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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Manufactured Housing

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.