Phil Grossfield's Blog

My Schedule…and A Little Extra:   Lincoln made me feel hopeful.  I forgot to mention that in my post yesterday where I drew an analogy between the 13^th and 2^nd amendments.  When I got out of the movie I was sad because Lincoln was shot and killed (spoiler alert!) but I felt hopeful because so much was accomplished.  The movie does a terrific job of illustrating just how difficult it was to pass the 13^th amendment…after all there was a civil war still in process.  In a nutshell, there was tremendous pressure and desire to end the war and it was believed that trying to force passage of the 13^th amendment would stammer the possibility of a cease-fire.  So, when I learned just how challenging it was to get the amendment passed, it gave me a sense of hope.  Yes, we have mental illness that has the capacity to destroy lives.  Yes, we have a violent culture in America that is growing.  Yes, we have gridlock.  But we have a legislative system that works if we can get together for the overall greater good.  I received a large number of comments on my post yesterday with varying opinions on gun laws, mental illness, constitutional rights and the like.  But I received only one opinion about what happened in Connecticut.  I am hopeful.

My Market Watch:  Heads-up this morning…the bond market is fluctuating.  The primary reason is renewed hope over discussions on the Fiscal Cliff which has given stocks a boost.  When stocks do well most traders are selling off bonds.  What that means to you is that rates/pricing might worsen…if you have a price-sensitive transaction and you are thinking about locking, this might be a good time to have a discussion with your borrower about locking in.  Why?  Because when bonds sell off the price worsens which makes lender rates/prices worse.  For now, it appears things have stabilized and maybe Cap Markets has already priced in these concerns.  Late this morning is a 5-year Note auction.  I think traders are pessimistic after an auction yesterday came in with a D rating which is not good.  It might be another reason why bonds were selling off.  My Disclaimer

My Schedule: Available all day until 4p and then done.

My Schedule…and A Little Extra:   My wife cried uncontrollably, “Why!?!”  After the initial horror of grasping the loss of those precious young lives and the others affected, her mind like every parent immediately refocused on her own seven and four years old kids…the target age of the shootings.  Not safe at school…not safe at the mall…not safe anywhere.  When I was 7-8 years old I was practically independent…I rode my bike to school and even went to the mall…after all, Tron, Pac Man and Star Wars were waiting for me at the arcade.  Now you can’t let your kids go to the bathroom without worrying they’re in danger.  But shootings at school?  Unthinkable.

My way of dealing with it on Friday was to avoid the news…I concentrated on work.  On Saturday night my wife and went to the movies…we saw Lincoln. Yes we knew it was a heavy movie and probably not the right medicine but we really wanted to see it.  Good Lord…the previews at the movie were so extremely violent I swear I was uncomfortable from the get-go.  My wife was squirming in her chair…we kept looking at each other…what is wrong with us Americans?  We glorify violence…the more ghastly the better.  Maybe there is some sort of death-toll requirement in Hollywood, you know like a formula they came up with…‘if we have 12 people brutally murdered within the first 15 minute of the movie then the movie’s success is 15% more likely, 20% if we add a lot of blood and guts.’  The directors in Hollywood must have special meetings to contemplate the most gruesome and horrific scenes possible…and then they go for shock value beyond that.  Sure, maybe I was over-sensitive but the previews made us altogether uncomfortable…and then the first scene of the movie was the civil war.

The movie however was fantastic in every aspect and I can’t recommend enough that you go see it.  Lincoln and so many others dedicated themselves to the abolishment of slavery…it was morally reprehensible…evil.  And they barely passed the amendment…but they did.  Although the intentions of the 2^nd amendment were honorable, I can’t help but think there is an analogy to the 13^th amendment.  I mean, Lincoln worked to abolish slavery not only to free the bound, but also to free the unborn shackled.  Maybe it’s time we reconsider the 2^nd amendment which indirectly guarantees more deaths of future Americans.  In modern times is the 2nd amendment necessary…is it outdated either in full or in part?

On Facebook I saw repeated comments like, “It’s ridiculous to live in this violent country where we encourage guns.  I’m outta here, done, I quit, I’m moving to Europe!”  My wife also expressed such concerns and said she wanted to move.  I participated in some respectful yet heated debates on Facebook about the 2^nd amendment and gun control laws.  I argued that the statement guns don’t kill – people kill, is not relevant when you see stats like in the graphic below which was circulating on FB (I have not verified its accuracy).  One of my neighbor friends elegantly pointed out the right to bear arms has been guaranteed to our citizens for more than 200 years…it is very dangerous to start picking and choosing which constitutional rights to restrict.  I had another close friend and former law school classmate argue that it’s just not feasible to close the door on gun laws, it’s ingrained into our society and impossible to scale back we have enough guns on the streets in America to arm the nation for the next millennium.  But in my opinion, particularly when I see stats about handguns in America, something has to change…both legally and culturally.  Your thoughts?

My Market Watch:  Very little activity other than a D rating on an auction…might move bonds south and if so rates might worsen…I’ll let you know if anything changes….  My Disclaimer

My Schedule: Available all day.  J

My Schedule…and A Little Extra:   I saw The Hobbit last night…it was just okay.  Certainly not the epic Lord Of The Rings and most definitely not Peter Jackson’s best work.  Some scenes were, eh, cheesy…that is, way too far beyond the realm of plausible.  I mean, we go to these movies knowing that trees don’t really come alive and that mountains don’t really fight each other during a storm, but we put aside that mindset and live within the author’s imagination.  But at the same time the plausibility of what is happening must stay within a certain boundary.  You can’t have a group of 15  fall 1000 feet down a mountainside with boulders flying everywhere and everyone just gets up and walks away unscathed.  Does that make sense? Also, having read the books when I was a kid, I found myself trying to remember since the movie seemed very different from my memory.  I was disappointed but I still found it entertaining….  |   Was it too harsh?  My post yesterday received many comments when I insisted the LO must be more proactive with expiring documentation and how you have to manage expectations of your client.  Most of the comments agreed with me but then added something about how the lender has to take responsibility for its delays.  I don’t disagree.  But I feel at ease knowing Interbank usually steps up and does the right thing most of the time, particularly when it comes to lock expirations. Anyway, I love this kind of commentary…it’s healthy.

My Market Watch:  Very little activity…I’ll let you know if anything changes….  My Disclaimer

My Schedule: Available all day.  J

and A Little Extra:  With the holidays the timelines for lending has gotten a bit crazy…and extended.  Are your docs expiring at the time of CTC?  Interbank issues a refi loan decision in about 10 business days which is 15-18 calendar days.  Depending on when and what documents you upload will in large part determine the remainder of the process.  Be proactive…I know you know this already but I have to say it because of what I see…get us expiring documentation before we have to ask.  More importantly, manage your client’s expectations!  I know you experience frustration too, but nothing frustrates me more than when I hear an LO say “I’m afraid to go back to the borrower and ask.”  Really?  Who trained you?  Did you explain at the onset that this is perhaps the most challenging lending environment ever?  Did you explain lenders must deal with unnecessary government intervention and compliance threats?  Did you explain the lender will be requiring updated documents and other items during the process?  For the love of all things holy in this land we call earth…that’s your job, is it not?  This way the borrower won’t get too frustrated when you have to go back to them.  If you are not proactive then Audit will catch it and you will find yourself scrambling for updated documentation in order to get CTC and docs out.  My best LOs/Processors do not wait for Interbank to tell them what is expired.  Manage expectations and be proactive.  Everyone knows the accepted age for loan documents:

• Paystubs must not be older than 90 days at funding and must be dated no more than 30 days from the loan application.  So when we underwrite the paystub cannot be more than 30 days old, but when the loan funds it cannot be more than 90 days old.  For example, if the Note date is 12/1, then paystub cannot be older than 9/1, but if we issued a lending approval on 11/15, then it can’t be older than 10/15.  Oh, and by the way, stubs must include the employer name, borrower name, and YTD earnings.
• Bank Statements must not be older than 90 days at funding and must be dated no more than 45 days from the application date.  While we’re on the subject, we need all pages and any large deposits ≥25% of the monthly gross income must be sourced and documented.
• The Credit Report cannot exceed 90 days at time of closing (which is the date on the Note).  If it is going to expire for sure then email me and I can try and get the DO released so you can get it updated.  FYI, when updating the credit report, the old case file must be used or the findings will go from 8.3 to 9.0 resulting in much more restrictive underwriting and appraisal requirements.
• The Appraisal cannot exceed 90 days at time of closing.  I have been successful in getting an extra week on occasion but no more, and a recert is possible if it expires.

My Market Watch:  Rates came out slightly worse than yesterday at the end of the day and bonds are holding steady at the moment.  I’ll be watching today to see if there is any movement and do my best to give you a heads up if I see volatility….  My Disclaimer

My Schedule: Today I have a couple of appointments and then I’m going to the pre-launch of The Hobbit tonight.  So excited!  J

My Schedule…and A Little Extra:   One of my Brokers wrote this and I liked it so here it is with is permission (emphasis added):

WHAT I THINK – I’ve been at this mortgage brokering business for 25 years. In my earlier years borrowers would be mortified and embarrassed to broach the subject of foreclosure. Short-sale wasn’t even a term back in the day. Recent times have certainly seen changed values. A recent study by ID Analytics and JZ Analytics found that 32 percent of respondents say that homeowners should be able to walk away from their mortgages without any consequences. This entitlement mentality, if it continues to fester, may ruin the very fiber of America homeownership. Nobody will want to invest in mortgages, not even the U.S. government. Pride, responsibility and fair dealings continue to fade away as important values to too many Americans. It’s sad enough that some borrowers have not been able to pay their monthly mortgage payments. Then came the “won’t pay borrowers” – those that have the means to pay but refuse to pay. The ultimate chutzpah now goes to those pathetic borrowers that think there should be no consequences for walking away from their home loan. Yes, the banksters have been so horrible on so many levels. But, come on. Two wrongs don’t make a right. Entitlement thinking is nothing short of mental cancer. Chapter One of the homebuyer education course that HUD recently announced will be mandated for FHA borrowers should start with the definitions for accountability and consequences. Maybe this can get us back on track to the good old days.  

Let me know your thoughts….

My Market Watch:  Friday is the big monthly Jobs Report which will no doubt affect trading and push rates/pricing in one direction.  In general terms, a strong Jobs Report will give traders the indication the economy is doing well since more people are working.  Therefore, a strong Jobs Report motivates traders to put their money into stocks rather than bonds and when that happens rates/pricing typically get worse.  On the other hand, if the Jobs Report comes in weak, then traders conclude the economy is not doing well and they will pull their money out of stocks and invest in bonds instead.  When that happens, typically rates/pricing get better.  Let me know if you have any questions, okay?   My Disclaimer

My Schedule This Week: Tomorrow I travel to Chicago for our annual Sales Conference and Holiday Party.  I will be traveling most of the day Wednesday and will be generally unavailable all day Thursday and Friday while in training meetings.  I am taking suggestions if you would like me to bring anything up about our procedures, etc.

My Schedule Today: Very busy day for me…I have a 10:30a appointment in Irvine and a 2:30p appointment in San Diego.  In-between I will be driving, eating, returning phone calls and trying to get caught up on emails….

My Schedule…and A Little Extra:   Every night after she’s tucked in and the lights are out, I tell my daughter a story.  Sometimes it’s just a simple short adventure but most of the time I tell her a story that has some kind of a moral problem and resolution.  For example, last night I told her a story about three friends that were in a store in the candy section…one of the girls put a candy bar in her pocket to steal and encouraged the other two girls to do it too.  Then I drag out the story for dramatic effect and ultimately come to the moral dilemma and resolution.  I’m hoping my stories teach her the difference between right and wrong, integrity, honor…you get the idea, right?  Anyway, I think last night’s story came on ears that were too tired.  When I completed the story I asked her if she understood or had any questions.  She had but one question, “Daddy, what kind of candy bar was it?”  Snickers.

My Schedule…and A Little Extra:  One Mo Day.  Tomorrow it comes off.  Tonight I party with my Mo Bro comrades.  So far I’ve raised $845 for prostate and testicular cancer research!  Last day to donate:  http://mobro.co/philgrossfield.   Tomorrow I’m taking the family to Disneyland!

Last night I went to the Cavalia show in downtown San Diego as a VIP with the TravelMama.  Simply put, it was awesome…I highly recommend it.  Basically it’s a Circus De Soleil type performance that incorporates and focuses on 50 gorgeous horses.  The show is peaceful, entertaining, and puts a lot of positive energy into the room.  The crowd gave the performers a standing ovation at the end.  Afterward, Colleen and I got to take pictures with the horses and tour the stables.  This mobile performance is a massive operation…our guide compared it to the Rolling Stones tour times 40.  I really enjoyed the whole thing.  Cavalia Equestrian Performance.

My Market Watch:  Rates are better today and there aren’t a lot of reports.  So far bonds are performing flat….  My Disclaimer

My Schedule: Available all day…done at 3:30p today.

Thankful:  |Mo| That I can grow a mustache that is not too embarrassing and raise $595, so far, for cancer research. |O| For a job that has given me the not-to-take-for-granted infrastructure to earn enough money to pay my bills, and sleep. |D| For my Dad who just turned 80 and has the innate ability to make people smile…he has been and continues to be a positive force in my life. |M| For my Mom for so many reasons…most recently for her courage, commitment, and most of all, and not to be understated, the love she feels and exudes for her family and close friends. |B| For my reborn relationship with my brother…so awesome. |S| For my two sisters who have found love…the real love…the fairytale love. |F| For all the other family members and in-laws in my life that if I were to write it all out would make this post too long. |L| For my son who makes it difficult to realize he is sick because he doesn’t complain and just wants to be happy and have fun. |K| For my daughter who is a lot smarter than me and is teaching me the most important lessons of my life. |C| For my wife, who never stops trying to be a better person…who reaches for enlightenment, and who wants and encourages me to come along for the ride. |||  I have so much to be thankful for…I want the universe to hear me, feel me, and absorb my sincere gratitude for all these and many more blessings.  Amen.  Happy Thanksgiving!

Donate:  Above is my wife and kids attempt at the mustache for Movember.  So far I’ve raised $595 for cancer research and would be VERY THANKFUL for a small addition from you J:  http://mobro.co/philgrossfield.

My Schedule…and A Little Extra:  |1| Did you see Federal Reserve Board Chairman Ben Bernanke said, “…it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.”  Really, you think?  Nice to hear him say that, eh?  |2|  TAKE 2 – Unscrupulous Agents – I received many comments about my post yesterday but I don’t have time to copy and paste them here this morning…I have a sick kid and my wife has appointments she could not cancel…I’m on kid duty early this morning as I take my daughter to the doctor.  So, in the interest of time, and since I got so many positive comments on yesterday’s post, I am putting it here today for your reading enjoyment, or, for your annoyance if you already read it yesterday….

WHAT IS WRONG WITH THESE PEOPLE?!  Before I tell you how unscrupulous this real estate agent is, let me say the purchase transaction in question was submitted just 6 calendar days ago and we had an underwriting decision within 2 days.  The only issue on the approval is the gift which was coming from an LLC and we conditioned that it come from an individual.  My broker called me to tell me the real estate agent is upset on how long it’s taking and she has advised the borrower to cancel the loan and go with her broker instead.  Are you blanking kidding me…it’s been 6 days!?  The borrower invested in an appraisal!  The Broker has spent time putting the transaction together!  Interbank has spent time in receiving and underwriting the loan!  She is clearly trying to steal the business away for her own broker which I wouldn’t be surprised if she receives a kick-back.  Too many times I hear this ridiculous complaint from real estate agents that they are putting a Notice To Perform if this or that.  It’s a completely bogus threat.  All they are doing is putting a ton of undue pressure on everyone and I’m sick of it.  This is 2012 and the lending environment is challenging.  Everyone is doing their best including the broker and lender.  Now I’m not suggesting that there aren’t fowl-ups, but most of the time things go well.  Brokers work their butts off and processors work endless hours and endure a very frustrating process in today’s world.  And at Interbank we are constantly trying to improve the process which is why we invested so much time and money into a new automated CIC and closing process.  And we funded near $1 billion last month and I personally funded 143 loans for almost $50 million.  We’re doing something right, right?  I know there are very reasonable and level-headed real estate agents out there and you may be one of them so don’t get offended with this post.  But there are too many agents out there that are unreasonable and need to take a chill pill with expectations.  Moreover, they need to stop putting so much blanking pressure on everyone…pressure that is already distinctly present without their nonsensical Notice to Perform threats.  Ugh!  That’s all I have to say about that.  My fingers hurt….  Is it Happy Hour yet?

My Market Watch:  Pricing is about 0.125 better than yesterday which is a good thing…I was worried we’d see no gains after the market movement yesterday.  I mean, we should have gotten the 0.125 but it concerned me that it didn’t happen yesterday.  Anyway, there are no economic reports today so all eyes will be on geopolitical news and events.  Also, everyone is expecting news on the political opinions around the Fiscal Cliff…look for news today and the coming week….  My Disclaimer

My Schedule: I have a sick kid I have to take the doctor this morning…my wife takes over before noon and then I’ll be more reachable….

My Schedule…and A Little Extra:  WHAT IS WRONG WITH THESE PEOPLE?!  Before I tell you how unscrupulous this real estate agent is, let me say the purchase transaction in question was submitted just 6 calendar days ago and we had an underwriting decision within 2 days.  The only issue on the approval is the gift which was coming from an LLC and we conditioned that it come from an individual.  My broker called me to tell me the real estate agent is upset on how long it’s taking and she has advised the borrower to cancel the loan and go with her broker instead.  Are you blanking kidding me…it’s been 6 days!?  The borrower invested in an appraisal!  The Broker has spent time putting the transaction together!  Interbank has spent time in receiving and underwriting the loan!  She is clearly trying to steal the business away for her own broker which I wouldn’t be surprised if she receives a kick-back.  Too many times I hear this ridiculous complaint from real estate agents that they are putting a Notice To Perform if this or that.  It’s a completely bogus threat.  All they are doing is putting a ton of undue pressure on everyone and I’m sick of it.  This is 2012 and the lending environment is challenging.  Everyone is doing their best including the broker and lender.  Now I’m not suggesting that there aren’t fowl-ups, but most of the time things go well.  Brokers work their butts off and processors work endless hours and endure a very frustrating process in today’s world.  And at Interbank we are constantly trying to improve the process which is why we invested so much time and money into a new automated CIC and closing process.  And we funded near $1 billion last month and I personally funded 143 loans for almost $50 million.  We’re doing something right, right?  I know there are very reasonable and level-headed real estate agents out there and you may be one of them so don’t get offended with this post.  But there are too many agents out there that are unreasonable and need to take a chill pill with expectations.  Moreover, they need to stop putting so much blanking pressure on everyone…pressure that is already distinctly present without their nonsensical Notice to Perform threats.  Ugh!  That’s all I have to say about that.  My fingers hurt….  Is it Happy Hour yet?

My Market Watch:  Rates/Pricing came out unchanged which is surprising considering the market movement yesterday afternoon…but who am I to question Capital Markets, eh?  And there is more good news…the Jobless Claims indicated weakness in the market which bodes well for bonds, and, economic news out of Europe bodes well for bonds.  On this news, you would think bond prices would improve and we could expect a mid-day rate change improvement.  You would think.  But so far, despite the news, bonds are not pushing as high as you’d expect…we are even.  Why?  I guess getting back losses from yesterday afternoon is good enough in trader’s eyes?  Or, maybe they are holding off on buying bonds to see what happens later this afternoon or tomorrow?  Your guess is as good as mine.  Your thoughts?   My Disclaimer

My Schedule: I am available all day except for one afternoon conference call from 1-2p.