Phil Grossfield's Blog

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

My Schedule…and A Little Extra:   It’s because I was up most of the night and I’m fighting a cold.  Yeah, I’m a little out of it.  I took my son to the emergency room last night because he couldn’t stop coughing, even after multiple asthmatic treatments.  He’s fine though, false alarm, just coughing a lot and really not much we can do about it.  Needless to say, I hardly slept last night and I feel much like I imagine Paula Abdul feels most of the time.  So, if I tell you we refinance 100% NOO SISA loans, I highly recommend you check my work.  Speaking of which, I remember as the branch manager of MortgageIT, after Deutsche Bank bought us back in 2007, my boss’s boss flew down to San Diego to tell us about some new products we were introducing, including a 100% NOO loan.  I remember asking if I could refuse to sell the product, since I felt it was nutballs.  Is that a real word, nutballs?  I remember being told that if I refused to sell a company product it would be considered insubordination.  To be fair, my superior also thought it was nutballs, but she had a responsibility to represent, nutballs or no nutballs.  I kind of like saying nutballs…has a nice ring to it.  Anyway, those were crazy times.  It was the beginning of the end…a desperate attempt by the powers-that-be to reach for more loans before the inevitable.  So, if I tell you we have a No-Doc loan, tell me I’m nutballs and to go lay down, alrighty? Cool.  Nutballs.  I like it.

My Schedule:  Cancelled my appointments and staying home.  Behind the computer all day with occasional naps I imagine. 

My Fun Stuff:  Humpback Whale Shows Appreciation After Being Freed From Nets  |||  All My Fun Stuff

My Market Watch:  Prices are a little better today after stocks started out slow, probably a result of traders taking gains from the last couple days.  With little in the way of economic reports, traders are looking to any tells on what is going to happen in the market, and when they do that they often look across seas.  This is actually a good thing for bonds, since financial issues over yonder impact global markets which of course impacts global markets.  However, that said, the bond is not trading favorably as I type and I will be watching it closely today, unless of course I am taking a nap.   My Disclaimer

My Schedule…and A Little Extra:   What do you mean you have no plan?!  It always amazes me when I ask Brokers and Loan Officers what their plan is…most of time they have no plan. Can you believe that? How can you have no plan?  Of course, the best LOs and Brokers not only have a plan, but they are executing that plan as I type.  I’ve spoken to a few brokers who use the excuse they’ve been too busy to put any attention to the future. So, we discussed ways to delegate to free up time.  After all, without some idea of what you are going to do over the next 10½ months, you’re really putting your business, yourself, and maybe your family at a huge disadvantage.  Everyone in business needs a plan, otherwise you’re just flailing about. When the market changes and rates continue to go up…where will you be…where will you be going? What have you been doing to capture purchase loans? What have you been doing to increase your referral sources? What have you been doing to stay in touch with your existing client base?  I am available to discuss these issues, either individually or in a group.  By the way, part of my plan is to make myself available to my clientele to consult on future business.  Let me know…I am accepting appointments….

My Schedule:  I had a conference call this morning from 9-10a and have back-to-back meetings in San Diego at 1:30p and 2:30p.  I will be available in-between and after, etc.  as this is a busy day, please be patient with replies….

My Fun Stuff:  Laugh!  |||  All My Fun Stuff

My Market Watch:  Yikes!  Bonds are down about -40bps this morning.  Wow.  Pricing dropped 0.500 in some spots.  And this after a price improvement yesterday.  Holy volatility Batman!  Its ugly right now, seems to me that traders are taking any reason they can to dump money into stocks and avoid the bond market.  Not sure if you know this but I’ve been accused of stating the obvious from time to time….  My Disclaimer

My Schedule…and A Little Extra:   The sirens roared as she saw fire-trucks and police cars whiz by…a panic overcame my wife…she was on her way to pick up my daughter from school…WHAT HAPPENNED?…was there a shooting, was she safe?!  Then she saw the scene of the accident just a few blocks from the school.  Immediate relief…our daughter was safe.  But the relief turned to sadness when we heard what happened…an SUV struck a nanny dead-center in the middle of the crosswalk as she pushed a stroller across the busy street.  The nanny soared 30 some feet into the air.  The baby who was strapped into the stroller was dragged under the car.  The first person to respond at the scene was my good friend and neighbor Jen…from her racing bike she saw the whole thing unfold before her eyes.  She went to the baby first and rescued it from underneath the truck…remarkably it was still alive…she ended up in critical condition with a skull fracture.  The 40-year old Nanny with two teenage children didn’t make it. Turns out the driver, who blew a red light at full speed, had given birth the day before…she never even slowed down, no doubt distracted by her cell phone.  Why she was driving a car the day after giving birth is a mystery.  I realize these horrible incidents happen all the time, but this was close to home.  My wife was really shook up.  I feel bad for the Nanny, her two young kids, and her family.  I feel bad for the driver, who will no doubt face manslaughter charges amongst other life-altering consequences.  I feel bad for the driver’s family and newborn baby, whose birth is scarred by the incident.  I feel bad for the baby and pray she will be alright.  The only joy I can grasp onto is that the baby is alive, and I am sending good thoughts into the universe as I visualize her recovery…please join me in this vision…take 15 seconds to close your eyes and visualize the baby smiling and laughing, and send well wishes her way….

My Schedule:  My daughter is home sick and my wife is having dental work this morning…that means I’m stuck at home, working in the kitchen.

My Fun Stuff:  Best Worst Learning Techniques  |||  All My Fun Stuff

My Market Watch:  Bonds were trading stronger out of the gates this morning as stocks tumbled a little.  No doubt investors were taking some gains from last week and with some negative economic news from across seas it was good excuse to sell stocks and buy bonds.  Pricing looks about 0.250 better than when things ended up on Friday.  This is a light week for economic reports so traders look to other sources for guidance, such as economic news from across seas or other geopolitical insight.  My Disclaimer

My Schedule…and A Little Extra:   I hope your January went well.  I funded 144 loans for near $50m tying me for 5^th place and I’m happy with that.  My short-term goal is to break $55m in March and $60m by June.  I hope you have goals set…if you don’t, then do it.  Goal setting is a must…even if you keep them to yourself.  I’d lecture as to why it’s important but you should already know that.  February is a short month so we need to jump on it.  |||  So here we go…you may or may not know this but I’m a fairly big American Idol fan.  Maybe it’s because I love to sing and envision myself, while I’m taking a shower, that I’m on stage singing to thousands of people.  That’s a fantastic image of me don’t you think? I mean the image of me singing to thousands of people on stage, not the image of me in the shower pretending to sing to thousands of people on stage.  The real reason I love American Idol is because it’s fun for me to see people’s dreams come true.  I love to see a construction worker audition and find himself living a dream.  And, it’s fun for me to see an unknown with incredible talent discovered.  You gotta dream people!

My Schedule:  My daughter is in some running event at school from 10-10:45a and I will there…other than that I’m available until Happy Hour….

My Fun Stuff:  Best Worst Learning Techniques  |||  All My Fun Stuff

My Market Watch:  The Jobs Report indicated a weaker than expected economy and traders bought bonds on the news.  There were other reports as well affecting spending but you can read about it on Bloomberg.  Suffice it to say our pricing this morning is better by about 0.250.  My Disclaimer

My Market Watch:  The 30-year bond traded up and down today.  This morning it was down and I was concerned we might have a price worsening.  Then around noon it ticked up over +12bps and I thought we might see a price improvement.  Bottom line is nobody knows what’s going to happen tomorrow with the Jobs Report but I think there will be some movement.

Remember, you can lock online until 9:45p…rates below are good until then.  After that, you’re on tomorrow’s rates.

The expected number to be reported in the Jobs Report is 160,000 new jobs.  Traders will decide how to spend tomorrow based on how many new jobs are reported above or below expectations of 160,000.  If the report comes in at 160,000 new jobs as expected, then the movement in the market should be minimal.  But if the number comes in at say 200,000, then traders will interpret that as a strong economy…more new jobs than expected equals a healthier economy, right?  In that case traders will invest in stocks and likely pull money out of bonds and when that happens rates/pricing worsen.  On the other hand, if the Jobs Report comes in low, say only 120,000 new jobs, then traders will interpret the economy is worse than thought and they will historically sell off stocks and use the money to buy bonds instead.  When that happens rates/pricing improve.

The reason bonds were trading up and down today is because of uncertainty…some were buying bonds in anticipation of a weak jobs report which drove the price of bonds up…then maybe sold off for a quick profit….but there is no way to know.  So, if you’re thinking about locking tonight in front of the Jobs Report, you have until 9:45p to do so…after that I wish you the best.  For my money, I’d lock.  Based on what I’m reading and based on the way things have gone lately I just feel there is more downside than upside.  Whatever you do, be sure to make decisions on whether to float or lock based on YOUR OWN RESEARCH.  My Disclaimer

If you know what’s going to happen tomorrow please let me know and after its over we can join Eddie Murphy and Dan Aykroyd on the beach.  Feeling Good Louis!   

My Schedule…and A Little Extra:   Last day of the month!  I am available all day except I have to go get my credit card that I left in a beer house the other day and I need to grab some dog food before she eats the legs on the tables.  |||  In case you missed it from yesterday:  Do you think your Real Estate Agents would find this interesting?  NAR with Google wrote a report on how people research home buying.  The Digital House Hunt reports/discusses:  90% of home buyers searched online during their home buying process; Real estate related searches on Google.com grew 253% over the past four years; YouTube is the top video research destination for home buyers, etc.

My Fun Stuff:  Where The Hell Is Matt?  In 2012   In 2008  |||  All My Fun Stuff

My Market Watch:  Rates/Pricing is the same as yesterday after a price improvement.  I hope you read my email yesterday and I hope you saw my warning about bonds improving and I hope you waited to lock to take advantage of my predicted mid-day rate change for the better.  Today the bond is already trading negatively from the onset…it’s currently down -9bps since yesterday’s close.  That said, Cap Markets published rates/pricing the same as last night after the price improvement.  That tells me they are probably watching closely to see if there is another down-tick on the horizon…if the bond slips even a little bit more, they might be inclined to protect themselves and issue a rate change for the worse.  Of course, who knows what’s going to happen in the next few hours, but if things deteriorate even slightly, I be they’ll act quickly.  |||  Changing the topic to the Jobs Report, which comes out in the morning, the expected number is around 160,000 new jobs.  Traders will decide how to spend tomorrow based on how many new jobs are reported above or below expectations of 160,000.  So, if the number comes in at say 200,000, then traders will interpret that as a strong economy…more new jobs equals a  healthier economy, right?  In that case traders will invest in stocks and likely pull money out of bonds and when that happens rates/pricing worsen.  On the other hand, if the Jobs Report comes in low, say at 120,000, then traders will interpret the economy is worse than thought and they will historically sell off stocks and use the money to buy bonds instead.  When that happens rates/pricing improve.  So, what the heck is going to happen tomorrow?  If you know the answer please let me know and after its over we can join Eddie Murphy and Dan Aykroyd on the beach.  Feeling Good Louis!   My Disclaimer

My Recent Posts:   Where The Hell Is Matt? Tracking Bonds  |  Kids Birthday Parties; Volatile Bond Market  |  Random Act of Kindness  |  Lance Armstrong – A Discussion…  |  MLK Gloriously Oblivious  |  Watch Out…I’m Packin’ A Gorilla!  |||  All My Previous Posts

My Important Reminders:

• LIMITED CONDO REVIEWS.  We can no longer accept limited reviews filled out by the LO and they need to be filled out by the HOA or Management Company…this is an investor requirement and is effective immediately.
• UW CHANGE.  Beginning with applications dated on or after 1/21/13, UWs will ask for 2012 W2s for salaried borrowers.  In the event the borrower has not yet received the W2, the condition will be added to the Approval and it must be furnished prior to closing.
• 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:   WHERE THE HELL IS MATT?  I love this guy…been following him for years now.  Basically he travels all over the place and takes video of dancing with people from all over the world.  Its infectious and he has made a living out of it.  His videos on YouTube are seen by millions and when you watch you’ll see why.  It’s a nice message and for some reason it resonates with people, including me.  2008:  Where the Hell is Matt? and 2012:  Where the Hell is Matt?  |||  LIMITED CONDO REVIEWS:  Please be advised, for all new submissions a condo cert must be filled out and signed by the HOA, even for a limited review.  This does not affect loans submitted prior to 1/21/13.  SALARIED 2012 W2s:  Beginning with applications dated on or after 1/21/13, UWs will ask for 2012 W2s for salaried borrowers.  In the event the borrower has not yet received the W2, the condition will be added to the Approval and it must be furnished prior to closing.  |||  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….

My Schedule:  I have one meeting today at 10:00a and otherwise available all day….

My Market Watch:  I received many questions and comments from yesterday’s post about market movement and the volatility of bonds.  So, this is an attempt to explain further.  In the graphic you can see that the 30-year Fannie Mae bond is trading between S1 and R1.  S1 is a floor of support and R1 is a ceiling of resistance.  Traders expect the bond to trade in-between these moving averages.  If the bond trades above R1, then traders look for the next ceiling, R2, for guidance.  Similar, if the bond trades below S1, then traders look to the next floor, S2, for guidance.  I hope this isn’t getting too technical.

Right now, the bond is trading just above the S1 floor of support…if it falls through the floor, then traders will continue to sell and you can expect it to slow down when it reaches S2.  Notice this is what happened yesterday…the bond sold all the way down to S2 and then bounced off the floor and started trading up again.  That’s why we saw pricing get worse and then improve again.  When bonds sell off (go down) then pricing/rates worsen.  If the bond is being bought (goes up) then rates/pricing improves.  Does that make sense?  Let me know if you have any questions, okay?   My Disclaimer