LOAN PEDDLERS

Where The Turf Meets the Surf...for the 70th Year

It's that time of year.

July 13 2009 Mortgage Rates Report: As Good As It Gets?

The future for July and August mortgage rates should take direction from the economic releases this week.  As you can see, we have some big market movers ahead of us:  PPI (Tues) , CPI (Wed) , Jobless Claims (Thur), and Housing Starts (Fri).  Mortgage bond traders will be looking for signs of a strengthening economy, which might hint at future inflation, to sell off bonds thereby increasing mortgage rates.

We're locking all loans as retail mortgage rates seem stable and attractive at this level:

Mortgage Rates for July 13, 2009:

Conv        5.0% (no points) , 4.75% ( 1 point), 4.5% (2 points)
FHA          5.0%  (no points)       
VA              5.0% (.25 point)         

All loan quotes assume a 740 credit score, full income documentation with acceptable debt-to-income ratios, and required down payments (20% for conventional, 3.5% for FHA, and zero-down for VA).  We will charge a 1% origination fee plus a $695 processing fee.

Apply online now.  It's really simple and should take about 20 minutes.

Is Texas Now The Golden State?

Many Californians who are close to me have heard me query this; " If the last 50 years were the 'California half-century', will the next 50 years be known as the 'Texas-half century?' "  I've had this conversation with Texas-phile Jeff Brown, mortgage partner Sean Purcell, and Texas buddy and money manager Nick Ripostella.

My thoughts:

1- While I warned that Texas' property taxes were a reason not to invest there, it appears that California's "buy now, pay later" approach (Proposition 13) is broken. 

2- California's march to socialism is an experiment gone awry.  If left unchecked, it will penalize the net producers in favor of the net consumers.  That penalty will drive producers to a state like...well, Texas.  Sean Purcell's argument was that the creative genius in California (ie- the Hollywood types) are decidedly liberal and would never leave.  My counter to that argument was that those creative types are still capitalists at heart, despite what they portray to the public.

3- Texas is more business-friendly and hell bent on a constructive immigration policy that continues the American tradition of new immigrants pushing the whole economy upwards instead of the California model of vote-buying through appeasement.  Texas' focus is on assimilation while California's is on victimization. 

4- While I believe Texas is advantaged today, California leads the nation and arguably the world in intellectual capital and innovation.  We thrive in spite of the actions of our obstructionist Legislature.  This (admittedly "homer") idea maintains my belief that California will eventually prevail.

I'm not alone.  The Economist must have been reading my mind:

Plenty of American states have budget crises; but California’s illustrate two more structural worries about the state. Back in its golden age in the 1950s and 1960s, it offered middle-class people, not just techy high-fliers, a shot at the American dream—complete with superb schools and universities, and an enviable physical infrastructure. These days California’s unemployment rate is running at 11.5%, two points ahead of the national average. In such Californian cities as Fresno, Merced and El Centro, jobless rates are higher than in Detroit. Its roads and schools are crumbling. Every year, over 100,000 more Americans leave the state than enter it.

This was the overarching theme in my hypothesis.  When you create an environment that gives middle-class people an incentive to build wealth, you have a winning formula.  Think of Hollywood in the 40's and 50's.  Think of Long Beach, for the defense workers,  in the 50s and 60s.  Think of Silicon Valley, for high-tech,  in the 80s and 90s.  Think of San Diego , for life sciences, in the 90s and this decade.  Californian entrepreneurs innovate and invent and of jobs (should) follow suit.  

The second worry has to do with dysfunctional government. No state has quite so many overlapping systems of accountability or such a gerrymandered legislature. Ballot initiatives, the crack cocaine of democracy, have left only around a quarter of its budget within the power of its representative politicians. (One reason budget cuts are inevitable is that voters rejected tax increases in a package of ballot measures in May.) Not that Californian government comes cheap: it has the second-highest top level of state income tax in America (after Hawaii, of all places). Indeed, high taxes, coupled with intrusive regulation of business and greenery taken to silly extremes, have gradually strangled what was once America’s most dynamic state economy. Chief Executive magazine, to take just one example, has ranked California the very worst state to do business in for each of the past four years.

This is the real chokepoint in California; our Legislature.  They just don't understand the California with Ronald Reagan at the helm.   They have irresponsibly spent money, in pursuit of the great social experiment, to the detriment of the innovators and inventors.  The result?  Businesses, and people, are leaving California for better opportunities in...

Good Lord....TEXAS????  Even LA Jollan, Arthur Laffer is eyeing the Lone Star State:

American conservatives have seized on this reversal of fortune: Arthur Laffer, a Reaganite economist, hails the Texan model over the Gipper’s now hopelessly leftish home. Despite all this, it still seems too early to cede America’s future to the Lone Star state. To begin with, that lean Texan model has its own problems. It has not invested enough in education, and many experts rightly worry about a “lost generation” of mostly Hispanic Texans with insufficient skills for the demands of the knowledge economy. Now immigration is likely to reconvert Texas from Republican red to Democratic blue; Latinos may justly demand a bigger, more “Californian” state to educate them and provide them with decent health care. But Texas could then end up with the same over-empowered public-sector unions who have helped wreck government in California.

Alas, the Economist's conclusion is identical to mine.  I believe that the inevitable California bankruptcy will pave the way for a reversal...a rebirth if you will.  Sharp leaders like Tom Mc Clintock will lead this "rebirth" and restore the gold to California's beautiful coastlines and mountaintops. 

I gotta stay positive because I'm an optimist at heart.  After all, that's why I moved here.

Should San Diego Home Buyers Wait Or Buy Today?

One reader asked me: " When does it make sense to "overpay" for a property?"

ANSWER:  When the future carrying cost of that property acquisition is likely to rise dramatically. 

READ: Waiting for lower San Diego real estate prices could be costly

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July 9, 2009 Mortgage Rates Report

Mortgage rates improved, this first week of July, from a horrible June.  If you followed the drama last month, fears of defaults and inflation ticked off a rise in mortgage rates of up to 6.0%.  As brutal as June, 2009 was, July is giving us back most of what we lost last month.  Still, I'm locking loans at application (listen to my two-minute report) because I've changed my bias to locking rather than floating.

The July exuberance may be unfounded:

Treasuries fell on speculation yesterday’s rally in 10-year notes, the biggest since March, was too large to sustain and the U.S. readied the last of this week’s four note and bond auctions.

Thirty-year bond yields rose from near the lowest in seven weeks before the $11 billion sale of the securities. Stocks gained. Yesterday’s $19 billion sale of 10-year notes drew the most bids on record from investors seeking refuge from an economy whose recovery may take longer than expected.

The bond market may have gotten ahead of itself.  Mortgage rates look REALLY attractive at 5%; I think this is about as good as it gets for the summer.

Mortgage Rates for July 9, 2009:

Conv        5.0% (no points) 
FHA          5.0%  (.5 points)       
VA              5.0% (.75 point)         

All loan quotes assume a 740 credit score, full income documentation with acceptable debt-to-income ratios, and required down payments (20% for conventional, 3.5% for FHA, and zero-down for VA).  We will charge a 1% origination fee plus a $695 processing fee.

Is that a good deal?  Look at this big bank's mortgage rates. posted in its lobby:

Apply online now.  It's really simple and should take about 20 minutes.

July 6, 2008 Mortgage Rates Report

Mortgage Rates Get Widgets

July 2, 2009 Mortgage Rates Report

Maybe not today, maybe not tomorrow but mortgage rates are headed higher before Labor Day.  The Fed is pulling the plug on its emergency, market-meddling:

An end to the Fed's emergency measures poses a "cliff-effect" risk for the bond market, according to Morgan Stanley.

The effect "increases the risk for a policy misstep and produces greater uncertainty," Morgan Stanley analysts wrote in their midyear outlook published on Wednesday.

They forecast benchmark 10-year Treasury note yields could push toward 4.25 percent by the end of the year, almost 0.70 percentage point above current levels. Short-term yields on the other hand will likely stay steady.

They also expect increased volatility and higher risk premiums on spread products like mortgage-backed securities.

Think of the relationship between Treasury bonds and mortgage-backed securities like a dog, leashed by his master.  Sometimes, the the master lets the dog run and then...

SNAP! 

The master tugs on the leash and the dog comes running towards him.  The Fed's emergency mortgage-backed securities program was a tug on the leash, in an effort to bring mortgage rates down towards Treasury bonds.  The Fed's letting the leash out.  Expect interest rates to rise and mortgage rates to rise even faster.  Let's lock all loans at application.

Social Media Marketing for REALTORs: (Part 10): Tying It All Together

"Who the heck has time to do all of this?" is a question that may have entered your mind these past ten days.  Certainly, a social media marketing campaign neither:

• produces immediate results, or

• is easy to implement. 

 

An effective social media campaign develops over years, not weeks.  All of the ideas I showed you are free or extremely low-cost (less than $50/month) but they do require a time investment on your part.  To develop a web presence like I or Greg Swann have is kind of like eating an elephant; you have to do it one bite at a time.  Here are some tips to help you get started:

Social Media Marketing for REALTORs (Part 9) : Blogging

Blogging is an excellent way to practice all five pillras of social media marketing.  It is a great way to demonstrate your expertise, provide contect for the search engines so that you are "findable" for certain key phrases, and answer client-generated questions in the public's eye.

Oftentimes, mainstream media read weblogs to look for local experts when working on a story.  Ive been interviewed and quoted by:

Forbes
Business Week
Yahoo! Finance
CNN Money
CNBC
MSNBC

This topic is so complex that a short video wouldn't do it justice.  Interested people should read:

REAL ESTATE WEBLOGGING 101

Should you decideyou want to set up your own weblog, you have many platforms from which to choose.  I prefer Typepad because of its simplicity.  Here is a video about how to set up a Typepad weblog:

Social Media Marketing for REALTORs (Part 8): Twitter

Twitter is a quickly growing social network, designed around the simple question "What are you doing?".  Essentially, users answer that question in 140 characters or less and post it so that all of their "followers" can see the answer.  Before you dismiss the network as banal, think about how you might watch for sales oopportunities or broadcast useful information on Twitter.

Here is a directory of real estate professionals using Twitter to build their businesses, today.

Watch this video to learn how to set up and use your Twitter account: