Radio Junk

Hi People.
Here's the first hour of last Saturday's show. Argued about loans, real estate, investments and ethnic food. A little bit of a clash of opinions.
God Bless

Gots To Hustle

Hey People.
I just wrote 12 offers for a client who is desperately trying to buy a San Diego home. Obviously, he's not that picky. He just wants a home to retire in. Too much to ask? Even for a Veteran? Hopefully not, but this is what he's fighting.
Not enough homes for sale under $400K. Anything out there on the market (Unless it's falling down, haunted or was owned by Al Davis. We San Diegans really hate Al Davis) that is properly priced will have several offers on it within a week, often as much as twenty offers. But, the unemployment? The multitude of foreclosures? The overall recession/ depression (Depending who you ask)? How can there be that many people buying? 3 main reasons. The tax credit for 1st time home buyers (Usually the full $8,000 for us San Diegans) is about to expire (Have to be in escrow by 4/30 & close by 6/30). Next is the prices are really low. There are a lot of people thinking we are at the bottom of prices & they want to get in while the gettin's good. Last, the interest rates are at a all time low and they are starting to creep up. Folks are trying to luck the good thing down.
The other thing working against my client is he is a Veteran who is going to use his V.A. loan. They're great loans for the Veterans because they are 100% financing, the only type of loan that still does it. The problem with loan is that they tend to take a little longer than most loans and the V.A. appraiser (BOO) is usually a little tight on the appraisal (Tight like my grip on a candy bar). Both of these factors make this loan less attractive to the seller. So, in a multi offer situation my client would get beat like Al Davis at a Charger tailgate party (We really do hate him).
The good news, my client is a hustler and that's why we wrote 12 offers at once. Sooner or later he will have his house.
God Bless the Veterans.

Used To Be A Dirty Word

Hi People.
Feeling lazy today (That feeling is not exactly exclusive to today) so my friend Sam Gardner of Gardner Mortgage said he'd pick up the slack. Off to do some San Diego fun.
Enjoy & God Bless.

Monday morning greetings,


It continues to be a Planet of the Apes out there in the mortgage world as the industry continues to struggle with changing guidelines. The good news is there does appear to be light at the end of the tunnel.

Positive changes we have seen recently are the re-appearance of mortgage insurance companies (PMI) and the willingness to insure loans with as little as 5% down payments. I never thought that I would welcome mortgage insurance but my arms are open and I'm ready for a hug! The only options for borrowers with small down payments (or minimal equity for those seeking to refinance) over the past couple of years has been FHA or VA loans. Another positive move is that B of A recently announced that they will be working with some borrowers who are under water on their loans by reducing principal balances and not just modifying loan terms. This I believe will do more to stabilize the housing market than any of the other well intentioned but poorly executed government plans. You can lower someone's house payment with a loan modification but history has shown this has not worked well for lenders who offered this option or to the few homeowners who qualified. The best way to keep people in their homes is to reduce their principal balance. This gives people a reason to stay in their house, maintain pride of ownership and helps keep neighborhoods intact. This action would eliminate many foreclosures, help stabilize prices and allow more families to take advantage of historically low rates. Families, who are able to save money by refinancing, pump this money back into the economy, helping to create jobs and stimulate growth.

Rates:

Rates continue to hover in the 4.75% - 5.00% range for 30 year loans and 4.25 - 4.50% range for 15 year mortgages. The government has continued to keep rates low for fear of slowing the economic recovery which continues to show light in some areas. Trust me, this too shall pass and both rates and inflation (low rates arch nemesis) will rear their ugly heads again. It is still a great time to reduce your rate, lower your monthly payment and consolidate debt. Home prices in most areas continue to be at or near their most affordable levels in years and there is still time to take advantage of the government’s 1st time buyer’s credit.

As always, please let me know if I can answer any questions or help with anything. Have a great week.

Sincerely,

Sam Gardner

Gardner Mortgage Inc.

2667 Camino Del Rio South #106

San Diego, Ca. 92108

Office (619) 497-6125

Cell (619) 804-2417

The best compliment I can receive is a referral to your friends and family!

Don't Get Cute

Buenos Dias, People?
Beware of situations and opportunities that are served with phrases like "They won't find out", or "I never got caught", or "I just learned this new form of torture. Let me show you, it won't hurt". These, and others, are red flags and should be avoided like water boarding.
Like this deal my client was considering. A nice duplex that was well remodeled. The rents were a little low, but the renter was willing to come up a little on his rent. The best part of the deal was the loan that the seller had that could be assumed (Meaning the buyer would take over the existing loan from the seller. Has nothing to do with the "makes an ASS out of U and Me). Assuming the loan would be less expensive for my buyer because no new loan fees or appraisal. The existing loan was also a 4.25% interest rate, super sweet for an investment property (Usual rate for a non-owner occupied or investor loan is currently around 6%, give or take). Gots to do it, right?
Well, after looking at the loan it turned out that it was a variable loan that adjusted every 6 months. Not great, but still workable. Then we found out it was an interest only loan, not exactly what my client wanted. Then we found out the loan was to mature (Bank wanted it's money back) in another 8 years. None of these things were on my client's wish list, but they were not ugly enough to scare her away. Then the ugly came.
We found out that this "assumable" loan was not sanctioned/ O.K.ed/ allowed by the bank. The seller's sweet deal turned into my client giving him a big chunk of money, him signing over the deed and my client would simply start making the payments. Was (It's German, meaning what. You're supposed to say it with a "V" sound and kind of Gestapo, coy like)? We asked him what would happen if the bank found out? He said "The bank could make you pay up all at once, or raise the interest rate or a # of other things. I don't really know, it's never happened to me". We asked how would she get the payment (Just out of curiosity, it's dead by this time). "I'd send it to you. And don't worry, I'll make arrangements to have the payment mailed to you if I die (He was very old)". We shook his shaky hand and said no thanks.
So, watch out for super great deals that you have to get overly creative with. Sometimes the word creative is code for fraud.
Let me know about your tricky deals, or escapes from them.
619-507-7449.
God Bless

Bull Ca-Ca

Hi People.
I said it before and I will croak saying it. You can not take the word of a journalist who is blindly looking (Oxy-moronic?) at info and adds it up wrong. Always remember, evidence does NOT equal proof. Throwing #s and stats at a scenario and hoping they stick is not building a case, it's building an out house.
For instance, a new article out by Forbes Magazine says we San Diegans are in the top 10 in the "America's Worst-Selling Housing Markets". Hooray, we finally made a list. Not the list we wanted to be on, but at least they know we're here.
The article goes on to say that we are in the top 10 with other Ca cities like L.A. (Boo!), Sacramento (Take it or leave it. To be honest I never even think of them) or San Francisco (Good eats). Saying further that we all over built at the wrong time (We did) and that we were the kings of the sub-prime mortgage (No one did it like us). All of that is true.
The thing that gets me is the writer saying that we are "saddled with 1000s of unsold homes". Que stupid? Tell that to my clients who have to write an approx 20 different offers (On average) in order to buy one home. Tell that to my seller who has to pick between a single mom who just wants a place to raise her kids and the investor who came in all cash (Sorry mom). I can not tell you how many times I've submitted a full price offer for a client, in the first day the house was on the market, just to be told by the listing agent that they have a total of 23 offers and 5 of them are well over asking price. It's been like this in San Diego real estate for the last 2 years.
So, when reading articles from people out of town, or people who do not work in that particular industry, be careful. Those articles will make you repeat dumb things.
Click on the title to read this fools nonsense.
God Bless.

Appraisers Suck

People, how do?
The title is a little harsh. Appraisers are in a bad situation. Their pay has been cut by the banks. They can not use their old contacts to get them jobs due to new Federal regulations. Instead, they are all pooled together like cattle in a sardine can until the lucky appraiser is picked (Yippee, I get to work for less money). Then they are so scared of over appraising a home that they naturally are over conservative. Very understandable. Some might even be glad that they are over conservative. Part of the reason we're in this economic mess is due to over inflated property values that went up like a high fly and then came screaming down on the kid without a mitt (That kid now has no teeth). Appraisers have it bad.
But, come on. They ruin more dreams than Freddy Kruger (Couldn't think of another bad dream persona. Sorry). 2 examples:
1. Nice lemon grove listing that I had listed for $350,000 and got an offer at $338,000 (It was a little over priced, so we liked the offer). The appraiser (An appraiser from Temecula) came up with a value of $315,000. For the math-can't-do-its that comes to a $23,000 discrepancy. My clients were counting on the extra loot to buy something worth $22,500. We ended up at a price of $330,000 and the buyer had to come up with another $15,000 cash to make the deal go. Why would the buyer do that? Because it was a great deal. The seller gets screwed out of some money and the seller doesn't get to finance the amount they should have.
2. Nice condo in Eastlake. I'm representing the buyer now and we're in escrow at $224,000. Mr Appraiser-Man gave us a slap in the face value of $200,000 (Again, lives in Riverside County). There is no way to bridge that amount on that low end of a deal. We are trying to work it out, but I have no faith that 10%+ of the purchase price can be settled (So pessimistic). My client will get his deposit back but not the $500 he spent on appraisal and not the $250 he spent on the property inspection. Ouch!!!
Both of these properties were under valued by someone who did not know the area.
So, I do feel bad for the appraisers and what they have been drug through, but not enough to not be really angry with them.
God Bless.

#s Don't Lie

Hola, People.
The Wall Street Journal just reported on an organization (The Center for Economic and Policy Research in Washington DC, or CFEAPRIWDC. Not the catchiest acronym) that came out with a crazy formula that can determine if you should buy a home or rent. It's called the "price-to-rent-ratio" (Again, not too catchy).
"Take two houses of similar size and quality—one for sale and one for rent—in the same neighborhood, or comparable neighborhoods. Take the price of the home for sale and divide it by the total cost of renting the other house for a year. If the resulting number is higher than 20, it's likely the price of the home for sale could fall further. Thus, renting might be a better option, says Mr. Baker. However, the price is most likely near its low if the figure is 15 or below; 15 is the general average price-to-rent ratio over time, Mr. Baker says, and the number at which rental and ownership costs are close to even". That's what he says. I like that he put a formula to it, I just do not understand his reasoning. The strange thing is, I agree with the out come.
Here's where he said San Diego is:
"Median home price: $387,816 (Closer to $350,000)
Average monthly home payment: $2,525 (Could be, with taxes & ins)
Average rent: $1,249 (Is he kidding? probably closer to $1800)
Price of appliance repair: $46.79 (23% below average) (I have no idea).
The article further states:
"San Diego presents an attractive buying opportunity. Prices have stabilized and in many cases are going up, says Mr. Yun.
Services are also below the national average, which puts another check in the buy column."
So, I do not know how he came up with his #s or his formula, but I do agree with this Nutty Professor's hypothesis for San Diego. I have no idea what the rest of the country think of his findings.
Click on the title for the rest of the article.
God Bless.