Ed's Blog

Rates Are Awesome- "Rates continue to obey gravity by staying low." We see home buyers in San Francisco, Oakland, San Jose, and other Bay Area communities qualifying for higher loan amounts due to lower rates. And we see homeowners saving Big Bank on refis.

Jumbo Loans Making a Comeback - More Jumbo lenders and lower jumbo pricing is enabling us to offer buyers better loan options for Jumbo loans. We recently closed on an 80% purchase at $1,325,000. Happy people all the way around. Sweet! Same applies to Jumbo refinances. Contact us for a quote.

Some Vets Have Until June 2011 To Receive $8,000 Federal Tax Credit- Vets who were overseas the past year will have an additional year to use the recently expired $8,000 federal tax credit for first time buyers.

New LQI (Loan Quality Initiative) from Fannie Mae Is Underway- Recently I told you how lenders verify everything once, and often twice! Take credit and employment for example. Many lenders will check these up front, and then check them again the day before funding the loan. So no big job changes or new purchases for buyers. That is, unless you don't care about closing escrow.

In fact, the new LQI (don't you just love acronyms!?) from Fannie Mae is requiring lenders to buy back loans where there were undisclosed debts prior to COE. So now lenders are scrutinizing inquiries on credit reports, interest deductions on tax returns, and public records on other properties owned by borrowers to see if there is any chance of an undisclosed loan somewhere.

We're Here to Help You- We love helping people buy homes. We're always glad to help our clients and your referrals when we can. And when we can't, we'll let you know. We've been at this for a long time and have helped a lot of people buy and refinance their home, second home, or investment property.

One Last Thing- We Offer Second Opinions - I don’t talk about it much, but if someone you know wants a second opinion on a loan, let us know. For a small fee we’ll review the financing offer in question. And if we can do better, and your friend ends up doing the loan with us, we’ll refund their fee.

Recently, the San Francisco Chronicle (June 7, 2010) reported that sales of single-family homes in San Francisco rose by 50% in the first quarter from a year earlier, and that the median price rose 5.4% to $685,000. The article went on to say that home prices are forecasted to gain 7% this year. That would be the biggest gain since 2005. Wow! Are you kidding me!? Good economic news in the newspapers? Fear not it's true.

And the news was good in more places than just San Francisco; as the article went on to say that “prices for existing single-family homes rose in 60% of US cities in the first quarter.”

But back to San Francisco. The article talked about bidding wars being back (who ever could have believed!?), and the nascent rebound in the tech industry. Now if only we can get a real employment recovery underway we’ll all be able to feel much better about the turn in the economy.

If you'd like to read the article, click here.

The good news continues. According to a recent article in the San Francisco Chronicle  (May 21, 2010), the median priced home in San Francisco, Oakland, San Jose, and other Bay Area communities continues to rise in value. In fact, the median price of resale homes jumped a whopping 30% in April 2010 compared with the prior year. While! Who knows, at this rate, maybe we'll get back to the pre-crash values before I die! (I kid, I kid!)

Whether you are looking for a mortgage to purchase a San Francisco Bay Area property, or a refinance, rising values can help you qualify for the loan you want.

If you need some help figuring out what you can afford, whether you should buy now, or whether it makes sense to refinance, contact us. We'll be glad to give you our viewpoint and help you figure out what's right for you.

Say what? It used to be said that when the US catches a cold, the world gets the flu due to the huge importance of the health of our economy to the health of economies around the globe.

But now it seems that the world has been stood on its head. Problems in the tiny economy of Greece are having huge repercussions throughout the world, including the US.

Welcome to the brave new world, the global economy, the New World order, or whatever you want to call it.

I call it the jitters. People are worried. Worried about jobs, the economy, deficits, taxes, and more.

What does it all mean?

Glad you asked. In my corner of the world's hit means great interest rates, bargain real estate prices, cautious underwriting, conservative lending guidelines and more.

It all adds up to an opportune time to refinance mortgages, and/or renegotiate debt, purchase a home, or perhaps purchase investment property. So long as you have stable income, good credit, money in the bank, and can qualify for a loan!

If you need help analyzing your position and opportunities, give us a call at 415-406-2330 or send me an e-mail at Ed@smithcraine.com. We'll be glad to help you think strategically about your real estate finances.

At Smith Craine Finance, we have started to witness a more reasonable criterion for both commercial real estate debt and equity in the last 45 days. The focus for capital continues to be top tier product, strong sponsorship, and solid location with reasonable price points or at the other side of the spectrum, discounted distressed assets that can produce higher yields that price in risk and justify the cost of funds. Presently, there is much interest in the $10 million to $20 million investment range for stabilized assets while we all await the expected increase in discounted notes and REO assets.

We encourage you to call Smith Craine to discuss both immediate transactions as well as your future business plans so we can align you with the newest and best debt and equity sources that match your needs.

Please contact us at your convenience to discuss your commercial real estate transaction with us.

• All Multifamily Financing Including HUD/FHA
• Industrial, Retail, Office Acquisition Financing
• Mezzanine Debt

• Bridge Financing
• Preferred Equity
• Joint Venture Equity
• Structured Financing
• Distressed Asset Acquisitions
• Distressed Note Purchases
• REO Acquisitions
• Discounted Performing/non-Performing Note Purchases
• Note Buybacks
• Deal Recapitalizations
• Fractured Condo Projects
• Partially Completed Construction Projects
• Partner Buyouts
• Select Development Financing
• Cash-Out Refinance
• Asset Repositioning

Whether or not you believe the economy is on the rebound, there are clearly some indications that the housing market is recovering, especially here in San Francisco. And well, if you’re of the belief that the economic collapse was –at least partly, if not mostly- to blame for the meltdown of our economy, then perhaps the housing recovery may be the precursor to a national economic recovery.

Consider these small but significant items of interest.

1. The FED has decided to keep interest rates the same. Low. Very low in fact.

2. Mortgage rates remain incredibly low. 15 year fixed at less than 5%? 30 year fixed at right around 5%? Jumbos under 6%? Wow! Who would have believed these low rates would still be here?

3. Home values are climbing again. In fact, here in the Bay Area according to several different studies, home prices here are up 12% year over year. (Of course I know that they are still down from a few years ago, but progress toward recovery of values is still welcome, even if it’s “only” 12% at a time).

4. The stock market is fairing pretty well in spite of Europe’s debt woes. Let’s hope the problems don’t rattle investors too much.

5. Foreclosures continue to decline. In the first quarter of 2010, foreclosures were down more than 4% from the previous quarter, and down a whopping 40% from the same time last year. I know there’s “shadow inventory” out there, but this is still good news.

I don’t know about you, but to me these items signify a reemerging consumer confidence in our housing market. And that’s good news for the economy as a whole.

Till next time!

The past week or two there has been a lot of discussion about mortgage interest rates climbing due to several pressures. Especially in light of the 1/8% to 1/4% recent bump in mortgage rates here are some of the factors being mentioned:

1) The Fed has announced it will no longer be buying Mortgage Backed Securities from Fannie and Freddie.

2) The recovery is underway! Or so they say.

3) Inflation must be on the horizon with all the money that has been pumped into the economy

4) China and Japan, the biggest buyers of our debt, are or will be scaling back on purchasing more of our debt.

5) Our soaring deficits will cause crowding out of private borrowing by government borrowing, inflation, or both, thus driving up rates.

Now that's quite a list! And it’s just a beginning.

Whether any or all of these are true, I do know this: Rates on home loans have been at historic lows for so long that sooner or later they're bound to go up.

So, if you've been thinking of refinancing, or buying a home at today's low rates, what are you waiting for?

Contact us and we will get you prequalified, preapproved, and locked in for a low interest rate mortgage on San Francisco, San Mateo, Marin, Oakland, San Jose, Sacramento, Los Angeles, San Diego, or wherever in California, homes or investment properties.

Don't miss out on this Nordstrom's sale on money!

When I read a few days ago that Bank of America was going to reduce the principal balance on up to 45,000 home loans you could have knocked me over with a feather!

What a novel concept! Help keep homeowners motivated to stay in their homes and paying their mortgages when they are so far underwater that they can't even see the light above. And they see their neighbors walking away from their mortgages right and left.

This idea was floated at least a couple of years ago when it actually could have done much more good for the economy. But there was great handwringing over moral hazard and other dairy I say “quaint” notions that used to be operative. But these have been tossed out the window by a steady stream of bad news and despair for homeowners who otherwise would most likely hang in there and “do the right thing.”

After helping create the bubble by lending with reckless abandon, foreclosing in massive numbers, and telling homeowners who wanted workouts to pound salt, some lender was bound to think, “There has to be a better way out of this.”

Congratulations to BofA. I hope their program works and that other lenders follow suit.

We need all the help we can get to get this housing market mess straightened out. Especially in hard-hit states like California, Arizona, Nevada, Florida, and others.

The credit for new and trade up homebuyers is scheduled to sunset soon, unless extended by Congress.

In order to take advantage of tax credits of up to $8,000, you must be in contact by April 30, 2010 and close by June 30, 2010.

Don't miss your chance to have Uncle Sam help you buy a home in San Francisco, Oakland, San Jose, Los Angeles, Sacramento, San Diego, or wherever in California or any other state for that matter. Or how about Weed, California? I love that name!

Get yourself prequalified, preapproved, and ready to close escrow. Contact us now to get yourself ready to get some help from your favorite uncle-Uncle Sam.

As the economy struggles to get back on track there is at least some good news.

Here are the top things that I'm seeing related to loans these days.

1) Interest rates are great-still! In fact we’ve been saving lots of people lots of money. You could say we’re stimulating the economy one borrower at a time. If you didn't refinance in 2009, you should get with us to see if it makes sense to now. Just hit the reply button and say “Refi?” You can say more if you want, but we're trying to make it E Z! We'll help you design your own personal stimulus plan.

2) People are buying. With home prices holding steady and rising in some areas, low rates, and a tax credit for both first-time buyers and move up buyers, were seeing a steady stream of buyers. If you or someone you know would like to take advantage of what many think is a strong buyers’ market, contact us. We’ll be glad to review your options and get you preapproved.

3) “Short refis” are here-for some. We're working on two short refis for a borrower as we speak. A short refi happens when you refinance with a lower loan amount than you currently owe and your current lender accepts a lower payoff than what you owe them. You end up with a smaller new loan at today's low interest rates. These are an alternative to loan modifications, short sales, or foreclosures. Contact us if you would like to discuss short refis or any of the other alternatives just mentioned.

Two other things before I sign out. I have been doing work as a consultant on legal cases related to lending practices. You would be amazed at the things people do to each other! I'm also consulting on troubled commercial loans and properties. If you know somebody who could use help either with a legal case or with troubled commercial properties, contact us. Back in the 1990’s I was able to help owners and lenders restructure loans on nearly $100 million of commercial investment properties and apartment buildings.

As always, we appreciate being able to help you or a client, friend, coworker, or family member you might refer to us. Your referrals are what keep us going, especially in times like these!

Hope 2010 is off to a great start for you!