Tucson By Choice!

I've landed at Sunstreet Mortgage here in Tucson!  I took my first signed application this afternoon at 4:30 p.m., a VA purchase for a young family here at Davis Monthan Air Force Base.  The REALTOR who referred the couple is Active Rain's Kevin Wood.

One of the loan officers at Sunstreet is Cathy Radford, my riding partner from our Miracle Mortgage days back in 2004.  (Her horse is named "Cash.")

Thanks for all the comments on Friday's post, and your emails and well-wishes. I'll have more about the new company later this week as I get settled in.

EDIT:  We can originate in all 50 states with Sunstreet!

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I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090

Photos copyright Mike in Tucson

I couldn't find a photo I liked to illustrate this crap, so I chose the frog instead.  You know the fable about the frog swimming about in hot water, never realizing the danger until (as it were) his goose is cooked!  (Gotta love mixed metaphors.)

This little guy has decided to get while the getting's good. Not so the venerable firm of Morgan Stanley.

I thought of the frog parable when I read last night on Bloomberg that "Morgan Stanley plans to repackage a downgraded collateralized debt obligation backed by leveraged loans into new securities with AAA ratings in the first transaction of its kind..."

The article goes on to say: "Two years after the credit markets began to seize up, costing the world's biggest financial institutions $1.47 trillion in writedowns and losses, banks are again taking so- called structured finance securities and turning them into new debt investments with top credit ratings. While the Morgan Stanley deal is the first to involve CDOs of loans, banks have been doing the same with commercial mortgage-backed securities in recent weeks."

But hey!  Banks and many other investors can't buy anything but AAA.  If it's not there, let's make something they can spend their TARP money on.  We'll make it out of these crappy collateralized debt obligation backed by leveraged loans!  Now there's an idea for the ages.

Isn't this just what got us in the mess we're in?!

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I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090

"It's always something," as Grandma used to say.  We're refinancing a home for clients, and the new appraisal process has been a nightmare for all concerned.  We got past that, however, and we're getting ready to draw docs for closing.

Things have taken weeks longer than expected with the new federally mandated blind appraisal process, and as of yesterday, my clients are on vacation in Belize, something they scheduled a year ago.

Never heard of Belize?  It used to be British Honduras.  I know, that probably doesn't help a lot either.  The little country is situated on the southeast side of the Yucatan peninsula, with Mexico to the north, Guatamala to the west, and the beautiful Carribean Ocean on it's coast.

So I'm figuring where we'll send docs for signing, as the lock expires at the end of next week.  I'll let you know how it works out.  Thank God for email and FedEx!

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I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090

Photo courtesy Wikipedia

Oak Grove Cemetery on Prospect Street, Fall River, MA is the final resting place of a suspected (though never convicted) killer. 

"Lizzie Borden took an ax," the ditty goes, "and gave her mother forty whacks.  When she saw what she had done, she gave her father forty-one."

Another famous Massachusetts resident, Congressman Barney Frank, may soon preside over the dismembering and demise of another famous couple with whom
he's intimately involved--Fannie Mae and Freddie Mac.

As in the trial of Lizzie Borden, the public will widely believe Congressman Frank to be culpable in the demise of Fannie and Freddie, despite his protestations to the contrary.

The 1977 Community Reinvestment Act, which had served well until Congressman Frank and the Clinton administration reinvented it, was turned inside out.  (REALTORS will recall from their ongoing education that the bill outlawed redlining, the wholesale designation of particular geographical communities as poor credit risks.)  Compliance is required by the act.

Compliance with the act was redefined by Frank & Company.  An October 6, '08 editorial in Investors Business Daily sums it up:

On Frank's and Clinton's watch, the Community Reinvestment Act was changed to force the issuance of bad loans. Banks would be rated on the number of loans, not on their soundness. Fannie Mae and Freddie Mac were then encouraged to buy them up. It was all about affordable housing, even if the housing was unaffordable.

When former Treasury Secretary John Snow pleaded for Frank to support Fannie and Freddie reform, Frank responded: "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Fannie Mae and Freddie Mac are on the chopping block. 

If Congressman Frank has his way, (and that's likely in the present political climate,) the two GSEs might as well have side by side plots in the Oak Grove Cemetary in Fall River, MA.

Lizzie Borden took an ax...

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I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson mortgage expert.

Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090

Oak Grove Cemetary photo courtesy Wikipedia

Sure we have money. 

Your congress gave it to us.  Billions and Billions, just like McDonalds hamburgers.  Since it's our money, what we do with it is up to us, not you. What we invest in is our business, not yours. 

Don't like the way that sounds?  Tough.  Somebody's got to be in charge, and it sure as hell isn't your elected officials.  They're convinced that we know what we're doing, and when it comes right down to it, they don't want to be held personally responsible for pushing us over the edge.

If we say the world of finance will collapse unless they give us more money, they believe us, just like you believe a guy with a gun standing in the alley when he says "Give me your watch and your money, or I'll shoot you." 

See?  That's how it works in the real world.  We threaten; you cave.  What's that?  Why do we deserve to be bailed out?

Because we say so.  That's why.

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

Think of me as your Tucson mortgage expert.

Call me if I can help you with a mortgage to buy your next house: 
(520) 349-9090

Veterans have an edge in the purchase market across the country.  While 100% financing has gone the way of the DoDo bird, qualified vets can still get 100% financing up to the conforming conventional limit of $417,000.  In some counties, that number can go as high as $729,750. with zero down.

That's where most realtors stop when talking to veterans.  Jumbo money is available to vets, though, and realtors in higher priced markets will want to re-think their focus.

Jumbo loans for Veterans?  Here's how it works:

Click on your state below (courtesy of VALoans.com) to find the maximum zero down amount for the county you're interested in. 

For Pima County in Arizona, for instance, that number is $417,000. 

In Dukes County, Massachussets, the maximum zero down amount is $736,250. 

The maximum VA guarantee amount in both cases, however, is $1,000,000.  Note that the veteran must qualify as follows for loans above the zero down amount for his/her particular county.

1. For a purchase price exceeding the zero down amount, the borrower must come to closing with funds equal to 25% of the amount by which the purchase price exceeds the zero down amount. 
   
   Example:  In Pima County, AZ, with a contract price of $690,000. the borrower would have to come to the table with $68,250 towards the purchase price.  (690,000 minus 417,000 x 25%.)
   
   
2. The VA funding fee cannot be financed above the maximum zero down amount, so in the example above, the veteran would have to pay that fee out of pocket.  (The VA funding fee for first time users is currently 2.15% of the loan amount, and 3.3% for subsequent uses of the VA eligibility.)
   
   
3. The minimum borrower FICO score for all loans above $417,000. is currently 680, and a second appraisal will be required as of January 1, 2009.
   

The subject hasn't decended upon us full blown as a result of the sub prime mess.  This book, available on Amazon and through other sources, was published in 2004.

The foreward was written by Paul Volker, and the authors, Gary Stern and Ron Feldman, served at the time as officers of the Federal Reserve Bank.

The authors warned in 2004 that "too little has been done to reduce creditors' expectations of ... protection.  To a large degree, the question is one of moral hazard, wherein anticipation of a safety net reduces a creditor or bank's incentive to act prudently."

That's exactly what happened. 

I'm Mike in Tucson, your preferred Tucson, Arizona mortgage lender.

Think of me as your local expert.

Related Posts by Mike in Tucson:

• WaMu Fails. Bailout Talks On the Ropes. What Does It Mean to My Business Today?
• Moral Hazard; The Bank Made Me Do It!

The Federal Open Market Committee lowered its benchmark rate by a quarter-point yesterday to 4.25 percent.  The market sure wasn't impressed, dropping nearly 300 points for the session.

I remember seeing a roadside ice cream stand with a hand lettered sign that read:  SCREAM TILL DADDY STOPS THE CAR.  I looked on Flickr and Google, but couldn't find a photo.

The jury's out on whether the Fed acted like Daddy driving the car.  CNN referred to financial markets putting undue pressure on the Fed, calling the major players "spoiled, demanding children." 

Will it help the real estate market?  We'll see.  Mortgage rates will certainly be better tomorrow.

And that's the real estate opinion of this Tucson, Arizona mortgage lender,

Mike in Tucson