Greg Vanslow rate sheet and wine tips love it!

Good afternoon,

The Bond markets plunged today after the labor Department reported that employers added 204K jobs in October, which was well above the 100K expected and up from the 148K created in September. August and September were revised higher by 60K. However, the Unemployment Rate ticked up to 7.3% as furloughed workers were counted as "out of work". In addition, 720,000 people exited the workforce in October causing the Labor Force Participation Rate to drop by 0.4% to 62.8%. The 4% coupon fell by 88bp to end the session at 104.31.

The 10 year treasury yield ended the day up 0.13% to 2.75%. Treasuries had been flat all week up to today. Last week’s close was 2.62%.

 

Stocks opened lower, but soon rallied on the Jobs Report - the Dow gained 167.80 today points to end at 15,761.78 - an all-time high record close and up from last Friday’s15,615.

The S&P 500 finished at 1,770.61 up 23.46 points while the Nasdaq rose by 61.90 points to finish the week at 3,919.23.

Oil was last seen at $94.37/barrel unchanged.

 

Some of the attached rates are up, but not the Jumbos. Rates are well below where they were over the summer, still.

 

QM

Lenders have begun rolling out new guidleines in advance of the roll-out of QM in a couple months.

The new max DTI (debt-to-income ratio) is going to be 43%.

Fannie, Freddie and a number of lenders have got rid of interest only loans.

 

GFE (Good Faith Estimate)

A couple years or so ago my brother-in-law was talking to me about his refinance. My sister’s good friend had already blown up one refi up after getting them to pay for an appraisal. After I got in my “I told you so” he asked me for input on the streamlined-no doc loan he was doing with his servicer. One worry, especially for my sister, was the loan officer kept telling him it was a no cost loan, but he kept sending GFEs to the house with $15,000 in fees on them.

My response was, “Only $15,000?  That’s nothing. I’ve done GFEs with $35,000 in fees on them when the actual is more like $2500. I give my clients an unofficial spreadsheet with my actual estimate, which is usually really close.”

Why would we inflate the GFE so much? While I didn’t like sending a GFE with $35k in fees to my clients it is what I had to do to make sure that I could serve the client the best. If I didn’t over estimate, by a lot, it would limit their options, and possibly derail the loan.

 

The GFE was the government’s idea of how to help the consumer. And to no one’s surprise, it didn’t. It’s about as useful a creation as you would expect from a government bureaucrat with no lending experience. It is mostly ignored in my experience, and those that don’t ignore it usually quickly decide it is best to ignore it. I’m happy to explain it, but I usually don’t get to finish my  explanation and I’m never asked about subsequent GFEs. “Can you send me an updated spreadsheet?” Of course.

Just last week my RESPA team and I and a wholesale lender’s team got into a days long argument over how to fill out the GFE.

You’re wrong, I told them. Our rep said, “I’m pretty sure you’re right about that, but this is how someone at HUD told us they interpret the rule and that’s how we are asking you to do it.”

And since he who has the gold gets to make the rules, even if they are wrong, we did it their way.

The point being that a few years and countless hours of training and practice later no understands it, still. It’s wonderful.

 

I used to tell people it at least stopped the bait and switch, but it didn’t even do that, it turns out. I could go on and on about the negative effects.

 

Anyway, I bring this up because in addition to QM we’re also getting a new good faith estimate in a couple months.

It will be combined with the truth in lending statement and the new HUD-1 will look similar to it.

Early reports are that it is a big improvement. Imperfect, but better. It couldn’t be worse.

 

More on this to follow.

 

Wine

2011 Sean Minor Carneros Pinot Noir - $13.99 @ Artisan Wine Depot, and other outlets – It’s a really good pinot for a great price. If you can find one as good for the money let me know.

 

2010 Teso La Monja "Romanico" Toro ($13.99 @ K&L)

 

92 points Robert Parker's Wine Advocate: "The 2010 Romanico (100% Tinta de Toro aged in 100% new French oak for six months) exhibits a sensational bouquet of licorice, unsmoked cigar tobacco, blackberries and cassis. Full-bodied, smoky, rich, complex, big and dense without being heavy or awkward, this beauty will drink well for 5-7 years. These are two extraordinary wines produced by the Eguren family in the province of Zamora in Toro. Readers who love full-flavored, robust, exuberant red wines will adore these two 2010s. " (10/2012)

 

91 points Stephen Tanzer's International Wine Cellar: "(100% tempranillo, raised in 100% new French oak and then aged for six months in more new oak): Saturated ruby. Vibrant raspberry and candied cherry on the nose, with strong oak-spiciness and a kiss of smoky mocha. Rich but vibrant, offering intense red berry flavors and a floral quality on the clinging finish. " (09/2012)

 

90 points Wine Enthusiast: "Teso la Monja picked a good vintage to introduce this entry-level Toro. Romanico is big and candied on the nose, with floral berry aromas, milk chocolate and a touch of raisin. On the palate, spunky berry fruit flavors blend with juniper notes, while the finish delivers herbal leftovers, a pinch more juniper and commendable length and smoothness. " (07/2013)

 

2008 Terlato Family Vineyards Russian River Valley Chardonnay – $16, or $120 per case @ Artisan Wine Depot -

“This exciting news will surely start your week off on a high note.  We've negotiated 69% off the winery price on a fantastic, high-quality Russian River Chardonnay from the original American wine industry icon: TERLATO.

Anthony Terlato has been called "one of the most accomplished wine personalities on the planet" and also makes great wines at Chimney Rock and Rutherford Hill.  He did a fine job with this Chardonnay balancing the almost hedonistic body and flavors with a 13.8% alcohol.

The original winery price of $32 per bottle was already reasonable for the quality... but with our case price of $9.99, this is a deal that's almost incomprehensible.”

 

2012 Shoofly Wines Shiraz South Australia ($9.99 @ K&L)

“What a great value in Aussie Shiraz. This fruit is picked from some great vineyards around South Australia and the blend of Shiraz sources works really well to create a big, rich wine with lots of concentration while retaining balance and freshness rather than jammy flavors. A great everyday drinker as we start to head into the winter months when we all need something hearty and warming. This one is made for immediate enjoyment and easy quaffing!” - Ryan Woodhouse, K&L

 

92 points James Halliday: "(Highlighted in Special Value Section) Full purple-crimson; the complex black fruits and spice bouquet leads into a richly robed, medium- to full-bodied palate where fruit, tannins and an infusion of smoky oak all coalesce. Exceptionally well priced."

 

Greg Vanslow

Mortgage Planning Specialist

Princeton Capital

Telephone  (650) 917-4263  |  Mobile  (650) 537-7905  |  Private Fax  (408) 335-1176

NMLS# 280209

http://princetoncap.com/gregvanslow

 

Princeton Capital is a Residential Mortgage Lender, and an RMR Financial company, licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act, license #415-0027.

 

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