January 09 Market Update
Posted in Mortgage News January 8th, 2009 by Rand Miller

New year is here. I hope you are moving toward accomplishing your New Year resolutions.  

Quote: “…the man who really counts in the world is the doer, not the mere critic-the man who actually does the work, even if roughly and imperfectly, not the man who only talks or writes about how it ought to be done.” (1891). Author: Theodore Roosevelt
 

Yes, 2008 is behind us, there are many who are glad, many who are really hoping that 2009 will be better. I just finished reading the book “The Rise of Theodore Roosevelt” very good book. Motivating, it will inspire you to take some dreams off the shelve or off the back burner and make them happen this year. Teddy lived his life with high energy and extreme accomplishment. I know of few who have accomplished as much as he, in the short time he was on earth. I encourage you to read an encouraging book this month, something that will inspire you to accomplish big goals.

So what has changed??

Stated income loans are almost gone, we still have a few programs, but you need at or below 75% loan to value, and we also have bank statement programs, but not at the same rates as full doc loans. In California we have 2nd mortgages for stated borrowers also, to 55%-65% ltv.

Loan limits changed - Conforming loans are still at $417,000 but the FNMA Jumbo is up to: call for your county

  • Los Angeles - 729,750
  • NY metro and Long Island - 729,750

Since January 1st 2009, the big difference is that the pricing is almost the same for a $417k and a 729k loan amount. These are the limits for 1 units, so 2, 3 and 4 unit loan amounts are more. It’s exciting to know that jumbo loans can now be in the low 5% range.

Rates have dropped, then started to show mixed signals through the past couple days and weeks. But take a look at the below chart. Rates this low [4.9%-5% 30/yr fixed] is such a pleasant surprise. Hopefully the low rates will continue until everyone who wants to refi and buy now can enjoy them. Call or email if you need to refi or purchase, these low rates might not last.

Lowering your rate with a Loan Modification - Yes, fresh example, a client had a payment of $2450 p/m and because of the slowdown in the economy, he couldn’t make that payment anymore. He had now equity and had some late payments. So he couldn’t refinance. He called in despair, wanted to know what could be done, was there any way we could help him. Yes, we negotiated his payment from $2450 down to $1700 on a fixed rate payment. The 4 months arrears were added to the back of his loan. So if you know anyone who might need a loan modification, have them call us. We will do our best to help.

Investment opportunities - We have had an increase in investors interested in transferring their money from the stock market to mortgages and real estate. Below are some examples of California & New York opportunities.

Leveraged fix and flip, with as little as $40,000 down. If you have small amounts of money to invest we can match you up with other investors. Normally the properties are purchased, fixed, resold within 60-90 days. Return on investment can range from 15% to 50% [sometimes more]. If you are interested call for details. That means that with as little as $40k after 90 days you have the potential to walk away with an extra $12,000 in earnings. That’s making your money work for you. We can carefully walk you through the process, call if interested.

 

 

July 08 Market Update
Posted in Mortgage News August 1st, 2008 by Rand Miller

I hope your summer is doing well for you. Remember to enjoy as much of today as you can.  

Quote: “Character is not made in a crisis, it is only exhibited.” Author: Freeman, Robert
 

 

Are times Good?? There are many stories in the news about the problems many are facing now. Most of the news is negative. The below snapshot is mixed, there is good news and some bad. I vote for the good news. We are helping many who need fast cash. The fast cash is easy when you have equity. Refinancing from a subprime loan to a 30 year fixed in the low to mid 6% range, this is good news. Many are buying homes that they normally couldn’t qualify for, because the prices have dropped a bit. The recession isn’t as bad as it was predicted. So we should be thankful for our God given blessings.Rates have risen, against our wishes but why?.Look at this 12 month mortgage rate chart, we sure saw a nice dip back in Feb. To bad more people weren’t able to take advantage of the dip. But rates are still very good. Being in the mid 6% range, nothing to complain about. Home values are down so it’s a great time to buy making this year one of the best years for buyers in 5+ years.We all knew values were increasing at such a wild pace. We all knew there was a bubble. So now we see the adjustment. Very good times for some, being able to purchase homes in areas and at prices that were out of their reach a year ago. We really should look at the bright side, it isn’t as bad as it could be for many, and it is very good for some. For those who are enduring hard times, hopefully the pain and frustration will be shore lived.

Purchasing: Last month, the Chicago branch of the National Association of Purchasing Management (now known nationally as the Institute for Supply Management or ISM) said that its Purchasing Managers’ Index (PMI) came in at 49.6. Any reading below 50.0 reflects a general contraction of activity relative to the previous month. June’s reading was stronger than the 48.5 that forecasters had predicted and stronger than the 49.1 posted in April, but it was still a fifth consecutive contraction indicator. So our purchasing is are better than what was predicted.

Jobs: Although everyone is complaining about the recession, the first quarter GDP [gross domestic product] showed a 0.6% increase in April’s initial or advance report, a 0.9% increase in May’s first revision or preliminary report, and a 1.0% increase in June’s final report. Though 1.0% growth is not robust, it is an acceleration from the 0.6% increase in the fourth quarter of 2007. The classical definition of a recession is a contraction of economic growth for at least two consecutive quarters. So because GDP isn’t decreasing, why does all the media talk about the severe recession?Stocks: Stocks were also strengthened by news that the Fed was expanding its lending program for securities dealers — this move eases some credit concerns. The American Housing Rescue and Foreclosure Prevention Act was signed by President Bush today this also brightens the outlook for wall street.. Although this bill increases government liability, it lessens the risk on mortgage related investments.Fuel: There was a sharp drop in gasoline inventories last week. They fell by 3.5 million barrels, the first contraction in five weeks and the largest since last April. Though supplies were still 4.3% higher than a year ago, the latest decline spurred a jump in oil futures. A barrel of light, sweet crude oil for September delivery rose by $4.58 on the New York Mercantile Exchange to settle at $126.77. The increase was the largest in the last fourteen sessions. My personal feelings, are get use to the shortage or fossil fuels, we have only had so much, eventually we will run out. But there are plenty of renewable energy sources, wind, water, solar, even turning leaves and scrap wood into fuels. Some day we will start considering what Holland does, they harvest more renewable energy then they use.Housing: May home prices dropped a record 15.8% from a year ago, according to the S&P/Case-Shiller Home Price Index of 20 cities. It was the 22nd consecutive month of decline recorded by the index. Prices fell 0.9% from April to May. Each of the 20 metro areas covered by the index posted annual declines; nine posted record lows and 10 cities recorded double-digit drops. Now is a great time to purchase a house or investment property - I am helping many first time buyers who haven’t been able to afford purchasing in the past several years. But now they can afford a nice house in a nice neighborhood. Houses that were selling for $700k 2 yrs ago are now selling for $450k. That is a big drop. Many of these homes are foreclosures or bank owned homes. But in all markets, there are winners and losers.Investors are now able to purchase properties that easily debt service. It was tough a couple years ago, values were going through the roof, but rents weren’t, so investors had to put huge downpayments down on properties to make the rent to payments make sense. Now, lower downpayments are ok, because although house prices have dropped, rents haven’t dropped. In fact rents will probably continue to increase. Now is a good time for new investors to pickup good rental properties. If you need me to run some numbers for you regarding purchasing investment properties, just call or email me. 

May 2008 Market Update
Posted in Mortgage News May 13th, 2008 by Rand Miller

I hope your 2008 is doing well for you. Remember 2008 will be as memorable as you make it.  

Quote: “Better a poor man whose walk is blameless than a rich man whose ways are perverse.” King Solomon 970bc

Fed lowers the Fed Funds Rate but mortgage rates don’t lower, why??

Rates are very good, but not as low as everyone hoped

Look at this 6 month comparison chart, comparing 30yr to Fed Funds Rate. Keep in mind, mortgage rates aren’t tied to the Fed Funds rate, they are affected by the 10yr T-Bond and other factors. As you can see, from November 07 to May 08 the Fed Funds dropped, but the mortgage rates have remained jittery. The purpose of the drop in the Fed Rate is to stimulate the economy. To try to get money flowing from banks to consumers and back out to the market. The graph for Prime [not pictured] has a decline similar to the Fed Funds decline. So that is a good sign that banks are passing the savings down to the consumers through prime related loans. But that is because the Fed is forcing them to do that. So equity line rates have dramatically decreased, but remember what goes down can also go up. Most equity lines have a maximum interest rate life cap of 18%, you probably don’t have to worry about them spiking upward in the near future though. Don’t complain - Rates are very good now. If you are sitting on the fence hoping for rates to move down to the low 5% range, you might be sitting on the fence for a while. I personally don’t think rates are going to get much lower than where they are. Rates are in the high 5% range. In my opinion, that is good. It seems that the few times rates have dropped to the low 5% range, it has only been for a day or two. The market seems to have a hard time enjoying real low mortgage rates. The 20 year average is in the 8% range, so rates are doing pretty good.Now is a great time to purchase a house or investment property - I am helping many first time buyers who haven’t been able to afford purchasing in the past several years. But now they can afford a nice house in a nice neighborhood. Houses that were selling for $700k 2 yrs ago are now selling for $450k. That is a big drop. Many of these homes are foreclosures or bank owned homes. But in all markets, there are winners and losers.

Investors are now able to purchase properties that easily debt service. It was tough a couple years ago, values were going through the roof, but rents weren’t, so investors had to put huge downpayments down on properties to make the rent to payments make sense. Now, lower downpayments are ok, because although house prices have dropped, rents haven’t dropped. In fact rents will probably continue to increase. Now is a good time for new investors to pickup good rental properties. If you need me to run some numbers for you regarding purchasing investment properties, just call or email me.

The banks don’t like mortgage brokers, why??

The big banks would like to eliminate the mortgage brokers. The banks would like the consumers to go directly to them. The banks don’t think mortgage brokers are needed. What do you think?

I worked for 2 banks before I started Atlantic Security Financial back in 1991. The below are some reasons why I left the banks:

  • What I didn’t like about the banks was it was all about the money, they cared more about the banks profits vs the customers wellbeing
  • The bank had limited programs, so out of every 10 customers, I could only help 3.
  • Most of the staff, really didn’t know mortgages, which was very frustrating for me, because if forced me to practically underwrite and process my client files..
  • They tried to force me to sell their adjustable loan programs, because they said the bank will always make a profit on the customer.
  • They didn’t like me selling fixed rates to my customers because the bank didn’t earn as much money on the fixed rate programs.
  • They preferred only full income and full asset doc loans, so my self employed customers were told to go elsewhere.
  • They preferred high credit score borrowers, so the undesirables were told to go elsewhere.
  • Since I came from a mortgage broker background I told them “why don’t we broker some of our loans to other institutions, so we can help more clients?” They said no, because the profit margins weren’t high enough.

I have no regrets leaving the bank. I like being able to study the market and find the best loan programs for my customers. Sometimes it is like finding a needle in a haystack, searching to find a specific program that will satisfy my clients needs and circumstances. But because of the variety of my clients needs, my days are never boring. It’s exciting to meet the challenges that my clients present to me.

Financing dreams since 1987. I’ve been working in the mortgage industry since 1987, since I was honorably discharged from the Army. I have spent almost half of my life in the mortgage business, although the present market is challenging, it is also exciting.

Mortgage industry problems

There are many problems that we in the mortgage industry are facing. I will describe a few problems and also a few good solutions:

There is a website that tracks all the major US lenders that have closed since 2006. The count is at 257.

Stated income HELOC’s - they are gone, with exception of some private investors that I have who will issue HELOC’s to borrowers with stated income. Remember, many self employed business owners need the stated income loans, so this hurts a big segment of the population. In fact I know many contractors who use the HELOC’s to fund portions of their building projects, some of these contractors have had their HELOC’s closed for future withdrawals. This has stopped many developments dead in their tracks. There are also many other small businesses who use HELOC’s to cover inventory purchases and salaries etc. As mentioned we have solutions to this problem, we are providing fixed private investor second mortgages and HELOC’s.

100% financing, NO downpayment purchase loans - they are gone. The closest we can get is 3.5% and 5% downpayment on a purchase. Credit scores have to be good and income is full doc.

100-95% cashout refinances - they are gone. Credit has to be pretty good to get high loan to value cashout now, but we can still go up to 90% for cashout.

What we can do:

Rehab loans - with 10% down we can finance up to 65% of future value. Investors are starting to move into the rehab market, buying homes from foreclosure sale, rehabbing them, then reselling them for profit.

Low credit scores can work - but the loan has to make sense. We can allow bank statements for self employed to verify income based on 6-12 months of deposits.

Stated income loans still available - credit scores need to be higher than before, but we still have many purchase, refi, and 2nd mortgage stated income programs. Rates are a little higher, so call for details.

Credit Card Usury - Do you know what the credit card companies are doing to make more money? They are arbitrarily raising rates on their customers accounts. Every week I hear the horror stories. Hear are some samples:

  1. Customer Jones has never made a late payment on his BofA credit card, but he has used over 50% of his available credit limits on other credit cards. So BofA increases his rate from 3% to 24% because BofA doesn’t like the fact that he is using so much credit..
  2. Customer Bilbo is having trouble paying his credit card payment because his business has slowed down. So he calls Capital One to see what can be done. Capital One reviews his credit and notices that he was late on some other accounts, so they increase his rate from 6% to 30%. So Customer Bilbo says, so if I can barely pay the 6% how can I pay the 30%?? Capital Ones tells him that he better try harder.

Maybe you have witnessed this yourself. I think this is crazy. Fortunately the Bush administration has pressed the Fed Chairman to tighten this up. The Federal Reserve Board Chairman Ben Bernanke has proposed new regulations for the credit-card industry that “are intended to establish a new baseline for fairness in how credit-card plans operate.” The new regs will limit the arbitrary increase in interest rates and other games that the credit card/banking industry has been playing lately.

The solution to refinance and consolidate the debts into your mortgage, is still an option to consider, at least with a fixed rate mortgage you don’t have to worry about arbitrary interest rate increases. If you want me to run the numbers to see if it makes sense, call or email me.

If you have any questions regarding purchasing, refinancing or investing in Real Estate just give me a call or send me an email. I look forward to offering you candid advice with facts and figures, to help you feel confident when you make your Real Estate Finance related decisions.

Any questions just call or email me.

 

 

 

January 08 Market Update
Posted in Mortgage News January 29th, 2008 by Rand Miller

I hope your 2008 is doing well for you. Remember it will be, what you make of it.  

Quote: “Resolved, to live with all my might, while I do live.” Jonathan Edward’s 1703-1758

 

Fed lowers the Fed Funds Rate by .75% This is very goodLook at this 3yr comparison chart, comparing 30yr to Fed Funds Rate. Keep in mind, mortgage rates aren’t tied to the Fed Funds rate, they are affected by the 10yr T-Bond. As you can see, from mid 2006 to mid 2007 there was a span where mortgage rates dipped but the Fed Funds Rate remained flat. The purpose of the drop in the Fed Rate is to stimulate the economy. To try to get money flowing from banks to consumers and back out to the market. So if you haven’t went out on a spending spree, you aren’t doing what your are suppose to. The problem is most people are trying to be cautious now, most have heard the woes of overspending. So, in my opinion, play it safe, be frugal this year. .Be frugal with your spending, avoid buying frivolous items, and also frugal on your fixed expenses, ie: your mortgage. With rates as low as they are, I hope you call me to analyze your mortgage, to see if a refinance can save you some money. We don’t have these windows of opportunity very often. In fact look at the chart, in 2005 we had a window of opportunity, and look how fast and and high rates rose. Even in the spring of 2007 look at the spike in rates [per the chart]. Saving money on your mortgage is the biggest way to save money. I look forward to your call or email.The Transfer of Power - Remember in 1992, after the real estate market dropped, that was another time such as this time. Where massive amounts of real estate were bought up by new real estate investors. We are in a similar time. Good deals, great rates. Don’t miss the boat. If you want to purchase investment property, call me, I may be able to find you a good deal, as I have access to foreclosure lists, and I can certainly provide you with a nice low fixed rate. Fixed rates are perfect for investment properties whether for commercial or residential. Having a fixed expense is good, knowing that rents can increase, that just puts more money in your pocket in the future, provided you have a fixed rate. Having an adjustable rate on an investment property is a fast way to to go upside down regarding expense to income. I look forward to helping you enter this exciting market as a Real Estate Investor.

HARD MONEY LOAN: These loans are great for if you have bad credit. Because with a regular refi, the lender normally will require that all derog credit is paid from the loan proceeds. So if you have $20,000 in collections, there isn’t a way to get the creditor to discount the balance payoff if they know the funds are coming from a refinance, because they know they have leverage and will refuse to discount, forcing you to pay full payoff price. Whereas with a hard money loan, the debts many times don’t have to be paid at close, thus allowing you the flexibility to have CreditCleaners.net negotiate your debts after your loan has funded. An example of a hard money loan payment for a $50,000 loan is $500. That doesn’t look that bad, because $50,000 in high interest credit card payments would total about $1,000 to $1,200. If you need money to pay off bad credit, call us, our hard money loans are pretty good.

REHAB - PURCHASE A FIXER: We still have investor rehab loans, for fixing and flipping. So if you want to make money in Rehabs, call us for the financing. We look forward to helping you in this exciting market.

FIRST TIME HOME BUYER: We still have 100% financing programs, with less than perfect credit and low down payment programs stated income buyers. There are some really good deals on homes right now, with very affordable prices. 

INVESTMENT IN MORTGAGES: Also if you have small chunks of money laying around in low interest accounts I arrange private investor mortgages which allow the investor a 10-12% return on his/her money. Sometimes our borrowers have good credit but just don’t fit within normal underwriting guidelines. So I match up an investor with $30,000 to 100,000 to fund the loan. The investor receives a monthly payment from the borrower of 10-12% and the borrower is happy to have the use of the money to solve whatever problems. As long as there is a good 30-50% equity,  the investor is pretty safe. if you have questions, call or email me. I can explain the details. Investors are provided full disclosure of investment risk and opportunities.

Need help with…Credit Problems?

If you have late payments, paid or unpaid collections, charge-offs, bankruptcy or repossession, you may need the help of a good credit-cleaning program. Try http://www.creditcleaners.net/ this service can clean or correct credit problems, remove lates and raise FICO scores. It can even fix problems caused by a Bankruptcy. Call me for details.

If you have any questions regarding purchasing, refinancing or investing in Real Estate just give me a call or send me an email. I look forward to offering you candid advice with facts and figures, to help you feel confident when you make your Real Estate Finance related decisions.

 

 

 

Hello world!
Posted in Uncategorized November 30th, 1999 by Rand Miller

Welcome to aLoanNow.com. This is a place where we can save past eNewsLetters and thoughts and little bits of important info to share with others or just to remember. Thanks for stopping by.