So three weeks ago we are in for a depression that will last for the next couple of years.
Last week all is good in the world and their is life in the markets!
This week, well not so much good news. In fact all the good news we told you, it was a lie.
THIS IS WHAT I'M TALKING ABOUT PEOPLE!!!! Whoever "they" are, are just talking out their collective asses. But your friend, the Bear, thinks he's figured it out. Not that hard to do.
I was checking out the web today and saw a video news headline from Fox News (if you can call them news) but it said "Home prices going up". I had to check it out. They brought on the COO of Zillow (which is so inaccurate it's a joke in our biz, but we all look at it anyway - figure that out). Even the head of Zillow stated that prices are not going up but falling and continuing to fall. For the same reasons I've been talking about. Higher end home are finally dropping prices and taking up more of the overall market which will off set the "median" price number. But in reality the values are still going down.
Zillow's CEO also said that he sees this continuing because of a backlog of foreclosures that the banks are sitting on AND what's worse is that of the people that don't need to sell due to foreclosure or financial problems, 1 out of 3 want to sell but are waiting. 1 out of 3! I don't know if that's accurate but who am I to dispute the great Zillow. Especially when they agree with my outlook on the rest of the market.
So what did we learn, the media needs a story and they don't want people to start killing themselves. So they say prices went up last month so that they can have their headlines, but it's not true. This talking head on Fox News did everything he could to make this guy from Zillow say we're doing better. Thank god he didn't cave. Fox even ended it with "we hope you're wrong". If that's so, why did you even have him on the show?
On a side note. I'm sure that you think I'm joking about people killing themselves. I wish I was. I happened to turn on the local news this friday and there where 2 stories about people who had either killed their families or just themselves and both where suspected to be because of economic issues, both homes happen to be in foreclosure or several months late. If these stories got the headlines instead of "home prices are up" maybe the government would actually do something FAST to help homeowners instead of banks. Don't they get it, if you helped the home owners it would in turn help the banks!!!
Wednesday, July 29, 2009
Friday, July 24, 2009
Knowns and Unknowns
There are a lot of headlines that indicate that the recession and mortgage crisis is over. We seeing the end and all is becoming well with the world, and why not the DOW is back to 9,000+.
That's all nice. Sounds good. But a lot of the reasons are not true. Worse yet, a lot of the truth isn't being given to the public. I truly believe we're in for another downturn in the market and for the economy. There is just no way that you have inflated all markets for close to a decade and in 6 months we've hit bottom and are ready to recover.
The median price rising that you heard last week is a joke. The truth is that there was a rise in sales in the High End homes. The high end sales took a larger percentage of the overall sales. So you might have an extra 10 - 20, 2 or 3 million dollar homes sold but that offsets hundreds of 200 - 300k home sales. Keep in mind those million dollar homes that sold probably lost about 1/3 - 1/2 of what the value was. This is a case where the median price can actually rise but home values are still going down. We haven't hit bottom yet.
I've got inside sources on the inner workings of big time lenders short sale, rate mod and foreclosure departments. Without going into detail, you wouldn't believe that these companies are still in business from the way their run. In reality there are so many delinquent borrowers that haven't even started to go through the process of short sales or foreclosures that there is a wave that's going to hit and hit hard. Especially with the employment problems only getting worse.
I've been told and seen that at many banks the rate mods are taking so long and putting people in such back situations that I feel there could be a rate mod bubble to burst. Unlike a bubble of prosperity I think it will be a break down of the system. Don't let this stop you from trying. I believe that modifications in anyway would be the only way to slow down the foreclosure mess (as we're structured now), but I'm hearing, going through and reading about horror stories. Between the fraud that's been in the paper lately and the way I've personally seen how these rate mods are run, it's a mess. Some lenders have got their stuff together so I won't unilaterally dis everyone. But I know of total incompetence from simple hangups and dropped calls to repeated requests for paperwork that they've already had, "it's just our screens aren't updated" or "I'm sorry, this screen showed we needed it again" to "No we don't know why someone called, you're fine". These I've all heard and been through.
What's worse is that many of these lenders, who initially said that you don't need to be late on your mortgage for help are now purposefully making you go late. I can go on but will leave you with one final thought for today.
Look at all that's going on. Take a step back and look at the ramifications of what we're going to be left with. There will be millions of people with bad credit. In many places you're going to see home values near 2000 levels. Inflation HAS to be a concern at some point which will only stifle any momentum in the real estate world. Financing will be so tight that it will almost be impossible for home owners, small businesses and even large companies to get loans. Commercial real estate and lending is the next shoe to drop. 30 - 40% vacancy wouldn't surprise me (I know that sounds crazy).
I would love to think that we are in the clear. But the truth is we are so far away and what's worse is no one knows the real answers. Read the actual article from these headlines. Picture the TV show The Office, think about the actual work that gets done. It's funny because it's true!! Starting next month the banks are going to initiate all types of new, incredibly stupid, lending regulations... but that's for my next post.
That's all nice. Sounds good. But a lot of the reasons are not true. Worse yet, a lot of the truth isn't being given to the public. I truly believe we're in for another downturn in the market and for the economy. There is just no way that you have inflated all markets for close to a decade and in 6 months we've hit bottom and are ready to recover.
The median price rising that you heard last week is a joke. The truth is that there was a rise in sales in the High End homes. The high end sales took a larger percentage of the overall sales. So you might have an extra 10 - 20, 2 or 3 million dollar homes sold but that offsets hundreds of 200 - 300k home sales. Keep in mind those million dollar homes that sold probably lost about 1/3 - 1/2 of what the value was. This is a case where the median price can actually rise but home values are still going down. We haven't hit bottom yet.
I've got inside sources on the inner workings of big time lenders short sale, rate mod and foreclosure departments. Without going into detail, you wouldn't believe that these companies are still in business from the way their run. In reality there are so many delinquent borrowers that haven't even started to go through the process of short sales or foreclosures that there is a wave that's going to hit and hit hard. Especially with the employment problems only getting worse.
I've been told and seen that at many banks the rate mods are taking so long and putting people in such back situations that I feel there could be a rate mod bubble to burst. Unlike a bubble of prosperity I think it will be a break down of the system. Don't let this stop you from trying. I believe that modifications in anyway would be the only way to slow down the foreclosure mess (as we're structured now), but I'm hearing, going through and reading about horror stories. Between the fraud that's been in the paper lately and the way I've personally seen how these rate mods are run, it's a mess. Some lenders have got their stuff together so I won't unilaterally dis everyone. But I know of total incompetence from simple hangups and dropped calls to repeated requests for paperwork that they've already had, "it's just our screens aren't updated" or "I'm sorry, this screen showed we needed it again" to "No we don't know why someone called, you're fine". These I've all heard and been through.
What's worse is that many of these lenders, who initially said that you don't need to be late on your mortgage for help are now purposefully making you go late. I can go on but will leave you with one final thought for today.
Look at all that's going on. Take a step back and look at the ramifications of what we're going to be left with. There will be millions of people with bad credit. In many places you're going to see home values near 2000 levels. Inflation HAS to be a concern at some point which will only stifle any momentum in the real estate world. Financing will be so tight that it will almost be impossible for home owners, small businesses and even large companies to get loans. Commercial real estate and lending is the next shoe to drop. 30 - 40% vacancy wouldn't surprise me (I know that sounds crazy).
I would love to think that we are in the clear. But the truth is we are so far away and what's worse is no one knows the real answers. Read the actual article from these headlines. Picture the TV show The Office, think about the actual work that gets done. It's funny because it's true!! Starting next month the banks are going to initiate all types of new, incredibly stupid, lending regulations... but that's for my next post.
Wednesday, July 1, 2009
The truth is coming out
Almost all the news today has been bad. Higher unemployment, lower sales and poor housing news. Basically all the stuff I've been talking about, the truth behind the headlines, is starting to poke it's head.
Next week will be an interesting one. The should be a few big sales of treasuries and depending on the demand we'll know where rates are going. I feel with this bad news out this week, people will buy up treasuries for safety which will bring the yields down and in turn hopefully the rates.
Again, I beg all of you to go to www.hvccpetition.com and sign this. What is going on with the appraisal process is going to kill this business and the value of your home.
Next week will be an interesting one. The should be a few big sales of treasuries and depending on the demand we'll know where rates are going. I feel with this bad news out this week, people will buy up treasuries for safety which will bring the yields down and in turn hopefully the rates.
Again, I beg all of you to go to www.hvccpetition.com and sign this. What is going on with the appraisal process is going to kill this business and the value of your home.
Tuesday, June 23, 2009
Appraisal issue
Here's proof that I'm not over reacting about this HVCC appraisal rule. This quote is strait from someone at NAR
As I always say, read the full article so here.
It's a lot of mix and mash info. If you take a step back, you'll realize that we're in for more troubles a head. The word from everyone that I speak to is that there is nothing good on the market. Most of the stuff that's priced correctly is all foreclosures or short sales, which doesn't leave a lot of quality to choose from when new buyers are looking. Most of the people who don't need to sell are taking their properties off the market or locking in at a price and not budging hoping that someone will come along and buy their house for the price they want. "You can hope in one hand and crap in the other, let's see what gets filled faster." - Ten points for who knows what movie that's from?
Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”
As I always say, read the full article so here.
It's a lot of mix and mash info. If you take a step back, you'll realize that we're in for more troubles a head. The word from everyone that I speak to is that there is nothing good on the market. Most of the stuff that's priced correctly is all foreclosures or short sales, which doesn't leave a lot of quality to choose from when new buyers are looking. Most of the people who don't need to sell are taking their properties off the market or locking in at a price and not budging hoping that someone will come along and buy their house for the price they want. "You can hope in one hand and crap in the other, let's see what gets filled faster." - Ten points for who knows what movie that's from?
Monday, June 22, 2009
The great slow down of 2009
This is a post about the lack of business. In fact, in many ways, business has never been easier to get. As you know I'm the best so it's not hard for Bear Financial to get new business. The slowdown comes from the banks.
I once thought that there was going to be a mass conspiracy to get rid of wholesale brokers all together and that the banks wanted to only have retail. But after all that I've seen in the last few weeks, I think if you asked the banks what do you really want, they'd tell you that they wouldn't lend another dime to anyone. Retail is running 75 - 90 days from some of my reports and this appraisal rule, HVCC (which I beg all of you to write your representatives to get rid of) is only making the experience harder for the borrowers.
Please hang in there. I do believe things will get worse before they get better but loans are still being funded, we just have to fight twice as hard and wait three times as long. Rates are slowing inching back down and hopefully someone will realize there is a lot of money to be made in the lending business. They just need someone who can look at files and borrowers as individuals and not lump everyone in these pigeon holes. There is money to be made and usually when that happens someone gets wise and figures out how to make that money. I just hope they do it sooner than later.
I once thought that there was going to be a mass conspiracy to get rid of wholesale brokers all together and that the banks wanted to only have retail. But after all that I've seen in the last few weeks, I think if you asked the banks what do you really want, they'd tell you that they wouldn't lend another dime to anyone. Retail is running 75 - 90 days from some of my reports and this appraisal rule, HVCC (which I beg all of you to write your representatives to get rid of) is only making the experience harder for the borrowers.
Please hang in there. I do believe things will get worse before they get better but loans are still being funded, we just have to fight twice as hard and wait three times as long. Rates are slowing inching back down and hopefully someone will realize there is a lot of money to be made in the lending business. They just need someone who can look at files and borrowers as individuals and not lump everyone in these pigeon holes. There is money to be made and usually when that happens someone gets wise and figures out how to make that money. I just hope they do it sooner than later.
Thursday, June 18, 2009
ups and downs
The Bear is back. Sorry for the delay.
Let's not waste time, let's get to work. First off, here is a quick link that just repeats everything that I've been saying for the past 2 months.
http://www.marketwatch.com/story/get-ready-to-pounce-on-lower-mortgage-rates
the bottom line is that the Market is crazy. I don't think anyone knows what they're doing and there is no clear answer or direction. It seems that even the people in the Fed that are supposed to be steering the ship are just hanging on to make sure we don't capsize.
I feel that we are in for a drop in the market and for news and REALITY peak its head. I don't know of one person or company that is doing well. I feel for every "good" economic indicator there are even more bad ones that are not talked about as much. For instance today it was said that the number of unemployment claims dropped, the fact is that new claims rose but people currently on unemployment have dropped mainly because their time was up. It's not like thousands of people got jobs last week. Their 12 months or 24 months or whatever the time frame they are under is up. That being said, yes there are less people on unemployment and now more that still don't have jobs and will be getting nothing. This should lead to more problems. Not very "good" after all, is it?
At least we can say, Go Lakers!!! Perfect scene yesterday. Ending the parade at the Coliseum is just like the government did during Greek times. Keep the masses in check by throwing a big party for them to go to. People must be out of work to have 500k+ show up on a Wednesday.
Let's not waste time, let's get to work. First off, here is a quick link that just repeats everything that I've been saying for the past 2 months.
http://www.marketwatch.com/story/get-ready-to-pounce-on-lower-mortgage-rates
the bottom line is that the Market is crazy. I don't think anyone knows what they're doing and there is no clear answer or direction. It seems that even the people in the Fed that are supposed to be steering the ship are just hanging on to make sure we don't capsize.
I feel that we are in for a drop in the market and for news and REALITY peak its head. I don't know of one person or company that is doing well. I feel for every "good" economic indicator there are even more bad ones that are not talked about as much. For instance today it was said that the number of unemployment claims dropped, the fact is that new claims rose but people currently on unemployment have dropped mainly because their time was up. It's not like thousands of people got jobs last week. Their 12 months or 24 months or whatever the time frame they are under is up. That being said, yes there are less people on unemployment and now more that still don't have jobs and will be getting nothing. This should lead to more problems. Not very "good" after all, is it?
At least we can say, Go Lakers!!! Perfect scene yesterday. Ending the parade at the Coliseum is just like the government did during Greek times. Keep the masses in check by throwing a big party for them to go to. People must be out of work to have 500k+ show up on a Wednesday.
Thursday, June 4, 2009
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.
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.
Subscribe to:
Posts (Atom)
Posts
