The Accunet Mortgage & Realty Show 8-25-24

Episode Transcript

Speaker 1 (00:00):
The following program. The ENT , mortgage and
Realty Show is paid for in fullby ENT mortgage, LLC and equal
housing lender consumeraccess.org number 2 5 5 3 6 8.
The advice and opinionsexpressed during the Academic
Mortgage and Realty Show aresolely that at the hosts and
guests of ENT mortgage, LLC,and not WTMJ or Good Karma
Brands.

Speaker 2 (00:20):
Welcome to the Accu Net Mortgage and Realty Show,
getting you inside informationon buying, selling, and
financing your home with expertadvice from Accu Net Mortgage
and Realty. And now here'sBrian and David Wickers.

Speaker 1 (00:34):
Welcome to the Accu Mortgage and Realty Show. I'm
Brian Wicker, licensed realestate broker with Academic
Realty Advisors and majorityowner of Academic Mortgage,
where my N-M-L-S-I-D numberindividually is 2 5 9 6 1 0.
I'm here today along with myson David, who's one of Ed's
Senior loan consultants, also amanaging owner and our Chief
client experience Officer. Hisindividual MLS ID number is 3 2

(00:56):
8 8 4 7. If you've got aquestion or a comment, you can
always call or text us on theWTMJ talk and text line , which
is 8 5 5 6 1 6 1 6 20. And youcan always grab a podcast if
today's show anywhere younormally get your podcast. So
David, another good week forinterest rates, by the way. And
the stock market too . Yeah.
And uh, why is that?

Speaker 3 (01:15):
Well, we're all approaching that magical
moment, dad, where the Fed isgonna cut rates at their
September meeting, culminatingon Friday when Chair Powell at
the, you know , uh, centralBankers , uh, party in Jackson
Hole, Wyoming

Speaker 1 (01:34):
Retreat, which is, we've been there one time and
it's beautiful.

Speaker 3 (01:36):
Yeah , it is beautiful. And he said, I'll,
I'll, I'm gonna , the mostimportant sentence, I'm looking
at the speech quote . The timehas come for policy to adjust,
which is nerd talk for, Hey, atthat September 18 second day of
our meeting, we're gonna cutrates, the rates dad, all of

(01:57):
'em . Right? All the rates .
That's right . The rates.

Speaker 1 (01:59):
Well, we've been living in a world for three or
four weeks already wheremortgage rates reflect the idea

Speaker 3 (02:06):
Today, the expectation Yeah.

Speaker 1 (02:08):
That , that, that the Fed has, it's like the Fed
has already made their ratecut. Okay. So now really, in my
opinion, the only question is ,um, are they gonna cut their
overnight rate? 'causeremember, they really only
control one rate. Yes. The ratethat banks charge each other
overnight. They do not have adial in the Federal Reserve
office in Washington, DC or NewYork that says mortgage rates.
Nope . They do not have thatdial that's set by the free

(02:28):
market. And , um, and , and sothe question now is it's gonna
be a quarter point cut or ahalf percent cut. Yeah . And I
looked up on the betting parlorknown as the CME. What's that ?
The Chicago

Speaker 3 (02:40):
Mercantile Yeah .

Speaker 1 (02:41):
Exchange. Yeah .
Mercantile Exchange where youcan bet on, hey, what is the
Fed gonna do with Fed fundsrate? And as of Friday, there
was a 63.5% chance of a quarterpoint cut, and the other money,
37.5% was not a half percentcut. Yeah . And not too long
ago it was over 50% , um,betting on the , uh, half a

(03:02):
point cut. So today's mortgagerates already reflects some,
some kind of combination. Ifthey were to cut a half, that
probably would be slightlyfavorable for mortgage rates.
Do you agree with that?

Speaker 3 (03:13):
Yeah. Well, and but to our point, if mortgage
markets have already baked thiscake , uh, and , and rates have
begun to come back to us,thankfully, let's then pivot
to, you know, the real world.
Who, among our listeners or whoamong, you know, our active
buyers here on Sunday morningand be like, well, I heard this

(03:37):
speech happened on Friday, andthen I listened to Brian and
David on Sunday. Honey, let'sget out there and start looking
now, because I heard ChairPowell's gonna cut rates by
something in September, right ?

Speaker 1 (03:49):
I I was on , uh, WBBM in Chicago News Radio
seven 80 a couple of weeks agoand was asked, because that's
when the first dip in rateshappened. Yeah. Like three
weeks ago. And so their noonbusiness hour host asked me, so
Brian, is this gonna make a lotmore people list their homes
for sale now that rates aredown? And I said,
unfortunately, no . Youknow, I think rates have to get

(04:11):
well into the fives, is myopinion. And I don't know if
that's gonna happen. 'cause wecan talk in a later segment of
the show, Fannie Mae's out withtheir most recent , uh,
forecast for interest rates andhome sales, and they have
wisely adjusted to the new ,um, market conditions, by the
way. And , and so no, thisisn't gonna all of a sudden
cause more people to list theirhomes. Maybe at the very, very

(04:33):
margin, maybe, maybe a littlebit. But this is not gonna
cause a gush of , uh, new homesturn .

Speaker 3 (04:40):
No , I'm gonna say that those clients who we have
helped get into their home inthe last few years are going to
want to tap into the equitythat they probably have
accumulated since purchasingtheir home 3, 4, 5 years ago.
More than perhaps getting backout into the market. That would

(05:00):
be, I think, a lot ofhomeowners first move. How can
we improve our current homerather than venture back out?
Yeah.

Speaker 1 (05:07):
Go back into that.
Yeah . Still painful market forYeah . For buyers are still
competitive, at least in ourcorner of the world. Remember,
all real estate is local. Ifyou're talking Florida, that's
a different kettle of fishaltogether than Mm-Hmm .
SoutheastWisconsin or even Chicago or
others. A couple of things tokeep in mind between now and
the next Fed meeting, which ison the 17th and culminates on

(05:29):
the 18th of September. So it's, we'll find out what they're
actually gonna do with theirovernight rate on the 18th of
September. Here are the thingsthat we're gonna be looking at
and the Fed will and the marketon August 30th. We've got the
Fed's favorite measurement ofinflation, the personal
consumption expenditures indexthat comes out the end of this
month. Mm-Hmm. ,uh, you get the jobs report

(05:50):
another big one. That'sprobably the biggest 'cause .
What did Fed po chair policysay about the jobs market? Do
you remember? Do you have thatup?

Speaker 3 (05:57):
I don't have it in front, but I can, I can guess.
He said, wow, we've, we've donewhat we need to do and now we
need to approach balance in thejobs market. Did I get

Speaker 1 (06:06):
That right? Yeah .
He said some . Yeah. He , hecommented that, you know what,
the current unemployment rateat 4.3%, we we're not looking
to make that any worse. No,there you go. That , that's
kind of what he said is we , wedo not wanna see the jobs
market deteriorate. Then wehave the consumer price index
report. That's the broadestmeasure of inflation is on nine
11. And finally we get retailsales, which is two thirds of
the American economy comes outon the first day of the Fed

(06:28):
meeting. So lots of data, lotof data. And that's what the
Fed says they wanna see here .
We wanna see the data. Uh , solot , lot to come yet on that.
Alright , when we come back,let's talk about the , uh,
buyer's agency commissionsbecause we're now living in the
new world. This last week wasthe first full week of the New
World of Buyer Agencycommissions. We'll talk about
that when we come back. You arelistening to the Academic

(06:49):
Mortgage and Realty Show on a Msix 20 WT MJ

Speaker 2 (06:54):
Home buying advice from the guys who know it best.
This is the ACU Net Mortgageand Realty Show with Brian
Wicker on WTMJ.

Speaker 1 (07:03):
Welcome back to the ACU Mortgage and Realty Show.
I'm Brian Wicker, the elder.
That's David Wicker, theyounger over there. Well,
David, this last week was thefirst week, first full week
since implementation of the newbuyer agency fee , uh,
practices, I'm gonna call itunder the National Association
of Realtors Class ActionLawsuit settlement. And as a
refresher, the, the oldpractice for decades was for

(07:27):
listing agents to tell theworld via the multiple listing
service how much they, thelisting broker was willing to
pay a cooperating broker whofound a buyer. Mm-Hmm .
. It's a verysimple system. You just look in
there and you say, well, howmuch is , um, you know, Keller
Williams willing to pay anyother broker who brings a
buyer? And in southeasternWisconsin, the most common

(07:50):
figure we would see was 2.4%.
Mm-Hmm . in otherparts of the state of
Wisconsin, it was very commonto see 3% as a cooperating
broker's percentage. And , youknow , that was kind of the
basic problem that this classaction lawsuit drew out, is
that that practice amounted toprice fixing. And it was

(08:11):
antitrust anti-competitivebecause there was no
negotiation between the buyerand the buyer's agent as to how
much , um, they were gonna becompensated. And so, under the
settlement , uh, one of therules now is that before a
buyer, if they're working witha buyer's agent , um, goes out
and sees any property, theyhave to have a written buyer's

(08:31):
agency agreement, which we'vehad, by the way, for years and
years in the state of Wisconsinthat articulates how the
buyer's agent is gonna getcompensated. You over there,
you're gonna ,

Speaker 3 (08:40):
I just want to , if you want, basically if you want
a private showing to a home ,you must execute a buyer's
agency agreement before youcross the threshold. If you as
a buyer go to a publiclyavailable open house , no such
agreement is required. You cango walk through. So my, my
thing is, you want that privateshowing. You must have formal

(09:03):
representation. Now

Speaker 1 (09:05):
What if you go to a, if , can you still go to an
open house and say, Hey, I'mhere at the open house, but I'm
gonna be working with Fred SchSlamowitz from a BC Realty as
my buyer's agent,

Speaker 3 (09:16):
I guess. Oh yeah.
Why wouldn't you? Right?
Because the only way thatrepresentation works right now
is upon the execution of theagreement, not just
procurement.

Speaker 1 (09:27):
Hmm . Yeah. We'll have to ask some of our friends
who are both attorneys and realestate brokers, what , what
their opinion is on that. Butnonetheless, what we now have
happening is, remember, thereare three parties who can pay
the buyer's agency fee, thebuyer. And that's what
essentially when you're signinga buyer's agency agreement with
a brokerage, you're saying,Hey, help me find a home and

(09:50):
negotiate on my behalf, be myadvocate. And when you do that,
I am willing to pay you. Andthen there's a line on there.
You'll , you know what? Youcould pay 'em an hourly fee,
you could pay 'em a flat fee.
Mm-Hmm . . But Ithink the still most common
thing, I haven't seen that bythe way, on any buyer's agency
agreement yet, it's still apercentage of the , um, offer
to purchase price. And so ifyou write in there, and I've,

(10:11):
I've looked up a couple herefrom this past week. I saw one
where , um, they agreed to pay3%. The buyer said, you know
what? Hey Mr. Agent , I'm gonnapay you 3% of the purchase
price of any home that I buy.
Mm-Hmm. . Then Ilooked at the contract and the
contract said that the listingbroker was willing to pay 2.5%.

(10:33):
So what happens to another halfpercent, David, in my

Speaker 3 (10:37):
Example? Well then, then you as the buyer have to
come up with the difference inorder to make whole what you
signed with your buyer's agentto, for them to represent you.

Speaker 1 (10:48):
That's right. And , um, I looked at another one. Uh
, and so in that example, bythe way, where the, where the
listing broker said, Hey, I'mwilling to pay any cooperating
broker 2.5%. So in thatexample, by the way, the
listing broker cannot publishin the multiple listing service
what amount that they arewilling to pay , uh, to the ,

(11:12):
uh, buyer's agent. And thoughthat would also tell me that
since the listing agent isoffering to compensate buyers
agents, they've got a littlethicker , uh, listing fee.
Whereas another example that Ilooked at , uh, from this past
week, the seller themselves,not their broker, the seller ,

(11:33):
uh, was willing to pay 2% ofthe , um, uh, offer price , uh,
for the buyer's agency fee.
Mm-Hmm. . And inthat example, the buyer had
agreed to pay 2.4. So whathappens to that gap between
what either the seller or theseller's broker is willing to
pay and what the buyer agreedto pay their buyer's agent?

Speaker 3 (11:53):
Well, and then in that example there, if, if the
numbers come together and yourbuyer's agent wants that last
0.4 per what you agreed you asthe buyer, just like your other
example, the gap between 2.5and three, you gotta come up
with that gap as the buyeryourself. Either, either,
either as cash or perhapsyou've got some wiggle room and

(12:17):
your friendly lender is smartenough to say, I can lend you
maybe a little bit more moneyso you don't have to come out
of pocket for that gap. Yeah .

Speaker 1 (12:24):
Yeah. Depending on what your original plan is for
the , uh, that's a good point.
Alright. And then , um, the ,uh, so , so it's, it's no
longer easy. What, what , how,how are listing agents
communicating? What, what doesa buyer's agent or have to do
in order to figure out, hey,what kind of compensation is
being offered?

Speaker 3 (12:42):
The answer is one by one, which is tedious.

Speaker 1 (12:47):
So, so your buyer's agent has to contact a listing
broker and say, Hey, is theseller willing to pay anything?
Uh, are you the listing brokerwilling to pay me anything? Yep
. And then we figure it outfrom there. So it's gotten more
complicated, all with the eyetowards , uh, making things
more negotiable. Yeah . Andhopefully less expensive for
buyers. We'll see if thatactually happens. More on that

(13:10):
as , as the weeks unfold.
Alright, when don't we comeback, David, what are we gonna
talk about?

Speaker 3 (13:14):
I have a home buyer story that I want to get into
'cause it's real life and no maneither rates nor commission
are getting in the way ofpeople getting out there
looking for a house. After thisbreak, you are listening to the
Accident Mortgage and RealtyShow on AM six 20 WTMJ

Speaker 2 (13:29):
Getting you into the home of your dreams. Here's
more of the Accu Net Mortgageand Realty Show with Brian Weer
on WTMJ.

Speaker 3 (13:36):
Welcome back to the Accu Net Mortgage and Realty
Show. I'm David, that's Brianover there. Uh, dad, I would
venture to say that one of thethings you , uh, take honor
from the most if that wasEnglish, is when our clients
send their children orgrandchildren for us to

(13:58):
connect. Yeah . Yeah .

Speaker 1 (14:00):
That , that is a great feeling when they say,
Hey, I trust you so much as ourfamily mortgage lender, that ,
uh, here please take care of myprecious children.

Speaker 3 (14:10):
And so I uh , was in , uh, contact with the daughter
and son-in-law of a many timecustomer who gave that
endorsement like, you need tocall Brian and David. You need
to have a conversation. Andthese buyers already had an
accepted offer. And what Ienjoyed about the conversation,

(14:33):
like when I have the ability tokind of like get into it,
right? Like, let's talk about,I don't, I wanna do more than
just give you numbers. And, andwe did. But there were two
other elements, dad, that I, Italked about with this client
that made it more than justlike, yeah, I got this rate and
these are the closing costs andwe'll see you, you know, at the
closing table. Yeah . Therewere two elements. One, they

(14:56):
are both working professionals.
They are buying a home out inthe western suburbs. And I
posed this question and I triedto frame it in the most like,
gentle way possible. I said, doyou think that there's a
possibility that if you guyshave kids, is one of you gonna
be taking time off to care forsaid child after they arrive?

(15:18):
And the answer is yes. Aha .
One, one of the rea or one ofthe things that led me down
that path, this client isunbelievably financially
strong. They would like to do a20% down payment. Dad and I
asked this, I I, it was thissimple, simple, basically I was

(15:38):
like, why, why do you want todo a 20% down payment?

Speaker 1 (15:43):
Well , let me pause it an answer. 'cause I don't
want to pay for that evilprivate mortgage insurance. Is
that what they were thinking?
Or just because they thought itwas cool?

Speaker 3 (15:52):
It wasn't so much that PMI is evil. And by the
way, I believe PMI is thegreatest invention in the
history of home ownership. Butthat's David's hot take. But
the reason why dad is they'remindful of payment. Hmm . Well,
I'm mindful of payment, but youguys are strong. Like, why are
you guys worried about payment?

(16:12):
Oh, well, payment is derivedfrom income and this is all
going on in my mind as we're onthe phone, I'm like, payment,
you know, obviously you gotta ,you make your payment from your
income probably. It's like,which is why I said, do you
expect your income to bedifferent to change in two or
three or four years? And theiranswer was , well , aren't you

(16:34):
? Yes .

Speaker 1 (16:34):
Aren't you saying it's gonna be less because one
of 'em is not gonna be working?

Speaker 3 (16:37):
Well, exactly. But as like in any financial
decision, you're doing it for areason. You're, you know, this
is, you're you're trying toachieve an outcome. Yeah . And
particularly for home buyers,the outcome is life based .
What is it that they're tryingto, how are they trying to live

(16:57):
their life in this house? And ,and so that, that was helpful
for me to understand. 'causeultimately whether they do a
20% down payment, a 15% downpayment, an 11% down payment,
we are agnostic. Right. I wannadeliver the plan that makes you
comfortable. But here's theother part of the , uh, story.

(17:18):
They're buying a house thatneeds some love.

Speaker 1 (17:22):
Oh, okay.

Speaker 3 (17:24):
and I counseled this home buyer. I
was like, have you gone out?
You know, now they, they havethe house and they know
implicitly, Hey, there's somework that's gonna need to get
done. You know, painting,flooring, whatever else,
landscaping, who knows. Butlike some of the, the , the

(17:47):
immediate tasks, not bigremodels, but just some of
those immediate things I said,I was like, have you gone out
and quantified what , what isthat going to cost you? Yeah.
Where are you gonna get themoney? I hadn't done that yet.
Right. Where are you gonna getthe money to do that? And I
said one thing to keep in mind.
If you want just an easy ruleof thumb for every thousand

(18:08):
dollars you borrow or don'tborrow, it's about a $7 a month
decision. And that's includingthe p if you scope out right.
If you scope out honey, ah ,all the things that we want to
do to just make this housenice, it's gonna be $30,000.
It's entirely reasonable thatyou could decide we're gonna

(18:28):
borrow 30,000 more dollars inour mortgage on the day we buy,
which is a $210 monthly paymentdecision so that they can keep
the cash to do the work thatthey have in mind. Right.
Alright . I , I'm , I'mrunning, I'm running up against
the bottom of the hour here. Ijust, I got like one little
extra nugget on this one that Iwanna reference after we come

(18:50):
back. But now it's time to turnit over to the WTMJ Breaking
News Center.

Speaker 2 (18:56):
Don't break the bank to get into a house. Back to
the Accu Net Mortgage andRealty Show with Brian Wicker
on WTMJ.

Speaker 3 (19:03):
Thanks for hanging out with us here on the Sunday
edition of the AcademicMortgage and Realty Show. The
only edition , although I amhumored when people say that
they hear us on the Saturdayshow and I say show you're
listening to. Yeah . But we'lltake credit any day . This is
the Sunday edition at least.
Uh, so dad talking counseling,a first time home buyer on

(19:29):
beginning with, beginning withthe end in mind. Unlike there
are chapters in the book ofyour ownership of this house.
And chapter one is, you know,getting in there, getting in
there at a , a downstroke and amonthly payment that makes you
comfortable. But then alsolike, you know, hey, there's

(19:50):
gonna be chapter two, chapterthree, chapter four of making
this mortgage better, smarter,cheaper. As I I've joked with
clients, Hey, it's been 25years. Do you know how many
clients from 1999 are probablystill in their mortgage that
you gave them back there at theend of the Clinton
administration? Yeah . In yearone. Yeah . Zero. None of them,
none of them are five yearsaway from paying off that 30

(20:12):
year from 1999. If you are outthere, please call. I would
love to talk to you .
But , uh, the , the otherelement, and we don't really
talk about this a lot, but Iwanted to, I'm gonna put you on
the spot to get your take.
They're closing 35 days in thefuture. Okay. And at the start
of the show we were referencingFederal Reserve, cut this, cut

(20:36):
that date . This data that, HeyBrian, should I float my
interest rate or should I lockmy interest rate? 'cause
there's a lot that could orcould not happen between now
and when I buy my house closeon my house 35 days from now.
Sure. I have my version. What'syour version off the top of
your head?

Speaker 1 (20:56):
Okay, so the technically correct uh, uh,
answer would probably be floatyour rate. Okay. But, you know,
I think the bigger question,and we're gonna talk maybe in
the next segment about , uh,Fannie Mae's future outlook for
interest rates through the endof 2025 is maybe it doesn't
matter. And so if you wannalike not worry about things,

(21:18):
you know, remember we saidtoday's interest rates already
reflect the idea that the Fedis cutting rates some blend of
a quarter and a half, you know,over the next couple of months.
Yep . And uh, so you know, ifyou want peace of mind, you
just want to set it and forgetit, this probably isn't gonna
be the final rate, you know,that, that you end up with for

(21:38):
the rest of your ownership ofthis house or

Speaker 3 (21:41):
For the longest stretch of your ownership.

Speaker 1 (21:42):
Yeah. Yeah. So what's your take on it?

Speaker 3 (21:44):
My take is that being right is a small victory.
Honey, I was Right. Rates didgo down between when we got the
accepted offer and the closingtable and that's gonna save us
Yeah . 36 bucks a month ifyou're right, the victory .

Speaker 1 (22:05):
So you quantified it Yeah . For them in terms of,
hey, if rates went down, whatis that an eighth of a percent
on their loan

Speaker 3 (22:10):
Or even a quarter?
Right? Because again, they'rekind of also thinking about, oh
, down payment, how much ofthis, how much of that. But if
you're right, you are tens ofdollars, right? Yeah. Which is
a lot of anxiety for not a lotof payoff.

Speaker 1 (22:26):
Yeah.

Speaker 3 (22:27):
Because, because if you're wrong, being wrong is
not bad either. Ah honey, I wasfloating our interest rate. I
don't know if I told you thator if you were listening to me
when I told you that, but Ifloated our interest rate and I
was wrong and now our paymentwent up $36 a month.

Speaker 1 (22:43):
Right. That just feels bad.

Speaker 3 (22:45):
Oh yeah, of course.
But it's not that bad. But ofcourse it feels , uh, losing
always feels 2, 3, 4 timesworse than winning . Winning.

Speaker 1 (22:55):
That's right .
That's right. Hey , and thenwhat are these people thinking
in terms of uh, closing costs ?
Do they wanna pay up now? Youknow , that's kind of the other
side of the same it discussionor a cousin to the same
discussion.

Speaker 3 (23:08):
My version is, I asked the client, I was like,
what do you think interestrates are gonna do in the next
18 months? And this client,what's the answer ? This their
, their personal answer was, Ithink they're gonna come down.
Okay. And so I said, if youwant your clo if you want the
rate here, when you buy thishouse this fall, if you want it

(23:31):
to reflect your opinion, youshould not be paying points to
get a lower rate. Why would youpay for a rate that's lower if
you're gonna try to trade it insometime soon in your ex in ,
you know , in the next 18months.

Speaker 1 (23:45):
Yeah . In the next Yeah. Because when you pay
those points in order toachieve a lower rate here in
the fall, let's say inSeptember of 2024, you never
get that money back. No. It'snot like, oh, you know what,
then I , then I refinanced thatloan and they gave me some of
that money back. Nope. Youdon't, it doesn't work that
way. That money is a sunk costas they say. Yeah. Alright. So
a lot, a lot going on there. Uh, anything else to add about

(24:08):
that ?

Speaker 3 (24:09):
No , that was, but it was like one of those
conversations where I alwaystry to ask permission, like,
would it be okay if I kind ofgave you like a little bit more
like I, I'll just give it ifyou're, if you're not really
interested in me telling youall the ways you can think
about this, I'm not gonna Yeah. But when I, when a client
engages in that, you know ,like wholeheartedly, I really

(24:30):
enjoy those conversations.
'cause we get to Yeah, we getto give, we get to talk about
more than just like, oh wellwhat's the principle and
interest on this payment? Andyeah, what are

Speaker 1 (24:38):
The, what's the rate and the closing cost ? Yeah .
It's , it seems like acommodity on the surface, but
you're kind of swinging a bigstick 'cause it's a large
amount of money and so you canuse it as a financial planning,
a family planning tool. Yeah.
Alright , why don't we comeback, David, let's take a quick
peek at what Fannie Mae saysthe future is gonna look like
in terms of interest rates andhome sales. You are listening
to the Academic Mortgage andRealty Show on Wisconsin's

(24:59):
radio station AM six 20 WTMJ.

Speaker 2 (25:02):
Important home buying questions and answers
you can count on. This is theAccu Mortgage and Realty Show
with Brian Wicker on WTMJ.
Welcome

Speaker 1 (25:12):
Back to the Accu Mortgage and Realty Show. I'm
Brian Wicker, the elder. That'sDavid Wicker, the younger,
taller, more handsome of thewicked men. And , uh, David
Fannie Mae is the biggest thingin mortgage lending. My former
employer back, by the way, wayback in the day, 1999, I forget
what year he worked for 'em .
It was the longest year of mylife. 1994 . Okay . But
, uh, they have got the best ,uh, economics department.

(25:34):
They've won awards and um, andso they came out with their
latest uh , predictions on thehousing market for the future.
And they're smart enough that ,uh, they bake in the current
reality. So since we've beentalking about rates coming down
here this great month ofAugust, they've guess what

(25:55):
lowered their interest rateforecast. And so they are now
saying that in the thirdquarter of the year , uh, they
expect the 30 year fixed ratemortgage to average 6.6%. And
that in the fourth quarter,which would be October,
November, and December, theyexpect the 30 year fixed rate
to average 6.4, which by theway is where we are right now.

(26:16):
Yeah. If you wanted to borrow$375,000 on a $500,000 home
purchase , uh, it could giveyou an interest rate of 6.375,
assuming it's seven 80 creditand all the other Right .
Stuff. The a PR would be 3.9,I'm sorry, 6.396, which is
pretty much 6.4. And uh , thenthey see that the , um,

(26:38):
interest rate's gonna continueto feather down , uh, starting
the year of 2025 in the firstthree months at about 6.2 and
then drifting down towards 5.9by the end of 2025. So that's
nice. Mm-Hmm. .
However, despite , despite that, uh, improvement, there are
still , um, they've reviseddownward their forecast for

(27:00):
total existing single familyhome sales. They're now saying
that we're gonna have 4.1million for the year of 2024,
which is only a 1% improvementover 2023 at one time. Weren't
they predicting it was gonna beup like 20% or 15%? Yeah ,
yeah. Yeah. So that's quite thedownward revision. And then ,

(27:21):
um, for all the real estateagents out there, existing home
sales, they are now predictingnationwide that we're gonna
have a 8% better market in2025. So about 4.5 million
units. And then the realproblem , uh, is that new home
construction Mm-Hmm.
, They're proprojecting it's only gonna

(27:43):
amount to 651,000 units, noteven a million that is just so
far below what is needed toreplace the housing stock. And
, um, and now, you know, theDemocratic , um, presidential
candidates is out with aproposal to somehow create 3
million new construction homes.

(28:03):
I have no detail on that. Thatis a really tall order. And
then also to incentivizebuilders to build starter homes
instead of, you know,McMansions.

Speaker 3 (28:15):
Yeah.

Speaker 1 (28:16):
No details on how that's gonna happen, but it's a
nice thing to say , uh, 'causewe need it. But it's a hard
road to , um, to climb becausewe've been below a million ever
since the housing crisis interms of new , um, new
construction homes availablefor sale. I, I

Speaker 3 (28:32):
Read , uh, there's literally not enough sawmills
to do 3 million houses a year.
Okay. like , which Iguess you can make a house out
of other stuff. Cinder blockbamboo. I don't know . You can

Speaker 1 (28:46):
Print one that's with a 3D printer. Um ,

Speaker 3 (28:50):
I can I just, I just also want to note it is my
observation perhaps more thanever that different markets are
behaving different from eachother , uh, in, in dramatic
ways that we really, we've saidfor years and years, you really

(29:11):
can't look to anywhere else inthe country to understand
what's happening in your ownbackyard. I'm saying if our
listeners read any headlineabout the housing market,
America's real estate, you justcan't because Florida is a
basket case unto itself. Uh,the coasts are their own story.

(29:34):
Totally . Yeah . Even thedifference between , uh, you
know, neighborhood byneighborhood here in the
Milwaukee area. Sure there arehomes languishing in in parts
of the Milwaukee market. Itjust doesn't matter. Is that
the market you are looking in?
You you can't, you have to finda great agent, do your research

(29:55):
and understand, oh, I'm lookingin Franklin above half a
million. What's that market?
Right ? 'cause it's gonna bedifferent than Grafton between
two 50 and 300 more than ever.

Speaker 1 (30:07):
Yep . It's, it's the micro market and you know, we
talked a couple weeks ago ormaybe a month ago now it's
different whether you're in ametropolitan area, a micro
metropolitan area, or a ruralarea. Yeah. The supply and
demand, you know, is, isdifferent. You know, when you
cut it that way. Alright, whenwe come back , uh, I saw a
headline in uh, CNBC and it wastalking about how an 85, you ,

(30:29):
you and Tim were talking , uh,when I was gone about
co-signing. Yeah, yeah , yeah.
And that was, that was a greatsegment. Thanks for doing that.
Sure. Because co-signing on amortgage is different than what
this article was about, whichthe headline was 85-year-old
mother who co-signed on studentloan now afraid of losing her
home. . Uh , so let'stalk about that malpractice of
journalism when we come back.

(30:49):
You are listening to theAcademic Mortgage and Realty
Show on AM six 20 WTMJ.

Speaker 2 (30:55):
Find a place to call home without the headache. This
is the Accu at Mortgage andRealty Show with Brian Wicker
on WTMJ.

Speaker 1 (31:03):
Welcome back to the Accu Mortgage and Realty Show.
Thanks for joining us today. SoDavid, there was a story this
last week on CNBC about an85-year-old mother who
co-signed for her daughter'snursing school loans like 17
years ago. And the headline wasthat she's now afraid that the
private student loan lenderNavient is gonna take her
house. And according to the, sothis, this is a discussion on

(31:24):
co-signing and we're gonna makeit the difference between
co-signing on a student loanand co-signing on somebody's
mortgage loan. So unfortunately, uh, they borrowed about 15
grand because nobody has made apayment on the student loan for
17 years. The balance is now upto $31,000. The daughter turned
out to have terrible bipolardisorder and could never work

(31:44):
as a nurse even though she gother degree apparently. And so
she's never made a payment andsomehow the daughter, the
primary borrower has beenexcused from the loan because
of her disability. Huh,interesting. Huh . But now the
85-year-old mother is still onthe hook , uh, for the $31,000
balance and of course can't payit back. What I have a gripe
about is this idea that she'sgonna lose her house. My

(32:06):
understanding is that there'sno way she's gonna lose her
house because she never signeda document that said if I don't
pay back the student loan, youcan sell my property. Yes . And
recoup the money. She did notsign that. What she said is, I
promised to pay back the moneyin full. And so what that
student loan lender is likelygonna do at some point is get a
judgment from the local countycourt that says, this woman has

(32:28):
never paid us back this money.
And the court is gonna say, youcan file a lien against her
real property so thateventually when she or her
estate after she dies, sellsthat home, there will be a
$31,000 lien against it. Yeah.
And, and at that point in thefuture, which could be another,
you know, five or 10 years,they're gonna get their money

(32:50):
back. Mm-Hmm. they cannot force a
foreclosure. Alright. So that'sjust try to clear up
journalism, malpractice andsensationalism. That was a good
example of Yeah . Purefalsehood in my opinion.
Alright . But when you co-signon your son or daughter's
mortgage loan, you're not gonnalose your house

Speaker 3 (33:07):
Or on your parents.
I have seen it the other way,child other way . Co-signing on
parents. Come on. Don't, don'tjust talk it one way. It can go
the other way too.

Speaker 1 (33:14):
That can go the other way. But you know what
you're, what you're doing isyou're not 50% liable for the
debt. You're a hundred percentliable. Oh yeah. But in that
case , uh, everybody who's anowner of that real property,
which is the collateral, soremember a student loan doesn't
have any collateral.

Speaker 3 (33:31):
Your brain

Speaker 1 (33:31):
Car, a car loan has collateral. It says, if I don't
make the payments on the loan,you can come and grab the car
'cause it's collateral. Mm-Hmm. a mortgage
note. If you don't make thepayments you've signed, the
owners have signed an agreementthat says if, if the payments
aren't made on the note, thelender can foreclose on the
property. Yep . Sell it andrecoup their loss. Alright , so

(33:51):
you got an example or a commenton this?

Speaker 3 (33:53):
Well, it's, and it's, we have clients who , uh,
come to us and if them bythemselves on the mortgage
doesn't make sense. Of course,one of the tools that we reach
for is, or we consider is aco-signer. A co-applicant. And
that only works. I had a recentexample this week. Our , uh,

(34:15):
inquiry, our customer had 500credit and that's pretty low.
That is low. And when you've,when you've got 500 credit,
even if your parents arewilling to co-sign, you cannot
be on the loan and get approvedwith 500 credit, because I have

(34:39):
to consider everybody who's onthe borrowed money and who has
the lowest credit score whendoing that analysis.

Speaker 1 (34:45):
That's right. It's a worst of , and let's just
clarify that in our world we'retalking about Fannie Mae,
Freddie Mac, va, FHA, most,most normal loans, it is
possible that a local bank, youknow, the bank of something
east overs shoe Wisconsin.
Yeah. Could say, Hey, you knowwhat, I , I'll I'll accept

(35:08):
your, your low credit score andput you on the loan. But that's
the tiniest of possibilities.

Speaker 3 (35:14):
And

Speaker 1 (35:15):
So what, what's gonna happen in this case,

Speaker 3 (35:17):
In this case, because our , um, um, first
customer inquiry could not hadthe low credit, the only way
forward is for the parents tobuy the home as an investment
property. Okay.

Speaker 1 (35:31):
Is

Speaker 3 (35:31):
That which , which they could still put the
daughter on title. Sure .
Which, so, alright . But we'reall about problem solving.
Right? It's like, let's atleast let's at least understand
the paths available to us basedupon the facts on the ground.

Speaker 1 (35:43):
Well, if you'd like some help , uh, finding your
way to home ownership, we'dlove to help you . And also,
hey , rates are low enough thatyou might be able to refinance
right now. All you gotta do toget started is click on that
blue [e-mail]. That'sall the time we have for
today's show. Thanks for tuningin. You've been listening to
the ANet Mortgage and RealtyShow on Wisconsin's radio
station. AM six 20 WTMJ. The

Speaker 4 (36:04):
Proceeding was a paid program. Advice and
opinions expressed during theACU Net Mortgage and Realty
Show are solely that of thehost or guests of Acuate
Mortgage and ANet RealtyAdvisors and not WTMJ Radio or
Good Karma Brands. Milwaukee,LLC.