All Encompassing Mortgage and Real Estate Thread

Wulaw Horn · October 21, 2021

5 minutes ago, UTPhil2006 said:

There's no guarantee it's gonna keep going up. Flip side of that coin is it may trickle up, settle, and that newer high becomes the new normal, rinse repeat. The main thing to consider from those of you who have emailed, I emailed you, called/texted, etc is that when we do get those trickle downs (when/if they come again) is to strike while the iron is hot.

Exactly.

I was putting people in during the spring at like 3.25-3.4 I want to say depending upon when they locked. Then a couple months ago it was down to 2.6 again for a couple of guys at least? Something like that. I'm not going to swear it won't ease back down again as I'm sure you won't either, but people not getting off the fence have really taken it in the tailpipe the last month for sure.

closetohumping · October 21, 2021

1 hour ago, UTPhil2006 said:

Good lord. I'm curious how it passed fee checks, QC, title, etc with that. Smh. Why a good LO/company is worth their weight in gold. If we screw up you can/will definitely hear about it here.

1 hour ago, Gil Bang said:

Wow.

TRID, how does it work?

Not even sure where to begin. A very kind person here introduced me to a colleague and she has been 100% great and above board with me. However, she could not match what my incumbent mortgager (rhymes with Home Depot) was offering. Had to go with best financial decision. So, now I wait. I haven't worked well with this company and this particular broker is so abhorrent that one of my neighbors passed on 10k (ironic) in incentives and used another mortgage company. Incentives were tied to using this company as it was a new build.

Separate but maybe related, but said company issued me a decent check as I overpaid my escrow last year. Told this to my broker and she said not to cash it as I would have to just bring that back to closing to cover my taxes. I "think" that makes sense as I don't think it would cost her anything if I had cashed the check.

Gil Bang · October 21, 2021

https://www.redfin.com/CA/Oceanside/4402-Chickadee-Way-92057/home/3313804

Zillow paid $471,500 for this POS in August. Then they listed it at $471,500.

Yada, yada, 34 days later, they've reduced the price to $449,900, which they won't get. They'll end up dumping this dump for $415,000 or so for a quick $90,000 loss after commissions and closing costs.

jimmyjazz · October 21, 2021

September stats for Austin (proper). Note that the median price in August was $540K, so that number sagged 2.8% month-over-month. I don't track seasonality per se, but this isn't particularly surprising to me. August probably represents the culmination of the spring/summer buying frenzy. It doesn't seem alarming in light of last year's September median price of ~ $378K.

closetohumping · October 21, 2021

1 hour ago, jimmyjazz said:

September stats for Austin (proper). Note that the median price in August was $540K, so that number sagged 2.8% month-over-month. I don't track seasonality per se, but this isn't particularly surprising to me. August probably represents the culmination of the spring/summer buying frenzy. It doesn't seem alarming in light of last year's September median price of ~ $378K.

378 to 525 is alarming to me

Dbeasy · October 22, 2021

Great call on Zillow by the Surly real estate elite. Opendoor is doing a little better but I’ve also seen at least a dozen houses they’ve bought that are probably upside down on sale.

Wulaw Horn · October 22, 2021

My friend sold his to Zillow. He was floored by their offer. He showed it to me and then I shopped it around to a couple agents and they were like- sign the papers. Now.

UTPhil2006 · October 25, 2021

On 9/30/2021 at 1:17 PM, Wulaw Horn said:

2) Will Austin become a high balance area? How about the Metroplex? It's beyond absurd to see what house prices there are fetching in these areas and have them not be high balance areas. The time is now. Make Austin (and maybe Dallas) a high balance area. That would take it up to 750 or 800k before you had to go to Jumbo.

High balance numbers from UWM came out today..

Actual 2022 conforming loan limits have not been released by FHFA just yet ... But effective today, for eligible high cost counties, we will now honor $937,500 for regular one-unit conventional loans.

Wulaw Horn · October 25, 2021

4 minutes ago, UTPhil2006 said:

High balance numbers from UWM came out today..

Actual 2022 conforming loan limits have not been released by FHFA just yet ... But effective today, for eligible high cost counties, we will now honor $937,500 for regular one-unit conventional loans.

That would not be out of line with Austin pricing market.

UTPhil2006 · October 25, 2021

31 minutes ago, Wulaw Horn said:

That would not be out of line with Austin pricing market.

Now just a matter of making Travis, Harris, DFW counties High cost counties.

Wulaw Horn · October 25, 2021

14 minutes ago, UTPhil2006 said:

Now just a matter of making Travis, Harris, DFW counties High cost counties.

Travis and DFW should be no brainers. Harris is still very affordable compared to everything nationwide- I just don't see any path forward for Harris being high balance anytime soon- but you never know...

jimmyjazz · October 25, 2021

Is Travis the most expensive county in Texas?

Wulaw Horn · October 25, 2021

Just now, jimmyjazz said:

Is Travis the most expensive county in Texas?

Yes. It's rivaling many coastal cities now in cost. I saw somewhere that it was expected to cross paths with New York and Seatle perhaps in cost per foot in the next decade (that's probably city of Austin- not county wide.)

https://comptroller.texas.gov/economy/fiscal-notes/2018/march/housing.php

jimmyjazz · October 25, 2021

Is it fair to assume that terms and qualification for "large balance" conventional loans should get better than they were as jumbos?

Wulaw Horn · October 25, 2021

9 minutes ago, jimmyjazz said:

Is it fair to assume that terms and qualification for "large balance" conventional loans should get better than they were as jumbos?

Typically yes. And an easier underwrite. Less need for reserves. Higher DTI allowed. Stuff like that.

Edited October 25, 2021 by Wulaw Horn

UTPhil2006 · October 25, 2021

41 minutes ago, jimmyjazz said:

Is it fair to assume that terms and qualification for "large balance" conventional loans should get better than they were as jumbos?

And a tick lower rate.

Wulaw Horn · October 25, 2021

So- here is the chart of the last 2.5 months with rates. Not great Bob. Friday was a new highest rate for the year- I believe- at 3.327.

Someone got a rate from me in the 2's today, but it hurt, bad. However- first day in the green (mortgage backed securities up) in some time at 19 basis points and counting right now. If mortgage backed securities are up that puts interest rates down. We got maybe $500 better in pricing- maybe $1,000- on the typical loan today. Not good enough to move us a full 1/8 of a point- that's 50 bips- but just stopping the skid made me happy enough for today (if we lose those 20 basis points between now and the bell I will not be happy with myself for posting this here and now).

trend mortgage trend chart.pdf

Wulaw Horn · October 25, 2021

Here is my normal Monday posting- the chart didn't show up the way I wanted b/c I'm an idiot- wonder if this will work...

https://www2.optimalblue.com/obmmi/ if you want the yearly

Status as of today:

30-YR. CONFORMING

3.327% +0.015

30-YR. JUMBO

3.283% +0.036

30-YR. FHA

3.398% +0.031

30-YR. VA

3.041% +0.008

30-YR. USDA

3.318% -0.003

15-YR. CONFORMING

2.534% +0.042

Wulaw Horn · October 25, 2021

2 years ago today the average 30 year was at 4.003. If you look at the two year chart you see that we have more room to run for rates getting worse than better. We are now up enough in interest rates though from where we were at our lows that we now have the opportunity for rates to get appreciably better than they are right now, maybe even enough better to lock if your deal works so that it won't get away from you forever.

gmr548 · October 26, 2021

20 hours ago, jimmyjazz said:

Is Travis the most expensive county in Texas?

The only thing that could compete is Midland during an oil boom

Gil Bang · October 27, 2021

By Patrick Clark and Noah Buhayar | Bloomberg

Faced with the fastest-rising real estate prices in U.S. history, Zillow Group tweaked the algorithms that power its home-flipping operation to make higher offers.

It ended up with so many winning bids that it had to stop making new offers on properties. Now, after buying more homes in the third quarter than it ever has before, the company is working through a backlog of houses that need to be fixed up and sold while facing an unpleasant reality: Slowing price appreciation means it will sell many homes at a loss.

Zillow put a record number of homes on the market in September, listing properties at the lowest markups since November 2018, according to research from YipitData. It also cut prices on nearly half of its U.S. listings in the third quarter, according to Yipit, signaling that its inventory was commanding prices lower than it expected.

The shift has been on display in places such as Atlanta and Phoenix, two markets where home prices have been surging. Zillow’s roughly 250 active listings in Phoenix are currently priced at 6% less, on average, than what the company paid for the home. That amounts to a $29,000 discount on the typical property, according to data compiled by Mike DelPrete, a real estate tech strategist and scholar-in-residence at the University of Colorado Boulder.

“Every key metric I’ve seen from Zillow over the past few months just doesn’t make sense,” DelPrete said. “It’s like it’s making decisions two to three months too late relative to the market.”Zillow’s new-found aggressiveness was good for people like Abidemi Bolatiwa, who watched the process play out in real-time. He sold his four-bedroom home in Phoenix to Zillow for $531,300 in late September, according to property records, paying a convenience fee that was less than what a traditional agent commission would have cost him.

Bolatiwa said he also solicited an offer from Opendoor Technologies, which would have paid him roughly $504,000. Ten days after Zillow bought the home, it listed the property for $505,900. When it didn’t sell, the company cut the price by another $11,000 to $494,900.

While Opendoor, Zillow’s chief competitor, has also seen its spread on home sales in Phoenix shrink, it has continued to sell houses for more than it buys them for, according to DelPrete’s analysis. It’s also outperforming in Atlanta, where Opendoor is listing homes at a 6.5% premium to its purchase price, compared to Zillow’s 1.3% spread.

A representative for Zillow declined to comment.

The company said on Oct. 18 that it would stop making new offers to buy homes while it works through the backlog, sending shares down by 9.4%. But the stock has recovered those losses, with analysts mostly shrugging off the operational stumble. The home-flipping operation, which dates to 2018, has yet to turn a profit.

“Prices turned on them and they got a little bit flat-footed and they were probably a little too aggressive on the bidding,” said Brad Erickson, an analyst at RBC Capital Markets. “They probably don’t care so much. It’s not as important at this stage of the game to make money.”

Zillow and Opendoor practice a high-tech spin on home-flipping called iBuying. The companies use software-powered algorithms to predict where home prices are going. They charge fees that take the place of the typical real estate agent commissions, pitching customers on the convenience of the service. Buying thousands of homes every quarter is a complicated process that requires a lot of precision to get right.

Zillow Chief Executive Officer Rich Barton has emphasized that making competitive offers is crucial to reaching the scale required to profit on the business. He lamented on an August call with investors that breakaway home price appreciation was expanding the spread between what it costs Zillow to buy and fix a house and what it sells the property for. That led the company, which bought 3,800 homes in the second quarter, to make higher offers as it pursues a goal of buying 5,000 homes a month by 2024.

“We saw rapid conversion gains throughout the quarter as we improved our offer strength,” he said.

OCR-L-iBuyer-1031.jpg?fit=620%2C9999px&s

Zillow and Opendoor practice a high-tech spin on home-flipping called iBuying. The companies use software-powered algorithms to predict where home prices are going. (Photo by Jeff Collins, the Orange County Register/SCNG)

Richard Flor talked to a real estate agent this summer about listing a three-bedroom, three-bathroom rental property he owned in Tolleson, Arizona, a suburb west of Phoenix, for around $390,000. Instead, he sold it to Zillow in September for about $412,000, according to property records, paying a 1% fee for the service.

Then he watched as Zillow made light repairs and relisted the house two weeks later for $387,000.

“I was thinking, ‘How are they making money?’” Flor said. “Maybe they know something I don’t.”

Neonmoon · October 27, 2021

So they’re trying to cut realtors fees from 6% down to 1%?

jimmyjazz · October 27, 2021

Quote

“We saw rapid conversion gains throughout the quarter as we improved our offer strength,” he said.

LMAO. So what we all questioned was actually happening . . . they got out over their skis and were buying at a premium that could not be recovered soon enough to cover carrying costs, if not outright invested $$$.

Good job, Zillow.

Wulaw Horn · October 27, 2021

1 minute ago, jimmyjazz said:

LMAO. So what we all questioned was actually happening . . . they got out over their skis and were buying at a premium that could not be recovered soon enough to cover carrying costs, if not outright invested $$$.

Good job, Zillow.

But they aren’t at the stage right now where they want to make money. They just want to lose money faster by upping their inventory. Why can’t you see that logic peasant?

Gil Bang · October 27, 2021

9 minutes ago, Neonmoon said:

So they’re trying to cut realtors fees from 6% down to 1%?

On the deals I'm seeing, they are offering 2.5 to buyer's agents.

Wulaw Horn · October 27, 2021

8 minutes ago, Gil Bang said:

On the deals I'm seeing, they are offering 2.5 to buyer's agents.

Is that standard for your area?

Neonmoon · October 27, 2021

20 minutes ago, Gil Bang said:

On the deals I'm seeing, they are offering 2.5 to buyer's agents.

Now I’m confused. I would think they would go lower than that

Gil Bang · October 27, 2021

in response to Wulaw: pretty much standard. Prices are so high out here that 6% listings are rarely seen, except on vacant land.

Edited October 27, 2021 by Gil Bang

Gil Bang · October 27, 2021

Just now, Gil Bang said:

pretty much standard. Prices are so high out here that 6% listings are rarely seen, except on vacant land.

1 minute ago, Neonmoon said:

Now I’m confused. I would think they would go lower than that

Here's the thing: we all hate zillow anyway, for trying to upset our fucking applecart. If they are lowballing on commission, a lot of agents are going to try to figure out any reason imaginable to "not" show that listing.

Now, in times of low inventory combined with every buyer doing their own iphone search 20 times a day, that's hard to do.

tokamak · October 27, 2021

Does all the institutional money that’s flipping houses (including Zillow and Opendoor) just have an army of contractors working for them? Just doing basic cosmetic shit on that many houses a month seems like an absolute nightmare. How do they manage that?

Gil Bang · October 27, 2021

2 hours ago, tokamak said:

Does all the institutional money that’s flipping houses (including Zillow and Opendoor) just have an army of contractors working for them? Just doing basic cosmetic shit on that many houses a month seems like an absolute nightmare. How do they manage that?

The one's I've seen, they didn't do a fucking thing except pay "X" and then list for less than X.

It's crazy as fuck.

UTPhil2006 · October 27, 2021

Nice little sizeable reprieve this morning on the 10 year

Wulaw Horn · October 27, 2021

Mortgage backed securities flat on the day and 16 basis points worse since open an hour ago. Good days Monday and Tuesday. Will it be a run where we get back so much of what we lost in the last 6 weeks or a dead cat bounce?

Wulaw Horn · October 27, 2021

Mortgaged back security Market is up 23 bips for the day. Combined with a good start to the week we likely have gotten back 1/8 of a point. If you are thinking about refinancing now talk to your guy- now is a good time for it if this is a dead cat bounce. If it continues to get better you should be able to exit this point and jump in during the process at an even better point in time if the guy is a broker.

If you don't have a guy I'd love to be that guy. Feel free to PM me or call me (832) 557-1095. Everything we do here benefits the site with our official sponsorship. If it starts to turn or improves more significantly will let you know. Overall market right now is 2 out of every 3 loans written up as refinances. Many people are using the equity in their home to restructure debts and investments as appreciation has been absolutely scorching hot almost everywhere. It would amaze me that there are still people out there with rates in the high 3's to high 4's after the environment we've had in the past 18 months but such a thing exists, I guess.

We are now back to the point in time where if you are good paper/good borrower you should be able to find, relatively easily, a 30 year rate that begins with a 2, and on a good scenrio for a good borrower a shorter term loan that begins with a 1 is definitely in play again. No discount points on those if you are shopping and trying to figure out if you are in the right spot.

Edited October 27, 2021 by Wulaw Horn

DonkeyCigars · October 27, 2021

19 hours ago, jimmyjazz said:

LMAO. So what we all questioned was actually happening . . . they got out over their skis and were buying at a premium that could not be recovered soon enough to cover carrying costs, if not outright invested $$$.

Good job, Zillow.

Faced with the fastest-rising real estate prices in U.S. history, Zillow Group Inc. tweaked the algorithms that power its home-flipping operation to make higher offers.

It ended up with so many winning bids that it had to stop making new offers on properties. Now, after buying more homes in the third quarter than it ever has before, the company is working through a backlog of houses that need to be fixed up and sold while facing an unpleasant reality: Slowing price appreciation means it will sell many homes at a loss. …

The shift has been on display in places such as Atlanta and Phoenix, two markets where home prices have been surging. Zillow’s roughly 250 active listings in Phoenix are currently priced at 6% less, on average, than what the company paid for the homes.

That amounts to a $29,000 discount on the typical property, according to data compiled by Mike DelPrete, a real estate tech strategist and scholar-in-residence at the University of Colorado Boulder.

“Every key metric I’ve seen from Zillow over the past few months just doesn’t make sense,” DelPrete said. “It’s like it’s making decisions two to three months too late relative to the market.”

I for one am excited for housing market structure to replicate equity market structure. Eventually people will list 100 houses for sale to spoof Zillow’s algorithm into lowering its price, and then buy one house from Zillow cheap.

Neonmoon · October 27, 2021

6 hours ago, UTPhil2006 said:

Nice little sizeable reprieve this morning on the 10 year

Repricing for the better!

Wulaw Horn · October 27, 2021

Just now, Neonmoon said:

Repricing for the better!

Yep yep. Always nice to get thsoe emails. We got as high as 33 points up for the day- looks like it's going to settle around 20...

Wulaw Horn · October 29, 2021

Logged on at one point this morning to see down 30 bips. Shit Fuck son of a bitch.
logged on a little ago and we were up 20 bips for the day. So-50 basis point delta from days low to high. Always nice.
got above support. Hope is that gets it rolling. But happy to see bleeding stop for a decent week.
next week big jobs report and another fed meeting. If you are looking to do something those are market movers, might ought to consider getting in a lock on this side and then moving that lock to another company if a big move in your favor. Because, if the move was against you during that time it can hurt. I’d expect volatile market tomorrow and plan accordingly.

Chewbacca · October 29, 2021

On 10/21/2021 at 2:33 PM, Gil Bang said:

https://www.redfin.com/CA/Oceanside/4402-Chickadee-Way-92057/home/3313804

Zillow paid $471,500 for this POS in August. Then they listed it at $471,500.

Yada, yada, 34 days later, they've reduced the price to $449,900, which they won't get. They'll end up dumping this dump for $415,000 or so for a quick $90,000 loss after commissions and closing costs.

Just saw another near me. House listed for $599k in May. Taken off market and relisted in July for $615k. Zillow bought it for $701k in August. Now they've got it listed for $669k. They've got to be hemmorhaging money on this new business venture of theirs.

LCHorn · October 30, 2021

6 hours ago, Wulaw Horn said:

Logged on at one point this morning to see down 30 bips. Shit Fuck son of a bitch.
logged on a little ago and we were up 20 bips for the day. So-50 basis point delta from days low to high. Always nice.
got above support. Hope is that gets it rolling. But happy to see bleeding stop for a decent week.
next week big jobs report and another fed meeting. If you are looking to do something those are market movers, might ought to consider getting in a lock on this side and then moving that lock to another company if a big move in your favor. Because, if the move was against you during that time it can hurt. I’d expect volatile market tomorrow and plan accordingly.

I locked one yesterday and when the market was up about 12 bps (so down from the high of 24 or whatever) and compared it to today’s retail pricing and it was 12.5 bps better than 4 pm today (in other words, that 25 bps finish didn’t result in better correspondent pricing, at least on the banker side).

TL:DR Wulaw and I have had a very up and down last two days but it kind of amounted to nothing.

Wulaw Horn · October 30, 2021

12 minutes ago, LCHorn said:

I locked one yesterday and when the market was up about 12 bps (so down from the high of 24 or whatever) and compared it to today’s retail pricing and it was 12.5 bps better than 4 pm today (in other words, that 25 bps finish didn’t result in better correspondent pricing, at least on the banker side).

TL:DR Wulaw and I have had a very up and down last two days but it kind of amounted to nothing.

Ha. But I will take roller coaster that ends up slightly up over the repetitive kick in the nuts from the last 4-6 weeks.

Assman · October 31, 2021

My lender guy who was #2 in the country last year in VA mortgage volume just quoted me 2.375% on a 30-year VA jumbo. That sounds lower than it should be. Is he able to get better rates due to his volume?

Wulaw Horn · October 31, 2021

8 minutes ago, Assman said:

My lender guy who was #2 in the country last year in VA mortgage volume just quoted me 2.375% on a 30-year VA jumbo. That sounds lower than it should be. Is he able to get better rates due to his volume?

Nope. I don’t think that is special. I just checked my board and the best pricing on that was 2.375% with a .11 rebate back to you. That’s better rate than most of my lenders, but it’s not unheard of or volume discount based.
thats just a really solid deal.

UTPhil2006 · November 1, 2021

TKthunder2 · November 1, 2021

Fumble aka major fuck up

Gil Bang · November 1, 2021

Fumble as in "I stepped in dogshit and tracked it in the house right after my wife mopped the floor".

Neonmoon · November 2, 2021

I always mess up some mundane detail

Wulaw Horn · November 2, 2021

Bouncing around and ending up about where we were 3 weeks ago or so in the mortgage market, which is about a 1/4 higher than we were a month ago and maybe 3/8 higher than we were 2 months ago- which was testing lows. Yesterday we started the day (and week) 15 or 20 basis points down and ended 5 or 6 basis points up (down is bad for rates- up is good when we are talking about mortgage backed securities), and today we are up 13 at the start of the day. We'd lost about 200 basis points and switched over to a newer higher coupon (that's bad) about a month ago, but got back most of the bad run from 2 weeks ago, but not the bad run from 6 weeks- 2 weeks in the recent slightly positive move in the markets. Fed meeting today and tomorrow. Expectation is that they are going to taper. That's priced in. They will probably announce how quickly and that might move the market. Then jobs report Friday. Some potential for volatility out there right now. Volatility can suck but it can also be your friend- who knows...

The Chart (again- this is not my rates or anyone elses necessarily- we are almost always better so is any broker that has access to a lot of the market- this is merely average in America getting locked Monday). 10 days ago (10/22) it was at 3.327- so we've seen some retrenchment from then, which was essentially an 18 month high that goes back to the start of COVID when everything was bouncing around like a hearth monitor machine: