Phil Grossfield's Blog

My Schedule…and A Little Extra:  I am taking advantage of the present moments.  Goodbye mon frère…today my best friend from Minneapolis flies back home to the frozen tundra.  While he was here I’ve gained 10 pounds and might need to have my liver checked out, but that’s the price one pays to be reunited with family.  My Mom and Dad arrive on Thursday and I am planning on taking some time off while they are here.  They are staying for 11 days over 2 weekends so that’s a lot of time. Nonetheless, while they visit I have decided to spend as much quality time with them as possible.  Therefore, you may see my out-of-office message over the next couple weeks…in it will be contact information for coverage in my absence.  I know you understand…at any age its true, but even more so as we get older…we must take advantage of the present moments.

My Schedule:  I have an appointment today from 9-11a and will be available the remainder of the day.

My Market Watch:   Interbank continues to be aggressive with rates…we are on the top of the list.  When Interbank is this aggressive Capital Markets tends to be a little trigger happy meaning that even slight fluctuations in the stock/bond markets can prompt a mid-day re-price.  Today Fed Chairman Ben Bernanke spoke to the Senate and said he believed the risks of Quantitative Easing outweighed the risks.  This is good for bonds but the stock market will like this as well.  How bonds and stocks react to the news is still a question at this point in the day.  Bernanke isn’t done either so there is definitely a possibility for continued volatility. According to the Mortgage Market Guide, there is resistance to increased bond prices and with yesterday’s gains they are recommending locking rather than floating.  I must agree…I think there is more downside than there is upside at this point.   My Disclaimer

My Fun Stuff:   Embrace Life  |  Bionic Hands Video  |  Bionic Eyes Video  |||  All My Fun Stuff

My Important Reminders:

• New Fannie Definition for Rate & Term/Cashout:
  • The definition of a limited cash out loan has been amended.  If you include the payment of real estate taxes in the loan amount, and you are not escrowing/impounding (meaning you are waiving impounds), then Fannie will consider the transaction cashout. HOWEVER, California does not allow a lender to require an escrow account, so, the rule does not apply in CA…how do you like them apples?!  Beautiful, eh?!  But if the real estate taxes are more than 60 days delinquent, then even in CA Fannie considers it a cashout transaction….kind of the exception to the exception.
  • None of this is applicable to a HARP/DU Refi Plus transaction.
  • So, to clarify the beautiful rule in California, we are not affected by this rule change, not even a tiny little bit, as long the payment of real estate taxes is not more than 60 days delinquent, got it?
• PURCHASE PRIORITY SENIOR UW TEAM.  Effective immediately, all purchases will be assigned to a Senior Underwriter team who will exclusively underwrite, condition, and clear conditions.  This is contrary to our normal queue-strategy for refinances using junior underwriters.  Interbank is doing this at the suggestion of the Account Executives who voiced their opinion that we need a more timely, consistent and predictable process for purchase transactions to give our clientele continued confidence to send them in.
• APPOINTMENTS.  I am setting up appointments for the next several weeks…please let me know if you’re interested in an office visit.  I will be sharing my insight on how to get new business in 2013 and what to prepare for as the year progresses….
• STILL WANTED.  We are looking for Senior Underwriters, Loan Coordinators, Junior UWs, Doc Specialists and Funders. Referrals are greatly appreciated.  Remote positions are available.

My Schedule…and A Little Extra:  Despite attending an Oscars party last night I didn’t watch even 2 minutes of the show…but that’s not too surprising.  The only movies I saw were Lincoln, Silver Linings, and of course Brave.  I LOVE movies but with two young kids it’s difficult to get out and when we do get a babysitter we are resigned to just grab some kidless peace with dinner and cocktails, can you dig it?  Sometimes I truly wish we lived near family…how lovely would it be to drive by my parents house, open the mini-van doors, push the kids out into a roll, and take off with the tires squealing?  But alas, we have no family in town so we have to hire someone to watch the kids…and that’s okay I guess.  Anyway, I thought Lincoln was tremendous but what do you expect when you put Daniel Day Lewis and Steven Spielberg together?  And I really liked Silver Linings although my wife wasn’t a fan.  But since I haven’t seen any of the other movies it’s hard to judge…kind of like voting for a political candidate whose name you don’t recognize.  My Mom and Dad said Les Miserables was the best movie they ever saw, even better than Gone With the Wind which made my jaw drop to the floor, but my parents are closing in on 80 so you have to take that into consideration (sorry Mom).  The only movie on the list I am going to make a point to see is Argo…I have heard great things about that one.  And that’s the end of my thrilling commentary on Oscar night…almost as exciting as the show itself.  |||  Fannie Mae is defining rate & term and cashout transaction differently with respect to the payment of real estate taxes, but the new definition will not affect CA loans in most cases…read My Important Reminders below.

My Schedule:  I have appointments today at 10a and 3p.

My Market Watch:   Interbank continues to be aggressive with rates…we are on the top of the list.  When Interbank is this aggressive Capital Markets tends to be a little trigger happy meaning that even slight fluctuations in the stock/bond markets can prompt a mid-day re-price.  Early tomorrow morning Fed Chairman Ben Bernanke speaks to the Senate and any time he opens his mouth traders are going to listen carefully.  I used to say that when Alan Greenspan showed up for anything traders were instantly making predictions about market direction based on the clothes he was wearing.  But Bernanke is expected to address the Fed’s intentions with respect to continued Quantitative Easing…the Fed’s strategy to buy bonds which continues to drive the artificial low rate bond market we are all currently enjoying.  Specifically, he is expected to tell us whether the Fed is going to continue buying bonds through 2013.  Needless to say, tomorrow morning should be interesting….   My Disclaimer

My Fun Stuff:   Embrace Life  |  Bionic Hands Video  |  Bionic Eyes Video  |||  All My Fun Stuff

My Important Reminders:

• New Fannie Definition for Rate & Term/Cashout:
  • The definition of a limited cash out loan has been amended.  If you include the payment of real estate taxes in the loan amount, and you are not escrowing/impounding (meaning you are waiving impounds), then Fannie will consider the transaction cashout. HOWEVER, California does not allow a lender to require an escrow account, so, the rule does not apply in CA…how do you like them apples?!  Beautiful, eh?!  But if the real estate taxes are more than 60 days delinquent, then even in CA Fannie considers it a cashout transaction….kind of the exception to the exception.
  • None of this is applicable to a HARP/DU Refi Plus transaction.
  • So, to clarify the beautiful rule in California, we are not affected by this rule change, not even a tiny little bit, as long the payment of real estate taxes is not more than 60 days delinquent, got it?

• PURCHASE SUBMISSIONS.  Effective immediately, all purchases will be assigned to a Senior Underwriter team who will exclusively underwrite, condition, and clear conditions.  This is contrary to our normal queue-strategy for refinances using junior underwriters.  Interbank is doing this at the suggestion of the Account Executives who voiced their opinion that we need a more timely, consistent and predictable process for purchase transactions to give our clientele continued confidence to send them in.
• APPOINTMENTS.  I am setting up appointments for the next several weeks…please let me know if you’re interested in an office visit.  I will be sharing my insight on how to get new business in 2013 and what to prepare for as the year progresses….
• STILL WANTED.  We are looking for Senior Underwriters, Loan Coordinators, Junior UWs, Doc Specialists and Funders. Referrals are greatly appreciated.  Remote positions are available.

My Schedule…and A Little Extra:   Fried Oysters and peppers, amazing stone crabs, Caesar salad, perfectly prepared lobster, filet mignon, and Alaskan king crab legs, crab fried rice, parmesan mashed potatoes, brussels sprouts, some kind of hot chocolate raspberry cake with sauce, and finally the best carrot cake I’ve ever had.  Oh, and 2004 Turley wine, a Vesper martini, and complimentary port to end the night.  That’s how we celebrated one of my two best friend’s birthday last night at Trulucks Seafood Restaurant in San Diego.  Then we crawled to the car and came home.  My other best friend flew in from Minneapolis to share the event and weekend.  On Sunday, we’re having another party with homemade Mexican cuisine from our mutual friend Rob who is an amazing unprofessional chef.  Good times y’all.  Celebrate them baby!

My Schedule:  I have an appointment today at noon and will be done at 4:45p today for neighborhood happy hour.

My Market Watch:   The Glass Elevator Analogy.  There was a mid-day rate change yesterday afternoon dropping pricing about 0.125 across the board, and that’s how pricing opened up this morning.  There are no economic reports out today or Monday so traders will look to technical signals to guess whether bond prices will go up or down.  That means traders look to a history of how the 30-year Fannie Mae bond has traded over the last 10 days, month, quarter, etc.  These indicators are called moving averages and they give traders a basis for guessing whether the price of bonds will go up or down.  Accordingly they buy and sell to try and earn a profit.  For example, if they see the bond is trading higher, like it is this morning, then they look for moving average ceilings.  As the bond price goes up a trader will expect it to hit the moving average ceiling and then start to come back down again.  If it goes through the ceiling, then they look for the next ceiling.  I wrote a post on this back in August called The Glass Elevator Analogy – I like to think it’s a good visual on how to look at the ups and downs of mortgage backed securities. Let me know your thoughts….  My Disclaimer

My Fun Stuff:   Embrace Life  |  Bionic Hands Video  |  Bionic Eyes Video  |||  All My Fun Stuff

My Important Reminders:

• APPOINTMENTS.  I am setting up appointments for the next several weeks…please let me know if you’re interested in an office visit.  I will be sharing my insight on how to get new business in 2013 and what to prepare for as the year progresses….
• STILL WANTED.  We are looking for Senior Underwriters, Loan Coordinators, Junior UWs, Doc Specialists and Funders. Referrals are greatly appreciated.  Remote positions are available.

My Schedule…and A Little Extra:  Embrace Life.

My Schedule:  I have an appointment today at noon and will be done at 4:30p today.

My Market Watch:  Pricing is better than yesterday by about 0.125-0.250, presumably in a reaction to the Fed minutes which were released yesterday.  The message in the minutes confused me because according to Bloomberg there was dissention on whether the Fed should continue to purchase bonds:  Several participants “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” the minutes showed…Bloomberg.  The reason it confused me is because a mere mention of the possibly that the Fed would alter its monetary policy for buying bonds is usually a good enough reason for traders to sell off bonds and put money into stocks instead.  But not this time.  It might be because there is a mention that monetary policy is increasing inflation, and bonds hate inflation.  So that little nugget may have tempered any concerns.  Not really sure.  I’d appreciate your thoughts on this one….  My Disclaimer

My Fun Stuff:   Bionic Eyes Video  |  Bionic Hands Video  |||  All My Fun Stuff

My Important Reminders:

• APPOINTMENTS.  I am setting up appointments for the next several weeks…please let me know if you’re interested in an office visit.  I will be sharing my insight on how to get new business in 2013 and what to prepare for as the year progresses….

• STILL WANTED.  We are looking for Senior Underwriters, Loan Coordinators, Junior UWs, Doc Specialists and Funders. Referrals are greatly appreciated.  Remote positions are available.

My Schedule…and A Little Extra:  Swing the Legs Soldier!  I worked out this morning for the first time in two and a half weeks.  I was up at 5a, got my blank out of bed and was at the club by 5:45a.  It was painful.  Being sick the last couple weeks has put a damper in my workout schedule and I finally felt up to the task to get back into it…but man, I tell ya, it was hard work getting out of bed.  I used to have a trainer who told me that when he was in the military his CO would come into the barracks at the crack of dawn screaming “swing those legs soldier!”. That meant swing the legs out of bed.  Now when my iPhone wakes me up at 5a I think just that…swing your legs Phil…get your blank out of bed!

My Schedule:  I have an appointment today at 11a in Lake Forest and otherwise available.

My Market Watch:  Pricing is the same as yesterday after the price worsening.  Today the Fed minutes from January 30^th will be released.  This report has a tendency to move the markets but usually it has just a mediocre effect since most of the information about that meeting is already known.  However, it’s possible there’s a nugget in the minutes that motivates traders to buy or sell bonds. After all, traders are looking for any information that will give them some insight into the direction of the market.  If they feel a new piece of information in the minutes indicates a stronger economy, it’s a good excuse to sell off bonds to free up funds to invest in stocks…this would worsen mortgage rates/prices.  On the other hand, if they find something that indicates a weaker economy than thought, then they would sell off stocks and use the capital to invest in bonds instead…this would improve rates/pricing.  So, all eyes are on the minutes which are released at 11a. My Disclaimer

My Fun Stuff:   Bionic Eyes Video  |  Bionic Hands Video  |||  All My Fun Stuff

My Schedule…and A Little Extra:  Soon everyone will be able to see…even blind people.  I don’t mean in some spiritual way, I mean actually see.  Like any true geek does, I was reading technology news and came across an article about bionic eyes…yes, you read me correctly.  They are developing technology that is surgically implanted into the eye and brain that will give people the ability to see.  For now its limited as you’d expect, but imagine being completely blind and seeing light for the first time in years, or the first time ever.  Just being able to distinguish light and maybe colors would dramatically change the life of a blind person.  And you know the technology is just going to get better and better, am I right?  Bionic Eyes Video.  And how about bionic hands?  They now have prosthetics that are so realistic it borders scary…it’s like from the future man!  It is so amazing to me the knowledge they have of how the body works that they can attach a prosthetic electronic/bionic hand to your arm and your brain can learn to control it as if it were an actual limb.  And you know the technology is just going to get better and better…amazing.  Bionic Hands Video.

My Schedule:  I am available all day.

My Market Watch:  Pricing is the same as Friday and yesterday…no changes. As of now the market is flat with almost no activity.  There is not much going on today but there are a fair amount of economic reports this week that could make the markets move.  In general, the inverse-relationship of stock and bonds is still a valid economic truth.  That is, when the stock market performs well the bond market performs poorly and vice-versa.  The theory, which is not always true, is that traders tend to pull money from bonds to invest in stocks and vice-versa.  Many believe stocks have reason to jump this week which would make bonds suffer.  But there is also concern over domestic companies poor reporting.  As always, there is no clear investment strategy.  My advice is to have healthy and comprehensive discussions with your borrowers about the advantages and disadvantages of floating versus locking.  But whatever you do, once you lock a loan, make sure your borrower understands that you  are doing so to protect them.  Should rates move, you expect them to be faithful to you.  Have I ever mentioned that I have a tendency to state the obvious?  My Disclaimer

My Fun Stuff:   All My Fun Stuff

My Important Reminders:

• Guideline Enhancements (from 2/8)
  • Condos to 90% LTV, OO (instead of only 80%) but if >80% then require 720 Fico
  • All NOO to 75% LTV (instead of only 70%) but if >70% then require 720 Fico

• APPOINTMENTS.  I am setting up appointments for the next several weeks…please let me know if you’re interested in an office visit.  I will be sharing my insight on how to get new business in 2013 and what to prepare for as the year progresses….
• STILL WANTED.  We are looking for Senior Underwriters, Loan Coordinators, Junior UWs, Doc Specialists and Funders. Referrals are greatly appreciated.  Remote positions are available.

My Schedule…and A Little Extra:  Winner!  As you know my wife is a travel writer with a website called TravelMamas.com.  Periodically she posts contests on her site and she has two of them going right now.  One is a chance to win a $100 VISA gift card and the other is a chance to win 10 trips to Kissimmee, Florida land of Disney plus $25,000.  Need I say more?  |||  Yesterday I wrote a nice little Be Hers Valentine message.  Below is from Bernie, one of my loyal readers for him:

Be His:   If you have a boyfriend make sure he knows how much he means to you. If you have a husband let him know you would say yes all over again. If you have a son let him know how proud you are of him. If you have a single guy friend let him know how cool he is. Happy Valentine’s Day!

My Schedule:  I have one meeting in San Diego at 2:00p.

My Market Watch:  Pricing is worse today by about 0.125…basically we lost the price improvement we saw yesterday afternoon and pricing is back where it begun yesterday morning.    My Disclaimer

My Fun Stuff:   All My Fun Stuff

My Schedule…and A Little Extra:   Be Hers.  If you have a girlfriend, make sure this day she knows how much you care about her.  If you have a wife, make sure this day she knows you appreciate her.  If you have a daughter, make sure this day she knows how special she is to you.  If you have a girlfriend who doesn’t have a valentine, reach out to her and be her valentine.  Happy Valentine’s Day!

My Schedule:  I have a meeting in Irvine at 11a so I will be in the car at 9:45a.

My Market Watch:  Pricing is better today by about 0.125-0.250 and this after a surprise price improvement yesterday by Cap Markets.  As I said yesterday, based on the trading of the bond I expected worse pricing but Cap Markets in their wisdom issued a price improvement and now after negative economic news out of Europe they have improved pricing further.    My Disclaimer

My Schedule…and A Little Extra:   “Because it’s fun!” was the reason my daughter gave me for why we were at the San Diego Food Bank last night volunteering our time.  She was right, it was fun, but then I asked her if that’s the only reason we do it and she gave me the best answer, “because we need to help out those who can’t help themselves.”  Right on the money baby!  Last night I picked my daughter up from school and we hit In-N-Out Burger before going to the San Diego Food Bank.  They assigned us to the assembly line of filling a box of food for needy seniors.  Each box was filled with two boxes of cereal, 2 cans of fruit, 2 cans of veggies, a can of beef, a carton of milk, OJ, dry beans, rice, and a bag of dried milk…that was our assignment, put in the dried milk.  Some of the volunteers were kids getting credit for school, some were paying off community service, and some were like us, just doing our part as citizens.  The whole commitment lasted 2 hours and my daughter worked the whole time without a complaint.  Afterwards, we went to the donut shop.  I’m proud of her, and of me.

My Schedule:  I have a meeting in San Diego at 1p.

My Market Watch:  Pricing is worse today by a significant amount.  Traders are dumping money into the stock market and bonds are getting killed as a result.  It’s a locking environment until further notice.  My Disclaimer

My Schedule…and A Little Extra:   I’m voiceless.   It happens to me occasionally…it is not uncommon.  When I was younger it happened every time I went to a concert.  I suppose it was cause I was singing with Billy Idol at the top of my lungs, or The Who, or Prince, or U2, or the Grateful Dead, or Van Halen, or Pink Floyd, or, well, you get the picture.  Then it started to happen when I went to parties, pretty much any loud party.  Now it only happens when I get sick since I rarely go to loud parties anymore.  I think it’s the Universe’s way of telling me to shut the hell up.  So, I’m shutting the hell up.  I will not be answering my phone today…only emails and text messages.  |||  I watched the Grammy’s last night with my wife.  While she commented on every single outfit, hairstyle, and guessed the age of all the singers, I tried to see if I was completely out of touch with today’s music culture.  Back in college I considered my tape collection to be pretty comprehensive…I loved music from Crosby Stills Nash & Young to Prince to John Denver.  Last night I was actually pleasantly surprised I recognized almost all the songs, although I had no idea what the people looked like that sang them.  I was also pleasantly surprised to really enjoy all the performances…all in all I’d say it was one of the better Grammy Award shows.  However, I didn’t see one awe-inspiring performance, you know, like Michael Jackson’s Billy Jean in 1984 or P!nk’s Glitter In the Air in 2010.

My Schedule:  I have one meeting in OC at noon and another at 2:30p.  Then I’ll hit a Starbucks and get caught up on emails and then drive home late.  Because my voice is gone, I will not be answering my phone today…only emails and text messages….

My Fun Stuff:  As I feel more and more alone, my phone confidently connects with everyone. As I feel more and more lost, my phone calmly knows how to get anywhere. As I struggle to remember mundane things like the name of that movie with the boat and the guy with the lip, my phone smugly recalls literally everything. As I increasingly lose the nouns, verbs and adjectives that once stood ready to articulate my thoughts, my phone taunts me with its instant access to all the words there have ever been. There is only one possible conclusion. Slowly, without realizing it, I seem to have outsourced my mind to my phone. And to make matters worse, the damn thing knows it…and it’s starting to screw with me. Several times during the day I feel it buzz in my pocket, alerting me that some vital information has just arrived. Then, when I look, there’s nothing there. No email. No text. Nothing. Was the buzz in my mind? I don’t think so. I think it’s purposeful. I think my phone is mocking me. And it’s not just my phone. It’s all of them. They are working together, systematically robbing us of our intelligence, our humanity. And then, when we are made stupid and helpless, they will take over. It’s just a matter of time before the next generation of iPhone is equipped with an opposable thumb. Oh yeah, they’re smart alright. Evil, world domination smart.  Vanity Card #407 – Chuck Lorre Productions |||  All My Fun Stuff

My Market Watch:  There’s not much going on today so I expect the market to be docile…I kind of wish I hadn’t typed that.  Rates are a little better than Friday by about 0.125 in price.  Unless something out of the ordinary gets reported today or some unexpected news comes out of Europe, I expect trading to stay flat all day….   My Disclaimer