Good morning…
I hope you had a nice weekend. If traffic is going to be as non-existent
as it has been the last few days, they can invite as many protesters to
the city as they want! If you went near the conference at McCormick,
I hope it was, at the very least, exciting. Thank you to those of you who
gave me feedback from last week’s message, I appreciate the input.
On today’s call: Markets, Housing, Mortgage Tip, Interest Rates
- The stock market is still trying to correct itself after last week’s worst
showing of the year. Investors remain cautious over the Euro situation
and as I’ve said previously, there doesn’t seem to be anything that will
alleviate concerns any time soon. Facebook went public but the stock
price has plunged 13% as of today. Investors were looking for this to be
a bright spot as it drew the largest volume in market history but it hasn’t
appeared to be the blockbuster they hoped for so far. Tomorrow, the
Existing Home Sales index comes out, as does the Consumer Sentiment
report, on Friday, with both numbers being highly anticipated.
- A recent Fitch Ratings report has predicted steady economic growth and
inflation levels close to 3% annually. This two indicators together could
cause home prices to reach the bottom sometime next year. I personally
think that these ratings agencies can be somewhat egregious in their
forecasting, but recent stabilization in prices in hard-hit states like Arizona
and Michigan gives hope. The rest of the fall won’t be pretty, though.
High unemployment still prevails these days. With a declining labor force,
stagnant wages, and what seems like a never-ending delinquent inventory,
gaining momentum is tedious at best. We don’t know what the lasting
effects will be once things turnaround. For now, we have to continue to
educate our clients on home affordability. With rental prices rising each
day, we have to stress the pros of owning a home, especially the long-term
benefits. The turnaround won’t be tomorrow, but we’ve got to be positive!
- In all the feedback I received, one thing was constant: more mortgage tips!
I thought I’d add this segment as it’s no secret that underwriting guidelines
and Fannie/Freddie requirements aren’t getting easier. This week, I’d like to
quickly review the “large deposits” requirement.” I can’t think of any other
part of the loan process that causes more headaches. Many people deposit
money into their bank account, obviously. The problem arises when the person
can’t remember what the deposit is for nor can they prove where the money
came from. On purchases especially, this can become a major problem.
Underwriters are looking for any non-payroll related deposits that are “out of
the ordinary.” Obviously, this is a grey area as it depends on the person’s income
and their spending habits. When meeting with your clients, make sure to tell them
that if they’re going to be purchasing a home soon, do not start moving money
around or make random deposits unless you can prove what the money was for,
where it came from, and how it got to the account. I would bet that this is one
of the top deal-killers for mortgages these days.
- Interest rates? Still unbelievable! 30 year fixed rates in the high-3% range…that
should sum it up I think! We’ve partnered with a couple more lenders for HELOC’s
so splitting the loan into two to make a more affordable jumbo purchase is very
attainable. Here’s more info on the recent rate drop:
http://realtormag.realtor.org/daily-news/2012/05/18/mortgage-rates-sink-new-records-once-again
Have a great week everyone. Please contact me if you need anything.
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