by Alex Stenback on August 19, 2010
Let’s do a little exercise in comparison/contrast, shall we?
The following is an image clipped from a pe-approval letter I recently received as an attachment to a purchase agreement. Anonymized for obvious reasons:
Translation: “Based on information that may or may not be either unverifiable or outright fiction, which we’ll only verify completely once you have taken your home off the market, our client is pre-qualified.” Congratulations indeed.
Confidence inspiring? No. Would you be comfortable buying or selling a home based on that letter? I hope not.
It clearly states nothing has been verified about this borower. Not income. Not credit. Not down payment. Nothing. Read closely and it appears the loan application is not yet complete.
I mean, why bother? According to that letter, the whole thing is a figment of imagination. So good luck, I guess.
To be fair, this is not the worst pre-approval letter I have seen, and all pre-approval letters have some qualifying language. After all, Minnesota Statute 58.13 Subdivision 1 (12)says: [No person acting as a loan originator shall] “issue any document indicating conditional qualification or conditional approval for a residential mortgage loan, unless the document also clearly indicates that final qualification or approval is not guaranteed, and may be subject to additional review;”
But still, surely this lender can do better for their clients, agents, and other interested parties.
In the interest of full disclosure, and as an example of a strong pre-approval, here’s what I send (in addition to a $10,000 guarantee to the seller that the loan will close):
I’ll close with a rhetorical question: Which letter would you rather have in a competitive situation, or if you are selling your home?
by Alex Stenback on August 11, 2010
“the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.”
That snippet of inimitably impenetrable prose from yesterday’s Federal Open Market Committee policy statement effectively means that interest rates, including mortgage rates, are likely to stay at incredibly low levels for a while.
This no guarantee, mind you, but that’s the intent.
Another way to look at this: With the economy showing real signs of stagnation (without the HUGE amounts of Fed intervention, it might even be shrinking) the Fed is content to keep the pool full and the heater on.
While that’s a good thing for interest rates, don’t forget that someday, maybe sooner than we think, somebody is going to stroll by and drop a toaster into the deep end.
by Alex Stenback on July 22, 2010
The Minneapolis Area Association of Realtors has just officially launched their proprietary, web-based, interactive market analytics tool, otherwise known as “The Thing.”
It is in a word, awesome, but we’ll let MAAR riff on this a little:
“Users can combine metrics like median sales price, months supply or days on market with breakouts like home types, foreclosures and new construction. The many possible combinations can be further broken down to geographic area, including cities, counties, ZIP codes and MLS areas. And none of this will take more than a few clicks. 10K products are built to be highly localized, visually elegant and intuitive.”
That makes it sound a little clunkier that it actually is, so check it out right here. Also, you know the best thing? Best thing is that it is open to anyone, not just industry professionals.
Taking valuable data and turning it into easy to use, informative, real estate market eye candy is something we can dig on, and you should too.
Equal Housing Lender |
Monday Market Commentary: This Week In Mortgage rates
by Alex Stenback 05.17.2010Last Week:
Mortgages improved modestly/minimally again last week – now even the pricier lenders are posting 1pt-included 30 year mortgage rates under 5%, though much of the street has been there for weeks.
In an interesting twist, and part of a play that may run to several acts, the domestic economy, while still anemic, is posting better numbers: [...]