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