The Loan Coach

   PREGAME SPEECH -

 3/4/2010

    It is very evident that many people are very hesitant to make any major decisions regarding purchasing, selling or even refinancing their homes today.  We all know why!  Unless you have been trapped under a rock for the last two years, many of us are very fearful of losing our jobs, getting laid off, or simply cutting hours or overtime that we've have counted on for years.  Bonuses are another accountability issue in a lot of households.  If you have received them for a few years, you start to plan for them in your budget.  In addition, many of our homes are worth quite a bit less than what we originally paid for them, or had recently refinanced. 

    I am not any different than any of you!  In fact, there has been as much change and scrutiny placed on my industry as any out there!  Changes to implement HVCC, the regulation of Fannie Mae, Freddie Mac and the near disappearance of the local and private investors has left us scratching our  heads.  Several years ago, we used to say that we could walk down a warehouse of products to find the exact product and program to suit each individuals needs.  Today, we look through a single box in a small room, and the individuals have to fit their qualifications to match the few products and programs available.  This has really changed the landscape for financing and we are all forced to reassess our expectations to meet that of the lenders and underwriters new, strict guidelines.  Of course, change is not always easy, especially when there are so many more expectations and hardships placed on the consumer. 

    We in the industry, have found it much harder to qualify buyers for new loans.  Even refinances have become a challenge and can take months to fill all the needs of the underwriters.  One loan officer asked me the other day "hey Coach, do you think they really want to lend money anymore?"  Another LO questioned buyers saying "I don't think people want to put in the time and effort to get financing today - it was too easy for them last time around?"  Well, although it may seem that way, it's really just a readjustment of standards for an industry that had some (and still is having) real struggles and failures.  When this occurs two things traditionally happen:  One, we become very conservative and probably go the opposite way until we find a new balance or some consistency.  We will never see the type of "loose" standard lending we experienced in the last 10 years ever again.  However, I do feel we will get back to a more relaxed standard than the current lending practice in a couple years from now!  Generally, the banking industry has a reputation for conservative and traditional operations.  However, in recent years the mismanagement and deregulation of Fannie and Freddie left the industry very vulnerable and at risk.  The mismanagement led to unstable and very poor investment strategies - while the deregulation decreased the quality of portfolios and increased the risk for failure within those investment strategies.  It was a very poor hedge that blew up in many of our faces and scared the rest of us into losing trust in our banking system.  The other occurrence, we start to point fingers.  Once we have a problem we have to identify what got us here, or what went wrong so we have something to learn from in the future.  However, we need to aim our focus on solvency and resolution.  When you point a finger you are only making haste and the allegations can really come back to haunt you!  Many pointed at the Bush Administration which had just left office and was a very likely candidate for blame.  They need to take part of that blame for not taking charge and nipping it in the butt before it got to this point.  However, the deregulation actually started with strong urging by the Clinton Administration!  But, again, we should not point fingers because one will always come back to point at you!  It is all of our fault!  We all accepted that it was this easy to make money in the high yielding funds.  We all accepted that obtaining a mortgage was this easy and you really didn't need to qualify by all previous standards of 20% down and perfect credit with debt-to-income ratios well below 40%.  We easily accepted the increased value of our homes of 15% - 20% in just 3 years time and refinanced out cash to buy things or consolidate other debt.  Most of us sat back and thought we had the world in our hands and all in life was great.  We became naive to what was really happening during the flourishing housing market.  We became cocky or arrogant to the notion that "we" could fail or our actions could hurt us in the future.  After all, we had the Fed protecting us from anything like that.  Those guys like "Greenspan" have been around forever and they are brilliantly making all of this happen.  Our trust in our government had led us down a very ugly path in which we only realize today!  Please scroll back up and read the first paragraph again!  Our consumer confidence levels are nearly as low as the Great Depression.  But, yet we continue to blame and point fingers.  We should know by now, that will not truthfully help us in the end.  But will make us look bad once again!  This is not a doom and gloom blog, its reality!  Let's start taking back America one household at a time.  Let's start organizing our homesteads so they reflect the order of a strong small business.  Let's make calculated decisions that will help our families now and in the future.  And, let's help our friends, families and neighbors again like we used to when we were kids growing up.  A time before tv's, multiple cars and nuclear families, which are all an evolution of our society in which we should be thankful.  However, let's not forget what got us to that point. 

Its a great time to buy for first-time home buyers as the credit is still available.  Refinancing remains a great way to reduce payments and/or term on your existing financing as rates are still FANTASTIC!!!  Its a great time to build as prices on building supplies remain incredibly low.  According to my Realtor friends, the market for home sales is really starting to take-off and 2010 is looking to be a good year as the market values are re-stabalizing!  Call me for a FREE Pre-Qualification today and see how much you can afford.

    You heard it from The Coach!  That's my Pregame speech...please check back in a week and I will be answering some more questions or giving another pep talk!  If you have any questions for The Loan Coach, please email me at idealhlc@new.rr.com

Rates Today Quoted with 0 points

30yr Fixed Rate:  5%

15yr Fixed Rate: 4.375%

FHA 30 Fixed Rt: 5.25%