Daily Mortgage Updates


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If I were considering financing/refinancing a home, I would….
Lock if my closing were taking place within 7 days…
Lock if my closing were taking place between 8 and 20 days…
Lock if my closing were taking place between 21 and 60 days…
Float if my closing were taking place over 60 days from now…

Tuesday’s bond market has opened well in positive territory following more stock selling yesterday. The major stock indexes are in positive territory during early trading, but have recovered only a small portion of yesterday’s 223 point loss in the Dow and 62 points in the Nasdaq. The Dow is currently up 42 points while the Nasdaq has gained 13 points. The bond market is currently up 18/32 (2.22%), which should improve this morning’s mortgage rates by approximately .250 of a discount point if comparing to Friday’s morning pricing. The bond market was closed yesterday for the Columbus Day holiday, but the stock markets were open for business.

There is no relevant economic data set for release today. This morning’s bond strength is mostly due to yesterday’s stock selling and some economic news from overseas that indicated slower economic growth. There is no doubt that bonds have rallied and mortgage rates have moved noticeably lower over the past week or so. However, I am not comfortable shifting to a less conservative stance towards rates just on this move alone. We are due for some profit-taking and possibly a sizable upward move in my opinion. If I was closing on a loan in the near future, I would seriously consider locking at these low rates before that move comes. There may or may not be a little more improvement, but the risk of a sizable upward spike in rates outweighs the potential gain of continuing to float much longer in my opinion.

We have three reports scheduled for tomorrow, all of which are considered highly relevant to bonds and mortgage pricing. September’s Retail Sales report is the first at 8:30 AM ET tomorrow morning. It measures consumer level sales and is very important to the markets because consumer spending makes up over two-thirds of the U.S. economy. If consumer level spending is strong, overall economic growth is likely to be stronger, making bonds less attractive to investors. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop again tomorrow. Current forecasts are calling for a 0.2% decline in sales. Good news for the bond market and mortgage pricing would be a larger decline.

Also set for release at 8:30 AM ET tomorrow is September’s Producer Price Index (PPI). This index measures inflationary pressures at the manufacturing level of the economy and is also considered to be highly important to the bond market. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.1% in the more important core data reading. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

The third and final relevant report of the day is the Federal Reserve’s Beige Book, which is named simply after the color of its cover. This report details economic conditions throughout the U.S. by Federal Reserve region. It is relied upon heavily by the Fed to determine monetary policy during their FOMC meetings. If it shows surprisingly softer economic activity since the last report, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing or rapidly expanding economic activity in many regions, we could see mortgage rates revise higher tomorrow afternoon.

Overall, it appears tomorrow is an easy label for the most important day of the week although today’s unexpected bond rally makes today a worthy opponent also. In addition to the economic data this week, there are many companies posting earning reports, including some big names such as Citigroup, GE and Intel. If the corporate earnings releases are generally weaker than forecasts, stocks may suffer, making bonds more appealing to investors. The end result would likely be an improvement in rates. The flip side though is stronger than expected earnings that drive stocks higher, pushing bond prices lower and mortgage rates upward. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.

What is Happening in the Arizona Housing Market August 2014

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The market continues to cruise at a moderate pace with 6,114 total resales in Maricopa County for July. REO closed was 367 which is 6%. Short sales closed were 214 which is 4% and normal sales closed was 5,533 which is 90%. Pending inventory is at 8,448 with REO pending at 450 which is 5% and short sales pending at 1,366 which is 16% and normal pending at 6,631 which is 79%. Active inventory in Maricopa County is down again slightly to 19,457. REO active is 644 and short sale active is also at 693 which is 3% each. Normal active is at 18,124 which is 94%.

school reports 2Home buyers and Home Sellers get started now.  Utilize our Free services and excellent resources for excellent information on the community you want to know about.

Appraisers Are Not My Favorite People in the world

First a Quick Poll Do you Think Appraisers Should See a Purchase Contract Before Appraising a home?

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     I recently helped a family get into a beautiful home over in the Val Vista Lakes community.  The home is 2911 St, two story with 4 bedrooms, 3 full bathrooms and a loft.  The home Was listed at $330,000 and with my help and negotiation skills we were able to get the seller down to $310,000 for the sales price with $1,500 paid towards our closing costs.  The buyer stated and I quote , “I am as happy as a pig in mud”  classic and comical.

     So we got off to a good start we were $21,500 below list price.  The average home was listed for $133 a sf, we just locked down our contract at a value of $106 a sq ft.  There were some minor repairs that needed to be done from when we did our walk through. But we still needed to get into our deep dark home inspection and really break down the integrity of the home.school reports 2

     The DAY OF THE INSPECTION.  The home is in pretty good shape except the roof has some minor issues.  We got a licensed roofer, well actually 2 roofer’s to come out and inspect the roof more thoroughly.  To replace the roof it would be $6,500 dollars, to just make repairs it would be about $1500. ( Yea $6500 to replace the roof, Hit me up if you need a good roofer that is cheap ).  So not to big of a deal.  We are $21,500 below the list price of the home and $27 below the average price per sq foot for the community.  We are still in great shape.

     DAY THE APPRAISAL COMES IN –  The lender calls me up and says congrats the appraisal came in at the contract price.  My response was not  excitement.  I was not happy with the results and asked the lender to forward me a copy to review.  Upon reviewing there was not one comparable that the appraiser used that supported the low $310,000 sale price in fact he used homes that were $20 to $30 thousand dollars more. One  was $27 a sq foot more than our property. If you take 2911 sq feet x $27 a sq ft that equals $78,597, just a small difference here, right?  Now you may be wondering why I was upset.  Well when your client thinks they are getting a great deal and the appraisal only comes back at the purchase price of the home, some buyers get discouraged and want to back out.

     Luckily I had explained to the buyers that it was very likely that we would get an appraisal just like the one we received because appraisers now a days are too conservative and worried that the banks will get upset with them if they appraise the home higher.  Now this brings me to my thought process, appraisals are supposed to be done by a non biased, licensed 3rd party to the transaction.  Well if the appraiser is supposed to come up with the true value of the home, the appraiser should never receive a copy of the purchase contract.  They don’t get a contract when they do appraisals for a refinance!

    Make sure you educate your clients before hand to help set the expectations so that you don’t have a deal killer later.

Stop Renting

Phoenix and Surrounding areas New FHA rules for past Homeowners that did a SHORT SALE can now buy again

Short Sales New FHA Guidelines for

Former Arizona Homeowner can now Buy Sooner

buying home after short sale

As a Short Sale Specialist in Arizona we know bad things happen to good people.

So don’t let your previous short sale paralyze you into thinking that you are not able to purchase a home again anytime soon.  This means that potential home buyers in the Phoenix, Ahwatukee, Gilbert, Chandler & Mesa areas in Arizona who would like to take advantage of the low rates and buy a home in the Phoenix area should contact us today 480-239-5468 and we can put you in touch with a lender to find out if you qualify for the Back at Work Program FHA. This is your second chance and its important to start the process now and learn about all the new guidelines available.

If your thinking about a short sale in Phoenix, Ahwatukee, Gilbert, Chandler & Mesa areas in Arizona, now is the time to start the process.

The worst thing you can do is nothing, if your falling behind on your mortgage or facing a hardship. Not only are the new FHA rules, helping homeowners who have previously had a short sale or foreclosure.

Phoenix Area HomesThese new rules are going to add a new group of buyers in the market, this may be the perfect opportunity to short sell your home and take advantage of all the new short sale guidelines. If you have had a short sale in past here is your chance to purchase a home again. There are some amazing homes on the market in Phoenix and surrounding areas.



Helping Phoenix and Surrounding Area Homeowners Make Tough Decisions


A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property. In addition, the property owner cannot afford or chooses not to repay the liens full amounts.

Therefore, the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency.

Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.  That is why finding the right short sale specialist is important.


Will the Bank’s Say Yes?

Banks do not want to take assets back.  With the amount of work it takes to foreclose and the losses incurred, it is easier to facilitate a short sale.

What About the Taxes?

There may be tax consequences to a short sale but every situation is unique.  Maybe you heard that you should not do a short sale or you will get taxed…

Does It Hurt My Credit?

Yes a short sale will have an impact on your credit.  But so does the 30 day late, 60 day late & 90 day late missed payments.  Most lenders will consider a 90 day late the same as a foreclosure status on your credit report.

Get Started Now

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What about the Taxes?

HomeSmartTop08There may be tax consequences to a Short Sale but every situation is unique. You may have been told that you should not do a short sale because you will get a 1099 and have to pay taxes on the difference between what you owed on your property and what you sold it for. That might be true, but it is not the whole truth.

If you borrow money from a bank and the bank cancels or forgives your debt, you might have to include the cancelled amount in income for tax purposes, depending on your personal situation.  When you borrowed the money you weren’t required to include the loan proceeds as income because you were obligated to repay the lender.

When a obligation to repay is forgiven, the amount you received from your loan is normally reported as income because you don’t have an obligation to repay the lender. The lender is typically required to report the amount of that canceled debt to you and to the IRS on a Form 1099-C, Cancellation of Debt.

The thing that most people won’t tell you is that with a Foreclosure, you will also get a 1099. With a Foreclosure the 1099 is called a “1099-A”  and the ‘A’ stands for “Acquisition or Abandonment of Secured Property”. It is critical to understand that while there are a number of differences, the tax consequences for the ‘C’ and the ‘A’ are the same. Because of The Mortgage Debt Relief Act of 2007 you may not even be required to pay taxes on the ‘income’ as shown on the 1099-C. However, don’t assume that you don’t have to pay these taxes. While we are very good at successfully closing Short Sales, we are not tax experts.

Before making your final decision, we always suggest that you first consult a CPA or Tax Preparer.

You may also want to check out some information regarding The Mortgage Debt Relief Act of 2007. It provides relief to many, many homeowners. For more information on the Mortgage Debt Relief Act, how it works, who it applies to, and more, please read more directly from the IRS website. Read The Mortgage Debt Relief Act of 2007.

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Why the Bank Would Say YES!

ready-to-sell (2)With the foreclosure boom in the United State, lenders were looking for any way they could to minimize their foreclosure losses. Basically, it is much more cost effective for a lender to agree to a short sale instead of a foreclose on a home.

Lenders aren’t in the business of owning real estate and collecting monthly mortgage payments, so a bank will take a minor loss on a short sale to start that payment cycle again.

In addition, if the home is in foreclosure, a bank must pay for upkeep, insurance, landscape, repairs, Legal Fees and other costs.  Plus, through the foreclosure process, the bank would incur legal and court fees that are in the thousands.  But most importantly is the lost time to do a foreclosure.

*Banks Can minimize their loss by up to 30% of completing a short sale instead of a foreclosure*