Your Mom’s real estate affairs are no joking matter!
Yo Mama is so important…you only want the best people helping her. From doctors to mechanics to financial planners, she deserves the best. That’s why I’m honored to have received many recent referrals to help several client’s moms with one of the most important financial moves of her life.
Asking to help those that mean the most to you is the highest compliment I can receive. I am elated to see this growing referral trend in my practice & I hope you keep my team and me in mind this holiday season if family discussions come up about buying or selling a home in the new year.
“It has been a long time since she’s sold a house so she’s nervous about the process,” Burke told me earlier this year about his mom’s upcoming home sale. “And she’s my mother so I only want the best for her which is why I thought of you.”
This was the beginning of a conversation I had earlier this year with a client. I went on to help Mom sell her home for well more than what she thought possible, which allowed her to best prepare for retirement in the coming years. Just as importantly, I was able to keep the transaction stress-free and simple. After the sale, she said “keeping me informed each step along the way” was what she valued most about my services.
Another family was concerned that Mom’s house was too cluttered & not in good enough condition to sell, but her finances and health prevented any significant repairs to be done. After my initial consult, I advised the family to save their cash and instead move Mom out so I could make due with the home’s current condition. After Mom moved out, we successfully marketed & sold the home for over-asking price in a short period of time. George, her son-in-law, said afterwards “I always knew I would get not just honest but forthcoming information and he didn’t treat us like we knew nothing about real estate even though he was the expert.” And with the home vacant and an overdue cleaning completed, “the photographs were fantastic!”
Over the last 20 years practicing real estate, I’ve learned that every transaction is emotionally “charged,” but often in varying ways. Specifically, last-time home sellers such these parents often approach a sale with fear, uncertainty, and procrastination. Providing them with a trustworthy advisor can diffuse these feelings, and allows them to make good decisions for their future. After helping Doralyn make a complicated move out of the area this summer, she shared “Matt’s guidance…was invaluable. He was on all the details all the time. I have full trust in Matt.”
My simple approach to all of these transactions was the same: treat your mama as if she was my own mama. I promise to be patient, thorough, honest and supportive. Mamas are too important to treat any other way.
Happy Thanksgiving to you all, and Happiest of Birthdays today my own Mama! Love you, Mom!!!
Last year I posted a ton about mortgage rates and refinance opportunities. This year to date I’ve been rather silent, largely because rates have trended higher and unfair government-imposed fees on refinance loans made them less attractive. But that’s yesterday’s news! Today its time to jump for joy and proclaim that mortgage rates are as low today as they have EVER been!!!
For starters, market conditions in recent weeks have been more favorable for mortgage rates. Initial fears of widespread inflation have subsided, which has allowed mortgage rates to drop. Furthermore, today the Federal Housing Finance Authority (FHFA) rescinded a fee applied last autumn that added a .5% charge to nearly all refinance transactions. This is pleasant, unexpected, and well-needed news.
Here’s a brief history lesson on the matter: the prior FHFA regime (under director Mark Calabria, appointee of former President Trump) suddenly and unilaterally imposed this fee in August 2020 under the guise of increased risk and costs associated with buying mortgages during the pandemic. In reality, it was a good ‘ol fashion money-grab by the US government. As soon as the law allowed (literally, a supreme court case was decided on the same day granting authority for removal from office), President Biden appointed current director Sandra L Thompson to replace Mr Calabria. Within 30 days of taking her position, the Agency has removed this unnecessary fee for American homeowners.
This means mortgage rates are at record lows!!! Like crazy low. Like 30-yr rates well under 3% & 15-yr rates near 2% low!!! If you haven’t refinanced in the last 12 months, we should chat ASAP. Or, if you’re looking to take cash-out for home improvements or debt consolidation, its never been cheaper to borrow money from your home. Tell your friends. Tell your family. Lets collectively shout this news from the figurative roof-tops to help all homeowners save money!
I know the world is starting to get back to normal (for the moment) and that there are more fun things to do in the middle of summer than apply for a refinance. But, I would recommend you take a few minutes to call me soon to crunch some numbers and see how these developments can help you save money every month.
Today’s Runoff Elections in Georgia will determine which political party holds majority power in the US Senate. The outcome will shape the national political landscape for the next two years, and could have a significant impact on mortgage rates over the next few days.
Watching The Peach State’s election results is important for all of us in the financial markets. If Georgia “turns blue,” meaning both Senate seats are won by Democrats, it will shift the balance of power of the national government and set the stage for sweeping changes for not just politics, but for finances as well.
Two Senate seats are up for grabs in Georgia. Presently, Republicans hold 50 US Senate posts while Democrats hold 48. If the Democratic nominees win both Georgia Senate positions, both parties will hold 50 seats, allowing for Vice-President Kamala Harris to hold tie-breaker voting rights. With politics sadly so polarized along party lines, this will allow for Democrats within the Senate to hold a majority and influence policy proposals.
This is of interest to the mortgage market because there are several political agenda items that are much likely to become law if Democrats control the US Senate. Most notably, a larger stimulus package to combat the economic struggles of the Covid-19 pandemic will likely pass. This federal financial aid will be paid for by selling government bonds, and when this is done at a large scale it tends to push mortgage rates higher.
There are obviously other complexities and uncertainties surrounding the direction of our nation’s political and financial arenas, but if you’re considering a refinance in the near future here is the take-home message: a “Blue” Senate means upwards pressure on rates. As the news headlines of the coming days begin to report Georgia’s election results keep an eye on if both elections are led by Democrats. You may not want to wait to see the results come in; a safer move would be to get a refinance application in ASAP to lock in a rate before the markets adjust. Its no guarantee rates will rise in the coming days, but mortgage rates presently have never been lower. Let me help you take advantage of the current market conditions before they potentially change.
Our country’s election is next week, and it has most of us filled with emotion. The emotions & opinions vary but they, like the stakes, are high. I encourage you to get out (or mail in!) to VOTE!
I have a good friend, Justin Raithel, running for Folsom City Council. If you live in Folsom please strongly consider voting for him. He currently serves as Folsom’s Planning Commission Chair and was recently recognized as Folsom’s Volunteer of the Year by the Chamber of Commerce. Justin would be a great addition to Folsom’s City Council!
I’ve been looking for ways to support Justin in his campaign, as I want to honor his tremendous courage to run for public office. Justin will likely need to gain 25% of citizen’s votes in order to secure one of the two open City Council seats. While hitting that mark means Justin will win and earn more votes than the other candidates, it also means 75% of voters didn’t believe in him. Ouch, right??!! Even if he wins the election, 3 out of 4 people didn’t vote for him.
When I have a friend take on a risky endeavor, like running for office or starting a band, I often throw my family’s full support behind them. While I’ve never done either, I too know the reality of winning while not having everyone’s support.
As a small business owner in a very competitive industry, I’m always on the “campaign trail.” A big part of my career is tirelessly showing why folks can trust me as their capable REALTOR or mortgage broker over the countless other “candidates” in our marketplace. Thanks to you, we’ve done more business than ever this year, largely through repeat and referral business. I am forever grateful for the confidence so many of you have in my team and me to help you through your real estate endeavors.
Despite crushing every metric we’ve ever set for The Blue Waters Group, I still feel the sting when realizing we don’t get everyone’s “vote” of confidence. Folks choose to do business with other REALTORS, with the big banks out of state and community credit unions down the street. The old adage says there’s plenty of business for everyone, and that’s true! But, as a small business owner, my goals have always looked beyond the bottom line. I constantly strive to be the professional in my hometown that can be trusted by my neighbors, by the parents of my kids’ friends, by the folks who I run into at the grocery store. If I can’t live up to that measure, then the money doesn’t mean much.
I share this with you to remind you how much it means to me when you refer your friends and family and when you come back for your next transaction. Sure, your business helps me to make payroll with my employees and put food on the table with my family. But you’re also fueling the very ethos of what I’m about, which is “earning your trust is far more important than simply getting your business.” Thank you for how you’ve shown your support over the years.
In similar fashion, I’m showing my support for Justin Raithel because he’s earned my trust. He is not running for City Council for the simple sake of winning an election. Justin wants to serve our city because he has the experience, the smarts and the heart to do it better than anyone else. I’d like to think the same could be said for me as your trusted mortgage and real estate professional.
Last month I covered an announcement by the Federal Housing Finance Authority that was going to make refinance loans significantly more expensive. Essentially overnight, closing costs increased by ½% of the refinanced loan amount for applications not yet locked due to this “Adverse Market Fee.”
This would have been similar to deciding to buy expensive item at a store with an advertised price on the shelf, and then having the price change while you’re in the check-out line!
If that happened to you, you’d be upset & probably ask to speak with the store manager! Many mortgage and finance stakeholders did just that, and lobbied to the director of the FHFA to reconsider the surprise fee. While the fee was not reversed, the FHFA recently announced a delay to the implementation of the Adverse Market Fee until later this year. As such, there presently is a narrow window to close a refinance application before closing costs skyrocket.
But this window is closing quickly. Lenders are already starting to announce when they’ll be implementing this Adverse Market Fee. Some of my lenders have set dates between now and October 5th as the deadline for a loan to be locked to avoid this fee.
Lots of refinance applications are going to rush through the system in the coming weeks, so its important to get your application in early and follow my “Ready. Aim. LOCK!” plan I detailed in my last blog post.
When you combine the incoming fee increase with the current crazy low interest rates, it makes a compelling case to take action now. Rarely in our industry do we have a certain forecast as we do now guaranteeing closing costs will be higher in the near future. Rates are literally on sale, but the sale is ending soon!
My wife & I are following my own advice and recently began a refinance application for our mortgage. I would strongly encourage you to do the same if you have a fixed rate over 3.5%.
Mortgage rates have been on a wild roller coaster ride for much of the year due to unpredictable and unprecedented Covid-related events. When rates suddenly began climbing this Spring, I advised refinance clients to submit applications but hold off on locking a rate, as I was optimistic rates would fall in the coming months. Nearly all of those clients who followed that advice benefited greatly as they locked record low rates this summer.
Now, mortgage rates are poised to take another dip after rising during most of August. With the stock market having an awful day today, mortgage rates are creeping back to their record lows seen earlier this summer. New season, but same strategy; get an application in ASAP and get ready to lock a rock bottom rate!
Please watch this video detailing how my Spring-time refinance clients followed my advice to lock a low rate, and why you should do the same as we head into Fall!
If you have considered refinancing in recent months but have hesitated moving forward, now is the time to get an application in with me! Doing so will help us get prepared to lock a record-low interest rate. Here’s what I need from you, and you can upload them safely using this link to Document Guardian:
Returning Clients Recent pay stubs from the last month 2019 w-2 (or 1099 if retired) An email authorizing me to pull your credit report Last month’s bank statement for checking and savings accounts 2019 & 2018 tax returns (only if self-employed or own rental properties) New Clients In addition to the documents above, complete an application at https://mattsundermier.zipforhome.com/
This week has been a wild one for mortgages! Let me breakdown the major headlines for you…
On Monday, one of our lending partners, United Wholesale Mortgage, began offering 30-yr fixed rates at 1.999%.Many clients have seen posts on social media about these never-before rates, and have asked if they can get on the action. Unfortunately, the marketing pieces don’t tell the whole story. While these rates are technically available, the closing costs are so high most clients will sour to the idea of this offer. I’m happy to discuss your options with you, but in general I do not recommend applying for these ultra-low rates just yet.
Then on Tuesday, mortgages had their single-worst day all summer, as most programs saw rates climb nearly .25% in a matter of hours due to mortgage investors lowering their demand to buy mortgage bonds.
Finally on Wednesday night, the US government imposed added closing costs for refinance loans. Yes, they can do this (whether they should is another matter I’ll dive into in this post), and ultimately these costs are passed on to homeowners looking to refinance.
Mortgage rates change because of these three entities: banks, investors, and the government. Here is a little insight into each, and while all of them influenced rates higher this week, I believe lower mortgage rates are ahead. Feel free to read the entire post to educate yourself a bit on the dynamics of the mortgage industry. Above all, however, I want to encourage you to still pursue a refinance application with me as I fully expect mortgage rates to settle down after this volatile week.
Banks – Banks are the connection between you (the consumer) and the market (bond investors). Think of them as the Amazon of the mortgage biz. When banks get overwhelmed with loan applications (as they have for the last several months) they make tons of money and take longer to process loans.
This is just like Amazon, which has made record profits during the pandemic but is also taking longer to deliver items. When business activity becomes unsustainable, banks raise their rates to slow down new applications. This is why our position as a mortgage broker is so important; we know which lenders are pushing business away and which are putting their rate “on sale” to encourage more business. Unlike Amazon, mortgage banks do not hold a market monopoly, so we navigate the market to help find you the best rates and terms available.
Investors – Investors are the “free market” component of the mortgage industry, where good old-fashioned Supply & Demand influence the price of a product, in this case the rate on a mortgage. As economic conditions change, it changes the value of mortgage bond investments.
This value to an investor is the rate and “points” you pay for a new mortgage. Generally speaking, when the economy is doing poorly, investors want to buy mortgage bonds because they are seen as a safe investment. And when the economy is doing well and/or inflation is running high, investors shy away from buying so rates must go up to entice investors to keep buying mortgages.
Government – Whether we like it or not, our US government literally owns the mortgage industry. The mortgage banks and investors utilize Fannie Mae and Freddie Mac to have standardized rules for mortgage underwriting and to “package” mortgages into investments. Fannie Mae and Freddie Mac are owned by the US Government (a result of the mortgage market collapse in 2008), and their Board of Directors (US Congress) has given orders to these companies to be as profitable as possible. They are not currently acting as a public service entity (as do most government operations); instead they are for-profit organizations for their shareholders (US taxpayers). To keep up with the Amazon analogy, if you are the consumer and the investor is the market, then the government is the provider of cardboard. Sounds benign enough, but in this world there is no other manufacturer of cardboard and all packages by law must be wrapped in cardboard. So when the cardboard company sees Amazon making record profits and consumers getting record-low prices on products, they see a market opportunity for themselves. They decide to drastically increase the price Amazon must pay for cardboard, so everyone in the supply chain must also increase their prices that the consumer ultimately pays.
This precise act just happened last night in the mortgage industry (read this article if you want to geek out on the details). In short, the US Government increased the price investors must pay to buy mortgage bonds from refinance loans, which means the banks now have to offer higher rates to offset this price increase.
In my opinion, this is a dirty “cash-grab” by a government forced to bail out an economy crippled by the pandemic with trillions of dollars in stimulus money. Their announcement last night references “economic uncertainty” as a justification for the added fee, but if that’s true why didn’t this fee come into play months ago when uncertainty was at its apex, and why not apply it to purchase loans? I don’t buy their story.
Congress is having a hard time passing laws to change taxes and other unemployment relief measures, so the government instead is changing “fees” to their services (you need a law to change taxes, but not fees) to raise money. As an example, a refinance loan of $400,000 now carries an extra $2,000 fee that wasn’t there yesterday, which ultimately works its way to the government. Multiply that by the millions of loans potentially closing in the coming months, and you can quickly see the government is taking advantage of their monopoly in the mortgage market. If you like Calls To Action, the Mortgage Bankers Association has already started an effort to reverse it. Click here to read their official statement and submit a message to politicians (use my company name in the business info section).
Simply put, this week was a bad week for mortgage rates, but I think better weeks lie ahead. Our economy is still on the ropes, and uncertainty remains high. An effective Covid vaccine may never make it to the market, the current state of USPS may make it difficult to have a timely presidential election during this pandemic, and millions of Americans may remain unemployed indefinitely as certain business sectors die under the weight of Covid. I know those are sobering points, but as long as they remain potential outcomes in the coming months it will keep downward pressure on mortgage rates. If you have a refinance application in with me or hope to be submitting one in the near future, I urge you to stay the course. Don’t abort your refinance mission, as I am confident rates will remain low and trend even lower in the coming months.
On Friday, we saw mortgage rates hit their lowest levels EVER! All month long, we’ve been helping many clients refinance to rates below 3%, and we anticipate helping even more through the rest of summer. Renewed fears of another spike in Covid cases around the country are impacting financial markets, leading to even lower mortgage rates.
Since Covid first swept the globe earlier this year, life has become incredibly unpredictable. This is true also for the world’s financial markets, as companies, banks, and investors were constantly re-calibrating the economic risks of Covid.
Typically, the more uncertainty and fear around the world the lower mortgage rates go, but that was not true for most of Spring. Other factors, which you can learn more about by watching my recent YouTube videos, kept the mortgage industry particularly vulnerable to financial losses, so rates did not go into a free-fall.
Now with a second round of Covid cases all but inevitable and a volatile presidential campaign right around the corner, mortgage rates may be poised to take another dip. If you have thought about refinancing, please get in touch with me ASAP. We are helping more clients than ever refi to lower rates, shorter terms, or take cash out to pay off debt, but keep in mind not all loan scenarios are able to capture these record low rates. Furthermore, underwriting a refinance is taking longer than normal, so its important to get your application submitted to us before any potential sudden rate drops.
I look forward to the opportunity to help you navigate your options and grab the lowest rates in our lifetimes!!!
As an independent mortgage broker, I have the ability to find you the best mortgage options in the marketplace. More and more mortgage banks are making drastic policy changes amidst the new Covid-economy. Some are pushing business away to avoid uncertain risks. For example, big banks like Wells Fargo & Chase have made it harder to qualify for loans with them. On the other hand, other firms are luring in business by offering competitive rates and reasonable guidelines. That’s why its so important that consumers like you utilize the services of a broker like me; to find you the best opportunities!
Case in point…one of our top lenders just introduced a program offering unbeatable fixed rates for certain scenarios! If you have been thinking about refinancing to get a lower rate or a shorter loan term, now is the time to act. This new program is not for everyone, as it doesn’t apply to cash-out refinances or rental properties, but for many folks looking to lock in a rate in the 2s, THIS IS IT!
Watch this video to learn more about the criteria & if you think you meet the criteria, give me a call or an email to discuss further. I anticipate a high level of interest in this new program, so I will handle inquiries on a first-come basis.
Times are uncertain, so skipping a few mortgage payments sounds nice, right? Not so fast.
In response to the economic turmoil caused by the Covid-19 pandemic, Congress passed an unprecedented 2.2 TRILLION dollar financial aid package for Americans. Known as The CARES Act, it aims at relieving businesses and individuals from economic hardships, including provisions to allow folks to request mortgage payment forbearance for the next several months. Awesome, right??!! Not so fast.
The intentions of this policy were wise, as a mortgage payment is often the single largest monthly expense for households. But, the unforeseen ripple effects of hundreds of billions of dollars in delayed payments has the potential to cripple the entire mortgage industry, put homeowners in perilous financial positions, cause grave damage to the overall economy.
To explain the economics of this issue, I’ll briefly touch on lessons of history, politics, English, and zoology. I know its long, but please take the time to understand the full story and the negative consequences you and society at large may face if pursuing mortgage payment forbearance.
First, A Bit of History
On March 27th, President Trump signed The CARES Act, a package of profound financial aid to Americans. The last time the federal government swooped in to save the economy, it was 2008 and TARP (“Troubled Asset Relief Program”) was passed to primarily bail out large (ie-“too big to fail”) banks in the midst of the “Mortgage Meltdown.” There was much criticism about how big banks were saved but the “little guy” was left out in the cold, so today’s policy makers didn’t want to repeat that same formula. The CARES Act is more focused on small businesses and individuals, and includes direct cash payments as well as the option to request to defer payments for the next 6-12 months without proof of financial hardship. As long as the mortgage is backed by a government entity, the mortgage servicer must honor the request. But, what the mortgage servicer must also honor is the monthly funds owed to the mortgage bond holders. In a nutshell, mortgage companies have to keep paying money out even though money is not coming in. YIKES!
Mortgage servicers will be facing incredible cash crunches and have repeatedly asked policy makers to establish a lifeline allowing mortgage servicers to borrow money from The Federal Reserve Bank to keep money flowing through the system. Without this form of aid, the mortgage industry as we know it could die.
Next, A Little Politics
As of this writing, the most influential politician on this matter insists that government intervention is not yet needed. Mark Calabria, the appointed director of Federal Housing Finance Agency (FHFA) who directs Fannie Mae & Freddie Mac, has a track record of disfavoring the government coming to the rescue in turbulent times. In fact, he’s gone on record to say if he were in charge during the Mortgage Meltdown of 2008 he would have let the very institutions he currently leads fail! Moreover, Mr. Calabria recently estimated “2 million borrowers would seek forbearance requests by May” and suggested if mortgage servicers get in trouble they could always sell their mortgage accounts to the larger mortgage servicers. Mr Calabria is either tragically miscalculating or misinformed on both fronts.
According to the Mortgage Bankers Association, the industry already processed well over 2 million requests by early April, and this number will only increase as our economy struggles to fully bounce back from shutdowns. Furthermore, the two largest mortgage servicers in the country, Wells Fargo & Chase Bank, have established policies in the last week to drastically reduce the amount and types of new mortgage
s they are willing to take on. There is no way the larger mortgage outfits will be a backstop to these new kinds of toxic mortgages with payment forbearance. Since the payment forbearance phenomenon was not created by the free markets, the free markets are not able to be the solution. Government intervention is essential, and at this time support to mortgage companies is only being offered to loans related to VA & FHA, which is a very small minority of the overall mortgage market.
Siri, What Does Forbearance Mean?
Unless you have a Jeopardy-sized vocabulary, forbearance is not a word you use often. Oxford dictionary says its “the action of refraining from exercising a legal right, especially enforcing the payment of a debt.” Simply put, forbearance does not mean forgiveness. Mortgage companies may temporarily refrain from collecting your payments, but they won’t hold back any longer than legally necessary, and likely won’t play nice when that time comes.
Survival Instincts Will Take Over
With inevitable liquidity issues and no sign of an immediate parachute from the federal government, mortgage servicers have impossible decisions ahead of them. Sadly, I believe this will force mortgage servicers to avoid favorable forbearance agreements at all costs. They will only play as nice as necessary to follow the law, but be ruthless otherwise. If you went through a short-sale or loan-modification process during the last housing recession, you know exactly what I’m talking about.
For example, there are no rules that govern when these deferred mortgage payments are re-paid. Even this video from the Consumer Finance Protection Bureau is vague. Potential options your mortgage servicer may offer: 1.) tack the payments on at the end of the loan; 2.) spread the missed payments over a period of time; or 3.) demand the payments be made in a lump sum.
What would you do if you ran out of cash and someone was overdue on a loan due to you? You’d force them to play catch up ASAP, right??!! Its not greed. Its not nasty. Its survival.
Mortgage servicers will do the same thing, forcing a homeowner who skipped payments at, say, $2000/month for 3 months & now pay $8000 in a lump sum in the 4th month. Obviously, most folks who truly need the payment relief in the coming months likely won’t be in a position to make a single catch-up payment, but tragically mortgage servicers are not in a position to float millions of skipped payments over the next few months and then patiently wait for reimbursement at the end of a 30-year loan. They have been backed into a corner, and will use any means necessary to try and survive.
I remain optimistic that policy intervention and clarity will eventually calm this situation down, but until it does every mortgage servicer is in a choke hold.
What Should I Do?
If you have suffered a big economic loss and cannot make your mortgage payment, by all means call your mortgage company and request payment forbearance. Yes, this may mean you are forced into a lump sum payment at some point, but that is tomorrow’s problem. You have bigger problems today; take the payment relief and hope repayment options are more favorable when you’re back on your feet.
BUT, if you are still able to make your mortgage payments, please continue to do so. Consider taking advantage of the delayed tax filing deadline (extended 90 days to July 15th!), but don’t delay making your mortgage payments unless absolutely necessary. Staying out of forbearance will allow you to keep your options open for refinancing if rates slip down (forbearance generally disqualifies you from getting a new mortgage) & will help you avoid a build-up of payments that will likely need to be paid all at once in the future. It is not only in your best interest, but also in the best interest of the mortgage industry and our country at large. If too many borrowers utilize payment forbearance, the mortgage system could face catastrophic failure that would result in a housing crash worse than the Mortgage Meltdown of the late 2000s.
Spread The Word, Not The Virus
Please pass this post along to as many friends and family as possible, and do your part to encourage folks who have been considering mortgage forbearance to know the full story. In the meantime, stay safe, stay inside, and stay sane!