Observations from the front lines of the Irvine housing market?

Thank you.  Can you please PM me the contact info?

USCTrojanCPA said:
gld2 said:
Which bank is offering 10% down with no PMI?
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US Bank...it's for loan amounts up to $1m for primary residence purchases. I can PM you my US Bank contact if you would like.
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Is 10% down with no PMI a good thing? I thought banks were pretty conservative now days to prevent events like the last crash?
 
Mety said:
Is 10% down with no PMI a good thing? I thought banks were pretty conservative now days to prevent events like the last crash?
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The last crash was the 0 down, false income aka mortgage fraud, over buying, low interest rates for too long (this might happen now idk)
 
The sketchy/questionable mortgage back securities back in the day, market over hyped.
(that?s what happened last crash)
 
Yeah, so now they're offering 10% down and they might slowly decrease that required amount to eventually 0 down? Who knows? While I think it's a good opportunity for some, it might also be a possibility that could start to get shaky.
 
I already mentioned it before. What did Greenspan say about low interest rates after the last housing crisis?
(I know the answer)
 
Mety said:
Is 10% down with no PMI a good thing? I thought banks were pretty conservative now days to prevent events like the last crash?
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It depends on the buyer's situation.  For example, I have buyer who has a DTI below 30% at purchase price of $1m but does not have 20% to put down so that's a great option for them.
 
irvinehomeowner said:
Mety said:
Is 10% down with no PMI a good thing? I thought banks were pretty conservative now days to prevent events like the last crash?
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Probably more stringent underwriting/qualification.
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That is correct, there's a hard cap on the DTI max % (no exceptions), 740+ FICO only, max loan amount of $1m, and 12 months of reserves (401k/IRAs are counted though).
 
Mety said:
Yeah, so now they're offering 10% down and they might slowly decrease that required amount to eventually 0 down? Who knows? While I think it's a good opportunity for some, it might also be a possibility that could start to get shaky.
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There are no more "signature only" loans, all loans are fully underwritten including sourcing ALL deposits (even $1) and search for unrecorded debts by reviewing all payments going out from your bank/brokerage account statements.
 
Mety said:
Yeah, so now they're offering 10% down and they might slowly decrease that required amount to eventually 0 down? Who knows? While I think it's a good opportunity for some, it might also be a possibility that could start to get shaky.
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When you see the 0 down loans come back again head for the hills. (Sa sa sell or don?t buy don?t buy)
 
Right. We don't have "signature only" loans or 0 down thing as of now. But it could possibly lead to that road. I hope it doesn't happen that way, but you never know. Seems like better and better options are popping up always.
 
To clarify, there is no such thing as a "no-PMI" loan. These are "LPMI" / "Lender Paid" PMI loans - mortgages that have a PMI contract with the cost built into the rate. It's tax effective at lower loan amounts, but perhaps not so much given the 750k threshold for deductible interest. I defer this piece to USC to calculate the dollar benefit from a taxation perspective. That kind of knowledge is significantly above my pay grade.

General rates for 20 percent down might be 3.5 (example only) with 85% being 3.625, and 90% being 3.750-3.875. Each higher rate tier is due to the higher cost of that blanket PMI contract.  I recall Wells Fargo had an 89.99 LPMI option but haven't heard any updates about that product for some time. Remember that LPMI is a misnomer. Since the rate is higher, it's borrower paid PMI, structured as interest costs.

There are "sign and drive" mortgage loans out there. Unfortunately they aren't at reasonable rates or terms. That's actually a good thing IMHO since publically backed Banks and Credit Unions should not be creating loans with at one time a 75 percent failure rate. Production of these kind of loans were off loaded to private investors where their capital can be risk priced correctly. A Seller Carry Back is an example of a "sign" only type of loan, albeit rare in this day and age. Assuming one of the "mass production providers" of easy qual loans is pricing their mortgages at 6.75 percent a seller might be able to get a 5.75 percent return on the carry back. That's not a bad deal if one is OK with the overall risks involved.

My .02c
 
USCTrojanCPA said:
Mety said:
Yeah, so now they're offering 10% down and they might slowly decrease that required amount to eventually 0 down? Who knows? While I think it's a good opportunity for some, it might also be a possibility that could start to get shaky.
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There are no more "signature only" loans, all loans are fully underwritten including sourcing ALL deposits (even $1) and search for unrecorded debts by reviewing all payments going out from your bank/brokerage account statements.
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Yup. In the midst of an (unplanned) refi and didn?t season the accounts 60 days so I?m in the midst of ?explain this deposit? emails. Not fun.
 
Irvinehomeseeker said:
With Cashcall and owning Refinances, I didn't have to explain deposits.
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As soon as Cashcall or owning.com start to offer 0 downpayment, you know where we're headed to.
 
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