Financial Update by Maurice Soussé

What a week we had in the markets. With the DOW going up and down over 300 points, we had the delight of employment numbers released on Friday. The number ticked up to 7.6% versus 7.5% from the prior month. We were counting on rates to decrease on this news, but, instead were hit with a rate increase in the mid-day trading. This is exactly opposite of all of the predictions for yesterday’s mortgage rates. Rates are up another .125 to .25% this week depending on the program. Just a reminder…when your client goes into contract, we can lock the rate at application if they wish and if the rate is lower by a .25% or more at the time of loan documents, we can look to negotiate a float down on the rate. This is a great advantage over many of our competitors.

This week I want to touch on a recurring challenge we are having with loan closings. Quite often clients will get to the closing of the transaction and wire money from an account we don’t have verified. Many clients don’t want to show all of their assets for privacy reasons and don’t realize it stops the transaction when the wire or closing funds come in from an account that doesn’t have “liquid” funds. Sometimes clients will take a “loan” against their assets versus cashing them in. This is allowable, but, we are required to get all of the paperwork and repayment terms on those loans to be reviewed by underwriting. Recently we had a transaction in which the money was wired in from a business account. The buyer was self-employed and while this sounds okay, it is not allowed by several investors (even if the buyer is 100% owner of the business).

We send out an initial letter at the loan opening which asks the buyer to make sure they don’t move money, make any big charges, buy or lease vehicles during the transaction. Some clients read the letter while many don’t. It is crucial that you and I as a team make sure the client knows that the tracking and transferring of money is the #1 reason for delaying closing. Due to the Anti-Money Laundering Act, the tracing of the down payment and other deposits into accounts has become more important than ever. Let me know if you have any questions on this subject and I would be happy to go over it with you.

A quote for this week. Aristotle said “Man is a goal seeking animal. His life only has meaning if he is reaching out and striving for his goals”.