Cal Coast Financial

12/01/2021

ITS Official FHA and Fannie Mae Loan Limits for year 2022 have been released. All across the USA, loan limits have been increased. The New Conforming limit is $ 647,200. FHA varies based on the county median price point. Call me regarding your county and see what the new values are? Rates are on the rise with fears of inflation, but still at 40 year lows.
Now is the time to consolidate loans or payoff other debt, before the Fed raises its rate.

04/27/2021

Two West Coast legislators have introduced a new bill providing a refundable tax credit of up to $15,000 for first-time homebuyers, potentially fulfilling one of President Joe Biden’s campaign promises.

Rep. Earl Blumenauer, D-Ore., and Rep. Jimmy Panetta, D-Calif., introduced the “First-Time Homebuyer Act,” which creates a tax credit worth up to 10% of the purchase price — or $15,000 — for the purchase of a home. To be eligible for the full credit, a buyer may not have owned or purchased a home within the prior three years. Eligibility is also income-based, with homebuyers needing incomes at or below 160% of their area’s median income and the home for purchase at or below 110% of the area’s median purchase price. Give us a call to discuss how this would work. Keep in Mind that a TAX CREDIT is different than the deduction for interest and property tax paid on a schedule A.

03/31/2021

Loans in Forbearance DROP again. The economy improves day by day, the number of loans being brought up to date, by borrowers improves, or a home can easily be sold in the blazing HOT real estate sales market.

The share of loans in forbearance nationwide has fallen to 4.96%, marking a milestone not reached since for 12 months, according to the Mortgage Bankers Association (MBA).

"The share of loans in forbearance decreased for the fourth straight week, dropping below 5% for the first time in a year,” said Mike Fratantoni, senior vice president and chief economist at the MBA. “New forbearance requests remained at their lowest level since last March, and the pace of exits increased."

The current share of mortgages in forbearance is down 9 basis points (bps) from 5.05% of servicers’ portfolio volume one week prior. Per MBA’s estimates, 2.5 million homeowners are presently in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.77% - a 6-basis-point improvement. Ginnie Mae loans in forbearance fell 20 bps to 6.83%, while the forbearance share for portfolio loans and private-label securities decreased by 1 bp to 8.90%. The share of loans in forbearance for independent mortgage bank (IMB) servicers fell 14 bps to 5.23%, and the percentage of loans in forbearance for depository servicers decreased 5 bps to 5.10%.

By stage, 13.8% of total loans in forbearance are in the initial forbearance plan stage, while 83.4% are in a forbearance extension. The remaining 2.8% are forbearance re-entries.

Fratantoni noted that a number of homeowners remain in forbearance plans that began at the onset of the pandemic, with more than 17% of borrowers in forbearance extensions now exceeding the 12-month mark.

"Many homeowners need this support, even as there are increasing signs that the pace of economic activity is picking up as the vaccine rollout continues,” Fratantoni said. Those who have an ongoing hardship due to the pandemic and want to extend their forbearance beyond the 12-month point need to contact their servicer. Servicers cannot automatically extend forbearance terms without the borrower's consent."

03/01/2021

Home Market Interest Rates have seen some volatility, but based on history, we have just seen the lowest rates in 60 years. see the table below. So I believe we are normalizing and reacting to a possibility of higher inflation due to government over reaction to the economy created by the Highly Politicized Pandemic and the bureaucratic czars shutting down small business.
See the table below from Freddie Mac rate history There is still time to grab these low rates. OR Its in your best interest to be an owner of real estate. Let me know if I can help

02/25/2021

Do you wish you could buy first and then sell your home later? Check out this 3 min video. Yes you can buy first, then sell and transfer the equity to the new home with an all in loan bridge loan.

https://youtu.be/882FtW_82ao

Home Loans for Purchase and Refinance. We have Special Programs for 1st time buyers. Government Bond programs and Grants. Want to Remodel your home or buy a fixer upper, we have expertise in these specialized mini construction packages.

11/03/2020

Its a Day to Cast your VOTE. Here is something you seldom see. The POLL results tell you just WHO was polled. Renters vs Home Owners. The results do not surprise me one bit. If we could change more renters to Home Owners that would be great, but then where would investors be if everyone was a home owner? In my experience over the last 30 years, there are many reasons why people are tenants vs home owners, so I expect that this mix of 35 % of the housing market will continue to be a great place for investors. We have many loans that address this market. Let me know if you have questions about how to purchase an investment home.

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10/22/2020

As we enter the final months of 2020 and continue to work through the challenges this year has brought, some of us wonder what impact continued economic uncertainty could have on home prices. Looking at the big picture, the rules of supply and demand will give us the clearest idea of what is to come.

Due to the undersupply of homes on the market today, there’s upward pressure on prices. Consider simple economics: when there is high demand for an item and a low supply of it, consumers are willing to pay more for that item. That’s what’s happening in today’s real estate market. The housing supply shortage is also resulting in bidding wars, which will also drive price points higher in the home sale process.

There’s no evidence that buyer demand will wane. As a result, experts project price appreciation will continue over the next twelve months. Here’s a graph of the major forecasts released in the last 60 days:

I hear many foreclosures might be coming to the market soon. Won’t that drive prices down?

Some are concerned that homeowners who entered a mortgage forbearance plan might face foreclosure once their plan ends. However, when you analyze the data on those in forbearance, it’s clear the actual level of risk is quite low.

Ivy Zelman, CEO of Zelman & Associates and a highly-regarded expert in housing and housing-related industries, was very firm in a podcast last week:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

With demand high, supply low, and little risk of a foreclosure crisis, home prices will continue to appreciate.

Bottom Line
Originally, many thought home prices would depreciate in 2020 due to the economic slowdown from the coronavirus. Instead, prices appreciated substantially. Over the next year, we will likely see home values rise even higher given the continued lack of inventory of homes for sale.

06/18/2020

An economist validates what I have been telling buyers. The real estate market is HOT in CA because we have new families coming to age and we are still behind the building curve that virtually stopped from 2009 to 2013. 4 years nothing was built, but families dont stop growing, so we have more demand than we have homes. Is it a good time to buy, I am asked. My PHD earned with 35 years of lending says, buy as soon as you can qualify to buy. Give me a shout if you would like to talk about investing in real estate.

The demand for homes isn’t going away

06/15/2020

Fed says Zero – Rates Improve
JUNE 15, 2020JORDANREEDNEWS
Last Week in Review: Fed says Zero – Rates Improve

About every six weeks the Federal Reserve meets and decides whether to make potential changes to the Fed Funds Rate, an overnight lending rate. They also release their Monetary Policy Statement which includes the reasoning for their action or inaction.

This past week, it was Fed Week and while they didn’t change rates or offer any big surprises it was the actual “zero” which ultimately hurt Stocks and helped Bonds and home loan rates.

The Fed said they are likely to keep the Fed Funds Rate at the current rate of zero, potentially through 2022.

Why would the Fed not hike rates for possibly 18 months or more?

It’s important to understand the Fed’s dual mandate and primary functions: to promote full employment and manage price stability (inflation). At the moment unemployment is highly elevated at 13.5% and it will take time for the labor market to get back to the 3.5% we saw just a few months ago.

The other reason is inflation or price stability. At the moment, inflation is running well below the Fed’s target of 2.00% and is likely to do so for the foreseeable future. With inflation currently no threat, there is no pressure for the Fed to raise rates.

What does this mean for mortgage and housing? Mortgage-backed securities are Bonds which influence home loan rates. Inflation is the main driver which pushes them higher or lower. If inflation indeed remains low as the Fed is currently forecasting, then home loan rates will remain relatively low for the foreseeable future.

Supporting the notion for low inflation in the near-term is the incremental re-opening of states and businesses. This will make consumer demand return more slowly as well.

In addition to the status quo on rates, the Fed also said they will continue to buy Treasuries and mortgage-backed securities on a daily basis to “sustain smooth functioning” of the markets. This action will also help keep home loan rates lower for longer.

The bottom line: The backdrop for housing and the economy continues to be bright. Inflation is low, jobs are returning, consumers are eager to spend, housing demand is increasing, and we should expect the Fed, Treasury, and administration to do whatever it takes to underwrite a full economic recovery.

Tagged Market Trends

06/15/2020

Fed says Zero – Rates Improve
JUNE 15, 2020JORDANREEDNEWS
Last Week in Review: Fed says Zero – Rates Improve

THE FED says the bank to bank rate may stay at Zero through 2022. Here is why.

About every six weeks the Federal Reserve meets and decides whether to make potential changes to the Fed Funds Rate, an overnight lending rate. They also release their Monetary Policy Statement which includes the reasoning for their action or inaction.

This past week, it was Fed Week and while they didn’t change rates or offer any big surprises it was the actual “zero” which ultimately hurt Stocks and helped Bonds and home loan rates.

The Fed said they are likely to keep the Fed Funds Rate at the current rate of zero, potentially through 2022.

Why would the Fed not hike rates for possibly 18 months or more?

It’s important to understand the Fed’s dual mandate and primary functions: to promote full employment and manage price stability (inflation). At the moment unemployment is highly elevated at 13.5% and it will take time for the labor market to get back to the 3.5% we saw just a few months ago.

The other reason is inflation or price stability. At the moment, inflation is running well below the Fed’s target of 2.00% and is likely to do so for the foreseeable future. With inflation currently no threat, there is no pressure for the Fed to raise rates.

What does this mean for mortgage and housing? Mortgage-backed securities are Bonds which influence home loan rates. Inflation is the main driver which pushes them higher or lower. If inflation indeed remains low as the Fed is currently forecasting, then home loan rates will remain relatively low for the foreseeable future.

Supporting the notion for low inflation in the near-term is the incremental re-opening of states and businesses. This will make consumer demand return more slowly as well.

In addition to the status quo on rates, the Fed also said they will continue to buy Treasuries and mortgage-backed securities on a daily basis to “sustain smooth functioning” of the markets. This action will also help keep home loan rates lower for longer.

The bottom line: The backdrop for housing and the economy continues to be bright. Inflation is low, jobs are returning, consumers are eager to spend, housing demand is increasing, and we should expect the Fed, Treasury, and administration to do whatever it takes to underwrite a full economic recovery.

Tagged Market Trends

05/18/2020

WHY are Rates so Volatile and increasing?
The New Stimulus Package is why, too many bonds and not enough investors to buy them. The market has a liquidity problem.

Fed Speak Shakes Markets
MAY 18, 2020JORDANREEDNEWS
Last Week in Review: Fed Speak Shakes Markets

Home loan rates remain near historic lows and have stabilized, thanks mainly to the Federal Reserve, as the central bank continues to purchase mortgage-backed securities on a daily basis.

The Fed also helped rates this past week in another way, but it may have been unintentional. Fed Chairman Powell spoke last Wednesday and uttered remarks that lifted uncertainty about the economic recovery. By saying the U.S. is facing an “extended period” of economic weakness, Stocks fell sharply, providing an improvement to rates.

The reality is the U.S. economic recovery is likely to be gradual as states re-open at a slower pace, while consumer demand may take some time to return to more normal levels. At the same time, we should expect the Fed, Treasury, and U.S. government to do whatever it takes to help the economy through this deep, yet temporary, recession — and revive it upon coming out of the other side of the virus.

The next couple of weeks are important to see whether the unemployment rate can decline in states that are re-opening, alongside a continued decline in cases.

Bottom line: Home loan rates are at all-time lows. Even all of the uncertainty and the sharp decline in Stocks could not push rates another leg lower this past week. Anyone with an opportunity to lock a 30-year mortgage, should do so.

Oversupply of Bonds and Unemployment
MAY 11, 2020JORDANREEDNEWS
Last Week in Review: Oversupply of Bonds and Unemployment

One week after home loan rates failed to improve further in the face of multiple Bond-friendly stories, such as low inflation, high unemployment claims, and the Fed’s continued commitment to purchase Bonds, we watched home loan rates tick up this past week.

Why?

Oversupply. The U.S. Treasury announced they will need to borrow $3 trillion through the third quarter of 2020 to pay for the economic stimulus package related to the coronavirus. In order to “borrow” the $3 trillion, the Treasury will issue a new 20-year Bond that will need to be purchased by investors.

Investors, at the moment, are showing early signs that rates will need to tick higher to meet the buying demand for this enormous new supply of Bonds. Early in the week, the 10-year yield hovered near .60% but ticked higher to .73% during the week and this weighed on mortgage-backed securities, which home loan rates are derived from.

On Friday, the Bureau of Labor Statistics reported that 20,500,000 were unemployed in April, lifting the unemployment rate to 14.7%. It was the worst Jobs Report in the history of the U.S.

Home loan rates didn’t improve in response to the horrible “oversupply” of unemployed shown in the Jobs Report. This is because the markets are forward-looking, and April’s Jobs Report is backward-looking.

Bottom line: The Bond market is more focused on the additional supply of Bonds that will need to be purchased and the cautious optimism seen in reopening parts of the U.S. economy. For this reason, consumers who have an opportunity to lock home loans at current all-time low rates would be wise to do so.

04/17/2020

News | Apr 13 2020 09:44 EDT
Mortgage Payment FORBEARANCE is NOT Payment Forgiveness. Sounds like a great idea BUT...this articles
discusses why its not that simple.

House Republicans join growing call for servicer relief
Arnie Aurellano
By Arnie Aurellano,
Website content editor, Scotsman Guide

Capitol Building at night
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Add House Republicans to the growing list calling for the federal government to address mortgage liquidity concerns as forbearances continue to mount.

Twenty-one GOP representatives, led by Rep. Lee Zeldin, R-New York, co-signed a joint letter to Treasury Secretary Steve Mnuchin on Friday pushing for the creation of a liquidity facility to help servicers deal with the rising tide of forbearances during the coronavirus crisis. The letter is the latest call to action directed at the federal government concerning the liquidity issue, joining similar pushes from housing industry trade organizations, advocacy groups, and senators.

“Congress has correctly decided that a nationwide, broad scale forbearance program is needed, but we need to make sure this is done responsibly to avoid unintended consequences and market uncertainty,” said the letter. “The mortgage industry cannot shoulder the entire onus of government actions to protect American homeowners impacted by COVID-19 when it does not have access to needed liquidity to execute on those government actions.

The issue stems from provisions included in the CARES (Coronavirus Aid, Relief, and. Economic Security) Act allowing for homeowners with federally-backed housing loans to be given mortgage relief. Specifically, the CARES Act offers homeowners suffering financial hardship because of COVID-19 up to six months of forbearance on their mortgage payments, with a possible extension of that forbearance for another six months.

Industry estimates of the total financial impact of such forbearances have been massive. As such, the representatives’ letter calls for funds appropriated in the CARES Act to be used for funding the legislation’s forbearance provisions.

The letter makes special mention of the particular peril the pandemic has imposed upon nonbank lenders and smaller servicers, whose thinner reserves of funds are especially threatened by widespread, potentially drawn-out forbearances.

“While elevated take-up rates on forbearance may be somewhat more manageable for certain servicers affiliated with banks, which have more diversified lines of business, it is likely that these advancing requirements will be unsustainable for many nonbank mortgage servicers,” said the letter. “Even those who may already have access to liquidity will likely have to divert resources from other businesses that provide capital to the American households and businesses in order to cover strains in their servicing businesses. Servicers will eventually be reimbursed for these servicing advances, so this issue represents a liquidity concern for otherwise solvent entities in the chain of payments as well.”

Last week, comments made by Mark Calabria, head of the Federal Housing Finance Agency (FHFA), implied that any market share lost through the dissolution of such smaller entities could be absorbed by “larger players” in the lending industry. Many in the mortgage business perceived those remarks as dismissive of nonbank and smaller lenders’ role in the housing ecosystem, and several came forward with statements criticizing or diverging with Calabria’s comments.

“All [independent mortgage bank] servicers should receive access to advances or a liquidity facility — for the simple reason that Congress is asking them to act as bankers to fund consumers' missed mortgage payments under the new forbearance option, at a time when missed payments are also growing because of spiking unemployment,” said the Community Home Lenders Association, via a statement from executive director Scott Olson.

“This liquidity should be equitably available to all servicers, particularly smaller IMBs, since their continued participation in mortgage markets has proven to be a boon to consumers, through more competition and more personalized servicing than the big banks have historically provided.”

It’s a point on which the representatives penning this latest letter apparently agree.

“As we all learned from the past crisis, the best way to protect the American taxpayer would be to create a facility now – in hope that it never needs to be used – than to wait for a market disruption when it may be too late,” the letter said. “The mere creation of such a facility may provide a level of support to the market without its even being utilized.”

The letter was signed by Zeldin; Steve Stivers; Steve Stivers, R-Ohio; Ann Wagner, R-Missouri; French Hill, R-Arkansas; Bill Posey, R-Florida; Blaine Luetkemeyer, R-Missouri; Bill Huizenga, R-Michigan; Andy Barr, R-Kentucky; Scott Tipton, R-Colorado; Roger Williams, R-Texas; Tom Emmer, R-Minnesota; Peter King, R-New York; Barry Loudermilk, R-Georgia; Ted Budd, R-North Carolina; Anthony Gonzalez, R-Ohio; John Rose, R-Tennessee; Lance Gooden, R-Texas; Denver Riggleman, R-Virginia; William Timmons, R-South Carolina; and Van Taylor, R-Texas. All are members of the House’s Financial Services Committee.

For his part, Mnuchin acknowledged liquidity concerns during a Monday White House briefing. He said that a task force has specifically studied the servicer liquidity conundrum and that the Treasury Department has discussed the issue with the FHFA.

“We have all the appropriate people on it,” said Mnuchin.

“We’re very aware of the issue.”