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All Encompassing Mortgage and Real Estate Thread


UTPhil2006

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1 hour ago, Mother mopar said:
14 hours ago, Neonmoon said:
Those 3 rate cuts trending towards no rate cuts this year. 

This shit is not helping me with my effort to move. Here's to 2025 cuts!

Buy now when you can get a deal. Get a free 1/0 buy down. Ask the sellers for a 2/1 buy down. Refinance later. Boom. 

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6 hours ago, Mother mopar said:
15 hours ago, Wulaw Horn said:
Buy now when you can get a deal. Get a free 1/0 buy down. Ask the sellers for a 2/1 buy down. Refinance later. Boom. 

For sure, except I'm building, not buying.

Ah. Missed that part. Carry on. 

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Inflation come in super hot today?  
I had 2 deals not locked ( not mine but my mentees) because we were waiting on her cup points so I assume today we will lose about 50 in the mbs market. 
rise and shine originators and people looking to buy a home- it’s time for your daily kick to the junk! 

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16 minutes ago, Wulaw Horn said:

Inflation come in super hot today?  
I had 2 deals not locked ( not mine but my mentees) because we were waiting on her cup points so I assume today we will lose about 50 in the mbs market. 
rise and shine originators and people looking to buy a home- it’s time for your daily kick to the junk! 

Yep. Will open at 4.50+ more than likely 

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Last year through April I’d closed 10 des. This year through April I will be at 40. There’s absolutely nothing helpful about what’s happening though, other than people are being jettisoned out of the market as far as originators go. 
Hope to hold onto- if you can make it through this (and it will turn at some time) it’s going to be fucking glorious on the other side. 

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Also, @Wulaw Horn, bright side is those 10 deals you locked won’t be calling you and saying “look Gabe, I like you and all but I know the market improved and this other guy is beating you by .25%-I’ve got to do what’s best for my family.”

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On 4/8/2024 at 12:06 AM, TreatyOak said:

As someone who thought I worked insane hours in advertising in NY, her job has been fairly astounding to us. She was a computer engineering major at Duke and interned at Morgan Stanley in NY two summers in school. Since graduation, she has been there full-time. The hours are like nothing we’ve ever seen. She will stay at her job (with a promotion in Aug) and has already accepted a job at another private equity firm & start in Aug of 2025. I have no understanding how the industry works as it seems to have its own unique structure, but perhaps all finance is like that. She has worked on some pretty cool deals, as well. I would encourage it, since your son can bank a lot of money and then be very valuable to so many different companies. 

yeah I think the law equivalent is about 10% less in hours but a whole lot less in pay. I worked 100 hours per week rarely but it happened. 65-70 was pretty standard - a lot of 12 hour days and a few hours to organize, think, catch up on the weekend. not great but manageable when you're young and no kids. but bump that up to 75-80 hours and more often at 100 hours per week and that will burn. but the money and the skills for sure.  good luck to her that's awesome.  world will be her oyster for sure.

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There’s a lot of people w expertise in this thread and I’ve learned a lot. From my untrained perspective, it seems the most high-end properties are relatively unaffected by the downturn in sales prices. All the reductions are really hitting the mid-level inventory. Can someone corroborate this or tell me if this is wrong?

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18 hours ago, LCHorn said:

Also, @Wulaw Horn, bright side is those 10 deals you locked won’t be calling you and saying “look Gabe, I like you and all but I know the market improved and this other guy is beating you by .25%-I’ve got to do what’s best for my family.”

For sure. Had 2 that weren’t locked and just too exposed. 
the bad news is I was going to roll my entire October pipeline (5 loans but still) into a refinance  after the 6 payments had been made. This 1/4 point loss doesn’t help that. Not all the doors I’ve been knocking on. 
It’s not really about the lousy day it’s about putting a nail in the idea of a Refiance boom this summer/fall. Looking like winter at earliest. 
that means a bigger boom later with less originators around to share it, the philosophical side of me says, but most of me is like fuck that shit- let’s do this now. 

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9 hours ago, TreatyOak said:

There’s a lot of people w expertise in this thread and I’ve learned a lot. From my untrained perspective, it seems the most high-end properties are relatively unaffected by the downturn in sales prices. All the reductions are really hitting the mid-level inventory. Can someone corroborate this or tell me if this is wrong?

Work with a couple agents at the 1.5-2M price point occasionally. 50+ percent of their deals are cash. Anecdotal, but yeah/ less rate sensitive the higher you get. 

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Posted (edited)
9 hours ago, TreatyOak said:

There’s a lot of people w expertise in this thread and I’ve learned a lot. From my untrained perspective, it seems the most high-end properties are relatively unaffected by the downturn in sales prices. All the reductions are really hitting the mid-level inventory. Can someone corroborate this or tell me if this is wrong?

Definitely location sensitive, but the lower level buyers are getting hamstrung by rates and other outside forces, whereas higher level buyers and homes, while there are fewer of them, are generally less concerned about rate and/or qualification 

Edited by UTPhil2006
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29 minutes ago, UTPhil2006 said:

Definitely location sensitive, but the lower level buyers are getting hamstrung by rates and other outside forces, whereas higher level buyers and homes, while there are fewer of them, are generally less concerned about rate and/or qualification 

Also when they sell they have appreciation from their purchase and plenty for downpayment, obviously. 

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10 hours ago, TreatyOak said:

There’s a lot of people w expertise in this thread and I’ve learned a lot. From my untrained perspective, it seems the most high-end properties are relatively unaffected by the downturn in sales prices. All the reductions are really hitting the mid-level inventory. Can someone corroborate this or tell me if this is wrong?

What’s high end?  I definitely think the $1m-$1.5m market in Austin is struggling.  It’s better at $2m plus because they are more rare immune. 
 

Most of the mid-level inventory I see in Austin is moving as long as the seller isn’t greedy.  

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Core PPI came in higher. That means CPE is possibly coming in higher later this month. 

Rate cuts ain't happening this summer and this year's outlook ain't so great either. 

I would bet higher for much longer than most people expect or want

image.png.9689c5737f392b7f34381d6ba5da02d0.png

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59 minutes ago, Neonmoon said:

Core PPI came in higher. That means CPE is possibly coming in higher later this month. 

Rate cuts ain't happening this summer and this year's outlook ain't so great either. 

I would bet higher for much longer than most people expect or want

image.png.9689c5737f392b7f34381d6ba5da02d0.png

This is going to be so funny when we get a 50 basis hike in July.  I'm here for it baby.  I'm tired of waiting expectantly- just lean into the suck.  The ride will be that much more glorious on the way back down.  Yeeeee haaaaaw.  

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26 minutes ago, Wulaw Horn said:

This is going to be so funny when we get a 50 basis hike in July.  I'm here for it baby.  I'm tired of waiting expectantly- just lean into the suck.  The ride will be that much more glorious on the way back down.  Yeeeee haaaaaw.  

The reverse jinx isn’t working 

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Just now, UTPhil2006 said:

The reverse jinx isn’t working 

I"m not actually going for the reverse jinx.  I'm just trying to condition myself to this mindset and not worry about rate at all making my life easier b/c the hope is killing me.  Kill all hope and just deal with the suck and figure it will put more people out of business, get more market share and create a bigger refinance boom and more robust market when things finally break loose.  Have to embrace environment instead of pining for a different one. Trying to find reason for optimism or a good step forward. 

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Person calls me Tuesday late asking to be pre approved fast as dream house has multiple offers. Etc. I drop everything and get it done within an hour. They got the house. CPI hits. Now they say rates are too high and went shopping and found an online lender willing to give them an 1/8 better. The aristocrats.
 

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10 hours ago, Neonmoon said:

Person calls me Tuesday late asking to be pre approved fast as dream house has multiple offers. Etc. I drop everything and get it done within an hour. They got the house. CPI hits. Now they say rates are too high and went shopping and found an online lender willing to give them an 1/8 better. The aristocrats.
 

They’ll be back when whomever that was can’t get them approved 

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13 hours ago, Neonmoon said:

Person calls me Tuesday late asking to be pre approved fast as dream house has multiple offers. Etc. I drop everything and get it done within an hour. They got the house. CPI hits. Now they say rates are too high and went shopping and found an online lender willing to give them an 1/8 better. The aristocrats.
 

I don't want purport that I'm some master salesmen but I've had a lot of training and trained up a team of my own and I'd like to think they were pretty good at executing my vision. 

A sales coach will rebut that pricing with "sell them service".  I have tried all kinds of different scripting and I bet it works about 10% of the time, and we have basically built our entire business on supporting a service model over pricing.  I've even table-set by saying "this should be very competitive pricing but if you find something better let's chat on it.", in the hopes of getting a chance to match.  I'm sure you did that, too, because the borrower told you about it and didn't ghost you. 

CSB: I lost a deal two years ago that still stings--jumbo, I connected well with the borrower, he's a new dad (same as me at the time), sent him a Berenstein bears book after our initial phone call, etc.  He's talking to me and the highest production team in Austin (his agent referred both of us) and I loved competing against them because I respected them (they didn't make promises they couldn't keep). 

Anyway, our pricing is very similar and they cut him a deal that I could match but their LO got their first, and he gave them a verbal commitment.  I didn't have any more margin left to give up and couldn't do much but sell him on service after that loan closed, which didn't work work (probably doesn't help that by that point I usually feel like I'm begging). 

Fast forward a few months and our bank is appearing insolvent, my partner and I are looking for a place to land and we've got two options under consideration--a bank that's been purchased by some of our former peers and promises no LLPA's, at least on investment properties (which at the time, a lot of our investors were California engineers, southeast Asian or Asian, and ruthless shoppers, so it's be cheapest or lose the business) and the Austin IMB that we lost that jumbo deal to. 

We're interviewing/being interviewed by the bank president/owner and I brought up that loan (which was originated by his most accomplished LO on his team) and he said "Yup, I'll tell you a secret about her--she's very transactional.", i.e., she understood that bottom-line, if you find yourself competing on price don't fuck around, get to the LOWEST you can stomach right off the bat.  Win it or lose it and move on.  I can get way too precious about trying to maximize profit and it's a bad strategy in that particular contest. 

Back to you, I'm sure doing this already but don't forget to sell him the refinance, but you're going to have to match the rate and maybe beat it. 

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3 hours ago, LCHorn said:

I don't want purport that I'm some master salesmen but I've had a lot of training and trained up a team of my own and I'd like to think they were pretty good at executing my vision. 

A sales coach will rebut that pricing with "sell them service".  I have tried all kinds of different scripting and I bet it works about 10% of the time, and we have basically built our entire business on supporting a service model over pricing.  I've even table-set by saying "this should be very competitive pricing but if you find something better let's chat on it.", in the hopes of getting a chance to match.  I'm sure you did that, too, because the borrower told you about it and didn't ghost you. 

CSB: I lost a deal two years ago that still stings--jumbo, I connected well with the borrower, he's a new dad (same as me at the time), sent him a Berenstein bears book after our initial phone call, etc.  He's talking to me and the highest production team in Austin (his agent referred both of us) and I loved competing against them because I respected them (they didn't make promises they couldn't keep). 

Anyway, our pricing is very similar and they cut him a deal that I could match but their LO got their first, and he gave them a verbal commitment.  I didn't have any more margin left to give up and couldn't do much but sell him on service after that loan closed, which didn't work work (probably doesn't help that by that point I usually feel like I'm begging). 

Fast forward a few months and our bank is appearing insolvent, my partner and I are looking for a place to land and we've got two options under consideration--a bank that's been purchased by some of our former peers and promises no LLPA's, at least on investment properties (which at the time, a lot of our investors were California engineers, southeast Asian or Asian, and ruthless shoppers, so it's be cheapest or lose the business) and the Austin IMB that we lost that jumbo deal to. 

We're interviewing/being interviewed by the bank president/owner and I brought up that loan (which was originated by his most accomplished LO on his team) and he said "Yup, I'll tell you a secret about her--she's very transactional.", i.e., she understood that bottom-line, if you find yourself competing on price don't fuck around, get to the LOWEST you can stomach right off the bat.  Win it or lose it and move on.  I can get way too precious about trying to maximize profit and it's a bad strategy in that particular contest. 

Back to you, I'm sure doing this already but don't forget to sell him the refinance, but you're going to have to match the rate and maybe beat it. 

Always appreciate the feedback. But yeah, if I know I'm competing, I drop my shorts all the way down. It's the best strategy. I've also found that when there's a huge change in pricing, people get sticker shock (very understandably). The shock usually equals looking around. It is what it is. As you know, when people are looking around, they either don't know what they're comparing or the sharks are offering fairytales to lure you in. Again, part of the business. Just frustrating when good service gets discarded like a prom dress. 

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On 4/11/2024 at 7:47 PM, Neonmoon said:

Person calls me Tuesday late asking to be pre approved fast as dream house has multiple offers. Etc. I drop everything and get it done within an hour. They got the house. CPI hits. Now they say rates are too high and went shopping and found an online lender willing to give them an 1/8 better. The aristocrats.
 

Some people suck. 1/8 of a point is a lousy jump off point man. I don’t blame anyone over 1/4. What sucks is they probably shopped your deal over to them and told them beat by 1/8 and we are good. Which/ cool- of you know you are going the lowest route go the lowest route and get with them from the word go, don’t go get everything sorted with you and get white glove service and then fuck you in the ass over a couple bucks. I mean, I’m sure there’s people on here that will consider what they did to be perfectly right and justifiable, but it’s a really shitty way to live and for your sake I hope they get fake cancer and die. 

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On 4/11/2024 at 10:38 AM, jimmyjazz said:

I have no data to back it up, but it feels like the Austin homes that were $1.5M-$2M listings three years ago (in my neighborhood) are being listed at 10%-20% less.  No idea about closing prices.

Austin market has taken the biggest dip

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@Wulaw (et al), any risk of these forward-seeking Refi's potentially getting derailed by short appraisals?  I don't know anything about HOU market, but I would imagine there's quite a few people in CenTex that bought in past 18-24 months who are underwater-ish right now (and seemingly getting worse, depending on their 'hood + price point).

That said, true market value not always reflected in appraisals, espec when it it seems (anecdotally) like the trend overall has been to err valuations in favor of buyer/borrower; at least since prices starting exploding in Summer of '21.

On related note, as someone in the "higher for longer" camp, I tend to think the only thing that would really force the issue w.r.t significant rate cuts would be an undeniable recession with corresponding surge in unemployment.  Under that scenario, I could see prices dropping quicker + further as 2nd homes, rental investors, + Airbnb'ers (of which there are many in TX) find themselves in liquidation mode.  I also would imagine a lot of hopeful refinancers would be DQ'd if they no longer have the jobs/income stability to pass underwriting...which may compel those same people to sell the houses that they can no longer afford.

 

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We haven’t had any issues coming short on appraisals. Outside of the market/loss of job crash scenario I suspect we’ve already hit the low end of houses coming in short. So fingers crossed not an issue, but as we have all seen anything can happen 

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7 hours ago, Muny_Tex said:

@Wulaw (et al), any risk of these forward-seeking Refi's potentially getting derailed by short appraisals?  I don't know anything about HOU market, but I would imagine there's quite a few people in CenTex that bought in past 18-24 months who are underwater-ish right now (and seemingly getting worse, depending on their 'hood + price point).

That said, true market value not always reflected in appraisals, espec when it it seems (anecdotally) like the trend overall has been to err valuations in favor of buyer/borrower; at least since prices starting exploding in Summer of '21.

On related note, as someone in the "higher for longer" camp, I tend to think the only thing that would really force the issue w.r.t significant rate cuts would be an undeniable recession with corresponding surge in unemployment.  Under that scenario, I could see prices dropping quicker + further as 2nd homes, rental investors, + Airbnb'ers (of which there are many in TX) find themselves in liquidation mode.  I also would imagine a lot of hopeful refinancers would be DQ'd if they no longer have the jobs/income stability to pass underwriting...which may compel those same people to sell the houses that they can no longer afford.

 

All those things could happen, sure, and a recession will definitely drive down interest rates and values both (at least almost always that’s what happens) which should make housing more important. 
a couple things to note regarding value as it pertains to refinance:

1) the houses with the least equity are Va and FHA loans, and refinance in those properties don’t require appraisals, merely paying on time 6 months in a row qualifies you for an appraisal-less Refiance 

2) Conventional homes require merely to see 5% equity- starting point on the vast majority of homes is much higher than that 

3) the best comp for a house generally is the purchase price of that house- it’s likely as you mentioned appraiser will err on the side of the borrower

4) the last time this became a systematic problem post 2008 market crash the government rolled out a program to allow this to happen- I’d expect similar here  and it makes sense- if the original loan is backed by Fannie/Freddy no reason not to make a new easier to pay loan also so backed- it’s smarter than letting it default  

recessions mean unemployment rate around 10 typically, right?  So 2X as many people unemployed as currently  I would submit that as minorities and poor are disproportionately hit by recessions, and least likely to own homes it’s unlikely that this would create a large group of homeowners wanting to refinance that cannot- especially in light of point 1 made above- but we shall see  

A recession not caused by housing is generally good for housing in the above sense  

 

 

 

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13 hours ago, closetohumping said:

Austin market has taken the biggest dip

I agree that it has but that’s on sales price, not so much on value.

If you have a $700k loan and bought in 2019 you likely have a 3% or better rate and  there’s just no way you’re going to spend twice that (plus more on taxes) to upgrade unless you REALLY need to.  

Removing these transactions has skewed the sales price numbers.  Appraisers are still finding comps at higher prices, they just have to do more legwork and can’t depend on 5 recent sales in a 1 miles radius.

1 hour ago, Wulaw Horn said:

3) the best comp for a house generally is the purchase price of that house- it’s likely as you mentioned appraiser will err on the side of the borrower

This was very well put, but it’s not purely out of deference to the buyer or so they don’t get yelled at-it’s because we are depending on the market to fundamentally answer this question of value and the price reached is the best evidence of it.  

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