All Encompassing Mortgage and Real Estate Thread

[LCHorn 2620]

4 hours ago, Wulaw Horn said:

This is making it all look like 1st and 2nd quarter next year are going to be good quarters for the first time in 2 years in the industry.

There was 110k in downward revisions, June and July numbers now look like the suck that they were, and the expectation was 200k until earlier in the week when they sandbagged down to 170k so they could now beat expectations at 186k or whatever it was.   The MBS market should be up on this news not down. Hopefully the idiots at the fed can read this report and the old revisions downward correctly and tell everyone we are through with the hikes. 

We are almost a full point higher on the spread than we normally are in mortgage rates and 10 year as the fed is hawkish and raising agressively.  @LCHorn is there some other reason for this that I'm not seeing, or do you think that spread reverts to the mean when the fed tells us they are pausing?  or is 3 the new normal when it used to be 2?

Thanks, will hang up and listen. 

Honestly I've never been a big fan of monitoring the ten year; this is super on the nose, but it's like looking at your orange tree to see how your apple tree should be doing.  Yeah, they are both fruits, but it's not apples to apples. 

Anyway, I think somewhere between 2 and 3 is the new normal.  My old boss blogged about it in May if you want to steal his explanation:

https://www.jvmlending.com/blog/10-year-treasury-yields-vs-mortgage-rates/

[UTPhil2006 3807]

10 year is pretty accurate as far as national rates 

[Gatorubet 30239]

Bounce back of 55 basis points. Yay
Also, Freedom Mortgage fined $1.75 million for Illegal Kickbacks to Realtors. 
https://nationalmortgageprofessional.com/news/cfpb-fines-freedom-mortgage-175-million-illegal-kickbacks
This is funny because this shit is common practice, if not standard practice. One lender in my town pays 13K a month to the largest realtor firm for a "Marketing Service Agreement". If you are a realtor in that firm, you are assigned a lender from them and supposed to send them your business. There are tons of these MSA's all over town. They pay money per month, have quarterly parties, etc. 
Lenders also pay realtors under the table for their online lead generation services for referrals. 
I'm sure there is tons of other shit too. 

[UTPhil2006 3807]

On 9/2/2023 at 10:44 AM, UTPhil2006 said:

10 year is pretty accurate as far as national rates 

Speaking of. We had a few nice runs early last week then .08 Friday and .08 today so far pretty much wiped all that out 

[Wulaw Horn 19070]

MBS down 45 bips today. Racing back to 7.5. Yippee. 

[hornian 5219]

Asking for a client, not for me: 

If someone in the Austin area has a home that appraised for $1.1MM recently, and doesn't have a mortgage, what would it cost (not the interest rate, but the fees to the lender) to get, say, a $400-$500K mortgage. Have good income, and good credit, and other assets, so approval shouldn't be an issues. Are costs 1% of loan? 2%? 10%?

[Wulaw Horn 19070]

23 minutes ago, hornian said:

Asking for a client, not for me: 

If someone in the Austin area has a home that appraised for $1.1MM recently, and doesn't have a mortgage, what would it cost (not the interest rate, but the fees to the lender) to get, say, a $400-$500K mortgage. Have good income, and good credit, and other assets, so approval shouldn't be an issues. Are costs 1% of loan? 2%? 10%?

Cost is always a function of interest rate. Or, said differently you can structure a loan however you want to structure it but for every dollar in cost you take away from the loan you are adding marginally higher interest rate to offset that cost, and vice versa. 
He needs to talk to a good mortgage dude to explain 3 different scenarios after he tells the mortgage guy what he’s trying to accomplish and how long (and what type) of loan he wants. 
Maldonado- cost is going to depend somewhat on his credit score and term of loan. 

[LCHorn 2620]

@hornianI think quoting him 1% right now as a non-mortgage person is fine.  The real number is predicated on a bunch of different questions that @Wulaw Horn described above-what’s the money for?  Is the property a homestead?  What are you other options for coming up with $500k?

The other hard part (in our efforts to be exact) is that the secondary market is punishing borrowers with loan level price adjustments FAR more than in 2020-2021.  That means your client, depending on credit scores and other factors, might pay 1% or might pay 3% for the same rate and that’s a lot of variance (the kind that makes us uncomfortable because we want to be accountable to the numbers we quote, even informally).  

I’m presuming that since it’s you doing the inquiring it’s part of property settlement 

[Cairn Horn88 8264]

Plans for the I-35 Capital Express Central project continue to move forward. As part of the project, the Texas Department of Transportation (TxDOT) will reconstruct 8 miles of the interstate, including near the University of Texas at Austin campus.

"Remove the upper deck, to add two high-occupancy vehicle lanes that would not be toll lanes," said Dan Allen, executive director of real estate planning and strategy at UT Austin.

Allen said UT is interested in the land above the interstate between 15th and Dean Keeton streets.

"Recognize opportunities and figure out what's feasible. But that's our goal, to execute, to get the deck plaza all the way from 15th Street to Dean Keeton," he said.

Allen said this "deck plaza," also known as a "cap," would be made of concrete, steel and iron and could create as much as 40 acres of land.

"It would be a generational opportunity," he said.

There are number of opportunities that could go there, and Allen said a big part of this would connect the east and west part of the city – a concept being explored by number of cities.

[UTPhil2006 3807]

42 minutes ago, LCHorn said:

@hornianI think quoting him 1% right now as a non-mortgage person is fine.  The real number is predicated on a bunch of different questions that @Wulaw Horn described above-what’s the money for?  Is the property a homestead?  What are you other options for coming up with $500k?

The other hard part (in our efforts to be exact) is that the secondary market is punishing borrowers with loan level price adjustments FAR more than in 2020-2021.  That means your client, depending on credit scores and other factors, might pay 1% or might pay 3% for the same rate and that’s a lot of variance (the kind that makes us uncomfortable because we want to be accountable to the numbers we quote, even informally).  

I’m presuming that since it’s you doing the inquiring it’s part of property settlement 

Yeah I assumed the same that it was part of a divorce 

[Neonmoon 38129]

Always a good feeling to get a lock in before the reprice for the worse. 

My company always reprices before Habib's alert. 

 

[Wulaw Horn 19070]

36 minutes ago, Neonmoon said:

Always a good feeling to get a lock in before the reprice for the worse. 

My company always reprices before Habib's alert. 

 

I have 2 people floating for a couple weeks. I took a hard run at getting them to lock middle of last week and they said no. We are down 100 bips from then. 

[Neonmoon 38129]

1 hour ago, Wulaw Horn said:

I have 2 people floating for a couple weeks. I took a hard run at getting them to lock middle of last week and they said no. We are down 100 bips from then. 

I'm in the same boat with 1 person floating. I'm waiting on their contingent property to get under contract, but...damn. The 60 day lock might have been better 

[hornian 5219]

5 hours ago, Wulaw Horn said:

Cost is always a function of interest rate. Or, said differently you can structure a loan however you want to structure it but for every dollar in cost you take away from the loan you are adding marginally higher interest rate to offset that cost, and vice versa. 
He needs to talk to a good mortgage dude to explain 3 different scenarios after he tells the mortgage guy what he’s trying to accomplish and how long (and what type) of loan he wants. 

I'll respond to your PM with more info not to put on the main / public board. 

4 hours ago, LCHorn said:

@hornianI think quoting him 1% right now as a non-mortgage person is fine.  The real number is predicated on a bunch of different questions that @Wulaw Horn described above-what’s the money for?  Is the property a homestead?  What are you other options for coming up with $500k?

The other hard part (in our efforts to be exact) is that the secondary market is punishing borrowers with loan level price adjustments FAR more than in 2020-2021.  That means your client, depending on credit scores and other factors, might pay 1% or might pay 3% for the same rate and that’s a lot of variance (the kind that makes us uncomfortable because we want to be accountable to the numbers we quote, even informally).  

I’m presuming that since it’s you doing the inquiring it’s part of property settlement 

Thanks. It's actually for my client's former spouse, and to pay my client a judgment, need to get a loan. The now former spouse is acting like taking out a mortgage is going to cots 10% of the loan amount, and is trying to use that the "reduce" the amount of the community estate to divide, and therefore pay my client a lower judgment. 

 

[LCHorn 2620]

57 minutes ago, hornian said:

I'll respond to your PM with more info not to put on the main / public board. 

Thanks. It's actually for my client's former spouse, and to pay my client a judgment, need to get a loan. The now former spouse is acting like taking out a mortgage is going to cots 10% of the loan amount, and is trying to use that the "reduce" the amount of the community estate to divide, and therefore pay my client a lower judgment. 

 

If he's occupying the property (which means it's a Texas A-6 loan), there will be very clear regulatory limitations on what the lender can charge and disclosures will have to be provided; it would seem to me that a former spouse resisting due to something so easy to quantify might be called on his/her bluff (or reassured, if they are not acting in bad faith) fairly easily. 

[Neonmoon 38129]

On 9/6/2023 at 9:09 AM, hornian said:

Asking for a client, not for me: 

If someone in the Austin area has a home that appraised for $1.1MM recently, and doesn't have a mortgage, what would it cost (not the interest rate, but the fees to the lender) to get, say, a $400-$500K mortgage. Have good income, and good credit, and other assets, so approval shouldn't be an issues. Are costs 1% of loan? 2%? 10%?

Points and Fees aren’t allowed to be higher than 3% of loan amount per qualified mortgage standard in Regulation Z. 
https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B2-Eligibility/Chapter-B2-1-Mortgage-Eligibility/1082571751/What-are-the-points-and-fees-limitations-for-lenders-when-delivering-loans-to-Fannie-Mae.htm

In no world is this person paying 10% in loan costs 

[Gil Bang 25959]

Update from my post a few weeks back:

Closing tomorrow with the windowpeeker.  She wired her funds today, and nothing is left but for title to put a bow on this mofo tomorrow morning. 

It's not a big commission by SoCal standards, but it's a check that I expect to clear the bank, and I'm always grateful to close a deal.  Client is happy, I'm happy.  

[UT_OB1 2223]

I have an interest only loan at 11%, with a yearly renewal that is about $500. I’m assuming I’m not going to do better than 8.5% on a ReFi for a rental property (about $160k loan).  I’d likely ReFi again in 12-18 months when I finish the next house on the property. Considering the ReFi costs, is there really any benefit to me getting out of the interest only loan right now?  I don’t think I’ll pay down more than about $1500 in principal, and the refi costs will eat every bit of tbst. 

[UTPhil2006 3807]

Yeah between cost and current rate and low reup cost it makes sense to wait and keep an eye on rates for a while 

[animaltobacco11 107]

I had never heard of mortgage assumption, but read about this cool new start-up in Bloomberg:

Mortgage assumption startup

Just conceptually it is an obvious trade:

• I own a house with a $400,000 mortgage with a 3% interest rate, and I want to sell it.
• You would like to buy my house for $500,000, putting 20% down and borrowing $400,000.
• But interest rates have gone up a lot, and if you got a $400,000 mortgage now, the interest rate would be 7%. 
• You can’t afford that, so you don’t borrow $400,000, so you don’t buy my house.
• What if you could give me $100,000, move into the house, and take over my mortgage, making the 3% payments until it is paid off? Then we are both better off.

Broadly speaking you could imagine two ways to do this:

1. We could call up my mortgage lender and say “hey, everything about this mortgage is gonna stay the same — same amount ($400,000),[2] same term (30 years or whatever), same rate (3%), same collateral (my house), except there’ll be a different borrower (you, not me). Are you cool with that?” And then the lender says “yes,” either out of the goodness of its heart or because we pay it a little fee or because the original terms of the mortgage specifically allowed me to let someone else take over the mortgage.
2. Magic? Like, we do some sleight of hand where we don’t call up my lender to get its approval, but we structure a transaction between ourselves that achieves this result. You give me $100,000, you move into the house, you send the mortgage checks to me, I forward them to my bank, we enter into some sort of blood oath that makes me not have to worry about your credit risk, I don’t know.

The first option is called “assuming” the mortgage. Generally speaking if you call up a bank asking them to let you assume a 3% mortgage, they will say no, because that is a money-losing trade for them. The lender would much rather have me sell the house for $500,000 to a new buyer who does not assume the mortgage, get its $400,000 below-market mortgage paid back, and then issue a new $400,000 mortgage to the buyer at market rates (7%).[3]

But, in the US, some mortgages are, by their terms, assumable: The bank doesn’t have to like it, but it can’t say no. In particular, the Wall Street Journal reports:

Some 22% of active mortgages are part of the government programs that have assumption features, according to the mortgage-data and technology company Black Knight. That includes loans extended through the Department of Veterans Affairs and the Federal Housing Administration programs.

Few consumers know about the option, and fewer still follow through with it. The FHA has processed 3,349 assumptions in the fiscal year that ends Sept. 30, up from 2,566 in the year prior.

That Journal article is about a new company called Roam that is launching to address that problem, mostly by telling people with assumable mortgages that they have assumable mortgages:

Raunaq Singh, Roam’s founder and chief executive officer, says his new company will find and advertise home listings attached to attractive assumable mortgages. It is initially launching in Georgia, Arizona, Colorado, Texas and Florida.

The company aims to help with the paperwork and other bureaucratic hoops. That means working with the seller’s mortgage company on behalf of the buyer and seller.

“Have you ever called someone every day until you get what you wanted?” says Singh, who earlier in his career worked at the online real-estate company Opendoor. “That’s the kind of service we do on your behalf.” 

The “paperwork and other bureaucratic hoops” are driven not only by old-fashioned banking processes but also by the fact we discussed above, that a bank doesn’t really want to keep a 3% mortgage outstanding if it doesn’t have to:

The startup could run up against the Luddite world of mortgage banking, where assumption documents are still often transmitted by fax machine. Lenders sometimes drag their feet in processing assumptions because they earn only a few hundred dollars for processing them, far less than for originating a new mortgage, according to Ted Tozer, nonresident fellow at the Urban Institute’s Housing Finance Policy Center.

For loan assumptions to become popular, lenders will need to be allowed to earn more on them, Tozer says. “There’s not much you can do with that if the lenders aren’t going to be efficiently processing assumptions,” he says.

[Neonmoon 38129]

Assumable Mortgages are great

Here is why they never happen 

1. The already mentioned 90 day timeframe by current lenders. This makes a competitive 30 day close impossible 

2. The buyer has to cover the gap between the assumable loan amount and the current home value. That loan comes with todays rates. If the gap loan is big enough, it negates or lessens the benefit of the assumable mortgage. If it’s too small, most retail lenders won’t do then because a 70K doesn’t cover expenses. 

3. It’s not simple. The majority of people have trouble providing documents in a timely manner. Asking them to do two loans to buy a house is too much for the a large portion of the general public. 
 

But I’m all for it. I explain the process to anyone who wants to go that route. Wish them luck and send them on their way. 

[Armybrat 40848]

[Mother mopar 3318]

How many tacos and for how long, asking for a friend.

[Armybrat 40848]

2 minutes ago, Mother mopar said:

17 minutes ago, Armybrat said:

How many tacos and for how long, asking for a friend.

Call Eric.

[UTPhil2006 3807]

20 hours ago, Mother mopar said:

20 hours ago, Armybrat said:

How many tacos and for how long, asking for a friend.

We will do $500 GC (seems the easiest way) to the taco place of your choosing in your city (since Thad and I couldn’t agree on the best and I wasn’t gonna let him choose Torchys) at your closing. 
 

Also can apply to mortgages (use us for both, yes you double)

[jimmyjazz 45957]

1 hour ago, UTPhil2006 said:

since Thad and I couldn’t agree on the best and I wasn’t gonna let him choose Torchys)

Lulz.  Well done.

[CooterBrown 18012]

On 9/16/2023 at 9:55 AM, UTPhil2006 said:

We will do $500 GC (seems the easiest way) to the taco place of your choosing in your city (since Thad and I couldn’t agree on the best and I wasn’t gonna let him choose Torchys) at your closing. 
 

Also can apply to mortgages (use us for both, yes you double)

Shit. Now I have another criteria for hiring an agent. No way in hell am I letting a Torchy's fan represent me.

[LCHorn 2620]

@UTPhil2006 @Neonmoon @Wulaw Horn, you guys are all brokers, right?  Where is UWM placing their jumbos with a temporary buy down option (to the best of your knowledge)?

[Wulaw Horn 19070]

1 minute ago, LCHorn said:

@UTPhil2006 @Neonmoon @Wulaw Horn, you guys are all brokers, right?  Where is UWM placing their jumbos with a temporary buy down option (to the best of your knowledge)?

Yes on Broker. No idea man. They call it a color and they are super tight lipped about it. Sorry. 

[UTPhil2006 3807]

1 minute ago, LCHorn said:

@UTPhil2006 @Neonmoon @Wulaw Horn, you guys are all brokers, right?  Where is UWM placing their jumbos with a temporary buy down option (to the best of your knowledge)?

Like what rate? They have 4 separate jumbo programs each by color which have different LTV, credit, and reserves requirements with about a .5 delta between the lowest and highest. I priced a 2/1 buy down on a jumbo last week with them if you need some help 

[Shaggy3.0 1695]

On 9/15/2023 at 1:59 PM, Armybrat said:

I might take that if she and her friends have clean pink tacos.  Hygiene is important.

 

[LCHorn 2620]

11 minutes ago, UTPhil2006 said:

Like what rate? They have 4 separate jumbo programs each by color which have different LTV, credit, and reserves requirements with about a .5 delta between the lowest and highest. I priced a 2/1 buy down on a jumbo last week with them if you need some help 

 

13 minutes ago, Wulaw Horn said:

Yes on Broker. No idea man. They call it a color and they are super tight lipped about it. Sorry. 

Ah, got it--what I wanted to know is what investor (Chase, Citibank, Wells) is buying them.  All of our jumbo investors (and non-QM options) won't allow a temp buy-down on anything non-conforming. 

[Wulaw Horn 19070]

28 minutes ago, LCHorn said:

 

Ah, got it--what I wanted to know is what investor (Chase, Citibank, Wells) is buying them.  All of our jumbo investors (and non-QM options) won't allow a temp buy-down on anything non-conforming. 

That’s what I thought you were asking. I asked my AE and he just laughed at me and said can’t tell you. 

[Neonmoon 38129]

1 hour ago, LCHorn said:

@UTPhil2006 @Neonmoon @Wulaw Horn, you guys are all brokers, right?  Where is UWM placing their jumbos with a temporary buy down option (to the best of your knowledge)?

I'm not a broker. Well...technically I am. Anyone that doesn't work at bank can/does broker loans. There are a bunch of companies in our pricing engine, and we broker out non-QM stuff, but no, we don't sell to UWM, so not a broker in that sense. 

[UTPhil2006 3807]

1 hour ago, LCHorn said:

 

Ah, got it--what I wanted to know is what investor (Chase, Citibank, Wells) is buying them.  All of our jumbo investors (and non-QM options) won't allow a temp buy-down on anything non-conforming. 

If @TouchdownTexas still gets on the board he could probably answer this for you 

[Neonmoon 38129]

The bond market woke up and chose violence

[Esque 135]

For real... and I don't even follow bonds.  Spiked last night and woke me up with an alert.  Wonder if we clear 4.50% on the US10Y today.

[Wulaw Horn 19070]

Ha. Was just fixing to post this. We were up 28 before the fed opened their mouth yesterday. Now down 80 more or less since then. 

Ha. Was just fixing to post this. We were up 28 before the fed opened their mouth yesterday. Now down 80 more or less since then. 
Now Down 58. 
If you ever think it can’t get worse just give it 20 minutes. 

Edited September 21, 2023 by Wulaw Horn

[Wulaw Horn 19070]

LIfe is awesome right now in the mortgage scene. 

Edited September 21, 2023 by Wulaw Horn

[Neonmoon 38129]

In light of the housing market dying, I've decided to offer XJ's in combinations with my ZJs

[ChickenSandwich 9836]

18 minutes ago, Neonmoon said:

In light of the housing market dying, I've decided to offer XJ's in combinations with my ZJs

We all have a mouth to feed. 

[Wulaw Horn 19070]

13 minutes ago, ChickenSandwich said:

We all have a mouth to feed. 

I've got 5, plus 2 dogs and 2 cats.  Good thing we got bariatic surgery and my kids get free lunch and breakfast (everyone at their school does).  Now I just have to convince my wife to go from $300 a week at the grocery store to $120.  Kids can eat Cheerios for dinner- it didn't at all adversely affect @closetojumping.  Will be good for their character.  

[Neonmoon 38129]

I think I'm going to switch from MBS Highway to MBS Live. I don't think Habib knows what he's talking about. He's just wishcasting too often 

 

[Incredulity 11674]

19 minutes ago, Neonmoon said:

I don't think Habib knows what he's talking about.

Narrator:  None of them do.

[Wulaw Horn 19070]

1 hour ago, Neonmoon said:

I think I'm going to switch from MBS Highway to MBS Live. I don't think Habib knows what he's talking about. He's just wishcasting too often 

 

If you do let me know how you like it and also how much it costs. I think Habib is actually more right then wrong (what you are calling wish casting) and the market and fed are nah sing irrationally and the employment numbers are a house of cards built on lies and nonsense (witness all the constant negative revisions) and it will swing and hard toward his POV in time. That could well be my own wishcasting. 

[ChickenSandwich 9836]

8 minutes ago, Wulaw Horn said:

If you do let me know how you like it and also how much it costs. I think Habib is actually more right then wrong (what you are calling wish casting) and the market and fed are nah sing irrationally and the employment numbers are a house of cards built on lies and nonsense (witness all the constant negative revisions) and it will swing and hard toward his POV in time. That could well be my own wishcasting. 

[Wulaw Horn 19070]

28 minutes ago, ChickenSandwich said:

Thanks. The numbers coming in “stronger than expected” always cause a melt down and then they get revised down at some point in the future and nobody gives a shit. Fun stuff. 

[Incredulity 11674]

I was told it's Jobsgiving...???  Sad Panda

 

Edited September 21, 2023 by Incredulity

[Neonmoon 38129]

1 hour ago, Wulaw Horn said:

If you do let me know how you like it and also how much it costs. I think Habib is actually more right then wrong (what you are calling wish casting) and the market and fed are nah sing irrationally and the employment numbers are a house of cards built on lies and nonsense (witness all the constant negative revisions) and it will swing and hard toward his POV in time. That could well be my own wishcasting. 

I think we're all wishcasting in this market. 

My boss uses MBS Live and he just gave me his password. So no need to cancel. I get both!

 

[gurt 748]

I figured the Fed pausing would be good for the rates, why did it jump so much?