THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – Great Day For Rates
- PRODUCT HIGHLIGHT – Handling Side Businesses
- JACKISM OF THE DAY- A Hollywood Christmas
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Tour De Mortgage Finance Learn Something New Everyday About Your Industry
GREAT DAY FOR RATES
I think at some point we all become numb when it comes to huge market movements in the mortgage industry. The exception has become the norm over the past few years.
At this point the market movements are at least moving in a good direction for lower rates at least as of this moment.
Yesterday we gained 22 BPS or $220 better pricing per 100K in loan size on Conventional loans and Govt was close with 19 BPS better pricing than yesterday close.
Those numbers are small compared to what we have seen. In reality though, that is $190 – $220 better pricing per 100K in loan size. On a 400K loan that is $760 to $880 better pricing than you had at time of morning open compared to the closing bell. Could you use a spare $800??? It’s actually a big deal.
The reason for this is that the Fed speakers cannot speak. The ECB (European Central Bank) stated they were surprised by how quick inflation was falling and then we got the JOLTS (Job Openings and Layoffs) was way off the mark yesterday. I mean way off. Job openings decreased by 617K from last month. Our industry was part of those losses in case you are curious to the tune of 49K less job openings.
This disturbance in the labor market data caused a flight to the safety of bonds while the stock market lost 73 points in the DOW. The 10 Yr decreased by 12 points to 4.16 which is AMAZING! Wow! Another great day.
We received the American Optimism Report which gauges Americans optimism about the next six months outlook on our economy. It dropped 10% month over month so the folks at large are not confident in what is happening which again is again good for rates. Bonds are a flight to safety.
In case you are curious the Redbook Index came out yesterday as well which measures retail sales and yep we are spending more money. 3% more than we were this same week last year. We Americans never seem to get the hint that the economy is hurting and we should be saving money.
Total vehicle sales also decreased by 120K month over month. I think this is why you are seeing better deals in the new car market and definitely in the RV and camper market. If your in the market then they are offering some pretty great deals.
Today we have ADP Payrolls as well as OPT. OPT is where we measure how efficiently the U.S. converts what we receive and converts it to what we put out in the form of goods and services.. Bottom line is if you were to compare how long an employee takes to produce a good or service compared to how efficient we were before it would be found in this OPT report. The more efficient the more profit. The less efficient the less profitable our country will be. Isn’t it cool we measure these things.
I will let you know via text service of what is happening at time of morning rate sheets.
Share this information in your conversations with referral partners and clients and show you are in the know.
Make it a great day just because it is your personal choice to do so.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
HANDLING SIDE BUSINESSES
The number of deals I have seen get messed up due to undisclosed side business losses is more than I care to share.
I thought today would be a great time to share the rules as it pertains to what you do when you have a borrower that has a primary W2 employment as their main job but then they do a little side hustle or side gig to either make a little money or more often a way to write off expenses on income they are not making in order to pay less taxes.
Fannie, Freddie, FHA and VA do not really care about side businesses if you do not disclose them. It is not considered fraud to not disclose a side self-employed business as long as you have a main employment stream.
The basis is that regardless of what happens to a side self-employment business you still have your full time main income that will pay the bills required for the loan that you are qualifying for. At any point you can stop the side business and stop losing money or truthfully stop writing off money to pay less taxes.
There is a kicker though. What happens when there is something on the loan that requires transcripts. For example, Sch E rental income or maybe you need to gross up fixed income so you have to show the full income is exempt from taxes or any other reason a tax return would be required.
If you are doing a conventional loan and you must show taxes and a side business shows a loss then you DO NOT need to count that income against the DTI. The burden typically is once we see something we cannot ignore it. But the agencies still allow you to ignore it per actual guidelines.
On FHA and VA it is ok to not disclose a side business and you are not committing fraud. Although on FHA and VA IF you send in tax returns and you show a side business loss we MUST count it against the DTI. With Govt loans if we know we must count it against you.
On USDA loans you absolutely must as it is an income based program. Whether it goes against your max income limit or against your DTI they require transcripts so there is no getting away with it.
Bottom line is this. If you must show tax returns and you have a side business losing money that kills a deal go conventional.
Now you know : )
Jackism of the Day Truths and Thoughts that make you go hmmm
A HOLLYWOOD CHRISTMAS
OMG! How much fun is this! Day two of Christmas movie truths.
I am not gonna lie. It is crazy that Netflix and Amazon Prime and even MAX does not have specialized sections for Christmas movies. They have ones kind of made for it but the thing I notice is there are NO NEW 2023 movies and I have seen every other one made.
What is a man to these days??? Hmmmmm. I gave up on Hallmark. They went all political these days so I may have to check em out to see if they have anything good this year due to the lack luster of good, cheap budget Christmas movies available in the open market.
So, tonight I chose “A Hollywood Christmas” on MAX. It is about a director making a Christmas movie but within the movie set was the making of a Christmas movie itself in real life. It was a fun twist on how to make a Christmas movie while being in one. It’s better than it sounds. I would give it a solid 4.7 out of 5.
Ok, so what truth can I glean from tonight’s movie?
Fairy tales do exist. Your man in shining armor does come alive if you see them in their suit of armor. Your wife does have a glass slipper if you choose to see her as Cinderella. Fake snow in a magical love scene is ok if you see each other from one another’s heart.
Dreams do come true, promises are kept, secrets can remain secret, love spells can happen and Christmas season can be a magical moment if you allow it to be.
I use the first day of every week, month and quarter to reset my options, my desires, my thoughts and my heart and give myself permission to be the person that I desire to be. There is always an opportunity to start anew. To see things in a new and fresh perspective and to say this is the day or this is the week or this is the month or this is the year that I discover the hope that I know I truly want to experience.
Hope, that is an amazing word. Go ahead, stop for a moment and just say the word. Hope. Stop reading just for a moment. Repeat the word hope. What comes to your mind? What are you hoping for in life that would only exist in a magical Christmas movie?
Hope is what keeps us going. It keeps us striving for our best self, for the best in others, for the opportunity to be part of something we have always wanted to see.
Go ahead, dream a little, love a little, give a little. Let the snow begin to flow in to the scene and go ahead and make your magical moment a reality as you experience something you have always dreamed of.
Every part of our lives there is a season as they say. This season is about fellowship, family, hope, joy, Christmas movies and for me Jesus. I googled amazon for a blowup that had Santa Claus and Jesus together putting up peace signs showing you can have one with the other. Didn’t find one, but if I do it’s going on the top of my RV along with all my other lights I lit my RV up with. Booya!
All this to say my friends. Don’t let this season pass you by regardless of your situation. Take the time to focus on what matters and become a part of it. Make your own Christmas movie and bring hope to all of those around you.
Turn Times As Of This Morning Lookin Good!
| TURN TIMES | Purchase | Refinance |
| Business days | business days | |
| Conv Non-MI | 1 | 1 |
| Conv MI | 1 | 1 |
| FHA/VA | 1 | 1 |
| USDA | 1 | 1 |
| Jumbo | 1 | 1 |
| Conditions | 1 | 1 |
