Phil Grossfield's Blog


You Locked It…You Stick With It!

You locked it…you stick with it!  I thought this was an interesting snippet from Rob Chrisman’s blog this morning regarding the practicality of the renegotiation of locks…a comment from one of his Capital Markets readers said, “LOs seem to forget it is a real economic cost to the company. After all, the company has guaranteed to stand by its lock – shouldn’t the borrower? And shouldn’t the LO remind the borrower of this?” I tend to agree but I also understand the borrower’s need to get a good deal, after all, this will conceivably be a 30-year transaction and it’s likely the largest financial transaction of the borrower’s life.  Therefore, if the market moves significantly, it’s not unreasonable for a borrower to ask for a better rate. Also, as an AE I understand I will lose some loans because of a drastic shift in rates, but I also know I’ll pick some up…believe me, Capital Markets knows this too.  All that said, the point in the above quote is well taken…as the LO you should communicate that a locked loan protects the borrower from a downturn in the market. If the bank must honor their locked rate then its only fair the bank asks the borrower to honor it too.

In my post yesterday I asked if $150 million was enough for any citizen.  I received some interesting feedback;

Mike in Laguna Hills said, “Billionaire oilman John D. Rockefeller in response to the question of how much is enough: “Just one more dollar.” It’s not the money that drives us Phil.  It is the game. Some of us just like winning more than others.”

Marcia in San Diego said, “The billionaires shouldn’t be the only people working hard to pass their money down to those working….well, not at all or certainly not as smart or hard as those making the big bucks. I think we need to get back to basics with our Civil Service jobs too. Congress and public officials need to have a cap on their salary, not work for 2 years and receive life time benefits. They need to be like everyone else in the work force.  Earn what you receive.  And receive the same health care, vacation time, etc. as the norm.  not make this sh#! up for the general public and give yourself another set of rules to live by….oh Phil, don’t get me started.  I have a lot of work to get done. Toodles.”

Bernie in San Diego said, “The issue is a personal one and every person will have their own opinion. I do not have a problem with people making a lot of money because they spend it and that creates jobs. Who I have a problem with is the able bodies person who lives on welfare and expects the world to take care of them because they are breathing. The person who robs and steals from others because they do not want to work just take from every one else. Because some how they feel the world owes them. I have a news flash the world owes you nothing.”

My Market Watch:

Stocks have made a move and bonds are suffering as a result. So far the damage is minimal…let’s hope it stays that way. Today’s big news is the release of the Fed meeting minutes from last session…typically they are released at 11a but they were released early this morning because apparently somebody leaked information…so they just put it out there early.  However, there were little surprises…some members feel they the Fed should continue to purchase bonds for an indefinite period while others feel the Fed should back off and dim the lights so to speak…but all this is old news. Later this morning there is a 10-year note bond auction which might affect trading.  For now it looks like locking in the short-term is prudent.  My Disclaimer

My Schedule:

I have a meeting this morning in Costa Mesa at 10:30a so I will be driving and available by phone early.  Then after noon I should be easy to reach….

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