Shelter Six:  No Tax Returns Required for Investment Property loan

Shelter’s new SmartVest program allows an experienced real estate investor to buy up to 15 financed investment properties with no income documentation or debt ratio calculation.

The qualification on a SmartVest loan is based on a property cash-flow analysis and allows investors to close in the name of an LLC with interest-only loan options.

Consumer spending accounts for about 70% of US economic activity and Retail Sales is the key economic report that investors watch each month that monitors spending.

Following the hurricanes last fall, Retail Sales showed strong gains for 3 months before posting 3 months of losses causing investors to worry that economic growth was slowing.

Last week’s Retail Sales report bucked the recent trend and showed a very healthy .3% increase in April spending from March.

The market is now pricing in a near 100% probability that the Fed will increase short-term rates by .25% in June with a 70% probability of another .25% hike in September.

Rate Update

A speech last week from the governor of the Bank of France hinting that a European rate hike might come sooner than expected was the catalyst for mortgage rates jumping to the highest level in seven years.

This Week

New Home Sales will be released on Wednesday, Existing Home Sales on Thursday, and Durable Orders on Friday.

May 21, 2018 by · Leave a Comment

Shelter Six:  Home Price Appreciation Continues to Surge

1. Metro Atlanta home prices surged 6.5% in February outpacing the national average of 6.3%, according to the latest S&P CoreLogic Case-Shiller Index.

2. March Existing Home Sales were up 1% from February and were about the same as this time last year.

3. March New Home Sales were up 4% from February, were 9% higher than a year ago, and now make up 11% of the total market.

4. New Home Sales peaked as a percentage of the market at a high point of 17% in June 2003 during the building boom and bottomed out at 5.4% in 2010 during the foreclosure crisis.

5. Inventory was down to a 3.6 month supply in March with 1.67M homes for sale, down 7.2% from a year ago and at the lowest level since data was kept in 1999, according to NAR.

6. Despite a small pool of unemployed workers to choose from, March job openings jumped to a record level of 6.55M, a significant sign of strength for the labor market.

Rate Update

With little major news last week and not much reaction to the economic data, mortgage rates ended the week slightly higher.

This Week

Retail Sales will be released on Tuesday with Industrial Production and Housing Starts out on Wednesday.

May 14, 2018 by · Leave a Comment

Shelter Six:  Unemployment Drops to 3.9%

1. The economy added 164K jobs in April.  Although 190K were expected, upward revisions added 30K jobs to results for prior months bringing net gains very close to expected levels.

2. The unemployment rate declined from 4.1% to 3.9%, the lowest level since December 2000.

3. The decline in Unemployment was mostly due to workers leaving the labor force rather than job gains, so it was not necessarily viewed as a sign of strength.

4. As widely expected, the Fed made no change to the Federal Funds rate on Wednesday and the meeting caused little change in investor expectations for the pace of future rate hikes.

5. The Census Bureau reports that the Homeownership Rate held steady at 64.2% in the 1st Qtr of 2018, unchanged from the prior quarter and still at the highest level since 2014.

6. The Homeownership Rate is up from 63.6% in the 1st Qtr or 2017 and is now higher than last year for the fifth consecutive quarter.

Rate Update

Despite a wide range of major economic news, it was a very quiet week for mortgage rates, which ended the week nearly unchanged.

This Week

The JOLTS report, which measures job openings and labor turnover rates, will come out on Wednesday while the Consumer Price Index (CPI) will come out on Thursday.

May 7, 2018 by · Leave a Comment

Shelter Six:  Credit Reports to No Longer Include Tax Liens

Three years ago in the aftermath of a settlement with 31 state attorney generals, the three national credit bureaus launched the National Consumer Assistance Plan (NCAP) in an effort to make credit reporting more accurate and credit problems easier to fix.

Last year, as a key NCAP initiative, Equifax, TransUnion, and Experian removed all civil judgments and the majority of tax liens from consumers’ credit reports.

After a critical CFPB report earlier this year, the three bureaus are now ceasing to report all tax liens and have been actively removing them from credit reports.

Moving forward, the only public records that will remain on credit reports will be bankruptcies, which come with publicly identifiable information such as a SS#.

According to FICO, credit scores are going to rise up to 20 points for 11M borrowers and up to 40 points for 700K borrowers.  With less credit information and higher scores, lenders are anticipating the fallout to be greater default risk.

With judgments and liens not appearing on credit reports, it will also be harder for creditors to collect forcing them to resort to other tactics such as wage garnishment and seizing funds via court orders.

Rate Update

Mortgage rates moved higher over the first half of last week only to settle back down toward the end of the week and finish nearly unchanged.

This Week

The Core PCE Price Index is due out on Monday, the ISM National Manufacturing Index on Tuesday, and Employment figures on Friday.  The next Fed meeting will also take place on Wednesday and no change in policy is expected.

April 30, 2018 by · Leave a Comment

Shelter Six:  Potential Trade War Biggest Risk to Economy

1. According to Fannie Mae’s latest economic report, U.S. economic fundamentals remain strong with the stimulus from the tax cut and new federal budget working well.

2. According to the report, the biggest economic downside risk at this time is the potential trade war with China.

3. Fannie Mae expects the Fed to raise interest rates for the second time this year in June and then once more before the end of the year, for a total of three times this year and not four.

4. After three months of unexpected declines, Retail Sales figures rebounded in March up to a very healthy .6%.

5. Multi-family Housing Starts were strong but Single-family Housing Starts fell 4% in March.

6. Shelter’s new Smart Choice program allows for loan amounts up to $2M with only 10% down and no PMI with the flexibility of one mortgage late in the last year and up to a 50% debt ratio.

Rate Update

Despite no compelling economic news nor a clear reason, mortgage rates moved to the highest point in several years last week.

This Week

Existing Home Sales will be released on Monday, New Home Sales on Tuesday, and Durable Orders on Thursday.

April 23, 2018 by · Leave a Comment

Shelter Six:  Optimistic Survey Points to Healthy Spring R.E. Market

1. Fannie Mae’s March National Housing Survey painted a very optimistic picture with more respondents indicating that it is a good time to both sell and buy a home.

2. Detailed minutes from the Fed’s March 21 meeting gave insight that Fed officials expect US economic growth to be stronger than average for the next few years.

3. MGIC lowered its borrower-paid PMI rates by approximately 11% to reflect the lower corporate tax rates signed into law in 2017.

4. Self-employed buyers now have a mortgage alternative where they don’t need to provide tax returns or any income documentation.

5. Shelter’s “SmartSelf” program allows a self-employed buyer’s income to be calculated exclusively from the last 1-2 years of bank statements.

6. The program requires only 10% down with no PMI and a 620 credit score while allowing for a Bankruptcy or Foreclosure as recent as two years ago and up to 15 financed properties.

Rate Update

The stock market performed well last week causing investors to shift money from bonds to stocks.  This was negative for mortgage rates which finished the week a bit higher.

This Week

Retail Sales and NAHB Housing figures will be released on Monday while Industrial Production and Housing Starts will come out on Tuesday.

April 16, 2018 by · Leave a Comment

Shelter Six:  Mortgage Option for Buyers with Credit Problems

1. Buyers with significant credit problems can still get a mortgage up to $1M with 20% down.

2. Shelter’s SmartTrac program requires only a one year waiting period for a Bankruptcy or Short Sale, only two years for a Foreclosure, and even allows for multiple mortgage late payments over the last 12 months.

3. The program is available as either a fixed-rate or an ARM, includes an Interest-Only option, requires a 620 score, and allows for up to 15 financed properties.

4. Against a consensus forecast of 175K, the economy added only 104K jobs in March.

5. Even with this disappointing figure, the economy has added an average of 202K jobs per month during the first three months of 2018.

6. The bright side of March’s Employment Report was that the Unemployment Rate remained only 4.1% and Average Hourly Earnings were up a little more than expected.

Rate Update

Mortgage rates moved to the lowest levels in nearly two months in the aftermath of last week’s trade-war inspired market sell-off.  As panicked investors moved money out of the stock market and into the bond market, mortgage rates fell slightly.

This Week

Wednesday is the big day this week with the release of the latest Consumer Price Index figures as well as the latest minutes from the Fed’s March 21 meeting.

April 9, 2018 by · Leave a Comment

Shelter Six:  Pending Home Sales Up

1. After a disappointing January, Pending Home Sales rebounded nicely in February with contracts signed to purchase previously owned homes increasing 3%.

2. This is an important metric because contracts signed are viewed as a leading indicator of future closings.

3. Millennials, or people roughly between 23 and 37 of age, were the most active generation of homebuyers in 2017, according to NAR.

4. Based on a recent survey, NAR estimated that 36% of all home sales involved Millennials last year, up from 34% the previous year.

5. And here comes Generation Z!  The post-Millennial crop of kids born in 1995 and later are buying houses much earlier than the Millennials.

6. MarketWatch reports that just shy of 100K members of Generation Z have already purchased a home and have a payment record better than Millennials.

Rate Update

It was a relatively quiet holiday-shortened week.  The economic data contained no major surprises and caused little reaction, and mortgage rates finished the week a bit lower.

This Week

The ISM National Manufacturing Index will be released on Monday, the ISM National Services Index on Wednesday, and the Employment Report on Friday.

March 30, 2018 by · Leave a Comment

Shelter Six:  The Fed Bumps Up Short-Term Rates

1. As expected, the Federal Reserve bumped up short-term rates .25% last week.

2. .New Fed Chair Jerome Powell’s first press conference left investors divided about whether there will be three or four total rate hikes this year.

3. Also last week, the Trump administration announced about $50B in new tariffs on Chinese imports.  Although less than expected, fears of Chinese retaliation still remain.

4. A trade war with China would be bad for the economy and stocks, but it’s impact on mortgage rates is hard to predict.

5. February sales of previously owned homes increased 3% from January and would have been even higher if not for the severe weather around the country.

6. Inventory seems to be finally heading in the right direction and was up 5% in February to a 3.4 month supply, but 8% lower than a year ago.

Rate Update

After a major surge in January and February, mortgage rates have managed to hold remarkably steady in March.  Even with the rate and tariff announcements last week, mortgage rates remained flat despite large stock market losses.

This Week

Pending Home Sales will be released on Wednesday and the Core PCE Price Index on Thursday.  Mortgage markets will close early on Thursday and all day on Good Friday.

March 26, 2018 by · Leave a Comment

Shelter Six:  More Lenient Jumbo Product Helps More Qualify

Shelter is proud to launch Smart Edge, a new “Non-QM” product that will enable Jumbo customers to qualify even with a Bankruptcy, Foreclosure, or Short Sale only two years ago.

The product requires only 10% down, no PMI, a credit score of only 620, and up to a 50% debt ratio.

Smart Edge is also great for investors as it allows up to 15 financed properties and the terms are creative with interest-only ARM’s enabling a very reasonable payment.

February Retail Sales were unexpectedly down for the third straight month.

With consumer spending accounting for 70% of economic activity in the U.S., economists will be carefully monitoring future Retail Sales figures to gauge the economy.

February Single-family Housing Starts were up 3% from January with 510K single-family units under construction, the most since June 2008.

Rate Update

Bad economic news normally drives mortgage rates down and this was true last week as lower than expected retail sales helped mortgage rates finish the week slightly lower.

This Week

This week’s big news is Wednesday’s Fed meeting.  Investors widely expect a .25% increase in the Federal Funds Rate.  Existing Home Sales will also be released on Wednesday, New Home Sales on Friday, and Durable Orders on Friday.

March 19, 2018 by · Leave a Comment

Next Page »