The "X" Factor in Housing Recovery

Rich Sweum (Golf Savings Bank) — Tue, 04 Nov 2008 10:55:54 -0600

Unemployment: the X factor in the housing recovery process. Inventory has to be absorbed by a shrinking demand pool at every pricepoint...especially higher end properties. If you look at national numbers as they relate to unemployment, the areas that already have the largest inventory (sunbelt) also stand to be hardest hit by the recession in terms of unemployment. That was Reagan's biggest challenge and the way that he dealt with the "perception" of high unemployment was revising the criteria over 20 times for how we count those who are unemployed. Unemployed people don't buy houses and don't keep houses; they don't buy flat screens, and they don't buy cars, computers, or airline tickets OR PAY TAXES. 70% of our economy is driven by "consumption" and that is the other side of the capitalism coin.

I believe that the recovery has already begun...however, the rehab process is going to be long and painful, particularly in the sunbelt!

NOVEMBER: 30 Reasons To Re-Connect With Clients and Referral Sources

Rich Sweum (Golf Savings Bank) — Mon, 03 Nov 2008 09:49:02 -0600

I don't do cold calls.

That being said, I call as many people a day as I can and what works for me above everything else is...

HAVING A REASON TO CALL!

Here are 30 reasons to call past clients, current clients, old referral sources, stale referral sources, etc.

1) Happy Thanksgiving!

2) Reminder about First Time Homebuyer Tax Credit.

3) Ask questions about homes for sale in their neighborhood.

4) Remind them to check the balance in their impound account.

5) Encourage them to revisit their Homeowner's Insurance Policy to see if they are adequately covered OR over covered.

6) Let them know about current lending guidelines.

7) Let them know about a "Holiday Warm Jacket Drive!"

8) Ask them if their home retention goals have changed.

9) Ask them if they know of a friend that might be interested in an investment property.

10) Ask them if they know of a first time homebuyer that might be interested in a DUPLEX.

11) Ask them if they can "recommend" or "refer" any of the following to you: a great accountant; a great financial planner; a great insurance agent; a great realtor; a great mortgage banker.

12) Ask them if they have any questions about the current "local" lending and real estate climate.

13) Wish them a Happy Thanksgiving, express gratitude and thanks for them!

14) Ask them if they know of anyone in trouble with their home mortgage and if you can call them.

15) Let them know you have a great resource for bankruptcy information if they know of anyone who might be in a tough financial situation.

16) Let them know of the people you have been able to help in the past 3 months.

17) Let them know about your professional opinion on where we are at in the current economic cycle.

18) Let them know about your goals and business plan for 2009.

19) Invite them to your home for Thanksgiving. Seriously, think about expanding your T-day celebration...the more the crazier and memorable!

20) Ask them if they know of any charities they work with have any special needs this month.

21) Connect with your neighborhood...do your own personal "coat" or "canned food" drive with your kids, pull the wagon around and shake some hands!

22) Ask them if they know of anyone that has kids that might need help with a Christmas gift this year?

23) Ask them if they know of any single Mom's that might appreciate a car detailing or a Jiffy-Lube certificate.

24) Remind them to change their furnace filter to folks that you helped buy homes this past summer and spring!

25) Remind them to check their on-line balances to make sure that their "auto-pay" for credit cards and mortgage payments are going through. With all of the consolidations etc., there have been record numbers of servicing mistakes!

26) Let them know about a local bank that has insured "CD's."

27) Encourage new home owners to check their gutters to make sure the downspouts are clear.

28) Encourage new home owners to check under their dishwasher for leaks.

29) Ask them if they have any questions about their mortgage.

30) AFTER ANY OF THESE LEAD ITEMS....ASK THEM FOR A FAVOR...

"CAN I ASK YOU FOR A FAVOR? IF YOU HAVE ANY FRIENDS, FAMILY MEMBERS, NEIGHBORS OR CO-WORKERS THAT MIGHT BE CONSIDERING BUYING A HOME OR REFINANCING, WOULD YOU ASK IF I COULD CONTACT THEM, AND THEN CALL OR EMAIL ME AND LET ME KNOW THEIR NUMBER?

Fed Funds Cut Analogy...

Rich Sweum (Golf Savings Bank) — Wed, 29 Oct 2008 11:57:54 -0500

Steve Martin: "What you need is a good "bleeding!""

Patient: "But I'm already Bleeding!"

Steve Martin: "Hey, who is the Barber here, anyway?"

Banks being exhorted to "lend" to each other with money they have been forced to borrow from the Government, and NOW, at a cheaper rate! The solution to our current condition that was created by lending money to people and institutions that couldn't pay back the money is being medicated with more loans that will never be repaid! Brilliant! This is akin to the SNL skit where Steve Martin plays a medieval Barber / Surgeon and his remedy for an injured man who is bleeding to death is "blood-letting."

If we believe blood-letting, (rate cuts) maybe the "faith" will be enough to turn things around. I don't think so...but I'm wrong a lot of the time.

Impact of Fed Funds Rate Cut: "Come on lucky 7!"

Rich Sweum (Golf Savings Bank) — Wed, 29 Oct 2008 00:20:48 -0500

Well, the impact of cheap money via a Fed Funds rate cut will be the onset of mortgage rates in the 7's. If the equities market gets revitalized, it will be at the expense of long bonds, and specifically Mortgage Backed Securities. Sure, I could be wrong, and I hope I am...but logically, there just isn't enough "cash" to go around from any of the usual sources. You ain't seen housing prices fall and inventory stack up until you add this to the mix. Fun times. And for those of you that think that a 900 pt gain in the DOW means that we are on the road to recovery, I've got some land in Florida I'd like to sell you!

"Go sell crazy somewhere else! We all stocked up here!"

Who Will Give You "Unbiased" Analysis About Our Housing Market and Economy???

Rich Sweum (Golf Savings Bank) — Fri, 24 Oct 2008 18:06:48 -0500

Whether it is Lawrence "we have hit the bottom" Yun, Barry "lock-float-lock" Habib, Hank "Strong Dollar Policy" Paulson, or Ben "That's what I said but not what I meant" Bernanke...it is tough to get a straight answer out there.

The talking heads and their guests on Bloomberg, Fox Business, and CNBC all have skin in the game and are salesmen and women. Even the "Goldbugs" that offer their spin want people, hell, need people to buy into the "collapse mindset." I've chuckled a few times as Gold has taken a recent pounding amidst panic and fear that should have driven its per-ounce price over $1500!

Everyone has a perspective that is going to ultimately benefit them and actively work at getting others to believe in their version of reality.

Yes, the market is driven by sentiment just as much as it is driven by technicals, and as such...it is subject to confidence, mojo, and optimism (based on reality or mass delusion). This fact lends credibility to those that believe that "drinking positive koolaid" will solve all our markets problems.

That being said, out of all the spin-meisters that have been read, seen or heard...who do you honestly think has given us the closest thing to the truth?

My vote is for "Nouriel Roubini" Chairman RGE Monitor and Professor of Economics, NYU.

Freddie Mac Changes, implemented 2/1/2009...a little late?

Rich Sweum (Golf Savings Bank) — Wed, 22 Oct 2008 10:53:17 -0500

The great thing...in my simpleminded opinion...is that home prices will be low enough next spring and summer that the hard "45% max DTI" ratio won't be too much of a problem...that is, as long as you are not part of the 9% unemployment figure. The reason that the "price" unwind is going to continue has to do with simpe supply and demand. More supply via REO's, and builders that keep on building, and an ever shrinking demand pool at every single pricepoint via jumbo loan unavailability; MI coverage increases; tightened UWing guidelines via Agency restrictions, MI restrictions, and investor overlay restrictions; unemployment and wage deflation; LTV restrictions; yada yada yada.

All the more justification in my "simple mind" that a bottom-up bailout would have been a better strategy. Sorry, still P.O.ed about the $700b bailout to nowhere!

Blackerer Tuesday or Wednesday (10/22 & 10/23)...going out on a limb! (update II)

Rich Sweum (Golf Savings Bank) — Fri, 17 Oct 2008 11:30:21 -0500

Tuesday 10/23 post closing: Dow closes down 236--Lehman CDS contract auctions "appear" to have gone without a hitch...we'll see, might have a slow fuse. This is only the bottom of the first inning...much more exciting news to come from the Derivatives market in the next 4 months that will hamstring a rebound in the Equities market.

Wednesday 10/23 posst closing: Dow closes down 514--indexes lose almost 10% in two days. The ripple effect, everything is connected and all the remedies have side effects. Strong dollar? Our trade deficit will skyrocket. You name it, whatever direction we turn, there is a roadblock of another shape and size. 6200 is Still the capitulation point for the DOW.

You ain't seen nothin' yet,
B-B-B-Baby, you just ain't seen nothin' yet,
Here's something that you never gonna forget,
B-B-B-Baby, you just ain't seen nothin' yet.

Bachman-Turner Overdrive...my favorite LDS Band!

All of the governmental efforts so far have, and will, amount to a "finger in the dyke!" The billions, nay, trillions set aside to stave off the impending defaults amount to Han Brinker's finger.

Next Tuesday and Wednesday, another set of contracts for Credit Default Swaps come due via auction. The last one fetched 9cents on the dollar...the hedge funds are on the hook for the other 90cents...fun times. More and more of these will be hitting the auction blocks over the next 3 months and if you think that this will pass unnoticed in the credit markets AND the shadow banking system of derivatives and off-balance sheet contracts you are sorely mistaken.

I am not sure that the impact of next Tuesday will be felt in the equity market (particularly the financials) immediately, it might take a few days. But there is a huge possibility that the HEDGE funds will have to unload all their equity positions to raise cash to cover the auction spread. Maybe they already have...if that is the case, then the impact will be delayed. But, just for fun, watch the play it gets next week in the media. The earnings reports will be killers next week!--it that weren't the only challenge!

Paulson said that the bailout, at this point, won't be used for Hedge funds...I think he will retrace his steps a bit on that point!

Financial Crisis and Secret Squirrel...I don't like it.

Rich Sweum (Golf Savings Bank) — Thu, 16 Oct 2008 13:42:34 -0500

We, the taxpayers who are on the hook for $700b / $1.5t in this Financial System Rescue Effort, have been kept in the dark. Secret meetings with Paulson and the banking heads, the President and foreign heads of state, hedge fund managers and government officials, etc. etc. and quite honestly it completely stinks to high heaven.

As the chumps who are funding this bailout with our childrens' futures, we deserve to know everything, and we are being told NOTHING! I can't believe that more folks are not as outraged as I am that decisions are being made with our money and we are not being told even half of what is going on. We have a right to transparency and yet we are being told to "trust" Hank, Ben, George and NOW this 35 year old former rocket scientist Neel Kashkari.

We will be regretting this blank check of trust for the rest of our lives.

Every Party Has a Pooper... Bull Trap a comin'!!!

Rich Sweum (Golf Savings Bank) — Mon, 13 Oct 2008 16:03:19 -0500

Sorry to rain on Wall Street's parade, 936 pts up on the Dow is a pretty good day...best in 70 years! So, I should have bought today, right???? Sure, but buy tomorrow with eyes wide open. There are a lot of blogs out there talking about the Chinese symbol for "crisis" having parts of the symbols of "danger" and "opportunity" in it, they are wrong. Danger is danger. In the words of Phil Esterhaus from Hill Street Blues..."Hey, let's be careful out there people!"

Why...

1) a plethora of recessionary data coming over the next 2 weeks, including zesty housing data.

2) weak earnings reports

3) the $700b bailout to no-where won't be hitting the streets for another few weeks.

4) Short seller madness over the past 3 trading days

5) McCrazy closing the gap in the polls...no one knows who will win...markets like predictability, regardless of the winner.

6) History repeats itself with regularity.

Take a look at the chart...buy back into the market at your own peril...until the longer term effects of the bailout are known and its ability to mitigate unemployment figures, you should tread carefully. There was a 9 month rebound in the market in 1929 too...sorry, but the fundementals for a quick recovery just don't exist!