June Letter From My Heart

Good morning to the wonder of Summer,

Here is hoping your Memorial Day was eventful. For us, it was highlighted by a few shared moments with our friend Dr. Doug Duncan, chief economist with Fannie Mae.

His Q&A was great, offering a consistent message of more good news.  Some brief notes:

  • Even if the Federal Reserve and Government policy had not “pushed” interest rates so low the past years, most likely today’s rates would only be slightly higher than they currently are.
  • Potential risks to the market:  “Shadow-Banking”.  This is more than just “BitCoin” and includes some shifting of corporate debt to non-bank lending solutions.
  • Shift in our market – post the financial crisis – shows the turnover rate for existing homes, to be the lowest in 30 years.  For reasons, we are simply staying put longer.

With our economy continuing to show great growth and appreciation, it becomes even more important to find needed time with each client. I believe it is Key to Success. Even for those with less than perfect credit.  It proves the best way to achieve the good news deserved, even if the first lender days No!  With the experience of providing a careful review, we are good at what we do and do not shy aways from the difficulties of unique challenges. It is part of what we do.  Please call us if you love success or have a friend who could use our specialized talents.

We can be especially helpful if you are retiring yet seeking to buy a home with a reverse mortgage, or a self-employed entrepreneur, or someone in need of a construction completion loan because cash needs are lacking. Now is the time to call. We are ready today, to address ever-changing lender challenges and answer crazy nuances of today’s new payroll structures.  We are also experienced lending partners for a farmer or mobile home park owner. We have the know-how to help turn your hopes and concepts, into a working reality. And we loving serving you.

Points of Interest:

1) Income disparity is on the increase.  For the lowest 25 % of wage earners (not part of the economy buying homes), incomes dropped 2.5 %. For the rest, incomes are up 4.7 %.  And when added to affordability numbers, this income increase will result in a positive shift in the number of people able to purchase a median priced home.  Love positive news.

2) While often reported that US median income – since 1979 –  barely kept up with inflation, new data is showing median income is at $73,200, up 51% since 1979.  Why the superior outcome? Three good reason: First, household size is shrinking. Second, outcomes based on after-tax income, that also includes a more complete measures of government assistance. Third,  using a more comprehensive and accurate measuring tool for inflation – PCE, not CPI.

3) Keep an eye on the Millennial’s, as we anticipate these future buyers specific housing needs. I believe it will prove fascinating, as their view and perspective of housing is unique.

Our Monthly: The Good, Bad n’ Ugly:

The Good:

The chokehold is loosening at the CFPB, as well its restrictive impact on lending.  This first step focuses on small banks and should lead to lower compliance costs.  This is especially good  for “entry-level” lending on lower priced homes.  Though likely not beneficial in the Bay Area,  this change in guidelines may prove quite helpful in Middle America.

The Bad:

Our economy continues to beat expectations, yet at the same times, we seem to stumble with counter productive plans and policies. Sometimes politics and what is good for the economy, are not always on the same page.  We will use a “3 + %” growth in GDP, as our key for policy and politics maybe working together a bit.

The Ugly:

Politics, speculations, and mid-term election.  Let the fun begin, as facts and helpful perspectives take a back seat to the noise and emotions of headline news and social media.  Often what is lost is our sense of priorities, the purpose of government, and the role of free enterprise. Look at home values, check your retirement, and consider those in real need.  And then please, be sure to vote.

In Closing

Our initial conversations are usually in two phases.  The first is to gain a mutual understanding of your situation, attain essential information to determine options, and then initiate our beginning conversations with our lending partners.  Our second conversation is to review and share with you the options that best fit your needs, expectations, and situation.  Then it time for you to decide.  Sound like an approach that will work for you?  Please give us a call.

Preparation is key and our team is ready to help you achieve your dream, now.

Call today!

Have a blessed day and a joyful June 2018.

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