St. Louis Real Estate - Mortgage News - Big Nothing

Filed under: Mortgage News

A Big Nothing! by Chris Scheer, District Manager, Cornerstone Mortgage, O’Fallon, MO

Well the Federal Reserve cut interest rates by another .5% today which makes 1.25% in the last 10 days. What did Wall Street do? They acted excited, but by the end of the day the DOW was down 37 points. The bond market was even less excited and there was almost no movement at all. Why is the big question?

I would love to tell you that I know the answer, but I don’t.

Here is my best guess as to what will happen over the next 30 days. As the heavy money has a chance to digest the Fed comments and view the rest of the economic indicators that are coming out this week they will determine in what direction the market will go. This week will still be a week with potentialy wild movements in both directions for mortgage interest rates. As the market recognizes that the Fed may have to take further action, positions on the bond market will be taken and we will see the 30 year fixed get down to 5.5% or possibly below.

Here are the economic indicators that are coming out this week:

1/30 Gross Domestic Product (Advance) (BEA) 2007 Q4 8:30
1/31 Personal Income (BEA) December 8:30
Construction Put in Place (Census) December 10:00

For more you can go to http://www.economicindicators.gov/

If you have questions or comments about this please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   01.30.2008

St. Louis Real Estate - Mortgage News - Economic Data

Filed under: Mortgage News

How will the economic reporting this week affect the St. Louis Housing Market?
If you haven’t already subscribed to our RSS feed, do so now, and be sure to follow Chris Scheer all this week as he examines the effects of the reports and weights in on Countrywide Mortgage.

“This will be a very busy week in terms of economic data. Tuesday will be the release of December’s Producer Price Index , along with Core PPI, and Retail Sales which gives a glimpse into the state of inflation and whether it is effecting consumer buying. Wednesday’s data will include Consumer Price Index and then Thursday will be the Philadelphia Fed Index, Housing starts, Building Permits, and Jobless Claims.

If that weren’t enough data, the equity market is going into earnings season when many companies report 4th quarter results. Traders will be looking for places to pick up quick profits based on earnings data and are likely to pull money out of bonds to fund these transactions, especially given the rumors that the Fed might ease rates prior to the end of the month FOMC meeting. The fact that the Fed is most likely to lower the Fed Funds rate again by the end of the month will put additional pressure on bonds which is never good for mortgage interest rates.

It seems however, that the never ending news of write-downs from companies such as Citifinancial and Merrill Lynch continue to balance these inflation indicators and keeps money in bonds.

If the upcoming economic data shows inflation concerns, mortgage interest rates are likely to deteriorate given the other factors this week.”

For comments or questions, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   01.14.2008

St. Louis Real Estate - Mortgage News - Falling Rates

Filed under: Mortgage News

Are Rates Falling? by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

Well the year has started off with interest rates heading lower, but have they really? With Fannie Mae and Freddie Mac adding risk based pricing to their delivery fees for all loans delivered after March 1, 2008, see Fannie Mae. Who knows what the rate will be at any given time. Couple that with this announcement; see Adverse Market Delivery Charge.
And the interest rate that I thought we should have is now at least .125% higher and in some cases .375% higher. Even though the price of mortgage backed securities continues to rise and the yield or effective interest rate is falling, the interest rate for most consumers is actually going up or staying the same!

Economic news favored rates falling and currently the trend has been favorable. However this week we have at least 3 Fed Governors speaking at various functions and the minutes from the December Fed meeting will be released. The market watchers will spend far too many hours dissecting the comments from these and we will see the bond market either give up its gains or take on a whole new energy as anticipation of the next Fed meeting begins. Either way, at this point it is going to take a strong push to get the 30 year fixed back down to 5.5% or below. Mostly due to the above mentioned pricing by Fannie and Freddie, but also keep in mind that the secondary departments of the major investment banks are under pressure to be profitable with the REO departments getting killed with all of the foreclosures. Thus when they do their pricing models, expect them to error on the conservative side.

For comments or questions, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   01.10.2008

St. Louis Real Estate - Mortgage News - Cust. Service

Filed under: First Time Home Buyer, For Buyers, For Sellers, Mortgage News, Real Estate News

Customer Service or Lack There Of! by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

If you have read my previous posting on Manufactured Housing you may be aware of the challenge that I had getting the appraiser to put the Make, Model, serial number and year manufactured on an appraisal of a Manufactured house. The appraisal form clearly states that this information is needed, yet the appraiser we chose to use could not find the information on the property and thus felt it was not his responsibility to locate it. Over a 2 week period my assistant requested the information be added to the appraisal and each time she was told he didn’t have it or have access to it. Since this was one of my first challenges working with this assistant I let her attempt to handle the situation until it became a crisis. I recognize I should have stepped in sooner, but until you see someone perform under fire you don’t know how good they are.

At the eleventh hour I went to the Internet and found the source of the information within 10 minutes. Prior to doing that I sent an e-mail to the managing partner of the appraisal company that was very direct and to the point, see the following:

“We have a challenge. As you are aware, we have asked the appraiser to supply the Manufacturer’s serial number, name, trade/model and date manufactured for the property on xxxxx road. At this time this is the only item I need to get a clear to close, however, we will not close until we have it. In the appraisers defense, the realtor and her clients went through the entire house tonight and could not find it. However, since there is the HUD certification label #RAD730051 as per his appraisal, this should be the basis to track down the required information. If the realtor manages to find this information then the appraiser looks bad. If we manage to find this information, then the appraiser looks bad. If HUD provides it, he still looks bad, but not as bad. If he finds it, then he gets off the hook. See the challenge? I realize that this is extra work and frustrating for everyone. However we have a client who is trying to purchase a home and helping them achieve their goal is what we do. Feel free to call me if you have any questions or comments.”

I have inserted “the appraiser” and “realtor” where the names were in the correspondence. I received no reply to this e-mail from the appraiser and when I was contacted that day by the appraiser to review the value on another property nothing was mentioned of the e-mail until I brought the situation up. The defense of the appraiser was that no other lender had ever requested this information and he felt it was not his responsibility. I reiterated that the underwriter requested that the appraiser complete this section of the appraisal, therefore at that time it becomes the appraisers responsibility. He continued to contend that since he couldn’t find it then it wasn’t his job to get it. When I explained how easy it was for me to obtain, he asked why I didn’t do that sooner. It became a circle of discussion with me telling him what I expected as the client and him saying that he wouldn’t do it. Later that day I addressed the situation with one of the other principals at the company whom the e-mail was sent to and he defended his partner. Going further to say that we didn’t know what we were doing.

I appreciate a business partner defending his associates, but at the point that you have a client telling you that you screwed up and that what was being requested was not out of the ordinary for our industy. . . this is not the stance to take if you want to keep the relationship. As the lender I have a choice of the appraisers I choose and the stance this company took will keep them from getting any more of my business.

For questions or comments on this post, please contact Chris Scheer at chrisscheer@stlouisrealestatevocie.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   01.07.2008

St. Louis Real Estate-Happy New Year!

Filed under: First Time Home Buyer, For Buyers, For Sellers, Mortgage News, Real Estate News, Relocation Buyer, St. Louis Market Reports, Unrepresented Seller(FSBO)

St. Louis Real Estate Market Watch
December 29th, 2007
The Anatomy of St. Louis Real Estate

The St. Louis Home for Sale Team provides a weekly St. Louis County and Bi-weekly St. Charles County Market and Jefferson County Market Watch Report to review and plug into your home buying or selling scenario. Your questions and comments are welcome!

St. Louis Real Estate comes to the close of another year. And what a year it’s been watching home prices slide downward and days on market climb into triple digits. Watching the “Mortgage Credit Crisis” unfold was, and still is, one of the major events we all are paying close attention to. Buyers and Sellers this past year have had to adjust to a new set of “rules-of-thumb” when it came to buying and selling a home. Those that adjusted quickly had great success with their buying and selling process; those that took too long to adjust helped contribute to the abundance of inventory of homes that are still available. When all the statistics are in, I think we will still see that 2007 was one of the better years in real estate here in St. Louis.

St. Louis Real Estate in 2008 is predicted to be a better picture with a slight increase in home prices and an increase in sales volume. We have a lot going for us here in St. Louis in the coming year. Just a few of the positives are:

1. Mortgage lenders are sorting out their problems and developing products to help us

move forward into 2008

2. The Fed’s Rate Cut in the last quarter of 2007 should spur more activity within our marketplace.

3. With New Home Builders slowing their production, inventories should start to level off

a bit and in turn help existing-home sales.

4. The Wacovia / A.G. Edwards Merger and the Edward Jones Co. expansion will certainly create some great real estate opportunities in St. Louis.

5. President Bush’s plan to help a portion of the sub-prime borrowers should

help to keep inventories in some price ranges in check.

SO…We’re looking forward to 2008 and all the opportunities a new year presents.

WATCH WHAT HAPPENS— Stay with us through 2008 and see if all the postive predictions come true.

HAVE A SAFE AND HAPPY NEW YEAR!!

Thinking of buying or selling a home? Contact Us for additional information tailored to your specific needs.

St. Louis Real Estate St. Louis County Market Watch December 29th, 2007

St. Louis Real Estate Jefferson County Market Watch December 29th, 2007

St. Louis Real Estate St. Charles County Market Watch December 22nd, 2007

St. Louis Real Estate Benchmark Report November 2007

The report begins by breaking the market into 17 distinct price ranges. Then we show current listings and current pending listings which creates a pending ratio, which is helpful on a week to week basis to see if activity is increasing or decreasing in a price category.

The report also shows the last 6 months of results and compares the data to the same 6 months of the previous year.

The Market Analysis includes data on:

Number of Active Listings (Current)
Pending Sales (Going to closing)
Pending Ratio (Active vs.Pending)
Sold (Last 6 months)
Expired (Last 6 months)1
Average List Price
Average Sale Price
Average List to Sales Price %
Days on Market (DOM)
Months worth of Inventory (Based on current pending rate)
Buyers Market: > 7 months of listing inventory

Transitional Market: 5 - 7 months of listing inventory (sometimes called a “balanced” market)

Seller Market: < 5 months of listing inventory

Average % Sale Price/List Price (0-30), (31-60), (61-90), (91-120), (120+)DOM

Notice that you’re paying a penalty for over pricing. . .hey. .it’s a fact!!

The Benchmark Report is produced monthly for:

• Single Family Residence
• Ranch Style
• 1300 - 2000 sq.ft.
• 3 Bedrooms
• 1.5 Bathrooms

Art Wagner can be reached at art@stlouisrealestatevoice.com

Posted by Art Wagner   |   Read More   |   Your Comments Are Welcome!   |   12.29.2007

St. Louis Real Estate - Mortgage News - Manufactured House Blues

Filed under: First Time Home Buyer, For Buyers, For Sellers, Mortgage News, Real Estate News, Relocation Buyer

Manufactured Housing by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

So why is it so hard to get a loan for a manufactured house?

Over the past month I have had the opportunity to work a loan that was on a manufactured house that had been repossessed by HUD. The client came to me saying they wanted to buy this house without having sold their current home so they could have time to fix it up before moving in. The borrower was self-employed and he felt his tax returns would not support him owning 2 homes. Based upon his excellent credit I told him we had a way to do the loan if he put 10% down. We would allow him to state his income and then when he sold his current home and was ready to pay down the mortgage on the new home we would refinance him. Things were going along swimmingly until the file hit underwriting. Even though the guidelines I had for the investor said they would do a conventional loan using stated income on a manufactured home, the information the underwriter had said otherwise. At this point most loan officers would take a pass and deny the loan. I chose to switch the loan to an FHA loan and ask the borrower for the documentation to support the income needed. Read the rest of this entry »

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   12.27.2007

St. Louis Real Estate - Mortgage News - Shell Game

Filed under: First Time Home Buyer, For Buyers, Mortgage News, Relocation Buyer

The Newspaper Game! by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

Have you ever looked in your local paper or looked in the Sunday Newspaper to get interest rates for mortgages? After looking did you take the time to call some of the lenders? What did you find? I will be that 99% of the time if you called you found out that the interest rate was not available. Or that the rate was available if you were willing to pay the points listed in the paper. If I am the consumer I am thinking what kind of game is this?

When I look at the rates posted in the paper I break them down into 3 classes;

Liars
Honest but trying to look good
Large corporation, I don’t care I am spending the company’s money.

I will work backwards on this list.

When I managed a branch for a large corporation, part of their business plan was to be in the newspaper. Their rates were not competitive and when I would have discussions with my boss he would say “don’t worry about putting a rate in there, just make sure our name and phone number are in bold print.” Their philosophy was that their name alone would get the business and that they viewed the paper as another place to advertise their name. Never mind that people were checking rates, just get the name out there in one more place. These are categorized by higher than average interest rates or the famous “Call for Rates.” An interesting marketing strategy, but it would cause the question from the consumer, what is your rate? This was all the company was trying to do, get the phone to ring.

Then you have the honest but trying to look good. I will place the company I work for now in this category. They use the put a low rate in with points trick. This is where they put a rate in with 1 origination and 1 discount point so that the rate seems as low as the others. If you were to equate that rate out to a 0 point loan then it would be a rate we could and would honor, but the rate in the paper will be expensive. At least we let you know how expensive it will be.

Lastly, we have the liars; these are the guys that use the famous bait and switch tactic. They put a rate in that is well below market, usually .25% or more and then when you call them they say that the rate was there last week but the market has moved or worse they tell you they can do that rate and then when you get your application you have charges that equate to 1 or 2 points. Again, it is the concept to do anything to make the phone ring and then get the borrower to commit. Once you have them committed you can usually coerce them or fast talk them to the closing table.

So what does the rate table in the paper do? Well I would personally use it as a guide to where interest rates are. Look for the middle of the rate scale and that is a good chance that you will be able to get that rate without excessive fees or expense.

For comments on this please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   12.18.2007

St. Louis Real Estate - Mortgage News - Bond Whiplash

Filed under: First Time Home Buyer, For Buyers, Mortgage News, Relocation Buyer

Follow the bouncing bond market! by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, MO

For those that take the time to check this blog often, you will notice that over the last two weeks we have had the past two Mondays highlighted by strong buying on the bond market which has driven the 30 year fixed interest rate to 5.875% and then 5.75% this week. However as you will now see, in both cases that rate did not hold through the week. On Thursday and Friday of this week Wall Street came to the conclusion that they were not going to get the .50% rate cut from the Fed that they wanted. Once that happened the blood letting began on the bond market and the 30 year fixed that was once at 5.75% is now at 6.125%. For all those inexperienced loan officers, the look on their faces as they watched the rate changes occur almost every hour for 2 days straight was priceless. Actually there was a price, it was the price that they had to pay to honor the locks that they had committed to and had not taken the time to lock with the investors.

So what does all this volatility mean to the homeowner? The millions of Americans who are looking for some relief from their mortgage payment; what do they do? Maybe the ones who were aggressive and took out 3 or 5 year adjustable rate mortgages in 2002 and 2003 and now those A.R.M.’s are going to start adjusting. They had a chance to lock in over the past two weeks at less than 6%, but only if they were on top of what was going on or their loan officer was. I know I personally talked to 10 people over the past two days that I had called on the previous 2 Mondays but they didn’t bother to return the call until yesterday or today. For them, all I could do was tell them they missed out and offer to get there information ready for the next time rates drop. But will there be a next time?

We will find out more this week when the Fed meets. At this point my crystal ball points to a .25% rate cut. Given the swing on Bonds Friday this may push the 30 year back to 6% or maybe slightly below. After that I think the Fed is going to hold steady and not do anything for another 60 days.

For your comments or questions, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Posted by Doug Aegerter   |   Read More   |   Your Comments Are Welcome!   |   12.10.2007