What I’m Seeing Right Now (And Why You Should Be Calling Your Past Clients)

I had a couple conversations earlier this week with clients who’ve had multiple mortgage lates in the past 12 months. That’s one of the hardest things to fix once it goes beyond a single 30-day late.
Yesterday, I also spoke with an agent who told me a client I helped last year is now facing a short sale.
That’s not an isolated story. I’m seeing more of this lately, clients struggling both with and without equity.
And that should get your attention.
If you’re not checking in with your past clients right now, you’re missing something important. 

Let's Talk About the Real Issue: Debt-to-Income
We’ve quietly watched debt-to-income ratios climb over the last decade, especially for first-time buyers.
Here's the reality based on what we’ve actually been approving: 

10-Year DTI Trend (First-Time Buyers - Real World – California)

2016: ~37 - 39%
2017: ~38 - 40%
2018: ~39 - 41%
2019: ~40 - 42%
2020: ~40 - 42%
2021: ~41 - 43%
2022: ~40 - 42%
2023: ~42 - 44%
2024: ~44 - 46%
2025: ~45 - 48%+
Now here's the part that should make you stop and think…
DTIs were already high in 2020 and 2021- when rates were in the 2's and 3's.
Let that sink in.
Even when money was cheap, people were still stretching. 

Fast Forward to Today
Now layer in:

• Higher rates
• Higher Insurance
• Higher gas prices
• Higher everything

And many of those same clients?
Their income hasn’t kept up.
That’s where the cracks start to show. 

What This Means for You (And Your Clients)

Some people today:

• Can’t afford to buy their own house back
• Are you one or two payments away from a problem
• Don’t even realize how tight things have become

And the worst part?
Most of them won’t raise their hand and tell you. 

This Isn't About Listings - It's About Being Proactive
I'm not out here trying to chase listings or hoping your buyers turn into sellers.
What I am doing is telling you what I'm seeing on the front lines.
Because there are real opportunities to help people before things get bad.
Maybe they need:

• A refinance strategy
• Debt restructuring
• Payment relief options
• Or just a reality check and a plan
• Maybe they have too much house.
• Maybe they actually need to upgrade.
• Maybe they're quietly struggling.

Make the Call
A simple check-in can uncover a lot:
"Hey, just wanted to see how things are going with the house - anything changed financially?"
That one conversation could:

• Save a client
• Create a plan
• Or prevent a short sale down the road 

Bottom Line
The market didn't create this problem overnight.
DTIs have been stretched for years.
But today's environment is exposing it.
And the agents who stay in touch with their clients are the ones who will:

• Protect relationships
• Create opportunities
• And stay ahead of the curve

Interest Rates
Monday and Tuesday were very solid! Wednesday and Thursday, rates have pulled back a bit, but we are still in a much better place than we were a couple of weeks ago!   

Loan Programs Snapshot

• Government loans (FHA/VA/USDA): in the 5s
• Conventional (≤ $832,750): high 5’s / low 6s
• High-balance: mid 6s
• Jumbo: Low to Mid6s
• ARMs: 5s - 6s

Additional options:

• Bank statement loans (10% down+)
• P&L loans (20% down, no bank statements)
• 0% down options (620+ score)
• DSCR loans (15% down)
• Bridge loans (~7.99%)
• Buydowns (3/2/1, 2/1, 1/0)

Rates subject to change without notice. 

Condo Update

• Good news: None today
• Bad news: Diamondhead – Stevenson Ranch  –  Fannie doesn't like them right now.  I believe there are some repairs going on due to SB-326.    

We love your Non-Warrantable Condo loans!!
Need help checking a condo? Call me, and we can look it up in real time.
Also:

Full California "naughty list" available here:

https://mikemeena.com/non-warrantable-condos/

Let's Connect
If you - or your clients, friends, or family - need guidance, I'm here.

📞 661-291-2222 (Direct)

📞 661-714-6258 (Cell)

📞 661-260-2970 ext. 2222 (Office)

📧 Mike@AugustaFinancial.com

Sincerely,