Way OT but seeking opinions
TheReb
Senior Member
from around the country...living here in Vegas can give a skewed look at what's really happening as opposed to the rest of the country regarding real estate. I know the markets that got hit the worst (Vegas, So. Cal. AZ. & Fla.) have rebounded the most in percentage terms. Just curious how other markets are doing, do they feel overheated again? In balance? Still down? Never got hit that bad? etc. Figured I could get a good sample as a lot of you are scattered around the country. Appreciate any and all responses, thanks in advance. -R
Comments
And I hope you're right with Michigan... enormously depressed market still.
Wurzz, just curious, how long have you been in it and are the loans you are seeing originated now some of the best quality you've seen in awhile ie., credit, debt ratio's, stable employment, etc.? Thanks!
I am going on my 6th year. I came in out of college right when sub-prime was just settling down. So I was never part of the "stated income", "negative am", "balloon" etc etc. However, comparing from year 1 to now, lenders have tightened every aspect of guidelines in terms of credit, debt ratios, etc. Borrowers cant expect to "slide" anything past underwriters anymore. It is too bad for the 800 credit "A" borrowers, because they are now getting over scrutinized with the rest of them. Sometimes common sense is often forgotten by the underwriters, where 6 years ago it was the main component to getting the financing.
However, it has been beneficial in "weeding" out the borrowers that truly shouldn't be able to obtain the financing, which will protect the bottom line in the future. There are some programs that have come about that don't require current FHA borrowers to prove any income or employment. This does help a lot of people that may have taken hits to their income, but have still been able to pay their mortgage. We can lower their rate/payment while keeping the loan balance and other aspects the same.
So in aspect of overall quality, yes it has increased quite a bit.
I would say one of the biggest struggles right now is with the appraisers and appraised values. Appraisers still hold a lot of power in terms of financing. It is amazing to see how one appraiser can bring in a property value $20k-$30k more or less from another appraiser on the same property. We are now required to order the appraisals from an appraisal management company who then randomly selects an appraiser (who sometimes comes from hours away and may not even be familiar with the area they are conducting their appraisal). This "middle man" of a management company adds more fees to the appraisal which is passed down to the borrower. On top of this, the lender still reviews the appraisal and can override the appraiser's decisions or values as well.
It is an ever-changing market and industry that relies on many moving parts (fed, appraisers, underwriters, etc) but all in all the borrowers getting financing nowadays should have a much lower rate of default than years ago.
Great stuff, just the kind of take I'm looking for, how's the employment back there, I know Charlotte is/was a huge banking center with probably a good amount of layoffs when consolidation took place, have most either relocated or moved into other industries, etc.?
Again, great stuff....the program you were talking about is most likely the FHA streamline, really only pays for those prior to June '09 I believe due to the increase in the MIP. Been at it 30yrs. Wurzz, stay with it, great industry still ;-) The loans I'm seeing now are some of the best I've seen quality wise since I first got into it. Thanks again for the input! -R
Yep, FHA streamlines... would be nice if they extend the dates to include more.
But absolutely, still loving it. Didn't know you were in the industry as well? How has everything in your area been?
What are you seeing in your area for values?
Not sure about recent prices in Michigan but the "Taxable value" on my summer property tax invoice I received last August was 35% lower than it was 6 years ago and about 40% from the year I bought it(14 years ago).
Aren't you able to create a list of appraisers with your AMC so you can atleast limit who will be chosen to do the appraisals? Helps a little but if you are doing loans all over the country then its certainly tough to get value consistently.
I am fortunate to keep most of my deals, with the exception of Jumbo loans, with my bank and our underwriters still utilize 'make sense' decisions and will always work with us to get a deal close vs being deal killers. Great business to be in on the bank side as the broker side is rough IMO. No control over anything.
Great hearing from different areas and others in biz.
We do have a list with certain AMCs which does help a lot. But depending on location, we will get random appraisers that throw kinks at some loans. It is interesting to hear from someone on the bank side. There are a lot of pros to having in-house uw's and servicing yourself. I continue to enjoy the broker side at the moment. There are so many deals that might not work with one lender/investor that we can get done with another. Gives more options to rates and programs. The largest downside, which I will tell our borrowers, is the inability to service our own loans. There are some occasions where we would have gotten the loan done by servicing it ourselves as the "make sense" decision would come into play. We do develop good relationships with a lot of lender's uw's where we can look over and work directly on deals.
Overall still loving the industry. And with these rates, not much to complain about.
the great thing is we do have the ability to broker loans out all over the place if needed. hate the time it takes to get them done as we are pushing files out in a couple of days vs a month. i agree though that the business is fantastic and its nice that most of the 'close 1 loan a month and make a million on it' type of guys have gone away to try and find the next best thing to sell
100% agree!
I got into the industry when I was an intern for a financial advisor in college. He realized that while he was looking at everyone's financials he might as well take a look at their mortgage too (created a mortgage co.) The best part about this was learning the mortgage industry from someone with ethics and compliance as everything was for the best interest of the client. Once I branched out and got to bigger mortgage brokers I realized that everyone was trying to "hit home runs" and no referral game at all. I keep the costs and compensation low knowing that my referrals and book will grow into more residuals/volume. You are 100% right, those guys are gone and if they aren't yet, they are struggling with all of the new rules etc.
well said Wurzz.
Wells Fargo is moving 1,300 jobs to Charlotte and are heavily recruiting Wall Street talent to move down there. Have been following the Charlotte market very closely for past year and I think it's on the uptick. Waxhaw and Weddigton are 2 areas worth a look at. Both are about 10 miles South of Charlotte.
Last year I was trying to refi my house and I had two different appraisers come back on a value, one was 550k and one was 450k. The one appraiser could not give a reason why it was 450k...
Actually, owned and operated a mortgage bank (Fannie/Freddie seller/servicer along with servicing retained for IndyMac, GMAC, among many others) for many years, sold it when I couldn't stomach watching kids who made 50k buy a 500k home knowing they were heading for big trouble (yes there were a few of us that had a conscience), took two years off to play poker at the Commerce in Ca (best action in the country for poker IMO). up until an agent I worked with for years called and asked me to help out on a deal for a teacher who was buying one of the first REO's back on the market in '07, felt good again and now manage a branch for a national mortgage co...values here have risen quite a bit from the bottom, for example, closed on a short sale in Sep. purchased for 90k now in escrow to close in a couple of weeks 137k, purchasing another for 118k that I went into contract on short sale a year ago....could turn around and sell now for 155k but it has a great tenant in that pays on time and will give tremendous ROI. That's why as I said in the beginning, a bit skewed here. Let me know if you are ever thinking of relocating would be more than happy to answer any questions. -R
Jeez, thought it had bottomed there, that explains your avatar even the cat has gone belly up :-)
LOL, funny you should bring up the appraisal issues, here there are bidding wars for houses right now with the low inventory so the ones that think they are smarter figure they will overbid and that way they get the house with the thought that the appraisal will come in under and they can renegotiate to the lower price...not so fast my friend...the sellers are now countering back with no contingency on the appraised value so the buyer has to make up the difference in down payment. Like I said, crazy market here.
So Eug, the impetus for this thread was to get an idea of the pulse of what is going on nationwide with regard to the housing market overall. In the stock thread, yourself and Coops has mentioned the bearish bias with respect to "can't understand why this market is rallying". There are a lot of pundits that are skeptical of the market right now feeling that the fed has artificially kept the market afloat and that the "bullish sentiment" indicators are extremely high which from a contrary indicator standpoint should imply we are due for a pretty good sized correction/pullback. This market is feeling more and more like the market in '89/'90 to me where after the crash in '87 when the Dow was hitting up against the highs prior to that crash everyone was looking and feeling like there was going to be a pullback from the previous resistance area. Well, it pushed through and never looked back from one of the longest bull runs in history. I've seen several articles and interviews this week with so called experts stating that we're in "real estate bubble part II", well being in the industry I cannot equate this with the bubble that burst in '07 rather quite the contrary. The loans that are being originated right now are IMO building a solid foundation from which to move forward from with great borrowers and low interest rates with a housing industry that has corrected. I'm seeing some new technology (especially in the medical arena), a pick up in manufacturing that has not been there for quite some time, and graduates that are finding employment. The student loan area is the biggest area of concern for me but somehow they (gov't) will get that stretched/worked out through deferments or forbearance over a longer period of time. Europe remains a mess but there have been other messes that have gotten themselves worked out in the past ie., Latin America in the early 90's so I'm in the camp that it just continues to provide "a wall of worry" to climb. Don't get me wrong, I'm not naive to be a Pollyanna without always keeping a cautious eye on things but little by little it's starting to look more and more like the early '90s to me. That's also not to say that we can't have those scary 10-20% corrections thrown in there every now and then but if they are met with buying from those that missed runs it will again just add to the healthier foundation I mentioned earlier. Just my take fwiw, but one I believe is worth considering. Thanks again to everyone that chimed in, really appreciate it! -R