Monday, December 30, 2013

Housing Trends

During the initial part of the recession recovery, the markets reacted to every nuance in the housing reports.  Today the stock market seems to be paying little attention to the housing market and all eyes are on employment and economic growth.

The stock market has been on a tear recently reaching another record high at the closing bell on Thursday.  The market jumped 122 points on Thursday due to a positive first time jobless claims report.  Claims plummeted 42,000 for the week of December 21st.  Employment claims have been moving back and forth in a very wide 75,000 range over the last 4 weeks.  Despite these large movements, the mood on Wall Street is that 2014 will be a better year for employment and the economy.  The Fed clearly reinforced this sentiment with their recent announcement that they will begin tapering the stimulus program starting in January.

The stock market loves the fact that expectations for 2014 are high.  On the other side is the bond market, which has been getting hammered lately.  The benchmark 10YR Treasury hit 3% which is the highest since September.  To make matters worse for bond investors, the expectation is that economic improvement will further drive interest rates higher which will create additional upward pressure on bond yields.  Mortgage rates are closely related to the movement in the bond market and mortgage rates have been steadily climbing for the last few weeks.

Rising mortgage rates are clearly impacting the housing and mortgage markets.  The Mortgage Bankers Association of American reported that for the week ending December 21st, purchase applications declined 4% while refinances dropped 8%.  This is on top of the prior week?s declines of 6% and 4% respectively.

The two positive housing reports this week came from the Federal Housing Finance Agency and the New Home Sales Report.  According to the FHFA home prices continued their upward trend for the month of October with an increase of ½%.  Additionally, home prices are up 8.2% from the same time last year.

Although on the surface, the new home sales data shows a decline of 2.1%, this number is very misleading.  September and October data was dramatically revised upward which creates the illusion that new home sales may be trending downward after this week?s report.  The reality is that new homes sales have been quite healthy and if the upward revisions of the last two months are any indication, we will likely see an upward revision to November?s numbers as well in the coming weeks. Despite tight supply of new home inventory, a surge in year end sales is good news for housing and construction related activity.

Next week?s market moving reports are:

·        Monday December 30th ? Pending Home Sales Index
·        Tuesday December 31st ? S&P Case-Shiller Home Price Index & Markets Close Early
·        Wednesday January 1st - New Year?s Day ? All Markets Closed
·        Thursday January 2nd - First Time Jobless Claims, MBA Purchase Applications & ISM Mfg Index

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Friday, December 27, 2013

Home Loan Mortgages With Bad Credit: Making Your Mortgage Affordable

It is an obvious assumption that getting a home loan mortgage with bad credit cannot be a simple task. The size of a mortgage alone means that repayments will be significant each month, and low credit ratings suggest a difficulty in making existing loan repayments anyway. But the good news is that even bad credit borrowers can get a mortgage.
Of course, some extra effort is needed to get mortgage approval despite low credit scores. And it is the steps that are taken before submitting your application that can make all the difference. In fact, a lot more is considered by lenders than the size of an income and the credit history of the applicant.
The key word amongst mortgage providers is affordability, and it is proving that a home loan is affordable over the long term that matters most of all. Thankfully, there are some measures that can effectively enhance the affordability of the terms.
1. Improve Your Debt-To-Income Ratio
As with any other loan, the debt-to-income ratio is the principal influence on a loan application, so when it comes to getting a home loan mortgage with bad credit, the healthier it looks the better chance there is of getting approved.
The ratio measures the monthly debt repayments due against the monthly income, and sets a 40:60 ratio that lenders stick religiously to. It means no more than 40% of income can be committed to debt repayments, leaving 60% to cover general monthly expenses and any unexpected bills. Securing mortgage approval despite low credit scores is possible if the 40% limit is adhered to.
Of course, income is closely related to this ratio with large monthly paychecks greatly benefiting the applicant. However, a home loan is not granted solely on the size of the income. A 12-month employment contract, for example, may be high paying but provides no guarantee of employment after it ends.
2. Promise A Bigger Down Payment
There can be no underestimating just how influential the down payment can be in the approval process. After all, it has a direct effect on the size of the required mortgage, and this can in turn make the home loan mortgage with bad credit affordable or not.
Real estate agents will usually look for down payments of at least 5% to seal the deal, but some mortgage providers are willing to grant no more than 90% mortgages. This is fine, but by committing a payment of 15% or even 20%, mortgage approval despite low credit scores becomes a far more possible outcome.
The only problem is raising the money involved. If a house is worth $200,000, a 20% down payment translates to a single lump sum payment of $40,000. Many people secure down payment loans from independent lenders online before applying for the home loan.
3. Agree A Longer Mortgage Term
Of course, when affordability is the premier concern, it all comes down to how large the monthly mortgage repayments will be. If the sum involved can be kept down, then the deal is more affordable, and makes the chances of securing a home loan mortgage with bad credit extremely good.
The best way to lower the repayment sum is to increase the number of ways the principal borrowed is divided - basically, lengthening the term of the mortgage. For example, a $200,000 mortgage repaid over 30 years will require repayments of over $600 per month, but over 40 years will cost $480.
That kind of savings can be significant and practically ensure mortgage approval despite low credit scores. But it is also important to note that with a longer term, more interest is paid over the lifetime of the home loan.

Article Source:

Saturday, December 21, 2013

It Was Bound To Happen.....

It was bound to happen.It was inevitable.  For well over a year the talk in the markets has been when is the Fed going to begin tapering the stimulus program?

As I am sure you have heard by now, the announcement finally came on Wednesday afternoon with the FOMC's policy announcement and FOMC market forecast.  It is official, the tapering will begin in January with a reduction of 10 billion dollars a month in bond purchases.  The reaction from the stock market was euphoria.  On the news, the DOW rose 262 point in the second half of the trading day on Wednesday.  The investor excitement stemmed from the upbeat forecast from the Fed on the expected growth of the economy.  Good economic news and expectations means good news for stock values.

While the sun shines in some parts of the world, it rains in others.  The bond market on the Fed news tanked.  The Fed stimulus program has been artificially keeping interest rates low.  With the beginning of the tapering interest rates will rise.  However bond investors know that rising rates will erode the values of their bond holdings which is why there was a flood of investors jumping out of the bond market once they heard the Fed plan.

Months ago it was thought that higher interest rates would kill the economic recovery and push housing activity and growth back to a crawl.  With the latest Fed report the belief seems now that the economy and housing market are strong enough to sustain slightly higher interest rates.  The Fed tapering plan is going to be extremely gradual so any large jump in rates should be averted.  Some experts are predicting that the whole tapering plan will take at least a couple of years before it is completely terminated.  Remember, the last thing the Fed wants to do is cut support for economic growth too quickly as that would have a devastating effect on the economy.

The Housing Market Index, which measures home builder sentiment on future housing growth, shot back up 4 points.  Currently the index is at the highest point it has been since the economic recovery began and it also ends a 3 month trend of declines in the index.

On the flip side, existing home sales fell a sharp 4.3% for the month of November.  This is the 4th straight month of disappointment.  The negative report is not due to a lack of buyers or the inability for them to obtain mortgage financing.  The decline is primarily because there are just not enough homes on the market for sale.  The worst part of the report is that existing home sales are actually 1.2% below where they were a year ago.  This is the first time since the beginning of the recovery that we have seen contraction in sales from the prior year.  Higher mortgage rates may be a small contributing factor to the decline as well
Next week's market moving reports are:

        Monday December 23rd  Consumer Sentiment
        Tuesday December 24th  Durable Goods Orders, FHFA House Price Index & New Home Sales
     Wednesday December 25th  Christmas Day ? Markets Closed
       Thursday December 26th  First Time Jobless Claims and MBA Purchase Applications

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Wednesday, December 18, 2013

Sunday, December 15, 2013

Be Still My Heart

Be still my heart, Is it possible that the government of the United States can actually get something done?

On Thursday the Republican controlled House of Representatives approved the proposed budget plan placed for a vote.  This budget actually appears to have the support of the majority of Republicans and just enough Democrats for it to be passed.  Next week the Democrat controlled Senate will vote on the bill which is expected to pass by a narrow margin.

It appears that Congress has finally realized that permitting, or even toying with a another possible government shutdown in January would create a firestorm of rebellion by the American public.  After the last shutdown in October it has been clear that the American people are fed up with government and that our elected officials would pay the price come the next election.

The response from the markets has been mixed.  The stock market has been dropping with the belief that the latest batch of positive economic data, combined with the government appearing to pass a budget, and finally a slowly improving job market, will likely move the Fed closer to tapering the stimulus program.  Bond yields have been rising on this news as well, moving interest rates higher over the last couple of days.

Last week mortgage rates declined slightly bringing some home buyers and refinance borrowers to take action.  Purchase applications increased 1.0% while refinances inched up 2.0% from the prior week.  With the latest jump in interest rates this week in response to the budget deal, it is likely that the MBA mortgage applications report will show declines next week.

Adding to the sentiment that the economy continues to recover is the latest report on retail sales.  Overall retail sales jumped 0.7% in November following a rise of 0.6 % in September.

At long last the foreclosure crisis is showing signs that is finally fading away.  The number of foreclosure filings dropped 15% down to 113,454 in November which is the largest decline since November 2010.  In addition, the total number of filings is the lowest since December 2006.  The number of filings is down 37% from the same time last year. 

I was speaking with a professional real estate agent the other day and they even said that they are noticing much faster responses from many banks when it comes to approving short sales.

Next week?s market moving reports are:

        Monday December 16th  Industrial Production
        Tuesday December 17th  Consumer Price Index
      Wednesday December 18th - MBA Purchase Applications, Housing Starts and FOMC Minutes
       Thursday December 19th  First Time Jobless Claims and Existing Home Sales
     Friday December 20th  GDP

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Thursday, December 12, 2013

This Weeks Highlights: December 12th 2013

Friday's employment report could be a big game changer if the data shows hiring continues to remain strong.  Last month 204,000 jobs were added which were more than expected.  ADP on Wednesday of this week released their report which showed private sector hiring to be quite strong.  With a strong ADP report, and if a strong employment report comes out Friday morning, that could very well put pressure on the Fed to once again begin discussing the tapering of the stimulus program.

As of late mortgage rates have risen almost to their highs for 2013 and it appears that any significant decline in the future is highly unlikely.   Although recent housing reports are not as strong as earlier in the year, other sectors of the economy seem to be doing better.  The Fed, for better or worse, does not make their future stimulus plans only based on the housing market.  They look at the overall health of the economy which can lead once again to investors trading on Fed stimulus speculation.

Auto sales for the month of November were at the highest level ever for the month.  When you combine that with lower first time jobless claims and higher than expected GDP, the signs are there that pressure could mount on the Fed to make at least some changes to the current stimulus program.

Housing which was once the bright spot of the recovery, then dipped, seems to be improving once again.  There were 2 new homes sales reports released on Wednesday.  The reason for the double reporting is that the September report was delayed due to the government shut down.

New home sales report sends a mixed message as sales for September declined 6.6%.  However October figures showed a 25.4% surge in new home sales.  The rate of sales annualized is 444,000 which is the highest pace since early this year.  Because of the big jump in sales the housing supply declined from 6.4 months down to 4.9 months.

The other report released this week on housing was regarding construction spending.  The latest report showed that spending increased .8% which was more than expected.  The concerning part of the report is that the majority of the increase was in the multifamily sector versus in single family homes.

On the flip side of housing the impact of higher mortgage rates is showing up loud and clear in the mortgage application index released by the Mortgage Bankers Association of America.  The latest report shows that purchase applications declined 4.0% and refinance apps plummeted 18%.  The continued trend of declining purchase applications could indicate weaker reports in new homes sales and existing home sales in future reports.

Next week?s market moving reports are:

  • Thursday December 12th  First Time Jobless Claims and Retail Sales
  • Friday December 13th  Producer Price Index

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Monday, December 9, 2013

Buy a Home in Winter and Save Money

While most people are accustomed to shopping for homes between Memorial Day and Labor day, that may actually be the worst time of the year to buy a house. The best time of year to go house hunting may be the dead of winter, rather than the summertime.
Most houses are bought and sold in the summer for a good reason. That's when children are out of school. Parents understandably want to avoid disrupting their children's' lives if they can possibly help it and moving when school is out of session is a big help towards avoiding some trauma.
Granted, one doesn't always have the opportunity to shop for houses at one's leisure; many people move because of job transfers or job changes, and with those, you pretty much have to move when the even occurs. But if you have control over when you start house hunting, you might do better to wait until the snow comes. Why is that?
The summer creates a seller's market. Buyers are working on tight schedules; they want to get settled into their new houses before school starts again. That being the case, sellers have an advantage, because most of the people who are shopping in the summertime want to get settled quickly. The opposite is true in the winter, when there are fewer homes for sale and far fewer buyers. Most people who have houses for sale in the winter months do so out of necessity. At this time of the year, the buyer has an edge, as sellers are more likely to be looking to sell their home quickly from a much smaller pool of potential buyers.
As such, buyers who shop in the winter may find sellers to be more flexible. They may be willing to haggle a bit more on the price, they may be more willing to allow concessions for paint or carpeting, and they may be more flexible on a closing date. All of these things work to the advantage of the savvy home shopper.
If it suits you to do so, the winter is a great time to buy a house.

Article Source:

Friday, December 6, 2013

How Does a Reverse Mortgage Work? A Simple to Understand Explanation of the Reverse Mortgage Process

If you're looking into a reverse mortgage, chances are you're interested in the immediate cash it can give by releasing the equity in your home. But how does it work? The whole process is relatively simple, but there are a few key points to keep in mind.
First of all, you should note that a reverse mortgage is not a good idea if you still owe a large balance on your regular mortgage. This option should only be considered if you own your home outright (you're not making mortgage payments anymore), or if you have just a small balance left. If you've lived in your home a long time and have finally paid it off, at that point a reverse mortgage is something to consider. Also, in the United States, you must be at least 62 years old to take advantage of this option.
Basically, the amount of equity in your home is converted into cash that can be paid to you in several ways. You can opt for one lump sum, a monthly payment, or a line of credit in which you can withdraw any amount at any time until the credit is exhausted. The money that is given to you must first be used to pay off an existing regular mortgage, if you still have one. Afterward the remaining balance can be used for anything you want.
The biggest benefit of a reverse mortgage is that you don't have to repay the money as long as you continue to live in the home. The payments are deferred until one of the following happens: 1) You or your surviving spouse pass away; 2) You sell the house; or 3) You move out of the home for longer than 12 months. Once any of these occur, the money from the reverse mortgage must be repaid.
However, you may not personally be responsible for the repayment. Obviously, if you pass away, the debt is passed on to your heirs. The same is true if you move into a retirement home and are incapable of repayment. If you do not plan on repaying the mortgage yourself, you should make sure your heirs or spouse are financially able to take on the debt.
A reverse mortgage is certainly a great way for seniors to take advantage of the equity in their home. We encourage you to look into this option if you are interested in accessing the value in your home.

Article Source:

Tuesday, December 3, 2013

Reverse Mortgages - What Does the Term Principal Limit Mean?

When explaining a reverse mortgage to a senior homeowner, one of the most important terms a reverse mortgage loan officer will discuss is the "Principal Limit."
What is the Principal Limit and why is it important?
The Principal Limit (PL) is the gross amount of money the lender is willing to lend to the borrower of a Home Equity Conversion Mortgage or HECM reverse mortgage, based on a formula derived from Congressional legislation and implemented by the Department of Housing and Urban Development (HUD) and using the following three criteria: 
  • The lower of the Maximum Claim Limit or the Federal Housing Administration (FHA) appraised value of the home;
  • The age of the youngest borrower (must be 62 or older);
  • The current expected interest rate (based on the current 10 year London Interbank Offered Rate, or LIBOR rate, plus a stated margin for the adjustable rate HECM and based on the current fixed interest rate for the fixed rate reverse mortgage).
The three listed criteria affect the PL in the following ways:
  • The higher the value of the home (up to the maximum claim limit of $625,500) the higher the amount of the PL will be;
  • The older the youngest borrower (age is always based on the youngest borrower's age, not a blending of multiple borrowers' ages) the higher the amount of the PL will be;
  • And, conversely, the higher the current expected interest rate, the lower the amount of the PL will be.
The reason potential borrowers should become familiar with the term Principal Limit and what it means is because it is from this cash figure that all fees and set asides will be subtracted in order to arrive at the maximum cash or loan proceeds available to the borrower.
Congress Plans to Lower the Principal Limit
Congress lowered the Principal Limit for the fiscal year 2010 signifantly to make up for a perceived budget shortfall of approximately $798 million for HECM reverse mortgages put in place within that fiscal year. HUD has announced that for the fiscal year 2011 there will likely be decreases in the Principal Limit as well. The 2011 year begins in October 2010 for budgetary purposes.
 Until the budget bill has made it through the joint Senate and House committee, been voted on and signed, we do not know what the exact amount of the cut in the principal limit will be. Senior homeowners who have investigated HECM reverse mortgages prior to October 1, 2010 should contact a reverse mortgage lender to learn how the decreases in Principal Limits could impact  them personally if they pursue a reverse mortgage.

Article Source:

Saturday, November 30, 2013

Meet Michael O'Rourke

Michael O'Rourke
As the owner of Big Valley Mortgage, I would like to thank all our employees, who over the years, have become like family. I would further like to thank all our loyal clients who have looked to us when they have needed Real Estate professionals. It is with everyone's help that we are privileged to serve the very community we live in.

Feel free to contact me at 707-455-7070 ext. 304

CA DRE LIC # 01259806/01215943
NMLS # 214645/1850

479 Mason St. Suite 109

Vacaville, CA 95688-4505

Phone: 707-455-7070 ext 304

Fax: 707-455-8337

Wednesday, November 27, 2013

Am I The Only One Confused?

Am I the only person confused by the fact that on Wednesday the FOMC minutes basically stated that the Fed does not yet have a timetable on tapering the stimulus program because the job market is still weak, however, the Fed may have to consider tapering for other factors regardless of the job market?and on this news the stock market plummeted 130 points in a matter of minutes?

This is the same thing the Fed has been saying for months, yet investors reacted with panic as if it was going to happen immediately.  Then to add to the craziness the stock market closed on Thursday near record highs once again.  Absolutely nothing changed from Wednesday to Thursday but the market reacted as if the Fed made an announcement of something brand new.  Ladies and Gentleman Investors?Please stop the insanity, nothing has changed with the Fed.

Further irony to the stock market reaction is that Janet Yellen, the heir to the Fed throne, has indicated that she sees absolutely no need to rush to change the Fed stimulus program.  Employment and economic weakness show little sign of any type of positive change and tapering would make it worse.

Mortgage rates for the prior week were little changed, however this week we did see a jump on Thursday when the bond market momentarily panicked about the Fed?s language regarding stimulus tapering.  The Mortgage Bankers Association reported that applications for purchases jumped 6% in the prior week.  This is a welcome report because it breaks the run of purchase declines happening over the last few weeks.  Refinances continued to decline dropping 7%.

As I have been writing for the last few weeks, housing appears to be slowing.  Existing home sales were down 3.2 percent in October to a 5.12 million annual sales rate. This is the 3rd month in a row displaying weakness in the market.  Single-family home sales declined 4.1 percent following a 1.5 percent decline in September.  The data shows that declines are broad based across the country however the West fell the most at 7.1%.  The national supply for existing homes is down for a 3rd straight month, at 2.13 million units for sale.

Sorry but I have to go back to my first point of today's newsletter.  The weak housing report was released at 8:30AM on Wednesday.  The FOMC minutes that created momentary market panic were released at 2:00PM the same day and the market panics.

Does anyone in their right mind believe that the Fed is going to pull back on tapering while the housing market has been showing signs of weakness not only in this latest report, buy many reports over the last few months? STOP THE INSANITY! (Didn't there used to be a commercial of someone saying that?)

Next week's market moving reports are:

     Monday November 25th  Pending Home Sales
    Tuesday November 26th Housing Starts, FHFA House Price Index and S&P Case-Shiller HPI
   Wednesday November 27th - MBA Purchase Applications and First Time Jobless Claims
    Thursday November 28th Thanksgiving Holiday, All Markets Closed

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Sunday, November 24, 2013

Thursday, November 21, 2013

Buying A New Home

  Buying a new home is a source of anxiety, frustration -- and a huge sense of accomplishment. You didn't pick the house that was best for someone else, you picked the one that's right for you! Trust our professionals to find the mortgage loan that best fits your needs, too. "Less paperwork and more personal attention" means you enter a frustration-free zone from application to decision. Getting the right mortgage loan is like getting the keys to your new house! We can help you get there. Call us to discuss your needs at 707-455-7070. We will make it easy, and answer all of your questions.

Monday, November 18, 2013

This Week In News

In the absence of any major economic data this week the stock market seems to be content with going on as business as usual and rising almost daily,  The stock market has been hitting new record highs this week and the DOW at 16,000 is in sight.

The market got a big boost on Thursday with the announcement from Janet Yellen that the Fed needs to be cautious in pulling back stimulus.  Ms. Yellen is the pretty much the likely heir to become the new Fed Chairman.  She is desired by both republican and democrats in that her views of economic policy seem to be well balanced between conservative and liberal policies.

Housing, which was for many months the bright side in the recovery, seems to have slowed significantly in the latest reports.  More housing reports are due out next week however the latest info suggest significant slowing.

The frenzy for home purchases has cooled dramatically.  Just a few months ago trying to purchase a home in Sacramento, you would have been on a long line of bidders trying to get their hands on the few houses that went up for sale.  Currently sales in the area are down and estimated 25% from the same time last year.

Rising mortgage rates are partially to blame as the cost of borrowing has been increasing as of late and is almost a full percentage higher than they were a year ago.  The Mortgage Bankers Association reported that once again loan applications for mortgages are down.  Purchase declined 1.0% and refinances dropped 2% following the previous revised decline of 4%.  With interest rates rising and considerable insecurity by consumers about the economy the likelihood that future real estate reports will be less than stellar.

When you look at mortgage application volume we see that they have declined 17% for home purchases since May.  The MBA reports on a weekly basis and we see drops of 1%, 2%, etc? however when you look at the activity over a larger period of time, the downward trend becomes clear.

Does this mean that real estate and mortgage professionals need to panic about their financial futures?
I personally do not believe that is the case.  When prices drop slightly, more than likely you will see purchasers jump back into the market.  Right now the market is in a transition to a new reality of slightly higher mortgage rates and home purchasers are very sensitive to this.  However, just like we get used to so many other happenings in the world, purchasers will adapt to slightly higher mortgage rates.

Next week is very light as far as market impacting reports:

       Monday November 18th Housing Market Index
      Wednesday November 20th - MBA Purchase Applications, Consumer Price Index, Retail Sales, Existing Home Sales and FOMC Minutes
  • Thursday November 21st - First Time Jobless Claims and Producer Price Index
  • Friday November 15th  Industrial Production

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Friday, November 15, 2013

Mortgage company must pay $13m for illegal bonus scheme

The CFPB has announced a proposed consent order in its action against Castle & Cooke for allegedly steering consumers into more expensive mortgages.
The Bureau took aim at Utah-based Castle & Cooke in July this year, filing a complaint in federal district court that alleged the company handed out bonuses to loan officers who steered borrowers into mortgages with higher interest rates. The CFPB has now announced it has asked a federal district court to approve a consent order that would see Castle & Cooke pay more than $9m in restitution and $4m in civil penalties.
Our action has put an end to illegal steering of consumers and has put more than $9 million back in their pockets. This outcome embodies our mission?to root out bad practices from the marketplace and ensure consumers are being treated fairly, CFPB Director Richard Cordray said.
The CFPB alleged that Castle & Cooke, through actions taken by president, Matthew A. Pineda, and senior vice-president of capital markets, Buck L. Hawkins, had violated the Loan Originator Compensation Rule by paying out quarterly bonuses based upon the interest rates of loans offered to borrowers by the company's loan officers. The Bureau alleged that more than 1,100 quarterly bonuses were paid to more than 215 of the company's loan officers.

Tuesday, November 12, 2013

This Week In Mortgage News

The DOW Jones Industrial Average started the week at 15,658.  After jumping up and down during the week as of mid-morning on Friday the average is at 15,690.  If you want an example of a market going nowhere fast, this is it.  Thus far the index is net changed 32 points after almost 4.5 days of trading.  Don?t expect much different next week as the economic data set to be released is minimal.

Mortgage rates on the other hand have once again been rising for more than a week.  The largest jump taking place today (Friday).  The driving factor behind this move is the better than expected employment report.

Mortgage applications for purchases and refinances are showing a reaction to the rising interest rates.  The Mortgage Bankers Association reported that last week applications declined 5% for purchases and 8% for refinances.  Next week if there is no reversal in the rising interest rate trend the MBA report will likely show more declines in both areas.

Total payroll jobs in October jumped up to 204,000, following a revised increase of 163,000 for September.  The consensus prior to the release of the report was for an increase of only 120,000.  This far better than expected report has traders focusing on the idea that with an improving employment picture, this may prompt the Fed to begin tapering the stimulus program sooner than later.

Most believe the Fed will not make a decision on stimulus tapering on the basis of only one monthly employment report, however the job market is a big factor in the Fed?s decision making process.  Investors are fearful that if another strong report follows for November the Fed would take action early 2014 or even as soon as next month.  Investors and traders cannot wait until the Fed makes a move so they are already starting to change their holdings and bond positions to minimize losses on their portfolios.  Additional data that bodes well for a strong employment report is that private payrolls gained 212,000 after a 150,000 increase in September. The consensus expected 128,000 in October.

The unemployment rate ticked up .1% to 7.3 percent after dipping to 7.2 percent in September. The forecast was for a 7.3 percent unemployment rate so this part of the report came as no surprise.  Once again the irony that exists is that hiring jumped but the unemployment rate also increased.  This is simply because fewer people are looking for work.

The other report that also has bond holders spooked about the Fed tapering the stimulus program sooner than later is the GDP report.  GDP increased for the 3rd quarter 2.8% which is much higher than analysts were expecting.

Next week is very light as far as market impacting reports:

  •         Monday November 11th  Veterans Day  Markets Open, Banks Closed
  •         Wednesday November 13th - MBA Purchase Applications and 10 Year Note Auction

  • Thursday November 14th - First Time Jobless Claims
  • Friday November 15th  Industrial Production

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Wednesday, November 6, 2013

Let Us Help You

Let us help you through the home loan process. With the right information and guidance, getting a home loan can be a fast and easy process.

We’re a full service provider – from conventional loans to refinances, we are here to help you through the loan process:

First Time Homebuyers
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Sunday, November 3, 2013

Inside A Spy Mansion

Espionage historian H. Keith Melton takes Forbes reporter Morgan Brennan on an exclusive tour of his Metropolis-inspired lair.

Thursday, October 31, 2013

Halloween Safety Tips

Get tips on how to keep your child safe during Halloween and how to make your home safe for tricker treaters

Monday, October 28, 2013

Friday, October 25, 2013

Why Use Big Valley Mortgage?

Mike, branch manager at Big Valley Mortgage, talks about what sets them apart.

Tuesday, October 22, 2013

The Government Shutdown Is Over....

The government shut down is over ? ?Who Hoo?.  The latest figures are that $600 Million was lost in production and performance for the entire time the government was closed.  I don?t know about you, but it makes me sick to my stomach to think that the citizens of the U.S. pay taxes to a government with little or no accountability to provide services that commensurate with what we pay.  Then, just in case you didn't hear, the Obamacare website isn't working properly and it cost more than $400 Million to be created.  Expert coders have reviewed the work on the site and unanimously have stated that the programming is ?severely? flawed.  (Please understand I am not making a political statement whatsoever, this craziness happens regardless of which party in power)

With the government functioning again, the economic reports are starting flow out to the public domain however they are slow in coming.  Some of the reports that have come out are listed below:

  • Mortgage rates have declined and with that refinance applications increased 3.0% in the prior week.  Applications for purchases declined 5.0% for the 3rd straight week in a row.  The belief is that the government uncertainty had buyers sitting on the fence waiting for matters to be resolved.
  • The Housing Market Index which measures builder confidence is not quite as high as it has was in August.  However the readings are still the highest they have been in 10 years.  Once again Washington seems to be to blame for concerns about housing.
  • First Time Jobless Claims came in at 358,000 however the numbers are very skewed.  Between the government shutdown and an information backlog out of California the numbers are not considered to be very accurate for this week?s report.

Some of the other economic reports which were due to be released are still delayed because of government workers just starting to get back to work.  The reports we are still awaiting from this week are Housing Starts, Industrial Production, and the Consumer Price Index.  Additional reports from last week that have yet to be released are Producer Price Index, Retail Sales and National Employment.

Given all the data that has not been released it is very difficult for anyone to effectively gauge the direction and strength of the economy.  However with that said?prior to the shutdown the economy was continuing to improve at a modest pace and the likelihood of that direction changing during the government shutdown is minimal.  Experts are predicting that the government shutdown will reduce the 4th quarter GDP numbers by ¼%.  This is not a very significant number however some analysts believe that this drop could be enough to have the Fed delay any pull back in the stimulus program that has been talked about all year to start in November or December.

This week's market moving reports:

  • Wednesday October 23rd - MBA Purchase Applications
  • Thursday October 24th - First Time Jobless Claims and New Home Sales
  • Friday October 25th ? Durable Goods Orders and Consumer Sentiment

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate information.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Wednesday, October 16, 2013

What You Need

  • Social Security Card for each borrower.
  • Current Driver’s License for each borrower.
  • Most recent 2 year address history.
  • Most recent 2 years employment history; name of employer(s), dates of employment, employer address for current work location,  number of years on current job, number of years in same line of work/profession, current position, main business phone number for current work location.
  • Current paystubs covering most recent 30 consecutive days.
  • Last 2 years 1040’s (Federal Tax Returns), including all W-2’s and 1099’s.
  •  If applicable, Award Letters for Social Security Income and Pension Income and verification of receipt.
  • 2 months statements for all asset accounts, i.e. bank accounts, 401k’s, IRA’s, Investment Accounts (include all numbered pages).  All non-payroll deposits that exceed 10% of combined monthly gross income must be sourced/papertrailed. Any other deposits may require additional documentation, subject to underwriter discretion.  Prior to any questionable deposits, first discuss with us.
  • If a homeowner, current monthly mortgage statement, tax roll and home insurance policy on your property(s), and rental agreement if applicable.
  • If a purchase, please contact an insurance company of your choice and request an insurance quote for property once in contract.  Have insurance agent fax or email the quote to us showing coverage and premium amount.
  • If renting, 2 year residential history showing name, address and phone number of landlord(s).
  • List of liabilities and balances.
  •  If applicable, bankruptcy papers, divorce papers or explanation for delinquent accounts.
Other income information you may need:
If you are self-employed:
  • 2 years 1040’s (Federal Returns) for Sole Proprietorship
  • If a Partnership, include 2 years 1065’s and K-1’s
  • If an S-Corp , include 2 years 1120S and K-l’s
  • If a regular Corporation, include 2 years 1120’s
  • Note: current Balance Sheet and Profit and Loss signed by a CPA may be required.

If you are employed by a family member:
  • Most recent paystub(s) documenting 30 days income.
  • W-2’s covering the most recent 2 years.
  • 2 years 1040’s (Federal Returns), verifying no ownership interest in the company.  If not addressed in the personal tax returns, a CPA letter is required to verify no ownership in the company.
  • Written Verification of Employment covering the most recent 2 years.
  • A minimum of 24 months average of income must be used in qualifying.
If you are divorced or separated:
  • Complete executed Divorce Decree and Settlement Agreement.
  • Payment history of alimony/child support over the past 12 months, if it is a financial obligation.
  • If you choose to have this be considered as part of your income, (you do not have to) be prepared to provide 12 months cancelled checks or bank statements reflecting income deposits.

If you own real estate:
  • If you are selling your home but it has not closed: a copy of the sales contract.
  • If you have sold your home and it has closed and you will use the proceeds for your new down payment:  A copy of the Hud-1 Uniform Settlement Statement.
If you are buying a home:
  • Purchase Sales Contract or offer to purchase and all addendums and counter offers, fully executed with signatures of buyer, sellers and agents.
If  the source of your down payment is a gift:
  • Name, address and relationship of donor.
  • Gift Funds will be verified in both the donor and recipient’s accounts.
  • Note: Not all loan programs allow gifts to be a part of your down payment.
For VA Financing:
  • DD214 and Certificate of Eligibility
For Construction/Perm Loan:
  • Contact us regarding permanent financing requirements.