KCAA: The Mortgage Voice with Jeff Barton (Sat, 20 Jul, 2024)

KCAA: The Mortgage Voice with Jeff Barton on Sat, 20 Jul, 2024

Episode Transcript

(00:00):
NBC News on CACAA Lomela DA sponsoredby Teamsters Local nineteen thirty two, protecting
the Future of working Families Teamsters nineteenthirty two dot org. You're listening to
an encore presentation of this program KCAAThe Inland Talk Express, The Mortgage Voice

(00:26):
with Jeff Barton, your Voice inthe mortgage industry. Each week on this
program, Jeff and his guests sharetheir expertise, personal antidotes, and the
latest industry news to keep you inthe loop. Now to provide you with
insights and help you navigate the consistentlychanging world of real estate lending. Here
is your host for The Mortgage Voice, Jeff Barton. Welcome back everybody.

(00:48):
I'm Jeff Bartner, your Voice inthe mortgage industry, and thank you very
much for tuning into the show.We are here on a terrific day in
the middle of summer. Yes,it is summer, and I know there's
a lot of people running around withtheir kids or looking for some place to
live or rent in the fall time. This is what they call the heightened
sweet spot. In the spring buyingseason turneding into summer buying season. There

(01:12):
is a window by which I thirdor forty percent of the homes in our
area will get sold within this timeframe. And it and it always becomes the
pressurized time frame for a seller becausethe seller wants to sell now. They
don't want to say, Okay,this is what the market is, you're

(01:34):
gonna have to wait three six monthsbefore it sells. No, they want
to sell now. And because we'vehad such a demand on housing in southern
California over the last oh pick ayear, four years, five years,
whatever it is, we've seen pricesrise, mortgage rates rise, and inventory
shrink. And because of that,sellers have an out you know, moded

(01:56):
look at the way it is interms of how quickly their house is going
to So if you're one of thesepeople, you've got kids, you got
a new job, you got tomove, and you're looking around for a
house, I really understand where you'recoming from and how you feel. Again,
I'm Jeff Barton. This is theMortgage Voice. If you want to
see and hear this show, youcan go to YouTube. Jeff Barton.

(02:17):
The Mortgage Voice is our YouTube channel. If you want to hear on Saturday
and Sunday driving around in the Ie, go to KCAA dot Com and that
is our radio station affiliate. We'vebeen with them for all a long,
long time and they do a greatjob at promoting what we do for you,
which is bring you real time informationabout what's going on in the mortgage

(02:40):
market and the hows and the whysof the situation and where we are and
how we got there and how wecan get out of that now. We
also bring to the show a lotof experts, experts in the field of
actual mortgages, actually a real estateagent, people who can say, this
is how I see it, thisis my business today, and these are

(03:00):
the things I can do to helpyou understand what's going on. You want
to use me, you don't wantto use me, that's fine, But
they're gracious enough to come on theshow and share the information, whether it's
the interest rates and where they've beenstuck like a rock in mid air on
a throwout. You can see sevenpercent as a persistent, you know,

(03:23):
six to eight month mortgage interest ratekind of where we've been and where we're
going to continue to be. Eventhough we see some movement and I say
some movement towards interest rate cuts bythe Fed. We're going to get into
a bunch of this stuff, andwe're going to talk about exactly what the
Fed's next move is. And we'veseen some new information come out the unemployment

(03:47):
rate, We've seen inflation data comingout later, and by the time of
the airing of this show, wewill have inflation data. We're probably going
to see slight decrease in the inflation. We're going to see people getting excited
about the inflation being under control andat the same time wanting the FED to
cut interest rates, so tangentially,mortgage interest rates follow as well. Now,

(04:12):
in looking historically at where we arein the interest rate climate, seven
percent, I said it's thirty yearfix. I'll go through that way.
The six point seven six is thethirty year fix, a little bit better.
In the fifteen years at five pointnine to eight, FAHA is at
six point four eight five to one, ARM is at six point five percent,
and the VA loan is at fivepoint eight seven, the two years
at four point six two four,and the ten years at four point two

(04:36):
seven. Now we've had that divergentin the two and the ten and how
the two is obviously worth more I'msorry, yes, is yielding more than
the ten year and has been forover two years, and why that may
be significant now as a pour tento four coming recession. We have a
number of different indicators as the economyhas cooled because of therates that the FED

(05:00):
has higher for longer, and peoplenow are more nervous about slowing economy turning
into recessionary mode and that never bodeswell for anybody. So pick your poison.
You want high or at least somewhathigh inflation, or do you want
the economy that's somehow lessening in termsof the power of what it is for

(05:25):
you and me to be able togo out there and buy a house.
Unemployment, insurance, social Security,other things that are there as a backstop.
We haven't seen really increases in anyof these things in terms of outlays
for either the federal or the state, in terms of how we're looking at

(05:45):
unemployment. So yes, all thesethings are to be considered. Let's go
through a few things that I haveon my list here today rather than just
riffing off the top of my head. Sorry about that. Employment adds two
hundred and six thousand jobs last month. Now, that's right in line with
where they are in terms of thecooling of the labor market. They Jerome

(06:06):
Pile had a number of different thingshe's talked about. He's doing some testimony
and you might catch some of histestimony. You can either do it on
YouTube or look at some of yourfavorite financial channels and catch some of the
highlights. Two quotes I want togive to you what Jerome Paul said,
we now face two sided risks.Now, what does that really mean?

(06:28):
Two sided risks. We've had inflationaryrisks, right obviously, and now we
have economy risks, meaning that okay, if inflation is under control, but
we've seen the economy cool to acertain extent that we may be sliding towards
a negative growth, which, aseveryone knows, a couple of quarters in
a row negative growth, you're ina recession. Are we headed that way?
So there are two sided risks.As long as we've been higher for

(06:51):
longer, inflation has has come undercontrol. Beginning of the year not so
much. But now we've seen inflation, as I say, continued downward trend
as it has been after it reachedits high of about nine percent a couple
of years ago. But there isthe danger that that will lead us into
recession. So the mandate for theFed right is low unemployment and growth with

(07:16):
the economy. So are they achievingthese things? And that's where we are
with Jerome Powell. The second quoteI want to quote to you is quote
labor markets appear to be fully backin balance. So if we're talking about
employment, where are you, You'redriving around, you're listening to me,
you're seeing on YouTube, wherever itis that you get this information. How's

(07:36):
your job? How secure do youfeel where you're working. We see some
of the employment numbers of the twohundred and six thousand that were hired last
month, a lot of them ingovernment. And is that a good thing?
Or is that what we do whenwe're going into a recession? Government
ups their hiring and therefore tries tokeep the numbers of people unemployed as low

(07:59):
as possible as we go through whateverit is now. I'm not saying it's
a recession, but in terms ofwhat they're talking about in employment wise,
and the people who are hired andworking in these sectors, everybody's a little
bit nervous. So that's why whenwe talk about these things right now,

(08:20):
is this the best time to buya house? There's several different factors in
terms of buying a house, aseverybody knows. One, you have to
have the money to be able toafford it. Two, there has to
be availability of housing, and thereis still a lack of housing opportunity and
availability here in Socow. We talkthroughout the year about all the exodus of
people that go from here to otherstates, and there's such a big thing.

(08:43):
Oh, it's this, it's that, you know what it really is.
People can't afford a house. That'sthe bottom line of it. If
you could afford your house, youprobably wouldn't leave here because it's a weatherwise,
it's a great place to live.Just the lifestyle itself, the way
California has a different mentality about itselfand how it self presents to the people

(09:05):
that live here. Now. Youmay not like taxes, you may not
like other certain things that the governmentdoes. Heck, I don't like them
either. However, when it comesto those statistics of people leaving California,
it's really about housing affordability, andwe've had such a lack of it now.
Conversely, if you own a home, we always talk about it your

(09:28):
happiest heck, and your happiest heck, because your house value has gone up
forty percent in the last three years, four years. That's amazing. You
buy for millions now worth a millionfour that's pretty good in terms of you
know what your house is worth todayand what you can do with that particular
equity in your home. We talkabout that. We'll talk about it again

(09:50):
today. We'll talk about helocks,we'll talk about seconds, we'll talk about
redoing your first if in fact,rates ever come down around the sixth percent
rate, if you have a fivepercent mortgage, difference is one hundred bucks
per one hundred thousand. So ifit's a you know, three hundred thousand
dollars house, she's gonna pay anotherthree hundred dollars in mortgage interest. In
terms of getting equity out of yourhouse and being able to afford a six

(10:13):
percent versus five percent mortgage. Anyway, I'm Jeff partner Voice in the mortgage
industry. Really appreciate your listening tothe show, and we will be right
back. You're listening to the MortgageVoice with Jeff Barton. We'll be right
back with more and just a momentfor questions or comments. Send emails to
Info at melibuponding dot Net. Nowback to the Mortgage Voys with your host,

(10:35):
Jeff Barton. Welcome back everybody onJeff Bartner Voice in the Mortgage Industry,
and thank you very much for listeningto the show. As you listen
to us each and every week,you can catch us on the usual suspects,
but also we have a number ofdifferent podcasts that you might be able
to tag into, especially if youalready have derely have a list of those.

(10:56):
Please yes, I do, JeffApple Podcast, Google Podcasts, five,
Spreaker, Stitcher, iHeartMedia, Odyssey, YouTube, podclips dot io,
and the Mortgage Voice dot Com.Mortgage Voice dot com. That's our website.
Go there. You can see andhear all the guests that come on
the show and you can contact themdirectly. And podclips dot io I'm pitching
them all the time. Great placeto go to get a central way that

(11:18):
you can plug into all your favoritepodcasting wants and needs and again podclips dot
io, that's a good place togo. Okay, So we were talking
earlier in a segment about what's happeninggenerally across a lot of what's going on
in the economy, of what's goingon in terms of inflation versus unemployment versus

(11:39):
where are we standing with the interestrates? A lot of good things.
Let's get right to some news touse section. Okay, this is a
quote and you have to guess whosaid it. Unless there is a significant
surge in the rate of unemployment,which is currently not in the forecast.
Unless there is a significant surge inthe rate of unemployment, which is currently

(12:00):
not in the forecast. That means, if in fact, we do get
a surgeon unemployment, we will definitelysee the Fed drop interest rates. So
where are we and who said it? Lawrence? Youun that's right. Nobody
would have guessed that. He's thechief economist for the California Association of Realtors.
We go to him pretty much whenwe're in these transition periods, and
right now we're in one. We'veseen inflation really cool. We've seen,

(12:24):
as Jerome Paul said, the labormarket has really come back into balance.
That would mean that it's pre pandemiclevels. And in that particular time period,
where were we What were we doingbefore pandemic hit and all the unemployment
and then the reemployment and now wehave a balancing out. Another thing to
indicate the balancing out. I don'tknow if people remember, but I harped

(12:48):
on what a cost of lumber wasin the pandemic and how it had gotten
so out of whack. It reallyis one hundred, four hundred and fifty
dollars within that range of one thousandboard feet. That's what lumber costs.
So you're building a house, yougot to figure that in. So costs

(13:09):
during the recession for building a housereally went out of whack with what traditionally
they were, and they went upto sixteen hundred feet per thousand board feet
sixteen hundred dollars when it was fourhundred dollars. So Mortgage News Daily came
out with their chart, and Ijust thought it was interesting to look at

(13:31):
of what the board feet costs today. In February March of twenty twenty one,
sixteen hundred and forty dollars per thousandsquare foot of board feet. Today
four hundred and forty dollars per thousandboard feet. Now that's that's right in
line with where it was prior toand this is where it is today.
Now we don't see a reduction inthat number, but we don't see it

(13:54):
really inflationary way above where it shouldbe where it was during the pre pandemic
level. So this is pretty interesting, and I think there's a lot of
products out there that are going tobe like that. There, let's see.
I have a chart here as wellabout some of the things that cost
less and have come down in pricesto whereby we're looking and comparing them to

(14:18):
pre pandemic type of prices. Hotelprices have come down, Rental costs for
housing have really come down, andcar sales lower prices for them as well.
This shows a weakness in demand,which is why the actual economy,
I mean, the prices for thesethree things have come down, and why
we see things like you know,building materials for housing has also come down.

(14:43):
Where will we be in six monthsa year really depends on what happens
with government spending, what happens withthe inflationary nod. Are we going to
go into one, are we're notgoing to go into them? We're back
to that again. And will theFED reduce the cost of borrowing inner bank,
which in turn reduces the cost formortgages, which of course in turn

(15:05):
unlocks all that equity which would reallyspur demand that's really where we're heading.
I think, I don't know ifit'll be this year or next year,
just really depends. If we havea change in writer at the top of
the presidential run here and we getdon Trump in again, well, that

(15:26):
will spur certain economic activity because cuttingtaxes and cutting regulation that's always a Republican
way by which they can stimulate.If we get up a more of a
Biden swing into this thing, wewill get more government spending. Both of
these guys are not going to doa thing about the debt unless we get
into the military versus social spending kindof argument, which I don't know.

(15:48):
You to me, when you're bailingpeople out or you're helping people out with
contracts from the government, what's thedifference if you're spending on one versus another.
I think one way to look atit is that if we had a
total reduction in spending, that wouldbe good long term. But is it
good for me who wants to buya house tomorrow. No, not really.
I did see an article today itwas incredibly interesting saying that the people

(16:12):
who are gonna pay for the hugeburgeoning, burgeoning I hate that word,
but the huge debt that the governmenthas thrown upon US thirty three trillion dollars
has gone up about twenty trillion inthe last fifteen years. Through the Gulf
War war. Yeah, the GulfWar, Afghanistan War, the tax cuts,

(16:33):
you know, all these things havereally added, like doubled the deficit.
But it's gonna come down to babyboomers having to pay. Now what
does that mean? I don't knowwhat that means. The article didn't say,
but my suspicion is the taxes oninheritance, taxes on transferring wealth are
all gonna go up, and thisis how these particular bills are gonna get

(16:56):
paid. I, for one,I'm in that age. I don't know
exactly what exactly that means for me. Does it mean my property tax goes
up? No, because that's notfederal. What it means would mean a
age bracket kind of increase. Idon't know, but I do know according
to this article, that's what itsaid. So uh take it for what

(17:18):
it is. Fifty four percent ofhome prices rise. Okay, so fifty
four percent is the number I said. Forty percent. Since twenty nineteen,
the average home in the US hasrisen in price fifty four percent. That's
a lot. That's that's that's notthe million to a million four, that's

(17:38):
a million to a million five.That's incredible, million five forty as a
matter of fact. So those peopleout there like myself, maybe this is
what the tax is going to be. It's a tax on unrealized debt,
I mean unrealized the increase in thevalue of your home. I was thinking
a couple of weeks ago, justabout okay, So if we took half

(18:00):
of the increase that people have gottenin their homes, refinance our homes and
paid it to the government, andattacks would that, in fact buy down
the debt. I think it would, And I think buying down the debt
for our kids and grand kids isprobably the best thing we could do in
order to ensure the US has theeconomic legs to be able to withstand whatever

(18:23):
economic issues come up, whether it'sa war, whether it's weather. And
weather is killing us by the way, I don't know if anyone was watching
Hurricane Barrel or the fires in southernCalifornia that are just burning really NonStop.
And apparently we have the fire DepartmentCounty in my house the other day and
they were saying, look, It'snot the dryness per se, although that's

(18:45):
bad. It's the wind. Youcan't control the wind, and it's unbelievable.
I know from my own house.I can attest over the last two
or three years. When it blows, it's blown fifty sixty miles an hour
and you get caught up in somekind of fire issue or the dryness and
a spark. That's what's pushing firesthrough not only here, but in Arizona,

(19:07):
Utah. A number of other stateshave experienced the same kind of wildfire.
We're lucky we got our insurance,and I know we talked about the
horribleness of having to cut all ourvegetation away from the house and being able
to, you know, get thatfire certificate so that we can bring it
to our insurance company and say,hey, look, we have this fire
certificate from a third party country,a company rather, and they've given us

(19:32):
the ability to say, hey,look, we've done everything we can to
prevent fire. Give us our insurance, which they did. But from the
insurance standpoint, oh my gosh,can you imagine trying to predict the loss
that you're going to get every timethere's a fire, especially in southern California
where the population is dense. Imean some areas of California there's nobody there,
so let it burn, right.But in a lot of areas where

(19:55):
there's a lot of brush, yeah, that's a problem. Anyway. I'm
Jeff part and your voice in themortgage industry. Really appreciate you listening to
the show, and we'll be rightback. You're listening to the Mortgage Boys
with Jeff Barton. We'll be rightback with more and just a moment for
questions or comments, send emails toinfo at melagupundames dot net. Now back

(20:15):
to the Mortgage Boys with your host, Jeff Barton. Welcome back, everybody.
I'm Jeff Barton, your voice inthe mortgage industry. Thanks very much
for tuning into the show listening tous on a weekly We come to you
Saturday and Sunday, driving around allthe things you do in order to get
those days done, whether it's you'regoing to church or you're going to the
hardware store, you're just driving thekids around, find something to do.

(20:37):
We are on casey aaam and FMsignals. We're on the big Hill and
we have a signal that carries allover the place. Out to Palm Springs
and western Los Angeles County, southto Orange County and North Ino, but
Sam Bernardine and Riverside Counties. That'sour bread and butter, and we like
to bring to you each and everyweek things that will help you to say

(21:00):
whether you're going to buy a house, whether you need to sell a house,
or whether you're just in the marketor not in the market. There's
certainly a lot of signs one wayor the other, but I'm not the
expert on this area. The guyI bring on usually to talk about it
is George Gonzalez, and I'm luckyenough to have him again today. He
works over at south Land Mortgage.George, how are you, hey,
Jeff, Thanks for having me on. I'm doing excellent. How are you

(21:21):
over there at the beach? Youknow, Nan, you had to throw
that out there. You know,the beach is nice, except sometimes it's
a little cold. To be honest, you'd like to rub that in the
face. I know, I know, I'm sorry, and that's not true.
I just said that because I knewit all right. So, speaking
of hot now, we've gone throughthe spring buying season, which, according

(21:45):
to you know, several sources waskind of a bust. Where are we
right now in terms of both inventoryand houses available? And how is the
market out there in the IE?Well those are those are awesome questions.
So we can start with the inventoryout here in the Inland Empire, you
know, Ontario, Ranch, Cucamonga, Fontana, rialto San Bernadino. All

(22:07):
these areas over here are okay,I mean it's there, there are some
there's more inventory, let's put itthat way. Because there's more inventory,
I've seen in the recent a fewprice reductions on properties okay, longer times
the sell, which means there,you know, more days on the market.
Before as you know, the lastyear two years, they were flying

(22:30):
off within fifteen twenty days sold.Now I think we're up to somewhere averaging
forty five to seventy five days onthe market, depending on you know,
on the area. Sure sure,the hot areas out there are where to
George, the hot areas are thenorthern part of Fontana area and the northern
part of Rancho Cucamonga area. Okay, And that's because the houses are great,

(22:53):
and the school system's great and allthe infrastructure that you need for you
know, that kind of price whatwhat are the as they're getting for those
houses out there. So if you'relooking, let's say, a standard three
bedrooms, two bath in Northern RanchCuckamonga's probably in the eight hundred and fifty
thousand range to start. The NorthFontana, which has the same quality of

(23:14):
the houses, maybe a little bitnewer, same sizes and all that good
stuff, you're looking somewhere in therange probably seven hundred thousand. Is so
about a set of fifty about onehundred hundred and fifty thousand differents after the
freeway that the freeway divides the values, right right? Okay, all right,
So now we talk about the realestate, the real estate inventory and

(23:36):
why it's gone up, and thatthe affordability index here in southern California is
terrible. What is the magic mixthat we have enough houses on the market
where prices come down, yet atthe same time, when we have lower
interest rates, we don't see arush back into the market pushing the prices
back up. Is there sort ofa then diagram I can send people to

(23:59):
to figure this out. Well,the thing about it is, you know,
this is the first time in history, as we all know, where
interest rates are high as well,as housing prices are high, typically it's
you know one or the other,right, you know, and and balance
it out a little bit. Soat this point, the thing that I'm
looking for is I'm telling my buyersis you know, I had a few

(24:21):
of them waiting for for such along time, and then finally I said,
look, let's let's not wait anymore. Let's just jump on something and
get you somewhere in something that youneed now for your family, and you
know, later on down at theline, hopefully when the rates come down,
we can drop your your payment,which will you know, you'll still
get the house you want, exceptyou're just paying a little more upfront for
it, but you'll get it backin the long run. And are you

(24:45):
suggesting to people that they put moreof a down payment so that the payment
between a higher price house one youknow they're paying with seven percent mortgage or
they're about thirty year fixed rate,or are you just saying, look,
let's just get in at the cheapestamount and go for the longer term payment
like a forty year and again,well, those are the two options.

(25:07):
I give them. It's case bycase, you know, and I just
let them I present them the paymentsin comparison with each other, and you
know, and they make the decisionon what's best for them, and so
you know, not every obviously notevery scenario is perfect for the next for
the next person. So yeah,that's basically I do. If they can
afford it and they're comfortable, whyare they waiting? They have the money

(25:30):
for the down payment, there's noreason to wait. You know, you
need to buy a house. Youneed somewhere to live. It's not like
a car, it's not like,you know, a TV. This is
something that you know you're going tobe living in. And you know,
it's hard for people to get thatbecause of the last what we just went
through, all their families and friendsbought them at three percent and throwing it
in their face. And so youknow, that's what's really really been the

(25:53):
hiccup is the people that got thelow rate who are bragging, and the
people who feel left out don't knowif it's time or if they should wait
their turn for three percent rate again, which probably will never come. What
is the hangover time on this threepercent thing? Now, we are almost
two years away from having low interestrates, and we've certainly seen seven percent

(26:14):
pretty consistently for the past I don'tknow, twelve to eighteen months. When
do people forget and say, youknow what, seven percent I can afford
that, let's go get it right. And that's where I think we're about
right now. Okay. As amatter of fact, Chief bernanke today,
I think I heard him on theonline saying that they're asking him what's going

(26:36):
on. I said, you know, they said, you see, we're
well into inflation here, people arestruggling people of this. What are you
guys waiting for? You haven't loweredthe interest rate? That was one of
the suggestions thrown at him, andhe basically said, I'm not going to
talk about that. I'm not givingnobody no needs of which way I'm going
to lean it to. So itwas just basically shut up, is what
he told them. Yeah, Isaw some of that, Powell speaking,

(26:59):
Jerome all speaking at the Senate Subcommitteeor wherever he goes to give his biannual
meeting notice, and what's going onat the FED and how they're planning to
I think what we're going to seeis probably September. That's what everybody's saying.
Seventy five percent chance they lower Fedinterest rates, And as you and
I both know, the FED interestrate is not the mortgage interest rate,

(27:22):
but they tend to follow one another. If the FED rate goes down,
mortgage interest rates can probably go downto so September. And so I don't
know if that is what people hereout there in the world. I mean,
I watch it because I watch Bloombergevery day, But I don't know
if your average person out there who'slooking to buy a house listens to that
stuff, what are you telling them? Well, this, as a matter
of fact, this last month,the vouchers came out for the first round

(27:47):
of vouchers came out for the Dreamfor All programs. Oh you're kidding?
Did you know how many of youpeople got one? I got out of
eight applications. One of my clientsgot one. Great that they're actually looking
for a house right now as wespeak. They're going to go see some
properties tonight with one of my agents. But yeah, so you're gonna notice
in the next thirty sixty ninety daysthere should be more closings right now because

(28:10):
they got these vouchers out there forthese people to use them. So those
might, you know, take inan account for some of the more cooming
upcoming sales that are about to happen. Okay, loan programs, give me
a quick rundown of of what loanprograms are you currently using. I know
you talked a little about the fortyyear, but what else are you doing?
Just the conventional thirty years are themost popular. Twenty percent down,

(28:32):
ten percent down, five percent down, you know, whatever they can can
come up with in their credit score, you know. But there's no fancy
loans out there. There's right,you know, that's basically straight income docs.
If you're self employed, then youknow, we can figure it out
with twelve months deposit bank statements tofind some non QM financing. Different there's

(28:55):
other different ways for self employed,but if you're employed with W two,
the standard is going to be theFAHA, the thirty years or the conventional
thirty years or the VA thirty years, because those are the most popular loans.
So if you're looking for a lowdown payment, it's FAHA. And
if you're looking for maybe you know, the best rate possible, you're still
going with a thirty year fixed.You're just extending out the time you're going

(29:15):
to pay it from thirty to fortythat's correct. Okay, And where are
we on all that? What doesa forty year payment look like in terms
of percentage wise? Are you lookingat like still six and a half to
seven percent on the forty year that'sthe thirty to forty I believe I haven't
priced went out lately because there's onlya few banks that are doing that,

(29:37):
right. That's true, and soI haven't priced went out in the recent
but they're a little bit higher,a little bit probably in the mid sevens.
I see. Okay, Hey listen, we're up against it. That's
a quick ten minutes. I lovehaving you on. You got a lot
of good information, perfect person togive a call. If you could let
people know how they can get intouch with you, that'd be great.
Yeah. My direct number is areacode nine O nine nine zeros zero nine

(30:00):
five six five excellent. George,thanks very much for coming on. Always
appreciated. Thanks. Jeff, appreciateit too. Thank you very much.
That's George Gonzales from Southland Mortgage.I'm Jeff Barton, your voice in the
mortgage industry. Be right back.You're listening to the Mortgage Boys with Jeff
Barton. We'll be right back withmore and just a moment. For questions

(30:21):
or comments, send emails to infoat Melbuthundings dot net. Now back to
the Mortgage Boys with your host JeffBarton. Welcome back, everybody. I'm
Jeff Barton, your voice in themortgage industry. Thanks very much for tuning
into the show, for listening tous. Each and every week we bring
to you some information that's going tohelp you in your decision making process.

(30:42):
I know we're getting to the middleof the summer. I know spring buying
season is over. I know thatyou probably want a house, but you
want to wait until September when theFED might drop rates. Yes, I
know, however, there is alwaysa good time to buy, and every
day is another day that you havean opportunity to go out and find something
you really like in the marketplace,find a great lender and find somebody to

(31:06):
be able to help you guide youthrough this process. And when rates drop,
you can always go back and refinance. I know that's a staid and
true explanation of what did you doin the marketplace, but it is true.
I mean, the opportunities are stillout there. We will see inventories
grow and we will see mortgage interestrates fall. This is what's going to

(31:27):
happen. Now, when it happens, I don't know. I'm not the
prognosticator, but I do have somebodyon the phone right now who may have
some answers. Jennifer Martinez from SierraPacific Mortgage joins us. Now, Jennifer,
how are you? I am doingwell, Jeff, how are you?
I'm pretty good? Well. Youheard that bloated in introduction. Where

(31:48):
do you think we are right nowin this cycle? I mean, I
don't know. You probably caught alot of Jerome Poll's explanation on the hill
today. So what do you think? I mean, I do think that
things are going to get better,right, you know, I have seen
production pick up, so that's anawesome thing. Yeah. So you know,

(32:09):
I think that probably the worst isbehind us, right, and so
we're looking towards brighter days, hopefullysooner than later. Right X And no,
I agree it, And I thinkthe optimism is good. I mean,
we in the mortgage business have beenhammered the past three years, and
knowing that business is going to getbetter when interest rates drop, we always

(32:30):
look towards the unemployment numbers and thosehave not been great. I mean they've
been rising unemployment, but employment numbersare coming down. These are the kind
of things that we say, Okay, we're happy that mortgage intro drates are
going to be lowered, but somepeople are going to be out of a
job. So what are we lookingat in terms of product from Sierra that
we might be able to say canhandle both of those possible outcomes. Well,

(32:54):
so, you know, the CaliforniaHousing Authority rolled out the Dream for
All. Yep, they finally haveissued the vouchers. So I think that
you know, with the sixteen hundredvouchers, you know we're going to see
a lot of first time home buyersget into homes. You know, the
saying you date the right, youmarry the house. I think that's absolutely
true. I don't think that peopleshould be sitting around waiting for these rates

(33:17):
to drop. I mean, ifyou can afford the mortgage payment at the
higher interest rate, I mean Iwould definitely get out there and you know,
get into homes because once those ratesdrop, it's going to be a
seating frenzy again. So right,definitely have an opportunity to get into a
house, I would jump at it. And then you know, refinance later

(33:38):
down the line when rates do dropdown. Now, we got a ton
of equity in most properties, right, I mean I have in my house.
I'm sure that you have in yourhouse. Most people who own a
home are very happy because they've seen, you know, obviously their equity rise
by about fifty percent in the lastfive years. What are you telling people
who want to tap into that butnot mess around with their three percent mortgage?

(34:00):
I mean, some of them,you know, do the line of
credit, right, get a homeequity line of credit and you know,
try to pay off your you know, because credit card debt is at the
maximum it's been in like twenty years, yep. So I think that if
you can tap into that equity,then do so. I mean, in

(34:21):
all honesty, if you look atwhat your credit card payments are compare to
you know, maybe a little bithigher of an interest rate, and yeah,
you are going to have to getrid of that three percent, but
you're also going to get out getrid of the thirty three percent interest rate
for your credit card debt. Soyou've got to look at that and maybe

(34:42):
it makes sense, you know,if you can't do a home equity line
of credit, just get rid ofall that credit card debt. So I
agree. I agree with that onehundred percent. I mean, you know,
the credit card debt has been chokingon us for some time. And
how do you wean people off fromspending money? I mean that's the real
issue here, Not that they shouldn'tspend money on a house, but should

(35:04):
you spend money on I don't know, some frivolous items that maybe not right
now. I mean this is one, yeah, I mean it's so if
you can get rid of those dements, I mean, it may be worth
getting into like a six and ahalf interest rate on your first mortgage,
right. So it's and sometimes likethey have to use their credit cards because

(35:25):
I mean inflation is still high yeap, So they're using it to go buy
grocery. You know, that's doublethan what they were paying two years ago
for grocery. So I mean it'skind of a double edged sword, right.
But if you have that equity,I mean I would probably maybe contemplate
getting, you know, refinancing yourhouse, tapping into that equity and getting

(35:45):
rid of some of those debts thatyou don't necessarily need. I agree.
I think debt is killing us,and I think the federal debt is killing
us more. And at some pointsomebody is going to say stop or we're
going to have an implosion, andthe things that are worth something now aren't
going to be worth the same things. And these are a problem. However,
specifically today, what are give mean example, a couple of the
programs that you have over at Sierrato be able to you know, help

(36:09):
people either first time home buyers orin you know, three year fix rate.
What are you all offering? What'sthe best programs? Well, so,
I mean, I we just rolledout with this W two wagering or
EXPRESSA. Basically it's a streamline it'sa streamline up loan. So we basically

(36:31):
there's a couple of buttons that youcan pressent our system and we will pull
a finicity report, okay, whichbasically pulls the like an income verification as
well as an asset verification. I'munderwriting those loans in twenty four hours,
you know, it's a one twotouch type of loan to where we're getting

(36:52):
them closed, you know, inless than twenty one days. And for
purposes, I mean, that's whatI'm getting a lot of is a twenty
one day close. So it definitelystreamlines the process. I mean, we
do faha, right, we domanual underwrits with FAHA. So let's say
you've got not so great credit,you know, we could definitely work with

(37:17):
you with certain guidelines and get youinto those homes. You know, we
also have we rolled out with thanksstatement programs, a twelve month and a
twenty four month program, as wellas a DSCR, which is the debt
service relief for the you know,the investment properties. My investment pricing and

(37:40):
second home pricing is off the charts, it's on fire. So I'm doing
a lot of that, doing alot of purchase purchases for investors. Okay,
that's good. Now let's just sitdown on that for a second to
give us an overall really specific pictureto your investment type purchases that you're saying,

(38:04):
is it the rate on fire oris just the availability of funds or
ease of transaction? What is it? I mean, it's the rate in
all honesty, it's pricing better thanactually a primary residence right now. And
that's unbelievable. That's great, yes, and so you know, and it's
a streamline process. So there arethings that you know you can do.

(38:25):
Yes, you you know, we'reputting the percent down. But you know,
for people, for people that wantto build up their portfolio, it's
a great product to get into whenyou're you know, getting a loan for
seven in an eighth opposed to sevenand a half when you're purchasing a primary

(38:46):
residence. So it's definitely if youhave the money and you want to build
your portfolio, it's a great product. It's it's almost mind boggling. I'm
thinking, well, why would thebank do that? So I'm trying to
think up questions to ask you aboutyou know. Okay, so you have
this ability to be able to offera cheaper rate on a second home.

(39:07):
Is that because the second homes havemore value? Or if we have a
downturn in the recession, these willget unloaded quickly so you don't have them
on your books. What are youthinking at in terms of you know,
the reason why that would be.I think Wall Street has an appetite for
them. Okay, that's right.So I definitely feel like, you know,

(39:27):
that's a huge part of it.And you know, second homes are
usually the ones that get offloaded first, right, up posting your primary or
an investment property, right right.So you know it's a great product.
It's a great way to build wealth. I agree one hundred percent. And

(39:49):
I also like the fact that youknow the rates are so attractive. You
know, if you're in the businessand this is what you do, absolutely
you'd look at this because otherwise yougo in non QM. You know,
all these invest is there pain anywherefrom eight to twelve percent in terms of
a yearly just to get into aninvestment property. Now you've got something now
that's a second home, so you'renot looking at it necessarily as an investment,

(40:10):
but that's probably what you're selling thesepeople to well, so the second
home order investment probably, So that'spricing is yes, it's just it's I
mean I've brought in probably a dozenthis week, right right, I'm sure
purchases with this product, so Imean, yeah, there's definitely deals being

(40:32):
done. So absolutely, well,they should give you a call you want
to shout out a way by whichpeople can get in touch with you,
that'd be great. Yeah, absolutely, So you can either reach out to
me via email at Jennifer dot Martinezat ss Sam Pas and Paul ms and
marycasncat dot com or give me acall at six one nine five zero two

(40:57):
zero three seven seven. Excellent.Well, thank you very much. We've
come to the end of our littletalk here and I really appreciate it.
That's a lot of good information.Thank you well. I appreciate you,
Joss. It's always a pleasure always. Thank you very much. Jennifer,
we'll talk soon. Okay, youhave a great day, you too.
That's Jennifer Martinez from Sierra Pacific Mortgage. I'm Jeff Barton, your voice in

(41:19):
the mortgage industry. We'll be rightback. You're listening to the Mortgage Voice
with Jeff Barton. We'll be rightback with more than just a moment.
For questions or comments, send emailsto info at Melbukumbings dot net. Now
back to the Mortgage Boys with yourhost, Jeff Barton. Welcome back,
everybody. I'm Jeff Martin, yourvoice in the mortgage industry. Thanks very

(41:40):
much for tuning into the show.Each week we come to you, we
bring you this information that we hopeyou act on. Sometimes it's a wait
and hold, sometimes it's a yougotta do it right now. We are
in and a time period between thespring buying season in the middle of the
summer where people gotta go, wegot to do it now, and people

(42:00):
who can wait are going to waitto see if September is the time when
the Fed drops interest rates and hopefullythe mortgage interest rates will follow. I've
got the best person. He comesto the show all the time. Charles
Giscomb joins us again from United SecurityFinancial to give us some answers as to
really what direction you might be ableto go, what kind of loan products
are out there? Charles, howare you? I'm doing good, Jeff,

(42:22):
thanks for having me again, myfriend. Thank you, buddy,
I appreciate it. And where arewe in this market? It's so confusing.
I'm watch Jerome Powell give testimony,I watch people bark at him for
two hours. I'm like, Istill don't really know what he's doing.
How we're going to get there inorder to satisfy so much demand and yet

(42:43):
so little product, as well asmortgage interest rates, which are scaring a
lot of people out of California andmaybe some other parts of the country as
well. Give us your overview asto what's happening. That'd be great,
absolutely well you know, an interestrate today probably about seven point for on
a thirty year, sixty seven ona fifteen year. So you know,

(43:06):
they're still steadily where they are.They haven't moved too much. They'll fluctuate
up and down, you know,to increasing twelve basis points over the last
seven days. But Jeff, guesswhat. The one thing that that doesn't
matter with that is that due tolimited supply, the home prices hold there's
value. So the reality of itis is with that happening, the values

(43:30):
are still there, which always meansfor Jeff and I when we're talking to
everybody out there, get in thegame. There's still value in the game.
You still can make money. You'renot losing money. Obviously, our
rational head says, we don't serviceupside down debt, but you're not going
to because the market's hold insteads.And so for traditional lending right now,

(43:53):
there are no really great interest ratesor great interest rates that we were used
to two years ago. There's nomore lows twos and threes and fours and
five and six is barely right.We are still back to where we work.
You still can get into the game. And even if a traditional rate
is not attritional mortgage is not whereyour structure is. There are many other

(44:16):
alternative loan programs that can help youget into this game, still help you
have an opportunity to make some moneyor at least to get into a steady
investment so that when things do correctthemselves, you will be able to make
money and you won't lose money.So if these cycles and where we are

(44:36):
now, we're not really quite sure. But Powell said today, he said,
hey, look, we are ina normal employment cycle, meaning that
we are pre pandemic. Normal employmentcycle meaning that you're going to get numbers
that are either going to indicate theeconomy is growing because more jobs are coming
into the market, or that theunemployment rate goes up which means less job.

(45:00):
And that really affects how we lookat a borrower, whether they got
a job obviously right, But inthe realm of investment properties, what are
we looking at different than a traditionalloan in a thirty year fixed rate from
Fannie May. Well, you knowwhat, although the economy, Jeff has

(45:21):
proven itself to be more resilient thanexpected despite what everyone else is saying and
the uncertainties, I feel like theinvestment market and getting into it won Jeff
had mentioned, is probably a betterinvolved compared to the traditional way. There
are a lot of investment property programs, fixing slip programs, you know,

(45:45):
holding rent DSCR loans. These areall loans that individuals can get into without
providing the full traditional mortgage structure andboth right, that's what I'm getting at,
right exactly that means and that meanstwo years of tax returns or W
two's I mean sixty days of bankstatements, which is two months. I

(46:07):
mean thirty days of paycheck stubs whichmeans four weeks too or bi weekly or
so basically, when you have that, when you when you're required to have
that, that is a traditional loan. What Jeff is referring to is the
ability to get into the investment marketif you have a capital that will allow
you to use less documentation and inmost cases what they call it is a

(46:29):
no doc. I know people arenot you know, used the no docks
were very a long time ago.There was a no dock owned and everyone
was using it and then it wentaway. Well now they're back. They're
called stated stated loans, and they'recalled no doc loans and real quick I'll
tell you. They don't require Wtwo's paycheck stubs, tax returns. They're
only require that you show the moneythat you have in the bank as a

(46:51):
down payment or reserves. And itdoesn't matter if the money is a seasoned
or not. You can utilize thosefunds even if they've got into your account
the day before. A long asthey come from you, your business account
and your personal account, you're allowedto utilize those funds as your down payment
and reserves. The other thing isyou can close in an entity name.
What an entity name what we meanis an LLC or a corporation, whether

(47:15):
it's an ES corp or a Ccorp, or even a trust. As
long as it's not in a revocabletrust, you can close it and a
revocable trust. The benefits of theseis to create protection for yourself. It
also acts as as the guarante weare on the loan, so now your
bills come in those entity names.The biggest and the biggest value added service

(47:38):
to a loan like this is thatthese mortgages and liabilities don't show up on
your personal name. Where you cando that, I don't know, but
we can do it here. Jessand the beautiful thing is we would love
to provide some of those things toindividuals. What kind of a down payment
and credit score you need on aloan like that? Surprisingly, obviously there

(48:00):
are some programs that on these programsthat will start anywhere from sixty five percent
LTV, which is thirty five down, seventy five, twenty five down on
up. There are some of theseprograms that we can get you into an
investment property or fixing flip with tenpercent down, same type of loans.
So there are many different loan productsout there, depending on where you are

(48:22):
now. Jeff said, it's it'simportant for the credit scores for these okay,
So, but the minimum credit scorethat we can work in I'm gonna
say this, and I know thephones are gonna go crazy, Jeff,
but we can get into some ofthese loans dependent on the LTV with a
five eighty Fyco score. Okay,So five eighty non QM, you must

(48:43):
have what thirty five percent down?Is that the way they'll do it well
in this loan. You can have, yeah, thirty five percent or thirty
percent down, okay, And ifyou have a Fyco score above six fifty,
it's twenty five percent down. Yeah, well that's really good. And
and I'm sure if you have usin that range, you get even less
down, you get less down,you get a better interest rate, and

(49:06):
you have more options. So allof this is designed to really help people
with you know, obviously challenges orthey're looking at maybe not a traditional type
loan, but something to get into, sink their teeth into, and with
the different options that they have,it becomes an attractive property, an attractive
loan for them to get into.Absolutely, Jeff, it's an attractive loan.

(49:30):
And it's also built for individuals onceagain that don't have traditional financial structure
or our traditional job. Someone that'shome every day working for themselves. It's
more importantly to keep their money asopposed to you know, it's not what
you make, it's what you keep. And in a lot of cases,
you know, if you're not providingyour tax returns and different stuff, the

(49:51):
entrepreneurs look for these type of loansso they don't have to provide that because
I'll tell you, if you're anentrepreneur, most times you're writing everything off
and so your income on taxi statementsdon't look as high even though you may
be doing very well for yourself.But guess what will always look good your
bank statements, whether they're commercial orpersonal, whether they're an LLC or personal,

(50:12):
your bank statements show the real depositsthat's coming through. And that's a
beautiful thing because as long as youcan show the ATR which we always talk
about here, which is the abilityto repay right, you can show that
if there's a loan for you outthere, and this is a great loan
that an individual who doesn't have thetraditional struct financial structure can get into a
loan. A lot of people feellike it's worth the down payment to have

(50:34):
the path of least resistance to getinvolved with this market still and still having
these properties have value and not losingor being upside down. Listen, we
got about a minute left on therefinance of a loan like this, especially
if it's an LLC. Any issueswould that come up later if somebody wants
to get out of the loan they'rein and maybe get a lower interest rate
on a similar type loan and sayless than a year, any issues with

(50:59):
that? No, there is reallyno issues. The one thing about it
is a lot of lenders that weutilize, they will have a prepayment penalty
because they have a lot of fees. They don't have a lot of fees
up front, so they're looking atyou to stay in that loan longer so
that the interest payments that they makeare the money that they make. The
beautiful thing is they give you theoption to buy the pre payment penalty down
to twelve months or less, andso that way you're in this property.

(51:21):
You use it as a strategy toget into a property, but within twelve
months or less, you can refinanceinto a traditional loan or another loan that
may have a better interest rate whenthe interest rates correct themselves. So this
is another great strategy for individuals toget into loans from a strategic standpoint on
a short term strategy, and thenin the longer term strategy, when the
interest rates do correct themselves, youcan refinance into a traditional loan. One

(51:45):
you can refinance into another loan similarto this with a lower interest rate.
It's all there for you. Allyou have to do is reach out and
make sure that you get an informeda loan of exactly like yourself. And
speaking of that, could you shoutup way by which people might be able
to get in touch with you.That'd be great. I sure will absolutely,
Jeff. You can reach me atseven two five five seven seven eight

(52:07):
seven sixty one again at seven twofive five seven seven eight seven sixty one,
or you can reach me at CGiftscom at USF Wholesale dot net.
Charles, thanks very much once againcoming on doing a great job. Appreciate
it. Thank you Jeff for havingme always. Thank you very much.
Charles getscomb from United Security Financial One. Jeff part and your voice in the
mortgage industry, and we'll see younext time you're listening to the Mortgage Voice

(52:31):
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