September Newsletter

The Yale Street Community
September 2010
A newsletter devoted to informing our clients, colleagues, and friends about the real estate industry as well as random but hopefully entertaining thoughts about life. Feel free to email us and give feedback on any of the topics.
A Few Observations
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My worst fears have finally been realized. One would think I might fear the usual suspects of sharks, terrorist attacks or earthquakes...but none of these hold a candle to my deepest fear...dust! It's been a year since I've moved out of my parents' house and the battle between those particles and me has never gotten more heated. It's EVERYWHERE; on my TV, desk, table and it never stops! Living in the dust-free friendly confides of my parents household for so long has left me not paying much attention to dust or how to clean it...until now! It's all I can think about. Someone has to win in this epic battle between particles and me. So far I'm afraid I've been left in the dust.
New Offer: Running from now until the end of November, if you close your loan with us we will give you a $200 Home Depot Gift Card. Win/Win situation by taking advantage of low interest rates as well as a new housewarming gift on us. Now you can get that electric power washer with power boost technology you've always wanted! Click here for current rates: www.yalestreet.com.
Real Estate News: Foreclosure filings in August fell 5% from a year ago, the third straight month of declines, according to RealtyTrac, an online foreclosure marketplace. Slightly up from July, but still an improvement. We're going to look at some bank auction homes this weekend to see if there any good deals out there. We'll report back.
Random Question of the Day: How come when describing tough times people say, "it was all downhill from there?" If you ask me, times should be getting better as walking/running downhill is easier than uphill...right?? It should be simple physics at work here! This needs to be settled once-and-for-all. Once we get this Middle East conflict all ironed out in the next couple of weeks, this should be the next hot-topic debate!
Economic News: The Labor Department reported weekly initial jobless claims decreased slightly last week to 450,000, which is the lowest level since July and roughly in line with consensus analysts' estimates. This is considered good news?! That's as if the total populations of Glendale, Burbank and Pasadena all lost their jobs at the same time!
About Yale Street: Yale Street provides financing for your home or apartment building in California. Loans to refinance, purchase or renovate. We set up a company that can give you the same rates and programs as the big banks, but with better service tailored to your needs. We don't have the big advertising budgets - we depend on word of mouth. If our borrowers are satisfied with their mortgage, we figure we will be given referrals to others wanting the same great service. Give us a call or send us an email. We'll buy you a latte.
Mark Van Dellen
(818) 424-4594
www.yalestreet.com
info@yalestreet.com
CA DRE Corp License # 08173119
NMLS Corp License # 311752
Follow our blog: http://savvyhomeowner.blogspot.com/

April Newsletter

The Yale street Community

April 2010

 A newsletter devoted to informing our clients, colleagues, and friends about the real estate industry as well as random but hopefully entertaining thoughts about life.  Feel free to email us and give feedback on any of the topics.

A few observations:

·         Is it really necessary to provide motivational quotes as you drive into a parking garage?  The latest one I came across read, “I believe life is constantly testing us for our level of commitment, and life’s greatest rewards are reserved for those who demonstrate a never-ending commitment to act until they achieve. -Anthony Robbins.”  For once I would love to park without contemplating my purpose in life. 

·         There is too much fanfare associated with Fajitas.  Half the reason people order the dish is because they know the whole restaurant will eye the steaming skillet they’re about to enjoy.  Burritos taste just as good as Fajitas with half the amount of hype! 

Big Surprise for Some:  File this under “ultimate justice” or “unintended consequences”, depending on your perspective.  California has not yet changed its income tax code to provide relief for homeowners who default on their loans.  When you default on your home loan and the lender ends up losing tens of thousands of dollars or more after their acquisition of your home through foreclosure, the lender informs the IRS and Franchise Tax Board that you had “income” for the amount of that loss.  That can be a pretty nasty surprise come April 15^th!

Final Four:  Who would have thought that only one of the regional #1 seeds would reach the Final Four?  Don’t worry, you weren’t the only ones.  ESPN reports that of the 4.8 million people who entered their tournament challenge, only 200 picked Michigan State, Duke, West Virginia and Butler in the Final Four.  Alas, none of you who entered our informal pool were winners.

Random Question of the Day: Don’t you feel really good about yourself when you pull to the side of the road for an ambulance or fire truck with its lights on?  Never mind that it’s the law, I feel like I’m Mother Teresa by pulling over.  If you feel the same way I do, I think it’s time we do some more charity work…

Market Trends:  The Federal Reserve ended its purchase of Mortgage Backed Securities (pools of mortgages) from Fannie Mae, Freddie Mac and Ginnie Mae on March 31^st.  Most people do not know that the Fed was effectively the ONLY buyer of mortgage loans over the past year, to the tune of $1.25 trillion.  The Fed is hoping the normal sale of loans by Wall Street brokers will pick up the slack in April.  We’ll be watching this closely.  Mortgage rates have already ticked up a bit in anticipation of greater returns required by private investors.  Bankrate’s survey of large banks found an average 5.23% rate for a 30 year fixed rate loan.

Home Foreclosure Inventory to Rise:  S&P, Moody’s and First American are all weighing in on estimating how many homes are heading for foreclosure.  Banks are still trying to save borrowers with the various loan modification programs, but it’s becoming apparent that many of those won’t work.   They expect to see between 1.7 million and 7.0 million more homes going on the market as “bank owned”.  There will be opportunities out there for those looking for a home or investment.

About Yale Street:  Yale Street is a mortgage firm specializing in single family and apartment lending, primarily in Southern California.  We strive to keep our rates as low as possible.  We’ll even publish them on our website so you can track us against the national averages.  Best of all, we will do it your way.  We can come to you, you can visit our website, or maybe we can grab a Starbucks together.  Whichever you prefer.  Give us a call or send us an email.

Mark Van Dellen

 (818) 949-8062

CA DRE License # 01872437

www.yalestreet.com

info@yalestreet.com

CA DRE Corp License # 08173119

March Newsletter

A few observations:
• Was there a better story from the Winter Olympics than the USA snowboarding uniforms? To the naked eye, it looked as if the snowboarding team was going down the hill in jeans. In reality they were Gore-Tex pants cut and dyed to look like distressed denim. Getting into the Olympics spirit, we at Yale Street will be wearing Gore-Tex clothing that looks like a suit and tie. We’ve finally found how to combine water-proof clothing and professionalism!

• In last month’s newsletter we put “Too Big to Fail” by Andrew Ross Sorkin on our book list. However, upon realizing the book is over 800 pages long, it may also be “Too Big to Read.” We’ll keep you updated on our progress; our goal is to finish it by the next Olympics.

• I just noticed that I’ve had the same belt holding up my pants since 1998. I would like to thank the Cabazon Eddie Bauer Outlet store for supplying me with eleven plus years of support...literally.
Some depressing stats regarding the “housing recovery”:
• LPS (Lenders Processing Services) reports 13.3% mortgages loans are delinquent or in foreclosure. Total delinquencies could hit 18% in 2010. They also report that over 1 million homes are now owned by banks.

• The National Association of Realtors report existing home sales dropped 7.2% in January from December. That is on top of another 16.7% drop in December from November. They report that there are 3.27 million homes now for sale.

• The Mortgage Bankers Association forecasts 30 year fixed rates to increase to 5.9% in the second quarter this year, 6% in the 3rd quarter and 6.1% by the end of the year.

• It will be interesting to see if the traditional Spring home-buying season pickup puts us back on track to the home sale gains we experienced in the latter half of 2009. We suspect we are in a double dip because we think foreclosures will continue to increase as many of the loans that are in various loan modification programs have merely delayed the inevitable foreclosure process. Recent home price gains are likely to stall.

News about the Mortgage Industry: American Banker reports that large banks are increasingly reluctant to provide prospective mortgage borrowers a “preapproval letter”. Many Realtors and sellers require them to ensure that the prospective homebuyer can actually afford the home they are purchasing. The reluctance comes from a new HUD requirement that went into effect on January 1st that requires that lenders provide a Good Faith Estimate (GFE) to the borrower within 3 days of obtaining the borrower’s name, property address, social security number, proposed loan amount and estimated property value or sales price. Banks are afraid that their loan officers will not be able to take a full loan application and provide the GFE within 3 business days. We don’t see the problem. Oh yeah, you probably need 10 levels of approval before the big banks can give you one. We don’t have any problem meeting the 3 day requirement.

Random Question of the Day: If the only difference between a female’s bicycle and a male’s bicycle is that the middle bar is lower, then what’s the point of the high middle bar? Why aren’t all bikes made with a lower bar?

Sports Update: Just as most grade school kids get excited for Santa Clause and the Easter Bunny, we get just as excited for March Madness! There is no doubt March Madness is the best sporting event of the year. Sure, there are the pro football playoffs leading up to the Super Bowl, the BCS Championship college football bowl games, the World Series (yawn), and even the tennis tournaments (a close second for one of us). We just don’t think there is anything out there to rival the excitement, the drama, the breadth, and the surprises that emanate from the NCAA college basketball tournament. We just feel very sorry for all the tax accountants out there who are unable to watch the games (One of the many reason we aren’t accountants) we would like to hear everyone’s pick for first and second place. If you tell us by March 15th we promise to publish the winners in our next newsletter. There will be a prize.

February Newsletter 2010

A Few Observations:

•Those of you who travel a lot know about the Sky Mall magazine. It’s the best thing to happen in aviation since the Wright Brothers. One flip of the page and you’re submersed in wonderful products such as crossword wall paper, a cat house disguised as a clay pot, and our personal favorite – a water purifier for parrots. If you ever wondered why so many Americans are in debt, Sky Mall is your answer!

•In contrast, something that does not fly is business lingo. The other day I was on a conference call where someone uttered the question, “What is the attention-bandwidth of the project.” What?? If business speak has come to this, it has got out of hand. It took me 10 minutes to figure out this person wanted to know the deadline of the project. We promise to never utter phrases like that at Yale Street!

Two books on our reading list:
•The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Destroyed It, Scott Patterson

•Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System and Themselves, Andrew Ross Sorkin

Maybe we’ll start with one of these and let you all know how it went. If any of you have read any of these, please send us a review!

FYI: The New York Times recently cited First American CoreLogic’s (a subsidiary of the title insurance giant) estimate that over 20% of U.S. homeowners are underwater on their mortgages, meaning, their mortgage balances were higher than the current value of their homes. (An incredible 65% of all residential properties with mortgages in Nevada are underwater!). The article wondered if homeowners will start to act like newspaper companies (i.e. Chicago Tribune Company, also owner of the bankrupt LA Times) and commercial property owners (Tishman Speyer Properties) and hedge funds (BlackRock) (in the default and imminent foreclosure of the huge Peter Cooper Village and Stuyvesant Town apartment complex in New York) and just walk away! However, a University of Arizona study found that far fewer people default on their underwater mortgage than one might expect because they fear the shame of foreclosure and the long term effect on their credit rating. Maybe the new loan modification program needs to more aggressively push lenders to reduce principal balances so homeowners can stay in their homes. And, banks need to stop delaying foreclosure on homes where the homeowners have already given up so we can be sure we’ve hit a true bottom in prices. Once we know we’re at a real bottom, people will start to have confidence in values and start buying homes again.

Random Question of the Day: What is the appropriate response when using a one-person bathroom and someone knocks to get in? Do you say, “Someone is in here?” or do you say, “Yeah?” or do you do the fake cough and clearing of the throat? We’re not sure.