THIS MORNINGS QUICK LOOK
- TOUR DE MTG FINANCE – What Happened Friday?
- PRODUCT HIGHLIGHT – Home Repairs W No Holdback
- JACKISM OF THE DAY- Acrosticizing Your Name
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Tour De Mortgage Finance Learn Something New Everyday About Your Industry
WHAT HAPPENED FRIDAY?
On Friday we lost 44 BPS in the Conventional market or $440 in premium for every 100K in loan amount and we lost 66 BPS on the Govt loans or $660 in premium for every 100K in loan amount.
On top of that we increased (bad) 13 BPS on the 10 Yr Note which is a lot and pushed us above the 3.50 mark that we absolutely want to stay below.
We are hoping that we will have a second reaction this morning after the markets have had a weekend to think about what happened on Friday and calm the market down.
So what happened? Use this information to educate your borrowers or your realtors to let them know you are the one in the know.
It was 7:30 AM on Friday morning and the first to hit was the unemployment rate. We were expecting a 3.6 unemployment rate but instead we received a 3.4% unemployment rate. Does not seem like much until you realize the markets priced in an increase in unemployment since we were at 3.5% last month. Instead of increasing, unemployment went down. That is a big deal.
Those that are unemployed lowered 28K down to 5.69 Million unemployed. Then the employed increased by 894K to 160.1 Million. This was a flip flop of what was expected. The last time unemployment was this low was May of 1969. Crazy huh!
Then at the same time the report for non-farm payrolls came out. The markets priced in an increase of jobs thinking 185K new jobs for January. Instead it was 517K new jobs. Leisure and hospitality was the lead on increasing job growth combined with many other markets. This makes for a very good economy and not much of a recession and this changed the markets thoughts of what they will invest in. Well, at least for one day as it changes fast.
The bottom line is we had a lot of reports come out on top of above on Friday that were positive for the economy vs expectations that they would be worse. From hourly wages not increasing as much, manufacturing orders increase a lot more as well as manufacturing jobs increased plus the average hours worked by employees increased as well.
All of these are good for the economy, which is great, but not great for mortgage rates. But the more folks make and the more hours they work and the more jobs that they have makes for more people buying houses so it is a win win.
We will see what the day brings and let’s hope for a good reaction to the markets in favor of lower mortgage rates this morning.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
HOME REPAIRS WITH NO HOLDBACK
This is an interesting piece of information that I have run in to with a few different files recently.
We all know that when you have deferred maintenance or subject to appraisal or safety and soundness items that the seller needs to usually fix these items before you can close on a home. If you do have to do an escrow holdback then it is 120% of the cost to cure and is a big pain in the tail to do.
Lets say you have something that does not impact the safety or soundness of the home and the seller is not going to fix it and the appraiser is willing to complete the appraisal as-is and instead put a cost to cure on the appraisal.
This means you have an appraisal completed as-is, a cost to cure the issue and work that is not much of a big deal but still needs to be done.
Examples of this may be missing flooring in the basement, an incomplete bathroom that is not a major bathroom in the house, or a job that they started and just have not finished but does not impact the livability of the home.
Let’s say for example the cost to cure is 20K. We would want to see the appraisal as-is and it comes down to what the appraiser puts in the comments, then we would want to see that the borrower has the funds to complete the cost to cure which in this example is 20K and then we would consider with an exception closing the house without an escrow holdback and just let the buyer have the home with no further requirements.
This is the exception and not the rule but we have made a few of these deals work.
Got a scenario? Feel free to reach out and ask.
Jackism of the Day Truths and Thoughts that make you go hmmm
ACROSTICIZING YOUR NAME
The world has created ways to remind ourselves of ways to think about things for thousands of years. When you hear an acrostic it instantly has meaning.
For example. Hey Jack, you seem to be over complicating this situation. Use the K.I.S.S method and your life will be much easier. And K.I.S.S stands for of course Keep It Simple Stupid.
How about WWJD – What would Jesus Do
How about SMART Goals – Specific, Measurable, Attainable, Realistic, Time Table
How about FORD – Found On Roadside Dead
How about BMW – Bring My Wallet
How about CHEVROLET – Constantly Having Every Vehicle Recalled Over Lousy Engineering Techniques
You get the point. It is fun or informative or meaningful ways to remember how you feel about a topic, person or concept.
This got me thinking last week and I decided what would an acrostic of myself look like? What do I stand for, what is my role, how do I want to be perceived and when I think of myself what comes to mind.
So I did a test trial over the past week and I just came up with the first thing that had meaning and represented who I am as a person and how I want others to see me.
J – Joy – I find mine in my faith.
A – Attitude – How I approach each day and each client.
C – Character – If I always do what is right, I will never be wrong.
K – Knowledgeable – Being a valuable asset to those who are in need.
Every time I was in a situation that required a solution or heading toward a place of frustration I said well Jack, what do you stand for? I went through who I am and it helped me through what I was going through. Pretty cool actually.
But wait, there is more! What if you took it to the next level and used your name for different areas of your life that was a reminder when you are in a situation you can bring this to top of mind.
Here are some I just came up with.
AS A HUSBAND – Joyful, Admiration, Caring, Kindling.
Imagine if every time I thought of my wife I thought of the joy she brings me, how much I admire her, to care for her needs and not my own and to continue to kindle the fire of our intimacy with one another.
AS A DAD – Just, Accessible, Communicative, Kind
Just means being fair minded for both them and I. Accessible is when they have a need they know that they can come to me. Communicative is to go out of my way to have conversations with them and to be Kind with all of the crazy stuff they come up with and not to be harsh to their ideas or thoughts.
I think you get the point here. Think of an area of your life or two and see what words you come up with that describe who you are or who you want to be in the different areas of your life.
Think as a boss, employee, husband, wife, parent, culture, extended family, community person, financially, health or anything you desire to figure out what you stand for.
WHO ARE YOU AND HOW DO YOU WANT OTHERS TO SEE YOU?
I would absolutely love to hear what you come up with.
