Saturday, April 30, 2011

Real estate apps for a smart phone suddenly my lap top seems like a relic!

Real Estate Apps on Your Smartphone

by admin on April 28, 2011
With smartphones and apps in abundance, it is no surprise that there is an app for just about everything. Homebuyers searching for the perfect home can now utilize their phones or tablets to find nearby houses in their price range.
Take a look at this Wall Street Journal video about real estate apps:

Is my credit my friend? Do I invest in improvement? Why do I care? Part 1


I have met with many folks who for work have moved here from other Countries. They are shocked at how much credit Americans have and it got me thinking about the importance of good credit in our Country. Many other places in the world, in fact most, credibility, your performance keeping promises is critical in business and finance. In this Country we say what is your credit score?
Credit scores are a predicting tool created through the efforts of Fair Issacs in San Rafael California. They took 5000 loans and studied why people pay and why they don't. The things they learned included;
Clients with most who had leveraged or borrowed most of their available credit are a higher risk
Those applying for credit often are a higher risk
Those with late payments that are recent or consistent are a higher risk
Those who do not use their credit at all for 6-9 months can not be read or rated
Those who have consumer finance company lined of credit are a higher risk

There are more but after studying loans they determined the Fair Issac score or FICO. Each of the three credit bureaus have their own scoring model. The scoring model used for mortgage loans ranges from 350-850 and you will find some on sites that sell scores that go to 950 this is not what we use for mortgage lending.

Where scores fall short largely is due to inaccurate ratings by creditors and not being intuitive. Let me explain if I have a client who has too much credit and too many cards a good debt management tool is to close out accounts. That makes sense right? However since this client actually reduced their available credit by closing out accounts they reduce their scores. There are other examples which I will cover later but now let’s answer my questions

Credit scores determine eligibility of obtaining credit
They are used at times as a character indicator for employment
They are used to price loans- gone are the days of what are your rates? Now we must ask more questions because pricing is tiered based upon down payment, credit scores and debt to income ratios.

I will talk more later but TAKE YOUR CREDIT SERIOUSLY because it will cost you if you do not.

Thursday, April 28, 2011

Why get pre-approved?? A ha there is a differance


While most mortgage lenders offer a form of “pre-approval” for a loan, Princeton Capital is one of the few lenders anywhere that can do an actual fully underwritten loan pre-approval. With our banker and broker business model, pre-approvals for loans are not conditional on multiple minutiae of a transaction.

It is difficult to overestimate the power of a real loan pre-approval and its role in a successful real estate transaction. Pre-approvals make the seller of a house more comfortable about the offer, and in a competitive market, this can make all the difference.

According to Bay Area Realtor Larry Miller of Coldwell Banker, standard practice in the area is that a loan pre-approval accompanies any offer on a home. When the pre-approval comes from Princeton Capital, he is able to give the seller complete confidence that buyer is, in fact, qualified and the transaction will be able to close.  Not so with many other pre-approvals, which are not fully underwritten and thus are only worth the paper they’re printed on.
“If a seller is looking at two different offers, they can feel much more confident with the Princeton Capital one,” said Miller.

The difference between the loan pre-approvals the real estate agent sees from other loan companies and from Princeton Capital is the reliable commitment of the latter that the buyer does indeed qualify.
Looking over pre-approval letters from three diffferent companies, one of which being Princeton Capital, Miller pointed out the extensive conditions on the other letters – one of which included more than eight conditions under which the”pre-approval” was not guaranteed.
“How much confidence can this give you?” asked Miller, in reference to the extensive conditions and lack of guarantees on one pre-approval letter.

A true pre-approval from Princeton Capital gives homebuyers a huge competitive advantage when making an offer on a home, because sellers can be completely confident that the buyer is indeed able to purchase the home, speeding up the transaction and ensuring its success.

Sunday, April 24, 2011

Book tips

My friends I read two books this weekend that I enjoyed and wanted to share this with you as good reads that challanged my thinking (I like this!).

The Happiness Project- Gretchen Rubin- she spent 1-year doing things that brought joy and happiness to her life. The book went through the minutia a lttiel much for you but it made me think more about why do so many things that are part of our day, the proverbial to do list, out of habit and should invest more in singing, cleaning out the clutter, reading more books, watching a favorite movie, walks whatever it is that brings you joy!

The second book was The Paleo Solution: The Original Human Diet [
Robb Wolf - I admit wanting to live well and live longer. I have 4 friends who have been on this plan for 1-year  and 3 of them are far more vibrant than before and 1 has had good results. I wonder what you think about these two books? Have you read them?? I am researching with a nutrionist and a MD before I make my decision.
 
 

Friday, April 22, 2011

sales are up!


This past March has seen the most home sales in Santa Clara and San Mateo counties in four years. According to an article in the San Jose Mercury, sales were up 4 and 5% in the respective counties  since March last year.

However, prices remain lower in these counties. “The median price for a single-family home in Santa Clara County was $528,000, down 4 percent; the median sales price in San Mateo County was $595,000, down 15 percent from a year ago,” said the Mercury.

South Bay sales were greater than Bay Area sales as a whole, with a 1.9% increase in home sales.
Foreclosure sales made up 31.5 percent of Bay Area resale transactions. Short sales — at prices less than the value of the mortgage on a home — made up 17.6 percent of the market.

The president of Dataquick, which measured these results, said “The housing market has certainly moved well back from the abyss of two years ago… [but] The big issue continues to be mortgage financing, which is still problematic for many potential borrowers.”

reduce stress when you move?? Never had that experience

Ways to Reduce Stress When You’re Moving

Buying and selling a home and moving is one of the most stressful processes on the human psyche. It is important that while going through the real estate process, you find time to take care of yourself.

Just like on an airplane, you have to put an oxygen mask on yourself before helping anyone else. This means that in order to be able to take care of things and other people, it is important that you make sure you take care of yourself first.

Savor time taking care of yourself to reduce the stress of moving.
Try setting aside relaxation time just for yourself each day, and do something you enjoy, despite the hectic and stressful nature of moving.

Reading a good book, spending time outside, taking a long bath, getting a massage – things like this will help you reduce your stress level immensely. With less real estate stress, handling the details will be easier.

Thursday, April 21, 2011

How to build finances back up if you were unemployed


If you are back in the workforce after a layoff, you might be wondering how to address financial issues.
For many re-employed people, a new paycheck might not solve all money problems. According to a survey by CareerBuilder, among workers who were laid off in 2010 and found new jobs, 61 percent took pay cuts.

With money tight, pay attention to urgent expenses first.
Attend to maintenance on your home and car. If you put off medical care for yourself and your family, that should be attended to. Advisors for Money magazine say it’s important to get the basics back on track.

The next priority is paying off credit card debt you have accumulated, paying more on the card with the highest interest rate first. Big credit card debt can harm your credit rating.
Paying off a home-equity line of credit is less urgent. The interest is tax deductible. Since the debt is secured, it won’t affect your credit score very much.

Since you have probably used all or most of your cash reserves, it’s important to rebuild them at the same time. If you have $500 a month in discretionary money, advisors recommend that you put $300 toward debt and $200 toward savings.

Next comes your retirement fund. Even if you can only manage a very small amount, contribute to your new company’s 401k plan right away.

If you don’t have enough cash to save and pay down debt, plus put a small sum into your retirement plan, it might be wise to refinance your mortgage. Especially if you have significant home equity, it will be easier to do now that you are employed.

Once you have met these goals, you will have more money to put into living life instead of playing catch-up.

Wednesday, April 20, 2011

John Miller QBQ http://www.qbq.com/blog/

I'm not very impressed with titles anymore. I used to be. Coming out of Cornell in 1980 and working for the large firm, Cargill, getting that "branch manager" title meant everything. Then, as a young salesperson selling management training, it was scarier to call on a CEO or an SVP than a director or a sales manager. But most of this has worn off—and for the right reason:
Titles don't leave the legacy. People do.
And since "legacy" is a pretty heavy word, how about this: Trail of Impact. Each of us, every day, has a chance to impact others through our words and our actions. Just in the past few days, I've had these random opportunities to leave a positive trail as I interacted with:
  • The Lowe's Home Improvement guy, working hard on Saturday to install our new dishwasher.
  • A confused caller who mistakenly dialed our land line twice looking to buy a car we didn't have for sale.
  • My wife, Karen, asking for help on a home project that I didn't know was on our agenda that day!
  • The flight attendant roaming the aisle during a five hour flight, inquiring, "Coffee, anyone?" as most passengers failed to acknowledge her at all.
  • The hotel trainee who took almost 20 minutes to check me in after that tiring five hour cross-country trip!
  • My colleague and daughter, Kristin, as we spent a full day working on—and sometimes disagreeing about—a "QBQ! for Schools" classroom curriculum. (More on this new product soonpromise!)
In these various moments with a variety of people, I had a choice to speak and act positively or negatively. In that time—and in my wake—a trail develops; a Trail of Impact.
Now, in an everyday way, I should strive in all moments to create a positive trail simply because it's the right thing to do. But, I must admit, I've always been intensely intrigued by "vendor-customer" moments. As we say in Outstanding! 47 Ways to Make Your Organization Exceptional, it's critical that we "never forget who pays the bills."

From Mitch of Husqvarna Construction Products, a reader of Outstanding!, comes this story:
John, I just had two bad travel weeks trying to get home on Fridays. Stranded by one airline the first week in Chicago, I had to buy a ticket on a different airline to get back to my family. The following Friday afternoon, after a complete fiasco with late flights and airline employees who did not care, we finally boarded the plane. Ahh, going home at last! I thought. As we were being told to raise our seat backs and tray tables, one passenger behind me was talking to her seat mate and didn't hear the instruction. Suddenly, a flight attendant loudly shouted at this customer, "I said put your seat back up!!!" Everyone within earshot seemed stunned. Fed up with lousy service in general, I stood up and said in my most commanding voice, "Excuse me!!!" I now had the attention of everyone within fifteen rows—including the just lectured passenger and the flight attendant. I turned to the woman who had been chastised and stated with a smile, "Welcome on board today and have a nice flight." Two seconds later the cabin filled with applause. Sitting down, I did my best to ignore some pretty nasty looks from the flight attendant.

By then, I was convinced that all airlines are alike and outstanding service doesn't exist anymore. Soon after, I boarded a flight expecting more of the same—but I was pleasantly surprised. The flight attendant, Christi, went above and beyond. Once in the air, after the regular delivery of pretzels and drinks (all you wanted, with no rationing), I assumed she'd take her seat to read a magazine. Instead, she joyfully traveled the aisle offering copies of puzzles and word games that she had obviously prepared before the flight. Clearly, she felt personally accountable for her guests' satisfaction on her plane. I told Christi that she was outstanding, a breath of fresh air, and the best flight attendant I'd seen in a long time. The next day I wrote a letter of praise to the airline.

As you write in Outstanding!, it's true: Customers can fire the organizations they do business with, just as they can "re-hire"—over and over—the ones they prefer. I have every intention to fly Christi's airline whenever I can!

Tuesday, April 19, 2011

take control of your credit! This is from Equifax

eqfx.cm
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to t

this weeks market updates

This Week’s Market Commentary

by admin on April 18, 2011

This holiday-shortened week is pretty light in terms of economic news scheduled for release. There are only three economic reports scheduled and none of them are considered to be highly important to the financial or mortgage markets.

Accordingly, there is a decent possibility of seeing a relatively calm week in the mortgage market, assuming that the stock markets do the same.

There is nothing of importance scheduled for release today. March’s Housing Starts is the first data, coming early Tuesday morning. It gives us a measurement of housing sector strength and mortgage credit demand by tracking starts of new home construction and the number of permits issued for future starts.
This data usually doesn’t cause much movement in mortgage pricing unless it varies greatly from forecasts. It is expected to show an increase in construction starts of new homes. Good news for the bond market and mortgage rates would be a decline in home starts, indicating housing sector weakness.
Wednesday’s only data is March’s Existing Homes Sales numbers from the National Association of Realtors. This report also gives us an indication of housing sector strength and mortgage credit demand. It is considered to be moderately important to the markets, but can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a drop in home resales because a soft housing sector makes a broader economic recovery difficult. Analysts are expecting to see an increase in sales between February and March. The larger the increase, the worse the news for bonds and mortgage rates.

The third and final report of the week will be posted late Thursday morning when the Conference Board releases their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this report. It is expected to show an increase of 0.2%, meaning it is predicting slight growth in economic activity over the next several months. A smaller increase, or a decline would be considered good news for the bond market and could lead to slightly lower mortgage rates.

The bond market will close early Thursday and will remain closed Friday in observance of the Good Friday holiday. The stock markets will be open Thursday for a full day of trading, but will also be closed Friday. The markets will reopen for regular hours Monday morning. The early close and Friday holiday may lead to some volatility in bonds Thursday afternoon as investors protect themselves over the long weekend. I don’t believe that this volatility will necessarily impact mortgage rates, but the possibility does exist, especially if the preceding days were active.

Overall, it is difficult to label one particular day as the most important of the week with no key economic data or other events scheduled. A good part of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall, we could see mortgage rates move lower the next few days. There is nothing on the agenda that is of much concern, but keep an eye on the markets and maintain contact with your mortgage professional if still floating an interest rate as conditions can change at any time.

Friday, April 15, 2011

Home are selling faster


The big day was March 20, the first day of spring. As almost everyone knows, it begins one of the most active seasons for home searches.

For good reason: If you can dodge the April showers, the weather will be nice. Flowers coming out everywhere will tempt you to drive about and see what appeals to you. Even if you haven’t decided to take the plunge, you could find that today’s bargains are hard to resist.

Home sellers will be out there with bells on. They know that buyers, dreamers and lookers will be out in force. Whichever category you fall into, they and their real estate agents will be pleased to see you.
Agents know that the lookers and dreamers of today could be buyers in the future. The agents are available in their offices or at open houses to tell you about the finer points of buying and selling. When your time comes, you will be prepared and knowledgeable.

Visiting open houses can be more than an enjoyable Sunday afternoon activity. Visitors get an idea of what features and home designs would best suit their needs, as well as what features should be added to their list of wants. Often, they can pick up a sheet of detailed information on a home, which can be referred to later on.

In spring, there are more homes on the market than at any other time of the year. You’ll find good bargains on some foreclosures that banks are willing to sell at a reduced price. But whether or not a home that interests you is in foreclosure, the price will be less than it would have sold for a few years ago.

That doesn’t mean that sellers aren’t willing to negotiate. Many have significant reasons to sell. Some sellers have to move to another city because of their work. They want to make a move well before school begins in fall.

Other properties might be part of an estate and heirs want to make a deal. Some sellers are retired and want to move to a smaller place.

There are many reasons sellers and their agents would like to see you!

Thursday, April 14, 2011

Credit scores tell me how to have a better score

The Complicated World of Credit Scores

by admin on April 12, 2011

Lenders use different credit scores for different purchases.
If you have successfully navigated a website that offers to sell you your credit score, you may think you have all the information you need in order to apply for a loan or new credit card.
Not necessarily. The score you received could be quite different from what a lender receives. Different scores are offered for mortgages, car loans, insurance and more.

Under the Fair Credit Reporting Act that took effect January 1, lenders must either tell those who apply for credit what score was used, or tell them how it was used if the applicant doesn’t receive the best terms available.

Here are some reasons why a credit score (a number between 300 and 850) still won’t tell you how a lender evaluates of you:
* Some lenders give the best rates to people with a score of 740, others may use 760 or higher. Some give credit to people with scores in the high 500s, but others require 620 or more.
* Credit scores don’t reflect whether you are making good financial decisions or poor ones.
If you refinance your home at a lower interest rate, inquiries could show up on your report. Inquiries lower a score.

* Late payments show up on your score for a couple of years, but paying down a high balance has an immediately beneficial impact.

* If you pay your credit card bill in full every month, you don’t get a zero balance on your credit report. The report shows the balance at the end of the billing period, before the payment.

* Rather than checking your score frequently, you are better off making sure the information on your report is correct. Make your payments on time and reduce monthly balances for a month or two before applying for a loan or mortgage.

Tuesday, April 12, 2011

I found a great article about condo sales in the Bay Area take a look at the article link

I asked Jeri Fink of State Farm how should I shop for insurance

When searching for insurance, here are a few things to consider:
~When you call for a quote, do they care about you by asking questions, personalizing the quote or just throw one at you?  
~Do they explain things or ask if you have questions?
~Does the agent do annual reviews with you, to verify proper coverage?

Here at Jeri Fink’s State Farm office, we pride ourselves on being the best at what we do. Give us a call & let us prove it #650-812-2700

I think the market is recovering this article does not what do you think?

Is the residential real estate double dip official?

Wall street Journal article I found interesting what do you think?

Monday, April 11, 2011

This weeks market commentary

This Week’s Market Commentary

by admin on April 11, 2011

This week brings us the release of seven relevant economic reports for the bond market to digest. We are also heading into corporate earnings season, which could lead to fluctuations in the stock markets.
If earnings come in lighter than estimates, the stock markets may fall, leading to an influx of funds into bonds. But if earnings and forecasts are strong, the major stock indexes may rally, pulling funds from bonds and leading to higher mortgage rates.

There is no relevant economic news scheduled for release tomorrow. The first report of the week comes Tuesday morning but it is the least important one. February’s Goods and Service Trade Balance will be posted early Tuesday morning. This data gives us the size of the U.S. trade deficit, but unless it varies greatly from forecasts, it likely will not cause much movement in mortgage rates. Current forecasts show a $45.7 billion trade deficit.

The first important report will be posted early Wednesday morning when the Commerce Department will release March’s Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Forecasts are calling for a 0.5% increase in sales last month. If we see a larger increase in spending, the bond market will likely fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Wednesday.

The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET Wednesday. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. Generally speaking, signs of strong economic growth or inflation rising would be considered negative for bonds and mortgage rates. Slowing economic conditions with little sign of inflationary pressures would be considered favorable for bonds and mortgage pricing.

The two Treasury auctions are scheduled for Wednesday and Thursday. There is a 10-year Treasury Note sale Wednesday and a 30-year Bond sale Thursday. We could see some weakness in bonds ahead of the sales as investing firms sell current holdings to prepare for them. This weakness is usually only temporary if the sales are met with a decent demand. The results of the auctions will be posted at 1:00 PM ET each day. If the demand from investors was strong, the bond market could rally during afternoon trading, leading to lower mortgage rates. If the sales were met with a poor demand, the afternoon weakness may cause upward revisions to mortgage pricing Wednesday and/or Thursday afternoon.
Thursday’s important data comes when the Labor Department will post March’s Producer Price Index (PPI) at 8:30 AM ET. It will give us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices since it erodes the value of a bond’s future fixed interest payments, leading to higher mortgage rates. A slight increase, or better yet a decline in prices, would be good news for the bond market and mortgage rates. Current forecasts are calling for a 1.0% increase in the overall reading and a 0.2% rise in the core data.

The remaining three economic reports will all be posted Friday morning. This first will be March’s Consumer Price Index (CPI). This index is one of the most important pieces of data we see each month. It is similar to Thursday’s PPI but measures inflationary pressures at the consumer level of the economy. If inflation is rapidly rising, bonds become less appealing to investors, leading to bond selling and higher mortgage rates. As with the PPI, there are two readings in the index that traders watch. Analysts are expecting to see a 0.5% increase in the overall readings and a 0.2% rise in the core reading. If we see larger increases, we could get higher mortgage rates Friday.

March’s Industrial Production data will be posted at 9:15 AM ET Friday. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for an increase in production of 0.6%. This data is considered to be only moderately important to rates, so it will take more than just a slight variance to influence bond trading and mortgage pricing.

The final release of the week is the University of Michigan’s Index of Consumer Sentiment at 9:55 AM ET Friday. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a sizable decline from March’s 67.5 reading. Current forecasts are calling for a reading of approximately 66.0.

Overall, look for the most movement in rates the middle part of the week. The Retail Sales and CPI reports are the biggest names on the agenda. Either of them can cause significant movement in the markets and mortgage rates, so either Wednesday or Friday will probably be the most active day of the week. Look for the stock markets to influence bond trading and mortgage rates the first part of the week, but we can expect to see the most movement in rates the latter part.

Sunday, April 10, 2011

Home prices and rates set up a mix of more people being able to qualify!

Time for a Home of Your Own?

by admin on April 5, 2011

Today, you can get all of what you need and most of what you want.

When it comes to fine kitchens, more bedrooms, storage space, and great features, your chance of getting them all is better than in many previous years. How about a deck and a sunroom?
The recent Housing Affordability Index by the National Association of Realtors is 173.8, or about 40 points lower than in 2008.

How to Qualify
The average price for a single-family home in the index is $170,300. To qualify for that purchase at an interest rate of 5.09 percent, buyers would only need a family income of $34,512.

Another interesting way to look at affordability was shown recently in The Wall Street Journal. The Journal reported that the cost of a home now is equivalent to about 19 months of total income for an average family. Previously, home prices averaged about 24 months of an individual or family income. That means more buyers can afford a home right now.

While the affordability numbers are a good indication, the number of available homes is also a plus. Home buyers can find many in their price range to choose from. Why should they pay  high rents when they could be accumulating equity?

What Mortgage Brokers Say

Home ownership is a smart choice when you have reached a stable situation in your life. According to mortgage brokers, that means you have decided on a life path and are taking steps to achieve it, and your income is secure.
When you aren’t moving to another city in the next several years, and you have savings for a down payment, you are ready to move forward with your housing plans.

An idealized vision of how life should be will help you choose a home, but the mortgage brokers say the basic facts to justify The American Dream should be in place.

Friday, April 8, 2011

Colors when we paint we add life to our homes do we add value too??

Focusing on Color: Painting your World

by admin on April 8, 2011

Wherever we go, we respond to color, though its effect is often underestimated. Color use is important to us in our homes and workplaces.

If you are selling a house, you will want to choose different colors than those you might use for your own home.

If you just purchased a house, you can add some of your own personality with paint.
HGTV’s Shari Hiller says color accounts for 60 percent of our response to a room. Here is some advice.

Living room: Start with colors you love from something in the room. Consider colors from artwork, a rug, dishes, an accessory or furniture for a main color or accent. Buy two or three quarts of paint. Paint sample boards to hold up to the furniture, fabrics and surfaces you choose.

If you aren’t sure where to begin with a color, experiment in a bathroom, a small hall or area between rooms. The dining room: Do you want the area to feel social and stimulating or be formal and quiet? Warmer, contrasting and somewhat brighter colors add to a sociable atmosphere. Deeper blue-greens and neutral colors make the dining area more formal.

The monochromatic color scheme: In any room, one color need not be boring. You can create bold or subtle variations within one color group with contrasting paint finishes. It helps to use matte finish paint for walls and slightly shiny eggshell paint for wood trim. The paint will appear to be a slightly different color. It can be attractive to paint an entire wall in a lighter or darker hue of the same color.

White or off-white tint can be a striking accent when used as trim with a monochromatic color group.
For bedrooms: Softer, cool colors and neutrals create a quiet feeling.

Children’s bedrooms: Stay away from bright and intense wall colors, which are said to lead to unrest and irritability.
For an accent color in any room, select a warmer color, more toward reds, or a cooler color more toward blues, to compliment your main color group.

Thursday, April 7, 2011

Post from my friend John Miller author of QBQ

Be Like Butler Brad
by John G. Miller
The QBQ! Guy
Twitter: QBQGUY
Facebook
LinkedIN
I grew up a wrestler. For that reasonand because I top out at 5' 6"I've never been much of a basketball fan. And if I did watch the sport on TV, it was the NBA and our local Denver Nuggets, not the NCAA. But that's all changed now, thanks to Coach Brad at Butler University.

A digression ...
In September of 2010, we received a QBQ! QuickNote subscription from Cathy in Indiana. As many of you know, when you sign up we ask, "How did you hear of QBQ!?" The responses range from "My dad told me about it!" to "I found a copy at the thrift store!" to "Our CEO bought everybody a copy!" It's always fun for me to see how QBQ! (as well as Flipping the Switch and Outstanding!) came into someone's life.

And on that day in 2010 Cathy wrote this:
"Brad Stevens, the head coach of the Butler Bulldogs basketball team (NCAA runner-up to Duke in 2010), spoke at our staff meeting. Part of his message was about personal accountability, and he mentioned the QBQ! book. He said it is required reading for all of his players. When something goes wrong on the court like a bad call, missed pass, or a player loses his man on defense, the players can come back to the sidelines distracted by what just happened. That's when the coaching staff simply says "QBQ!" and everybody knows what that meansand gets refocused. Something certainly is working for them, so I was compelled to read the QBQ! book, too."
Honestly, my first thought was, Who is Brad Stevens? Well, thanks to Cathy's note and a call the same week from an Alabama coach looking for QBQ! books for his team (he'd heard about QBQ! from Coach Brad, as well), I thought it was high time I thank this guywhoever he was!

Well, what a treat it was when Coach Brad responded to my email, affirming it's true that all Butler players for the past several years have been given QBQ! to read.

So, I started to take note of this man from afar—and I am impressed. Allow me to share what I think he understands ...
Teamwork: Coach Brad knows that even in a tremendously collaborative arena like basketball, it's STILL ABOUT THE INDIVIDUAL. Don't buy the lie, "There are no I's in team!" Not true. Every corporate, nonprofit, athletic, family, and church team I've ever come across is full of I's. And it's amazing what a team can do when each person practices Personal Accountability. Teamwork is great, but high functioning teams are built on individuals who don't blame, procrastinate, or engage in victim thinking.

Humility: After Butler's come-from-behind victory against Florida in the 2011 NCAA tourney, he stated in an ESPN interview that he'd been "out coached" and that his assistants and team had carried him. This statement, coming after a big win, caused a lot of head scratching in the media. Why? Well, it's simple: The sports world isn't accustomed to hearing contrite statements like that.

Perspective: People speculate about which big school might offer him a ton of money to come coach. To that Coach Brad says, "It’s not like I’m a guy who thinks the grass is greener somewhere else just because everybody says it’s supposed to be. I think that we are very fortunate to have really green grass at Butler.” For a young guy who's become famous real fast, he still has both feet planted firmly on the ground. A rarity in our world today.

Maturity: Go ahead, watch him on the sidelines. This is one guy you won't see cussing at the officials and throwing chairs out of childlike anger. His calm and cool style is an outstanding example for players and coaches everywhere ... and the rest of us, too.

Grace: After Butler's loss to University of Connecticut in the 2011 finals, he stated, "I don't love my guys any less because we lost." Hmmm, I bet young athletes everywhere could stand to hear an it's-not-all-about-winning message from mom and dad, and their coaches, too.

Personal Accountability: Coach Stevens made a very meaningful statement to me. He said, "Accountability is a core value for our team and QBQ! defines it for us." Obviously, I couldn't be more honored. Thank you, Coach! But after watching him being interviewed several times now, I didn't really need him to tell me that. It's evident in his words and his actions. Clearly, Personal Accountability is not just a corporate value for the Butler team, but a personal value for the Butler coach.
I'm sure there is much more to Coach Brad Stevensthe husband, the dad, the man of faith—but I've never met him. I hope to someday. And if I do, it'll be this author asking for his autograph. I'll also thank him for not only engendering in a former grappler an interest in college basketball, but for representing his sport in an outstanding way.

Note: As always, we'd be delighted to have you forward this QuickNote to everyone you know, but at the very least, please send to coaches, school superintendents, and athletic directors everywhere. Thank you!
John G. Miller The QBQ! Guy

Article about how our home is such a major source of retirement

Gallup: 36% of Pre-Retirees See Home as Major Source of Retirement Funding

April 6th, 2011  |  by John Yedinak Published in News, Reverse Mortgage
Retirees and pre-retirees have a lot in common when it comes to funding retirement.  They all intend to rely on the same six major funding resources, but those who are still working say they plan on depending far more on their personal resources than Americans already in retirement according to a new Gallup Wells Fargo poll.

The survey found that 48% of retirees consider social security to be the #2 major source of income during their later years, while non-retirees 28% percent consider it to be their 6th major source of income later in life.

“In one sense, these findings are encouraging. Many American investors who have yet to retire recognize the need to provide their own funding for retirement and are acting to make that happen,” said the report.  ”Further, investors are hopeful about retirement, with 72% of retirees and 62% of those yet to retire believing retirement is/will be a fulfilling phase in their lives.”

Despite the significant drop in home values the last few years, 36% of pre-retirees markets look to the equity in their home as a major source of retirement funding — similar to the 32% of current retirees.  The report doesn’t say whether the respondents plan on selling their home, taking out a HELOC, or using reverse mortgages.

About three in four investors say the major factor that will determine when they are financially able to retire is the value of their investments. This reflects non-retired investors’ reliance on their own resources to fund their retirement.

Two in three investors rank their personal health and the cost of healthcare as key determinants of their financial ability to retire. This is likely one of the reasons why so many Americans continue to worry about the full implications of the healthcare reform legislation passed last year.

“On the other hand, less than half of investors — who represent roughly the top third of Americans in terms of investable assets — are confident in their ability to achieve a comfortable retirement or maintain their lifestyle without working in retirement,” said Gallup.  ”This lack of confidence concerning retirement among this more financially secure group of Americans does not bode well for those who are not as well off. Maybe that is why retirement remains high on Americans’ worry list.”


Wednesday, April 6, 2011

Loan amounts change later this year great time to buy is now!

Lower Loan Limits Coming October 2011

by admin on April 6, 2011

At the beginning of the mortgage meltdown a couple of years ago, Congress enacted emergency legislation raising the limits on High Balance Conforming Loans.

These loans are designated “conforming,” meaning lower interest rates and typically a slightly easier transaction to get approved and closed when compared to Jumbo (or non-conforming) financing.  The High Balance variety is only available in designated high cost areas, like the San Francisco Bay Area.
Currently the “temporary” limit on these loans is $729,750.  This means that if you put 20% down on a $900,000 home, you can get a conforming loan in the amount of $720,000.  Effective October 1, 2011 the emergency legislation expires and is not expected to be extended.  This lowers this High Balance Conforming Loan to $625,500.

So, what does that mean to you?  If you buy the same $900,000 home and put 20% down, your loan will now be considered a Jumbo loan.  Rates on Jumbo loans are typically 1-1.5% higher, so if today you could get that loan for, say, 5% your payment would be $3865.12.  The same loan amount using the Jumbo rates would be 6-6.5%, bringing your payment to $4550.89.  Over 30 years, that totals over $246,000!  The other option would be to put a larger down payment on the property, to the tune of nearly $100,000.

The important thing to note is that if you are looking for a loan to purchase a home, or refinance the one you already have, now is the time to move forward. The limit will remain at the higher point until the first of October, giving home buyers the spring and summer seasons to purchase a property before the high limits are gone.

To find out what the current loan limit is in your area, you can access the Fannie Mae website to see a county-by-county spreadsheet.

According to Alan Russell, a local mortgage professional, “The higher limits have really helped people get into homes here in the Bay Area.  Once those limits reduce, there will be fewer options for those trying to get into the real estate market.  I’ve been talking to all my buyers and giving them fair warning that the time to move is definitely now.”

Tuesday, April 5, 2011

This weeks market update take a look and let me know what you think

This Week’s Market Commentary

by admin on April 4, 2011

This week brings us the release of little relevant economic data for the markets to digest. We will, however, see the minutes from the last FOMC meeting.

There are no important monthly economic reports scheduled for release this week, so look for the stock markets to heavily influence bond trading and mortgage rates.

There is nothing of relevance scheduled for today or Tuesday morning, but Fed Chairman Bernanke will be speaking at a financial conference in Georgia tomorrow evening. Whenever he speaks, the markets pay attention and this one will be no different.

However, since the speech is at 7:15 PM ET, we won’t see its impact on the financial and mortgage markets until Tuesday morning. I don’t believe that his words will cause too much movement this time, but the potential does exist, especially since it is an extremely light week in terms of economic releases and other relevant events. Therefore, we should be attentive to what he says.

The first important event comes Tuesday afternoon when the Fed releases the minutes of their last FOMC meeting. Market participants will be looking at them closely. They give us insight to the Fed’s current thought process and individual Fed member opinions.

Any surprises in the 2:00 PM ET release, particularly about inflation or when the Fed may start raising key interest rates, could cause afternoon volatility in the markets Tuesday and possible changes in mortgage pricing.

The only other data worth mentioning is the weekly release of unemployment figures Thursday morning. This data usually does not impact mortgage rates much, but due to the lack of other data on the calendar this week’s update could influence rates. Analysts are expecting the Labor Department to announce that 385,000 new claims for unemployment benefits were filed last week. This would be a small decline from the previous week. The larger the number, the better the news for the bond market and mortgage rates.

Overall, there are several variables that could make this week very quiet or quite rocky for mortgage shoppers. Tuesday’s FOMC minutes could very well be a major market mover or a complete non-factor. In other words, we may have a very calm week ahead of us, or we may see rates move noticeably several days. With no important economic data to drive trading and mortgage rates, bonds may move with stocks. This means large stock gains could lead to bond selling and higher mortgage rates. But stock weakness could lead to mortgage pricing improving for the week.

Saturday, April 2, 2011

Fed Lending saved many

The Fed’s Crisis Lending: A Billion Here, a Thousand There
Joshua Roberts/Bloomberg News
The Fed released a complete list Thursday of banks that borrowed during the crisis from its discount window, its oldest and broadest emergency lending program.
WASHINGTON — The Federal Reserve’s huge lending programs, which saved Wall Street in the fall of 2008, also benefited a wide range of other financial companies, including community banks, credit unions and foreign banks, according to documents released by the central bank on Thursday.
Multimedia
Hundreds of small banks borrowed modest amounts of cash in 2008 and 2009, ranging from $1,000 to several million dollars, from an emergency loan program known as the discount window.
The Fed also used the discount window to make dozens of loans, often exceeding several billion dollars at a time, to the United States Central Federal Credit Union, helping to prevent a collapse that would have harmed hundreds of smaller credit unions. And the Fed helped to save some of the largest banks in Europe by pumping desperately needed dollars into their American subsidiaries. In fact, the biggest borrower from the Fed program was Dexia, a French-Belgian bank that frequently held more than $30 billion in outstanding loans from the program from late 2008 to early 2009.

The story of the Fed’s efforts to rescue giant banks like Merrill Lynch, Citigroup and Washington Mutual from the consequences of reckless lending and investments is already well known. The central bank released detailed information in December about the emergency programs it created to pump billions of dollars into those banks.

But the Fed fought long and hard to preserve the secrecy of transactions at the discount window, its oldest and most inclusive lending program. The grudging release of the data Thursday, in a format that impeded analysis, came only after a series of federal courts ruled in favor of lawsuits brought by Bloomberg News and Fox News.

The long list of borrowers, provided in the form of a daily loan register, gives a striking impression of a crisis spreading to every last corner of the financial system.
By late October 2008, the volume of outstanding loans topped $100 billion, with several dozen banks borrowing each day.

Some banks borrowed minimal amounts to test the process in case things got worse. For example, First City Bank in Fort Walton Beach, Fla., borrowed just $1,000 in October 2008 and repaid the money the next day.

“Our regulators encouraged us to do it,” the bank’s president, Robert E. Bennett Jr., said.
Other banks were already struggling to survive. Pacific National Bank of San Francisco borrowed 125 times from February 2008 to February 2009. The bank was closed by regulators in October 2009.
Borrowing from the discount window, even on a confidential basis, has long been viewed as a sign of weakness, to be avoided if at all possible. From 2003 to 2006, the Fed lent an average of less than $50 million each week.

By the summer of 2007, however, the Fed was increasingly concerned that banks were shunning necessary help. In August, officials cut the cost of borrowing from the discount window by half a percentage point. Then they arranged for four of the nation’s largest banks — Bank of America, Citigroup, JPMorgan Chase and Wachovia — to take what were described as symbolic loans of $500 million each.

The records released Thursday show that JPMorgan and Wachovia returned most of the money the next day. Bank of America and Citigroup, already showing signs of the problems they still face, kept the money for a month.

Perhaps the most surprising revelation in Thursday’s documents was that foreign banks quickly became the largest and most frequent borrowers. On Sept. 15, 2008, the day that Lehman Brothers filed for bankruptcy, the Austrian bank Erste Group borrowed $4 billion. By the end of that week banks from Spain, France and Japan had also borrowed billions.

An analysis of discount window lending from February 2008 to February 2009 shows that the vast majority of the loan volume went to foreign institutions.

Donald L. Kohn, the Fed’s vice chairman during the crisis, said that many foreign banks needed dollars to meet their financial obligations. The Fed arranged swaps with central banks in other countries to provide dollars, but the flow was insufficient.

“They not only borrowed dollars from their central banks, but they needed to borrow dollars from us as well,” said Mr. Kohn, now a fellow at the Brookings Institution.
Dexia was one of the most frequent and prolific borrowers.

By October 2008, the company’s American subsidiary was regularly visiting the discount window to renew what amounted to a line of credit that eventually reached into the tens of billions. The company continued to borrow from the Fed through November 2009, taking more than 100 short-term loans.
Dexia, which specialized in lending to municipalities, made the nearly fatal mistake of buying an American company that insured bonds — including subprime mortgage bonds. The governments of France, Belgium and Luxembourg invested about $9.2 billion to stabilize the company in 2008.
Ulrike Pommee, a spokeswoman for the company, described the information released Thursday as “backward-looking,” and said the bank had been open about its need for help.

“Dexia was one of the banks most dependent on central banks,” Ms. Pommee said in an e-mail. “The Fed played its role as central banker, providing liquidity to banks that needed it.”

The Arab Banking Corporation, partly owned by the Central Bank of Libya, was another frequent visitor, taking more than two dozen short-term loans of several hundred million dollars each.
“It is incomprehensible to me that while credit-worthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit,” Senator Bernie Sanders, Independent of Vermont, wrote in a letter sent Thursday to the Fed chairman, Ben S. Bernanke, and other government officials.
The data also provided new details on the struggles of the largest banks.

Goldman Sachs, which has said that it borrowed from the window only as a test, took five loans of $1 million to $50 million between September 2008 and January 2010.

JPMorgan Chase, which lately has insisted that it did not need government aid during the crisis, also took discount window loans on several occasions, including a $3.5 billion loan in January 2008 on a day that it announced disappointing earnings.

The records show that several banks that failed or were forced into mergers borrowed heavily as problems deepened, including Wachovia, which is now part of Wells Fargo, and Washington Mutual, which is now part of JPMorgan Chase.

The Fed provided the data to reporters Thursday in the form of thousands of pages of electronic documents, loaded on a compact disc and distributed by hand.

Bankers have expressed concerns about the release of the discount window data, saying that the prospect of publicity will deter future borrowing.

“I think it will make it harder for people to use the discount window in the future,” Jamie Dimon, chief executive of JPMorgan Chase, said Wednesday.

Rob Gebeloff and Janet Roberts contributed from New York.

Good article about Fed Rules let me know what you think!

March 31, 2011

A Flaw in New Rules for Mortgages

If you want to get the government out of financing normal home mortgages, you have to find a way to bring in private capital — and on terms that do not make government-guaranteed mortgages a clearly superior product.

That fact was central to the Obama administration’s proposals to fix the housing finance market a couple of months ago, but it seems to have been forgotten by a collection of regulators that proposed rules this week on when banks will not have to retain risks for loans they make.

Perhaps inadvertently, they gave Fannie Mae and Freddie Mac, the government-run housing finance agencies, another competitive advantage. That is exactly the opposite of what needs to be done.

The proposals are generally good. They force lenders to shoulder some of the risk when they securitize all but the safest mortgages. That is what the Dodd-Frank law required, and for good reason. One of the big problems we had leading up to the crisis was that many lenders believed they could profit by making loans while leaving others to suffer if the loans went bad.

But where is that risk to be retained? The law says it should be retained by lenders or securitizers; an unwieldy group of regulators is left to fill in the details. The regulators are also supposed to determine what constitutes a “qualified residential mortgage” — one that is so safe that the lender need not retain any of the risk.

It was those issues that the regulators addressed this week. They decided that “Q.R.M.’s,” as they are called, had to be very conservative, with 20 percent down payments and strict limits on leverage. That is good. If mortgage loans do not meet the highest standards, somebody involved in making the loans should be responsible if they blow up.

Much of the criticism of the proposed new rules seems to assume that no mortgage loans will be made at all if lenders have to keep some of the risk.

“By mandating a 20 percent down payment on qualified residential mortgages, the administration and federal regulators are excluding those without huge cash reserves — which constitutes most first-time home buyers and many middle-class households — from a chance to buy a home,” said Bob Nielsen, a home builder from Nevada and chairman of the National Association of Home Builders.
Regrettably, some consumer advocates have joined in that chorus.
What should happen, said Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation and one of the regulators involved in the proposal, is that “Q.R.M. loans will be a small part of the market,” and other loans will be made by lenders who do have “skin in the game.” The proposal asks for discussion of ways that can be accomplished without forcing banks to tie up excessive amounts of capital.

“Economic incentives,” she said, “are the best check against lax underwriting standards.”
Consider how absurd this debate would have seemed a few decades ago. Then you got a mortgage loan from a bank, which stood to profit if you made your payments and risked loss if you did not. Imagine arguing that no bank would lend if it had to take a risk. What business, people would have asked, did banks think they were in?

Over the decades, banks got out of the habit of actually owning loans. Instead, the loans were securitized, with investors putting up the money. Some loans went to Fannie Mae and Freddie Mac, so-called government-sponsored enterprises, whose securities were widely viewed as backed by the federal government. Others were securitized by Wall Street firms.

Investors should have monitored the quality of the loans — just as Fannie and Freddie should have — but they did not. Lower rungs of those securities would take losses if there were a lot of defaults, but senior tranches were deemed completely safe by bond rating agencies, who assumed that losses would never rise to those levels.

You know what happened. Easy money led to excessive lending and soaring home prices. That led to overbuilding. Mortgages were written on terms that lenders knew home buyers could not really afford. The borrower would pay less than the interest owed for a while, and then payments would soar. It was assumed that a homeowner facing those high payments would either sell the home or refinance the mortgage, creating more fees and more mortgages to securitize.

Then it all collapsed. It turned out that people who could not afford payments did not make them. House prices began to fall, and refinancing or selling at a profit became impossible. Investors wanted no part of private-label mortgages, and banks wanted to lend to only the safest borrowers. Fannie and Freddie would have gone bankrupt without the government stepping in to rescue them.

Now the government is responsible for something like 95 percent of all new mortgages issued. The exceptions are “jumbo” mortgages that are too large to be guaranteed by Fannie or Freddie and that banks are keeping on their books.

The banking system is unlikely to want to keep enough loans to allow the government market share to shrink as much as it needs to, so it will be necessary to re-establish a private securitization market. That market has recovered for many things, like credit card and auto loans, but not for residential mortgages.
What will it take to get a private securitization market going?

First you need investors who are willing to believe that this time is different. The skin-in-the-game rules, plus additional disclosure being mandated by regulators, should help.

Second, you need to make Fannie and Freddie less competitive, without destroying the market. The Obama administration has supported gradually raising the fees they charge for their guarantees and reducing the size of the mortgages they can guarantee. The idea is to develop what some regulators call an exit strategy for Fannie and Freddie.

We don’t know how much fees would have to go up to provide enough for investors to step up, but we do know that the housing market is so weak that rapid radical action would be risky.

In looking to the skin-in-the-game rules, however, the regulators forgot about what seemed important when they were thinking about Fannie and Freddie. Community banks were insistent that they be able to sell loans to Fannie and Freddie without having to set aside any capital. Since the rules say it is the securitizer who is to take the risk — and Fannie and Freddie shoulder the entire risk when they guarantee securities — that seemed to make sense.

But it also gives the government lenders another advantage. Say you are with the First National Bank of Smalltown. You can sell your non-Q.R.M. loans to Bank of America to securitize, and it may try to find a way to make you keep some of the risk. In any case, since it will have to keep some risk itself, it has a stake in carefully monitoring your loan underwriting standards.

If Fannie or Freddie buys your non-Q.R.M. loan, there will be no private sector money at risk. Will they carefully control risks? We can hope. But they sure did not do that before. On the margin, it makes dealing with Fannie or Freddie more attractive to banks, and it makes a private market less likely to develop.

The proposed new rules are open for comment, and there will be intense lobbying to relax the Q.R.M. rules as a way of completely getting around forcing banks to take risks when they make loans. Small banks especially seem to think it is a birthright for them to make money on mortgages without suffering any ill effects if the loans go bad. They argue that they did not cause the last crisis, so they should not have to suffer now.

The founders of many of those little banks — now long dead — would never have thought it possible that such a right could exist. Now it is defended as critical to saving the housing market.
To get a private securitization market going, we need both to make that market more attractive to investors and to make Fannie and Freddie less attractive to banks trying to dispose of loans. This proposal does one, but unfortunately not the other.