Has the old way of doing business with your realtor and lender gone away?

My quick answer to this question is, “Yes, it is changing.”  I think the big banks are trying to limit your choices and push you into situations that are best for their corporations.  I heard a joke the other day and it goes something like this, “Why does just one company make the game monopoly?”  I think that is a good example of what is trying to be done to the consumer, limit their choices.

It is a sad day when I used to get over 300 rate sheets from big companies such as Washington Mutual, Downey Savings and Loan, Citibank and Thornburg just to name a few.  I don’t receive them anymore.  Do you no why they are out of business?  The big institutions have been fighting to do away with the people who they felt were getting paid too much money to deliver loans to them.  

I remember a meeting I was in, when I was apart of Coldwell Banker and the head guy there said ”Henry Silverman thought realtors and mortgage brokers were paid too much and he was going to do whatever he could to end this.”  I ask you a question, why does a man with top position get to make that decision?

We, the people, created the market where we want to befriend our realtor.  We ask them for advice on how the kitchen looks and what changes we can make.  We like having an advocate to win our battle, against buyers and sellers and to get us a fair price on our new home.  Then, we want to go to our friendly banker’s office and have loan options.  We want that person to be knowledgeable and explain different financing options based on the information we give them.  We will be asked, how long are you planning on being in this house. Our response could be five years or until my kids go away to school and then we want to sell.  The mortgage broker or banker would then come up with a list of options for the client, including payments, timeframe and affordability to get us into the house.

Today, the big banks only want to sell a 30 year fixed.  Why, because of higher interest rates.  While you are in the home they can make more money.  They say things like, “this is the loan your grandparents have.”   I ask you this, “Are you still watching tv on your Grandparents tv?”  I don’t think so.  Banks are hording cash and want to show Wall Street they got it the right way, by taking away your choices.

There is a rash of companies coming into the market where half of the commission on a sale goes back to the buyer or seller.  What happens after six months of you living in this house and you find a foundation crack or the neighbor next door has a dog that won’t stop barking?  Who are you going to call for help, the discount company?  Do you think they can handle it? Do they have the resources and the relationships to help solve your problem?  Have you ever gotten into a car with a realtor, who you just spoke with on the phone the week or night before and they started showing you property and you did not like anything they showed you?  What does the realtor do next?  They get you back on the horse and find you the house of your dreams!  They hold your hand through the process and are with you the day you get your keys.  I think the market is changing and it is changing for better.  Realtors and lenders actually care about their clients and are not looking at them as a quick sale.  

When you are buying or selling a home, we can easily turn it into a transaction when we know it is not.  This is where your kids are going to grow up, and where your friends and family are going to visit. This is your home.  On your worst days you can’t wait to get there and on your best you want to enjoy the comfort of your home.  I think we are changing.  I think, as in any cycle, things go from one extreme to the next.  The consumer has to decide what type of relationship they are looking for but remember, in most purchases of this size, there are two opinions.  Perhaps husband and wife or child and parent and when choosing a company to work with, everyone should be on the same page.

There are the big antiquated real estate companies that have everything.  Their own lender, usually a big bank, their own Title Company, Escrow Company and they want you to use them all.  Are you asking your self why?  It’s not for your benefit but because they need to make money on everything.  They need to pay their employees less to do more transactions.  

 There are boutique real estate and mortgage companies where the client’s needs and wants come first.  If you choose to use their services, great, if you choose not to, that’s okay too.  If you choose to buy one of their listings great, if you decide not to, that’s okay too.  Why do they have this attitude, because they want to earn your business not expect it.  They want you to refer your friends and family to their realtors.  They want you to refer the lender who got you into your home, the lender who showed up on moving day with pizza and smiles to welcome you home.  

This is why I chose to open Samuel Scott Financial Group.  We believe in not making just one transaction with you but making all of them with you.  As your life changes, we want to be there to support you when purchasing a bigger home, the possibility of relocating or when your thinking of downsizing.  We have mortgages that meet all these needs and we have aligned ourselves with realtors who share our same mantra.  You can always get a discount and work with another company, but why?  Do you really think it makes a difference to the big bank or the real estate company that they did your deal?   At Samuel Scott it does.  The client always comes first!  I treat my clients the way I want to be treated and I think that says enough. I ask this every time I end my blog but this time I am going to ask it differently.  If you had a good experience with Samuel Scott, please share it with us.  If you have had a bad experience with Samuel Scott, please share it with us as well.  If you have had a good experience or a bad experience at one of the big banks please share them with us.  If you have real estate experiences that you would like to share with us that would be great too!  

Remember, we are here for you.  Mark and I have our cell phones on in the evenings and on the weekends.  Call us any time, Todd Pianin 858-775-8958 and Mark Robertson 858-401-9353.  We can’t wait to work with you!

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

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