All Encompassing Mortgage and Real Estate Thread

[Wulaw Horn 18919]

This looks a little more plausible based upon my close of business stuff from Friday:

From Mortgage News Daily.

Mortgage Rates	Rate	Points	Change
30 Yr. Fixed	7.12%	0.00	+0.08%
15 Yr. Fixed	6.35%	0.00	+0.20%
30 Yr. Jumbo	6.10%	0.00	+0.07%
5/1 ARM	6.45%	0.00	+0.08%
30 Yr. FHA	6.62%	0.00	+0.00%
30 Yr. VA	6.69%	0.00	+0.01%

[Wulaw Horn 18919]

FYI, all my tea leaf readers are saying lock now b/c it's going to get worse this week.

They say the Bond auction is going to tank tomorrow b/c nobody is going to want to buy in front of the fed minutes, the fed minutes are going to be grim and depressing, and then Thursday the inflation report is going to be brutal b/c it's replacing last September's numbers which were actually decent at 0.25.  They say that the November report for October will be the first time we really get the benefit of replacing bad numbers from last year, and things might start to change then.  So yeah, all of that sounds fun. 

[UTPhil2006 3773]

I gotta think this is close to the “bottom” at least. 

[Wulaw Horn 18919]

3 minutes ago, UTPhil2006 said:

I gotta think this is close to the “bottom” at least. 

Sure hope so.  My guys keep saying almost there, just get through October into inflation numbers being baked in to basically having to come down.  Election could be pretty key.  Markets love split control- we are likely to see that come into being (I'd think).  Eventually gravity takes over.  

[jimmyjazz 45211]

I'm sure one of you has answered this, but I can't remember my own phone number these days:  why are 30 year jumbos so much cheaper than 30 year conventionals?

[TKthunder2 4959]

1 hour ago, jimmyjazz said:

I'm sure one of you has answered this, but I can't remember my own phone number these days:  why are 30 year jumbos so much cheaper than 30 year conventionals?

https://www.jvmlending.com/blog/why-jumbo-interest-rates-much-lower-than-conforming/

 

[Incredulity 11197]

Cause the financial markets are chock full of dislocations.

 

2yr Treasury and 10yr Treasury for example.

 

Anyone who gave you a rock solid certain answer right now is pretty much selling magic beans.

[YGIFS 19445]

Curious to get a take from your legal experts in real estate.  Was on a zoom call getting pitched to invest in this company called POINT.  Basically they bundle equity slices of residential single-family homes and sell off.  We get into the weeds of how they do it, I think I finally have my arms around it.  But that's not my question.  

They're in 18-20 states right now, about 40-60 MSA's.  But the one state they cannot do business in (aside from taking LP sidecar capital) is Texas.  We apparently would need a constitutional amendment to be able to allow consumers to sell slices of their equity to outside entities.  Anybody know why that is  ?

[Wulaw Horn 18919]

5 minutes ago, YGIFS said:

Curious to get a take from your legal experts in real estate.  Was on a zoom call getting pitched to invest in this company called POINT.  Basically they bundle equity slices of residential single-family homes and sell off.  We get into the weeds of how they do it, I think I finally have my arms around it.  But that's not my question.  

They're in 18-20 states right now, about 40-60 MSA's.  But the one state they cannot do business in (aside from taking LP sidecar capital) is Texas.  We apparently would need a constitutional amendment to be able to allow consumers to sell slices of their equity to outside entities.  Anybody know why that is  ?

It was illegal to do home equity loans in the state of Texas for forever.  That law was changed in the early 90's by ammendment to the constitution in 50a6.  Later, we allowed Heloc's in another amendment as well as reverse mortgages.  But, long story short you essentially have to have a positive carve out to do a home equity in the state of Texas, and there are a ton of regs you have to hit that just don't exist elsewhere.  

[Incredulity 11197]

10 minutes ago, YGIFS said:

Basically they bundle equity slices of residential single-family homes and sell off.

obligatory

 

I would love to hear how a company "sells" equity slices of SFH.  Cliffs if you please.

 

edit**  sells equity LOAN slices?  correct?

Edited October 12, 2022 by Incredulity

[YGIFS 19445]

https://point.com/

Same way they've been bundling the debt stack for decades.  It's risky enough, but so is everything else related to real estate.  They've actually got a decent 6-year track record and are pretty diligent in terms of reporting and regulatory compliance.  We're not gonna participate for other reasons, just a redundancy of asset class (not approach).  But it's worth a look.  But what caught me off guard is we get to the part about expansion and they're walking us through their state-by-state approach and they get to Texas and it's "Whoah Nelly!"  The exit and option contract buyback with the discount from par at inception should worry the homeowner.  But they've found a sweet-spot submarket.  They're doing pretty well, family office LP's are mostly happy, it's just not for us right now.  But curious as to how Texas may eventually turn on this.  

Wulaw, thanks for insight.  I knew we were one of the last to go in for HELOC's...odd for a state that prides itself on liberating property owners to do as they please.  I figure this'll happen one day in Texas, but not for another decade or so.  Was wondering if there's some over-arching legal theme to why they don't allow it right now when so maby Western/Central/South states permit it.  noCR....but this is obviously a legislative branch call.  

[Incredulity 11197]

Who are the debt stacks being sold to?  Insurance companies, financial institutions, pensions...All of the above?

It would seem the product has all the challenges of bundled mortgages, with a subordinated loan positions and obviously a much higher default risk.

 

From the Point sight.

The banks required a lot more to qualify for their loans. Point came in and said, here’s an option for you.

[YGIFS 19445]

Point is selling to 4 institutional investors as of now on the retail side (about $100mm/year).  Their LP aggregation seems to be mostly family offices as of now (so, not me).  But we deploy on behalf of some, so they reached out.  I don't like being anywhere in the foodchain of fund-of-funds or double promotes but the model seems interesting and is doing solid work for 6+ years in the states they operate in.  We derisked the shit out of it from a financial perspective (even with rising inflation and interest rates...in a bizarre way that seems to help).  In the end, it's just an oversaturation of underlying real asset class so we're passing.  But their model, even if this company POINT doesn't last, isn't going away and will become more attractive to that person with several hundred grand in equity on a $800k house. 

Thanks for addt'l insight though, I'm curious to see how this current cycle plays out for them  plus the 10+ new state expansion.  We'll take another hard look in 18 months.   

[Wulaw Horn 18919]

25 minutes ago, YGIFS said:

https://point.com/

Same way they've been bundling the debt stack for decades.  It's risky enough, but so is everything else related to real estate.  They've actually got a decent 6-year track record and are pretty diligent in terms of reporting and regulatory compliance.  We're not gonna participate for other reasons, just a redundancy of asset class (not approach).  But it's worth a look.  But what caught me off guard is we get to the part about expansion and they're walking us through their state-by-state approach and they get to Texas and it's "Whoah Nelly!"  The exit and option contract buyback with the discount from par at inception should worry the homeowner.  But they've found a sweet-spot submarket.  They're doing pretty well, family office LP's are mostly happy, it's just not for us right now.  But curious as to how Texas may eventually turn on this.  

Wulaw, thanks for insight.  I knew we were one of the last to go in for HELOC's...odd for a state that prides itself on liberating property owners to do as they please.  I figure this'll happen one day in Texas, but not for another decade or so.  Was wondering if there's some over-arching legal theme to why they don't allow it right now when so maby Western/Central/South states permit it.  noCR....but this is obviously a legislative branch call.  

So, basically the way it was always explained to me is this goes back to the frontier days when the settlers were all homesteaders coming out here for land and to make a home.  That was paramount over the entirety of the settling. The idea was that once you owned a place you owned it (and as my FIL said- they can't hardly starve you out at that point in time if you don't owe on your house).  Mix that in with the idea of won't somebody please think of the children (and women) that accompanied some of the wild and wholly wildcatter days, or even just signing a promissory note over a card game when you have 8's full of aces and then losing your house, and it was very conservative.

Fast forward 50 or 100 years and the real estate lobby loved the prohibition against getting equity from your house.  That way- if you wanted that money you had to sell and buy somewhere else and they'd make a commission on both places.  

Now, is any of this true or is it all nostalgic tinged bullshit?  I have no idea- but it does make a certain amount of sense.  I certainly haven't dug into the legislative records or anything like that dealing with this issue.  

[YGIFS 19445]

Nah, that makes perfect sense actually.  But Texas, as much as we like to think so, ain't that special.  At least in terms of settler law.  Half their business comes from states west of the Mississippi who had the same challenges as we did once upon a time.  The real estate lobby commission deal plus closing fees at bank/title makes sense.  No judgement  

[LCHorn 2564]

20 hours ago, TKthunder2 said:

https://www.jvmlending.com/blog/why-jumbo-interest-rates-much-lower-than-conforming/

 

Hah!  Would love to know how you encountered that (I used to work at JVM).  Love their origination model but I bet they are hurting at the moment (as are we all, *tips his 40*)

[Gil Bang 25689]

Fuck me.  

I listed a little condo for a crazy woman and closed it a little over a year ago. 

Today, I get an email from the buyer, who I did not represent, and she's asking for my mailing address and a mailing address for the seller. 

Well, shit...that adds up to one thing, and it's not good.   

Her agent was cool, so I call her and ask WTF.  She says that buyer called her a couple of months ago, saying that there are foundation issues at the condo complex, and that the seller should have known and didn't disclose.    I saw no evidence of foundation issues, there were none noted in the inspection, and none of the nosy neighbors mentioned anything.   So, there's a really good chance that I'm going to get pulled into some bullshit lawsuit that has zero to do with anything that I did or did not do. 

[UTGrad98 2221]

Human beings are the worst. 

[Gil Bang 25689]

OCTOBER 12--A jury yesterday convicted a Michigan man of aggravated indecent exposure for using a Tickle Me Elmo doll to masturbate while he was inspecting a residence on behalf of a potential purchaser.

Kevin VanLuven, 60, was found guilty of the misdemeanor following a one-day trial in Oakland County Circuit Court. The jury acquitted VanLuven of malicious destruction of property, also a misdemeanor.

Judge Phyllis McMillen scheduled VanLuven’s sentencing for December 2. The indecent exposure count carries a maximum penalty of two years in prison and a $2000 fine.

VanLuven, who works as a home inspector, was arrested last year after the owners of a suburban Detroit home contacted cops to report that a nanny cam recorded VanLuven pleasuring himself inside the residence.

VanLuven was inspecting the Oxford Township home on behalf of a potential purchaser. The home’s owners had let VanLuven, another inspector, the buyers, and a real estate agent into the property.

When the inspection began, the owners and their two small boys left the three-bedroom house. After two hours had passed, homeowner Jaida Dodson remotely accessed her home security cameras to check on the progress of the inspection.

At a court hearing last year, Dodson testified that she saw VanLuven remove a Tickle Me Elmo doll that had been among stuffed animals stored in a small teepee tent in the bedroom of Dodson’s two-year-old son. VanLuven then allegedly “unzipped his pants and began masturbating in our son’s closet with his Tickle Me Elmo,” Dodson recalled.

The above surveillance still shows VanLuven holding the Elmo doll.

After Dodson called police, an officer confronted VanLuven at the residence. The cop reported that VanLuven “admitted to placing his penis in Elmo’s mouth, in the doll’s mouth” and “apologized and said he was ashamed.”

VanLuven subsequently sought to quash verbal and written confessions given to police, but a judge denied his motion to suppress those statements. (3 pages)

 

[Incredulity 11197]

Sorry for partying?

[PhillyD 1246]

6 hours ago, Gil Bang said:

Fuck me.  

I listed a little condo for a crazy woman and closed it a little over a year ago. 

Today, I get an email from the buyer, who I did not represent, and she's asking for my mailing address and a mailing address for the seller. 

Well, shit...that adds up to one thing, and it's not good.   

Her agent was cool, so I call her and ask WTF.  She says that buyer called her a couple of months ago, saying that there are foundation issues at the condo complex, and that the seller should have known and didn't disclose.    I saw no evidence of foundation issues, there were none noted in the inspection, and none of the nosy neighbors mentioned anything.   So, there's a really good chance that I'm going to get pulled into some bullshit lawsuit that has zero to do with anything that I did or did not do. 

Seems like the issue is not with the seller (or you) but with the condo association.  If foundation issues were mentioned in a meeting, it should be in the meeting minutes and disclosed in the resale package that were provided to the buyer.  If they had gone so far as to hire an engineer to investigate, that definitely should been in the resale documents along with the results of that investigation.  You may get dragged in because they will drag everyone in, but if was a known issue to the association and not in the resale documents, you (as the agent) ought to be in the clear.  The association, on the other hand, might want to consult with their attorney and prepare their anus.

[Gil Bang 25689]

10 minutes ago, PhillyD said:

Seems like the issue is not with the seller (or you) but with the condo association.  If foundation issues were mentioned in a meeting, it should be in the meeting minutes and disclosed in the resale package that were provided to the buyer.  If they had gone so far as to hire an engineer to investigate, that definitely should been in the resale documents along with the results of that investigation.  You may get dragged in because they will drag everyone in, but if was a known issue to the association and not in the resale documents, you (as the agent) ought to be in the clear.  The association, on the other hand, might want to consult with their attorney and prepare their anus.

Oh indeed.  But, from the buyer's prospective, I'm the motherfucker with E&O insurance.  I'm sure that she's figuring that my carrier will throw a few G her way to avoid any litigation, innocent as I may be.

[gmr548 16316]

OCTOBER 12--A jury yesterday convicted a Michigan man of aggravated indecent exposure for using a Tickle Me Elmo doll to masturbate while he was inspecting a residence on behalf of a potential purchaser.

Kevin VanLuven, 60, was found guilty of the misdemeanor following a one-day trial in Oakland County Circuit Court. The jury acquitted VanLuven of malicious destruction of property, also a misdemeanor.

Judge Phyllis McMillen scheduled VanLuven’s sentencing for December 2. The indecent exposure count carries a maximum penalty of two years in prison and a $2000 fine.

VanLuven, who works as a home inspector, was arrested last year after the owners of a suburban Detroit home contacted cops to report that a nanny cam recorded VanLuven pleasuring himself inside the residence.

VanLuven was inspecting the Oxford Township home on behalf of a potential purchaser. The home’s owners had let VanLuven, another inspector, the buyers, and a real estate agent into the property.

When the inspection began, the owners and their two small boys left the three-bedroom house. After two hours had passed, homeowner Jaida Dodson remotely accessed her home security cameras to check on the progress of the inspection.

At a court hearing last year, Dodson testified that she saw VanLuven remove a Tickle Me Elmo doll that had been among stuffed animals stored in a small teepee tent in the bedroom of Dodson’s two-year-old son. VanLuven then allegedly “unzipped his pants and began masturbating in our son’s closet with his Tickle Me Elmo,” Dodson recalled.

The above surveillance still shows VanLuven holding the Elmo doll.

After Dodson called police, an officer confronted VanLuven at the residence. The cop reported that VanLuven “admitted to placing his penis in Elmo’s mouth, in the doll’s mouth” and “apologized and said he was ashamed.”

VanLuven subsequently sought to quash verbal and written confessions given to police, but a judge denied his motion to suppress those statements. (3 pages)

 

[Neonmoon 38126]

CPI report showed 8.2% instead of expected 8.1%. Monthly rose larger than expected at 0.4% 

This means more pain. Lots of pain

[Catpfish 618]

10 hours ago, Gil Bang said:

Oh indeed.  But, from the buyer's prospective, I'm the motherfucker with E&O insurance.  I'm sure that she's figuring that my carrier will throw a few G her way to avoid any litigation, innocent as I may be.

I hate this bullshit.  Might have told this story, but I got roped into a lawsuit because the plaintiffs were about to be summarily dismissed.  They needed to bring new people in to keep the lawsuit going and I got the call.  Our E&O refused to cover because intentional fraud was alleged.  Had about $18K out of pocket before the first deposition.  At the deposition, the plaintiff actually admitted that I had done nothing wrong and handled the whole situation both professionally and ethically.  They dropped me from the suit that day.  My attorney wrote to the insurance company and threatened them with action if they didn't cover the costs since it should have been defended from the beginning.  He got an extra couple of grand from that letter when the insurance company agreed that they should have been there from the beginning.

In short, fuck bullshit lawsuits.

[Wulaw Horn 18919]

21 minutes ago, Neonmoon said:

CPI report showed 8.2% instead of expected 8.1%. Monthly rose larger than expected at 0.4% 

This means more pain. Lots of pain

Yeah- that's not even really the worst part of the news, in a bucket of shit nothing went well except energy and gas prices down slightly.  Of course, that's all been offset by recent rises and OPEC+ cutting 2,000,000 barrels a day in production.

Wife woke me up for sex at 5:37 AM.  Got my first text at 8:01 MBS down 105 points (that's basically 1/4 of a point in higher interest rates for the borrower).  I'm not sure that was a good trade for me, even if I did appreciate the effort on her part. 

[Neonmoon 38126]

What are the chances interest rates improve before October 28th?

[Incredulity 11197]

15 minutes ago, Neonmoon said:

What are the chances interest rates improve before October 28th?

[UTPhil2006 3773]

1 hour ago, Neonmoon said:

What are the chances interest rates improve before October 28th?

At this point anything from 6.5-9 is possible 

[Neonmoon 38126]

10 minutes ago, UTPhil2006 said:

At this point anything from 6.5-9 is possible 

[LCHorn 2564]

5 hours ago, Wulaw Horn said:

Yeah- that's not even really the worst part of the news, in a bucket of shit nothing went well except energy and gas prices down slightly.  Of course, that's all been offset by recent rises and OPEC+ cutting 2,000,000 barrels a day in production.

Wife woke me up for sex at 5:37 AM.  Got my first text at 8:01 MBS down 105 points (that's basically 1/4 of a point in higher interest rates for the borrower).  I'm not sure that was a good trade for me, even if I did appreciate the effort on her part. 

I ended up not reading MBS Highway until about 12:30 today and saw Barry’s “Dow is down by 700” comment; checked the current market and it was up 800 (who knows what it is now).  I don’t know how anyone can feel confident about any prediction with this mind of volatility.

[closetohumping 17302]

20 hours ago, Incredulity said:

Zero as in zero % interest?

[Neonmoon 38126]

Floating a rate right now...

I am so dumb

[Wulaw Horn 18919]

12 minutes ago, Neonmoon said:

Floating a rate right now...

I am so dumb

We’ve all been there. Ask me how I made $1500 on a $400,000 on Friday…

[LCHorn 2564]

42 minutes ago, Neonmoon said:

Floating a rate right now...

I am so dumb

I don't think it's that dumb as long as it's not trying to close next week. 

[UTPhil2006 3773]

1 hour ago, Neonmoon said:

Floating a rate right now...

I am so dumb

Depends on the customer (some don’t like to test things) but I think that’s a reasonable thing to currently 

[Shaggy3.0 1694]

On 10/12/2022 at 5:08 PM, Gil Bang said:

So, there's a really good chance that I'm going to get pulled into some bullshit lawsuit that has zero to do with anything that I did or did not do. 

Famous last words.

 

Signed,

Shaggy 1.0 Website

[Neonmoon 38126]

2 hours ago, Wulaw Horn said:

We’ve all been there. Ask me how I made $1500 on a $400,000 on Friday…

Hahaha that’s brutal 

[UTPhil2006 3773]

Hit 3 year (at least) highs this morning at 4.12.. hanging around 4.09 as I type this.  What I'm saying is ZJ's are back on the table.

[Wulaw Horn 18919]

22 hours ago, Neonmoon said:

Floating a rate right now...

I am so dumb

When does the loan close?  You are down 53 basis points in the MBS market right now.  I haven't had a single good thing happen to me in years floating a loan.  Hope you have a really long timeline potential...

[Neonmoon 38126]

40 minutes ago, Wulaw Horn said:

When does the loan close?  You are down 53 basis points in the MBS market right now.  I haven't had a single good thing happen to me in years floating a loan.  Hope you have a really long timeline potential...

Loan closes November 28th

I'm almost at the point of locking the 30 today and eating the extension fee

[LCHorn 2564]

@Wulaw Horn’s secret crush Barry Habib thinks the Nov 10 CPI report will calm the market.  That gives you 2 weeks of positive days if you think he’s right.  
 

I was listening to the Eurodollar Univ. podcast yesterday and those guys are convinced inflation is already going back down and the September numbers are really just capturing increased rents rather than more broadly felt inflation.

[Neonmoon 38126]

1 hour ago, LCHorn said:

@Wulaw Horn’s secret crush Barry Habib thinks the Nov 10 CPI report will calm the market.  That gives you 2 weeks of positive days if you think he’s right.  
 

I was listening to the Eurodollar Univ. podcast yesterday and those guys are convinced inflation is already going back down and the September numbers are really just capturing increased rents rather than more broadly felt inflation.

I mean that's the hope, but it's all prayers at this point

[StruggleBus 3922]

On 10/13/2022 at 9:12 AM, Catpfish said:

I hate this bullshit.  Might have told this story, but I got roped into a lawsuit because the plaintiffs were about to be summarily dismissed.  They needed to bring new people in to keep the lawsuit going and I got the call.  Our E&O refused to cover because intentional fraud was alleged.  Had about $18K out of pocket before the first deposition.  At the deposition, the plaintiff actually admitted that I had done nothing wrong and handled the whole situation both professionally and ethically.  They dropped me from the suit that day.  My attorney wrote to the insurance company and threatened them with action if they didn't cover the costs since it should have been defended from the beginning.  He got an extra couple of grand from that letter when the insurance company agreed that they should have been there from the beginning.

In short, fuck lawyers

I agree

[UTPhil2006 3773]

3 hours ago, LCHorn said:

@Wulaw Horn’s secret crush Barry Habib thinks the Nov 10 CPI report will calm the market.  That gives you 2 weeks of positive days if you think he’s right.  
 

I was listening to the Eurodollar Univ. podcast yesterday and those guys are convinced inflation is already going back down and the September numbers are really just capturing increased rents rather than more broadly felt inflation.

From your lips or Barry’s to gods ears 

[UTPhil2006 3773]

7 hours ago, UTPhil2006 said:

Hit 3 year (at least) highs this morning at 4.12.. hanging around 4.09 as I type this.  What I'm saying is ZJ's are back on the table.

And by 3 year I meant 14 year highs. Last time it was this high was July 23, 2008

[Gil Bang 25689]

NOTHING IS FUCKED HERE DUDE

 

 

Spoiler

everything is fucked

 

[UTPhil2006 3773]

10 year up to 4.20 for those of you that partake smoke em up 

[Gatorubet 29789]

On 10/12/2022 at 4:08 PM, Gil Bang said:

I listed a little condo for a crazy woman and closed it a little over a year ago. 

She says that buyer called her a couple of months ago, saying that there are foundation issues at the condo complex, and that the seller should have known and didn't disclose.    I saw no evidence of foundation issues, there were none noted in the inspection, and none of the nosy neighbors mentioned anything.   So, there's a really good chance that I'm going to get pulled into some bullshit lawsuit that has zero to do with anything that I did or did not do. 

I’d put the system on trial. 

[Incredulity 11197]

See the Waukesha threads.

 

actually don’t, it’s depressing as shit.  Unless you have an extremely dark sense of humor.  But probably still not.