The Emergence of The Mortgage Broker

The Federal Government recently implemented new regulations on the mortgage industry in order to “regulate” us and to stop abuses. Much of what they did was applauded by myself and other mortgage professionals. One of the intended goals was to put uncompetitive pressures on “Mortgage Brokers”…as they were determined to be the worst of the bad guys from the mortgage meltdown. But, as is often the case when dealing with the government, they ended up putting the forward thinking mortgage professionals in a Broker operation in a great position. To explain!! The regulation that was supposed to put us out of business was a new rule which went into effect on April 1, 2011 that says that a Mortgage Broker can not accept compensation from more than one party. In it’s simplest form what that means is that we can not get paid by a “Borrower” and earn any form of compensation from a “Lender”. The result has been a big win for both the consumer and for the broker. On the loans that we are doing today…we now have NO COSTS to the consumer!!! We receive our compensation from the Lender we choose to fund your loan…we receive ALL compensation from them…and you, the borrower end up with a Good Faith Estimate which shows NO origination fee, NO points, NO junk fees… nothing, nada is charged to the borrower. So if you are looking for a home loan, ask the lender you’re referred to if they are a ‘banker’ or a ‘broker’…because thanks to our friends at the Fed…an experienced reputable Mortgage Broker is now your best choice for mortgage financing.

Is There Any Sunshine Behind These Clouds?

I personally hate where the Las Vegas real estate market has gone to in the last few years! Give me back the ‘ol days when we experienced a 2-5% annual appreciation rate and our homes were truly great long term piggy-banks!

Larry Murphy from SalesTraq just posted a report with these sobering numbers: “Since 2007 a total of 86,736 homes have been foreclosed upon in Las Vegas. That’s approximately 1 out of every 7 homes. During the same time frame, 82,169 of these REO homes have subsequently been resold by the banks who today have an estimated 11,000 REO homes in their inventory. But future foreclosures could easily equal the number of past foreclosures considering the Core Logic estimate that 20% of mortgages in Nevada are 90 days or more delinquent. If true, that means we can expect another 80,000 homes to end up as some sort of distressed sale, either at auction, as an REO or short sale. Another 80,000 distressed sales will undoubtedly keep downward pressure on sale prices, even on those properties which are not distressed. If this scenario is valid, it means we are approximately halfway thru the most severe housing crisis in Nevada and our Nation’s history.”

The only rays of sunshine I can gleam from this report is that sales prices are very affordable! I have lived in Las Vegas for 30 years. As our city started to grow in 1983, there were 2 distinct things that were obviously the reasons behind our growth.  One was jobs! The second was cheap housing!  At least we’ve got one of the two going for us again!

Up, Down or Sideways?

The Las Vegas real estate market is presently going through a “head-scratching” period. We keep seeing the statistics that our housing prices continue to drop, but at the same time there are multiple offers on most properties. Economics 101 would teach us that supply and demand drives prices. But the reality is that there are literally tens of thousands of homes that are vacant or in default with their lenders, but the inventory just isn’t coming to market! So why is it that the demand for houses seems to be almost overwhelming but yet prices are dropping?  This seems to be contrary to what should be happening? More homes on the market should mean downward pressure on prices and fewer homes on the market should mean upward pressure on prices. I guess suffice it to say “it is a very good time to be buying a home in Las Vegas!” Affordability will probably never be better than today.