Rates:
Well for those who gambled on rates, whoops!
Rates this week worsened, although coming back a little today, due to economic news and what the Federal Reserve said in their meeting on Wednesday.
First some economic news of the week:
- Existing Home sales 5.55M vs est. of 5.38M, good number.
- New Home Sales for September 468,000 vs est. 550,000
- Durable Goods orders -1.2% vs est. -1.1%, 2nd+ month that this is negative, not a happy sign.
- Consumer Confidence 97.6 vs est. 102.5, lower but still a HUGE number over 50.
- Jobless Claims 260,000 vs est. 264,000, still at 40 year low!
- Pending Home Sales -2.3% vs est. 1.0%, big miss!
I want to point out that existing home sales are still on a rise while new home sales are slumping, we are seeing a similar item here in the Treasure Valley, while builders are having a tougher time selling home, evident by spiffs, incentives and paying closing costs. Existing homes are flying off the market!
But it was what the Federal Reserve hinted at, from last month, where the Fed indicated and people were betting that they would start raising rates until Spring, now the wording has changed, and there is a 53% likely hood of them raising rates in December.
This caused the bonds to sell off and we got a small rally in the stock market. The Fed mentioned that the US economy is still growing at a “moderate” pace and they are not worried about global weakness now.
We definitely have fallen out of our trading channel, and might have sunk into a new trading channel, the 4.00% range, rather than the 3.875% range. It will take a few more trading sessions for rates to simmer down. Will be nice to get into a stable trading channel, which is possible, until the Fed meets again.
Lock them, end of the year always bring volatility, and with the Federal Reserve going to potentially raise rates in December, we can only guess how high rates could potentially go.
Text Messaging
As it becomes more and more for people to do business via text messaging, it also becomes more and more important to store those communications. I would highly recommend that if you are doing business via texting with clients, that you get with your broker on your company policy on storing those text messages.
You should also know how to create physical copies of your text messages. For example, I have an iPhone, and to take a picture of the screen, you hold down the Home Button and the Top button (Side button on newer iPhones) and it takes a picture of your screen. Then you can simple print that or email that picture to you for storage.
Flood Rules
With all the focus on TRID and the new disclosures, we almost forgot about all the new Flood Rules that went into affect on October 1st:
Flood rates are not being determined by land value, just building values now.
People won’t have to get flood insurance for structures not used as living areas, i.e. if you have a small shed out in the “back 40” no insurance will be required.
For people who don’t get flood insurance, but it is required, they will get a 45 days notice to get flood insurance, or now the lender will put “forced placed” flood insurance on the property.
The biggest change will come 1/1/2016, Flood insurance will not have to be escrowed, which means the lender will have to collect monthly escrow payments for the flood insurance. AND those payments will now have to be calculated into Debt To Income ratios.
Things to watch out for, and don’t forget, there is LOTS of flood areas in the Boise, Meridian, Nampa and Caldwell area.
Zombie Debt
Yep, it is close to Halloween and we are talking about Zombie Debt. You borrower is prequalified for a great home in the Boise Foothills, with a 720 FICO score and then all of a sudden, the lender re pulls credit and the FICO went down to a 620 because some debt all of a sudden showed up on the credit report. Well it doesn’t mean you are hosed, but the FTC came out with some tips on dealing with this, link here: http://www.consumer.ftc.gov/blog/when-dead-debt-comes-back-life
Speaking of Closing….
Do you know your Idaho Real Estate License number? If not please put it into your phone, or write it down on the back of your business card somewhere. Why you may ask, well because the CFPB requires it for the new Closing Disclosure!
Lead generator
Nothing helps you sell more, or gain more buyers that compliments from past clients, are you asking for testimonials?
It is easier than you think, simple create a 5 question survey and send it to each of your clients as soon as you complete the transaction.
Here is a sample of what I send out to my clients: http://www.375loan.com/contact_about_us/need_your_feedback/
I really thing you would be surprise, because I am, on how many people are willing to give you feed back.
Then you put them on your web site: http://www.375loan.com/contact_about_us/testimonials/
But, I will warn you, make sure they are legit, the CFPB, DOF and IREC will audit those testimonials!!!