Do rates tend to rise on inflation and fears of inflation? Remember that the real interest rate includes both inflation and the nominal rate of interest. In the case of a loan, it is this real interest that the lender receives as income. If the lender is receiving 3.5% percent from a loan and inflation [...]

Greece’s Impact On U.S. Mortgage Rates Turning to Greece, since that situation is certainly impacting our markets, the fear that a) the problems will spread beyond Greece, b) Greece may leave the 11-yr old single currency “euro-zone, or c) this is the beginning of the entire euro experiment are causing a drop in the value [...]

In the past week, we’ve seen promising economic and home price data, but many homeowners are still strained to the point where foreclosure is inevitable—or perhaps “viable” for those deeply underwater homeowners considering strategic defaults. So the often repeated question is: what do late mortgage payments, foreclosures and bankruptcies do to your credit score? A [...]

An Underwriter Explains Why Are Loans So Hard To Approve Lately I have been hearing from producers, some of whom are upset about the current lending environment, some not. But for a slightly different view of things, here is what one very experienced and knowledgeable underwriter wrote to me. This is worth the read even [...]

RELEVANCE OF FHA LOANS Q: Are FHA loans even relevant for the San Francisco Bay Area? A: Yes. In the 9 county San Francisco Bay Area, FHA loan limits are $729,750. With a 3.5% down payment, this translates into a $756,217 home purchase price. So on a condo with $350 HOA dues, all-inclusive pretax monthly [...]

Yesterday was a special day. In the late afternoon I visited Costco, which some people feel simultaneously represents everything that is both bad and good about the retail channel. The change in time over the weekend had made it so the setting sun shone through the front entrance, illuminating the Samsung 46 inch plasma, the [...]

In a market report last quarter, we buried a quotation that’s worth revisiting. It was from investment luminary Dean Witter in May 1933, about 3.5 years after the Great Depression began. He said: “Some people say they want to wait for a clearer view of the future. But when the future is clear, the present [...]

Non-depository mortgage banks had some good news: the FDIC notified personnel that Colonial’s warehouse relationships would continue under BB&T, at least in the short term. Many of Colonial’s assets were purchased by BB&T, including the warehouse facility which appears to be operating “business as usual” and funding loans. There is some nervousness, however, given the [...]

For Californians, property taxes aren’t automatically adjusted to market levels like many other states because Prop 13 imposes a cap on property taxes as the price of your home goes up. But if the price of your home has decreased and you want to appeal your property taxes in San Francisco, below are some good [...]

In our previous post, we highlighted Ben Bernanke’s testimony on the Hill today, and below is a full excerpt from the Fed’s most recent monetary policy report—this is the section discussing what they plan to do with rates as the economy recovers. Monetary Policy as the Economy Recovers At present, the focus of monetary policy [...]