The Mortgage Man

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Monday November 10, 2008

Stocks are higher this morning following a rally in the Chinese market after a government stimulus plan for $586 Billion was announced to help relieve their struggling economy.  As the stock market shows signs of life, it will continue to put pressure on bonds this week to hold their current levels above established resistance.

Also scheduled this week, the Treasury Department will be auctioning off $55 Billion in treasury notes which will no doubt put even greater pressure on the bond yield.  If the yield on mortgage bonds falls, mortgage rates will go up to meet the market demand.

Watch rates carefully this week.  If you have a loan in process, it would probably be prudent to lock ahead of potentially bad news in the financial markets.  If you are still looking for a house, or are not ready to lock, it may cost you on your mortgage rates later this week.

Stock Rally Puts Pressure On Mortgage Bonds

Stocks are rallying today sending mortgage bonds lower.

Crude Oil traded below a significant support level around $121 per barrel today, and that triggered bullish sentiments on the stock market.  In addition, Consumer Confidence for June was reported today at 51.9 slightly above the 50.0 that was predicted.  This is not a significant move upward, but it is the first move upward since December.  With oil down and confidence up, traders are pulling money out of bonds and putting it into stocks, and this as you know is not good for mortgage rates.

If you have a loan file in processing currently, I recommend locking your rate on continued volatility in the markets.

IndyMac Bank Collapses Under Its Own Weight

IndyMac Bank closes.

IndyMac Bank Collapses Under Its Own Weight

IndyMac bank has long been recognized in the mortgage industry as a pioneer in technology and its applications to wholesale mortgage businesses.  They have specialized in unique loans for Jumbo customers and outside the box underwriting with regard to income and asset verification.

I can say from my own experiences with the company on a wholesale level that the news is not a complete shock.  It is significant in that it is the second largest bank in history to close down like this.  But, their internal customer service and general underwriting skills have been nothing to write home about (again, this is based on my personal experience with Florida based wholesale operations).

I have had 2 different friends and associates that have gone to work for the company based on blue skies and empty promises, only to run back to their previous employers begging for forgiveness in less than 90 days.  Those in California who use the bank as their retail checking and savings holders have less to worry about than may be reported in the news.  Any accounts with less than $100,000 are automatically covered by insurance provided by the FDIC.  For accounts with more than that, you still may be safe, but stay tuned to the latest news to see how you will be affected by this in the long run.

While the headlines may be a little scary, it is not the time to go put all of your cash in a coffee can and bury it in the back yard.  Don’t panic, just keep yourself informed.

Celebrities In Foreclosure – Latrell Sprewell

Even though he once turned down a 3 year deal for $21 million, Latrell Sprewell might re-think that deal today.

MILWAUKEE — Former NBA star Latrell Sprewell‘s home is up for foreclosure and his yacht sold at auction to help pay off the $1.3 million he owes on the boat, according to court filings.

Sprewell, who once turned down a three-year, $21 million contract extension saying, “I’ve got my family to feed,” has apparently fallen on tough times.

Latrell SprewellSprewell

RBS Citizens NA, or Citizens Bank, filed a foreclosure suit last week in Milwaukee County for the $405,000 home Sprewell bought in the Milwaukee suburb of River Hills in 1994.

In court documents, the bank said Sprewell owed $295,138 in outstanding payments plus interest.

Sprewell failed to make his mortgage payments of $2,593 per month from September 2007 to January 2008, the documents said.

The Associated Press tried to reach Sprewell for comment Monday but a telephone number in his name was disconnected. A message to one of his attorneys, Robert A. Gist of Atlanta, and an agency in New York were not immediately returned.

The 37-year-old Sprewell played 13 seasons in the NBA for the Minnesota Timberwolves, the New York Knicks and the Golden State Warriors. The Milwaukee native was a four-time All-Star, but perhaps best known for choking coach P.J. Carlesimo during a Warriors practice in 1997.

He hasn’t played professional basketball since turning down the $21 million extension from the Timberwolves during the 2004-05 season. He was making $14.6 million at the time.

Last month, Sprewell’s 70-foot yacht, named “Milwaukee’s Best,” was sold at auction for $856,000 to a man from Milwaukee.

It was originally worth about $1.5 million. The bank holding that mortgage, New York-based North Fork Bank, asked that it be seized to pay off $1.3 million in debt.

Sprewell’s firm, LSF Marine Holdings, hadn’t made its $10,322 monthly payments on time or maintained the necessary insurance on the boat, the bank said. Sprewell bought the yacht built by the Italian firm Azimut-Benetti in 2003, according to court records.

A federal marshal seized the boat last summer in Manitowoc, about 80 miles north of Milwaukee, where it was in storage.

The sale price means the bank is still owed about $500,000, and it said in court filings it plans to go after the rest.

Last week, prosecutors in New York said they’d drop their case against Sprewell, who was accused of assaulting his girlfriend in front of their children. Prosecutors in Westchester County said the charges will be dismissed in a year if Sprewell stays out of trouble.

Copyright 2008 by The Associated Press

Celebrities In Foreclosure – Evander Holyfield

Even Evander Holyfield couldn’t avoid the knock out punch of foreclosure.

Evander Holyfield in foreclosure

I have a soft spot for those facing foreclosure in the country today. The economy is shaky, and many people have gotten themselves into homes they couldn’t afford and mortgages that didn’t make sense.

That being said, I’m going to have to go ahead and file Evander Holyfield in the “stupid is as stupid does” folder. According to public notice filed in Fayette County, GA, the former heavyweight champ is in foreclosure on his sprawling estate. This is where it gets good; the (stay with me here) 104 room, 54,000 square foot (yes that is not a misprint) estate is scheduled to go on the auction block on July 1st.

Now, I don’t claim to know anything about Evander Holyfield or his finances. But what I can tell you, as both a mortgage banker and a person with some level of common sense, if you buy a 54,000 square foot home, and you need to have a mortgage on it…….You Don’t Need To Be Living In A 54,000 Square Foot Home. There, i said it. I’m sure most of you are thinking it, but there it is.

A fool and his money are easily parted, and apparently this is just another example of that.

Celebrities In Foreclosure – Michael Jackson

Even the King of Pop is not immune from the foreclosure crisis.

Neverland Ranch foreclosure

It was reported in March that Michael Jackson was in default on the $24.5 million dollar loan on the now infamous Neverland Ranch.  The 2500 acre Santa Barbara County property was saved from foreclosure last month when investment company Colony Capital bought the defaulted loan.  It is not yet known what his intentions are with the property, but for now, he has dodged the bullet.

Jackson bought the property in 1988 and turned it into a miniature amusement park complete with ferris wheel and a roller coaster.  While Jackson’s attorney declined comment over this “Thriller”, it is no doubt that Jackson sees himself as a “Smooth Criminal”.  (I couldn’t help myself)