Mortgage Roundtable - Part I

Mortgage Professionals Debate the State of Real Estate Lending

For today's real estate lending discussion I was lucky enough to get a panel of experts from the real estate lending community to answer 5 questions about mortgages, home loans, and the lending industry. I posed the same questions to each panelist in the roundtable and none of the panelist have yet read the other's answers. 

 

 

By Zesmerelda

By Zesmerelda

 

 

Our panelists include:

Michelle Wilson of Alpine Mortgage. You can find her on the web at WilsonHomeFinancing.com

Darel Ansley of Peoples Bank in Wenatchee Washington. He blogs on Active Rain and has been a guest contributor here.

William Doom of Columbia Mortgage Capital in Gig Harbor who blogs at MyEquityPro.com you can follow him @Ymplanner

Rhonda Porter of  Mortgage Master.  She blogs at www.MortgagePorter.com and is a contributor on RainCityGuide . You can follow her on twitter @mortgageporter.

Tom Vanderwell of  Fifth Third Bank, blogs at StraightTalkAboutMortgages.com. You can follow him @tvanderwell

David Gibbons of Zillow.  Zillow provides real estate data about houses and house prices. You can follow him @davidgibbons

 

I hope that these questions serve as a starting point which might continue in the comments section that follows.

I divided this post into two parts since there was so much great info here.  I will post part II in a few days.

 

1.2008 was a rough year. What is the silver lining for 2009? 

Michelle: I think everyone can agree the silver lining for 2009 will be buying low at historically low rates.  Also, first-time buyers from April 2008-July 2009 can take advantage of the $7500 interest free tax credit for renovations, debt consolidation or any other uses. 

Darel: I am still uncomfortable with heavy involvement of the Federal Government in the financial markets. However; one benefit of all their actions is lower mortgage interest rates. Things can change, but currently the FED plans to buy up Mortgage Backed Securities for the first half of the year in an effort to lower mortgage rates and get people buying homes again. This is working so far, and combined with recently lower home prices, homes are more affordable than in recent years. Fortunately, subprime is gone, so this program is limited to people who can actually afford to make their payments.

William: The end of banks failing. Dare I say the worst is behind us. 

Rhonda: Many unscrupulous loan originators are out of the business due to licensing requirements, less business and fewer programs. Consumers should have better odds of working with a mortgage professional than they did just a few years ago. 

Tom: The silver lining for 2009 is that it's not 2008. Seriously, we've made it through 2008 and we've cleaned out a fair amount of the problems that have been happening. Seriously, I think if we did had lending requirement in place from 2002 to 2007 that we have in place now, we'd be sitting in pretty good shape right now. Is there some what of a pendulum that has swung a bit too far? I think that potentially is true, but time will tell. The other silver lining for 2009 is that in some markets there will be signs of a bottom and a slow and gradual recovery. What areas? Not Michigan (where I'm from) but places like San Diego and a few others.

David:  Historically row rates. All homeowners with some equity in their homes should look into refinancing in 2009.

 

2.What kinds of home buyers will have the best opportunities in 2009?

Michelle: First-time homebuyers with down payments will be able to capitalize on low rates and have more likely have leverage over sellers regarding price negotiations.  

Darel: Really anyone who plans to buy and hold. Prices are low and financing is cheap, so now is a great time to buy a primary residence, second home or an investment. I am of the opinion that the people who make the most money tend to move in the opposite direction of the masses. So while people and banks are unloading homes cheaply, I think wise people are picking them up. This is the time to dust off the creative financing and zero-down books and find a Realtor who has a good track record of negotiating (Geordie).

William: Given FHA has increased its loan limits for King county from the esoteric limits, First time homebuyers will have the best opportunities. King County 2009 FHA loan Limit $506,000 for more info on New Loan Limits and New Guidelines for 2009 visit http://www.myequitypro.com/?p=642

Rhonda: Home buyers who are able to go "full doc" for their mortgage will have the most opportunities going forward. This just means being able to document your employment (college may sometimes count) for two years, show proof of your income for the past two years and document your assets/down payment. FHA offers minimum down at 3.5% which a home buyers immediate family may contribute towards as a gift or a loan and sellers can pay for the closing costs. 

Tom: The buyers with the best opportunities in 2009 will be those who are either first time home buyers with secure jobs and a down payment or those who are financially well off enough that they can have the cash to buy a new house without having sold their old one (or they sold their old one). The "contingent" buyers are the ones who are going to continue to struggle in 2009.

David: If you don't need to move in the next 7 years, you will find great mortgage rates, incredible selection and almost no competition. I also think that we will start to see a return of investors in many large markets. Some of the deals on bank-owned properties will just be too irresistible for a gambler.

 
3.Who shouldn't buy a house in 2009?

MichelleI don’t think people with little or no savings should buy a house.  A few years ago, when the market was surging and banks were lending to everyone and anyone who signed on the dotted line, buyers didn’t need a down payment or reserves to qualify for financing.  I think everyone should have at least 6-12 months of mortgage payments in reserves before considering a purchase (in this tight economy).  Job security just isn’t as secure as it once was.   

Darel: Property-flippers should stay out of the market. Not because the good deals aren't there, but because the market is not very liquid, and it might be a while before they get their money out.

William: Those who can will those who can't qualify wont. With new guidelines individuals don't have the option they previously had, that is the breathing on the mirror test. 

Rhonda:  Someone who is uncertain about their employment should maybe consider not buying at this time until our economy turns around. 

Tom: The buyers who shouldn't buy a house in 2009 are those who aren't confident they are going to stay in the same place for the next 7 to 10 years. How did I come up with that time frame? I think there's a good chance (on a national level) that we could see another 10% in price reductions. I also believe we're going to see what's called a "bathtub" recovery. That means that when we do hit bottom, we're going to bounce along that bottom for a while before we start seeing house prices resume their upward trend. If you figure a 10% drop and 6% brokerage fees and then a 3 year "muddle through" that means that in order to break even, you'd need 4 years of 4% appreciation to break even after 7 years. The time frame that buyers need to look at is substantially longer than it was a few years ago.

David: Homes in most markets are still losing value. People who aren't 100% certain that they'll stay in their homes for 5 or more years will not be buyers; they will continue to rent for the foreseeable future.

 

Like what you read here?

You can subscribe to future articles by email or get them in your feed reader.  You can even share them on sites like Digg, StumbleUpon, or Delicious by clicking the "Share This" symbol below.

We'd also love your comments.

Tagged: 

Comments

Great Blog, but can't seem to figure out how to subscribe to your RSS feed, can you help? Thanks. <a href="http://largedebts.info" rel="nofollow">:)</a>

Tanya- Thanks for visiting. You can subscribe either in a reader (like google reader) or have articles emailed to you. The feeds are located on the blue sidebar on the left hand side of the website at the bottom.

Looks as though Great Minds think alike. This is a great concept!! Accolades Geordie Romer.

Geordie Romer has posed 3 pressing questions to 5 currently best minds in real estate today. Great remarks from the roundtable.. you are helping us all make sense of how &amp; why to participate in today's real estate market - can't wait to get Part II of the discussion. ;-)

Great idea, some one needs to step up and help the industry

Miami Beach and Diane, Thank you for your kind words. One of the things that I'm attempting to do in my writing online and elsewhere is exactly that. Help others make sense of it all. I'm looking forward to Part II as well. Tom

Nice site! Thanks for the great post

Add new comment

Allyson and Geordie Romer

Leavenworth real estate agents - Allyson and Geordie Romer

For over a decade, Allyson and Geordie have been serving clients in the Leavenworth-area real estate market. Together, they work tirelessly to stay on top of the regional market and present the most relevant opportunities to their clientele.

When not in the office, they can be found exploring the endless recreation opportunities of the area in all of its seasons.

 

Testimonials

 

Geordie provided excellent real estate representation! We appreciated his detailed knowledge of the market, his up front and honest approach, and his negotiation skills.
As reviewed on Zillow  – 

- Laura Anderson

 

 

As “west siders” looking for a getaway near Leavenworth, Geordie provided insight … his knowledge of design features important in a “snowy winter wonderland” was appreciated. Thanks Geordie!
As reviewed on Zillow  –
 

- Jean Stern

 

 

Geordie made this somewhat complicated transition easier for us…going above and beyond to help us work through issues that came up during the sale of our parents home. We appreciated his knowledge, attentiveness to details and his willing spirit.
Our family is grateful for Geordie!
As reviewed on Zillow  – 

- Terry Foster

 

 

Geordie was great in every way. We have been looking in the Leavenworth area for some time, and Geordie was absolutely the best for local knowledge, history and depth on neighborhoods, developments and the local market trends. He was very quick to respond (even when he was on his vacation) and worked very diligently to get all of our questions answered in a very timely fashion. We would recommend him highly to anyone looking to buy or sell a home. Very friendly, and helped us navigate all of the local options before we made an offer on the property that we purchased. Thank you, Geordie!

As reviewed on Zillow  – 

- Ryan Olsen

 

 

It was such a pleasure to work with Geordie and his wife, Allyson on our cabin purchase. They showed us a variety of locations, listened to what we wanted and helped us find the perfect match. Everything was smooth and not stressful, just relaxed and easy. We would definitely recommend Geordie and use him again if the need arises!

As reviewed on Zillow  – 

- Cammie Schlosser

 

Moving to Leavenworth?

Are you looking for a cabin or a condo in Leavenworth that your family can use as a home base when climbing, skiing or hiking around Leavenworth or Lake Wenatchee?

Maybe you rent a house here and have decided to stay, surprised how a summer of rafting somehow turned into seven years.

Maybe it’s time to escape the hustle of the big city (and its rain) and move to Leavenworth with its four seasons.

Maybe you bought a condo years ago, don’t seem to use as much, and it’s time to sell.

Whatever your motivation, we are here to help. If you are buying a home, the best place to start is with our Homebuyer’s Guide to Leavenworth.