Mortgage rates

[Concrete Helmet]

That’s nice but there still seems to be a lot of fat in there compared to 2012.

I'm not really good at explaining what I know but see if this makes any sense to you....here goes.
Lenders in 2010-2014 were coming off catastrophic losses with short sales and foreclosures at an all time high. Yes, the money was cheap then too BUT if you had just lost your ass lending money to a bunch of people would you be as excited about lending money for a while especially in Obummer's economic guidance?
Well now they are wanting to lend money to anyone with a pulse BUT the home values/loan amounts are higher so their spread/fees are also higher to make more profit while the getting is good....Most of these lenders are selling off the loans in a couple of years time if not sooner so they are scraping off the top and passing it on.

I spend a good part of my day doing title searches mostly for refinances and I got to tell you I wouldn't lend half of them a stick of bubble gum seeing all of the judgements, liens, lis pendens a lot of time from the same credit unions and banks that are refinancing them again for the 3 or 4th time over the last 5 years and almost always paying off 40-80K in revolving credit card debt...

 

[GatorInGeorgia]

I'm not really good at explaining what I know but see if this makes any sense to you....here goes.
Lenders in 2010-2014 were coming off catastrophic losses with short sales and foreclosures at an all time high. Yes, the money was cheap then too BUT if you had just lost your ass lending money to a bunch of people would you be as excited about lending money for a while especially in Obummer's economic guidance?
Well now they are wanting to lend money to anyone with a pulse BUT the home values/loan amounts are higher so their spread/fees are also higher to make more profit while the getting is good....Most of these lenders are selling off the loans in a couple of years time if not sooner so they are scraping off the top and passing it on.

I spend a good part of my day doing title searches mostly for refinances and I got to tell you I wouldn't lend half of them a stick of bubble gum seeing all of the judgements, liens, lis pendens a lot of time from the same credit unions and banks that are refinancing them again for the 3 or 4th time over the last 5 years and almost always paying off 40-80K in revolving credit card debt...

Thanks for the info. The part above that I bolded feeds into my point to a degree. If they didn’t want to lend coming off getting burned by bad loans (which makes sense), you’d think the rates in 2012 would be higher relative to the 10 year but they were lower. It seems to me the lenders now are keeping the extra spread. It’s possible the desire to get foreclosed homes off the books in 2011/2012 incentivized lenders to drop the rates very low so buyers would act. Just a thought.

 

[Concrete Helmet]

If they didn’t want to lend coming off getting burned by bad loans (which makes sense), you’d think the rates in 2012 would be higher relative to the 10 year but they were lower.

Remember who bailed them out? The Gov pushed them to lend to help a stagnant economy while they were douching their books....Yes, lenders are more than happy to lend at today's lower rates because they are making a larger initial profit...

 

[FireFoley]

@Concrete Helmet today, JP Morgan just raised their standards for new applicants for home mortgages. A minimum credit score of 700 and 20% down payment. That is clearly more old school and I do not know how big of a player JPM is in the mortgage market, but being that are viewed at the King of U. S. banks regarding balance sheet strength, do you think this will affect other big banks and smaller lenders? This only applies to new mortgages and not existing loans or other programs that can be qualified for.

 

[Detroitgator]

@Concrete Helmet today, JP Morgan just raised their standards for new applicants for home mortgages. A minimum credit score of 700 and 20% down payment. That is clearly more old school and I do not know how big of a player JPM is in the mortgage market, but being that are viewed at the King of U. S. banks regarding balance sheet strength, do you think this will affect other big banks and smaller lenders? This only applies to new mortgages and not existing loans or other programs that can be qualified for.

My mortgage is Chase (JP Morgan)

 

[FireFoley]

My mortgage is Chase (JP Morgan)

I understand but current mortgages are not affected. My question is do others join the ranks? Look there are plenty of small lenders out there that have minimal requirements b/c they sell that paper pronto, but if the bigger guys pull back, it might begin to affect the secondary market., etc.

 

[Concrete Helmet]

@Concrete Helmet today, JP Morgan just raised their standards for new applicants for home mortgages. A minimum credit score of 700 and 20% down payment. That is clearly more old school and I do not know how big of a player JPM is in the mortgage market, but being that are viewed at the King of U. S. banks regarding balance sheet strength, do you think this will affect other big banks and smaller lenders? This only applies to new mortgages and not existing loans or other programs that can be qualified for.

Pretty standard outside of FHA(10% down with PMI)and VA 0% down(for now)refi's are at 80% and thank God have been mostly over the last few years, Investment is dependent on lender(70-75%) .....banks will be keeping a tight eye on property values over the next few month's as well as checking employment verification 2 or 3 times during the application process...we schedule 2 weeks in advance for closings at our office but recently our largest client(credit union) gets us a green light THE DAY BEFORE closing to make sure they haven't been furloughed....Oh and yeah I'd imagine FIco score scales will get shifted upward if they haven't already.

 

[Concrete Helmet]

I understand but current mortgages are not affected. My question is do others join the ranks? Look there are plenty of small lenders out there that have minimal requirements b/c they sell that paper pronto, but if the bigger guys pull back, it might begin to affect the secondary market., etc.

Great point.... and if the original lender is "stuck" with a first mortgage especially a new loan they better make sure the borrower is worth the gamble of having to spent money on legal fees foreclosing in a dropping market....as well as due diligence on proper title work as fraud and claims against title skyrocket in unsettled markets....There's a reason the Dept. of Financial Regulation and Dept. of Insurance can probably tell you if I had corn for dinner last night...

 

[Detroitgator]

I understand but current mortgages are not affected. My question is do others join the ranks? Look there are plenty of small lenders out there that have minimal requirements b/c they sell that paper pronto, but if the bigger guys pull back, it might begin to affect the secondary market., etc.

Agreed, I just meant JP Morgan Chase is a major player.

 

[Gator By Marriage]

@Concrete Helmet today, JP Morgan just raised their standards for new applicants for home mortgages. A minimum credit score of 700 and 20% down payment. That is clearly more old school and I do not know how big of a player JPM is in the mortgage market, but being that are viewed at the King of U. S. banks regarding balance sheet strength, do you think this will affect other big banks and smaller lenders? This only applies to new mortgages and not existing loans or other programs that can be qualified for.

I don't follow this closely as it has no impact on my job and I'm not looking to buy a house anytime soon, so my question is really one of curiosity only for guys like you and @Concrete Helmet : What percentage of new applicants fall into this range? I suspect it's not too many.

 

[Detroitgator]

I don't follow this closely as it has no impact on my job and I'm not looking to buy a house anytime soon, so my question is really one of curiosity only for guys like you and @Concrete Helmet : What percentage of new applicants fall into this range? I suspect it's not too many.

You mean there are people that have credit scores below 700?!?!?! If so, I will now add them to the category of people that fly economy/coach... or what I refer to as, "the others!" ;)

 

[Gator By Marriage]

You mean there are people that have credit scores below 700?!?!?! If so, I will now add them to the category of people that fly economy/coach... or what I refer to as, "the others!" ;)

You rich guys are all the same.

 

[FireFoley]

I don't follow this closely as it has no impact on my job and I'm not looking to buy a house anytime soon, so my question is really one of curiosity only for guys like you and @Concrete Helmet : What percentage of new applicants fall into this range? I suspect it's not too many.

I am not really sure as far as new applicants go, probably not very many. But to broaden it, I do not think that a large majority of people, any age, have credit scores above 700. But I am not a good person to talk in depth on the topic as I don;t do credit and have not had a significant debt in almost 20 years. But knowing that a good amount of people do not own anything anymore (meaning they have a home mortgage, lease a car, boat payment, etc. etc. etc. etc.), I am not sure if that helps or hurts a credit score. And I am not judging them, but let's be honest that leasing and free money for all has not necessarily been a good thing for many people living within their means. And yes I have friends that have a large home, lease 2+ expensive cars and other toys and tell me they own all that stuff. I ask if they are making payments on it and when the answer is yes I tell them they don't own shyt!

 

[FireFoley]

You mean there are people that have credit scores below 700?!?!?! If so, I will now add them to the category of people that fly economy/coach... or what I refer to as, "the others!" ;)

AKA Pikers!

 

[Detroitgator]

I am not really sure as far as new applicants go, probably not very many. But to broaden it, I do not think that a large majority of people, any age, have credit scores above 700. But I am not a good person to talk in depth on the topic as I don;t do credit and have not had a significant debt in almost 20 years. But knowing that a good amount of people do not own anything anymore (meaning they have a home mortgage, lease a car, boat payment, etc. etc. etc. etc.), I am not sure if that helps or hurts a credit score. And I am not judging them, but let's be honest that leasing and free money for all has not necessarily been a good thing for many people living within their means. And yes I have friends that have a large home, lease 2+ expensive cars and other toys and tell me they own all that stuff. I ask if they are making payments on it and when the answer is yes I tell them they don't own shyt!

I affected the closing I'm going through right now on the second part of my Idaho sale, and that's with a broker, not a JP Morgan Chase (who would likely buy this kind of paper)... The appraisal value for their loan was less than the sale price, and I wouldn't budge on my sale price, so the buyer had to come up with more cash (which they did) to keep the deal alive. I've had that land on the market for over a year because I wouldn't come off my sale price... interest and offers on ALL the land out there have gone through the roof in the last 45-60 days.

 

[Concrete Helmet]

I am not really sure as far as new applicants go, probably not very many. But to broaden it, I do not think that a large majority of people, any age, have credit scores above 700. But I am not a good person to talk in depth on the topic as I don;t do credit and have not had a significant debt in almost 20 years. But knowing that a good amount of people do not own anything anymore (meaning they have a home mortgage, lease a car, boat payment, etc. etc. etc. etc.), I am not sure if that helps or hurts a credit score. And I am not judging them, but let's be honest that leasing and free money for all has not necessarily been a good thing for many people living within their means. And yes I have friends that have a large home, lease 2+ expensive cars and other toys and tell me they own all that stuff. I ask if they are making payments on it and when the answer is yes I tell them they don't own shyt!

Having a 700 credit score isn't nearly as hard as it once was....if you have a revolving credit card account and make even minimum timely payments on it you get what is known as an R1....R1's believe it or not carry more weight and raise your credit score 5-10x faster than making timely car payments or even mortgage payments......why???? Because it is unsecured collateral....Keep in mind Beacon scoring and FICO scoring are not exactly the same thing.....

 

[FireFoley]

I affected the closing I'm going through right now on the second part of my Idaho sale, and that's with a broker, not a JP Morgan Chase (who would likely buy this kind of paper)... The appraisal value for their loan was less than the sale price, and I wouldn't budge on my sale price, so the buyer had to come up with more cash (which they did) to keep the deal alive. I've had that land on the market for over a year because I wouldn't come off my sale price... interest and offers on ALL the land out there have gone through the roof in the last 45-60 days.

Congrats, that is awesome. guess people are interested in being out on the open range not near anyone. Also goes to show you that something is worth what someone is willing to give you. These appraisals are for shyt! Had the same issue when I sold my dump in G'ville. Did not appraise, I challenged it b/c they used comps clear across town, saying there was nothing near me. Well I told them to get off their a$$, sent them stuff from the area. They said it was outside of their time frame, so I told them you use their asses and along with the supply/ demand, plus Zillow, Case-shiller and Realtor stats, they could extrapolate. a reasonable price. These idiots can only do what the machine tells them. They have no idea what is going on.

 

[FireFoley]

I affected the closing I'm going through right now on the second part of my Idaho sale, and that's with a broker, not a JP Morgan Chase (who would likely buy this kind of paper)... The appraisal value for their loan was less than the sale price, and I wouldn't budge on my sale price, so the buyer had to come up with more cash (which they did) to keep the deal alive. I've had that land on the market for over a year because I wouldn't come off my sale price... interest and offers on ALL the land out there have gone through the roof in the last 45-60 days.

Oh and I forgot to say that this is a perfect example of true "price discovery" something that no longer exists in the stock or credit markets.

 

[Detroitgator]

Oh and I forgot to say that this is a perfect example of true "price discovery" something that no longer exists in the stock or credit markets.

Yup, and on that note, I told Brad earlier that i'll probably post my latest thoughts on the markets et al sometime tonight. I think we're fooked economically, but i'm bullish on the stock market now... illustrates exactly what you're talking about. Look at the market RIGHT NOW... at 3:28 PM... FULL juicing in effect... why try to fight then manipulation?

 

[FireFoley]

Yup, and on that note, I told Brad earlier that i'll probably post my latest thoughts on the markets et al sometime tonight. I think we're fooked economically, but i'm bullish on the stock market now... illustrates exactly what you're talking about. Look at the market RIGHT NOW... at 3:28 PM... FULL juicing in effect... why try to fight then manipulation?

I don;t disagree at all, but as long as the manipulation machine and plunge protection team still exists, the stock market can stay afloat. The Fed has gone well beyond their dual mandate and once you go there, it is impossible to get out. They have been involved over 10 years and probably going to be involved long enough that I never get a chance to read the book on the outcome. I was just reading where depending on where the unemployment rate settles, there could be between 2-10 million delinquent residential mortgages. So when that happens that will be another bailout that occurs. As I said prior the Roach Motel: you check in but....................