Ed's Blog

It’s been a long time since I’ve made a holiday wish list. But after what our economy has gone through in the last year, I feel entitled to put my wishes out there. I figure it can’t hurt. So here goes nothing:

*I sure wish that the housing market would recover. (And the sooner the better). We may already be on the way, despite some bumps ahead.

* I’m hoping for a holiday miracle in which somehow everyone owns their home free and clear, and no longer has to pay a mortgage. Hey, the banks got bailed out by us. Now it’s our turn to get bailed out. This is hope we could all believe in!

*I’m dreaming of a New Year where foreclosures are a thing of the past. Yes, I do believe in Santa and the Tooth FairyJ

*I wish that those needing to modify their mortgages would be able to do so, without it taking 6 months or more, or never. Look, it took less than a month to bail out Wall Street and the Big Banks with hundreds of billions of dollars. And it’s taken them just a little more than a year to pay themselves $30 Billion plus in bonuses. How about showing homeowners a little love too?

*I wish that everyone who would like to would be able to experience the American Dream through owning their own home. (It would be nice if it was affordable, too!) Just consider this to be the taxpayers’ year end retention bonus.

*I hope 2010 brings nothing but joy to all of us, and marks the beginning of a new decade in which we all see our dreams come true. And how about bringing about world peace while we’re at it?JJJ

See, that’s not too much to ask for now is it? Here’s to hoping that my wish list is fulfilled in its entirety… And here’s to hoping yours is as well!

Warm Wishes For A Happy and Healthy Holiday Season,

Here’s an abundance of good news for you on the eve (almost) of Thanksgiving.

For those who like the short version here it is:

1) Interest Rates Have Remained Low so you can still refinance even if you are a procrastinator.

2) Home Buyer Credits Have Been Extended expanded to current homeowners.

3) Home Values Are Up 7% In The Bay Area- Yippee!

4) A Happy Pet Story

And now the details:

Interest Rates Remain Low, Low, Low-

For you procrastinators out there, the interest rate gods (and goddesses) are smiling on you. Defying odds, interest rates continue remain in historically low range. For most of you we can take your application and gather all of your data in an hour or two tops. Contact us and we’ll have you saving money in no time flat.

Home Buyer Credits Expanded and Extended-

The $8,000 first time homebuyer credit has been extended thru the middle of 2010. And a provision has been added to offer up to a $6,500 credit to current homeowners who buy a new primary residence. Contact us to see if you might qualify. We’ve already helped a number of first time buyers who are getting credits.

Home Values Up Again In October-

The San Francisco Chronicle had a story (Friday, November 20, 2009) about rising median home prices in the San Francisco Bay Area. In fact, prices were up 7%! And the Chronicle reported today (Tuesday, November 24, 2009) that home sales nationwide are up 10%. Good news! (I think!) Doesn’t mean we’re out of the woods yet, but sure is nice to see that prices don’t always go down. Hang in there, things will change for the better as the economy stabilizes and inevitably improves.

Happy Pet Story-

Hope you’ll indulge me a bit as I tell you a personal story. A few days ago, my youngest daughter’s favorite cat, “JT”, went missing. By the next day we were in full panic mode. Long story short, we found him at Animal Care and Control (ACC) in San Francisco.

In a demonstration of how life can run full circle, it was from ACC that we adopted JT. It was about 8 years ago that our daughter Cassie was doing volunteer work there and we ended up adopting him the day before he was scheduled to be euthanized. (The adoption is a whole story in itself!)Thanks to ACC, JT will continue on in his revered position in our family for at least a bit longer!

According to a new report released this week, the number of homeowners who owe more on their home than it is worth dropped in the third quarter this year. According to the report, which was conducted by Zillow, the number of homeowners underwater dropped 2% to 21%.

While this number is still far too high, the fact that it’s decreasing rather than increasing is a step in the right direction. Refinancing becomes easier once homeowners obtain equity in their homes, and this also indicates that home values are probably leveling out.

If you’d like to know if you are underwater, feel free to contact us today, and we’ll determine your eligibility for a refinance. We can always be reached at 415-406-2330, or email me at ecraine@smithcraine.com

There’s good news this week. For the third straight month foreclosure filings have fallen, though they still remain at much higher levels than in 2008. All the same, this is good news for homeowners everywhere.

First and foremost this is good news because it indicates that homeowners in distress have been able to refinance or modify their current mortgages. It’s also good news for homeowners who are current on their mortgage, as fewer foreclosures in an area, help maintain home values, instead of pulling them down.

Let’s keep our fingers crossed that this trend continues through the holiday season and New Year!

Questions? We can always be reached at 415-406-2330, or email me at ecraine@smithcraine.com

Recently I received an email from an astute reader asking why I think that now is a good time to buy a home. After all he pointed out; if rates and home prices are both low, wouldn’t that mean that when rates increase once again, home prices may actually decline further in order to sustain affordability for homeowners?

I admit this is a very good question. In fact, it’s such a good question, that I’ve decided to lay out exactly why I wholeheartedly believe that now is an excellent time to buy a home (barring some unforeseen event like a terrorist attack, major earthquake, etc.) for qualified buyers who do their homework.

First, in most markets, we’re currently experiencing the highest home affordability rate in years. In the past, when affordability reaches historically high levels, prices bottom out and start to recover.

Second, although it’s happening slowly, there are some strong indications that the abysmal economy is on the rebound, which will ultimately create greater demand for homes. The laws of supply and demand dictate that when demand goes up, and supply goes down, prices will increase.

Third, I’m certainly seeing a high demand for lower-end properties. This is due to the cost of buying becoming ever more favorable when compared with renting.

Fourthly, we’re also seeing multiple offers on many lower priced homes (from buyers with cash or cash equivalent). These buyers have plenty of liquidity which is allowing them to purchase properties at discounted prices, when compared with those needing traditional financing. This disparity will ultimately come to an end, and prices will once again increase, regardless of the liquidity of the buyer.

Next, over the past several weeks and months, investor interest has sharply increased due to favorable rent to price ratio. The ratio in most markets in California is the best I have seen from a buyer’s point of view in my 30 years in the business.

Again, the reasons I believe that buying a home now is a smart financial decision may be contingent upon what the future holds, but after nearly 30 years in the real estate financing business, I can tell you that what goes up must come down, and vice versa. And I have observed that those who view and choose real estate as a long term investment, nearly always come out on top.

If you’d like us to run your numbers for you to see if you can qualify to purchase a home or rental property, contact us today at 415-406-2330 or ed@smithcraine.com.

These days, you just can’t be too diligent in doing your homework before selecting a mortgage broker to assist you with your residential or commercial loan. Here are a few questions you should ask your broker before deciding to work with them.

1. Will You Need a Full Application To Quote Me A Rate?

This can be tricky. Tenured brokers will likely be able to quote you a rate very close to accurate without a full application. However, because lending guidelines have changed so much over the past year, although your broker may be able to quote you a rate, and even lock in your rate; there is still the possibility that when your loan goes through the underwriting process, things are subject to change. In general though, the longer your broker has been in business, the more likely they are to be able to quote you a pretty darned accurate rate.

2. Do You Own A Home And Have A Mortgage?

Would you feel comfortable having a CPA do your taxes if he hadn’t paid his own in five years? Or would you want to invest your money with a financial planner who kept her money buried in her backyard? Of course not.

Personal experience is often times the best education one can have. So I’d steer clear of mortgage brokers who have never owned a home, or for that matter who have never refinanced their home. Mortgage brokers who are invested in their careers will unanimously agree that owning a home is not only one part of achieving the American Dream, but it’s also a sound long term investment.

3. Can You Provide Me With At Least Three References?

Don’t be afraid to ask for references from your broker, and then make sure you call them! I recommend that at least two of the references are recent borrowers. You may also opt to ask for a REALTOR® , lender, or title company as a referral. If your broker tells you to read testimonials from their website, instead of providing direct contact information, you may want to watch out. Those testimonials may be years old. You need to speak with references who have worked with your broker since the economic shift of the past 18 months. Things have changed greatly, and you’ll want to make sure you’re working with a broker who is up to date with these changes, and more importantly, able to provide you with excellent service.

That’s all for now. I’ll be back with additional questions soon. For any questions though, please contact us at 415-406-2330 today!

In this topsy turvy real estate market, it’s crucial that the broker you select to help you with your home financing is equipped to handle all of the challenges this market presents. To make sure you’re working with a broker who will provide you with the service you need and deserve, consider asking them these questions before you decide to work with them.

1. Do You Subscribe to a Code of Ethics?

Until more stringent laws are enacted, in many states such as California, most loan originators have no legal obligation to work in the best interests of their clients.. On the other hand, licensed mortgage brokers involved in organizations such as the California Association of Mortgage Brokers (CAMB) or the National Association of Mortgage Brokers (NAMB) willingly agree to abide by a code of ethics. In particular this code of ethics includes a promise to act with fiduciary duty to ensure the best interest of clients at all times.

2. Have You Won any Industry Recognition or Awards?

If you ask a potential broker if they’ve won any industry recognition or awards, and they reply “No,” that doesn’t mean that you should automatically rule them out. Perhaps they’ve never responded to any call for entries for various awards.

On the other hand, if you ask a potential broker if they’ve been recognized in their industry, and they respond that they in fact, were nominated by clients or colleagues and won “Broker of the Year” or something similar; this is a very good sign. This means that your broker is active in the industry, and has a vested interest in their reputation, and career. Others clearly think highly of them, and it’s likely because they provide exceptional service, and operate with high ethical standards.

3. Do You Participate in Ongoing Education? Are You Required to?

Brokers who are deeply committed to their careers will demonstrate this by keeping up to date with changes in the mortgage industry through ongoing education. After all, no broker can serve their clients with the best possible service without constantly learning more and keeping up to date with industry standards. While membership in some organizations such as CAMB or NAMB will require members to participate in ongoing education, most loan originators aren’t legally required to complete ongoing education. (Thankfully, it looks like this will be changing soon under newly proposed legislation and regulation.)

However, you’ll find that the most successful and longest tenured mortgage brokers will elect to participate in educational courses regularly, as this only stands to help them improve as professionals.

I recently returned from the California Association of Mortgage Brokers (CAMB) Annual Convention in San Diego, which was nothing short of phenomenal! The best of the best in the mortgage industry were eager to educate, enlighten and share best practices! And they certainly succeeded in doing so.

With so many legislative changes occurring over the last year; the resounding themes of the convention were: “How Can We Best Protect Our Clients?” and “How Can We Best Educate Our Clients?”

You know, that’s the thing that I’ve always loved about belonging to CAMB. This group of professionals has a true passion for helping consumers. Obtaining a mortgage is often confusing. Unfortunately, during the boom in the housing market, many people entered the industry to capitalize on this fact, in an effort to line their own pockets. But members of CAMB are just a different breed. Members willingly agree to abide by the highest standards of ethics, and to put consumer education and protection at the forefront of their daily objectives.

I’m proud to stay on the state board and Executive Committee as Vice President of Finance this year, and look forward to the leadership of our new president, Ed Smith Jr. Ed will be furthering our consumer education and protection agendas during his leadership term.

Until next time, I can be reached at 415-406-2330.

Here's a recent market update that I sent to my clients:

Here is a quick summary of this market update. I’ll be following up on these themes with more email updates, blogs, and postcards in the next month or two.

     1) If You Haven’t Refinanced Yet- Don’t Delay Any More. Rates Are    Rising.

     2) Jumbo Loans (over $729,750) Are Finally Improving- We’ll Update You As Time Goes On.

     3) Good Time to Buy a Home or Investment Property- Median Prices Have Risen 4 Straight Months.

     4) Top 3 Mistakes People Are Making Today.

1) Good News, Bad News, Good News About Mortgage Interest Rates-

First the First Good News. The economy looks like it’s at or near bottom, and a recovery may be just around the corner. I know it seems unlikely, but there are a variety of signals that have been coming in lately.

The Bad News. Bond investors hate good economic news because it usually means higher inflation. So interest rates will be moving up. In fact, they’ve already started. Some mortgage rates are already up ½% from their all time lows. For you procrastinators out there, give us a call. I know from speaking and emailing with a number of you that many of you can still save a lot of money, but the window is closing.

Second Good News. Interest rates are still very low. For example, a person with a loan of $417,000 and under can still refinance in the low fives. If you’re paying 5.5% or higher, a refinance can still potentially save you tens of thousands of dollars over the life of the loan.

2) Jumbo Loan Rates and Terms Improving Slowly But Surely-

Many of you in the jumbo loan category (over $729,750) have had to hear about all the great low rates only to find out that they don’t apply to you. It looks like that is starting to change. There are more lenders willing to be more competitive on jumbo loans. Stand by for updates.

3) The Residential Real Estate Market Is Improving-

Is now a good time to buy a home or rental property? Could be. Looks like we’re at a juncture where low rates and low prices have brought about a bottom to the residential real estate market. Although there are still problems ahead for the housing market- tough economy, more foreclosures- it looks like we’ve turned a corner. The SF Chronicle reported that median home prices in the Bay Area were up for the fourth straight month in July. I’m hearing the same thing from most of the real estate agents we work with.

For those of you interested in buying either a home or an investment property, give us a call at 415-406-2330 or send an email to ed@smithcraine.com. We can discuss your loan options, get you pre-approved, and help you find a good real estate agent and property.

4) Top 3 Mistakes to Avoid Today-

· Procrastinating on Your Refinance. Said it all above! Don’t let some lingering bad economic news lull you in to inaction.

· Trying to Hit the Bottom of the Interest Rate Market. In the quest to get the absolute “best rate” and save another $30 to $50 per month, some of you will be spending $200, $400, $600 or more monthly. Ouch! Only hindsight can tell you the best rate.

· Missing a Great Buying Opportunity. There are some risks with any great buying opportunity. The biggest is that you have to buy with no guarantee that prices will go up. Many people did not buy when stocks were at their lows earlier this year (DOW at 6,600+/- and now at 9,500+/-). Most now wish they had.

Don’t let these three mistakes keep you from saving money now, and/or buying a great opportunity.

We can help you fill out your loan application in an hour or less, and get you pre-approved for either a refinance or purchase in a matter of hours or days, and get you positioned to take action.

Hope you’ve had a great summer!

I know this is a stretch, but I’m hoping to use the Beam Me Up analogy to make you think about how to be prepared to get the best rate on your loan in any market.

Remember in Star Trek where Kirk, Spock or whoever had to have their coordinates identified before being beamed up successfully? Locking in a great rate on a home loan is much like this. You need to have all your coordinates identified to get the best results.

For those of you who were not Star Trek fans, or are too young to identify, think about trying to use your cell phone in a dead zone. Just doesn’t work!

We’re having great success locking in awesome rates for borrowers who fill out loan applications and get us all their documents in advance so that we can find their “coordinates” and lock them in to the best rates available.

If you or someone you know needs a loan, have them contact us at 415-406-2330 or ed@smithcraine.com. We’ll get them all set to have Scotty beam them up to a great loan with a great rate!