My Bellaire Blog

Another exciting week, as rates were up down, up ,down, and finally down .25% from last week. Will we ever see 4.0%? I don’t know, but if it makes sense right now to buy or refinance, do it. That is my ongoing advice.

 There is rumor that a $15,000 homebuyer credit has been approved in the Senate. I have not been able to confirm , but I know it is looming. Currently, there is APPROVED a  $7500 tax credit that is given at the time they file their taxes. So, if a first time homeowner (who makes less than $75,000/year)  buys before July 2009, they can claim this credit for 2008 (if they file an extension) or on 2009 tax return (a whole year from now!). The credit offsets the tax they owe, and is required to be repaid over 15 years. So basically, and interest free loan. 

The NEW PROPOSAL posed to the Senate as a part of the stimulus package is: Increase the credit to $15,000 (or 10% of the purchase price if less), and available to ALL homebuyers, regardless of income or purchase history, and not require repayment. Wow. That would spur some buying for sure. I will just avoid thinking where that money will come from for now. Let’s just take a bat for the team on this one, and call it a good thing.

I saw an article online that said ‘Credit Standards Tighten’. Where has that journalist been? That is old news! Yes, it is true. There are more rules, more paperwork. But we just get through it all somehow. The funniest example I have is one of our investors now requires that any letters of explanation for the borrower are handwritten, not typed. Hint: loan officers have really good writing skills. But isn’t that funny? We are going to such extremes. But again, a bat for the team. When I am 80, I hope to look back on 2009 with a grin, and know that I helped a lot of people accomplish the American dream of homeownership.

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

At the last Condit Elementary School PTO Meeting, Melissa Lowry, a private education consultant from Smartpantz Education based in West U gave a crowd of Bellaire parents some helpful tips to manage the all-too frequent homework excuses from the kids.  As I was starting to wonder whether my child was too young and immature for the responsibilities the school asked of her, Melissa soothed my worries by stating that up until 8th grade, parents need to go through the famous blackhole called “backpack” nightly to ensure important papers have not strangely slipped out of binders and folders. 

What a big relief for me!  My child was not really behind…  Expecting a fifth grader to be on top of all assignments, worksheets, projects and field trip permission slips is apparently too much to ask.  So now I don’t feel guilty hovering, digging through the backpack, checking the agenda despite the claims of my daughter that everything is taken care of.

On the other hand, Melissa emphasized that it is important to let the kids fail from time to time in the elementary years so that they learn from the natural consequences of their non-actions: better now, than when you are paying thousands of dollars for a college semester!  Homework needs to be a positive experience, with a consistent place and time attached to it.  It also needs to be a priority, because kids will learn study skills and the ability to concentrate for along period of time.  The role of the parent should be similar to the encouragement of a sport coach’s - as opposed to being tyrannic… 

Lastly, your child needs only to be the most effective student to succeed, not necessarily the smartest.  Good study skills, test-taking strategies, project management skills are all that are needed to breeze through high-school and college.  And consistent homework habits will help to develop those.

If you are interested in having Melissa come to speak at your school, give her a call at 713-444-6471.  She is really passionate about teaching and is a great speaker!

So where are the 4.5% rates, you are wondering? Your clients are asking, I am sure. They ask me too! Well, as you can see below, the rates are not far from that at  4.625%. But keep in mind, to get that, you MUST pay 1% origination fee (1% of the loan amount added to closing costs). If you want to ‘waive’ that fee, you can expect .625-.75% higher interest rate. That is a far cry from the .25% in the past. In other words, it makes sense to pay the 1% origination for many people, who expect to be in the home a long time. For those on a 6 year or less timeline, maybe not pay the point, and save your cash.

Why such a large spread between the 1 Origination and 0 Origination? I have heard several theories (a) lenders do not want to sell the higher coupons (rates), as they anticipate rates will go down, and their fallout will increase (b) they have been burned in the past paying originators the premiums on the back end, just to have early payoff in low rate markets, and (c) no one knows.  I pick C!  Does anyone really know?

Another rumor I have heard, is that some , if not all, of the big banks are losing money in their mortgage divisions. Big money. So they are hesitant to lower their rates because they are adding larger margins than in the past. To make it ‘worth it’ for them to stay in business. The margins from 03/04 when the rates were also at historic lows, and lenders could not print money fast enough, were turbulent times. Hiring frenzies, backlog in processing and fundings. The grass was not necessarily greener on the lenders’ side. Are they now remorseful and learning from their mistakes?

The FED meets this week for a 2 day meeting (Tuesday/Wednesday). For the first time, they will not consider lowering or increasing the rates. They will be concentrating instead on strategy to get the economy turned around.

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

Happy New Year to all!  This long absence only reflects the busy-ness of my business.  Yes, real estate is doing well, and it has been given a jolt in December when the Fed lowered interest rates.  We have seen closings at 4.5% on a 30-year fixed, unheard off rates for the last 50 years.  That’s a powerful incentive for buyers and investors standing on the sidelines to get into the game…  As for mover-uppers, there are so many homes for sale that the savings you will get on your higher priced bigger home will more than compensate for whatever you think it will take to sell your existing home! 

Besides “divine”, another mantra for the new year could be ”2009 is my Inaugural Year”.  I am sure you have witnessed the events in Washington, which had a magical, almost “fairy tale” feel to it.  I suppose you have taken it all in, and hoped for changes in your own lives.  Well, if you keep thinking of 2009 as your Inaugural Year, it will carry you a long way to implement many changes that you have perhaps been thinking about.  So what are you inaugurating this year? Let us know!

Have you ever been to the Awty International School campus at I-10 and N. Post Oak?  All the walkways are framed with rose bushes - still in bloom at this time of the year…  It is just beautiful and so fragrant to walk around the campus!  The same goes for St Anne’s Catholic Church/School at Westheimer and Sheperd.  Roses are quite delicate and they need the exact amount of water and sunshine – and pesticides to prevent fungus in the humid Houston summer.  However the gardeners at these 2 places are doing an amazing job.  I have a rose bush in a pot that I purchased a couple of years ago.  I forgot the name of it, but it is purple and so fragrant.!…  I could not resist but photograph 2 of the blooms last week to share with you.  I wish I could transmit scent over the Internet…

What’s your favorite rose?

Recent bloom in a pot

I have not used any chemicals yet...

Jennifer Hernandez from Patriot Bank Contributed this:

Well, on Friday I did receive confirmation from Santa that I have been good….rates were 4.625% on a 30 year fixed. (They were 4.5% for about an hour). This is for purchases. Refinances are a bit higher, so additional quotes apply. My feeling is that this WILL spark the interest of home buyers, and that activity in the new year will be renewed, and that it will spark the activity the government is hoping for. Why are rates so low? Who cares…take it for what it is, if I can be so blunt.

I would like to address builders. I predict that this is the next industry to be really affected by our economic downturn (recession!).  In fact they already are. Track builders mostly, who build specs. But custom builders too. They are being squeezed , and in some cases cut off, by banks . The strong builders are surviving, and are being required to put more equity in deals. Gone are the days of 100% cost lending. So, in turn, builders with inventory worried . They cannot get more lines to build more homes. Many will unfortunately go under. Spec lending is on hold with many banks, including ours. The banks just don’t want the risk. So I sit here and think what this could mean for consumers:  (a) Good deals on new construction (b) less inventory , and that will cause inventory homes to be more expensive. (c) less new homes, for now. ONLY MY PREDICTION that has no merit other than my own.

I hope you are enjoying the holidays! Have a great week, and keep saying your prayers. Its working.

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

I wanted to share my first attempts at growing food in Bellaire.  For so many years, after being discouraged by the hard clay that surrounds our home, I gave up my passion of growing vegetables and fruits.  Finally, this summer I reconfigured the backyard, cut out the tree that was shading it as well as the evergreen bushes, and spread bags of soil around the beds.  Finally I could experiment with my green thumb.  Well, as you can see in this photo, I have quite a few tomatoes!  Papayas have also done extremely well:  I just pray we won’t get a hard freeze before I pick all the ripened fruits.  Bell peppers are not doing so well.  I put them on a southern exposure but they are shaded by my neighbor’s house.  Other than that, herbs are flourishing:  Basil, parsley and fennel.  I have a few sprouts of Swiss Chard but they are taking forever to grow! 

How about you?  Have you tried your luck at gardening in Bellaire?  What works and what doesn’t?  I would love to hear from you.   One house on Evergreen has a loaded tangerine tree.  My mother on Azalea Trail was successful with eggplants and figs.

My Papayas

This is a contribution by Jennifer Hernandez:

Merry Christmas….oh, is it not Christmas yet? I thought the 4.875% 30 Fixed I saw this morning was Santa’s gift to me for being such a good girl this year. Then it vanished into thin air hours later, and we are at 5.25% . We should be careful what we wish for.  Rates are extremely low, but the economy is in the tanker. There are so many things making the yields (rates) of bonds go down on a daily basis. Remember that yields/rates down means prices are up. Prices up means that there is more demand for bonds. This happens when investors lose confidence in stocks, and they buy more bonds. For the mortgage coupons these days, no one seems to know what they are buying. The spreads between buying a point are unreal, anywhere from .500% – .750%. Never in 14 years have I seen that much of a spread. So save your money to buy that point down, otherwise, you will be paying dearly in the interest rate.

Some headlines for you, that affect the market in every way: Foreclosures have risen in every state in the nation (out just hours ago), foreclosures are forecasted to double in 09, California is on the verge of literally running out of money (all of Arnolds muscle flexing and charm means nothing now!), car giants are folding, we are officially in a recession (since Dec 07- ya think?), major corporate layoffs, terrorist attacks in Mumbai, changing regime in USA for the presidency, and to top all this off, there are pirates attacking ships off the coast of Somalia. Pirates? Are we living in some fairy tale now? Some days it sure feels like it.

But let’s look at the bright side! Gas is under $2.00/gallon, every consumer product imaginable is on sale, cars prices are rock bottom, and we have a new President that has given hope to the country, and seems like the world. There are right this very minute, 4,000 job openings in the Texas Medical Center that need to be filled. Houston is adding jobs! The Medical Center led us through the 80’s, and it will lead us through this, I can assure you.

I had a thought this week that should solve our country’s problems: why don’t we use part of lottery winnings to finance these bail outs!? The mega jackpot was $146 million! Who needs that kind of money anyway?

Have a great weekend! 

JENNIFER HERNANDEZ

Jennifer Hernandez

Vice President/Mortgage Consultant

Patriot Bank Mortgage

Office:    713-337-8400

Mobile:   713-446-7791

E-mail:    jennifer@patriotbankusa.com

Web:      www.loanwithjennifer.com

For those of you worried about the current state of the housing market, this video summarizes the suffering real estate owners have been going through lately.  It is painful…

http://www.youtube.com/watch?v=bNmcf4Y3lGM

Despondency is a great fancy word for a reality that is not so glorious… Basically, you’re feeling down in the dumps.  You’ve got the blues.  Despondency is a little more elegant than depression but it is basically the same thing.  It is easy to let oneself step on this downward slope.  All you have to do is listen to the news of doom and gloom, feel the pinch at the check-out line, hear the predictions of looming bankruptcies and bailouts, learn of a friend who has been laid off…  Unquestionably, times are tough right now.  And this is a good time not to look at the big picture anymore.  Look at your own situation, focus on what YOU can do.  It does not matter what’s out there.

One principle I have learned recently is “WHAT YOU FOCUS ON EXPANDS”.  And I have very much experienced this in my business.  While everyone is sounding the bells for the choking real estate market, I have put my focus on one thing: Lead Generation.  And what I focused on has expanded my business. 

You can do anything you put your mind to, so where are you putting your mind?  If you need inspiration, watch these 2 videos and let’s talk after that… 

http://www.youtube.com/watch?v=GF9wo9sVn2c

http://www.youtube.com/watch?v=CaSh7QYd-GE