Brenner Place Historic District (Long Beach, CA)
Brenner Place Historic District (Long Beach, CA) Real Estate News
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Direct Lending taking an edge over brokering loans
Kirk Mulhearn (Prudential California Realty/Gem Mortgage)

Long Beach, Ca.  When buying or selling an REO property, it is much better to go with a direct lender; especially, here is Southern California in that there's quite a bit of doubt about the viability and truthfulness for the pre-qualifications offered by mortgage brokers at the receiving end of a sales contract.  In addition, CNN is reporting more large banks are cutting ties to mortgage brokers, insisting that direct contact with an internal mortgage officer who can explain various products and help borrowers choose one that best meets their needs is essential. Brokers counter that they help consumers by monitoring products and costs of various lenders and that lenders --not brokers-- have the final say when it comes to writing the loan. Perhaps that is why we are seeing a number of former broker shops wanting to become a mortgage banker.  In fact, partly because of this reason, this writer has associated with GEM Mortgage, a direct lender headquartered in Bakersfield, Ca.  From a seasoned mortgage broker's perspective, it is definitely an edge right now to be associated with a direct  bank over brokering loans and I feel that if you are an active real estate agent, then you should stick with a direct lender that you trust and has the experience to ride out this market.   Likewise, if you are a buyer, make sure that you wisely shop your new home loan to several lenders so at to get a feel for the available interest rates.

As you probably are aware, the Stimulus Package is being fast tracked, however one key provision for housing, the $15,000 tax credit will not be a lucrative as we originally thought.  Senate lawmakers have agreed on a nearly $790 billion stimulus package, with the House expected to vote on the plan by the weekend and the legislation to arrive on the president's desk by Feb. 16. The bill comprises four main categories: investments in health care and alternative energy; funding for "shovel-ready" infrastructure projects; tax breaks for people and businesses; and aid to state and local governments. Initial reports showed that the bill includes $282 billion in tax breaks. However, the final package will substantially reduce the Senate's proposed $15,000 tax credit for home buyers, placing income limits on who could benefit and reducing the overall cost from $35 billion to about $5 billion.  Not what we would have hoped for, but perhaps better than a poke in the eye as they say.

Equity market off to an unpleasant start this AM as skepticism is creeping in on the impact of the stimulus package and jobless claims climbed to a new record.  "The market is deeply cynical of what's going on and no one in Washington has any more idea than a goat what they're doing," said Peter Sorrentino, who helps manage $15.5 billion at Huntington Asset Management in Cincinnati. "Unemployment numbers are going to be bad for a while.  Wall street seems to be saying " President Barack Obama's stimulus plan will be insufficient to avert the biggest U.S. economic decline since 1946 as consumer spending posts its longest slide on record, according to a monthly Bloomberg News survey. The world's largest economy will contract 2 percent this year, half a percentage point more than last month's forecast, according to the survey.

With this concern in the equity market it has curtailed the increase in pricing from the last several weeks. Treasurys remained higher Thursday, pushing yields down, after a report showed continuing stress in the employment market amid rising concern that lawmakers' plan to stimulate the economy will not be effective. Yet on a positive side, retail sales were surprising improved in January. "U.S. Treasurys are lower in yield on concerns that the U.S. stimulus package will not be sufficient enough," said Thomas di Galoma, head of U.S. government bond trading at Jefferies & Co.  Investors often seek the relative reliability of U.S. government debt as an alternative to riskier assets, including stocks, when the economy declines. So where does that leave us this morning.  I still think rates will relax after the huge government auctions are over with and while investors remain in a skeptical mood, we should see rates moving back from our current highs in the next few weeks.  So says the great "Oracle" of Bakersfield.  For now your pricing for 30 year fixed rate loans is about the same as yesterday. Currently, the Ten Year yield is at 2.79% (2.82% yesterday) Remember tomorrow is a short lock day and with the long President's weekend, make your lock decisions early.

According to "The Wall Street Journal," the city of Las Vegas wants to use two million dollars of the economic stimulus for new neon signs. City officials are concerned, since they don't want to make the city look tacky.  Appearances are everything. If you want to lighten your day, you can see some humorous looks at the so called Stimulus package.  Enjoy.

Kirk Mulhearn, a Long Beach Real Estate Broker and Professional Mortgage Planner, may be contacted at:  562-989-4608 ext. 110

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The Long Beach Mortgage Report: Fico is revising credit scoring models
Kirk Mulhearn (Prudential California Realty/Gem Mortgage)

The Long Beach Mortgage Report: Fico is revising Credit Scoring Models

Long Beach, Ca.  On the Credit Front.   Credit scores and the system are being revised.  Fair Issac will start offering the revamped score, "FICO 08," to lenders. Fair Isaac believes that the new score will do a better job of predicting borrower defaults, be more forgiving of one-time slipups, take a harder line on repeat offenders, and in general will do a deeper analysis of borrowers with poor or thin credit histories. The score will still range from 300 to 850.

Hard to believe January 2009 is almost over.  This morning market is being driven by shrinking manufacturing numbers.  A government report today showed the U.S. economy shrank at the fastest pace since 1982 in the fourth quarter as consumer spending slid the most in the postwar era. Gross domestic product contracted at a 3.8 percent annual pace from October through December, the Commerce Department said in Washington. Prices also retreated. The Institute for Supply Management-Chicago said today its business barometer decreased to 33.3, the lowest reading since March 1982, from 35.1 the prior month. Readings below 50 signal a contraction. As a result, the Ginny Mae 4% mortgage backed bond pricing is up 6/32nds at present and 30 year mortgages should be better priced this AM to yesterday close.  Currently, the Ten Year yield is at 2.80% (2.68% yesterday).

Kirk Mulhearn, a Long Beach Realtor and professional mortgage planner can be reached at: 

562-989-4608 ext. 110    You may read more at:

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The Long Beach Mortgage Report: Fannie to request $16 billion bailout from US Treasury
Kirk Mulhearn (Prudential California Realty/Gem Mortgage)

Long Beach, Ca.   With all the news about the recent layoffs, there is no holding back by home buyers in the local Long Beach real estate markets if the price on a listing is reasonable.   Inventories for certain areas of REOs on the market have diminished.  The current trend is Short Sale listings.  Remember that there are approximately 50 million mortgages outstanding and a full 10% of them are in default.  That means that one out of every 10 neighbors is probably feeling the stress of the new economy.  There are lots of short sale properties avialable at more affordable prices; but, not not as many agents that understand how the process of getting the property accepted by the lenders. 

Yesterday we had some interesting economic news. The Conference Board's Leading Economic Index rose .3%, which is the first gain in six months. Four of the 10 indicators the report were positive, unfortunately led by a 0.99 percent increase in the money supply adjusted for inflation, which is due to increased lending and purchases of securities by the Federal Reserve to unclog credit markets and ease borrowing costs. We also had Existing Home Sales unexpectedly rise 6.5% in December, mostly attributed to prices being down and a brisk market in foreclosures.

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Long Beach Mortgage Report: December Housing Sales rise!!!
Kirk Mulhearn (Prudential California Realty/Gem Mortgage)

Long Beach, Ca. Now for some good news.  Sales of existing homes rose 6.5 percent from November to December, closing out the worst year for the U.S. real estate market in more than a decade, an industry trade group said Monday. The National Association of Realtors reported that sales of existing homes rose to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.   December's sales had been expected to fall to a pace of 4.4 million units. according to Thomson Reuters.   For the full story you can go to:

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Seven Simple Lessons Learned from a real estate insider...
Kirk Mulhearn (Prudential California Realty/Gem Mortgage)

1.  Property values don't always go up.

2.  Use common sense when buying anything.  If you don't have common sense, borrow it from someone who does.

 3.  Be prepared for the worst case scenario.  Assume it will happen and make sure you are ready.

4. Talk to a CPA and a bankruptcy attorney before you, "let the house go back to the bank."

 5.  Understand how the banking system really works by watching the classic, "Money as Debt." 

7.   Explore the Loan Modification process only with an attorney that knows what he is doing.

Long Beach, Ca.  Following the current equity markets and correlating them to the fact that real estate foreclosures are up over 80% this year over last is like watching a slow moving train wreck happen in real time.  The first sound of crunching metal  on the rail  lines could be heard  back in the fall of 2006.  Yes, almost two and one half years ago, we began to fill the pinch first in the mortgage markets and credit crunch and then soon after in the real estate markets.  I began to avidly watch:  The Mortgage Ledger's mortgage implode-o-meter.  You can follow this link to see all the banks that have failed since the Fall of 2006.  To continue reading this article, which is full of many other priceless nuggets of golden wisdom, go to:

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