• 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.
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