Rates continue to be excellent for home buying and refinancing, whether for personal use or investment. And while the MBS prices just dropped below the 200-day moving average we are still in better territory than we were all summer which was very good on its own.
Commercial property loans have also benefited from the improving rates recently. And while many lenders are just saying “no!”, Signet Mortgage’s lender connections are closing commercial purchases and refinances for owner-users and investors. During this past week, the White House was actively pushing for extending small business lending options (click here.). The key improvement that may affect commercial property owner-users is the expansion of limits where prior SBA caps were in the $2M neighborhood, would be moved to $5 - 5.5M. This will allow operators with existing SBA loans to go back to the well for additional loans. We are tracking legislation sponsored by Senator Landrieu (D-LA) to implement that change.
On the Homebuyer Credit front, hearings on the topic drew some attention in the week. For a good summary from Bulletin writer Keith Chu, scroll to the very bottom of this newsletter. One of those giving testimony was Senator Johnny Isakson (R-GA) who has been a Realtor in his career. Senator Isakson made a passionate plea for extension and expansion of the credit through the middle of next year. Other senators listen to him on Real Estate matters. Isakson’s testimony complete with charts showing examples of the pricing meltdown and the effect of foreclosures in the suburban Atlanta area is interesting and you can view it by clicking here.
A quick note on the residential lending process: I’m sure you have all experienced of heard of difficulties with residential appraisals recently. This has been the result of the HVCC imposed on banks and therefore borrowers by the NY State Attorney General. There is currently legislation making real headway in congress that would overturn the HVCC, allowing qualified lenders and brokers to order appraisals again. Another processing matter you need to be aware of is the change to Truth in Lending (TIL) rules. The effect is a 3-7 day disclosure requirement at the end of the process that can extend closings. Make sure you have baked in enough time to cover these longer turn times when writing contracts.
If these process headaches have been making you ill, you will want to check the helpful chart further down that compares the H1N1 swine flu symptoms to the common cold. Most important to remember is, if you have the flu, stay away from others for 24 hours after your fever (100°) has subsided for 24 hours without fever reducing aids like Tylenol
Important economic news in the coming week includes housing on Wednesday, jobs and GDP on Thursday and Consumer Prices/Inflation (PCE) on Friday.
Through all of this, rates remain fantastic. Is there anyone you know who would benefit from receiving this kind of timely information? Please hit the reply button and let me know – I’ll be happy to help them make informed decisions in this important time. Or give me a call anytime at 541 318 0888. I look forward to helping you, your clients, family and friends get the best professional advice and service available. Make it a great week!
Fall colors are in full swing and the chill of inflation is just starting to be seen in early reports. While we don’t feel inflation will roar until unemployment has peaked and a hot economy starts to pay more and hire more, it will start to make its presence known in the coming months. This week we saw it in the CPI numbers coming in a little higher than expected and a little higher than the prior month, too. Only a tenth higher and that wouldn’t be as concerning except for the fact that the CPI measure includes all the cash for clunker rebates as if they were price decreases. Certainly we would have seen an even-hotter CPI increase if the pre-rebate price had been used. Another small indicator was the NY State Manufacturing index coming in at 34.57, not high on its own but when compared to expectations of 17.25 it was noticed.
Remember that two things drive long-term real estate interest rates: INFLATION and SUPPLY AND DEMAND. On the scorecard, mark inflation as a tiny rattle of the sabers this week. Supply and Demand remains in our favor, BUT we like Belshazzar are reading the writing on the wall and it too isn’t pretty for the near future. The Fed purchases of MBS will taper off but continue through about 3/31/10. Over the past many months they have purchased at about a $25B/wk run rate. This week was $16B and on average it would be near $14B to hit $1.25T in March. You can mark your scorecard here as Writing-on-the-wall, still helping but it won’t be there for long.
One further indicator we use measure the two keys mentioned is the words of the Fed. And this morning, even as we write, Fed Chairman Ben Bernanke is speaking in San Francisco. Watch for news on this tonight and in the a.m. to see if he gives any further hints on their exit strategy from the current near-zero interest rate policy, weak-dollar actions and inflation watch. Another powerful voice is FDIC Chairman Sheila Bair. She testified before the Senate Banking Committee this past week that the biggest pressure that will bear on insured lenders in the near term will be troubled commercial real estate (CRE) loans. She recommended modifications and workouts as the way to head off this trouble at the pass. Watch for more news on CRE workouts.
On the Legislative front, Homebuyer Tax Credit extension bills are multiplying and sitting. The Military Extension that passed the house waits in the Senate Finance Committee for discussion and eventually a floor vote. The other extension bills are in two camps, the “As-is until June 1, 2010” camp and the “Take-it-to-the-Limit, $15k, All-Buyers, January 1, 2011” camp. The latter sounds like the NAR drafted the bill. In fact, the chief proponent of that approach, Senator Johnny Isakson, R-GA, spoke up this past week. He wants the “All-in” approach but is willing to extend it just to June 30. Read his entire comments by clicking here, or read a taste of it: “So I would submit that when we look at the sunset date of November 30 on the first-time home buyer tax credit, we should extend it--not forever but through midyear next year, to the end of June 2010. There is a reason for that recommendation. The worst 3 months of the year in any housing market anywhere in the United States are December, January, and February because it is winter and because it is the holidays.” Right now bills for both camps are in the Senate Finance and the House Ways & Means committees. The working proposal for paying for either camp is now to ratchet back some of the discretionary ARRA stimulus act spending, and reallocate it. We’ll keep our eye on progress there and let you know.
Through all of this, rates remain fantastic. Is there anyone you know who would benefit from receiving this kind of timely information? Please hit the reply button and let me know – I’ll be happy to help them make informed decisions in this important time. Or give me a call anytime at 541 318 0888. I look forward to helping you, your clients, family and friends get the best professional advice and service available. Make it a great week!
Catching up on the recent blog posts this one is from 10/19 - if you would like to receive these real time, send me an email: dave@signetmortgage.com.
We have some great things learned in this past week and if you take nothing else away from today’s email remember 2 things:
The bond market (MBS) dropped off suddenly on Friday and while the big red bar in the chart below has some technical movement (30-day rollover) that makes it look worse than it is, it was still a rocket sled ride from 180 day highs we were enjoying. What happened? A few things:
In the commercial lending arena, the looming refi needs (>1 Trillion in next 18 months) continue to be a dark cloud on the horizon as lender credit is still limited. There is some hope for additional Treasury purchases of CMBS, but no real sign from them that it is forthcoming. We are still hoping the Goldman Sachs projection has legs that 10-year treasuries will get down to 3.0% before rising, but they snapped back up above 3.25% again this week and it is inflation and supply and demand there as well. We still have lenders making great commercial loans on Owner-User AND Investor properties with good economics and strong borrowers.
Quick update on the two key bills addressing the $8,000 homebuyer tax credit (if you missed the Thursday full report click here): The Senate bill only added one senator since last Monday, but it is Christopher Dodd, once again a very influential, power-broker. The Charlie Rangel bill focusing on servicemen added 11 Congressmen since Monday and is now up to 40 Co-Sponsors. Our expectation is that these two will be the ones to make it into conference for a battle that will determine if anything gets extended. The hope is still for action by Halloween, but there was not further indicator this week that this will be met. The White House remains mum on the topic.
Career advice: check out the discussion below on feedback and 360 reviews made easy at checkster.com. Something to consider with your bosses, peers, and key customers.
In the meantime, the rates are fantastic. Is there anyone you know who would benefit from receiving this kind of timely information? Please hit the reply button and let me know – I’ll be happy to help them make informed decisions in this important time. Or give me a call anytime at 541 318 0888. I look forward to helping you, your clients, family and friends get the best professional advice and service available. Make it a great week!
While the White House remains mum on the topic, an interesting battle is developing in congress around extending the current $8,000 homebuyer tax credit. Two bills have been introduced with very different objectives. Let’s hope the two merge into a true extension of the credit before it expires in 53 days.
The House Bill H.R.3590, introduced by Charlie Rangel (D-NY), has added 10 more co-sponsors just this week, now with 40 congressmen pushing for it. HR3590 would extend the credit through 2010, but unfortunately, only to certain servicemen and other federal employees.
We are more interested in the Senate version, S.1678, introduced 3 weeks ago by Senator Ben Cardin (D-MD), which would extend the credit as is, to first-time homebuyers buying before June 1, 2010, fully a 6-month extension. The Senate bill has just this week attracted 2 more co-sponsors including Oregon’s Jeff Merkley (D-OR). The good news is that this bill already has 11 Senators backing it including Senator Harry Reid, Charles Schumer and other powerbrokers, more than 20% of the Senate and from both sides of the aisle. The bad news is that as this is a revenue matter, it must be initiated in the House.
This takes us back to the House Ways and Means committee, chaired by Charlie Rangel, sponsor of H.R.3590. With the legislation process being much like the sausage-making process, bills will rise up in committees of both houses, be voted-on and referred to their respective floors, debated and voted-on separately and then referred to a conference committee where the final legislation will get hammered out and returned to the floors for another vote. Note that at least 4 competing bills around this topic currently languish in Ways and Means. Which do you think Charlie Rangel will allow through to the floor?
We’ll keep an eye out and let you know the developments. In the meantime, here are the words used by Senator Cardin when he introduced the S.1678 on September 16th. Note that he was then and is now hoping for conclusion before November 1. Maybe a Halloween treat; or is this just a trick?
[photo courtesy of sxc.hu]
From Senator Ben Cardin (D-MD). “The legislation I am introducing today with my colleagues Senators Ensign, Harry Reid, Isakson, and Stabenow would change the expiration date from December 1, 2009, to June 1, 2010.
“I know my colleagues understand the time delay here which requires that the houses go through settlement in order to qualify for the credit. So I think it is important that we act timely, not waiting until November 1, but to try to get this bill moving quickly. It has been an incredibly important tool to help the housing market to help restore our economy.
“This is a direct extension, a clean extension. It basically extends it for 6 months. I have talked with my colleagues about ways this credit perhaps could be improved, and I know we will get into that debate. But I want to make sure we don't have a lapse in this credit being available to help first-time home buyers. It has been very valuable. As we work to perhaps modify this proposal, let us make sure we continue it so as we are fighting to get our economy back on track, we don't regress and lose this tool that is available to help the housing market.
“The credit has been a huge success in helping to revive a depressed housing market.
“As many as 40 percent of all home buyers this year will qualify for a credit. That tells us this credit is working. It is getting people who have never owned a home before into the home-buying market, knowing that the Federal Government is providing an incentive. It is estimated the credit is directly responsible for roughly 300,000 to 400,000 purchases this year. According to the National Association of Realtors, those additional sales have pumped approximately $22 billion into the economy. This is a modest tax incentive to help an industry that is vital to our economy, that produces an incredible amount of economic activity and jobs. Mortgage applications increased nearly 10 percent for the week ending September 3 from late August, the largest gain since early April.
“Extending the credit is prudent and a fiscally responsible measure. It provides the help. We know it works. We know what has happened. We know we are still in difficult times. It is not the time to eliminate this tool that we have available. That is why I am recommending an extension, not a permanent extension, because we want this credit to be available to get us out of our current economic problems. We know we still need it. A 6-month extension is the minimum we should do. At the same time, we should look at other ways to improve and help the housing industry and to help the recovery of our Nation.”
[This post was originally emailed to subscribers Monday October 5, 2009 - If you wish to subscribe, just send me an email - dave@signetmortgage.com]
The residential mortgage rates continued to improve throughout the week so we are now back into the record territory enjoyed before Memorial Day! See the chart below for MBS numbers and remember that “up” is positive on this chart. Rates are great and we are running out of runway on the $8,000 tax credit (56 days remain!) but we can still get in if you act quickly.
Sunday’s surprise blanketing of show here in Bend, OR was nice until the trees started breaking. The stock markets climb over the past 6 months was encouraging, until the supports started snapping. Dr Nouriel Roubini (NYU Econ Prof who predicted the subprime and economic meltdown, aka Dr Doom) is admitting that our present condition is rosier than he predicted, but sees the recovery as “anemic” over the next several years. This is in sharp contrast to the V recovery baked into the stock market today and a correction is at hand. This is consistent with the concerns raised for a W shape to the stock market where we are now into the 3rd leg. Money coming out of the stock market over the next months could help mortgage securities attract investors, offsetting some of the Fed pull back in investment. Certainly the MBS activity of the past 2 weeks (see chart below) shows tremendous positive activity and loans locking in the 4’s again is the result.
Banking Update: This week had some significant news for lending banks, both residential and commercial. Banks throughout the country are either regulated by the OTS or the Comptroller of the Currency, but all are members of the FDIC. That insurance consortium survives on insurance premiums paid by member banks. This week, Sheila Bair of the FDIC proposed for banks to prepay up to $54B of fees covering 2010-2012 (click here.) This added cost will be spread out over the 3 years, but will likely cause lenders to seek offsetting revenue to offset the cost. Loan fees and interest rates are where banks make the money to pay these hefty insurance premiums. Watch for conclusions on this prepayment proposal, the beginning of funding the FDIC.
Also on the FDIC front – watch for news this Friday of FDIC bank takeovers surpassing the 100 mark. As of last Friday, the number hit 98 with 3 new failures costing the FDIC about $300 million (for more, click here.)
Homebuyer Tax Credit Update: The legislation continues to garner support with 2 new Senators and 5 new Congressmen jumping on board as Co-Sponsors this week, though both bills languish in busy Committees. The increasing support (most notably the powerful Senate Majority Leader, Harry Reid) is a good indication this will pass extending the current December 1, 2009 date to probably June 1, 2010, though much will have to happen before that can be the case. (Two things you don’t want to see made – sausage and legislation.) I am giving it a better than 50/50 chance though with the increasing support weekly. Watch for my updates on Twitter if you want to hear anything between the Monday weekly reports.
In the meantime, the rates are fantastic. Is there anyone you know who would benefit from receiving this kind of timely information? Please hit the reply button and let me know – I’ll be happy to help them make informed decisions in this important time. Or give me a call anytime at 541 318 0888. I look forward to helping you, your clients, family and friends get the best professional advice and service available. Make it a great week!
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20+ years background as a CPA in Silicon Valley prior to relocating to the paradise of Bend, OR. I love helping people meet their dreams, and brokers beat their financial goals. Let's talk! -Dave
Signet Mortgage has a unique and proven-succesful lending proposition. Founders and principals are former CPAs with a view to a buyer's whole financial picture when structuring the right loan.
As your loan officer, my job is to oversee your loan and be a resource for you throughout the loan process in regards to interest rates, programs, and de-mystifying the world of real estate loans. I will work hard to ensure your loan is structured to not only be a perfect match with your real estate needs, but to also complement and enhance your entire financial picture.
Our team has one basic philosophy
We want you to have the best financing experience of your life.
Commercial and Residential Lending
Commercial Expertise: 20+ years in Financial Services has led to relationships and abilities to get loans done.
Our stable of commercial lenders include many well-known Wall Street banks, regional banks throughout the country - especially in California, Texas, Utah, Washington and Oregon - and local banks in Central Oregon. We like to say that we'll work your loan "from Wall Street to Bond Street" sm and everything in between.
Residential Programs include:
FHA and Conventional
Luxury Home/Jumbo and Conforming
USDA Guaranteed Housing loans
Oregon Bond First-Time Home Buyer programs
Reverse Mortgages
Construction and Permanent Financing
For your Principal Residence, Vacation Home and Investment Properties
Dave Woodland is our Northwest Regional Manager located in beautiful Bend, OR. He and his wife Satu and kids relocated to Bend, opening the Signet Mortgage operation there in 2006. Prior to that, Dave worked as a financial executive in Silicon Valley with two semiconductor companies as well as 10 years in public accounting with one of the largest international CPA firms. Dave notes, “my financial services business background allows me to help people make dreams become reality.”
Dave has a significant number of relationships with investors, a variety of lenders, commercial and residential brokers and attorneys that help serve his clients’ needs in getting deals done.
When not financing deals, Dave can be found with his wife and boys – Matt and Josh - hiking, camping, skiing, cycling and golfing. Come over to the house and they’ll challenge you to a game of bocce ball.
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