June 29, 2022

I know it is a day late, sorry!! I had to take an exam to complete my Texas and Arizona licensing yesterday. Yes, I passed, but I hate that stuff! I can now do loans in Arizona and Texas so bring those babies my way!!!

Monday was a bloodbath in the mortgage industry, and I have always said that no matter how good it gets, it's going to get that bad too! A big lender First Guaranty Mortgage is likely closing its doors and decided not to buy a bunch of loans they had committed to buy just a week or so ago. They cut 465 of their 600 people that worked there as a possible sale of the company was cancelled. They purchased a small portion of Conventional and Government Loans, but they were a large purchaser of Non-QM Loans, Bank Statement Loans, Debt Service Loans, Foreign National Loans, ITIN Loans, and Asset Depletion Loans. The concern is that rates could increase on these Non-QM loans if investors find the waters are too rough to sell to the remaining players in this market. We have seen this all before, but it was a lot different the last time we went through this.

A couple of significant Mortgage Companies that went public in the past couple of years have struggling stock prices around $1.00 per share. That means they could get delisted from the NYSE, and it would likely put those companies in a takeover position. Does this mean your loans with those companies will not close? NO! It means that they will likely restructure, and having your buyer work with a company in transition is never fun. They would likely close outlets and try to centralize Processing and Underwriting somewhere outside of California, where it is cheaper.

The whole industry was bustling just a year ago, and we hired like mad to keep files moving, and now everyone is slow, consolidating, and concerned. The Refinance shops are all going away, so be careful if your client is doing a Bank Statement loan or working with a lender you have never heard of. I am not trying to scare you, but it is normal in this industry when people get too big and don't consolidate fast enough. Pennymac laid off over 400 people since March, Mr. Cooper laid off 400 +, and Costco closed its mortgage division. On the other hand, we will be here and close what we open as we have done for 26+ years! LOL! Well, there is nothing funny about this market, but you have to laugh, or you start to cry.

Interest rates are a bit better today, but crept a bit higher last week. We need about 60 good days in a row to see some 3% rates again! We have quite a few cool options, including 2/1 buydowns which I will write about on Thursday, and don't forget interest-only loans!
30-year Government Loans (FHA / VA) are in the 5's
Conventional Loans up to $647,200.00 - High 5's low 6's
High Balance Loans $647,201.00-$ 970,800.00 are in the high 5's and low 6's
Jumbo loans above $970,801 are in the high 5's and low 6's.
5/1, 7/1, 10/1 Arms are in the 4's for over $647,201. Under that, don't bother right now!
Bank statement loans - They are available with 10% down again! 7's+ depending on down and credit score.
Stated income loans - I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the high 6's.
0 down loans are in the 5's - 620 credit score min right now! Mid 6's, for the most part, up to $670,000.00 Price.
0 down Jumbo to $975,000.00 - 680 credit score - call for a quote
Private Money lenders - hard Money Loans - 35% down!
No Ratio Loans 30% down
Debt Service Coverage loans with as little as 25% down
Bridge Loans - are typically 6.49 - 6.99% with limited fees - But they get you where you need to go!
Interest rates are subject to change without notice! Above are LA County Loan Limits.

I will be around all week if you have any questions or if someone interested in buying a property! My cell is (661) 714-6258, and my office line is (661) 260-2970 xt. 2222. Please text me at (661) 714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!