Sunday night and I really don't know what's going to happen with the GM BK. I'm curious to see what happens next week. This is so big, it's not really called a BK even though we all know it to be one. I've heard and read a ton of theories but at the end of the day I don't think anyone knows what all this will mean.
I do know that it looks like a lot of people are going to loose their jobs. My prediction seems to be unfolding about a summer crash. Almost everyone, except the government, seems to think we're going to be in trouble for at least another six months. Then, who knows about a recovery? That's a whole other mess.
It should be an interesting week. Just remember, like I always say, read the articles. You're going to see the headlines but the truth will be somewhere in the text. The roller coaster ride isn't over yet.
Just hold my hand and we'll get though this. Patience and a level head is the key.
Sunday, May 31, 2009
Thursday, May 28, 2009
Panic?!?! The roof is on fire but the ground is ice cold.
As you've probably seen, rates shot up this week. I say, and as always I could be wrong, it doesn't matter. First off, rates are still good and secondly, rates will come back down.
I've read many articles the past few days and what I've taken away is that the market is showing small signs of recovery. But that's what gets the headlines. I ask of you to read the whole articles because they paint a different picture.
For example, you'll hear home sales have gone up 3%, but you don't hear the values have gone down 15%. You don't hear that the current inventory for sale has increased 8% or that 45% of the sold houses are foreclosures / short sales (and this number is only going to rise).
If rates go up, we're seriously screwed. Some of the reasons for the "experts" to say that we're on the road to recovery is because of people refinancing and being able to purchase homes at low rates. An increase of .5 - 1% in rate will stop that in it's tracks.
Even if the government has to step in and buy up more mortgage back securities or treasuries, which we'll pay for it in the future, it will save us now. I can't tell you if that's the right thing to do in the long run, but it's the only thing to do in the short run. The Fed won't let this chance at recovery just slip away.
I've read many articles the past few days and what I've taken away is that the market is showing small signs of recovery. But that's what gets the headlines. I ask of you to read the whole articles because they paint a different picture.
For example, you'll hear home sales have gone up 3%, but you don't hear the values have gone down 15%. You don't hear that the current inventory for sale has increased 8% or that 45% of the sold houses are foreclosures / short sales (and this number is only going to rise).
If rates go up, we're seriously screwed. Some of the reasons for the "experts" to say that we're on the road to recovery is because of people refinancing and being able to purchase homes at low rates. An increase of .5 - 1% in rate will stop that in it's tracks.
Even if the government has to step in and buy up more mortgage back securities or treasuries, which we'll pay for it in the future, it will save us now. I can't tell you if that's the right thing to do in the long run, but it's the only thing to do in the short run. The Fed won't let this chance at recovery just slip away.
Tuesday, May 5, 2009
Something smells (2)
I just read that B of A (owner of Countrywide) needs 34 BILLION dollars. I told you all that there is something not right about the info that is being pushed out to us. There will be more to come, but you'll see. We're far from bottom and even if we are, it's going to be a long time to come out. Check out this article
http://news.yahoo.com/s/nm/20090506/bs_nm/us_bankofamerica_9
I don't know why, and I have no reason to say this, but I just don't trust in Bernanke. At least with Greenspan, you knew he was bullshit-ing. You'd watch his speeches and he would never answer a question strait. Bernanke says things that just feel forced. Like "We'll see a bottom in 2009." Why, where's the proof for that?
http://news.yahoo.com/s/nm/20090506/bs_nm/us_bankofamerica_9
I don't know why, and I have no reason to say this, but I just don't trust in Bernanke. At least with Greenspan, you knew he was bullshit-ing. You'd watch his speeches and he would never answer a question strait. Bernanke says things that just feel forced. Like "We'll see a bottom in 2009." Why, where's the proof for that?
Something smells
I had this great post sitting for a few days but got so busy now it's outdated. Fortunately, I've been busy, unforunately you've missed my words of wisdom. Well here's a quick doozy.
I don't believe all this good economic news. I hope to god I'm wrong but it can't be true. From someone that in the trenches I see nothing but lower values and hard to get loans. I'll address a few issues and feel free to discuss with me more but here we go:
"They" say that home sales have increased. Yes, that's true, but those are of sales of homes in Palmdale and Landcaster that are foreclosures selling for 100k. And a lot of these are being bought by first time investors hoping to cash in, which won't happen and that's a whole other speech.
"Values have increased for the first time in...", bull shit! I'm having appraisal issues everyday about values being too high and appraisal reviews are cutting values all over the place. If you under price a sale soooo low that you get multiple offers and the end value is higher than what you originally offered, then yes "value" went up. But did it really, no because you started so low. Almost every deal I've done or heard about from reps, we're all having value issues. So I'm still seeing a decline.
"We're seeing signs that we'll hit the bottom in 2009". If I fall down a well, eventually I'll hit the bottom. If I'm not dead, I'll have a broken leg / knocked unconsious / AND STILL BE AT THE BOTTOM OF THE WELL!!! Is that anything to cheer about? How do I get out? How fast will it take me to get out if all my tools are gone and I've got morons trying to figure out how to save me?
I know this is a little depressing but it's the truth. I've got inside sources that have said that Countrywide employees have been told that the company made more money in the first quarter of 2009 than 2008. This is impossible. They're either cooking the books, ignoring tremendous loss, or using TARP funds to mask the true loss. How can it be even possible for a bank to say this?
My theory is that they want to make sure that they don't have more people killing themselves and get people to come to work in the morning. Again, hope I'm wrong.
I don't believe all this good economic news. I hope to god I'm wrong but it can't be true. From someone that in the trenches I see nothing but lower values and hard to get loans. I'll address a few issues and feel free to discuss with me more but here we go:
"They" say that home sales have increased. Yes, that's true, but those are of sales of homes in Palmdale and Landcaster that are foreclosures selling for 100k. And a lot of these are being bought by first time investors hoping to cash in, which won't happen and that's a whole other speech.
"Values have increased for the first time in...", bull shit! I'm having appraisal issues everyday about values being too high and appraisal reviews are cutting values all over the place. If you under price a sale soooo low that you get multiple offers and the end value is higher than what you originally offered, then yes "value" went up. But did it really, no because you started so low. Almost every deal I've done or heard about from reps, we're all having value issues. So I'm still seeing a decline.
"We're seeing signs that we'll hit the bottom in 2009". If I fall down a well, eventually I'll hit the bottom. If I'm not dead, I'll have a broken leg / knocked unconsious / AND STILL BE AT THE BOTTOM OF THE WELL!!! Is that anything to cheer about? How do I get out? How fast will it take me to get out if all my tools are gone and I've got morons trying to figure out how to save me?
I know this is a little depressing but it's the truth. I've got inside sources that have said that Countrywide employees have been told that the company made more money in the first quarter of 2009 than 2008. This is impossible. They're either cooking the books, ignoring tremendous loss, or using TARP funds to mask the true loss. How can it be even possible for a bank to say this?
My theory is that they want to make sure that they don't have more people killing themselves and get people to come to work in the morning. Again, hope I'm wrong.
Tuesday, April 21, 2009
FEAR, boo!
Change is coming. So everyone just calm down.
The last two days I've spent my entire day calming down people, fixing and addressing errors and getting people through issues based on FEAR. Fear of appraisal changes, rate changes, program changes or any other change that seems to be happening.
I'm reminded of the latest Batman movie, The Dark Knight. The Joker has a scene where he says that chaos is caused by fear and fear is caused by chaos. If he says he's going to kill 10 people tomorrow and does it, everyone is fine BUT if he just says someone is going to die and no one knows who / what / why / when, then everyone flips out. This, in a strange way, is exactly what's happening with the real estate and mortgage business.
There is so much change happening and not a lot of people know how to handle this, which results in a lot of chaos. I don't want to sit here and give every example because I don't have the time or space. Just know that if you're a client, co-worker, associate, employee or partner just calm down and we'll get through this. I leave this vague because all of you have an unique issue but my answer is pretty much the same. We've got it under control and we'll work through your particular issue together. Whether it's a rate question, appraisal question, submission question, credit question.... It's all the same answer. We'll handle it. "Relax, We've got it covered." is our slogan and I plan on making sure we live up to that.
There is a reason I'm working 12 - 15 hours a day. Stay calm, let us do what we do best and you'll get the best result possible. Always feel free to email me willie@1bearfinancial.com to stay on top of me. I don't mind because we're in this together. We just need to be patient and not so frightened of change because in the end we can't stop change.
The last two days I've spent my entire day calming down people, fixing and addressing errors and getting people through issues based on FEAR. Fear of appraisal changes, rate changes, program changes or any other change that seems to be happening.
I'm reminded of the latest Batman movie, The Dark Knight. The Joker has a scene where he says that chaos is caused by fear and fear is caused by chaos. If he says he's going to kill 10 people tomorrow and does it, everyone is fine BUT if he just says someone is going to die and no one knows who / what / why / when, then everyone flips out. This, in a strange way, is exactly what's happening with the real estate and mortgage business.
There is so much change happening and not a lot of people know how to handle this, which results in a lot of chaos. I don't want to sit here and give every example because I don't have the time or space. Just know that if you're a client, co-worker, associate, employee or partner just calm down and we'll get through this. I leave this vague because all of you have an unique issue but my answer is pretty much the same. We've got it under control and we'll work through your particular issue together. Whether it's a rate question, appraisal question, submission question, credit question.... It's all the same answer. We'll handle it. "Relax, We've got it covered." is our slogan and I plan on making sure we live up to that.
There is a reason I'm working 12 - 15 hours a day. Stay calm, let us do what we do best and you'll get the best result possible. Always feel free to email me willie@1bearfinancial.com to stay on top of me. I don't mind because we're in this together. We just need to be patient and not so frightened of change because in the end we can't stop change.
Thursday, April 16, 2009
Thinking about rates
I want to thank everyone who's been calling and emailing. I know we're super busy and I really appreciate all the business. I'm doing the best to stay caught up and make sure I get my hands dirty on every deal.
These are amazing times. Everyday there is economic news, good and bad. There are changes happening all over with every lender and every program, some good and bad. And rates are really good still!
To everyone waiting for rates to drop, stop. We're at 5% or better on average, so what are you waiting for? Pay a point, pay two points, with money this cheap you don't want to miss it because over the long run no one has seen much better. Besides, I had an interesting conversation the other day. I was getting into rates and there was a realization (to which I could be wrong) that rates can't get much lower. You can't have 3% rates and here is why; investors can find that elsewhere. Our whole system is based on rates selling on the secondary market, even with all this Fannie and Freddie intervention, we're based on a secondary market. If you could get 1 or 2% in a bond or straight interest savings or money market from the bank, you would take that over a 3% government backed mortgage instrument. Your money would be liquid and there is no risk. So there has to be a natural bottom to where the rates will go. How low, I don't know? but somewhere there is a bottom.
I can't imagine that rates are going to ever be at 2%. I hope they do and I can refi everyone again, but I just don't think so. I often relate rates to the stock market and say "you never buy at the low and sell at the high, so we can just get close" and along with that stocks just don't go to 0, unless they go BK. Rates aren't a company, they're a tool or equation. You can't touch a rate so can it go BK? I will say no. I'm sure there is a flaw in my thinking but until I see it, this makes sense to me. Now, I'm getting a little too Andy Rooney, next thing you know I'll hate water because it's too wet.
These are amazing times. Everyday there is economic news, good and bad. There are changes happening all over with every lender and every program, some good and bad. And rates are really good still!
To everyone waiting for rates to drop, stop. We're at 5% or better on average, so what are you waiting for? Pay a point, pay two points, with money this cheap you don't want to miss it because over the long run no one has seen much better. Besides, I had an interesting conversation the other day. I was getting into rates and there was a realization (to which I could be wrong) that rates can't get much lower. You can't have 3% rates and here is why; investors can find that elsewhere. Our whole system is based on rates selling on the secondary market, even with all this Fannie and Freddie intervention, we're based on a secondary market. If you could get 1 or 2% in a bond or straight interest savings or money market from the bank, you would take that over a 3% government backed mortgage instrument. Your money would be liquid and there is no risk. So there has to be a natural bottom to where the rates will go. How low, I don't know? but somewhere there is a bottom.
I can't imagine that rates are going to ever be at 2%. I hope they do and I can refi everyone again, but I just don't think so. I often relate rates to the stock market and say "you never buy at the low and sell at the high, so we can just get close" and along with that stocks just don't go to 0, unless they go BK. Rates aren't a company, they're a tool or equation. You can't touch a rate so can it go BK? I will say no. I'm sure there is a flaw in my thinking but until I see it, this makes sense to me. Now, I'm getting a little too Andy Rooney, next thing you know I'll hate water because it's too wet.
Monday, April 13, 2009
Not all that shines is Gold
I'm learning and reading about the new Freddie and Fannie programs and the biggest problem that I see with them is that they don't help the people that need help the most.
If your loan is currently owned or backed by Freddie or Fannie, refinancing could be very easy. But if you where someone who got a subprime or alt-A loan you probably aren't backed by either of these two companies. So for all the people who have ARMs coming up or where on 2 - 5 year subprime / alt-a loans, you can't capitalize on these great programs with great rates.
For instance I got a 5 year ARM. It is now coming to the adjustable period. Out of easy 5 years ago I went through a subprime lender for less documentation. I do not qualify for either of these lender's new programs because who knows who backs my loan. I'm probably one of a million good, always have made my payment, borrowers that would love to get a lower interest rate and a long term 30 year fixed loan. I can't for right now. maybe they'll change the guidelines but not tomorrow they aren't.
As I predicted there are going to be some good things that come out with these programs but there are also some drawbacks. It's going to be a long process to help so many people out. I suspect a lot of changes in the coming months.
Also, this is another sign that things are not going to get better anytime soon. A few good pieces of news last week and people are ready to proclaim the bottom is near. Not so fast my friends. We may be plateauing before another shoe drops.
If your loan is currently owned or backed by Freddie or Fannie, refinancing could be very easy. But if you where someone who got a subprime or alt-A loan you probably aren't backed by either of these two companies. So for all the people who have ARMs coming up or where on 2 - 5 year subprime / alt-a loans, you can't capitalize on these great programs with great rates.
For instance I got a 5 year ARM. It is now coming to the adjustable period. Out of easy 5 years ago I went through a subprime lender for less documentation. I do not qualify for either of these lender's new programs because who knows who backs my loan. I'm probably one of a million good, always have made my payment, borrowers that would love to get a lower interest rate and a long term 30 year fixed loan. I can't for right now. maybe they'll change the guidelines but not tomorrow they aren't.
As I predicted there are going to be some good things that come out with these programs but there are also some drawbacks. It's going to be a long process to help so many people out. I suspect a lot of changes in the coming months.
Also, this is another sign that things are not going to get better anytime soon. A few good pieces of news last week and people are ready to proclaim the bottom is near. Not so fast my friends. We may be plateauing before another shoe drops.
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