Headless Ranger

Sean La Rue
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So I now know that there is no CRV for wine bottles. Recycling is good for the planet but I thought I'd be getting some cash. :(

Sean La Rue
SeanLaRue.com
760-835-5663

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Twitter: www.twitter.com/seanlarue

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News Update for USDA Home Loan 502

John Rodgers called my attention to the following bulletin released by the USDA:

This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.”  This is because it is not certain when additional funding will be available. 

Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita.  Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited. 

We apologize for any inconvenience this may cause you.  Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.

Rodgers writes:

Every year USDA runs out of money for their fundings and normally you are not affected by this however, this year is very different. The USDA Section 502 guaranteed Rural Housing Program will have exhausted there 2010 fiscal funds by the end of April. The USDA would need to receive about 150 million in funding to be able to continue funding loans for the rest of fiscal year 2010.

In past years USDA has appropriated funds from other areas to make up for the shortfall in funding dollars giving lenders the oppurtunity to continue to fund USDA loans.

Why is this year any different then past years? USDA is removing the “subject to receipt of appropriated funds” from their conditional commitments meaning there is no guarantee that lenders will be able to guarantee the loan and fund it.

Why are they doing this? The money usually runs out around the end of the government’s fiscal year which is September 30th and USDA basically tells everyone we’ll get you’re funding commitments either this year or next. Since the money is running out so early in the fiscal year USDA is not sure where the money will come from therefore will not put “subject to receipt of appropriated funds” on their conditional commitments. Last year the money ran out in March but the stimulus provided the gap funding to carry the program thru to the end of the year but this year there is no stimulus money.

What can I do as a Realtor, Builder, Developer or loan officer? You need to contact your US Congressman, US Senator, professional lobby and employer to get them working on a solution because if this happens many homeowners will be left out on their loan closing because it simply won’t happen.

The USDA loan program is a wonderful program for Rural America. The program is ran very efficiently and the default rate on USDA loans are much lower than FHA or other financing programs.

Please take action today.

-----------------------------

Well....lenders have already begun cutting off the program. Both Wells Fargo and BB&T stopped taking USDA Rural Development loan commitments TODAY. Others will soon follow....

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Well if this doesn't put a smile on your face today.... WATCH it again tomorrow~!! This is the Tuesday Afternoon pump you music video

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Sean La Rue's Weekly Newsletter: Retail Sales Spring Forward

Last Week in Review "IF WE HAD NO WINTER...THE SPRING WOULD NOT BE SO PLEASANT." 17th-Century poet Anne Bradstreet's words ring true not only for the seasons, but also for last week's Retail Sales numbers. Just days before Sunday's "spring forward" into Daylight Savings Time, the retail sector looked to be unfreezing and showing at least a little spring in its step. As you can see in the chart below, Retail Sales for February were reported last Friday at 0.3%, which was better than the previous month's reading and much better than the -0.2% expected. Despite the good news, however, we need to keep in mind that it will be subject to future revisions - just like we saw in Friday's report, in which last month's decent 0.5% reading was revised sharply lower to just 0.1%.  ----------------------- Chart: Retail Sales (Month-Over-Month) The better-than-expected Retail Sales was good news for the economy, but it could also lead to inflation trouble ahead. Remember, inflation is the archenemy of Bonds. Just last week, fears of inflation in China pressured Bonds around the globe. And here in the US, a number of Fed members have already mentioned inflation as an increasing concern. And it isn't just Fed officials who have been warning against inflation; investors around the globe are having increased doubts. Massive debt and massive balance sheet expansion - combined with near zero interest rates for a long period of time - will no doubt conjure a recipe for inflation.  The question is this: Once inflation rears its ugly head...will the Fed have the courage and the will to kill the monster by tightening policy, amidst enormous political pressure not to do so?  As you'll see in the Forecast section below, the next Fed meeting is taking place this week, and the Policy Statement released on Tuesday will garner intense scrutiny. WHILE THE ECONOMY HAS BEEN SHOWING SOME SIGNS OF RECOVERY LATELY, MANY FOLKS STILL NEED HELP IMPROVING THEIR OWN FINANCIAL PICTURES. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW FOR A VIDEO FEATURING FIVE WAYS TO GET OUT DEBT FASTER.

Forecast for the Week There's a lot of news on tap for this week, starting off right away Monday with the Empire State Index, Industrial Production and Capacity Utilization. These reports will give us a look at the manufacturing sector - and any bad news could certainly shake up the markets. We'll also see an update on the health of the new construction sector of the housing market, with reports on Building Permits and Housing Starts coming on Tuesday. Perhaps the biggest news of the week will be the inflation news carried in the Producer Price Index on Wednesday and the Consumer Price Index on Thursday. As stated above and in the chart below, hints of inflation fears have the potential to negatively impact the markets - and can quickly drive Bond prices lower and home loan rates higher. The news from these reports will be even more interesting, since they come just after the Fed's Monetary Policy and Fed Funds Rate decision on Tuesday...and many members of the Fed have lately been expressing their growing concerns about inflation. The Policy Statement following the Fed meeting is always dissected carefully - but with the rising fears of the inflation genie escaping the bottle, this Statement takes on even more significance. Remember: Overall, weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, inflation fears pushed Mortgage Bonds below two key technical levels last week...and those levels now may become "ceilings of resistance" for Bonds, making it harder for them to improve. Chart: Fannie Mae 4.5%% Mortgage Bond (Mar 12, 2010)

The Mortgage Market View... 5 Ways to Get Out of Debt Faster Making smart choices with your money is always a good idea, but it's especially important if you are working to become debt free. Check out this video from www.Kiplinger.com for 5 ways to get out of debt faster.

The Week's Economic Indicator Calendar Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 15 - March 19 Date ET Economic Report For Estimate Actual Prior Impact Mon. March 15 08:30 Empire State Index Mar 23.45   24.91 Moderate Mon. March 15 09:15 Capacity Utilization Feb 72.3%   72.6% Moderate Mon. March 15 09:15 Industrial Production Feb 0.0%   0.9% Moderate Tue. March 16 08:30 Building Permits Feb 602K   622K Moderate Tue. March 16 08:30 Housing Starts Feb 570K   591K Moderate Tue. March 16 02:15 FOMC Meeting   .25%   .25% HIGH Wed. March 17 10:30 Crude Inventories 3/13 NA   1.43M Moderate Wed. March 17 08:30 Producer Price Index (PPI) Feb -0.2%   1.4% Moderate Wed. March 17 08:30 Core Producer Price Index (PPI) Feb 0.1%   0.3% Moderate Thu. March 18 08:30 Core Consumer Price Index (CPI) Feb 0.1%   0.2% HIGH Thu. March 18 08:15 Consumer Price Index (CPI) Feb 0.1%   0.2% Moderate Thu. March 18 08:30 Jobless Claims (Initial) 3/13 450K   462K Moderate Thu. March 18 10:00 Index of Leading Econ Ind (LEI) Feb 0.2%   0.3% Low Thu. March 18 10:00 Philadelphia Fed Index Mar 18.0   17.6 HIGH

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My view this morning. How is your view today? What's your favorite scenic view?

Sean La Rue
SeanLaRue.com
760-835-5663

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My morning view. How are the sites where you are?

Sean La Rue
SeanLaRue.com
760-835-5663

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Twitter: www.twitter.com/seanlarue

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New picture of me and Peanut

Sean La Rue
SeanLaRue.com
760-835-5663

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Twitter: www.twitter.com/seanlarue

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Here's a snow picture from Nor Cal. Oh Palm Springs how I miss you!

Sean La Rue
SeanLaRue.com
760-835-5663

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Twitter: www.twitter.com/seanlarue

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Sometimes this is all you need...

You can do it, Sean.

It's why you're there.

And it's why I'm here -
    The Universe

www.Tut.com  

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New art we picked up from Tulip Hiill Winery

Sean La Rue
SeanLaRue.com
760-835-5663

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Social Media Package

I am interested in helping you with your social media package.  If you or someone you know wants help with their social media platform let me know.  I just helped a client who is very excited about the new network I set up for him!  Get connected!

-Sean

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Sean La Rue's Weekly Newsletter

Last Week in Review "LIKE SLUGGISH WATERS THROUGH A MARSH..." The poet Sir Walter Scott wasn't talking about the economic recovery, but his words paint a pretty vivid picture...and after last week's economic reports, perhaps a pretty accurate one on the state of the recovery. Last week's Gross Domestic Product (GDP) report showed that the economy grew 5.9% in the 4th quarter of 2009, which was in line with expectations and the best GDP reading in more than 6 years - which on the surface, sounds like a great number. However, the gains came from rebuilding of inventory and very modest business spending - not from consumer spending.  The biggest component of GDP is consumer spending and the revised number on that front came in lower than expected, and far worse than the 3rd Quarter of 2009, when the government's Cash for Clunkers program temporarily boosted sales.  On the housing front, Existing Home Sales for January were reported at 5.05 Million units, which was less than expectation of 5.44 Million.  As you can see from the chart below, Existing Home Sales have now declined for two consecutive months. New Home Sales for January were also reported below expectations last week.  Odds are that inclement weather affected the housing market negatively in January - since people are less likely to go house hunting in the midst of snowstorms and freezing temperatures. But in any case, last week's data demonstrated that the housing market remains a bit lethargic. The good news is that today's affordable home prices and amount of supply on the market - not to mention low rates and the government's Homebuyers Tax Credit - present tremendous opportunities for homebuyers who are looking for a great deal. ----------------------- Chart: Existing Home Sales (By Month) So how do consumers feel about the economy? Last week, we got a look at two different reports...and both indicated that consumers don't share the rosy outlook of politicians and the media. Consumer Confidence was reported at 46.0, which was much lower than expectations of 55.0. In addition, the University of Michigan reported that Consumer Sentiment also fell in February. Both reports pointed to ongoing concerns over employment as a major reason for the drop in consumer attitudes about the economy. To help make ends meet during the recession, some consumers have turned to earning cash as a landlord. If you or someone you know is considering doing the same, read the view article below for important advice to help make sure you're successful!

Forecast for the Week This will be a big week of news, starting off right away Monday morning with reports on Personal Income and Personal Spending. We'll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed's favorite gauge of inflation. As if that weren't enough news for one day, we'll also see the Institute for Supply Management Index on Monday. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector, so the markets will be paying attention to this report. Toward the end of the week, we'll get another look at employment and housing with the reports on Initial Jobless Claims and Pending Home Sales on Thursday. Finally, the week ends with a bang when the official Jobs Report is released. This report includes the latest government data on job losses and the unemployment rate, as well as the average work week and hourly earnings. With the ongoing concerns over the struggling job market, it will be important to get a current read on the situation. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds were able to rally last week on weak housing numbers and the struggling jobs market, resulting in improved home loan rates. I'll be watching carefully in the week ahead to see if Bonds and home loan rates can build on their positive momentum. Chart: Fannie Mae 4.5%% Mortgage Bond (Feb 26, 2010)

The Mortgage Market View... Being a Successful Landlord These days, some homeowners are choosing to rent out all or part of their home to help pay for their mortgage costs. But being a successful landlord is more than just sitting back and collecting the rent. Here are some tips to help if you ever choose to become a landlord. Charge a Fair Price: All real estate is local, and the best and quickest way to success is to know your marketplace and what you can expect to charge for a fair rent in your area. Some things you can do to determine a fair price include studying local classified ads, scouring the Internet, and finding out what neighbors are charging for rent. Write the Right Ad: Getting the right tenant is even more important than picking the right price to charge. Attract the right tenants with ad phrases such as "good credit and references," "no pets," "no smokers," etc. Create a Thorough Application Process: Be sure to require proof of identity, past addresses and landlord contact information, employment information, and references. Also, ask questions like how many people will be living with the applicant and how long they plan to rent. Check References EVERY Time: Call their previous landlords and ask if the rent was paid on time. Find out how the property was left when they vacated. Were the tenants loud and troublesome? Did they complain a lot? Did they report small repairs in a timely manner? It's easier to avoid a bad tenant now than to try and evict one later. A Final Creative Idea: Before signing the deal, make an unexpected visit to your prospective tenants' current apartment or residence. You will get a good look at how they keep their home as it is likely to be the way they keep yours. And Always Ask the Experts: Be sure to check with your tax professional to make sure you file your taxes correctly and to see if there are any rebates or other benefits you qualify for. Some people choose to be landlords, while others have it thrust upon them due to market conditions. Either way, taking the steps mentioned here will help make the experience more successful for everyone involved.

Make It A Great Day,

Sean K. La Rue
Sr. Vice President | Franklin Loan Center | Se Habla Español

Direct: 760-837-1488 | Mobile: 760-835-5663 | Fax: 800-784-9089

44-800 Village Court Palm Desert, CA 92260

FHA | VA | USDA | Jumbo Loans | Reverse Mortgage | Canadian Loans

“Your KEY to Moving Home!”

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Patience, Education Helps Win Mortgage http://bit.ly/9pQiyp

March 1, 2010

Patience, education helps win mortgage

Lenders willing to help first-time homebuyers

MIKE PERRAULT
The Desert Sun

La Quinta High School teacher Lauren Young didn't allow her friends' horror stories about the home mortgage process to deter her from finding and purchasing an affordable fixer-upper in La Quinta.

Young's friends warned of frustrations having to work months with eight or nine different underwriters.

Young's home-buying experience turned out to be entirely different, even though it involved a “short sale.” Short sales occur when sale proceeds fall short of the balance owed on the property's loan. It often can take months to get the necessary approvals.

Young attributes a relatively smooth loan process to working with a knowledgeable lender who understood what she wanted and “had my best interest” at heart.

“Sean (La Rue) deterred me from jumping in too deep,” Young said. “And he was able to find me a loan where the seller paid half my closing costs and half the down payment.”

With mortgage interest rates hovering at 5 percent, and $6,500 to $8,000 available in federal tax credits, more prospective homebuyers are tiptoeing back into the Coachella Valley's housing market to take advantage of bargain home prices.

But buyers also are finding that lending standards are more stringent. Home loans require considerably more detailed information than in past years.

Banks are scrutinizing assets, income, collateral, appraisals, tax returns, whether the home will be occupied and other information to ensure those getting loans can afford the house, said La Rue, senior vice president at Franklin Loan Center in Palm Desert.

“Everything is being picked through with a fine-tooth-comb,” La Rue said. “But for most people, they still qualify.”

Most borrowers understand the rationale behind new restrictions and paperwork, and are adjusting said Andy Montgomery, chief executive officer of El Paseo Bank, which has branches in Palm Desert and Rancho Mirage.

“We're seeing people come in actually more qualified than they used to be,” he said.

Homebuyer Ted Hane admits he was hesitant and wanted to find out what kind of payment he could handle when he began his hunt last fall for a home in La Quinta Cove. Previously, he couldn't afford a home in that neighborhood.

“I wanted to be really, really careful not to overextend myself,” said Hane, manager of the Mary Pickford movie theater in Cathedral City. “Of course at this point, (lenders) aren't really letting you.”

Documents in hand

Lenders are so careful, many people have the misconception that banks and other lenders aren't interested in doling out home loans.

“Some people may tell you that it is impossible to get (home) loans, but only because they're comparing it to a time when you didn't need the documentation,” said Chris Platamone, senior mortgage loan officer at Bank of America Home Loans in Palm Springs.

“You can get loans as long as you can document that you qualify.”

That includes jumbo mortgages — loan amounts above conventional conforming loan limits — and loans to buyers who aren't U.S. citizens, said Brent Platt, president of Millennium Mortgage Co. in Palm Desert.

Platt, a lender in the Coachella Valley for two decades, said “there's money out there” to lend.

“I hear people saying all the time, ‘Is there any jumbo money out there?' or ‘I can't seem to get a jumbo loan,'” Platt said. “You have to know where to go to get it.”

First-time homebuyer Hane began his quest to finance a La Quinta Cove home with his credit union. But early in the process, he felt the credit union was unresponsive.

Hane switched to Franklin Loan Center, where he found La Rue was willing to stay on top of the details and answer his many questions about all the documentation.

The bottom line for borrowers is that they need to be more patient, La Rue said.

“There are some restrictions that are kicking out some good buyers,” he said. “But, in general, the people who should be able to get a mortgage are getting a mortgage.”

Lenders are looking at stable income and a minimum credit score, or FICO score, of about 620 to 640. Factors such as other debt you're carrying and how much you want to borrow also enter the equation.

“Your debt-to-income ratio has got to be fairly reasonable,” said John Sloan, longtime real estate agent with John Sloan Realty Group, Keller Williams Realty in Rancho Mirage.

Tax credits abound

In recent weeks, average interest rates for 30-year fixed mortgages have fallen to just below 5 percent, with 15-year rates at about 4.34, according to a Mortgage Bankers Association weekly report.

The favorable interest rates, federal and state tax credits, and generally low home prices in the valley have swayed buyers.

The state is no longer accepting applications for the $10,000 new homebuyer tax credit, but the $8,000 or $6,500 federal tax credits are available until April 30, lenders said.

Buyers previously locked out of the federal $8,000 first-time homebuyer credit because they earned too much may now qualify under new income limits.

“There are a lot of first-time homebuyers out there who have time to close and get that credit,” Sloan said. “So there is a little bit of a frenzy out there right now.”

Bankers and mortgage lenders are seeing more valley residents beginning to look into home loan applications.

“Since the beginning of the year, we've definitely seen an increase in activity,” Platamone said.

Prospective buyer Jerry Brown of the San Francisco area believes the valley offers some “really good” buys right now.“Homes in the $400,000 range used to be $700,000 to $800,000 homes,” Brown said. “I think it's a good time to make an investment.”Most buyers prefer the 30-year fixed mortgage, but the FHA option has become popular for many first-time homebuyers because it requires down payments as low as 3.5 percent, Platamone said.

Sloan said as more buyers and investors enter the market, it pays to work with a lender to get pre-approved. Buyers can be in a better negotiating position when they do find the house they want.

“I would absolutely get prequalified and get a sense of what banks are looking for,” Montgomery said. “Go shop. How much home can they buy with existing loan products?”

The “sweet spot” in the valley housing market right now is homes under $250,000, he said. Some are bank-owned, and they're often getting multiple offers.

Investors spot those opportunities and compete against first-time homebuyers. The investors sometimes have a leg up if they can walk in with cash in hand.

“That's why it's important that the buyer know exactly where they're at in terms of affordability,” Sloan said. “You just lose out on something you really want.”

Sloan said that, in one recent instance, four buyers made an offer on a $250,000 bank-owned property. Three buyers came in with FHA loans with 3.5 percent down. The other buyer had a conventional loan and was offering a 20 percent down payment.

“The bank felt that that particular buyer was more worthy to sell the home to,” he said. “Because chances of them defaulting are much less because they've got more skin in the game.”

Appraisals also are playing into the financing picture, Sloan said.

Several buyers recently made an offer on a $239,000 home. The bank asked all buyers for their highest and best offer. The winning buyers offered more than the appraised value and were required to make up the difference out of their own pocket.

Staying in the game

Homebuyer Hane qualified for an $8,000 federal tax credit and closed on his home Dec. 30.

He advises buyers to remain involved in the process so they're not caught at the last minute in “panic mode.”

Despite working 12-hour days, Hane remained involved daily because he didn't want to be the one to drop the ball.

“I faxed or e-mailed everything to make sure it was received and correct and legible,” Hane said. “When the appraiser was there, I was there. When the inspector was there, I was there.”

Hane stressed that it's important to ask questions.

“If I wasn't sure, I wanted to know,” Hane said. “This was a pretty hefty decision. It's not like you're buying a $300 Blu-ray or something.”

Hane's experience was a far cry from several years ago, when he felt he was being pushed into a home he couldn't afford.

“The lender said, ‘Sure you can.' I said, ‘No I can't. I'm not about to become a surgeon or something.'”

Some area banks hit by losses on commercial real estate have reined in home loans, but other banks see that as an opportunity.“We've ramped up our efforts even more in the last year,” Montgomery said. “We see that there is a good market opportunity as fewer banks offer loans on homes — especially the jumbo. As demand increases, we think we have a pretty good opportunity to experience a lot of growth in that business.”

Make It A Great Day,

Sean K. La Rue
Sr. Vice President | Franklin Loan Center | Se Habla Español

Direct: 760-837-1488 | Mobile: 760-835-5663 | Fax: 800-784-9089

44-800 Village Court Palm Desert, CA 92260

FHA | VA | USDA | Jumbo Loans | Reverse Mortgage | Canadian Loans

“Your KEY to Moving Home!”

Let's Get Connected!

Facebook | Twitter | YouTube | Linkedin

Sean's Website | Sean's Blog | Click for Sean's Weekly Update | Click for Sean's Monthly Update

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