HARP 2.0 and builders flourish in Southern Nevada

HARP 2.0 Update:

First Cal is proud to announce the release of the most aggressive HARP refinance program available amongst any retail mortgage companies.  We will now approve any LTV, for any occupancy, regardless of expanded level approval types.  (Many lenders won’t lend if the loan to value is too high, if it’s not owner-occupied or if the loan receives and Expanded Level 1, 2 or 3 approval).  We will also provide financing if the loan is owned by Freddie Mac at an unlimited Loan to Value.  If a client has been turned down for a refinance recently, please have them contact me or visit my website.    

Financial Markets

The Dow Jones, and all 3 stock indices for that matter, ended the week up considerably, the Dow landing at 13,306.  Here’s a twist for you (I know, super exciting stuff)…It was a disappointing jobs report that stocks rallied around today.  A weak jobs report does two things: 1) Increases the chances that the Fed will be pressured into yet another round of stimulus or quantitative easing and 2) increases chances that we could see a change in leadership in Washington come November.  Mortgage bonds traded in the opposite direction as a result mortgage rates are up for the week by .125%.    

Southern Nevada Real Estate Related Data

No surprise home builders continue to reap the benefits of the lean and picked over supply in housing.  New home closings were up 49% in the month of July, with home builders selling 468 homes.  Prices also drifted upward, up 1.6% from July 2011.

http://www.lvrj.com/business/local-new-home-sales-gain-in-july-168737056.html

Have a great week!  For more real estate financing information, please visit my website: http://www.matthewtmaltese.com/home.html

Unemployment rate/ Zillow study shows Las Vegas a smart buy

How are we closing purchase transactions in 15 days (Quadruple asterisk next to this one!)

Diamond Lane: When we submit a purchase file with all of the key ingredients for First Cal's underwriting department, the loan is appropriately coded, Diamond Lane.  This means that the turn time in Underwriting, Final Underwriting and Closing Department is not to exceed 24 hours under any circumstances. 

All of your clients should use Diamond Lane.  It takes some coordination and working together on everyone’s part upfront, but makes the transaction so much smoother. 

Financial Markets

The Dow Jones rallied nearly 220 points on Friday, the rally stemming from the jobs report that was released and the numbers were better than analysts forecasted.  163,000 non-farm payroll jobs were created for the month of July.  Unemployment rate actually inched up to 8.3% (up from 8.2%).  Economists predicted job growth of about 100,000 so even though UU Rate went up the report was enough to trigger a rally in stocks and a sell off in bonds, which drove mortgage rates up a tick. 

Southern Nevada Real Estate Related Data

A study from Zillow supports purchasing a home in Nevada vs. renting provided the home owner intends to stay in it or hold it for 20 months or more.  Las Vegas “break-even horizon” for rent vs. own exceeds all but 3 of the 200 metros in the study. 

http://www.lvrj.com/business/buying-vs-renting-pays-off-in-shorter-time-in-las-vegas-than-national-average-164858036.html

Have a great week!

Home values rise for 5th consecutive month!

June is in the books, and as stated in my previous weekly email, I am a “proof is in the pudding” kind of a guy.  My team and I closed 13 transactions this month.   The average time from application to docs out was 24.1 days.  8 had docs out in less than 22 days, 4 had docs out less than 15 days!  Of note, 2 VA loans had docs out in 14 and 21 days respectively.  I am happy to tell you, it’s not just speed we provide.  I was able to provide more aggressive financing packages than USAA (on 2 VA loans), Bank of America and I Mortgage for my clients.

Also, I am now a member of Rate Plug, a free service offered in the MLS.  If you are not linked up with a lender, please call or email me and would be happy to partner up with you so you can offer your MLS listings to your clients with important financing data. 

Financial Markets

The Dow Jones rallied nearly 280 points on Friday amid news…come on guys….you gotta know this by now……that’s right, Europe’s tentative solution to its debt crisis…I am sure this will be the last we have heard of market volatility and its relation to Europe’s credit concerns…(insert sarcastic smirk here).  Also making headlines are national increases in home prices and an uptick in new home sales and permits being pulled. 

Southern Nevada Real Estate Related Data

A 5^th straight month of rising median home prices caps off an encouraging May in home sales for Southern Nevada.  The median priced home reached $118,000, up 2.5% from last month and up 6% from May 2011.  The report states only 2,533 listings not in “contingent” status.  With nearly 5,000 transactions taking place in May, this leaves virtually a 2 week supply of homes on the market.  Builders sold 401 homes in May, and 1,617 year-to-date, up 23 percent from this time last year.  Builders continued its aggressiveness by pulling over 650 permits for the month as well. 

http://www.lvrj.com/business/local-median-home-prices-rise-in-may-160346535.html

Have a great week!

The Day the Supply of Homes Died.....

Two exciting product updates I wanted to make you all aware of:

·         97% conventional loan!  (great for flips or if non-borrowing spouse had recent foreclosure/short sale)

·         HARP 2.0.  Unlimited Loan to Value.  If the loan is owned by Fannie Mae or Freddie Mac, and the loan was taken out prior to May 31^st, 2009, we can refinance with rates in the high 3’s and low 4’s.

Financial Markets

The Dow Jones ended its best week of the year with a 93 pt gain, up over 400 pts for the week ending at 12,460.  Once again Europe’s debt crisis took center stage, the latest (and who really cares, it’s been dragging on for what seems like years) was that Eurozone leaders indicated that there would be a recapitalization of Spain’s banking system.  This came literally 1 day after Fitch downgraded Spain’s banking system 3 levels to “BBB”.  As is typically the case, mortgage rates increased by about 50 bps for the week (about .125%), as investors trade safe haven bond investments for the riches of more aggressive returns in the stock market.   Facebook ended the day at $27 per share.  (It’s IPO opened at $38 per share)

Southern Nevada Real Estate Related Data

Data we all know too well at this point (unless you have been asleep for the past 6 months).  Prices are up for the 4^th consecutive month, and up 1.6% from May 2011.  The number of single family residence sales are also up (3,413 for the month of May) nearly 10% from May 2011!  According to the article below, 17,346 homes for sale in the MLS and only 3,800 are not under contract.  My uncanny math skills tells me that we have roughly 1 month’s supply of homes available….Again, can’t underscore how encouraging it is for home builders.  There is actually a secondary benefit to the local economy, as home builders build more, it creates construction jobs and am sure you can all draw the parallel to how that helps the local economy.  The future relies heavily on how bill 284 will affect banks bringing the backlog of foreclosures to market.  If we have a tsunami of homes hit the market at once, we will most likely see a decline in prices.  If we experience a trickle or even flow, we can expect slow steady appreciation in home values. 

http://www.lvrj.com/business/sharpened-interest-bidding-wars-send-up-las-vegas-home-prices-158053095.html

It’s been quite some time since my last “Week in Review”…As you can see, my team and I transitioned to a new mortgage company.  I am excited to share with you the phenomenal features about the new company, but I am more of a “proof is in the pudding” kind of a guy so in the upcoming weeks I will provide data with average # of days to docs, and unique circumstances that we have successfully secured financing.   Now that the transition is complete and I have my first month with First Cal in the rear view mirror, I am energized to get back to what I enjoy most and do best, helping home owners secure financing.  

Financial Markets

Friday was a dismal day for the stock market as the Dow Jones shed 300 points on a number of economic reports that failed to satisfy investors.  National unemployment inched up from 8% to 8.2%.  Roughly 69,000 jobs were created but the general consensus is that you need roughly 150,000 jobs to be created on a monthly basis to simply keep pace with population growth.  Consumer confidence dipped and of course, the European Union is been unable to right the debt-crisis ship, which compounded investor confidence in stocks.  The silver lining, as many of you know, is very low mortgage rates.  In many instances, 30 yr fixed mortgages are below 4%. 

Southern Nevada Real Estate Related Data

We all know “the sitch” (Jersey Shore reference).  Inventory down…prices up…(so simple a caveman gets it).  So who reaps the benefits of Bill 284?  Home builders for starters…347 new home sales were recorded in April, a 34% improvement from April 2011.  Year to date, new home closings reached 1,220, up 20% Median prices are up 6% from a year ago as well. 

http://www.lvrj.com/business/new-homes-sales-jump-34-5-percent-in-april-153201195.html

Who else benefits from Bill 284?  Sellers engaged in a short sale transaction.  The estimated timeframe for the bank to foreclose on a home owner has now doubled, (and may even triple but still don’t know the full affects of the Bill)  and clearly there is a financial benefit for the bank to agree to a short sale, more so now than ever before.  In April, 30% of the sales consisted of short sales for Southern Nevada. 

http://www.lvrj.com/business/short-sales-of-homes-increasing-across-u-s-156215715.html

First month with FirstCal Mortgage:

In my first month, I closed 10 transactions with the company and I have been over the moon with excitement on the consistency and speed of the fulfillment aspect of the transactions.  On average, it took 21.8 days to get docs out from the time the file was submitted to processing.  With two transactions, we had docs out in 13 days!  The average doesn’t strip out the days missed because the value did not come in and buyer and seller had to renegotiate. 

Inflation and the Tooth Fairy

Financial Markets

Stocks rallied Friday, as the Dow rose 156 points for the day, and ended at 12,862, which is the highest close since 2008.  The catalyst for the surge in stocks was January’s unemployment report.  Nearly a quarter of a million jobs were created in January (243,000 to be more accurate), blowing past estimates of 150,000.  Furthermore, November and December’s jobs reports were revised as 160,000 more jobs were created than initially thought.  The national unemployment rate dropped from 8.5% to 8.3%, in what has to be considered one of the more favorable job reports in several years.  It is a clear signal that the US economy is finally starting to gain momentum.

The bond market, and in particular, mortgage-backed securities are seeing an exodus of investors, as they look to seek juicer returns in stocks.  Mortgage rates have gone up by .25% in the past 10 days. 

Food for thought: My son is about to lose his tooth.  The going rate for an 8yr olds’ tooth appears to be $5.  I remembered growing up the Tooth Fairy slipped me a GW under my pillow ($1 bill) for losing my tooth.  My parents were over for dinner, so I asked them what they cashed in from the Tooth Fairy, answer was “25 cents”.  My grandmother was there as well, her answer….”A nickel”.  The trend…The amount multiplies by 4 to 5 every generation.  This means my grandkids will get $20 to $25 and my great grand kids, 50 years from now, will get $100 when they lose a tooth!  Wonder if I get my kids to reimburse me Tooth Fairy fees if my teeth start falling out when I get old…Who needs social security??      

Southern Nevada Real Estate and Economy

S/P Case-Shiller Home Price Index report was released along with predictions from a data contributor, Fiserv.  Fiserv predicted another double digit decline in home values for Las Vegas, but predicted that home values will have increased a little more than 5.5% from middle of 2011 to 2016. 

http://www.vegasinc.com/news/2012/jan/31/las-vegas-home-prices-sink-1997-level-standard-poo/

Food for thought: My son is about to lose his tooth.  The going rate for an 8yr olds’ tooth appears to be $5.  I remembered growing up the Tooth Fairy slipped me a GW under my pillow ($1 bill) for losing my tooth.  My parents were over for dinner, so I asked them what they cashed in from the Tooth Fairy, answer was “25 cents”.  My grandmother was there as well, her answer….”A nickel”.  The trend…The amount multiplies by 4 to 5 every generation.  This means my grandkids will get $20 to $25 and my great grand kids, 50 years from now, will get $100 when they lose a tooth!  Wonder if I get my kids to reimburse me Tooth Fairy fees if my teeth start falling out when I get old…Who needs social security??      

week in review

Primary Residential Mortgage is in the finishing stages of establishing a correspondent relationship with  PennyMac in hopes to offer financing for condo developments that might not otherwise fit agency guidelines.  We also now allow borrowers with VA loans to refinance without an appraisal if the current loan is serviced by Wells Fargo. 

Financial Markets

The Dow posted another strong week, rising nearly 2.5% and landing at 12,720.  Bank of America’s Q4 earnings surpassed expectations as losses for the banking behemoth were not as bad as forecasters anticipated.  National home sales for the year were tallied and reported at 4.26 million sales for 2011.  Economists agree that a healthy housing market should post roughly 6 million sales.  Approximately 33% of all sales nationwide were distressed sales. 

A tame Consumer Price Index report (0%) helped keep mortgage rates in check.  The Core Consumer Price Index, which excludes energy costs such as volatile oil prices, finished the year at 2.2%, which is within the Fed’s tolerance level.  The reading supports the Fed’s decision to leave rates where they are. 

Last, talks of a widespread principal write down for non-Fannie Mae and Freddie Mac loans might actually become a reality, according to the article below.  There are little details as to who would qualify.  It discusses that the settlement is tied to the “robo-signing scandal” many banks have been accused of participating in and that it would go towards roughly 1 million homeowners.

http://www.cnbc.com/id/46046377

Southern Nevada Real Estate and Economy

Larry Murphy held his crystal ball seminar this past week, and his crystal ball wasn’t as optimistic as in years past. He predicts an additional 10% decline in home values and an additional 100,000 homes to be foreclosed on in the next 4 years.  With that I decided to crunch numbers to see how an increase in rates + a decrease in loan amount would affect monthly payment.  Basically, a 10% decrease in loan amount is equivalent to about ½% increase in interest rate to offset the payment.  Meaning, if the price and thereby the loan amount drops by 10%, but mortgage rates go from say 4% to 4.5%, the monthly payment actually remains the same.

http://www.lvrj.com/business/another-rough-year-forecast-for-las-vegas-housing-137779633.html

week in review

Financial Markets

The Dow Jones had a relatively quiet week and ended up for the week slightly, but the big mover for mortgage interest rates had little to do with the European debt crisis or the beginning of earnings season.  The Guarantee-Fee, (aka the G-Fee) is a new fee that is charged by Fannie Mae and Freddie Mac to mortgage companies, for all conventional loans.  A recent bill passed by congress to extend payroll tax cuts included a provision that allowed the GSE’s (government sponsored entities, Fannie Mae and Freddie Mac) to increase fees in an effort to increase revenue.  This fee goes into effect April 1^st, but loans being locked today are being affected, so you will notice mortgage rates increased by .125% to .25%. 

Southern Nevada Real Estate and Economy

Southern Nevada set the record in home sales for 2011, with 48,186 sales for the year.  38,153 of the sales were single family residences while 10,073 of the sales were townhomes and condos.  Roughly 50% of the sales were sold to cash buyers.  Nearly 50% of the sales were bank-owned properties and another roughly 25% of the sales were short-sales.  2011 was not so kind to builders, as new home sales attributed to just under 4,000 for the year, this down from 39,000 new home sales in 2006. 

The inventory of homes on the MLS is falling and according to the article below, sits under 20,000 homes for sale, with a little over 45% of the homes classified as “contingent”, which is a positive sign for builders and equity sellers.  (Amazing to think that individuals selling a home in which they have equity, have their own category now…”equity sellers”…like unicorns…)

http://www.lvrj.com/business/home-sales-set-record-136998508.html

week in review

HARP 2.0, enabling home owner’s to refinance regardless of loan to value provided the loan is owned by Fannie Mae or Freddie Mac will not roll out now until the end of March.  Both agencies are still in the process of building their automated underwriting systems to support the guideline changes. 

Financial Markets

The Dow ended the week up roughly 150 points, ending at 12,359.  A stronger than expected unemployment report was released Friday, with over 200,000 private sector jobs created in December.  The national unemployment rate dropped to 8.5%, the U-6 report (underemployment, those that gave up looking for a job and part-time workers looking for full time employment) remains high, at 15.2%. 

Mortgage rates, which ordinarily would have risen off the news of a stronger than expected jobs report actually improved slightly Friday, as drama in Europe’s credit scene continued.  The latest, Hungary’s bonds were downgraded to “junk” status. 

Southern Nevada Real Estate and Economy

No articles of interest this week, but did a little research on the local unemployment numbers for the past 20 years.  In January 2008, with the housing market in free-fall, the unemployment rate still remained low, at roughly 5%.  In just 1 year, the unemployment rate sky-rocketed to 9.9%, basically doubling.  In the following 12 months, unemployment continued its unprecedented climb, reaching 14.7% in January 2010.  Unemployment rose 200% in 24 months…In the previous two recessions (1993 and 2000), unemployment recovered to its pre-unemployment rate in about same time it took to reach its peak.  That won’t happen in this recovery, but it is encouraging that a recovery in employment can happen quickly. 

http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&met_y=unemployment_rate&idim=state:ST320000&fdim_y=seasonality:S&dl=en&hl=en&q=nevada+unemployment

week in review

I want to wish you all Happy New Year’s and all the best in 2012!  I want to sincerely thank you for the opportunity to work with you and your clients, and look forward to helping many more of your clients in the years to come. 

The numbers are in and our branch, in its first full year with Primary Residential Mortgage, we finished in the top 10 in units for 2012 out of over 300 branches nationwide!  We are extremely proud of this accomplishment.  On an individual note, I finished the year as the 5^th highest producing loan officer in the company, out of over 1,000 loan officers nationwide. 

I thank you again for your support and will continue to strive to make the home buying process a smooth and pleasant experience!

Financial Markets

The Dow ended the year at 12,217, up roughly 5 ½% for the year, a year in which the market experienced tremendous volatility and uncertainty.  For the quarter, the market was up nearly 12%, marking the highest quarterly gain in the stock market’s history. 

Mortgage rates continue to remain at historically low levels, as the ongoing crisis in Europe directed and continues to direct investors to the safe haven US bonds, despite US debt being downgraded for the first time in our nation’s history.  I suspect that the trend will continue as Europe continues to struggle with solutions to their own debt problems. 

So, my bold and gutsy prediction is that mortgage rates remain low in 2012 but rise by as much as ½ percent towards the latter part of the year.  30 year fixed would still remain below 5% and shouldn’t have a noticeable adverse effect on housing demand.

Southern Nevada Real Estate and Economy

Below is a link to the Las Vegas Sun where 10 economists give their forecasts for the local economy for 2012.  It is undisputed that our housing market can only recover as our local economy recovers, so it is critical to keep a watchful eye on local economic conditions.  The consensus is that the worst is behind us.  With unemployment now down to as low as 12.5%, (Still among the nation’s highest, but better than the 15% reached last year) being among the most critical of economic statistics.  All agree that our economy must diversify, and will be critical to a stabilized economy in the future. 

http://www.lasvegassun.com/news/2012/jan/01/economy-2012-forecast/