Daily Rate Briefing:

RATES & JOBS

Due to traveling last week (see Jackism below), this is my first update since last Tuesday. So let’s take a quick look at what happened while I was away.

The good news is mortgage-backed securities are up 22 basis points from where they were a week ago. We took a winding road to get there, but that’s where we sit today. The 10-year Treasury is holding around 4.44%, which is very similar to last week, while oil has moved up from roughly $88 per barrel to around $91.

This morning, mortgage-backed securities are up another 6 basis points. That means most lenders should open with pricing very close to yesterday’s afternoon rate sheets, with only minor changes if any.

The biggest wild card remains the situation in Iran and the Middle East. Depending on who you listen to, peace talks are progressing or they are not. The reality is that uncertainty creates volatility, and volatility can move markets quickly in either direction.

This week, the focus shifts to jobs data. Economic reports may take a back seat if major geopolitical news breaks, but in a normal week, employment data is one of the biggest drivers of market movement.

Today brings the JOLTS report, which stands for Job Openings and Labor Turnover Survey. In simple terms, it gives us a snapshot of hiring, quitting, and layoffs across the country. Tomorrow we get the ADP Employment Report, and Friday wraps up with the heavy hitters: Non-Farm Payrolls, Average Hourly Earnings, and the Unemployment Rate.

Why do these reports matter? The Federal Reserve has a dual mandate: maintain price stability and support maximum employment. Inflation and jobs data are the two biggest pieces of that puzzle, so markets pay very close attention to both.

The bottom line is simple. Lock when you are comfortable with the rate. Today’s rate is the only rate you can actually secure. No one knows where rates will be an hour from now, tomorrow, or next week, and we have plenty of potential market-moving events ahead of us.

DYK – Mortgage Playbook:

C CORP FINANCING

Most loan officers know that Non-QM lenders can finance an investment property held in an LLC. But did you know also allow the property to be held in a corporation?

That’s right. If your borrower owns or buying an investment property through a corporation, that does not automatically take the deal off the table.

What do LLCs and corporations have in common?

For both ownership structures, lenders typically require:

• The property must be an investment property

• The entity must be formed and in good standing

• The borrower must meet the lender’s ownership requirements in the entity. For AD that means anyone with 25% or more ownership must be on the loan

• A business purpose loan is required meaning it cannot be used for personal reasons of any kind

• Personal guarantees are generally required from the owners

What’s different?

LLC

• Most common ownership structure for real estate investors

• Owned by members

• Typically simpler operating documents

Corporation

• Owned by shareholders

• Uses corporate documents instead of an operating agreement

• May require additional corporate resolutions or authorizations

The key takeaway to share with your potential clients and referral partners:

When a borrower asks, “Can I put my investment property in an LLC?” the answer is yes. But don’t stop there.

If they already own the property in a corporation or wnat to buy one, the answer may still be yes.

Knowing that both LLCs and corporations can be eligible ownership structures opens up more opportunities and helps you avoid walking away from deals that may fit perfectly within Non-QM guidelines.

Jackism – A Thought For Today:

YOUR TIME

I am writing this about an hour before you receive it. It is Tuesday morning, June 2nd, and I just got home late last night from a trip that started early Thursday morning. Meetings all weekend. Meetings all day yesterday. Then a six-hour drive home from Atlanta.

Needless to say, I have a lot to catch up on today. A lot.

As I was thinking through everything waiting for me, it almost felt like a burden. Then something unexpected happened. I felt peace.

My wife asked, “Are you going to your men’s breakfast this morning?” Without hesitation I replied, “There is no way I have time to go hang out with the boys this morning.”

Then I stopped. I looked up. I thought about it. And I smiled. A big smile. “You know what, honey?” “What she said?” “I actually have all the time in the world to go hang with the boys this morning.” And I did.

We sat around telling stories, laughing, eating breakfast, and enjoying each other’s company. Eventually everyone headed their separate ways.

Mine brought me right here. As I sat down at my desk for the first time since last Wednesday night, I didn’t open my email.

I opened my Jackism folder. And I started typing. Right now, this is where I am. This is what I am doing. And I have all the time in the world to do it.

Why?

Because our time is our time. Nobody else’s. We decide what deserves our attention. We decide what gets our energy. We decide what kind of day we are going to have.

Yes, there are meetings to attend, responsibilities to fulfill, and commitments we should honor. We should show up. We should work hard. We should strive to excel.

But somewhere along the way, many of us start living as if every minute belongs to everyone except ourselves. It doesn’t. Your time is yours.

Make sure you are filling it with the things you are trying to accomplish and not simply reacting to what everyone else is trying to accomplish around you.

I went to breakfast with the boys. I am writing a Jackism, which I love to do. Next, I’ll write a DYK, check the markets, and put together a morning update that hopefully helps someone else have a better day.

Then I’ll spend time with clients, helping them with their files, their challenges, and their goals.

That sounds like a pretty good way to spend my time. How about you?