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All Encompassing Mortgage and Real Estate Thread


UTPhil2006

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7 minutes ago, LCHorn said:

My advice, considering you moved in with your SO and not homeless, is to wait it out rather than reduce price.  The rate environment is significantly distorting demand and it isn’t likely to be as seasonally driven as 2014-2019.  It might be that demand peaks in October because rates are in the 5’s.  
 

I also think the previous prejudice against houses that have been sitting isn’t as strong.

Thanks for the input.  Splitting my bride-to-be's mortgage is a bargain, and if the wait is worth it, I think I can float the mortgage at my house for several more months.  My agent did express some concern with days on market, and suggested a small price decrease just to get showings, which has worked a bit.

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54 minutes ago, South Austin said:

As someone with a house on the market since just before Spring Break, the buyer's market is really, really quiet right now.  I've got a lot of equity in my home, but unless I decide to suck it up and rent for a year or so, I'm going to make a lot less than I had thought at the beginning of the year.

You're fine. 

Anytime the MBS market goes down, I'm going to cry and moan like a little bitch. (It already reversed and is back up 11 on the day)

Rates are going to say in high 6s/low 7s until the Fed makes a cut. 

 

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I love working with "good" investors.   I listed a property that my investor has used as a rental for 10 years.   The tenants moved and left it super clean, but the smell of wet dog is thick in the air.  I'm trying to figure out how I'm gonna overcome this.  

The seller asks me how the property looks, and I tell him everything is great except the dog smell.

"Fuck that...do you have a carpet guy?  Find out how fast we can get new carpet and have your guy call me for a credit card number".  

Booyah.  My carpet guy will measure today and install thursday. 

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16 minutes ago, Aqua Buddha said:

Is the Austin home market cracking?  I saw the story in the WSJ a few weeks ago and now this:

GKLf-EdWMAA8InE?format=jpg&name=large

GKLpmteXoAA3FRx?format=jpg&name=large

I've heard it definitely was.  One of the few places where values are dropping.

This person sounds like an Alexandre Dumas

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Posted (edited)
5 hours ago, LCHorn said:

GSE money is the only game in town and we’ve seen them happily return profits to shareholders rather than adjust pricing to incentivize borrowing.  

Point of parliamentary procedure.  The shareholder in the GSEs is the Treasury, less some of the profits they now allow them to keep to build up capital reserves.

Edited by Surly Bevo
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Posted (edited)
44 minutes ago, Sbbruin said:

I've heard it definitely was.  One of the few places where values are dropping.

I posted this on the inflation thread and got some pushback, but I don't really care.  At a very basic aggregate analysis, Austin residential prices have been dropping since summer 2022.  They're currently down ~ 23%, and approximately even with spring 2021 pricing.  I took the data from the Texas A&M real estate website, which seems pretty legit compared to that of Austin Board of Realtors, etc.

image.thumb.png.b5856d7ded460c745bf7b2f489115475.png

 

Edited by jimmyjazz
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1 hour ago, Aqua Buddha said:

Is the Austin home market cracking?  I saw the story in the WSJ a few weeks ago and now this:

GKLf-EdWMAA8InE?format=jpg&name=large

GKLpmteXoAA3FRx?format=jpg&name=large


This person is really dumb. I want to know who employs them so I can short the stock. In no way is this evidence of the market cracking. This is further evidence that successful people (aka people that make lots of money) can be really fucking stupid. 

The majority of lenders sells loans to investors after closing them so they have more money to lend to other people. It’s not because the loan is risky, that’s stupid. In fact, it’s a sign the loan is not risky since they can easily sell it. 

 

 

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27 minutes ago, jimmyjazz said:

I posted this on the inflation thread and got some pushback, but I don't really care.  At a very basic aggregate analysis, Austin residential prices have been dropping since summer 2022.  They're currently down ~ 23%, and approximately even with spring 2021 pricing.  I took the data from the Texas A&M real estate website, which seems pretty legit compared to that of Austin Board of Realtors, etc.

image.thumb.png.b5856d7ded460c745bf7b2f489115475.png

 

Here is a more recent metric. Down -14.5% from peak. I trust Freddie Mac data more than some fucking Aggy 
 

IMG_0418.thumb.jpeg.bb697f39cb4a598806adeb0e9d0c0fc5.jpeg
 

the above graph is most down metros. Below is the most up metros 

IMG_0419.thumb.jpeg.3ba5deb9dacdccfc565432d6d8daa3a5.jpeg

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Posted (edited)
2 minutes ago, Neonmoon said:

I trust Freddie Mac data more than some fucking Aggy 

Understood, but at least it's not a bunch of local Realtor data, which kinda screams "conflict".

Also, my data was for Austin proper, not Austin MSA, which has seemingly been a little less susceptible to downward price pressure.

 

Edited by jimmyjazz
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42 minutes ago, jimmyjazz said:

I posted this on the inflation thread and got some pushback, but I don't really care.  At a very basic aggregate analysis, Austin residential prices have been dropping since summer 2022.  They're currently down ~ 23%, and approximately even with spring 2021 pricing.  I took the data from the Texas A&M real estate website, which seems pretty legit compared to that of Austin Board of Realtors, etc.

image.thumb.png.b5856d7ded460c745bf7b2f489115475.png

 

 

11 minutes ago, Neonmoon said:

Here is a more recent metric. Down -14.5% from peak. I trust Freddie Mac data more than some fucking Aggy 
 

IMG_0418.thumb.jpeg.bb697f39cb4a598806adeb0e9d0c0fc5.jpeg
 

the above graph is most down metros. Below is the most up metros 

IMG_0419.thumb.jpeg.3ba5deb9dacdccfc565432d6d8daa3a5.jpeg

 

9 minutes ago, jimmyjazz said:

Understood, but at least it's not a bunch of local Realtor data, which kinda screams "conflict".

Also, my data was for Austin proper, not Austin MSA, which has seemingly been a little less susceptible to downward price pressure.

 

All this data looks correct.  And the ABoR data should be ok because its pulled directly from MLS data. Here is through February.  My experience is that prices were still dropping though December/January and stabilized in February/March.  If you look at JimmyJazz trend line, the current prices are just about back on the trend line.  2022 was ridiculous.

 

image.thumb.png.220f7d1820616e60945c2cbb243a24cf.png

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UWM sued for steering

Actual Court Filing

UWM sued for steering. It will be interesting what happens to this case. Probably nothing as UWM has deep pockets, but when I pull up the broker production in my town. They are 100% UWM. Nothing wrong with that as they probably have the best price/product/system but I always chuckle a little when I hear the “we shop so you don’t have to” sales line 

I know @Wulaw Horn is going to come off the top rope in 3…2…

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All I know is that I had a great sideline seat in 2007 when the brokers got fucked by the regulators and it looked to me like the mortgage bankers were able to protect themselves.

 

17 years later and I think the independent mortgage bankers are vulnerable and wholesale banks like UWM and Rocket appear to have grown sufficiently large that they have a created a target on their back.  I wonder if this lawsuit is the first cannon shot.  

5 hours ago, Neonmoon said:

Probably nothing as UWM has deep pockets

You’re relatively new to this and haven’t watched banks disappear overnight like that scene in Brand of Brothers where they faded out all the Currahee guys who didn’t make it to Berchtesgarden.  Everyone thought Countrywide had deep pockets, too.  

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On 4/2/2024 at 5:18 PM, Neonmoon said:


This person is really dumb. I want to know who employs them so I can short the stock. In no way is this evidence of the market cracking. This is further evidence that successful people (aka people that make lots of money) can be really fucking stupid. 

The majority of lenders sells loans to investors after closing them so they have more money to lend to other people. It’s not because the loan is risky, that’s stupid. In fact, it’s a sign the loan is not risky since they can easily sell it. 

 

 

It'd almost as if we've seen this before except not in Texas. 

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On 3/15/2024 at 6:18 PM, UTPhil2006 said:

And that’s fair. Absolutely is. I try to explain my value both mortgage and real estate and try to get the most value for using us. I feel like I’ve been pretty on point on that with you guys. 

Quoted for truth. I feel like I’ve been very transparent for 17 years with y’all. 

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7 hours ago, LCHorn said:

All I know is that I had a great sideline seat in 2007 when the brokers got fucked by the regulators and it looked to me like the mortgage bankers were able to protect themselves.

17 years later and I think the independent mortgage bankers are vulnerable and wholesale banks like UWM and Rocket appear to have grown sufficiently large that they have a created a target on their back.  I wonder if this lawsuit is the first cannon shot.  

You’re relatively new to this and haven’t watched banks disappear overnight like that scene in Brand of Brothers where they faded out all the Currahee guys who didn’t make it to Berchtesgarden.  Everyone thought Countrywide had deep pockets, too.  

I see your point, but these scenarios are a little different. Countrywide had deep pockets, but their implosion was to due with subprime exposure and fraud. UWM isn’t making bad loans to unqualified borrowers or submitting fraudulent loans to GSEs. They required brokers to sign agreements  (spoilered). I don’t know the legalities of it or enforcing it, but they clearly do enforce it. (A Florida district judge dismissed a similar case due to personal jurisdiction, but nothing about the merits of allegation)

Spoiler

IMG_0423.thumb.jpeg.b62cabbed2e3681226f919bf198a04f7.jpeg

 

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While I can’t speak for a top 100 guy, I can say that UWM puts out the best rates almost 95% of the time, and if it was the other 5% we used them as @Dbeasy Can attest. UWM is also incredible at turn times. Like stupid good. I presume it’s another pointless shot across the bow in the Dan Gilbert/Mat Ishbia fight 

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4 hours ago, Neonmoon said:

I don’t know the legalities of it or enforcing it,

I am not a lawyer and nor do I work in the mortgage business.  Contractual stipulations barring an "independent" businesses doing business with other businesses seems rife with opportunity for a motivated lawyer to start nailing asses.

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Posted (edited)

The problem for UWM or others like them is that they don't have "deep pockets". They have great access to credit via their warehouse lines but for them or anybody else in that game if that were to go away the game is up and right quick.  

The basic allegation is that the arrangement post "ultimatum" (or whatever you want to call it) has lead brokers to deliver in many instances substantially all of their loans to UWM when a better option for the consumer cost-wise was available thus breaking the general fiduciary duty an independent broker has to their client's best interests above their own.  

Now that said read another article last night that the collaborators on the research and article I posted have a significant short position in UWM (of course) but I am reminded that Burry, Eisman, Lippman et al also had significant short positions underpinning their motivations.....didn't make them wrong.

So who knows, but could be interesting to see how it all plays out.  

Edited by Surly Bevo
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53 minutes ago, Surly Bevo said:

The problem for UWM or others like them is that they don't have "deep pockets".

That was kind of my point but I also don’t have deep insight into what UWM and Rocket may have done to mitigate this.  In 2007 lots of banks were alive yesterday, dead today because they really didn’t have assets to speak of-they were middle men that sold aggregated loans to other entities.  If those entities aren’t buying or in smaller quantities it can cause cash flow problems super quick.  

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Posted (edited)

This is so fucking dumb. 
to be clear- I don’t even like UWM. I don’t trust them as far as I can throw them. I’m a too 100 broker in the country for them (#6 in the state of Texas) not because I like them but because I can’t afford not to use them. My average clear to close is less than 10 days in an industry where 44 days is average and 30 is considered doing well, and their pricing is pretty good too. 
Mat gonna go to the mattresses over this I bet. 
I also have sent 2M to other than UWM this year. Thats more than the average originator has originated so far this year btw. 

Edited by Wulaw Horn
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12 minutes ago, Storm the Field said:

10-year edging higher on a strong March jobs report:

Participation rate up from 62.5% to 62.7%

January and February revised higher by a net 22K jobs.

 

I locked 9 deals yesterday in anticipation of this report being strong. Nice to finally be on the right side of one. 
MBS down 21. 

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I have a question for the real estate experts here. We own a second home in Lakeway that we currently rent. (It used to have lake views, lol, when there was a lake). Super-wiz NYC investment banker daughter wants to buy a condo in NYC. Can we sell the Lakeway property and use the money to help her purchase a condo in NYC and avoid capital gains taxes if she is the owner of the condo?  

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1 hour ago, TreatyOak said:

I have a question for the real estate experts here. We own a second home in Lakeway that we currently rent. (It used to have lake views, lol, when there was a lake). Super-wiz NYC investment banker daughter wants to buy a condo in NYC. Can we sell the Lakeway property and use the money to help her purchase a condo in NYC and avoid capital gains taxes if she is the owner of the condo?  

I don't claim to be a tax expert, but I think the answer is no.  The only way to avoid taxes is to do a 1039 into another "like" property, or move into the house for 2 years.  

Is she buying a condo, or a co-op? (co-ops are very common in NYC).  If she's buying a condo, you might get away with it if you purchase as tenants-in-common, but then again, I don't know shit about fuck.

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3 minutes ago, Gil Bang said:

I don't claim to be a tax expert, but I think the answer is no.  The only way to avoid taxes is to do a 1039 into another "like" property, or move into the house for 2 years.  

Is she buying a condo, or a co-op? (co-ops are very common in NYC).  If she's buying a condo, you might get away with it if you purchase as tenants-in-common, but then again, I don't know shit about fuck.

Yeah I’m wondering about being on the note with her may help 

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1 hour ago, Gil Bang said:

I don't claim to be a tax expert, but I think the answer is no.  The only way to avoid taxes is to do a 1039 into another "like" property, or move into the house for 2 years.  

Is she buying a condo, or a co-op? (co-ops are very common in NYC).  If she's buying a condo, you might get away with it if you purchase as tenants-in-common, but then again, I don't know shit about fuck.

Thanks for the info. I think you’re right.  Thinking it will be a condo. We used to live/own a co-op in NYC. I never really understood that we actually owned shares in the co-op, rather than the apartment. Hated selling it, but co-op rules required you to live in it for a year every two years. So we would try to time the sale/purchase for next Spring. Thanks again. 

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@UTPhil2006 and the other Texas real estate guys/gals - have any of you heard of Guerilla Investments?  They made an offer on a house we have listed for sale that is Subject To. I have heard of these but have zero experience with them. From the details in the offer, it sounds like a good deal. Good deals make me suspicious though, on the other hand we ReFi when rates were super low, and any rate these days will be almost twice as high 

Thoughts?

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Too late to edit, but probably worth mentioning they are offering my asking price. So probably my biggest concern would be what happens if the house burns down / washes away and they walk?  

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40 minutes ago, UT_OB1 said:

Too late to edit, but probably worth mentioning they are offering my asking price. So probably my biggest concern would be what happens if the house burns down / washes away and they walk?  

If you wanna send it over I can look at the offer 

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16 minutes ago, blacklab said:

Do you not have insurance?

Yes I have insurance, but I’m not positive what happens after they are on the deed. I did find in their FAQ letter that the insurance will stay with me and they are responsible for paying. Not sure still what happens if there is a claim. The money would come to me the way I understand it, and I would send it on, but how do they guarantee people would send it to them?  

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Yes I have insurance, but I’m not positive what happens after they are on the deed. I did find in their FAQ letter that the insurance will stay with me and they are responsible for paying. Not sure still what happens if there is a claim. The money would come to me the way I understand it, and I would send it on, but how do they guarantee people would send it to them?  
If you have to keep asking yourself questions, you already know the answer.
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Posted (edited)
6 hours ago, UT_OB1 said:

@UTPhil2006 and the other Texas real estate guys/gals - have any of you heard of Guerilla Investments?  They made an offer on a house we have listed for sale that is Subject To. I have heard of these but have zero experience with them. From the details in the offer, it sounds like a good deal. Good deals make me suspicious though, on the other hand we ReFi when rates were super low, and any rate these days will be almost twice as high 

Thoughts?

With a “Subject To”, aren’t you still liable for the mortgage? Meaning, you’re hoping the investor makes payments on time. If not, it could negatively affect your credit, but the debt obligation would still be on your credit report. 

Edited by Neonmoon
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Posted (edited)
7 hours ago, TreatyOak said:

Thanks for the info. I think you’re right.  Thinking it will be a condo. We used to live/own a co-op in NYC. I never really understood that we actually owned shares in the co-op, rather than the apartment. Hated selling it, but co-op rules required you to live in it for a year every two years. So we would try to time the sale/purchase for next Spring. Thanks again. 

If your Lakeway property is investment property and you buy the condo - not just help your daughter - and you then treat it as an investment property - which means she rents from you, then you’re in 1031 territory. If you are just helping her then no unless you have leftover homestead tax exemption available - the 2 out of the last 5 years rule under the federal tax code.  
 

TIC might work but you’d want to have a 1031 expert look at it.

don’t know shit about fuck about co-ops.

So your answer is yes you can but probably you won’t - for good reason. 

Edited by troph
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2 hours ago, Neonmoon said:

With a “Subject To”, aren’t you still liable for the mortgage? Meaning, you’re hoping the investor makes payments on time. If not, it could negatively affect your credit, but the debt obligation would still be on your credit report. 

Yep.  The ONLY way to do such a deal is to collect a large enough chunk of up-front cash to cover the payments should the buyer shit the bed.   The buyer's payment needs to go to a 3rd party (escrow-ish) that in turn, pays the existing mortgage. 

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Posted (edited)

I’d love for Austin to bottom out. It’s been a shit 2 years with my wife playing tennis 5 days a week and doing a custom job every now and again. We haven’t started a spec house since 2020. It’s been so bad I wouldn’t even consider click on this thread for the longest time.

Edited by troph
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57 minutes ago, troph said:

If your Lakeway property is investment property and you buy the condo - not just help your daughter - and you then treat it as an investment property - which means she rents from you, then you’re in 1031 territory. If you are just helping her then no unless you have leftover homestead tax exemption available - the 2 out of the last 5 years rule under the federal tax code.  
 

TIC might work but you’d want to have a 1031 expert look at it.

don’t know shit about fuck about co-ops.

So your answer is yes you can but probably you won’t - for good reason. 

Thanks so much. This is really helpful and I think you’re right. I will continue to check but I really appreciate your input. She’s 24 and already making some serious dosh and insanely, would be able to buy her own NYC condo outright in 2025. Investment banking is a brutal profession but the pay is just crazy. 

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17 minutes ago, TreatyOak said:

Thanks so much. This is really helpful and I think you’re right. I will continue to check but I really appreciate your input. She’s 24 and already making some serious dosh and insanely, would be able to buy her own NYC condo outright in 2025. Investment banking is a brutal profession but the pay is just crazy. 

I’ve talked to my son about going that route and doing it for 8-10 years. I’ve talked to him about a number of angles but there is no doubt it’s one of the most lucrative ways to go. To me the gamble isn’t the hours it’s the lifestyle. Which is not to say anything negative about your daughter at all. 

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1 hour ago, troph said:

I’ve talked to my son about going that route and doing it for 8-10 years. I’ve talked to him about a number of angles but there is no doubt it’s one of the most lucrative ways to go. To me the gamble isn’t the hours it’s the lifestyle. Which is not to say anything negative about your daughter at all. 

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. 

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9 hours ago, TreatyOak said:

Thanks so much. This is really helpful and I think you’re right. I will continue to check but I really appreciate your input. She’s 24 and already making some serious dosh and insanely, would be able to buy her own NYC condo outright in 2025. Investment banking is a brutal profession but the pay is just crazy. 

There are a ton of variables buying a condo. HOA, assessments, volatile market values, outside the inside wall problems you cannot control, etc. If you go this route, then you can 1031 exchange and lease back to her for now and then she can buy it outright from you in a couple of years and then you can 1031 into another income producing property anywhere you want unless you want to take the capital gains hit at that time. 

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7 minutes ago, Newdoc said:

There are a ton of variables buying a condo. HOA, assessments, volatile market values, outside the inside wall problems you cannot control, etc. If you go this route, then you can 1031 exchange and lease back to her for now and then she can buy it outright from you in a couple of years and then you can 1031 into another income producing property anywhere you want unless you want to take the capital gains hit at that time. 

This is brilliant. Thanks so very much. Very simple and smart. 

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