March 27 – Weekly Update During the Coronavirus

Good afternoon to a heads up-response to the Coronavirus 

Mortgage Rates: Time is Now\

– DON’T MISS OUT

The next 30 days will be quite insightful. Also, it may be a good time for careful listening and to be most watchful, as one begins to carefully evaluate near term possibilities. There have been many dramatic changes in response to the coronavirus. Yet most encouraging, is the multi-front approach to seeking solutions. The likelihood of a mid-term bounce back is increasing.

For me, I am a ‘perma-bull’ with regards to Real Estate. And though we may hit the pause button for a short while, let’s keep our eyes open for excellent options, alternatives, and ways to be prepared for this market of extremely low interest rates, supported by falling gas prices. 

Consider the following:

US Federal Reserve: The are acting, not waiting:

  • Fed Funds rate are now effectively zero (target rate now 0.25 %)
  • Pumping new liquidity into the market – Buying mortgages – $50 B daily Buying corporate bonds along with Treasuries. 

Actions by our US Government:

  • Removed liquidity restrictions on the banking industry, put in place by the Dodd-Frank
  • law. In short, money previously frozen, is now available for use – $1.5 Trillion. 
  • Payroll Tax Holiday, money to people and families, and much more.
  • Passage of a 2.2 T spending bill approved by Congress
  • Taxes delayed until July 15.

Mortgages:

Jumbo Loans– Many lending sources are drying up – almost daily. Call today.

Commercial Loans– Many banks are not lending, having difficulties trying to figure out who paysand who isn’t. Legal damage control. Think of a flood that happened, with the business doors now open. The focus is to determine the actual extent of the damage.

Non-QM– Such lenders are pretty much gone. A few remain. These are the lenders outside the mainstream, conventional loans whose focus was our bank statement, rent qualifying income, etc. They stood before one sought a private or hard money lender. 

All is not lost – Check the following – Opportunities exist:

Refinance Strategy:

A) Debt consolidation reduces overall payments, puts cash in the bank, and builds a safety net. Home improvements can also increase home value, add curb appeal, and reduce the days on the market. 

B) No Cash out / Rate Reduction loan: Get in the system, let the system – underwriting, appraisal, etc, – to its thing. You watch / wait / and execute 

when rates hit your low point.Good News:Here is why it work – Appraisals are good for 4 months, with a simple update. So too, the paperwork and a quick update.

Call Now – Let’s Start Today.

Purchase Strategy:

A) Fear creates opportunity, storms can create deals. Those ready are in the driver’s seat. I am a long-term Bull with California real estate market. The fundamentals remain the same – lack of Supply + one of the best places in the World to live, and home to high tech. These will continue to drive demand.

B) With rates this low, consider a low down payments options. Keeps you in control of your cash and remember, cash is king during an economic slow down. Even better, when the market kicks back in gear and rates double from here, you will be smile at your low rate, while enjoying your cash for other investments. 

Stock Market Strategy: 

Actual Company earnings are the big unknown. You have the corona-virus causing wide spread shut downs, while also having very low oil prices, very low interest rates, and Congress throwing money at the problem. At the same time, dropping oil prices are putting major financial stress across the entire oil sector, that should benefit airlines who suffer cash-flow issued due to the CV-Shutdown, or corona-virus. A cross-road of complex confusion.

If you have not sold stocks, hang in there. My guess: The worst maybe over. If you have cash, wait. Let the market stabilize – become less volatile. Many so-called smart investors, trying to play the swings, have watched their money just disappear from their computer screens.

For right now, there are few safe havens. Please – Don’t let low interest money tempt you to play the money game called Wall Street. Even such investments as Treasuries and Mortgage Backed Securities sold, as well as the king of safe havens, gold. 

This strange, near Twilight Zone event, has increased ‘risk pricing’ of long-term mortgages, even with falling rates. It is the intricacies of this complex industry. Thus when we ‘lock’ a loan, note, the actual money to be used, is for now held as a derivative or in a margin account. It is why if time extensions are needed, the new pricing is hard to predict. Start today.

MarketAwareness

Stocks:No one knows where the bottom is. One day opens positive and closes weak. Next day, just the opposite. Opens down, closes strong. In the quicksand called the stock market, real estate may prove the better investment and the timing could not be better. 

Unemployment:Last week I suggested we would be seeing the unemployment claims number blowing through 1 Million. WoW! 3.2 Million. Yet the US Government is moving mountains to catch up, or get in front of this. Word the Unemployment claims period will be extended from 26 weeks to 39 weeks. Increasing the actual cash payment up to +$ 600 per week. 

Housing and Rent Payments: Most all areas have stopped eviction. Now it comes to the individual people. Work outs will be needed for some. Clear communication, providing resources for many well capitalized resources. Talk of up to 4 months of rent help in some communities. If you have a problem paying rent, or collecting rent… seek the local resources. 

Mortgage Rates:Near and dear to our hearts. Rates short-term: all over the board. Longer term: Lower, but not as dramatic as short-term money. But what a time to act. 

Infections:Current estimates: Peak late April to mid-May. But the investment question and question to Small Business is how long before our government let’s this nation of free-loving people, be free again from current restrictions and limitations.

There is current trials in New York City, we should hear results about mid – next week. But, also hearing of another mutation already beginning in the Far East. The ride is not over yet.

Because You Matter

As you read, if questions come to mind, let me know. Your thoughts and opinion are important. Why? Because people and their best interest, is where my work is focused. It is why I offer guidance – along with a complete set of tools – in finding the best answers. After 30 years, you know and learn many things about many different circumstances, situations, and people. 

Call us, we know success.

Thank you for trusting me with yourself and your friends and family. Referrals are appreciated.

Call me – Your success is our priority.

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