Good afternoon,
The GDP numbers weren’t so hot.
That was good for bonds. Rates are great.
The Dow ended at 14,713 up from last week’s 15,457.
The 10 year treasury closed at 1.66% down from 1.70% and the
lowest yield since December 12.
The dollar closed at $1.29/Euro, about the same.
The MBS is at its best in a month.
Rates are the same or lower.
Reports/inspections
I was asked this yesterday, after a lender found an
inspection fee on the seller’s final HUD-1 and eventually demanded section 1
clearance (not my loan):
“If the borrower is putting 50% down, if it’s a mere $4000
in termite work, it’s as-is and the buyer is willing to take the risk, why does
the lender feel it has the right to derail the transaction?”
I’m going to skip over the golden rule and talk about the
lender’s rationale.
Let’s imagine the borrower defaults. I know, with 50% down,
the borrower isn’t going to default, but imagine the termite work wasn’t done,
the house fell down, and the borrower walked away from it. OK, still not going
to happen in Los Altos, but you wouldn’t have to go far from here where it
could.
Or, the borrower loses his job and is late with some
payments.
Or, puts all his money into the property and has nothing
left to make payments with.
Or, just forgets to make a payment.
The investor who buys the loan is then going to pick up the
loan package and go through it page by page, line by line. Until he comes to
the Final HUD-1 and sees the inspection report. He picks up the phone and calls
the funding lender, “There was clearly an inspection. Why didn’t you ask for
the inspection report? You didn’t do your due diligence. Here, you can have the
loan back.”
Or, “There is a termite report calling for work and you
funded the loan without asking for the work to be done first? It’s yours.”
Now not all lenders are going to ask for an inspection
listed on the seller’s HUD every time. We generally don’t, but that isn’t
something I like to leave to chance.
However, if an underwriter finds out that a professional
expert has called for work, 100% of the time the underwriter will require the
work be done. If Larry Ellison’s house needed $100 of termite work, and Larry
wanted a tiny conventional loan, he’d have to get the work done.
There is a short list of lenders who still allow holdbacks.
Not Fannie and Freddie loans, and there are restrictions, but the holdback is
possible.
I’ve said it before, there is always a reason lenders want
something. The reason might be that we have illogical regulations and liability
laws and so the condition is illogical, but it’s a valid reason to the lender.
Wine
2007 Sanford "La Rinconada" Sta. Rita Hills
Chardonnay (Previously $35) ($16.99 @ K&L Wines) – pretty good deal for
Santa Rita Hills Chard. I tend to like mine a little more mature, too.
93 points Wine Enthusiast: " *Editor's Choice* Rich in
acids and steely minerals, which gives the wine a tart scour, grounding the
pineapples, pears and honeyed oak. Very nice and classic, and should gradually
develop bottle complexities through 2013. (Web-2009)"
92 points The Wine News: "Pale yellow-gold hue. Sweet,
smoky oak scents with undertones of apricot, peach and vanilla. Flavors of
pineapple and caramel laced with minerals and crisp acids. Lengthy, even, sweet
finish with wet stone-like mineral impressions. " (08/2009)
91 points Wine & Spirits: "Hidden behind oak
flavors and a tight structure, this is hard to read at first. It's more open
after a day of air, revealing zesty lemon and orange flavors in addition to
rich vanilla and ripe apple notes. It will be brilliant with seared scallops
after a year or two in the cellar. " (10/2009)
2010 Pecchenino Dolcetto Dogliani Superiore Siri
d'Jermu Piedmont, Italy - $21.99 @ the Wine Club – benchmark Dolcetto-
93 points James Suckling
The Pecchenino wine estate dates back to the end of the
1700's and has always been a family-run operation, with the holding handed down
from father to son for generations.
Today, brothers Orlando and Attilio Pecchenino run this
small property in Dogliani, where they make "some of the most powerful,
intense wines readers are likely to come across" according to former Wine
Advocate wine writer, Antonio Galloni. We agree.
Beginning with the 2005 vintage, Siri d'Jermu qualifies for
the fairly new Dogliani DOCG which producers can use for their high-end Dolcettos.
James Suckling (jamessuckling.com, January 18th, 2013):
"A wine with a balance of spices and dark fruits with
firm yet polish tannins. Muscular but agile. One of the best Dolcettos around.
Better in 2014."
Apart from Mr. Suckling's glowing review, the other critics
had this to say too…
"An intense, deeply-colored red, boasting black pepper,
blackberry, black currant and leather aromas and flavors. Polished to a gleam,
with structure buried beneath the fruit and flesh. Excellent finish. Drink now
through 2015. 400 cases imported. 91 pts" –BS (Wine Spectator, Dec. 15,
2012)
"The 2010 Dogliani Siri d’Jermu (Dolcetto) explodes
from the glass with bacon fat, smoke, licorice, plums and the blackest of
cherries. A deep, muscular wine, the 2010 shows all the qualities of top-flight
Dolcetto from Dogliani. This is a decidedly huge, powerful wine loaded with
personality. Expressive floral notes add a measure of lift on the finish, but
this remains a big wine with a bright future. Anticipated maturity: 2012-2016.
90 pts" - AG (Wine Advocate, Oct. 2012)
Greg Vanslow
Mortgage Planning Specialist
Princeton Capital
Telephone (650) 917-4263 | Mobile (650)
537-7905 | Private Fax (408) 335-1176
Princeton Capital is a Residential Mortgage
Lender, and an RMR Financial company, licensed by the California Department of
Corporations under the California Residential Mortgage Lending Act, license
#415-0027.
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