The Fed Lowering rates and Your Mortgage Rate

It's today that everyone in the mortgage and financial advising world are on the edge of their seats to see what the Federal Reserve decides on the recent rate adjustment. Some think .25% and others hope .5%. Just about any veteran Loan Consultant such as myself can expect clients and prospects to start asking the question, "will I get a better rate now that the Fed lowered the rate...". The answer to that is, "not congruent to the amount that prime changes necessarily, but over a couple days, it seems that the stimulus in the market that will reside from such a move will cause a "bettering" in the 30 year mortgage rate in the short term."

If you have been waiting for a good turn in the market for rates before you start your home search, now is the time. Rates really settled to a lowest rate seen in a couple years in recent weeks, and then started upward again this week and last. My guess is that in the next couple weeks or months, rates will hold, then settle a little before they make an upward swing again. If you want to catch this window of time for best rate options, go to this link and start a Market Watch so you can start actively seeking a home.

Best of luck in your Home Search
Brad Lynch
LivingInPlano.com
LivingInIrving.com
Frisco Plano Irving Home Loans

The Future of loans: Banker VS. Broker

Nobody is real sure about the future of mortgage lending. It really seems like the real-estate market and lending world has plowed forward like a steam engine w/ placebo for energy. The positive thinking and perception of the public towards our industry has powered our economy as a whole, seemingly. I'm not an economist, but I am a mortgage consultant making that statement. The atmosphere that is created through the aforementioned style or reason for growth is not one that in the end I think people will be happy of. The atmosphere is more like a school of sharks in a feeding frenzy rather than a bow fisherman who targets only trophy fish. Quantity VS. Quality or better stated, Wholesale/Broker VS. Banker.

The broker or wholesaler is all about numbers and quantity. As I have worked the majority of my career as a broker and the last year as a banker, the one difference that I notice above all is, ATMOSPHERE. Account reps for wholesale banks, investors, and lenders use phrases like "can you sell this...", or "when you are selling this to your client...". That disgusts me! In my position, "selling" can ruin the financial stability of a whole family and take decades to overcome. The thing is, that phrase is being taught and trickled down from the heads of those companies and if it didn't get "numbers" in the door, they wouldn't do it. So, there are stinking Loan Officer's out there "selling" loans that aren't in the best interest of the clients. Heck, once that loan is closed, then funded, and then sold to the servicing lender (usually bank), they can move on to the next VICTIM. The loan is no longer their liability.

When you are a banker, you have more responsibility and a little "skin in the game". It creates pride among the employees and the "atmosphere" breeds success in targeting clients' best interest. Now, you aren't trying to get loans to people that shouldn't qualify and don't deserve them...if they foreclose, it can hurt the future of your company/bank. Bankers care more about their clients, and the establishments are full of consultants and not pressure slick salesman. Our/banker's head people are interested first in profitable loans that don't foreclose, not number of closed loans.

Articles everyday are passed on from experts in the field that tell us that the broker world is seeing it's last days. If that isn't the case, we'll soon see a huge change in the way brokers/wholesalers are held accountable for their actions. They are at the heart of this lending industry downfall. They are the ones that are putting the pressure on the appraisers to squeeze every dollar out of the value of homes to roll in closing cost. They are the ones that are pressuring underwriters to accept over inflated appraises so they can get their commission. They are the entities that offer the interest only coupled with 100% financing for super low credit borrowers. When 3 wholesale subprime companies offer 100% financing at 580 and a bank has two choices: 1. Don't offer it and lose a lot of acknowledgement as Loan Officers begin to go elsewhere for ALL of their loans and for sure where they can "get tough loans closed". 2. Reduce their minimum guidelines in hopes that they will not see too much collateral damage and outlast the lesser sized wholesalers. As a broker, I didn't use Bank of America much because many borrowers were hard to get approved there, and when they did get approved, the underwriters were too picky. Well in the end, look who comes out on top.

It is important that I mention, not ALL brokers are pressure slick salesman, but the atmosphere the broker works in definitely inhibits lesser integral lending. I'm anxious to see what the mortgage world will see.

Dallas and Fort Worth Projected Real-estate Economy

We all wonder if it is myth or fact when our economic guru's report about their calculated estimates of our big expectations for the real-estate and economic future in Dallas and Fort-Worth. Senior Writer for CNN Paul Kaihla's recent article is I'm sure a breath of fresh air for many readers as it was for me. The report mentions a growth in the median sale price of homes from 2008 to 2009 of 6.4%. That is refreshing at a glance. An example for that might be that a $150k home might appreciate by $9,500 in that amount of time. Unfortunately, IT'S just an average. Some areas like the Highland Park, University Park, (Park Cities) will have huge appreciation along with other highly demanded areas, and then many other neighborhoods won't see much of anything. Most of us don't live in those highly demanded home markets...that makes that breath of fresh air a little less fresh, right?
More in the same report says that Dallas is doubling the national rate at adding jobs, and adding them in the well paying fields. That may have a positive effect on Dallas that research can't foresee...HUH?
Lets conclude by comparing our city to the rest of the nation in this huge real-estate "swing". The people of Dallas never observed the huge real-estate "bubble" that grew exponentially yearly and sometimes monthly like some markets saw. What goes up must come down...those "bubbles" have popped or are in the middle of the burst today. We can just be thankful that our Dallas Metroplex stayed on the conservative end during the real-estate "bubble blowing" days, and in the end we can respectfully expect to not see major collateral damage in the slowing home market.
God Bless,
Brad Lynch