JohnsBlog (articles, news, thoughts, advice)

With today and tomorrow's Fed meeting underway, there has been a .25 rate cut factored into recent market activity, and this will likely play out as expected, with the Fed funds rate reduced to 2%.

Another grumbling in the market is that this may be the last of the Fed rate cuts, coming 7 months after the initial cut in September.  This is good and bad news.  The good news is there have been some signs of life in recent weeks in the economy which have reflected in the stock markets, showing that the worst may in fact be over so far as the financial crisis.  Also, eliminating rate cuts or raising the rates will add more power to the dollar, resulting in balancing oil and commodity prices.  This will also curb inflation which has been on the rise, hopefully strengthening the bond market and lowering mortgage rates.

The downside to this is everyone enjoying their home equity line of credit at prime +/- whatever, may see an increase sooner than later in their monthly payments for both equity loans and credit cards, so everyone robbing Peter to pay Paul and relying on credit to pull them through this crunch may find themselves in a tighter bond.  I guess we'll have to wait and see how this all plays out, but it looks like if nothing else, there may be more stability in the near future throughout the market, which is much needed after months of extreme volatility.

I have a client I did a loan for about a year and a half back now, and after closing her loan, the lender sold it (as nearly all loans are sold) on the market to a different servicer.  Unfortunately, she ended up with ASC (American Servicing Company), and here's the story...

after some medical issues left her out of work for a few weeks, and having her husbands income cut in half due to the recession and his job cutting back hours BIGTIME, she called the lender for fear of falling behind on their payment to see if there was any arrangement which could be made to prevent that from happening.  What did the girl at ASC tell her?

"You may as well just give us the deed back with the keys and walk away"

No, I'm not kidding.  Yes, true story.

In a market where foreclosures are costing corporations and families alike millions upon millions of dollars, THIS is what some horrible employees offer as sympathy and assistance.  I'm sorry to mention a whole company, but to hire someone that is that cold and mean-spirited is a shame.  I hope for ASC's sake that they record that girls call, and ask for her keys to the office, and send her and her personal belongings off to the unemployment line.  How some people have such little compassion for others astounds me.

Just a little note to others with ASC, not that you have much choice in who purchases your loan, but don't expect much help or service from anyone there.

This is in response to recent posts in a forum I belong to, in which many brokers/loan officers are expressing frustration in the fact that this business is becoming more and more difficult to succeed in, as a mortgage loan becomes more of a commodity than a strong asset.

I, too, am extremely frustrated, and disappointed with the way this business is turning.  Many consumers fall into the trap of advertising, application fees, and lies of so many 'commidity lenders'  out there.  What I mean by 'commodity lender' is a lender spending tons on advertising and little on employee training.  It is so easy to walk into this industry and on day 1 be handed a book of cards stating "Sr. Loan Officer" or "Senior Consultant", and many people go along with mortgages from inexperienced, unprofessional, irresponsible brokers simply because they quote the lowest rate, or have a fee that is slightly lower.

I'm not complaining that our fees have been reduced, but I am irate at the fact that the government, consumers, lenders, and investors play the blame game on brokers, when in fact it is ALL of them that have allowed this to happen....from "no point, low fee, low rate" ads online to "no one can do what ______ can" phrases, everyone has been going with the lowest bidder in attempt to save a few bucks on what might be the largest financial move in their lifetime.  Let's use a few analogies....if you've got money to burn, and your indicted for a crime you did not commit, are you going to go w/a public defender, or are you gonna call the attorney that kept OJ out of jail?  Do you pay the same for a burger at a gourmet, 5 star restaurant that you do driving through McDonalds drive-thru?  NO...do you get the same burger?  NO.

Everyones out to save a buck here and there, and have in effect sacrificed quality and the respectability that used to come with this profession.  I will not work for free, nor will any respected professional who knows they are amongst the best at what they do...what I promise is that not one dollar of what my clients spend will go to waste.  I am 24/7 accessible, I will look into myriad loan programs to explore every option for my clients financial well being, and can ensure they're given the loan program that will benefit them the most tomorrow, and for years to come.  I will also offer my referral partners as means for them to save money in other area's of their lives, whether it be insurance, financial planning, taxes, their children's education, etc.  Calling 1-800-CheapMortgage will not do this, and likely will end up costing you the up front savings in addition to extra thousands over the life of a bad loan.

This is not so much a rant or venting as it may seem, just an agreement with some of my peers that this business has become a mere commodity, with rewards going to the lowest bidder, and this is one of the major causes of all the issues which have come about in the business.  I used to believe brokers were looked upon in the same light as doctors and attorneys...those who make a good bit of money, but for doing their job very well, and knowing what's best for their clientele...until it gets back to that way, and people can trust their brokers, and compensate them, rather than leaving a trusted advisor because someone else promised to pay their appraisal, we'll have issues with a commodified industry.

Yesterday was an ugly day for bonds, as they broke through what's recently been a very strong floor of support at the 50- and 100- day moving averages....we've lost a ton of ground over the past week and rates have been heading up, up, up....I think this comes on a bit of disillusioned speculation on the heels of decent economic news...

There hasn't been much to cheer about in the economy over the past few months, and some reports have been downright ugly, obvious indicators of a recession...however, over the past couple weeks, we've gotten reports that haven't been THAT bad....not good, but just not AS bad as they've been...this has caused stocks to pop up, and bonds to lose some major ground, however I'm still seeing indicators that say we're not out of the mess yet.....major companies Pfizer, Roche, and Merrill all reported either missing expectations or having losses, showing not all major players in the game are back on their feet yet.  Also, the Philadelphia fed index came in well below expectations of -15, down to -24.9, the lowest since 2001.  In 2007, the index averaged 5.1, and any negative number signals contraction in economics, so we're still seeing a slide, as the number got worse from March's reading.  What this means is that manufacturing demand for materials and supplies is still on the low.  These factors show that although we're coming out of a recession in some areas and things may be getting healthier, we've still got a lonnnng way to go before these investors should get trigger happy.

Hopefully they'll realize this sooner than later and bonds will gain some strength over the next week or 2...that's my prediction anyhow, we'll see how I stack up against the "experts".  We're still losing ground with the next floor of support well below our current levels, but hopefully we'll go nowhere near that low and rebound above the 50- and 100- day averages again before long.

We shall see!

Alright, not on the topic of mortgages at all, but I'm pretty excited about heading into the city for the Flyers-Capitals game this evening.  I'll be leaving the office at 4 and picking up my dad and heading down, father-son and friends night at the game...

The Flyers have been playing on top of their game, and with hockey being by far my favorite sport and the Flyers my favorite team, it's been great to see them doing so well, especially after last seasons debacle.  If they pull out a win tonight, it will almost certainly wrap up the series...they're getting scoring from everywhere, remarkable goaltending, and solid defense...3 necessary components to a dangerous team...cant wait to see it live tonight!!! 

So the job reports numbers are in...80,000 jobs lost in March, and this is likely an understatement, as revisions will assumably increase this number.  This is the worst loss in 5 years time, and has raised the current unemployment rate to 5.1%, higher than the estimates of 5% that investors were forecasting...

For the past couple of months, I have seen countless articles stating "the country MAY be heading for recession", or "numbers point towards a POSSIBLE recession", however no one seems to want to come out and say it, like recession is a taboo word, and if unsaid, will not become a reality....well, let me take an opportunity to spell it out, as I've been stating for the past couple months and has now been proven true...WE'RE IN THE MIDST OF A RECESSION.....this isn't necessarily a horrible thing though, while many people are suffering job loss and the economy has slowed, recession is just a natural time period in the cycles of capitalism.....a boom is always followed by a bust and that's what we're seeing with the housing market.  Here's a good article on the jobs report and what is means...to me it seems like more negative pub from the media outlets, who I wish would just leave it alone....isn't Brittany Spears doing anything in her life they could focus their articles on???  Jobs Report/Bloomberg

I'm thinking if less attention were being put on scaring home buyers and frightening sellers, this market would turn around a heck of a lot quicker...and government staying out of it wouldn't hurt.

Hello all

As you can tell I've updated the site a bit....added the new Home price index for anyone interested in finding the value of their home

I have also added some more resources, and over the next month or so will be adding a ton more, so please bear with me while I make the changes...Im not very web savvy, so its quite the learning process!!!!

Hopefully the results will be a more accessible, more informative website for you to use in the very near future!