Random Thoughts

Random.

That seems to be the way I'd put this market. No one knows what's happening or really what's going on. I feel that there is a tremendous amount of sheep fallowing the blind leaders. Panic will drive a market up hundreds of points and the same blind fear of the unknown or belief in what others might be doing will drive the market into a tailspin.

I've been talking about a summer crash for weeks now. I felt that I was going just on a gut feeling but now there seems to be more and more people that are saying the same thing.

It's funny, because while rates have (and historically) been good, they where so low that there was a ton of pressure to get every one's loan done. All the lenders are backed up and many are even going past the RESPA 30 day requirement to have a decision. I could talk for hours on why and how this is affecting everything and one but maybe later. Back to my main point here, I was hoping that we'd get a small raise in the rates. "Give me a week or two with higher rates, just so we / I can get caught up." Well be careful for what you wish for. We got a spike in rates this week. Most people are trying to find a cliff to leap off of, but I've got to remind myself I asked for this. With my firm belief, and over the past few days this has happened, rates will come back down. Now is the time to get caught up.

Now is the time to get those apps in. Lenders truly are taking sometimes 60+ days to get some deals done. There are a lot of problems. For instance this new HVCC appraisal rule is HORRIBLE. I beg all that read this to write your congress, Senate and president to get rid of this rule or at least make it work within reality. I hope to put together an idea that can incorporate the "thought" behind this rule with some reality so that if this is what the law makers want, it can work. Back to my example, most every lender wants an appraisal to be submitted with a complete loan package. Well if they insist that the appraisal can't have comps past 90 days, but don't underwrite a file for 30 days, that's only really a 60 day window for comps. So often I'm finding that a lender will kick a loan out or charge the borrower with a review fee because the appraisal is old and the value has dropped or there are no current comps to support the file, so the lender would rather decline it than risk approving it and not being able to re-sell it on the secondary market. This is horrible for the borrowers and for us trying to work within the system and the long run for the lenders because they're not making as much money and passing up on helping lower people's payments and in turn stimulating the economy, which is what this is all about.

We've got so many problems right now. Even if and when we solve them, these answers will cause more issues that will need to be addressed. But if rates go up now, from mortgages to business loans, you'd might as well pack your bags because we're all going to be screwed.

It is late and I know I'm bouncing around here, but just be patient. As always read further than the first line of these financial articles. And call or write me if you have any questions.