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The Great Loan Blog
A spirited discussion of real estate, the mortgage business and the economy.

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100% Home Purchase after 04 can't refinance!
2007-10-03 02:08:00
Thousands of prime full doc homeowners are shocked/angry to discover that they can't refinance under any terms. Washington Mutual, Bank of America, Indymac, etc don't allow above a 95% Loan to Value on jumbo loans after losing their shirts on risky loans in the last few years. Many people are coming out of adjustables or want a better fixed rate. These aren't risky cashout, stated deals. This is bread and butter lending. The banks and Wall St based money sources have completely pulled back on risk and this is terrible for client's trying to refinance anything above a conforming loan limit, (417k for a single family home.) The biggest problem is values in bubble market have collapsed back to 2004 or 05. These homeowners don't have equity and their loans are adjusting. This is the tip of the iceberg of the housing meltdown. The entire lending industry better get the math wizards in a room and whip up some products to do these loans otherwise you haven't even seen round 1 of this...
More About: Home , Refinance , Purchase , Hase

CNBC's Maria Bartiromo/Bill Maher Housing Bubble Video
2007-10-01 19:49:00
Here is a clip from Real Time with Bill Maher which aired Friday September 28th. I have never heard the housing slump sound or look this good. Mortgage Insider dishes it straight on housing and the mortgage market.
More About: Video , Housing Bubble , Housing , Bubble

CNBC's Maria Bartiromo/Bill Maher Housing Bubble Video
2007-10-01 19:49:00
Here is a clip from Real Time with Bill Maher which aired Friday September 28th. I have never heard the housing slump sound or look this good.
More About: Video , Housing Bubble , Housing , Bubble

Millions of Homeowners Have Only Three Choices
2007-09-30 02:43:00
I believe millions of homeowners that purchased with little or nothing down and folks who accessed the ATM machine one too many times via HELOCs and serial refis with unaffordable payments only have three choices. The first option is to consider refinancing now into an ARM or a fixed mortgage rate to avoid the rate resets that they may be facing in coming months. Most resetting ARM's both prime and subprime are looking at a first adjustment of 2-2.5% from the rate that they were accustomed to paying. This is only an option if their is equity, the client can afford the payment, fully document income and has a decent FICO score. Stated income is still available although the rates are healthy and are only available if their is 10-15% equity in the property.The second option is to sell. Many people were severely stretching to pay the interest only or even the teaser rate on a pick-a-pay loan. Struggling to pay a mortgage is a bit more satisfying in a stable to rising environment as you...
More About: Millions , Choices , Owners , Homeowners , Homeowner

CA Tops List of Most Expensive Homes
2007-09-27 07:47:00
If you are looking to buy the average home in the United States, these are the most expensive markets. The average home in this survey by Coldwell Banker is 2,200 square feet with 4 bedrooms, 2 1/2 baths, a family room, and a 2 car garage.Looking over the list, California has 8 of the top 10 most expensive towns for the average home which is not a surprise with the fantastic run up in property values in the last decade and the largest percentage of wealthy citizens per capita of any state according to Forbes. Also on the list are Greenwich, Connecticut and Boston, Massachusetts in the northeast.This accounts for the attention placed on housing out in California. When the working rich(doctors, lawyers, small business owners) have to dig up nearly a million to get into an "appropriate" home, housing becomes the leading discussion in the household. And if you held onto a home during the run-up you have a great deal of your wealth tied up in your primary residence. Consideration should ...
More About: Tops , List , Most Expensive , Homes

Why do mortgage rates move around daily?
2007-09-26 06:35:00
1) What are mortgage interest rates based on? The only correct answer is Mort gage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.2) What is the next Economic Report or event that could cause interest rate movement?A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, email mrmortgage (AT) thegreatloan (DOT) com and we'll add you to our mortgage rates report. Can't post the address here because the spam bots would get it and we would be getting offers for prescription drugs and to help Nigerians with money exchanges.3) When Bernanke and the Fed "change rates", what does this mean. and what impact does this have on mortgage interest ra...
More About: Daily , Move , Rates

Give children an XO laptop to climb out of poverty.
2007-09-25 21:46:00
Do you want to fight a war on poverty? A war on terror? A war on the senseless waste of the sole source of capital, the human mind? Here’s your chance. For two weeks in November, you’ll be able to buy two XO laptops, the One-Laptop -Per-Child computer, with one coming to you and the other going to a hungry young mind overseas.From the Boston Globe:With orders for its rugged XO laptop falling short of its initial goal, the One Laptop Per Child project announced today that it would let consumers in the United States and Canada buy the cute computer for a limited time.In an interview last week, Nicholas Negroponte, the former MIT Media Lab director and founder of the so-called $100 laptop initiative, conceded that he had not locked in the 3 million orders that he once said were necessary to trigger mass production.The new “Give 1, Get 1″ initiative could be the antidote, he said, by helping to spread the project.For a limited two-week span in November, people will be able to buy...
More About: Children , Poverty , Climb

Give children an XO laptop to climb out of poverty.
2007-09-25 21:46:00
Do you want to fight a war on poverty? A war on terror? A war on the senseless waste of the sole source of capital, the human mind? Here’s your chance. For two weeks in November, you’ll be able to buy two XO laptops, the One-Laptop -Per-Child computer, with one coming to you and the other going to a hungry young mind overseas. From the Boston Globe:With orders for its rugged XO laptop falling short of its initial goal, the One Laptop Per Child project announced today that it would let consumers in the United States and Canada buy the cute computer for a limited time.In an interview last week, Nicholas Negroponte, the former MIT Media Lab director and founder of the so-called $100 laptop initiative, conceded that he had not locked in the 3 million orders that he once said were necessary to trigger mass production.The new “Give 1, Get 1″ initiative could be the antidote, he said, by helping to spread the project.For a limited two-week span in November, people will be able t...
More About: Children , Poverty , Climb

Greenspan Nailed in Interview w/ John Stewart
2007-09-22 09:00:00
From the Daily Show on Comedy Central. My favorite show. The only way to get your "news," with a laugh. Enjoy.
More About: John Stewart , Interview , John , Stewart , Greenspan

Greenspan Nailed in Interview w/ John Stewart
2007-09-22 09:00:00
From the Daily Show on Comedy Central. My favorite show. The only way to get your "news," with a laugh. Enjoy.Mortgage Insider dishes it straight on housing and the mortgage market.
More About: John Stewart , Interview , John , Stewart , Greenspan

The FED cut and rates are higher?
2007-09-21 22:40:00
As clients are learning, mortgage rates are higher now than last week, back up to 6.5 percent for vanilla 30-year and 7% for Jumbo mortgages. Yes, higher.Federal Reserve Chair Ben Bernanke probably has the same frustrated shoulder sag that we do: he played this thing exactly right, and has gotten nothing for his trouble but a run on the dollar.The Fed's 0.5 percent was actually two quarters: the federal funds rate had been trading near 5 percent, 0.25 percent off-peg, for a few weeks. That was an inter meeting ease not formalized, a deft piece of central banking: if formalized, and then the crunch dissolved by itself, the Fed would have had to execute an embarrassing formal reversal. Instead, Sept. 7 news of sinking payrolls (an economic fade additional to and independent of housing and the crunch) made it easy to cut. At this moment the economy receives some dinky benefit from the cut (Construction money is 0.5 percent cheaper -- wanna build a house? Short-term rates are down -- h...
More About: Higher , Rates

The Thrill is Gone.
2007-09-20 18:10:00
Mortgage Rates are trading higher again this morning. The euphoria has worn off from Tuesday's rally following the interest rate cut. Traders have now assessed the long-term negative effects of the sinking Dollar and have begun selling into the market.The US Dollar has been falling against foreign currencies. This is inflationary because it takes more Dollars to buy foreign imports, which is effectively the same thing as a price increase.Bond prices may continue to drift lower throughout the day, pressuring home loan rates higher. For today, I would advise sticking with a locking bias.Mortgage Insider dishes it straight on housing and the mortgage market.

What's the cost of the interest rate drop to you?
2007-09-20 07:08:00
Have you seen the value of your hard earned dollars? I remember as a child traveling to Mexico struggling to figure out how many thousands of pesos I had to get from my pocket to buy ice cream. The U.S. dollar has not collapsed to that degree but it's value has declined dramatically in the last five years. An empire can't wage war and spend like a drunken sailor forever. Eventually, the currency suffers. How does this matter to you? Well as a starter, do you buy gas? Two reasons why it's $3 a gallon is rising global demand and the falling dollar. Oil is traded in dollars and the middle east pegs their currency to the green back. They are demanding more dollars because each month because they are worth less relative to other currencies. In order to protect the dollar the FED would have had to keep rates steady on Tuesday. They chose to bail out speculative investors(hedge funds, investment banks, and leveraged buyout shops) and hope it trickles down to Joe Six Pack. Investors arou...
More About: Cost , Interest , Rate , Interest Rate , Drop

What's the cost of the interest rate drop to you?
2007-09-20 07:08:00
Have you seen the value of your hard earned dollars? I remember as a child traveling to Mexico struggling to figure out how many thousands of pesos I had to get from my pocket to buy ice cream. The U.S. dollar has not collapsed to that degree but its value has declined dramatically in the last five years. An empire can't wage war and spend like a drunken sailor forever. Eventually, the currency suffers. How does this matter to you? Well as a starter, do you buy gas? Two reasons why it's $3 a gallon is rising global demand and the falling dollar. Oil is traded in dollars and the middle east pegs their currency to the green back. They are demanding more dollars because each month because they are worth less relative to other currencies. In order to protect the dollar the FED would have had to keep rates steady on Tuesday. They chose to bail out speculative investors(hedge funds, investment banks, and leveraged buyout shops) and hope it trickles down to Joe Six Pack. Investors around...
More About: Cost , Interest , Rate , Interest Rate , Drop

Your real estate hasn't dropped like this property.
2007-09-19 03:01:00
In a stunning transaction, a Los Angeles luxury Condo Development Sold today. The developer Fifield Cos. has sold an unfinished Wilshire Corridor condo development - once touted as the city's most high-end - to a Dubai developer for $65 million, some $30 million less than a recent valuation. The recent tightening in the luxury mortgage market and declining real estate values in CA forced a sale. Foreign investors are flush with cash and the steady decline of the dollar vs their currencies has made the U.S. an attractive investment opportunity for large real estate players overseas. This is reminiscent of the flood of money from Japan during the 80's. Now it is oil money from the middle east that is searching for an attractive home in the U.S. market. I wouldn't be surprised to see more deals in the coming months especially for luxury condo and hotel properties. Mortgage Insider dishes it straight on housing and the mortgage market.
More About: Estate , Real Estate , Property , Real , Drop

Your real estate hasn't dropped like this property.
2007-09-19 03:01:00
In a stunning transaction, a Los Angeles luxury Condo Development Sold today. The developer Fifield Cos. has sold an unfinished Wilshire Corridor condo development - once touted as the city's most high-end - to a Dubai developer for $95 million, some $30 million less than a recent valuation. The recent tightening in the luxury mortgage market and declining real estate values in CA forced a sale. Foreign investors are flush with cash and the steady decline of the dollar vs their currencies has made the U.S. an attractive investment opportunity for large real estate players overseas. This is reminiscent of the flood of money from Japan during the 80's. Now it is oil money from the middle east that is searching for an attractive home in the U.S. market. I wouldn't be surprised to see more deals in the coming months especially for luxury condo and hotel properties.
More About: Estate , Real Estate , Property , Real , Drop

A ray of sun for borrowers and investors.
2007-09-19 01:59:00
The long awaited Fed decision arrived with a bang! The Fed surprised many economists and traders with a half percent cut in both the Fed Funds and Discount Rates. Stocks soared higher and enjoyed their largest gain since 2003.What does the Fed cut mean? Rates on consumer debt, car loans, and Home Equity lines will all benefit. But because Home Loan rates are tied more closely to inflation, it is not uncommon to see less of a reaction...or even an opposite reaction in mortgage rates.The Fed cut also hurts rates of return on investments, which gives foreign investors less incentive to invest in US securities. This has sent the Dollar much lower against the currency of most major foreign countries. This makes foreign goods more expensive for us to buy, which adds to inflation pressures.Overall, the Fed cut is good news for the economy, but may nudge inflation a bit higher long term. In the short run, we have seen an improvement in mortgage rates for prime credit borrowers especially wi...
More About: Investors

The FED drops rates, mortgage rates drop, right?
2007-09-18 04:43:00
Clients have been asking on a regular basis what effect the Federal Reserve's expected rate cut will have on mortgage rates. Mort gage rates have rallied for the last month for prime borrowers because of the slowdown in the economy and the flight to quality. Investors around the world have made a clear decision and their appetite is only for mortgage loans extended to very well qualified clients in the jumbo mortgage market or FANNIE MAE paper on the conforming side because it has an implied U.S. government guarantee.Essentially, risk based pricing has returned to the mortgage space. In a small way the Fed's action influences rates around the world. Most nations have a central bank or monetary policy board and react to local/global conditions to set policy. Europe has the European Central Bank whic primarily influences LIBOR which is the index used for almost all corporate lending and found in the majority of adjustable rate mortgage products in this country. If the Fed doesn't cu...
More About: Rates , Rate , Drop

Excellent Series of Greenspan Interviews Today.
2007-09-18 00:40:00
Fortune magazine has published an excellent interview with Alan Greenspan . I would encourage you to watch the videos. Unfortunately, they can't be embedded. Here is the link:Mortgage Insider dishes it straight on housing and the mortgage market.
More About: Interviews , Series , Today , Span

Excellent Series of Greenspan Interviews Today.
2007-09-18 00:40:00
Fortune magazine has published an excellent interview with Alan Greenspan . I would encourage you to watch the videos. Unfortunately, they can't be embedded. Here is the link:
More About: Interviews , Series , Today , Span

Waiting for the FED meeting on Tuesday?
2007-09-15 05:23:00
Investors, clients and borrowers in general are looking forward to the FED meeting on Tuesday for a rate cut. The market has priced in a 50bps reduction. Any less and we could see major declines in stock markets. I would think that the FED will cut only 25bps. I think we can gather the overall thinking in these two quotes:"It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford." - President Bush "It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions."- Fed Chairman Ben Bernanke
More About: Waiting , Meeting , Wait

More articles from this author:
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