All Encompassing Mortgage and Real Estate Thread

[Wulaw Horn 19236]

1 hour ago, LCHorn said:

I almost lost a jumbo VA loan to Quicken last week because Quicken quoted the borrower a rate .5% less than what I quoted.  
 

What they failed to explain to the borrower was that they were charging him $5k for it.  
 

I have lost a couple deals to Quicken that way. Usually small deals with relatively unsophisticated borrowers that just aren’t listening or following the math. At the end of the day I just shrug and figure bullet dodged. When you show someone the math on a payout that takes 230 months to realize, and it’s their starter house, and you talk about time value of money and they still insist on a mathematically absurd structure where the hot points to quicken because they say- hurr durr  their interest rate is lower so that’s a better loan what are you gonna do?  
I almost never do a loan where the savings aren’t realized inside of 3 years. If that doesn’t happen it’s just too likely to be a transaction that doesn’t make sense and the client will regret someday. I don’t like those deals so I don’t do them. There’s enough other people that can be helped to not mess with that. 
Exceptions abound for individual deals of course with some purpose other than lowering interest rate if there’s some other purpose for doing the loan. 

[closetohumping 17547]

3 hours ago, LCHorn said:

I almost lost a jumbo VA loan to Quicken last week because Quicken quoted the borrower a rate .5% less than what I quoted.  
 

What they failed to explain to the borrower was that they were charging him $5k for it.  
 

Sounds like a bargain compared to some of what Ive been quoted.  One company, who has great reviews online btw and I'm talking hundreds of reviews, tried to charge me 20k, and the great part was "hey able to find you a great rate!!"

[UTPhil2006 3828]

Sounds an awful lot like this..

(also who remembers that whole fiasco on the old site when I used this quote to respond to him and he went nuclear? -- forgot his screen name but definitely remember his real name and 90% sure he got banned by blacklab)

[T’Boo Ted Marshall 2741]

first offer on a house was declined and I'm not unhappy about it.  It was going to be temporary and end up a rental but their math wasn't the same as mine.  

[DefinitelyNotHollywoodColt 12301]

i feel really, really bad for anyone that feels pressure to buy a house right now. it isn't going to end well, i fear.

[DonkeyCigars 143]

6 minutes ago, DefinitelyNotHollywoodColt said:

i feel really, really bad for anyone that feels pressure to buy a house right now. it isn't going to end well, i fear.

So someone pressure test this for me on what I'm hearing. It essentially goes like this: Housing market will actually come down to earth (at least supply side) based off of two things. 1 is a minor thing; the incremental gains in supply chain issues that have been a bottleneck will get marginally better. The other is a bigger deal, which is that once the eviction/repossessing moratorium is over (which I understand is in a matter of weeks), folks who are currently occupying a home but would otherwise have been forced to leave/sell/evacuate, will bring more supply back into the equation.

Right now there are a bunch of homes occupied that won't be occupied in the increasingly near-term, is the thesis at least. Thoughts?

[Neonmoon 38130]

2 hours ago, DefinitelyNotHollywoodColt said:

i feel really, really bad for anyone that feels pressure to buy a house right now. it isn't going to end well, i fear.

Imagine being a young first time homebuyer. Brutal 

[tokamak 6459]

11 minutes ago, Neonmoon said:

Imagine being a young first time homebuyer. Brutal 

People that are first time homebuyer age right now are probably pretty used to getting fucked in the ass by macroeconomics at this point. No CR.

[DonkeyCigars 143]

19 hours ago, DonkeyCigars said:

So someone pressure test this for me on what I'm hearing. It essentially goes like this: Housing market will actually come down to earth (at least supply side) based off of two things. 1 is a minor thing; the incremental gains in supply chain issues that have been a bottleneck will get marginally better. The other is a bigger deal, which is that once the eviction/repossessing moratorium is over (which I understand is in a matter of weeks), folks who are currently occupying a home but would otherwise have been forced to leave/sell/evacuate, will bring more supply back into the equation.

Right now there are a bunch of homes occupied that won't be occupied in the increasingly near-term, is the thesis at least. Thoughts?

Following up on this idea I read this, this AM:

https://www.cnbc.com/2021/07/22/sales-of-existing-homes-rise-slightly-as-more-listings-finally-hit-the-market.html

Quote

 

Before you offer $100k over asking price on a new home, you should hear this: The boiling US housing market took a refreshing dip in the pool in June. 

Yes, the US median house price did hit a record high of $363,300 last month, up 22.9% from a year earlier. But median home prices are a lagging indicator—June’s data is based on contracts signed in April and May. 

More supply is coming onto the market. More owners listed their homes last month after they saw home seekers offering things like crypto in order to secure the deed. The inventory of houses for sale at the end of June was 1.25 million, a slight improvement from May. 

“I don’t believe you’ll see the kinds of [price] increases you’ve seen in the last 12 months,” Sheryl Palmer, a home-builder executive, told the WSJ. “That’s not sustainable.”

 

I know this thread has an Austin-centric point of view so let me clarify my question about supply opening up with the eviction moratorium lifting and prices having peaked is for the macro housing market in America, I think Austin is unique in it's rowdy real estate market that will continue to go to the moon.

[CooterBrown 18089]

If you’re waiting on evictions, you’re waiting on homes that are routinely trashed and gutted prior to the former owners leaving the premises.

[HRSchenker 2288]

3 hours ago, CooterBrown said:

If you’re waiting on evictions, you’re waiting on homes that are routinely trashed and gutted prior to the former owners leaving the premises.

Gah, I can only hope that's the case. This market badly needs a shake up 

[DonkeyCigars 143]

3 hours ago, CooterBrown said:

If you’re waiting on evictions, you’re waiting on homes that are routinely trashed and gutted prior to the former owners leaving the premises.

no different than foreclosures, which drive up supply and help the overall market as well. Most evictions repairs, especially at valuations today, won't be but a blip on the radar

[CHIEF 5096]

I don't see foreclosures going up, or going into the market. Who is upside down on a mortgage? If you get in trouble on payments just put your house on the market, rake in a profit, and buy something you can afford.

CHIEF

[DonkeyCigars 143]

54 minutes ago, CHIEF said:

I don't see foreclosures going up, or going into the market. Who is upside down on a mortgage? If you get in trouble on payments just put your house on the market, rake in a profit, and buy something you can afford.

CHIEF

Can you sell without being current? Anyways, that's a good point on foreclosures-- maybe it's more about the evictions of renters and how that might impact supply outside of just the rental market.

[CHIEF 5096]

38 minutes ago, DonkeyCigars said:

Can you sell without being current? Anyways, that's a good point on foreclosures-- maybe it's more about the evictions of renters and how that might impact supply outside of just the rental market.

That's a good question. In years of real estate I've never come across anyone that I've known to be behind on their mortgage. It's been either people in good standing, or a post-foreclosure. As a kid, when both of my parents were agents/brokers. I remember bankers calling and saying so-and-so was behind on a piece of property, and needs to sell it. Could you help them out? I'm not sure how it works with mortgage companies. I would assume they would want to work something out, add the payments to the end like they did during COVID when people couldn't work. This is a good question for Phil.

CHIEF 

[swraith 347]

If you are behind, doesn’t the sale price just need to be sufficient to meet the payoff…including whatever they are behind on? If the sales price is below the amount needed, that would be a blocker as they likely would not have cash.

The mortgage holder would seem to prefer the home sold and loan paid off vs the expenses of foreclosure.

[Neonmoon 38130]

If the sale pays off the loan, of course you can sell. if you are headed to foreclosure, and the market value of your property will cover the loan, you can do a deed in lieu of foreclosure to your lender to avoid a foreclosure hit on your credit. If you are underwater and the sale won’t pay off the loan, the lender can get a deficiency judgment against you to make up the difference after the foreclosure. 

[UT_OB1 2227]

Yeah people aren’t getting foreclosed on in this market. You sale or you just go on forbearance.  You have to have really screwed up to be getting foreclosed on right now.  

[Hefeweizen 5357]

So we closed on a refi about a month ago now (thx Phil and Thad) and today I get a check out of nowhere from my prior mortgage servicer.  I thought I was pretty much done and getting that was icing on the cake.  What's funny is that it says it's escrow refund but I didn't have an escrow account.

[Pato del Muerto 52858]

35 minutes ago, Hefeweizen said:

So we closed on a refi about a month ago now (thx Phil and Thad) and today I get a check out of nowhere from my prior mortgage servicer.  I thought I was pretty much done and getting that was icing on the cake.  What's funny is that it says it's escrow refund but I didn't have an escrow account.

Probably an overage on the payoff then. 

[3adays 454]

Is anyone familiar with the process of adding someone to the title of a home? There is a mortgage on the home and this is in Texas. 

[CooterBrown 18089]

Is anyone familiar with the process of adding someone to the title of a home? There is a mortgage on the home and this is in Texas. 

If you are trying to get on someone else’s title, do it.

If you are considering adding someone to your title, don’t do it unless you’re willing to give that home and equity away down the road.

[TwiceHorn 31678]

17 minutes ago, 3adays said:

Is anyone familiar with the process of adding someone to the title of a home? There is a mortgage on the home and this is in Texas. 

The "process" would be for the current owners to execute a deed in favor of the new ownership "entity."  In other words, from Owner A to owners A and Owner B.

From a practical perspective, this would be very problematic.  It would create ownership in a party not liable on the note.  I believe it would be a condition of acceleration or default on the mortgage.  

There are a host of other problems, as well, such as gift tax, homestead exemption if the new person doesn't live there, and the thing cooter mentions.

Probably the most straightforward way to do it would be to refinance the mortgage and add on the new person as part of the purchasing/owning entity.

But the big question is why?  Owning property jointly (as tenants in common, the usual deeded arrangement) is just a hassle for all involved.

 

Edited July 24, 2021 by TwiceHorn

[Neonmoon 38130]

44 minutes ago, 3adays said:

Is anyone familiar with the process of adding someone to the title of a home? There is a mortgage on the home and this is in Texas. 

What’s her name?

[CHIEF 5096]

I bought the lot my house sits on without Mrs. CHIEF, but we were married. She just wasn't here to sign. I did a Quit Claim Deed and added her. It was one page, easy, and you can find templates, and examples online. We were twelve years in, not recommended for Sugar Babies.

CHIEF

[hornian 5251]

12 minutes ago, CHIEF said:

I bought the lot my house sits on without Mrs. CHIEF, but we were married. She just wasn't here to sign. I did a Quit Claim Deed and added her. It was one page, easy, and you can find templates, and examples online. We were twelve years in, not recommended for Sugar Babies.

CHIEF

A quitclaim huh? You sure about that, CHIEF? You may have made a whole mess of the title. It should have been a warranty deed, and you should have made sure to add you and Mrs. CHIEF as the grantees, not just Mrs. CHIEF. Because if you just executed a quitclaim from CHIEF to Mrs. CHIEF, I have news for your bud: You just gifted her all of your community interest in the property, and it's now her separate property. Have fun with that if things go south, or if they don't and she dies before you!

[hornian 5251]

4 hours ago, 3adays said:

Is anyone familiar with the process of adding someone to the title of a home? There is a mortgage on the home and this is in Texas. 

Yes, I help clients do it when necessary. 

3 hours ago, TwiceHorn said:

The "process" would be for the current owners to execute a deed in favor of the new ownership "entity."  In other words, from Owner A to owners A and Owner B.

From a practical perspective, this would be very problematic.  It would create ownership in a party not liable on the note.  I believe it would be a condition of acceleration or default on the mortgage.  

There are a host of other problems, as well, such as gift tax, homestead exemption if the new person doesn't live there, and the thing cooter mentions.

Probably the most straightforward way to do it would be to refinance the mortgage and add on the new person as part of the purchasing/owning entity.

But the big question is why?  Owning property jointly (as tenants in common, the usual deeded arrangement) is just a hassle for all involved.

 

To avoid these problems, two recommendations: 1) get an attorney who knows what they are doing, don't just use an online from like CHIEF and 2) contact your mortgage lender and get something in writing that this won't make any due in full clause in your deed of trust accelerate the mortgage. And re-read what I just said and GET IT IN WRITING. I've had several clients do this, and the mortgage companies haven't had any problem confirming that in writing, but I wouldn't draft a deed for them without that.

[Surly Bevo 25503]

Lenders would almost always rather you as the borrower liquidate the property rather than continue cost to carry, foreclose, evict, rehab, market and sell (as REO). Obviously now in most markets HPA wouldn't necessitate short sales like was going on post Financial Crisis and there are still net execution numbers to be met (obviously lender isn't just going to take bullshit cents on the dollar just because you brought in a buyer) but even in much worse times than this you can get out through a DIL or a short sale.

But yea right now if you are behind and forbearance options run out, and a modification etc isn't going to work either then market the house and sell it.  You are likely not underwater....especially not in Texas.

There is a general moratorium on most GSE and FHA foreclosure activity until the end of the year so nobody really has their back against the wall yet.  It won't be that homes will so much actually go through foreclosure, but when that stick comes back some who can no longer make a go of their payments will have to sell.

It will open up supply to some extent, obviously mostly on the lower ends of the valuation spectrum with borrowers who tend to already be on a bit shakier financial footing.

Edited July 25, 2021 by Surly Bevo

[Okie State 3856]

So we closed on a refi about a month ago now (thx Phil and Thad) and today I get a check out of nowhere from my prior mortgage servicer.  I thought I was pretty much done and getting that was icing on the cake.  What's funny is that it says it's escrow refund but I didn't have an escrow account.

Time to blow it on something stupid.

[TwiceHorn 31678]

9 hours ago, hornian said:

A quitclaim huh? You sure about that, CHIEF? You may have made a whole mess of the title. It should have been a warranty deed, and you should have made sure to add you and Mrs. CHIEF as the grantees, not just Mrs. CHIEF. Because if you just executed a quitclaim from CHIEF to Mrs. CHIEF, I have news for your bud: You just gifted her all of your community interest in the property, and it's now her separate property. Have fun with that if things go south, or if they don't and she dies before you!

Can you quitclaim an undivided half interest?  

From what I understand, a quitclaim deed in the chain of title is quite hazardous to future title insurance. 

For reference, there are generally three types of deeds in Texas:  the general warranty deed, the special warranty deed, and the quitclaim deed.

A general warranty deed includes all of the warranties of title and quiet enjoyment and a covenant to defend title against all comers.  It puts the grantor on the hook for any and all defects of title.

A special warranty deed contains less than all of the warranties of a general warranty deed, and can be "custom."    Most typically, it warrants only that the grantor didn't impair title and only indemnifies the grantee for warranty defects caused by or arising during the grantor's ownership.

A quitclaim has no warranties at all.  It's basically whatever I've got, you've now got.  Which could be a whole lotta nothin.  You only use a quitclaim when title is already fubar and/or you dislike the grantee.

Edited July 25, 2021 by TwiceHorn

[CHIEF 5096]

Paid cash for the lot. It was just to give her her 1/2 interest in what was community property that she was entitled. Sorry for the bad advice. Yes, contact your lender and do what they require. This was before DocuSign was available.

CHIEF

[TwiceHorn 31678]

20 minutes ago, CHIEF said:

Paid cash for the lot. It was just to give her her 1/2 interest in what was community property that she was entitled. Sorry for the bad advice. Yes, contact your lender and do what they require. This was before DocuSign was available.

CHIEF

For future reference, the record state of title does not dictate the existence of a community interest.  If property is acquired during marriage and isn't a gift or inheritance, it's community property regardless of what the deed says.  However, if, during marriage, one spouse conveys property to another, it may be treated as a "partition" that makes the conveyed interest separate property.

[dingleberryswitzer 2724]

16 hours ago, Hefeweizen said:

So we closed on a refi about a month ago now (thx Phil and Thad) and today I get a check out of nowhere from my prior mortgage servicer.  I thought I was pretty much done and getting that was icing on the cake.  What's funny is that it says it's escrow refund but I didn't have an escrow account.

Did you previous have escrow?  Could be leftover. 

[Hefeweizen 5357]

11 hours ago, Okie State said:

17 hours ago, Hefeweizen said:

So we closed on a refi about a month ago now (thx Phil and Thad) and today I get a check out of nowhere from my prior mortgage servicer.  I thought I was pretty much done and getting that was icing on the cake.  What's funny is that it says it's escrow refund but I didn't have an escrow account.

Time to blow it on something stupid.

It is known ... I'll probably go buy some more AMYZF since I like to watch the world burn ...

[UTPhil2006 3828]

11 hours ago, Okie State said:

17 hours ago, Hefeweizen said:

So we closed on a refi about a month ago now (thx Phil and Thad) and today I get a check out of nowhere from my prior mortgage servicer.  I thought I was pretty much done and getting that was icing on the cake.  What's funny is that it says it's escrow refund but I didn't have an escrow account.

Time to blow it on something stupid.

I can be in Austin in 3 hours

[UT_OB1 2227]

5 hours ago, TwiceHorn said:

Can you quitclaim an undivided half interest?  

From what I understand, a quitclaim deed in the chain of title is quite hazardous to future title insurance. 

For reference, there are generally three types of deeds in Texas:  the general warranty deed, the special warranty deed, and the quitclaim deed.

A general warranty deed includes all of the warranties of title and quiet enjoyment and a covenant to defend title against all comers.  It puts the grantor on the hook for any and all defects of title.

A special warranty deed contains less than all of the warranties of a general warranty deed, and can be "custom."    Most typically, it warrants only that the grantor didn't impair title and only indemnifies the grantee for warranty defects caused by or arising during the grantor's ownership.

A quitclaim has no warranties at all.  It's basically whatever I've got, you've now got.  Which could be a whole lotta nothin.  You only use a quitclaim when title is already fubar and/or you dislike the grantee.

How about a Sheriff’s deed?

[tokamak 6459]

What about a dirty deed, done dirt cheap?

[Larry T. Spider 1747]

If I was looking to buy a 200k rental property, what am I looking at for a down payment? I have always assumed 20-25% but figured I would ask the experts.

If it matters, I still have a mortgage on my primary residence. Owe 150 on a 550-600k house. 

Edit: would be looking at a SFH or duplex. Not sure if those are done differently.

Edited July 26, 2021 by Larry T. Spider

[Wulaw Horn 19236]

10 hours ago, Larry T. Spider said:

If I was looking to buy a 200k rental property, what am I looking at for a down payment? I have always assumed 20-25% but figured I would ask the experts.

If it matters, I still have a mortgage on my primary residence. Owe 150 on a 550-600k house. 

Edit: would be looking at a SFH or duplex. Not sure if those are done differently.

We’ve got some 15% down or at least did until a couple months ago when the investment home world blew up a little bit. 
20% for sure exists 

25% has better pricing. 
 

Your interest rate will be a point to point and a half higher than market and you might pay some points to boot. 
 

I ask everyone in your situation- “you sure you don’t want to do a home equity and then offer cash?”  That will be the cheapest way to do it, but some people don’t like mortgaging their homestead more. Just a thing to consider. 

[UT_OB1 2227]

1 hour ago, Wulaw Horn said:

We’ve got some 15% down or at least did until a couple months ago when the investment home world blew up a little bit. 
20% for sure exists 

25% has better pricing. 
 

Your interest rate will be a point to point and a half higher than market and you might pay some points to boot. 
 

I ask everyone in your situation- “you sure you don’t want to do a home equity and then offer cash?”  That will be the cheapest way to do it, but some people don’t like mortgaging their homestead more. Just a thing to consider. 

My wife strongly objected to getting a heloc to buy our first (or any other) rental. She’s a bit more conservative and concerned in that approach. I think it would be beneficial, but it’s probably best to have that part of her personality balance mine our or I might have run us into the ground left unchecked. 

[Wulaw Horn 19236]

34 minutes ago, UT_OB1 said:

My wife strongly objected to getting a heloc to buy our first (or any other) rental. She’s a bit more conservative and concerned in that approach. I think it would be beneficial, but it’s probably best to have that part of her personality balance mine our or I might have run us into the ground left unchecked. 

Sure, and that makes complete sense. All I'm saying is that I'd lay it out as an option when I'm figuring out what to do...

[Gil Bang 26099]

On 7/25/2021 at 7:08 AM, CHIEF said:

Paid cash for the lot. It was just to give her her 1/2 interest in what was community property that she was entitled. Sorry for the bad advice. Yes, contact your lender and do what they require. This was before DocuSign was available.

CHIEF

DocuSign still doesn't work on deeds.  At least out here.  They have to be notarized. 

[Pato del Muerto 52858]

2 minutes ago, Gil Bang said:

DocuSign still doesn't work on deeds.  At least out here.  They have to be notarized. 

There’s virtual notaries now

[Larry T. Spider 1747]

12 hours ago, Wulaw Horn said:

We’ve got some 15% down or at least did until a couple months ago when the investment home world blew up a little bit. 
20% for sure exists 

25% has better pricing. 
 

Your interest rate will be a point to point and a half higher than market and you might pay some points to boot. 
 

I ask everyone in your situation- “you sure you don’t want to do a home equity and then offer cash?”  That will be the cheapest way to do it, but some people don’t like mortgaging their homestead more. Just a thing to consider. 

Thanks for the help. Does putting more than 25% help your rate any or is that the best it gets?

[Wulaw Horn 19236]

8 minutes ago, Larry T. Spider said:

Thanks for the help. Does putting more than 25% help your rate any or is that the best it gets?

Slight break at 70/65/60 ltv. So, maybe 1/8 or 1/4 difference between 75 and 60. ltv. 

[Gil Bang 26099]

1 hour ago, Pato del Muerto said:

There’s virtual notaries now

I'm sure that there are.  Do any of the big boys in title accept them?  

 

[Sam Lin 3564]

FWIW, when I tried to refi while out of country, the only option was physical notary, no online/virtual options accepted. As my only option was the Embassy during Covid, it stopped me from proceeding.

[CHIEF 5096]

1 hour ago, Gil Bang said:

I'm sure that there are.  Do any of the big boys in title accept them?  

 

 Ours doesn't. You have to have a mobile notary, or have a distant buyer go to a local title company to close.

CHIEF

[DonkeyCigars 143]

WASHINGTON, July 26 (Reuters) - Sales of new U.S. single-family homes tumbled to a 14-month low in June and sales in the prior month were weaker than initially estimated, the latest signs that expensive lumber and shortages of other building materials were hurting the housing market.

The third straight monthly decline in sales reported by the Commerce Department on Monday followed news last week that permits for future homebuilding dropped to a nine-month low in June while home resales rebounded modestly. Higher production costs are forcing builders to scale back, keeping supply tight and boosting home prices to the detriment of first-time buyers.

New home sales fell 6.6% to a seasonally adjusted annual rate of 676,000 units last month, the lowest level since April 2020, the Commerce Department said on Monday. May's sales pace was revised down to 724,000 units from the previously reported 769,000 units.

[Horn Under a Bad Sign 20620]

This is an actual, real listing.  TCAD has the property valued at 452k.

It was purchased by the current owner in January 2020.