105% Loan to Value… Can I really refinance?

Yes you can. The new Obama Plan has rolled out and lenders have begun pricing them.

What does this mean? It means, if your home is worth 105% of your loan amount and you are under the 2009 conforming loan limits and Fannie Mae or Freddie Mac is servicing your loan, you can refinance at market rates.

How does the program work? The same way it worked when you bought your house. You still have to qualify and if you have mortgage insurance it stays on there. You will have to provide full income documentation, just like a normal loan, it will be underwritten, etc. and wham, there you are. What could not be done before is now being done. A new loan for you with lower payments and that is that.

How do you know if you qualify for this magic program? You need to call us at Samuel Scott and we can check for you very easily and quickly. This is something that you need to do right away, while interest rates are at an all time low. I even suggest you talk to your friends and family about this program. It is real and we can help, trust me.

Modifications, should you use a modification company? Well, let me answer that for you. My short answer is, No. The reason is that these lenders are set up to help you modify your mortgage. So, why would you need someone to do something you can do yourself? Oh yeah, they tell you, “I know someone at your bank who can expedite the process.” Everybody knows somebody. Have you ever got a letter that says “I have clients relocating from Chicago and they need a house? Have you ever got an email from someone in Nigeria asking you to send them your account information so they can send millions of dollars to your bank account? There is your answer. Call me and I can help you understand what you need to do before you shell out any money.

Now, let’s talk about the elephant in the room. A lot of you have been asking me if I was so down on the big banks, how come their numbers that they have been posting are out of this world and the stock market is going crazy? First, let me ask you a question, “Didn’t all these big banks get a bunch of money from us, the tax payers?” Are these big banks lending? Where did all this mysterious revenue come from? Oh wait, TARP money. So, now what happens next quarter if banks are lending, they should make money again. Let me ask you, do you think they are lending?

The other elephant in the room is the Jumbo- A paper that Barack Obama does not seem to think is a problem because he is helping 95% of Americans. Those loans are all about to reset and who do you think owns those loans? That’s right, Bank of America/ Countrywide, Wells Fargo and Chase/ Wamu. What is going to happen when those homeowners realize their short term interest only is resetting to a fully amortizing loan, not on a 30 year cycle but on a 27, 25, 23 or 20 depending on what type of loan they took out. These people, you know who you are, all put as little down as possible on these purchases and now when they find out their values have one down, they’re going to be stuck.

How would you like to wake up to your mortgage payment going up by 1/3 and the value of your home is upside down? This is going to be a real problem pretty quickly and nobody is talking about it. Everyone thinks we are doing better but what happens when these loans start going bad and your neighbors house is in foreclosure. Let me tell you what will happen. Our big banks will get more money again, from us tax payers, to shore up their balance sheets that won’t lend and they will show great earnings all over again. Or perhaps we learned from last time. We won’t give them more money, we will let them figure it out and we may lose a bank or two that is called Capitalism.

At Samuel Scott, we are not a big bank, we have never taken TARP money and we are growing. Why, you ask. Because we have muscled are way through the last two years in the mortgage business and we believe that we should do what is right for our employees and clients. So now, I am going to give you another challenge. If you are not working with us, who are you working with and why have you not told them to come and work for Samuel Scott? That is right, I am looking for more loan agents to come and work at the best company in San Diego. Send your loan officer my way. Who cares if they work for a bank or another mortgage company, they would be foolish in this market not to talk with us. So I am asking you to send me loan officer referrals.

Mark and I are available to you 7 days a week on our cell phones or at the office. Mark can be reached on cell at 858-401-9353 or directly in the office at 858-793-4904. Todd can be reached on cell at 858-775-8958 and directly in the office at 858-259-4014. We look forward to any and all business you can send our way. We promise to always do the right thing for you and your clients because clients always come first.

Where O where have the Jumbo loans gone?

This is a question the Obama administration, Barney Frank and Tim Geitner should be asking themselves, before the next shoe drops! In the past, it was as easy to get a Jumbo loan as it was to get a conforming loan. Now, there are fewer lenders doing these loans and the process is ten times as difficult. The pricing on these loans is so far out of whack that it is unfair to the consumer. This is the stuff that the big banks are selling.
It is amazing to me how the whole market is being controlled by these big banks and what they want to do. The market should be controlled by the people and the consumers. If we leave things status quo, which we have been doing, don’t call and complain when the values of your million dollar homes continue to fall. This is the reason the big banks are choking the Jumbo market and making it difficult for people to refinance or even buy.
Now, with the start of HVCC, the log jam and depreciation is on its way and faster in the higher end if we don’t do something now. What can be done you ask? Complain to your administration or congressman. Tell them that they need to get their eye back on the ball. This can be solved if we attack it head on. How can this be accomplished by freeing up money to be lent in this market place? There should be some kind of FHA program for the Jumbo market place. If this does not happen, mark my words, this could be the next shoe to drop.
Fortunately, for Samuel Scott we have searched out relationships in the Jumbo marketplace to continue to offer programs to our clients. The downside is that, with little competition, these lenders take their time and cherry pick the files they want. Back in the day, we could close these loans in a week. Now, it takes 30 days just to get an approval and clients become angry and frustrated because they are used to the past. Again, I suggest letting your administration know that you have a voice. We should get this changed.
The stock market also rebounded this week based on words from Ken Lewis. Bank of America and Citibank are both saying they are profitable. Mark my words, this is going to come back and haunt these two banks. They are very nervous about becoming nationalized and they have to say something to keep the wolves at bay. Go back in time and re-read the testimony from George Bush, Barney Frank and Bernie Madoff. These people have all mislead us to serve their own agenda. This is the same speech, different day. Again, speak up to make a change. Don’t go to these big banks for anything, not your mortgage, car loan or savings account. This will teach them to tell the truth and do the right thing.
Break the cycle and give Samuel Scott Financial Group a try. I am sure you will very happy. Mark and I are always available to you, your family and friends, 858 259-6070

Are the lenders and banks continuing the downward spiral of our credit collapse?

First, I can’t tell you how many phone calls I am getting about credit companies reducing people’s limits to where their balance is at. Second, trust deed lenders reducing or cancelling people’s lines of credit. There are the non-stop commercials on loan modifications, CNN running daily emergency town halls about the mounting recession, interviewing people at food banks telling their stories and companies constantly laying people off. The stock market continues to go down when everything our parents taught us about investing is going out the window.

We voted for a leader who has come out with a few big ideas and no real substance. We are having our Treasury Secretary go before the knuckleheads who created this mess to get confirmed. The Treasury Secretary, who everyone says is brilliant, can’t put a team together because nobody wants to go in front of our Congress to get confirmed. It is like, why would you want to get grilled by the same person who started this whole mess to begin with. We keep hoping for answers, we keep looking for the silver lining. My comment is, quit looking and start creating your own linings. We are in this mess but we cannot allow it to over power us. Remember everything that goes down always comes back up. It just may not be as quick as we all want or need. How long did it take you to gain that weight? Every year you say you are going to take off and when you try it takes forever to lose it.

Why can’t the economy take a little time to readjust? This does not mean be paralyzed in purchasing a home or be paralyzed in refinancing your home. This means, take the bull by the horns and take advantage of the market. Ask your grandparents, how many millionaires came out of the great depression. Ask any realtor, how much did it cost to buy a home in 1980 in the neighborhood you want to purchase in? Are values there? No. Of course not, because Homes and real estate goes up. It may never be like it was, but then, how many people made money trading in one day. Remember when you could buy Google on the IPO and get rich? Guess what, real estate has been a way to build wealth, not a get rich quick scam.

My buddy, back in Philly has a system on what he buys a property for and how much he should get in rent for it to make sense. Maybe, now is the time to start thinking like that. I can’t tell you how many of my wealthy clients see this as a buying opportunity, why aren’t you? I can tell you why, because you are used to buy it three months later you have made 30 percent. Smart money knows it does not work like that. So stop thinking it does. You buy, hold, pay off the debt and then buy some more. Think about this for a minute. You have a job, you get paid for your job if you are still employed everyday, you go to work, get a paycheck, maybe a year goes by and you get a raise. Buying real estate is the same way.  Years go by, you pay down the note and either you move up and buy another home or you sell it and buy more rental property. Remember, your house is not like a credit card. You should not keep pulling money out of it to pay bills. It is a means to an end. Quit watching late night infomercials, those guys got you into that way of thinking and now those same guys are telling you how to get rich in a down market. If those guys are so smart, why are the selling you something and not getting rich on their own idea?

Next problem, those of you who think you are still going to get something for nothing. You know who you are. You want a 0 point 0 fee refinance. Guess what, those days are long gone. That’s why were in this mess. Don you remember when your grandparents would say,” if is to too good to be true, it probably is.” So ask yourselves, why are we in this mess? It’s okay to pay points and fees. Do you think that people were not making money on you doing that type of program? Of course they were. But now they’re on TV selling you loan modifications or working at one of the big banks that us tax payers own. So when you call your big bank and get a quote from a person who is selling you what they are told to sell and they offer you a no point no fee deal, remember, this is why we will continue to stay in this mess.

This is not what we do at Samuel Scott Financial Group. No Tarp money, completely independent. Mark and I want to be your lender for life. We guarantee the person you called at your big bank, you will never talk to again. They will probably be working for another branch of the government next time you need a loan. The question is real simple, am I putting out. 

So the challenge I’m putting out to you is the next time you or a friend needs a loan, how about referring Mark and I. We are both available 7 days a week until 11 o’clock every night. I bet your big bank guy isn’t. Call us or have your family member of a friend refer us. 858-259-6070.

Dear President Obama, My friends and I are wondering how the Stimulus Act and Housing Bill will affect us.

When I look at the Stimulus Act, I ask myself, “What does it do for the middle and upper middle class?

The tax credit for homebuyers has been taken out, unless you are a first time homebuyer. If I ask any realtor, “What market is moving?” They would say, the first time homebuyer market, especially with the benefits that FHA can offer. Help me understand this correctly, we are giving a credit to a group of people to purchase property that is already selling. Is this to stimulate more sales? I know realtors who are doing more business in this market then ever, so I don’t think that is the reason. This must have been a miscommunication to the President.

When I spoke with realtors about the $15,000 tax credit towards buying a house this year, they started up their engines. This tax credit was supposed to be offered to anyone who bought a home, but it was slashed out of the bill.

The next piece of news is the raising of Conforming and FHA loan limits back up to where they were last year. This was put back into the bill.  Has it happened yet? No. When do I think it will happen?  Some time in April.  How are the lenders reacting to this fine news? I have heard several lenders state, “We will take our time to put this into effect and we will not price these loans aggressively.” This is another example of something good that may not turn into something good.  I do know that this will help low down payment buyers in the FHA world get into a new home in some of the higher priced neighborhoods or condominiums, provided the pricing is any good.

The Stimulus Act is helping to build roads next year. I’m not sure what that does for California. The Stimulus Act gives money to states to help pay for law enforcement. I like that, more police is always a good thing, especially during economic uncertainty. The Stimulus Act will help send kids to college, provided you don’t make too much money to qualify for that program. I hope that helps, but it looks like those of you who are already sending your kids to college will not qualify for this program. Part of the Stimulus Act helps the unions. I don’t see how that will affect us, except by protecting some jobs in the entertainment industry and those well needed jobs in the American Auto industry. Those unions got it right.

If you read through the entire Stimulus Act, it really is a “Thank You” from President Obama to all the people who helped him get elected. It’s like giving Hilary Clinton the Secretary of State position.

Now that the Non-Stimulus, thank you for getting me elected, Act is behind us, let’s get down to business on the Housing Recovery Bill. There has to be some juice in there to get the real estate market moving and off to recovery. I have good news for well qualified, responsible homeowners who paid there bills on time but are now upside down in your mortgage. I think we are going to be able to refinance you if you put 20% down on the purchase of your home and now you are underwater, meaning that you owe more then your house is worth. This happens to me every time I lease a car. We can refinance you without an appraisal, at a great interest rate, not to be lower then 5.125% and you cannot be underwater more then 105%.

Let’s do the math, shall we. I bought a home for $100,000 (unrealistic in California but maybe, not for much longer). I put down 20%, $20,000, I owe $80,000 and I have been responsible about paying my mortgage on time. I can refinance, provided my value has not dropped more then 25% from when I bought it. The Case Schiller index shows that the average home price drop in the United States is about 35-40% nationwide. President Obama, I think you missed the mark again. On top of that, if I can rent a house in my neighborhood, for the same price as what I am paying for the mortgage that I have no equity in, why stay? Didn’t you payoff or take over debt for all the banks and some insurance companies? I guess paying down our mortgages so we have some equity and want to stay in our homes, is only on the table for mismanaged companies, not for responsible homeowners. Also, this program is only for conforming loans. How does that help the middle or upper middle class homeowner when they owe more than the conforming loan limit? What happens when the middle or upper middle class homeowners start to give their houses back and we have no money available to purchase these homes? We could, in essence, have a free fall in the Jumbo market. If we have learned from our past mistakes, why are we not making changes to prevent it?  Fortunately, at Samuel Scott, we have some options for Jumbo purchases and refinances to help people stay in their homes because there are many great deals out there.
I also believe that the administration has some very smart people involved and will react quickly and swiftly not to have a freefall effect. I think and believe, if you are sitting on the sidelines, thinking of refinancing or even buying, your window is going to shrink. One thing I have learned from being in the business, for 17 years now, is what goes up always goes down and what goes down always goes up. Over 30 years ago, you could buy a home in Brentwood, Fairbanks or Del Mar for $80,000. What price are you going to pay today? Thirty years ago, we have gone through at least two recessions and one terrorist attack on our soil. I would say that,” that was a good return on investment.”

Remember, now is the time to take advantage of the market, it is not the top. Do not try to time the lowest rate or the lowest price. Trust me, you will lose and then you will say, “Todd you were right, I should have listened!”
Mark and I are available 7 days a week, until 11pm every night on our cell phones. Call us so we can get you off the fence, to either refinance or purchase your home. A wind of change is coming. Today we have options in lenders and appraisers but tomorrow, those same options may not be available. I look forward to hearing from you. Next week I will write about how we used to have competition in the mortgage world and now we don’t. Do you think that is a good thing? Boy, do I have a lot to say.

Call us 858-259-6070 office, my cell is 858-775-8958 and Mark Robertson cell is 858-401-9353

Stimulus act stalled, rates have gone up, Obama is angry and the highest unemployment rate since the early 80’s!!

Things need to be done immediately to stop this free fall and the politicians need to get it right to make the fix.
The stimulus act has so many holes in it that the real question is, will it help?
One thing that will help is the $15,000 tax credit for new home buyers, either in 2008 or 2009. This will not be a loan. This will not be a deduction. This will be a credit. This is huge!
The republicans in the senate are trying to push this through and we need to support this decision. Write a letter to your Senator and your House representative. Tell them to pass this part of the bill. This will help stimulate home purchases. It could start to stabilize the housing market and quite possibly, bring the construction market back for new the homes being built.
Imagine this, a $15,000 tax credit, interest rates at an all time low and points on your loan deductible as well. One would also be able to use the credit over a two year period if need be.
The next question you are probably angered about is why are rates higher right now? The answer to that is lenders are waiting for the stimulus act to go through because they do not know how this is going to effect rates. We have seen a few days when we have been able to take advantage of a short term lock, but the file needs to be completely approved with no conditions to take advantage of this type of situation. Soon, we will probably see a nice little drop in rates on this type of lock. If you have not got your packages in, you should do so now. Most lenders are running 30-45 days in underwriting. All through, right now at our bank, we are at about a week, which is good. But, if I were to send your loan out to Countrywide, they are 45 days in underwriting, so one could not even lock for 75 days with them.
What I find funny is the big banks are quoting low rates on ten day locks that they can’t even deliver on. It is the old bait and switch story. They bring you in, you think you are going to get a cheap rate and then your file is stuck in underwriting hell and now you have to pay for lock extensions.
One more good thing in the stimulus act will be the raising of loan limits back to last years numbers! The rest of the act is full of a lot of pork. I suggest reading what is in the Stimulus Act. You can Google this and you might be shocked.
Remember we are here for you. Give us a call and get your packages in, 858-259-6070

Rumors, rumors, rumors about what is going to happen in the mortgage world…

Let’s talk about these rumors, shall we? 

The biggest rumor, which we already know about, is that Jumbo Agency loans are going back up to last year’s loan amounts. The rumor is, that this is part of the stimulus plan that passed through the house which needs to go to the Senate to pass and then to President Obama.  Doesn’t that sound cool, President Obama! He has already said he will sign the stimulus plan so this rumor could be true and coming very soon.

The other rumor attached to this is about California becoming a high cost state like Alaska and Hawaii.  If that rumor would come true we could see conforming loan limit over $900k.  This rumor should get all the realtors excited.  Conforming loan amounts just under a million dollars in California, with rates in the high 4% to low 5% range, on a 30 year fixed.  Look out.  This could really fire up the purchase market.

Another crazy rumor is refinancing without an appraisal for those of us who are upside down in our properties, who want to stay and get the more attractive rates. I do not see this rumor coming true.  I am sorry to say but one never knows.

The next rumor is about lenders owning their own appraisal companies, charging you money for your appraisal and then paying the appraiser half or even a third of what they charge. We know this is true because it is already happening. They are making money even if the appraisal does not come in at value.  Great idea, huh?

I heard a rumor about rates are going to 2%.  I am going to wait for that to happen before I do something like refinance or purchase. The big problem with this rumor is we have a couple of smart guys in the White House now and if this would happen, the after effect would be runaway inflation. I don’t see this happening.  People always want something for nothing. Right now rates being in the upper 4% to low 5% range is a gift that won’t give for very long.  I suggest you don’t walk, run to Samuel Scott and let us start working on your loan now or you may miss the boat.

Another rumor is one the consumer is not going to like but this one is coming and coming quick.  The rumor is upfront money to lock your loan.  That is right you heard it here.  First you will be required to pay up to one point to lock your loan when you meet with your local banker.  Why would this happen?  Ask yourself, if you had to write a check for one point to lock your loan, the bank can guarantee you won’t shop them anymore and they can charge you whatever. Isn’t this a great?  It’s like this, my family used to own a trucking company in Ohio.  We owned the rights to drive our trucks from Youngstown Ohio to Pittsburgh Pennsylvania and we could charge whatever we wanted because we owned that lane. This is exactly what these big banks have wanted to do forever.  Lock you in, write us a check, rates go down, you lose and they got you. If you cancel, just like there is a restocking fee, there will be a cancellation fee.

The last rumor that has been spread by our competition is that there are no jumbo loans available. This is incorrect.  We have several lenders who have incredibly low rates on jumbo money.  One more rumor, just for fun, is that there are no stated income loans left.  Again this is incorrect.  We have a lender or two in our arsenal that will still do these deals and on top of that, we may even bank ourselves is a program for stated self employed borrowers.

 Now, let me tell you some truths about Samuel Scott.  We are always going to fight the trend and do what is best for you, the client, not what is best for us to make a couple of extra bucks.  For one we are creating our own appraisal company.  We will not split the fee with the appraiser but we will take a little off the top to cover the cost of running the department. Taking money upfront, if that becomes the nor in our industry, I am sure we will follow.  The advantage is we can take your loan anywhere and you are not trapped with what you are locked into because we are a broker as well as a banker.

We at Samuel Scott don’t like to paint within the lines, we like to help you, our clients, get whatever dream you desire.  We are constantly going above and beyond to do this. If you need anything or no anyone that needs a loan for a purchase or refinance please have them call Mark or myself, we would love to help. Oh yeah, one more thing, remember what I said about loan modification companies a couple of blogs back? California’s attorney general is now investigating 250 of these companies. Now, will you quit giving your business to these big banks and come our way. 858-259-6070

It is coming. Loan officers will not be able to choose their appraisers anymore. This could mean big problems for you

That’s right, effective May 1st you will have to order your appraisals through a nationwide appraiser service.

Some lenders have already started using this service. What does that mean to you? If you live in a track community this probably doesn’t mean much. If you live in a custom community it means a lot. Let me explain how these nationwide appraisal services need to make money. They can’t charge you anymore money than they normally would so who do they squeeze? They squeeze the appraiser. An appraiser, who used to get paid $500 for an appraisal, will now get paid $200. Why would he or she want to do something this complicated for such a little amount of money? They won’t or they will do the least amount of work to get the appraisal done.

On top of that, we, as the loan office, cannot have a conversation with the appraiser at all. The reason for this is to prevent collusion between the loan officer and the appraiser. I can understand where they are coming from but my main issue and problem is the quality of appraisers who are coming into your home. The appraisers that we use at Samuel Scott are all professional and most of you know them because we have been using the same ones for years, they are like family. They dress professionally and know the areas that they appraise in. The nationwide companies may use an appraiser from Chula Vista to appraise Rancho Santa Fe. In Los Angeles you may get an appraiser from Thousand Oaks appraising Brentwood or the Palisades. This is going to be a nightmare.

Initially, people trust me when I tell you this, I know some appraisers who are getting out of the business because they know they can’t survive in this environment. My solution right out of the gun is if you have a custom home and need to refinance in the next couple of years, I would be getting in gear now.

Do not wait, do not pass go. Get Mark or myself on the phone. Let’s get the process moving forward and put something in long term to protect you. Eventually, in a few years I am sure this will get worked out but initially, it is going to be a nightmare. At Samuel Scott, we are putting together our own appraisal service which will help us when this program is rolled out. It will still be random on what appraiser gets the appraisal but at least it will be our quality appraisers who will be in the program.

The next question you are going to say is,” Todd, I heard there is not a lot of Jumbo money out there right now. How are you going to get my loan refinanced?” My comment back to you is “we have a few lenders who have come back in to the market which I believe will be for a short time at some fairly good rates in the short term environment, meaning the 3,5,7 or 10 year term. This new should not stop you from picking up the phone and calling Mark or I at 858-259-6070. I look forward to hearing from you. Have a great week.

4.5% thirty year fixed, reality?

It sure seems that way. Most clients right now, up to 417k, are being locked into rates between 4.5% and 5.0% on a 30 year fixed mortgage. Some clients are waiting on the side lines because they think that rates are going to drop. Perhaps they might. I don’t have a crystal ball, but often times those who get greedy and think they can time the market are the ones kicking themselves after the fact. How many times on the show Deal or No Deal does the offer come out really high early on and the contestant keeps playing? This is what we do as Americans, we get greedy. My comment would be, haven’t we learned over the last 2 years of excessive greed from Wall Street and all around us. Let’s take what we can get and when we can get it. I spoke with a client last week that was going to save over $600 a month on his mortgage payment and did not want to lock because he felt rates were going to come down. If the rates dropped another .25% he was only going to save an additional $50.

Remember, as quickly as rates fall, they can go up just as fast. The crazy thing is if rates were to drop to 4% and you had a 4.75% loan you would refinance again, wouldn’t you? Of course you would, but if rates today are at 4.75% and next week they jump to 5.25% which is still low you would get upset with yourself for not locking when you had the chance.

Another crazy thing happened this week. Bank of America is going back to their investment bankers and asking for more money to close their acquisition of Countrywide and Merrill Lynch. Guess who their investment bankers are, the government, us, the tax payer. Did you get a letter letting you know the TARP funds we originally gave them were going to be used to buy other companies in there market place? It’s crazy that this is happening. I find it as a slap in the face to us. We keep doing business with these banks and on top of that, allow it to happen. What are we supposed to do now that this has happened? Let’s start to hold them accountable. Clean house, put new management in place to steer these big goliaths the right way. Isn’t that what we just did? We the white house, we the people did not like the way our country was going so we voted in a new President. Why are we allowing the same people to stay in these banks? All they are going to do is make the same mistakes over and over again. Remember, the mortgage meltdown that got us in this mess to begin with. Didn’t these big banks blame me the mortgage broker/banker for the mess we are in? Yes they did but on CNBC today they are not using that excuse anymore. They are coming to the reality of the situation that it was the leaders of these banks and their bad decisions that have gotten them into this mess. Do you think that Citi sold off Smith Barney because of the subprime mortgage mess? No, they did it because Citi does household finance. That is what they know, not where to invest your assets.

That is why at Samuel Scott we only do residential mortgages. We don’t do commercial loans, modifications and array of other stuff because we are the best at what we do. We put the client first, not our paychecks. I am sure the heads of these big banks are not paying themselves because of the mistakes they made.

Please remember us when considering refinancing or purchasing your next home we do those loans and we do them well with your best interest first. Give us a call and ask for Todd or Mark 858- 259-6070

Conforming loan amounts being raised back up?

This is circling the globe right now, as we speak. Barney Frank came out today and stated that part of the changes he would like to have made is increasing the conforming loan amount back to the levels it was at last year.
What does this mean to the market place? I think that it can’t hurt and that it will help.
Frank also mentioned that he would like this to become the new level and would work this year on making the loan amount permanent. That would be a great new conforming limit, $697,500 for San Diego County and $729,500 for Los Angeles County. That would be incredible for those of you who can prove income and have at least an 80% LTV in those areas.

My issue again is, why didn’t they do this from the start? Do you know how much drama we were in at the end of the year trying to get all those loans closed? Do you know that people who did not make it in time were penalized? The government can’t seem to get it right. I do like the fact that they are now trying to lead the charge for penalizing the banks for taking the money and not using it to lend but to buy other banks. Some used our TARP money to bonus themselves, wasn’t that nice. All this spending of TARP money will stop in the next round, supposedly. I spoke with a friend this week, at one of the big banks that got TARP money and made an acquisition with their capital. He said his phone has been ringing off the hook for refinances. It shows that we really have not changed that much as Americans. We voted for change, we want change, but we continue to do the same thing by calling these big banks for refinance money instead of giving the small businesses more of a shot. I am really confused, our fellow Americans are struggling. Congress steps in and says the way to save them is to save the banks. We take our tax payer’s money to save them and they take the money and put it in their balance sheet which freezes up the credit markets. We as homeowners and Americans then call them up for our loan to refinance our house and wonder why we are in this mess. It is similar to what is happening in Illinois. The governor is being impeached because he is being alledgly charged with the idea that he was trying to sell Obama’s seat in the Senate. The Senate is going to allow the guy he appointed to take the seat. Come on we should be outraged about this but we are not. How do you expect change to happen when we do the same thing and allow the same thing to happen? The first place to start is stop doing your loans with these big banks. You are telling them it is okay to do these things. We need to make a change with our business. This will get them to change what they do. Remember, small companies like Samuel Scott Financial Group. We can get every loan the large banks can and most times at a better interest rate. So remember, support your small businesses like us and really help to make a change. Call me or anyone at Samuel Scott, (858) 259-6070

Welcome to 2009! Will things change for the better for all of us?

That’s a great question.  The big answer is what the new administration will do. Obama has a lot of work cut out for him and a huge mess to clean up.

The big concern is, can we Americans actually give him time to set things right. We, as people, are all about instant gratification. We are going to want to see things change quickly or we may give up to soon. There are some great ideas floating around about how to fix the mortgage mess.  Did you know that half of the modifications that were made last year are back into default? I wonder why? Did you read my blog about modifications? Who made money off those modifications if half went bad? Are we going after the modification companies for their fee? Obviously, they did not do a good enough job or how would they have approved them for the modification in the first place.

The new modification plan being talked about would actually cut principal and lower the interest. This would be great! The down side is the person being modified would give up 50% of any appreciation they get. This will probably get tweaked before it goes into effect but I think they are on the right track. Also, on a side note, they are going to limit the amount of money that modification companies can charge, well around $1000. How many of these mod companies are going to stick around for that? Did you know that one of the big firms that got our TARP money is using it to pay out their bonuses? I ask you guys again, why are you continuing to do business with these big banks when they are only looking out for themselves?! So let’s follow the money as my professor used to say.

The big banks took big gambles with your money that you deposited into their institutions and lost, so they stopped lending you, the consumer, money. They threatened bankruptcy and some failed, such as WAMU and Indy Mac Bank. The government had to step in and bail them out with our money, again. Some banks took our money, bought other banks and blamed those failed institutions for the bad loans to not make them look bad. Others took the TARP money and bonuses out there. Now we, as consumers, are still going to those institutions for loans and going to start the cycle all over again. I ask you this if you voted for change why are you continuing the same old cycle.

You should be getting your home loan whether it is a refinance or purchase through a small company like Samuel Scott. This is going to be the only way to create in 2009 and not repeat the same mistakes. Do you really think what these big institutions are doing is okay? I ask because that is what everyone’s actions are saying.

Let’s really make a change in 2009 and not make the same mistakes of the past. Make companies like Samuel Scott your first and only phone call. I look forward to hearing from you all. Let’s have a great 2009 and remember Mark and I are here for all your residential lending needs in 2009.
Samuel Scott Financial Group Todd Pianin (858) 259-6070

Why not call my current lender to refinance or maybe even for rates on the purchase of my new home?

This is another great question we get all the time. Refinancing or purchasing a home from your current lender versus going to a mortgage broker is what your current lender is counting on. Just like Coke-a-Cola would like you not to know about Pepsi. A mortgage broker/banker deals with all different types of lenders all over the country and can shop for you. Surprisingly, different lenders have different rates for the same program.

Today, though the mortgage broker/banker has gotten a bad rap, the truth be told, the surviving ones are the good guys. They are the ones you want to go to for your refinance or purchase. Think about it. How many mortgage broker/bankers have you heard about in the news asking for a bailout? None. The dirty ones, or the churn and burn shops that we like to call them, have all just about closed up shop and their employees are now working for the direct lenders you are going to call for your mortgage. So let me explain this to you in simple terms. The mortgage broker/banker that are left have been working harder than they ever have to keep their doors open. The direct lenders, who we the tax payers just financed, have hired people at lower wages that probably worked in those churn shops that are out of business. You, the consumer, would be playing right into their hands if you did not at least owe a phone call to a company mortgage company like Samuel Scott to do your loan.

I had a buddy that used to work for one of the nonexistent wall street firms once tell me that we were given a list everyday of stocks to sell our clients and the more we sold the better our commission was. I asked him if he knew if these were good companies and should be buying them. He would say he did not know but he was going on the presidents trip to the Bahamas thanks to his clients buying the stock. So I ask you why would you not call a mortgage company like Samuel Scott, that is incentive enough! By client referrals and not selling just one program or just one lender!

I think a good way to show change next year is to say enough is enough! We want options! Call companies like Samuel Scott Financial Group for your mortgage. If not, we are just following down the same path that has given us auto bailouts, bank bailouts, and who knows what is coming next bail outs!

We need to prove that we have learned from our mistakes and we need to keep small businesses like Samuel Scott Financial Group alive and not reward the greed of years past and make the same mistakes. So I say again, if you have not gotten your mortgage from Samuel Scott financial Group are you sure you got the right mortgage??

Loan Modification …Short sale….Foreclosure… it won’t affect my credit

This is what these loan modification companies are selling and I have to be truthful I ain’t buying it. Let’s take each issue in order, shall we?

First, loan modifications. Currently, lenders are not going to discuss a modification with you unless you are behind on your payment. If you are behind on your payment, then you are going to have a mortgage late on your credit report. This is disastrous for anyone right now with credit as tight as it is. This late becomes a recent derogatory on your credit report. Then I hear my loan modification company say that they can get the late removed if I write them a check and they work on deleting it. If you are late, whether it is your mortgage, car loan, or credit card, they are required by law to report you late. Anybody that says they can make this go away is probably not telling you the truth. It has happened, but it is not the norm, so don’t believe it.

Next, a short sale won’t show up on my credit. My loan modification company is telling me this. Let me explain to you, in no confusing terms, a short sale is viewed in the mortgage business just like a foreclosure! The modification company is getting a commission on the short sale and they are never going to talk to you again, so why do they care if you have something on your credit? If they say it won’t show up in your credit, get it in writing from your lender that is allowing the short sale. Guess what? They are not going to give it to you.  How about a foreclosure on your credit report for 7 years?  Most lenders will not give anyone a loan that has a foreclosure for at least 5 years after the foreclosure. Think about all these things. Would you loan your family member money again if they never paid you back from the first time you lent them money? Then why should banks? People are doing any of the above three things for a variety of reasons. They are designed to help those in need, not to help people take advantage of a situation. I have heard of people taking all of their money out on their equity lines and then waiting a month or two and then they stop making payments and want the lender to help them. In my mind, this is stealing and taking advantage of a situation, just like insurance fraud. I have always been a believer of doing the right thing. Those of you who have worked with me or my company know this. We do not mislead. We do not overpromise. We tell you exactly what it is. We, including me, have had to pay the price over the years by doing this because our competitors who lied, cheated, and have stolen, received some client’s trust, and we lost the deal because of it! I wonder where those lenders are now? I know! Calling you to modify your mortgage and telling you that it won’t affect your credit, and asking you for upfront fees.  I cant say that all loan modification companies are bad because we work with a couple.  What you should know is that there are companies out there who are not being up front with you. 

Remember, when it comes to your loan, buying, selling, refinancing, questions about short sales or foreclosures, or modifying, we can help. With the ever changing lending environment, in which now we are seeing the consequences of greed in my market place, I beg you to refer your friends and family to a trustworthy company, which ours is.

Samuel Scott Financial Group will continue to be the leader in our market place! I look forward to doing your loan! Call me soon at 858-259-6070.

4.5% Fixed Rates

This is what the government is talking about doing. How would they do that? Great question. How would it affect California is a better question.

The 4.5% fixed rates would only affect conforming loans. How many loans in California are under the conforming loan limit? Not enough to spur another housing boom. It will be great for Middle America but not so great for us in Southern California. Before you call me and ask for a 4.5%, 30 year fixed for your $1,500,000 loan right, now, it does not exist. What does exist right now, are a few lenders doing short term ARM’s with a 5 in front of it. If you are waiting to see what happens and have a short term fixed rate that is going to adjust in a year or two, I would say,” Don’t wait, now is the time to act.” Programs are disappearing. For example, Jumbo conforming loan limits that used to go to $729k in Los Angeles and $697500 in San Diego will be cut to $625,500 in Los Angeles County and $546,250 in San Diego County. 5% down programs are around for conventional loans but they need mortgage insurance and there are no mortgage insurance companies doing them.

Stated income loans have become harder and harder to find and at Samuel Scott, we have two lenders that are doing stated income loans. I suggest that before guidelines change again, you get ahead of the curve and we get working on your loan. I warned a few of you about the conforming loan amount changes. I warned a few of you about the stated income changes. Why didn’t you listen to me? So now listen! If you have a loan that is going to adjust within the next three years, you need to call our office and we need to start working on your loan now.

Things are changing rapidly. For example, pretty soon here I will not be able to order your appraisal. It will need to be ordered through either the lender we are going to or a nationwide company. This is a silent but concerning change coming down the pipe. Not many people are talking about this next shoe to drop. One good note in the whole scheme of things is that we still impress our clients. If you read what they are saying about us, why would you not be referring us out to your friends and family? We have not received any bailout money, so why do you reward the banks that are? You keep paying your taxes and then do your loans with these banks that received bailout money. 

Remember, we can help you with FHA, VA, Refinances and Purchases.   Samuel Scott Financial Group is here to answer all and any residential mortgage questions that you may have. You can call us anytime, we are here for you.  (858.259.6070).

Where to start?

What a wild week!  I believe this is becoming part and parcel for our economy. We have become a nation of over reactors.  

Let’s start at the beginning of the week.  The three chairmen of the car companies fly out to Washington D.C from Detroit asking for a 25 billion dollar bailout of the auto industry.  First, they all live in Detroit.  Did you know they each flew out in their own private planes? Second, if they can afford private planes, why do they need a bail out? They must think the American people don’t care about stuff like that. Third question, do they really need a bail out? We bailed out AIG and they went to the St Regis in Laguna Beach and spent $400k. Who runs these guys public relations?  If I did, I would tell them all to fly coach. We have families out of work, the highest unemployment that we have seen in a long time, and they are flying private jets? So to save the public persona, they get the leaders of the unions that work for them to go on TV the next day and demand a bridge loan for the auto makers.  Now, I am really confused.  Isn’t this one of the reasons why Detroit needs this bailout?  Because of these unions? This is what they said before they needed them to demand a bridge loan.  The ramification of these two days equates to two horrible days in the stock market.

It is happening again, fear and panic.  I believe is what the old guard wants us to live by.  I mean by the old guard, which are the people in Wall Street, Detroit and the White House. As the market began to tumble, the 10 year yield which used to be tied to the mortgage market started falling rapidly. This got us all here at Samuel Scott excited thinking we were going to be able to deliver lower rates to our clients. We found out that because nobody has any faith in anything in the financial markets, mortgage backed securities broke away from the 10 year yield and rates went the other direction, up. Bottom line, we need someone or something to bring calm to this market which right now has become so reactionary.  

The good news is we are still funding loans and the real people seem to still be buying them.  Something else to point out that happened this week, Fannie Mae and Freddie Mac stopped all foreclosures. What does this mean?  This means the beginning of the end of values going down.  If foreclosures stop and people can stay in their homes because they get modified, provided they have jobs, of course, then supply will start to drop.  When that happens, things start changing.

Values will not increase anytime soon, but values will begin to stabilize. I have been saying all along spring 2009 things will start to look better. Remember, look around, don’t get distracted by CNBC and Wall Street’s nonsense. What they want you to be is afraid. Like we spoke about last week, are you better off after the bail out of Wall Street? Will you be better off with a bail out for the auto industry? Answer seems quite clear to this blogger.

Remember Samuel Scott is here for all your residential mortgage needs.  Call us anytime with any questions. We do FHA, VA, Refinances and Purchases.          858- 259-6070.

Something to think about over the weekend!

I have been thinking about what our government has been doing to help everyones situation.  Please ask yourself, are you better off now or before the bailouts began?

My answer would be, before.  I was spending money, going out to dinner and buying things for my home.  Today, my wife and I are scared to purchase soap.  We look at each other and say, “Do we really need it right now?”  The second point I’d like to make is that it seems like everyone wants the bailout.  Those of you who are parents, do you bail your children out every time they get into trouble.  If you do, how will your children learn from their mistakes? 

The auto industry now wants a bailout.  Explain to me why a company, where the CO Chairman has two helicopters, one for himself, one for his wife and who own several homes, need a bailout.  Oh yeah, I know the reason.  He wants to become like Toyota, Honda and that little car company in Silicon Valley and make more economical, less gas guzzling cars.  Question, shouldn’t he have thought about that a couple years ago, perhaps before he bought that second helicopter?

We live in America where companies fail and new companies emerge.  Nobody gave Steve Jobs a bailout when Bill Gates stole his operating system.  What did he do?  Like most Americans, he dusted himself off and recreated himself. 

Today, I was listening to a program on NPR that was talking about a school district in Wisconsin.  This school district borrowed money to participate in these credit insurance programs to make 1%.  Why would you borrow money to make money as a school district?  Now they are about to lose 37 million dollars that they borrowed!  I’m sure they want a bailout because some people who voted thought it was a good idea.

I remember, my first mentor told me that you take 10% of what you make off the top to pay yourself and save it.  He didn’t say take 10% of what you make and borrow 10 times that and invest it in something you don’t understand. 

So back to the original question, are you better off now with all the bailouts?  I would say Wells Fargo is.  Remember, when they said they were gong to buy Wachovia with only their money and it was way better for the tax payers unlike the Citi deal?  Guess what?  Now they want 10 billion dollars of your bailout money to buy Wachovia.  They are not lending out any more money, they just want to gobble up other banks, grow their business and wait it out until the economy comes back.  This seems like a great idea to help us all out. 

I have personally not let anybody go at Samuel Scott,  not with the governments help, but my own.  This has been a tough year and I have been supporting the company personally to keep everyone employed.  Perhaps I should call Paulson and ask for a bailout for my company.  A better idea I think, would be for all of you to continue to support us here at Samuel Scott and then let our government officials know that it is okay to let some companies fail for making bad decisions.  I know that there will be some pain but it can’t be any worse than the pain we are feeling now.  For example, consumer rates should be much lower now with all the lowering of rates and they are not.  For example, the banks should be easing up on credit and they are not.  How many people have had their credit lines cut or lowered their HELOC’s as well as credit cards?  This is in my opinion becoming another scam for the big companies to get richer and life to get much harder for the rest of us.  Please speak up here or in other places for your voice to be heard!  Pass this BLOG onto others so we can get the word out.  If you disagree with me please comment and say so.  If you agree with me, please comment and say so.  Please pass my BLOG on.  It is the only way we are going to be heard.  Remember for all your lending needs, Samuel Scott is here for you.

Thank you for reading.