Property taxes in California are due and all payments must be post-marked today if payment is mailed or made on-line.
Here is a list of Southern California Counties and links to their assessors' offices if you wish to pay on-line.
For Los Angeles County click here for the pay on-line information.
For Orange County click here for the pay on-line information.
For Riverside County click here for the pay on-line information.
For San Diego County click here for the pay on-line information.
For San Bernardino County click here for the pay on-line information.
Question: What is a “seller carry-back?”
Answer: This question came up this week in a transaction we were helping to structure. Many “old-timers” in the real estate and mortgage industry are very familiar with the term, but it is a strategy that has not been part of residential real estate for quite some time.
A “seller carry-back” is when the seller of a home instead of cashing out all the equity when selling their property place a second trust deed, or mortgage, on the property for a portion of the sales price. Prior to the year 2000 seller carry-backs were not uncommon as a way for sellers to broaden the market for their properties, receive some monthly income and possibly defer capital gains on the sale of properties. Around 2000 banks started becoming more aggressive with their second trust deed mortgages, most commonly the “HELOC” (Home Equity Line of Credit) and seller carry-backs were no longer part of the marketplace.
When purchasing a property obtaining a second trust deed has many advantages to the buyer, it lowers the down payment requirement and can also lower the total monthly payment to make qualifying stronger, or enable qualifying at all for a property. In the transaction we working on this week our buyers were looking at putting 10% down, leaving 90% of the purchase price to be financed. In the past we would look at getting a HELOC for 10% of the purchase price and have what is known as an 80-10-10 transaction: 80% loan to value for the first trust deed, or primary mortgage, 10% loan to value in the second trust deed or HELOC, and a 10% down payment from the borrowers. With most banks changing their criteria for HELOC’s and second trust deeds to no longer lend over 80% total loan to value (combined loan to value of the first and second mortgages) the institutional second for an 80-10-10 is no longer an option for most borrowers instead. But the 80-10-10 option is available if you have a seller with the equity and the ability to carry-back a second trust deed on the sale of their home.
Why do an 80-10-10? Primarily to lower the total monthly payments for the buyers. In a traditional 10% down transaction the borrower would obtain a loan covering 90% of the purchase price and need to get Private Mortgage Insurance, or PMI (click here to read about different types of mortgage insurance). By having a 10% second and lowering the primary loan to 80% of the value of the property value the lender will no longer require mortgage insurance. Depending on how the payments on the second mortgage payable to the seller is structured the total housing payments for the borrowers can be significantly lower than if they obtain PMI.
As mentioned above, the benefits to the seller are three-fold, one they are able to ensure the buyer of their home can qualify, two they receive a monthly income from the interest paid on the second they are carrying and three in many cases can defer capital gains taxes on the portion of their equity they are taking in the form of a mortgage until such time as the buyer pays off the loan. Of course in order to carry-back a second trust deed the seller will need to have the equity to cover at a minimum their closing costs as well as the amount of the second.
When structuring an 80-10-10 transaction the requirements of the primary lien holder, i.e. the lender, must be taken into consideration. The standard guidelines from Fannie Mae and Freddie Mac that most lenders follow is that the borrower must make minimum payments of interest only to the seller. The interest rate must be no lower than 2% below the current market rate. If the term of the loan is less than five years from the date of the sale then the borrower must show at the close of the escrow they have the ability to pay off the loan balance, if the term of the loan is five years or longer they need not have the equivalent of the second mortgage in assets at closing when they purchase the home.
Because most seller carry-back transactions are structured to improve the ability of the buyer to qualify the typical set up is an interest near what the rate for the primary loan is and requires an interest only payment for five years with a balloon payment of the mortgage in five years.
If you do sell or purchase a property with a seller carry-back it is very important that both parties maintain an amortization schedule that is sent between the parties and acknowledged with each monthly payment. This is to ensure when it comes time to pay off the loan both parties are in agreement as to the correct balance, as well should one of the parties pass away before the loan is paid off the estate has an accurate accounting of the terms and balance due on the note.
There is risk to the seller, primarily if the borrower does not pay them and they need to go through the foreclosure process, or if the borrower does not make payments to the primary mortgage holder causing them to foreclose and putting the seller in jeopardy of not receiving their balance due.
While not for everyone the seller carry-back transaction will start appearing more often as a tool for buyers and sellers to facilitate their transactions, especially as equity in homes grow and banks are slow to re-enter the high loan to value second trust deed market.
Have a question? Ask me!
Remember, with Dennis it’s not just a mortgage, it’s your complete financial picture.
Lots of movement this week in the Mortgage Backed Securities (MBS) markets on ecomomic data. Investors are pushing the Fed taper is coming sooner rather than later as seen by drop in MBS prices (higher rates) and stocks all week until rallies after the markets opened today.
On Wednesday new home sales for September and October were released, with September showing a sharp decline from August, then rebounded sharply in October. This is positive economic news, which is not good for lower interest rates.
More impactful was the release from the payroll company ADP on private payroll growth in November, showing 215,000 jobs created in the month in their survey. In October ADP grossly underestimated employment growth and revised its October data upward by over 50,000 jobs. This news pushed mortgage rates and stocks higher as employment is the primary factor the Fed has stated will determine when it will begin to unwind its QE3 purchase of mortgages and federal debt.
Thursday more news for the overall economy was released with the revised 3rd Quarter GDP (Gross Domestic Product) numbers being released. The overall number was revised upward from 2.8% to 3.6% annual growth. Normally this large increase in GDP would have sent MBS plunging and rates higher, however the cause for the upward revision was an increase in inventory and demand was little changed. In essence the upward revision does not indicate a more robust economy but a growth in commodities in warehouses. Also released on Thursday was the weekly unemployment claim filings, which were below 300,000. The release indicated seasonal factors for holiday employment contributed to the lower number of filings. Filings for unemployment insurance have declined in seven of the past eight weeks, good news for workers but not so good for mortgage rates.
Today is a big announcement day. The headline number in tomorrow’s newspapers will be the tremendous drop in the unemployment rate from 7.3% in October to 7.0% in November. Deep inside the news story you may find the reason for the sharp decline is not significantly more higher but lower participation; i.e. fewer people looking for work because they have given up looking for work at this time. Will they return to the labor market following the holidays? If so expect a surge in the unemployment rate in January, reported the first Friday in February. The Labor Department announced that total payrolls increased by 203,000 jobs, 196,000 of them in the private sector.
The other big data release was consumer income and spending. Consumer activity is a very important economic indicator as consumer spending is approximately 65-70% of the total economy, if consumers are spending then economic activity will increase. For October consumers increased their spending from September by 0.3%, not bad but not great. Most of the spending was in durable goods such as automobiles and appliances. While consumer spending increased in October consumer income did not, posting a 0.1% decline from the prior month.
Rates for Friday December 6, 2013: Reaction to the economic news today has been positive for rates and stocks, perhaps an indication that investors have priced in any future rate increases due to the Fed easing its asset purchases in the near future. In the past several months news that we received this week would have generated a large spike in interest rates, instead we see an increase from last week but not as much as we would have in the recent past.
FIXED RATE MORTGAGES AT COST OF 1.25 POINTS
30 year conforming 4.375% Up 0.200%
30 year high-balance conforming 4.50% Up 0.125%
30 year FHA 3.75% Up 0.125%
30 year FHA high-balance 3.875% Up 0.125%
Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down (3.5% for FHA) with 740 FICO score for purchase mortgages.
I hope everyone had a wonderful Thanksgiving and you are ready for the shorter than usual time between Thanksgiving and Christmas.
Have a great week,
Question: This week’s question from me to you: Did you have a nice Thanksgiving?
Answer: I am hopeful the answer for each of you is yes.
It was for us as we had our traditional barbecued turkey, sausage cornbread dressing, homemade rolls and customary desserts of pumpkin cheesecake and apple pie. Our oldest daughter is slowly taking over the dessert department being very helpful in the cheesecake and making the apple pie—she has become very good at it!
I continue to be thankful to have a rewarding career helping families purchase their homes and restructure their mortgage and debt to improve their financial situations, for the many real estate, financial and legal professionals and past clients, friends and family who refer me to those who can benefit from my services.
Have a question? Ask me!
A short week but one with some important economic data. Monday the National Association of Realtors announced the pending home sales index for October and it was down 0.6%, following a 5.6% drop in September from the prior month; this is the fifth month in a row the index has dropped—preceded by the spike in interest rates in May. Year over year pending home sales were down 1.6% from October 2012, the second month in a row for the year over to year index to decline. Later in the week more housing news was announced with the release of the S&P/Case-Schiller Home Price Index for twenty major metropolitan markets for the month of September. All twenty cities showed gains and the national average was a 1% gain in price over the prior month. Year over year the index is up 13.3%. The increase in home prices supports the decline in pending home sales. The combination of higher prices and declining sales cannot continue for too many months as at some point the slowdown in demand must impact prices. The question is how much of an impact, or will there be a balancing of slower price increases until demand catches back up? Finally, is the 13.3% price increase evidence of a bubble in the making in the housing market?
Housing is critical to our economic recovery. Since the end of the recession in June 2009 housing has been a significant factor in economic growth. Should the housing market slow down it could stall economic recovery. Unfortunately the slowing sales of existing homes and its potential impact on the economy has not been recognized by federal regulators nor politicians who continue forward with policies and proposals to further restrict mortgage lending and narrow the range of potential homeowners. While acknowledging that the range of potential homeowners was far too vast in the period leading up to the 2007-8 housing and mortgage market collapses, regulators and government officials are pushing the pendulum too far the other way. We will see the impact in 2014 as regulations are rolled out as part of the Dodd-Frank Act requirements and the Consumer Financial Protection Bureau implements new rules and regulations for lenders and banks.
In other economic news durable goods orders declined in October by 2% after an increase in September of 4.1%, mainly on aircraft orders; ex-aircraft durable goods orders are negative for the prior two months. This is negative news for the economy, but beneficial for mortgage rates as it increases the probability of the Fed continuing to feed the economy under its Quantitative Easing policy. On the other side of the bad news-good news spectrum was a spike in Consumer Confidence in the final reading for November and a reduction in initial unemployment claims from the prior week. Higher Consumer Confidence is very good for the economy as approximately 65-70% of economic activity is consumer spending, higher consumer confidence usually leads to higher consumer spending and increased economic growth. Higher economic growth leads to higher mortgage rates.
Rates for Friday November 29, 2013: On a short week like this economic news has very little impact on mortgage rates, vacations however have a large impact. Even though markets are open today, most senior traders and managers take a four day weekend for Thanksgiving, leaving junior traders in charge with orders, “nothing risky, don’t lose money.” As a result this week we experienced the traditional pre-Thanksgiving sell off in the Mortgage Backed Securities market pushing rates higher. Today the markets are flat as everyone sits on cash waiting for Monday and the return of the decision makers.
30 year conforming 4.175% Up 0.050%
30 year high-balance conforming 4.375% Up 0.125%
30 year FHA 3.625%** Up 1 point (see below)
30 year FHA high-balance 3.75% Flat
Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down (3.5% for FHA) with 740 FICO score for purchase mortgages. **30 Year FHA has higher points at 3.625%, at 3.75% is available with no points and credit for closing costs.
Enjoy your Thanksgiving leftovers, both the food and family remaining through the weekend!
Question: What are some stumbling blocks to getting our loan approved?
Answer: Lack of preparation through the pre-qualification process is the primary cause of most delays or problems in the loan approval process. When getting pre-qualified or pre-approved most of the following problems should forth so solutions can be put in place; the potential approval problems should become apparent through a thorough questioning and investigation of your financial abilities by the mortgage professional. Your pre-qualification interview should be more than two questions, “how much do you make? How much money do you have?”
Here are some areas that can cause an issue during the approval process if they are not properly documented for the underwriter:
Income: Do you get overtime? For how many years? If less than two is it mandatory? Can you prove it is mandatory? Was it much higher last year than so far this year? If so is it because you have seasonal overtime where you work a lot more than other times of the year? Can you document this? The basic rule on counting overtime income for qualifying is that it must be of a constant and continuing nature and applicant must have received for the past two years. Some exceptions are possible so if you have only been receiving overtime for the past fifteen months don’t despair, call me and we can discuss your situation and determine you qualifying ability.
Do you get a bonus? The same questions apply as do the guidelines, typically a two year history of receiving the bonus is required and be of a constant and continuing nature. Some of the challenges on bonuses are if you are buying early in the year and your bonus is paid at the end of the year. Declining bonus from the prior year can also cause an issue if not properly explained and documented.
Commission income can create an issue if not properly documented. Again the two year time frame is the standard. If commission is declining it can create an issue, as well if your commissions are higher at the end of the year than earlier in the year. Commission income needs good documentation and explanation as to its nature and timing to make it easier for an underwriter to accept and use the same calculations we are using for total income.
Self-employed and owners of companies are also required to show two years of income for averaging and calculation of income used for qualifying. A challenge is the income typically used is the two complete prior years’ tax returns; so until you file your 2013 tax returns sometime in 2014 your income for qualifying will be based on taxes filed in 2011 and 2012.
Finally, do you write off business expenses on your income tax returns? Many people who have this deduction on their schedule A of their returns are not aware they make the deduction. More importantly they are not aware that this deduction for tax purposes is also a deduction from your income from your mortgage application. This deduction has come back to hurt qualifying for some applicants, which is why it is important to have your tax returns reviewed during the qualifying process.
Assets I have written many times over the years about documenting funds for down payment, closing costs and reserves. Asset documentation, actually deposit of funds documentation is the number one stumbling block to final loan approval and closing.
If you have any deposit that is not part of your employment it will need to be documented. Just got married and deposited wedding gift checks? Copy them before you deposit them. Sell an old car? Copy the title, bill of sale and title transfer to prove you owned the car and sold it. Win a bunch of money in Vegas? Don’t deposit the cash into your account until a conversation is had regarding documentation. Get reimbursed from your employer for expenses? Receive a monthly check from family from a co-owned asset? Receive a birthday check from grandma?
Any deposit going back through two months of your bank statements prior to your application (if applying today this would mean we will need your September and October statements) any deposit that is not part of your salary or ordinary income will need explanation and documentation.
A big challenge for documenting assets can be receiving gift funds for purchase, or for paying down loan balance on a cash-in refinance. The challenge can occur because of the information we need from the donor to prove they had the funds and transferred them to you. Before receiving gift funds please contact me to discuss the steps so the funds can be properly documented, or read this Weekly Update discussing gift funds.
Credit This is rarely an issue that can slow down a loan application once it is running as any credit issues should be apparent during the initial qualifying process when a credit report is run. Depending on the nature of the credit issue it can either be taken care of during the application process or it may take some time to be resolved and credit rehabilitated. I have had clients I have worked with for more than a year to rehabilitate their credit and be in a position to purchase their new home. My rule on rebuilding good credit is the sooner you start the sooner you can be a homeowner. Some people who had credit challenges in the past put off the initial steps of running a credit report to see where they stand and begin the process because they task seems very daunting, and it can be, but once you start and gain momentum with the goal of purchasing a home the quicker you will own that home.
We get several loans a year where the applicants were in the loan process, either for a refinance or purchase, with another lender and some of these issues came forward during the loan process, not during pre-qualification but after the escrow was opened, because of lack of proper preparation and ability to solve the issues. We can’t solve all the problems in time, but often we can put forward solutions so that a home can be purchased or refinanced in the near future. All qualification problems have a solution; it is just a question of how long those solutions may take.
Every loan is a bit different because every borrower is a bit different and bring their own set of issues to the process. The three main components of mortgage approval for an applicant are income, credit and cash, one of the three is usually the limiting aspect of how much you can qualify to purchase. Knowing what the potential problems and weaknesses are in your qualifying are key to a successful and smooth loan process.
Reflecting a market that has seen a rise in the number of purchases and first time buyers over the past year or more we have also seen a rise in questions regarding purchases from our clients. Here is a recap with links of some topics we have covered that are helpful to home buyers, and especially first time buyers:
What price should we offer on home we want to buy? Weekly update 11-15-13
What do we need to get pre-approved? Weekly update 11-8-13
Having a hard time finding a home, advice on buying? Weekly update 10-11-13
Why do I need mortgage insurance? Weekly update 10-18-13
What are different types of mortgage insurance premiums? Weekly update 10-25-13
What are the options if our appraisal comes in low? Weekly update 6-14-13
Regular readers of the Weekly Rate & Market Update know there are many questions throughout the year that inform new, and seasoned, home buyers on the process and details of purchasing a new home—keep checking in every Friday to see what can help you, or someone you know, with your home buying, or mortgage, experience.
Once again words not data have the greatest impact on mortgage rates this week. There was quite a bit of significant economic data this week, but most of it was pushed aside by investors who instead reacted strongly when the minutes of the most recent Federal Reserve meeting were released. In the meeting a few members of the Fed commented on how the tapering of the Fed’s Quantitative Easing program of purchasing $85 billion per month of mortgages and U.S. Treasury debt should ensue “in the coming months” and want the Fed to put up a time table. “Coming months” triggered a sell-off in Mortgage Backed Securities on Wednesday that reversed a week worth of gains.
Also in the Fed news cycle was current Fed Chief Ben Bernanke commenting that even after the QE program is wound down that the Fed will keep its Fed Funds rate at extremely low levels, low as in the current near zero rate. This is good news for anyone with a Home Equity Line of Credit or anyone with an adjustable rate that is in some way pegged to the Fed rates as your rates should remain extremely low through 2015 per Bernanke.
Finishing the Fed news is one of the big political stories of the year. On Thursday President Obama’s nominee to replace Bernanke as head of the Fed was approved by the Senate Banking Committee and sent to the Senate for final approval. Senator Rand Paul (R-Ky) has said he would filibuster the vote to confirm Yellen unless the Federal Reserve is audited. With the threat of this nomination as well as the filibuster of other Obama nominees the Senate Majority Leader Harry Reid (D-Nv) led a vote to change the rules of the Senate and weaken the ability of the party in the minority to filibuster Presidential appointments. This ensures Yellen’s confirmation. Yellen appears to be much more “loose” regarding Quantitative Easing and Fed intervention with monetary policy than Bernanke, which heartens investors who have been feeding on the free money from the Fed.
In real economic news there was a trifecta of big reports on Wednesday and a duo on Thursday, none of which had as big an impact on the market as they normally would due to the Fed minutes release on Wednesday. The Consumer Price Index (CPI) for October dropped 0.1% from the prior month and is up only 0.9% from a year ago (stripping out energy and food annual inflation was 1.7%. Not great news as low CPI indicates low economic activity and an absence of bidding up prices for consumer goods and services. Retail sales for October were stronger than anticipated rising 0.4%. Strong retail sales is a positive for the economy as it shows consumer spending, which accounts for approximately 65-70% of total economic activity in America, is strong and pushing economic growth. Finally on Wednesday the National Association of Realtors released existing home sale numbers which dropped 3.2% for the month of October, the fourth month in a row of declining sales. Sales were up 6% from October 2012. The NAR said in its release the decline was due to the government shutdown slowing closings, I am skeptical as to the size of the impact but we will see when November sales are released if there is a spike due to October closings pushing to November.
Home sales have been critical to whatever economic recovery the country has been experiencing since the recession ended in 2009. The Fed QE policy has benefited the financial and housing sectors more than any other. The financial sector gains have plumped up corporate balance sheets and employees 401(k) accounts with growing stock prices. The housing sector gains have seen increases in sales, equity for homeowners and lowering of costs of homeownership with lower interest rates. If the housing sector slows back down it will have repercussions throughout the economy.
The Thursday economic data duo was initial unemployment claim filings, down 21,000 from the prior week and the lowest number since before the shutdown, the numbers were impacted by the Veteran’s Day holiday during which claims could not be filed. The other half of the data duo was the Producer Price Index (PPI) for October which showed a drop in wholesale prices of 0.2% for the month. Not a great sign for economic growth as lower wholesale prices means lower demand, lower wholesale demand signifies lower production and output, which generally means lower wages and hirings.
Rates for Friday November 22, 2013: In a non-QE environment the economic data for the week would push Mortgage Backed Securities prices higher and mortgage rates lower. In the QE environment however words of Fed officials speculating on their QE policy trumps hard data. The result of this dynamic is instead of lower rates from last Friday the markets scratched back close to level following the spike midweek.
30 year conforming 4.125% Flat
30 year high-balance conforming 4.25% Flat
30 year FHA 3.625% Flat
Thanksgiving in 2013 is the latest it can possibly be since the 1st of the month was on a Friday. Combined with the late Thanksgiving is the earliest Hanukkah in many years and the first time it will be celebrated on Thanksgiving since 1888, aren’t calendars fun?
The Smith Family wishes a very blessed and wonderful Thanksgiving to all and Happy Hanukkah to our Jewish friends and their families. Celebrate your family, friends and community and be thankful to reside in this wonderful, at time tumultuous, nation.
Question: What price should we offer on the home we are interested in?
Answer: Whatever will get you the house you want at a price the seller is willing to accept. How’s that for trite?
Trite but true. When wondering what to offer a seller for a home buyers are conflicted between not wanting to over pay, to try to get a bargain, to making sure they don’t blow an opportunity to get the home they really want. For whatever reason when it comes to buying a home from an individual human nature seems to demand that we negotiate and “get the best possible price” but when buying a stereo, tires for our car or booking a hotel room while we look for a sale we usually don’t negotiate. We accept the price from a company but feel an individual is trying to get a little bit more from us than they should.
Several years ago, pre-kids, Leslie and I were on a trip to the East Coast and were visiting with my closest friend from high school in New York. He and his wife had just purchased a new home in New Jersey and we were on our way from New York City to their home. At one point he looked at me and said, “Dennis, I paid asking price for our house. Did I get screwed?” (As I said, he’s from New York, his vernacular fits). I asked him a few questions:
Do you like the home? Does your wife like your home? She loves it, we both do, so do the kids.
Can you afford the payment? Absolutely, it’s actually less than I budgeted.
Are you planning on selling in the next year or so? No, we’ll be there a while.
Our conversation continued and I asked him what if they had lost the home to another buyers because he wanted to negotiate and see how low he could get the seller. He said that would have been really hard to accept, they really liked the home. So I told him to get past whether he could have purchased the home for a lower price and instead be grateful they were able to get a home they really love for a price they could really afford.
Over the years I have seen many clients write offer, after offer, after offer, after offer, looking for “a great deal.” As I have told many of them, if you look long enough someone may give you a home for free—but the chances of it being in Coastal California or somewhere not in the middle of desolate plains land in flyover country are very slim. I ask them what is more important to them, buying a home for their family or getting “a deal.” Too often this buyer ends up either giving up on trying to beat the market and finally purchases the home they like at a fair market price, or purchases a home that while a perceived bargain they come to find out does not make them happy and not long after buying are looking to move—there goes their “deal” as now they have transaction costs on selling and buying again.
What price should you offer? Based on our conversations we know what price and mortgage amount you are qualified to purchase, is the asking price within our qualification numbers? Are the comparable sales in the neighborhood supportive of the price being asked? Do you really like the home? Then my suggestion is to offer the price that you know will be accepted by the seller and buy your new home.
In 1994 I bought my first house. Leslie and I were dating and had not exactly spoken about marriage but we both knew it was not if but when (turned out to be later that year). I was at a real estate marketing meeting and an agent was pitching a property she owned. I went up to her and asked when I could see it as I wanted to buy it. And I did the next day, paying her what she was asking because I knew I could afford it, the price was fair for the neighborhood and I knew it was where Leslie would also want to live someday. Did I over pay? Nope, we loved that home and it allowed us to trade up in 1998 for our current home. Where again we paid the seller their asking price, and at least one person in the industry said, “you may have over paid for that house.” Did we? Looking back on 15 plus years, raising two wonderful daughters, having great neighbors, living in Bixby Knolls area of Long Beach, I’d say we got a bargain.
Don’t be afraid to give a seller what they are asking to get the home you want and can afford. Several years from now a few thousand dollars in sales price that may have cost you the home so you can feel like you got a deal will seem insignificant to what that home has meant to you and your family.
What do we need to get pre-approved? Weekly update 11-15-13
Very slow economic week with primary reports being weekly unemployment claims (down 2,000 from last week to 339,000 claims filed after last week’s claims were adjusted up 5,000 claims to 341,000), productivity and costs (productivity up in the 3rd quarter 1.9% after rising in 2nd quarter as well and unit labor costs dipped—not a great sign for more hiring, if employers are able to get more productivity for less cost they are less apt to hire more workers) and industrial production (overall number showed a slight decline, but manufacturing showed another increase which is positive for the economy). Combining the reports we have status quo, which is sluggish economy and labor markets which is beneficial to mortgage rates holding ground or slipping down a bit.
The main market mover this week has been the hearings in the Senate for Janet Yellen, President Obama’s nominee to replace Ben Bernanke as Chair of the Federal Reserve. What has come out is that Ms. Yellen is a big proponent of Mr. Bernanke’s Quantitative Easing policies and will want to continue the current asset buying program. Her testimony and probable confirmation as the new head of the Fed should dampen speculation on when the Fed will stop pushing $85 billion a month into the economy and perhaps cause mortgage rates to trickle back down in the near to mid-term.
Rates for Friday November 15, 2013: Rates started the week of spiking from Friday’s close and crawling back the rest of the week. The result is a bit better than last Friday but momentum for lower rates throughout the week after Tuesday’s opening.
30 year high-balance conforming 4.25% Down 0.125%
30 year FHA 3.625% Down 0.125%
30 year FHA high-balance 3.75% Down 0.125%
Recently I received a call from long time client and friend who is in the financial consulting industry. She was calling because a client of hers had passed away and the daughter was distraught because it appeared her elderly father had left his home and assets to his live in care giver. A little research and I discovered a similar situation in a nearby city where the same care giver had been deeded another home, from the look of the signature on the deed it appears also an elderly person. The daughter and family are filing a law suit and having the situations investigated to see if they can recover what appears to be assets obtained through deception by an individual who has engaged in this activity before.
I pass along this story as a reminder that we all need to look after our neighbors, especially our older neighbors who may be living alone. If we see anything that seems strange we need to contact the family to alert them to our suspicions and encourage them to check in on their parents and ascertain that everything is as it should be. Take care of each other, be a good neighbor.
It’s a great weekend to buy a home in California, if you, or anyone you know, will be out looking please don’t hesitate to give me a call to go through your mortgage options and get pre-approved for your offer.
Dennis C. Smith, California Bureau of Real Estate Broker #00966315; NMLS #296660
Stratis Financial Corporation, California Dept. of Real Estate Broker #01269597; NMLS #238166
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