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Viral (Vic) Joshi
Loan Consultant
(510) 655-2868 office
(510) 853-2407 mobile
(510) 291-2824 fax

Hello Friends,

Interest rates fell to the lowest levels this year on October 15th for four hours! As the Dow was down 450+ points during the day’s trading we saw the bond market hit levels not seen since May of 2013. Unfortunately, this lasted for a very short time before stocks recovered and the bond market lost almost all of the improvements of the day. Still, mortgage interest rates are in a favorable spot and with low inflation numbers, the Federal Reserve may hold off on hiking interest rates for the foreseeable future. Recently, my assistant went on vacation and I was blessed with his job and my own. Every year I get to see, first hand, how loans are processed when I get to do his job. Every year, I am amazed at how much paperwork goes into getting a loan. We only process between three and twenty loans a month and the pushing of paper, for this relatively small amount of transactions, is a full time job. Since 2007, when the mortgage markets collapsed prior to the recent depression, the paper requirements for getting a mortgage have increased every year. I read recently that Ben Bernanke, prior Federal Reserve Chair, was not able to refinance his own mortgage on his primary residence. This is likely because the paper requirements to get a mortgage are so ridiculously onerous that he was not able to meet these requirements. I actually had to work twelve to sixteen hours a day, while my assistant was away, just to keep up with the paperwork while taking calls and booking new business. Each loan file is like two phone books these days, which seems absurd to me. Obviously, the credit crunch we read about is still in full swing. Self-employed borrowers are still not able to get mortgages after seven years of credit tightening and many people who are perfectly good credit risks are blocked out of the markets due to all of the government regulation and underwriting requirements. As I often tell my clients when we are in the middle of a mortgage transaction, mortgage underwriting makes no common sense. It is a series of arbitrary rules and guidelines set by risk managers that we have to fulfill in order to get the lender to fund the loan. If we try to apply basic common sense to the underwriting, we will only get a headache while the lenders continue to pile on nonsensical conditions to every loan. It is best to consult with your loan agent before any financial transaction to make sure some harmless action doesn’t ruin the possibility of getting a loan. We are always surprised at how simple actions on the part of our borrowers can cause a loan to go sideways and create unnecessary anxiety throughout the loan process. I am always available for free consultations, whether I am doing the loan or someone else is working on it. My entire business is based on giving good, free information.

As always, your loan guy

Viral (Vic) Joshi

P.S. If you want to get more timely market updates, I have a weekly newsletter that goes out via e-mail. E-mail me, viral@vicjoshi.com, so that I can put you on the mailing list.
 

   
 

 

 
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