LaPorte's Blog

LaPorte Group Blog

More Fraud and ID Theft

July 2nd, 2008 12:02 PM

I just saw this article in the Star Tribune today.

An Eagan mortgage company owner pleaded guilty to defrauding several financial institutions out of about $1.8 million and using some of the money to buy homes and "support a lavish lifestyle."

Posted by Joe Springer MMS on July 2nd, 2008 12:02 PMPost a Comment (0)

New BNI Minute

April 11th, 2008 5:04 PM

On Wednesday April 9th, I was looking at a graph of the mortgage bonds which control where the interest rates on our mortgages. They were at almost exactly the same spot as they were back on January 22nd when rates were at their lowest point in over 2 years. The main difference is that the interest rates now are a little over .5% higher since the lenders haven't lowered the rates as fast as they raised them in late January. Rates are still in a very good position even though they haven't fallen as fast.

With that in mind, a good referral for me this week is a friend or neighbor that missed the chance to refinance back in January and wants to take a look at it again. I would like to have a conversation with that person.

Posted by Joe Springer MMS on April 11th, 2008 5:04 PMPost a Comment (0)

Weekend Wackiness

March 16th, 2008 7:46 PM

I think tomorrow morning things are going to go crazy. The news is JP Morgan bought Bear Stearns for $2/share over the weekend. Bear was at about $60/share at Thursday’s close. The Fed also basically insured $30 billion in losses from Bear Stearns in this transaction. They also lowered the discount rate, which mainly affects banks on money they lend back and forth, but will affect the market. Asia is down 4-5% in their days trading.

I think the stock market is going to take a huge hit in the morning with a little bounce by the end of the day. Our bonds and rates should get better, it’s just a matter of how much and how long they stay lowered. The volatility has been outrageous lately and wish things would settle down.

We'll see how my prediction stands tomorrow.

Posted by Joe Springer MMS on March 16th, 2008 7:46 PMPost a Comment (0)

BNI Minute

March 7th, 2008 6:57 AM

I haven't done a BNI Minute in a while, so here goes.

There have been a lot of changes in the mortgage industry recently and the latest is some guidance from Fannie Mae. They have decided certain areas are considered in "declining markets." Some lenders have a taken very strict stance on declining markets and others are more lenient. I have one lender that has the entire Twin Cities metro area in a declining market that requires the appraisal to add comparable properties that have sold within 3 months and to also add pending sales to prove that is what the current market is. I have another lender that has no part of Minnesota in a declining market. This is one benefit of using a mortgage broker instead of a bank. I have over 20 prime lenders with different underwriting guidelines, where at the local bank you have to abide by their guidelines and if your loan doesn't fit it will be declined.

With that in mind, a good referral for me this week is someone that is thinking of buying a home. With the ever changing market, it is a good idea to see exactly what can be done with each specific situation. The sooner the process is started, the better.

Posted by Joe Springer MMS on March 7th, 2008 6:57 AMPost a Comment (0)

Hopkins Remodel Fair

March 3rd, 2008 8:38 PM

I haven't had a chance to talk about the Hopkins Remodel Fair my wife and I attended about a week ago, February 24th.

It was a great time and we talked to many people that were interested in financing a remodel project or buying a new home. I want to thank all of you that came and chatted with me.

Here is a picture of our booth at the Remodel Fair.

Posted by Joe Springer MMS on March 3rd, 2008 8:38 PMPost a Comment (0)

Wow!

February 20th, 2008 2:15 PM

I wrote a little while ago about the major volatility going on right now on the mortgage interest rate market. Well, the rollercoaster ride continues. We have gone from 5.125% on a 30 year fixed on MLK Jr day to 6.5% the day after Presidents day. And now it appears we may be heading back down again.

Take a look at the chart below and notice the severe move down in the mortgage bond the last 2+ weeks. Yesterday alone we had a 100 basis point move down, which I can not remember ever seeing. Then today we start the day down another 34 basis points, only to finish the day up 56 basis points. A 90 point move back the other direction. I hope this trend continues and rates come back down to the mid 5% range.

Posted by Joe Springer MMS on February 20th, 2008 2:15 PMPost a Comment (0)

Rates Heading in the Wrong Direction

February 7th, 2008 2:34 PM

This afternoon we saw rates turn around and go the wrong way on us, and pretty fast. One of the Federal Reserve Presidents spoke a little too openly about his feelings on the Fed rate cuts. Richard Fisher, the only Fed president to vote against rate cuts, said that the rate cuts could "juice up inflation." You can read more about his comments here.

Another Fed president, Dennis Lockhart, spoke today and said that the turmoil in the credit markets was "painful but necessary" and that we are now headed to a "new normal" in how the credit markets work. You can read more about that here.

Now here is a surprise. In an election year, the Democrats and Republicans were able to work together quickly to pass a stimulus package that will send about $600 to most tax payers in the United States. For more info on this happening read this.

Here is a chart of today's movement on the bond market. When the bond falls, our rates on mortgages go up. Fairly early in the day we broke throught the 25 day moving average and headed towards the 50 day moving average before bouncing back a little in the afternoon.

Posted by Joe Springer MMS on February 7th, 2008 2:34 PMPost a Comment (0)

Volitile

February 2nd, 2008 7:43 AM

That is probably the only word to describe the stock and bond market right now. The change in mortgage bonds since Martin Luther King Jr day has taken us from a 30 year fixed rate of 5.25% to 6.25% and now back down to about 5.75%. We have been all over the place and there is no sign of the volitility slowing down.

This week has been a big one for news that can affect the interest rates and today's major news was the jobs report. If the numbers come in higher than expected, that can hurt rates. And if the number is lower than expected, that can help rates. Lately the number has been better and in the next month they will revise lower, giving a better impression of the economy.

Well today the number was expected to be a gain of 71,000 jobs and instead it came in with a loss of 17,000 jobs. We did have revisions that added 11,000 jobs to the previous 2 months though. This morning rates did come down a touch.

Looking ahead to next week, there is not much news that would move interest rates on the schedule. We have a couple of minor reportes on Tuesday and Thursday.

Posted by Joe Springer MMS on February 2nd, 2008 7:43 AMPost a Comment (0)

.5% Rate Cut

January 30th, 2008 3:41 PM

Today we got the expected half point rate cut. The Fed has now lowered the Fed Funds rate to the 2004 level. You can read the Fed Statement Here.

Now I want to discuss what happened on the market after they lowered the rates for the second time in a week and a total of 1.25%.

What has been happening when the Fed has lowered rates is we see an immediate drop in our mortgage rates, then one or two days later, rates move up to levels even with or slightly higher than they were before the rate cut.

The reason for this is that lenders see rate cuts as inflationary. When there is inflation money is worth less in the future, that's why bread used to cost 25 cents instead of $2. The lenders want to protect the money they are lending out and want a larger interest rate for a 30 year fixed or a 15 year fixed rate loan. That is what we are seeing here the last 2 weeks. Last Tuesday we had rates that I have only seen when I first got in the business, then they went up more than I have ever seen in one day.

The main thing to remember is that we still have interest rates that are extremely low, both historically and compared to the last 2 years.

If you or anyone you know has any questions about financing, please feel free to email or call and I will answer any questions you may have.

Posted by Joe Springer MMS on January 30th, 2008 3:41 PMPost a Comment (0)

Fed Slashes Rates

January 22nd, 2008 2:50 PM

The Fed today slashed the Fed Funds Rate by .75% before the market opened this morning. This is the first time the Fed has had a rate cut in between meetings since September 17, 2001 just after the 9-11 attacks. And this is the first .75% cut since 1984.

This helped to make sure the Dow Jones Industrial Average from dropping like other stock markets around the world did. On Monday while the US markets were closed France and Germany stock markets fell by 7%, London's exchange fell just about 5%, and the Asian markets were down 5+%. The cut in rates helped hold our losses to just over 1% or 128 points.

You can read the Fed statement here.

We shall see what the effect is to the economy over the coming months.

My one concern is that lenders see rate cuts as inflationary and tend to want more interest for their long term loans, like the 30 year fixed rate mortgages. Initially today the rates came down and are sitting at lows not seen in over 2 years, but I will be watching to see what happens as more level heads prevail in the coming days and weeks.

I will be sure to keep you posted.

Posted by Joe Springer MMS on January 22nd, 2008 2:50 PMPost a Comment (0)