The Phoenix Real Estate Guy » Mortgage / Finance

Mortgage Tech Summit Comes to Scottsdale Feb 9 & 10!

Jay Thompson — Mon, 06 Feb 2012 19:21:30 +0000

If you are in the mortgage business and near Scottsdale, AZ then you should already be registered and have this on your calendar.

Why?

Because where else are you going to get two days jam-packed with info to help your business?

If you are a real estate agent or broker, you should strongly consider attending the Mortgage Tech Summit.

Why?

Because as a real estate agent, it is crucial for you to understand how those crazy mortgage people do business. After all, like them or not, mortgage people are fundamental to getting your real estate transactions closed.

Besides, just take a look at the schedule. Much of the discussions happening could be easily used in the real estate sales business with some very minor tweaking. Seeing how other groups of businesses — not just those in real estate sales — go about marketing, using their database, and applying tools to prospecting can be a valuable learning experience.

The “MTS” starts Thursday. Be there…

What: Mortgage Tech Summit
When: February 9 and 10, 2012
Where: Arizona School of Real Estate & Business. 7142 E. 1st Street, Scottsdale, AZ 85251.

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Historical Mortgage Rate Chart: 30 Year Fixed Interest Loan

Jay Thompson — Tue, 20 Dec 2011 01:50:30 +0000

For whatever reason, people always seem to find these mortgage rate trend charts fascinating.

Here is the historical mortgage rate trend chart for 30 year fixed loans from April 1971 through November 2011.

Data is supplied by FreddieMac. Excel wizardry by yours truly. You are welcome to use this chart, all I ask is that you keep the credit box on the chart and link back here.

When I first published charts like this back in 2006, people left comments saying there was NO WAY the interest rates would stay where they were.

And they were right. Rates have dropped a full point since then. Though really they were wrong, because everyone expected them to rise, not continue to fall. Some even prognosticated that there was “impending doom” for mortgage rates.

Moral of that story?

No one can predict mortgage rates with any real accuracy.

One thing is evident though. Right now mortgage rates are at all-time lows (or at least at their lowest since 1971, I can’t find any earlier data). November 2011 marked the first time 30 year rates dipped below 4% (to 3.99%. Hey, it’s under 4%…). And Bloomberg reported a few days ago that rates were at 3.94 percent.

Will they drop lower? Maybe, maybe not. But let’s face it, at 4% they can’t really go much lower. Or so one would think.

Will they rise? Maybe, maybe not. Sooner or later, sure they’ll rise. When and to what extent? Your guess is as good as mine.

Should you refinance? Depends on many factors. Contact your mortgage loan officer.

I’ll attempt to update historical mortgage rate trend charts for other mortgage products (15 year fixed, 1 and 5 year Adjustable Rate Mortgages) over the next couple of weeks. Attempt mind you, no promises!

Until then, enjoy this chart, and be thankful you didn’t get a mortgage in October 1981, when rates peaked at 18.45%…

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Help for Underwater Homeowners in Arizona. New HARP / Making Home Affordable Rules

Jay Thompson — Wed, 26 Oct 2011 00:11:19 +0000

HARP – the Home Affordable Refinance Program - is undergoing some much needed revisions to its eligibility criteria. Previously the program allowed some homeowners to refinance their existing mortgages up to 125% of the home’s value.

For example, let’s say you owe $200,000 on your mortgage. Due to the dramatic drop in home values across the Valley (generally), your home is now worth $140,000 (sadly, this is not unreasonable within the Phoenix market). Under the old HARP guidelines, the most you could refinance for would have been 125% of that $140K home value — that would be $175,000 (140K * 1.25 = 175K).

But you owe $200K, so a refi for $175K does you absolutely no good.

Enter the new guidelines. The 125% loan-to-value (LTV) limit has been lifted. Gone. Over. There is no LTV restriction under the new HARP guidelines.

This bodes well for Arizona homeowners.

I am not a lender. I’m a real estate broker.

I can answer some questions on the new HARP / Making Home Affordable program, but the person you really need to be talking to is a lender / loan officer.

Dan Green, a noted and highly regarded loan officer, has written the definitive article on the new HARP / Making Home Affordable eligibility requirements. Read that post. It is written in simple to understand terms, not the seemingly foreign language many lenders and real estate people toss about. It’s important to understand the program, and Dan explains it very well.

Keep in mind, not everyone will be eligible for a HARP refinance. But under the new guidelines, many more just may be able to refi that seriously underwater home…

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Underwater on your mortgage in Phoenix? You need legal advice, not Realtor advice.

Jay Thompson — Thu, 04 Aug 2011 20:37:46 +0000

Owe more on your Phoenix home that it is worth? Welcome to the Underwater Club. It’s not a pleasant club to belong to, despite its massive size.

If you bought a home, or refinanced an existing home, anytime circa 2005 and beyond you are quite likely a member of the Underwater Club. And you’ve got to be wondering what your options are. Foreclosure, short sale, loan modification, trustee sale, default, walking away, deed in lieu, foreclosure abatement – all are big buzz words of late.

And they are complicated buzz words, fraught with legal, tax and credit implications.

I can’t tell you how many people that are underwater on their mortgage (or mortgages) have asked us questions like, “What should we do?”, “Should we stop making our mortgage payments?”, “Can the lender or IRS come after us if we short sell, or default, or mail in the keys?”

You don’t have to look far on the internet to see that Arizona is an “anti-deficiency state” – ie: lenders can’t come after you for the balance of your mortgage.

Not so fast folks. Yes, there is some anti-deficiency protection in Arizona. Keyword some. There is NOT blanket anti-deficiency protection for all types of mortgages, or homes, or actions you may take surrounding your underwater status. Every situation is different.

BE VERY CAREFUL. Do the wrong thing, or do the right thing the wrong way and you may find a process server knocking on your door.

If you talk to a real estate agent and they tell you things like, “Don’t worry, you are protected” or “Arizona is an anti-deficiency state” or “you need to stop making your mortgage payments” you need to run, not walk, away.

Real estate agents are neither licensed nor trained to make such bold sweeping statements.

You need legal advice

I can not stress this enough. YOU NEED LEGAL ADVICE and with very rare exceptions, real estate agents aren’t trained or licensed to give legal advice.

Enter Kevin Hardin with Thomson Law’s Mortgage Mediation Group. Kevin is a Specialized Mortgage Paralegal and Director of the Mortgage Mediation Group at Thomson Law, PLC.

Kevin is wicked smart. He’s done time (so to speak) in the mortgage industry and is a Certified Mortgage Banker, a Certified Mortgage Consultant, and a Certified Mortgage Planning Specialist. All that in addition to being a JD candidate at Concord University School of Law.

Kevin knows his stuff. Top to bottom, inside and out.

He’s also a heck of a good guy and can cook up some amazing bar-b-que (he has a smoker as big as a SUV).

I can attest from personal experience that a consultation with Kevin is well worth the $150 consultation fee. Honestly, he could charge ten times that and it would still be the best money an underwater home owner in Phoenix could spend.

If you are underwater on your Phoenix area home and need to discuss your options, Kevin Hardin is your man.

Here is Kevin’s contact info:

Kevin W. Hardin, CMB, CMC, CMPS
Thomson Law, PLC
Counselors At Law

2701 E. Camelback Rd, Suite 150
Phoenix, AZ 85016

602-774-3757

www.MortgageMediationGroup.com
@HardinKevinW
On Facebook

Full Disclosure: I receive absolutely zero compensation in any form what-so-ever from Kevin Hardin or Thomson Law for writing this article, if you consult with Kevin, or secure any service Thomson Law offers. Kevin didn’t even ask me to write this. Yes, Kevin is a friend, but I have consulted personally with Kevin on my mortgage situation and fully endorse his expertise in the mortgage arena. My only “compensation” for writing this is in knowing I am passing on a valuable resource for the underwater Phoenix homeowner.

Updated 8/6/2011: A couple of attorney’s, one former and one currently practicing, have correctly pointed out that a paralegal cannot provide ‘legal advice”. Using those words was bad writing on my part. Kevin Hardin is imminently qualified to discuss mortgage and financial issues. He can not, and does not, provide legal advice. I liken talking to paralegals to seeing a Nurse Practitioner, a Physicians Assistant, or a Chiropractor. They aren’t MD’s, but they are trained professionals that can discuss and treat you. Rest assured that if you need an attorney, Kevin can and will direct you to one.

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

What is Buy and Bail, and should I do it?

Jay Thompson — Mon, 04 Jul 2011 21:19:33 +0000

First up, the standard disclaimer: I am in no way, shape or form an attorney or tax professional. And you should seek the advice of both if you are even remotely considering buying and bailing.

“Buy and Bail” is the term commonly used when one purchases as new home and then “bails” on their existing home.

Let’s say you, unfortunately, bought your home at the peak of the Phoenix real estate market. You paid $300,000 for your lovely abode. Now you consult your trusty real estate professional about selling your home and find out that you will be lucky to get $180K for it.

“What are my options?” you ask your Realtor.

“Well, you could try a short sale (getting your lender to accept less than what is owed). Or you could bring a sack of bills totaling $120,000 to the closing table to make up the difference. You could also walk away and let the lender foreclose.”

“But I can afford my house, I just don’t want to make payments on a home worth barely half of what I paid for it. So a short sale isn’t really an option. And I don’t happen to have one hundred and twenty thousand dollars stuffed in a mattress, or in the bank for that matter. And if I walk away or short sale, I won’t be able to buy another home for several years!”

All true.

“Hey! I can qualify for a mortgage on a new home while I keep my current home. What’s stopping me from buying a new house and then just foreclosing on the old one?”

That would be Buy and Bail, Jump and Dump, Switch and Ditch.

What might be stopping you from buying and bailing is that many consider it mortgage fraud. If you lie on a mortgage application – ie: claiming you are going to rent out your existing home when you know full well you are not – then you are quite likely committing mortgage fraud.

Which, according to the FBI, is punishable by up to 30 years in federal prison, or a $1,000,000 fine. Or both.

I don’t know about you, but I have zero desire to spend the next 30 years in the federal pokey, and/or writing million dollar checks.

“But Jay, I know people that have done this, and nothing has happened to them!”

Yet…

I don’t know O.J. Simpson, but I’m pretty sure he got away with murder. That doesn’t make murder acceptable, nor does it mean you would get away with it.

If you are pondering a Buy and Bail, the only advice I can offer is this: Seek legal counsel. In addition to legal implications, there are also potential tax implications, so you should talk to a tax professional as well. Do you want the FBI and the IRS crawling all over you?

For additional information, here is a great article on Buy and Bail from a California attorney’s perspective.

Photo Credit: petercastleton on Flickr. CC Licensed.

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Historical Mortgage Rate Trend Charts: Updated through May 2011

Jay Thompson — Thu, 02 Jun 2011 20:20:16 +0000

People seem fascinated by mortgage rate trend charts. In a geeky sort of way, they are interesting to examine. We’ve published these charts in 2006 and 2008, and they still get visited every day. Yes, I am now hanging my head in shame for not updating them in almost three years.

As you’ll see below, mortgage rates continue to hover at or near historical lows.

Anyone is welcome to use these charts, all I ask is you keep the information box that is on the chart intact and link back to this post if you use them on a web page.

Enjoy!

This chart shows the monthly average interest rate for 30 year fixed rate mortgage loans from April 1971 through May 2011:

This chart shows the monthly average interest rate for 15 year fixed rate mortgage loans from September 1991 through May 2011:

This chart shows the monthly average interest rate for 5 year Adjustable Rate Mortgage loans from January 2005 through May 2011:

This chart shows the monthly average interest rate for 1 Adjustable Rate Mortgage loans from January 1984 through May 2011:

All data was supplied by Freddie Mac’s Primary Mortgage Market Survey Archives and is believed to be accurate but is not guaranteed.

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Boo hoo for the CEO of J.P. Morgan Chase. $52M per day profit isn’t enough.

Jay Thompson — Sat, 15 Jan 2011 01:55:00 +0000

J.P. Morgan Chase & Co reported quarterly results today.

Their profit is up 47%.

How many dollars is that?

$4,800,000,000

That’s 4.8 billion dollars. Billion with a B. Profit. In 91 days.

I’ll do the math for you.

J.P. Morgan Chase made $52,747,252 *in profit* EVERY SINGLE DAY during the 4th quarter of 2010. That includes the days they were closed for business.

Fifty two million dollars a day profit. Ponder that.

These earnings were reported on MarketWatch at 12:29pm EST today. Five hours and seven minutes later, MarketWatch ran another article, Foreclosure process a ‘mess,” J.P. Morgan CEO says.

In that article it is reported that on a call with analysts, J.P. Morgan Chase & Co, Chief Executive Officer Jamie Dimon said the foreclosure situation, “is a big mess, it has cost us a lot of money.”

Well boo freaking hoo. Cry me a river pal. Your company made FIFTY TWO MILLION DOLLARS A DAY; it’s pretty hard to feel bad for you.

I’d love for Mr. Dimon to list a Chase short sale and have to deal with his own loss mitigation department. If he’s whining about spending money when he’s earning almost $5 billion a quarter then I suspect he’d put a bullet in his head after a 5 minute discussion with a Chase loss mitigation officer. Assuming of course he could get the guy to even answer the phone.

Here’s an idea for you Mr. Jamie Dimon – spend some of that billions in profit and fix your lousy short sale process. Hire some staff, preferably ones with at least a modicum of intelligence. Help us actually CLOSE some short sales and you won’t have so many foreclosures to cry about.

Remember that $1,200 extra you wanted from our client in order to approve their short sale? They couldn’t pay that so you wound up foreclosing on them. That $1,200 amounted to 0.002% of your profit for ONE DAY.

Of course you don’t remember, because you don’t give a crap.

I’m sorry your bank only made $52,746,052 in profit that day.

Moron.

UPDATE: In an odd twist of timing, two other Thompson’s Realty agents also penned posts today about banks. Great reads here: Heather Barr writes, Not paying your mortgage? Don’t worry, banks making money off you anyhow, and Elizabeth Newlin writes, Getting Inside the Head of The Bank.

UPDATE#2 (Jan 17): Chase was profiled on the Today show this morning for overcharging military families and wrongly foreclosing on some of them. Nice of them to pry loose $2M to reimburse the overcharges, but what about the 14 families they wrongly kicked to the street?

Visit msnbc.com for breaking news, world news, and news about the economy

Hat tip to Shar Rundio for the earnings and Dru Bloomfield for the Today show clip.

Photo Credit: epicharmus on Flickr. CC Licensed.

What is a Short Sale?

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Dear U.S. Bank: Thanks for the valuable lesson in how NOT to be of service

Jay Thompson — Mon, 27 Dec 2010 21:48:32 +0000

Banks. The mere mention of the word is enough to make people shake their heads in dismay, and raise their blood pressure past unhealthy levels.

We are currently in the midst of a transaction going south as a direct result of U.S. Bank’s ineptitude.

Yes, lenders can be a pain in the posterior to work with. Unfortunately, working with them is a given in the vast majority of real estate transactions.

If it was just one thing gone wrong, I could deal with it. But it’s the near constant display of cluelessness that mystifies me.

Well that and the lying.

I don’t tolerate being lied to. It feels like there are people within the hallowed halls of U.S. Bank’s mortgage department that subscribe to the “tell them whatever it takes to get them off the phone, even if it is pure unadulterated bullshit” theory of customer service.

Lie #1

On Monday, December 20 at roughly 2:00pm the loan officer, we’ll just call him “Richard” said that docs were drawn and on the way to title. Closing as per the contract on the 22nd seemed like a no-brainer.

The next day, the doc’s still weren’t at title. Of course “Richard” didn’t answer the phone or respond to emails. Finally around 4:00 he stated the doc’s were still at underwriting…

“But you said they were drawn and would be delivered Monday afternoon.”

“Yeah, that’s what ‘they’ told me.”

Whatever.

Lie #2

Getting frustrated with Richard’s complete lack of follow-up, and his habit of replying to voice mail and email 30 hours later, we tried talking to Richard’s manager. We’ll just call him “John Boy”.

“John Boy”, despite being a manager, claimed to have no access to Richard’s file. So he was really of no help.

A couple of days later (we’re now two days past the scheduled close of escrow), John Boy finally tells us that ‘they’ had goofed up a previous FHA case number and were getting it addressed. He had no idea when the problem would be resolved. But on Friday the 24th, John Boy was gracious enough to say, “I will personally contact the seller on Monday and explain the situation to him. We’ll get it fixed.”

OKfine. Monday rolls around.

Richard is now throwing everyone under the bus, and claiming it’s all in the hands of “management”. There is nothing he can do.

So we email John Boy, asking him to please contact the seller as he promised he would on Friday.

Within seconds we get an email back from John Boy.

An Out of the Office auto-response.

Seems John Boy is out all this week on vacation.

Maybe John Boy didn’t lie. Maybe on Friday afternoon at 3:00pm when he said he’d make a call on Monday he just forgot that he had a week of vacation coming up. I mean that’s an easy thing to forget, right? After all, who is really thinking about their upcoming week off on a Friday afternoon?

Lessons learned from U.S. Bank’s ineptitude

While it seems stunningly obvious, apparently it has to be said – don’t lie. If you don’t know the answer just say so. And follow up when you find said answer.
Don’t take 30+ hours to respond to email and voice mail. Particularly with a contractual deadline looming.
Saying, “I was in a meeting” is a poor excuse for failing to respond. Especially when you use that same excuse day after day after day –and even multiple times in one day. You’re a lender, not a Chief Executive Officer. You can’t possibly have that many meetings.
Blaming everyone but yourself is annoying.
Throwing your boss under the bus, when you’ve been told he will be contacted, is annoying. And not very bright.

This isn’t our first poor experience with the mortgage division of U.S. Bank. Hopefully it is our last. When we entered into this client relationship, we warned the client our past experience with this lender. That warning will be even stronger the next time – and backed up with documentation.

If you are looking for a great mortgage lender, contact us and we’ll be happy to send you a list of several. Not all lenders are clueless. Your lender plays a critical role in getting your real estate transaction closed. Avoid the clueless, use a good lender – there are some out there.

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

New Features on Phoenix Real Estate Guy

Jay Thompson — Tue, 21 Dec 2010 03:12:08 +0000

OK, so “new” should be in quotes in the title…

Fact is, putting real estate market statistics and mortgage / financial calculators on your real estate blog is hardly innovative, mind-bending stuff. But add them we did…

Market Statistics

There are countless articles here on Phoenix real estate market stats. LOTS of people want to see real estate market statistics. Understandable. Stats on things like price trends, listing inventory, sales, etc is a good way to get an understanding of what is happening in the market.

Problem is I find it horrifically boring to write about market statistics. And let’s face it, what I write today will be out of date and useless in a few days/weeks/months. Such is the nature of the beast – the real estate market is ever changing.

So what people really need is real time market statistics. Or at least as close to real time as we can get.

Enter The Cromford Report. Mike Orr is a freaking genius, and has put together a real estate statistics package for the Phoenix market that is second to none. I can assure you that agents across the country would love to have something like Orr’s reports available to them. I am way late to the party in finding out Cromford / MLS feature, but I’m now able to incorporate directly into the blog Cromford charts – with user selectable choices in city and/or zip code – that automatically update and stay current. (Hat tip to Phil Sexton and Dru Bloomfield for brining me up to speed).

Just hover over the “Market Statistics” tab in the navigation bar under the header and select market stats by city or zip code.

Mortgage / Finance Calculators

I’ve looked at roughly half a jillion mortgage and finance type of calculators for web sites and never found any I was particularly enamored with. Freddie Mac makes some great ones – they allow input of many variables, and nicely chart and tabulate the results. Problem is, up until a few days ago the Freddie calculators provided no way to enter in a negative number for changes in home value. Yes, shock of all shock, home values do not always go up. Freddie realized the glaring error of their ways and just fixed their calculators. So now we’ve included them here on TPREG. Hover over “calculator” in the aforementioned nav bar and you’ll see calculator options for:

Renting vs. Buying
Tax Savings
How much can you borrow
15 vs. 30 year mortgages
Fixed vs. adjustable rate mortgages

As with any financial calculator, these tools provide estimates. Please don’t go basing life-altering financial decisions on a calculator you find here, or any other web site.

Give them a whirl, let me know what you think…

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.

Are Stated Income Loans Coming Back?

Justin McHood — Tue, 06 Jul 2010 14:21:14 +0000

If you are a successful small business entrepreneur in America, I can generally group you into one of two groups:

You run a great business and are shrewd with your accounting…

You can qualify for a mortgage.

You mean that you can’t be a shrewd small business person and qualify for a mortgage?

Generally speaking… that is exactly what I mean.

During the big real estate and mortgage boom of the early part of the decade many lenders were offering Stated Income Loans which would come in various forms with wild acronyms: NINA, No Doc, Low Doc, etc — But in the last few years, pretty much every loan program at every lender has required that income be documented and verified which eliminated stated income loans.

Until now.

I have seen my first ad from a wholesale lender who is starting to offer stated income loans and I suspect that now one is offering stated income loans, other lenders will follow.

Are stated income loans bad?

I don’t think any particular kind of loan is bad per se — but if a loan program is abused, that is when there are problems. But if you own a small business and happen to be shrewd with your accounting, the good news is that stated income loans may be making a comeback — which means you might actually be able to qualify for a mortgage in the near future.

Oh, and I hope someone figures out how to not let the waitress who makes $2.13 an hour qualify for a $500,000 house because she stated that she made enough to make the payments.

About the Author:Justin McHood calls himself a “Mortgage Commentator” and works for Academy Mortgage Corporation. You can find his loan officers at Ten Day Close and read more of his thoughts on the mortgage business on Zillow’s Mortgages Unzipped Blog. You can also find him at most East Valley Friday Nights gatherings. He’s the one in the blue shirt.

Originally posted on Phoenix Real Estate Guy. If you are reading this anywhere but inside your RSS feed reader, the site you are on is guilty of stealing content.