Rates
OUCH!
Well BLS unemployment came out to day, expectation was around 130,000 new jobs created, a low number, mainly due to the expectation that the government shutdown would have an affect of the job market.
Well they were wrong and by quite a bit, job numbers came in at 204,000, a HUGE miss.
And with that came talk that the shutdown didn’t really damage the economy as once thought, thus bring up the speculation that the Federal Reserve, seeing these numbers and a couple more we will talk about, will reduce their QE3 bond purchase sooner rather than later.
A few weeks ago there was a 90% chance that the Fed wouldn’t do anything until March and a 50% chance that they wouldn’t do anything until June.
Well that is off the table, and traders are now worried that they could do something as soon as December!
We also had huge numbers coming from the ISM side:
Last week on Friday we has ISM Manufacturing come in really high at 56.4, above 50 is good. And this was a huge jump, ISM manufacture tax into account all aspects of manufacturing a product, labor, supplies, inventory etc. So a large number here means the Manufacturing in the US is picking up, thus more jobs, thus no need for QE3.
This week, ISM Non-MFG cam in at 55.4, another high number. This takes into account services, such as what you and I do, the cashier at MCD or the work at Wal-Mart. This also showed an increase, thus showing the economy is growing.
These 3 reports have all the traders rethinking what the Fed is going to do, and the outlook is negative for rates.
We are in a pure locking mode now, not worth the gamble no matter how well you do in Vegas.
Mortgage Debt Relief Act of 2007
Well this was the law, by which a person who foreclosed or short sale a home, how received a deficiency, i.e. sold for less than it was owed on, could potentially not have to pay Income Tax on that deficiency.
So say borrowed owe $100,000 and home sold for $60,000.00. That remaining balance of $40,000 was typically forgiven by the bank and the borrower was issued a 1099 C.
Before 2007, that $40,000 was taxed. But Bush signed the law giving them a tax break.
Well come 1/1/2014, that law expires, unless Congress extends it, which they have in the past 2x already.
Will they do it again, 50/50 chance. But tell clients, if they short sale or FC after 1/1/2014, they need to get with their CPA, they could be taxed, a lot!!!!
Dates to remember
When writing contracts some dates to remember:
November 11, holiday everyone close, well not me.
November 27th, day before Thanksgiving, no one pretty much works after 12:00 PM
November 28th, Turkey Day
November 29th, Day after, only those who don’t have belly aches or hangovers work.
December 24th, most closes at 12
December 25th, Merry Christmas
Last business day of 2013 will be 12/31.
Lead Generation for you
Here is a GREAT way to get leads.
Under rules created by the MI companies and Federal Law, a borrower has to have Conventional Mortgage Insurance on their home for a minimum 24 months after closing.
So on the 25th month they can contact their Lender to see if they can get this removed, potentially saving the HUNDREDS!!!!!
So here is your script:
Ring Ring: Hello
Realtor: Hello Mr. XXXX, this is Joe Bob (please insert you name here J) I was your Realtor that helped you buy you home.
Realtor: I am giving you a phone call today because it has been 25 months since you purchase you home, and it is time to see if you can get your Mortgage Insurance removed.
Borrower: Really? Well how do I do this.
Realtor: Well first thing we need to do is see if your home has appreciated by the right percentage and or you have paid extra principal.
Borrower: What do I need to do.
Realtor: Well first call you mortgage lender and see what you need to do to make this work. In the mean time I will do a CMA for you for Free to give you an estimated value for your home.
Borrower: WOW thank you!
Realtor: Ok lets get started, and is their anyone else I can help you might know of?
Call me and I can show you where to look on the HUD-1 to see what clients of yours qualify. I guarantee you will get some referral out of it. BECAUSE I DO IT!!!!
Castle and Cook
So the CFPB has caught C & C violating laws in a big and bad way. And it looks like they are going to try and settle with C & C, but it is going to be VERY expensive.
Although C & C are not fully admitting they did anything wrong, they are going to potentially pay past clients $9,000,000 in restitution to consumers. I.e. we screwed the consumer over and are going to pay them back.
So are these consumers going to be happy, knowing this lender hosed them. Probably not. And what about all the Realtors who referred their client to Castle and Cook that got hosed…. Remember Realtor told them to use Castle and Cook…ouch.
Link to CFPB web site here: http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-castle-cooke-for-steering-consumers-into-costlier-mortgages/