Well I hope you all had a great 4th of July weekend. It is an election year and politics were everywhere. The rodeo, the parade and even the parties. I had the opportunity to have lunch in Prescott with Felecia Rotellini on Saturday. Felecia is a democrat running for the attorney general position left open by Terry Goddard, who is running for governor. I first met Felecia when she headed up the Department of Financial Institutions which used to be known as State Banking. Anyway, I am supporting Felecia as she is a good person with strong convictions. One of her political assistants asked if I was republican and why should they be talking to me, of which I replied I was neither Republican or Democrat, I am voting for some common sense. People need to quit taking sides and talk. Naturally we discussed many of the problems our country and state currently face. Felecia and I may take a different approach to a problem but typically we met in the middle on most topics. We both just want what is good for the people of Arizona. Felecia is being backed by the Arizona Realtors Association and understands the problem we are facing in the real estate and financing world.
That being said Felecia and I both have a deep concern about where this economy is headed. There is currently much talk about a double dip recession. As of this writing housing inventories are building and sales are slowing. That is never a good sign. Remember my business 101 class on supply vs demand. Well we are headed out of adjustment again with too much supply and not enough demand.
The good news is that banks seem to finally have grasped the concept of short sales, taking them more seriously and are pushing them through. Get your buyers to make offers. Banks seem more than willing to accept even low offers right now to get these properties off their books. They know there are more foreclosures on the horizon.
Rates are extremely low right now, but lenders have thrown up all kinds of road blocks to funding. There are some great refinance programs available and lenders seem to be willing to open up for people trying to reduce their monthly mortgage payments.
As of last week all loan officers who were not licensed became unemployed. The only exceptions are loan officers working for a federal or state chartered bank. There are currently over 1300 files yet to be approved by the state banking department. An unlicensed loan officer cannot speak to, or work on any lending file. If you have a file in progress my advice is to check the status of the loan originators license. If they do not have it yet, then you are working with a new person. I had a conversation earlier this week with a loan originator in Phoenix who is currently unlicensed and is waiting on their approval which could be as late as September. His idea was to just delay the files he currently has, until he has his license so he can get paid! Wow! I was shocked and furious that anyone would care so little about the borrower! So my advice would be to check with any loan officers you are currently working with to verify they received their license. I can not stress this enough.
This summer seems to have slowed since the first time homebuyers incentive went away. As I said back in February, I met with the Senator from Georgia who created that incentive and he had no intention of continuing it. He feels that it would just become a continuous program and come to be expected. I agreed with him then. I now think it needs revisited. If we are going to have a hope of turning this economy around it is better money spent than any of the other weird projects the government is currently funding. Quite honestly I think we are in this for a while yet. Consumer confidence fell to 52%, and home prices are not showing signs of sustained recovery. The recovery of the mortgage banking industry and thus the real estate industry, depends to a large degree of its ability to salvage loans made from 2002 till 2008 which were either doubtful to begin with or became troublesome as home prices declined.
I would guess that most people are feeling uneasy about the short term future right now. Election years are always tricky and we might have to wait till November to see what happens. If the vote is one of confidence then that could be the signal starting a market turn around.
Have a great week and please call should you need help with a loan.