Archive for April, 2006

Bernanke Speaks!

Ben Bernanke made Wall Street happy today when he did not come right out and say that his policy, like the policy of his predecessor, is to completely destroy the world economy.

Well, he didn’t.

He even indicated that there might come a time when the Fed did not automatically drive the Prime Rate up just because they were holding a meeting, although this has been the policy for the last two years.

Here, read for yourself.

CNNMoney says that Bernanke said that “a pause in rate hikes may be likely”.  Ah.  I suppose that means a pause may not be likely, as well.  How much comfort can you take from that?  Not much, apparently, as the bond market rose a modest .03% in yield, not enough to make any rate difference worth commenting about.  So I won’t.

You have a nice day, now, y’hear?

Toot! Toot! Goes the Horn!

Tooting my own horn, here’s a letter (edited for space and relevance) I received yesterday:


It was nice to finally meet you in person. I had surfed your website [The Chris Jones Group] and saw a picture of you so I had an idea of what you look like. Olivia Votaw has made it clear that I need a new picture on my site, cards etc. I agree and it is my plan for this year some time.

I have been VERY impressed with you and enjoyed getting to know you and work with you. I of course appreciate getting a referral and will reciprocate for certain.

It is my intention to send you more business than even I thought I would send to “someone else”. I have been impressed by you and you are clearly in the top tier of loan officers in this valley. I also enjoy your personality very much and the fact that you are from the DC area doesn’t hurt either.

On my website, I have a personal policy that I don’t link to other sites (excluding charities). I don’t want people to lose focus on me as they surf through an affiliate site. My website is to bring me business and help my clients meet their needs. What I will do is put your company name and phone # with your name on the site. Further I will actively refer buyers to you whenever possible and hope you will do the same. My personal goal is to give you 2 referrals for every one you give me as a minimum standard.  I forsee the potential for a strong business relationship that will be beneficial for us both.

Thanks again for everything.


Harry A. Rodas, ABR, CRS, GRI
Direct Line (801) 787-7990

My marketing philosophy is to just go and meet people in the normal course of doing interesting things, impress the socks off them if possible, and develop a natural relationship that matures into something fine.  I do understand that the average loan officer goes about marketing to Realtors as a way to get business.  Some are successful and make a good living doing that.  But it isn’t for me.

My relationship with Harry (and with Greg and with Amber, who are the Realtors I do business with) came about naturally over the course of us each doing the best job we could on a difficult loan.  We like each other.  I can recommend him (and have already done so).  In response to his goal to give me two referrals for every one that he gets from me, I offered a friendly wager that he couldn’t even match me one for one.  No Realtor ever has.  That’s mostly a tribute to you.

Meantime, I recommend Harry’s site to you, and I recommend Harry Rodas as one of the finest Realtors I’ve worked with.  If you’re looking, he can help.

Title Insurance? Who Needs Title Insurance?

Can’t pass this one up.  One of the best blogs on mortgages in the country, David Porter’s Pacesetter Blog out of Lansing, Michigan, has a great post on title insurance, what it is and why you need it.  It’s worth the read.

Save On Fuel!

We don’t just save you money on your mortgage here.  We’re all about saving you money everywhere we can.

A long while back, I posted some of my gas mileage experiments with my 1997 Dodge Stratus.  What I found was that the type of gas made no difference at all, but the speed I drove did.  Since gasoline is back above $2.50 again, it might be nice to haul some of those things out again.

Apropos of that, here is an article about gasoline savings that I thought you might enjoy.  I have a neighbor with a hybrid car, and rode in one with a client the other day (and quite liked it – quiet is one of my favorite things), so I have wondered about the fuel efficiency (it’s better) of these cars, and whether they save people money (they don’t).  Having spent a good amount of time studying alternative energy and renewable fuels, as well as innovative recycling techniques (we both recycle and compost – roughly half the normal waste of our house goes places other than the landfills) (I guess today is a parenthesis day), I know one thing about them that most people don’t – they don’t necessarily save either money or natural resources.

Wind power is not more efficient – hence not more eco-friendly – than oil or even coal.  People forget this one very simple truth: it’s not the end result that determines whether a process is worth it.  Cloth diapers, for instance, do not clog landfills.  But they do destroy large amounts of water and require far, far more energy to produce and to clean than disposable diapers.  These are costs it seems few want to think about.  Wind power, if it were cheaper, would be a major source of energy for cities and towns (the oil lobby, please believe me, does not have a lot to do with whether Lehi buys its power from Utah Power or produces its own).  But it isn’t.  Wind power, solar power, all these alternative, renewable energy sources are still much more expensive than fossil fuels.  When that changes, watch how fast we get wind farms and solar arrays all over creation.

And then, watch how fast people complain that all their precious virgin land is smeared with windmills and billboard-sized solar collectors.  This is a tradeoff nobody seems interested in talking about.

But I digress (Me? Digress? Never!), one of the leading car-review sites on the web, ran some tests to determine what the best gas-saving ideas really are.  Here are a few of the findings:

  • Cruise control really does save gas on the highway.

  • There is no gas savings from leaving the air conditioner off but rolling down the windows.  The reverse saves no gas, either.

  • Jackrabbit starts eat up fearsome amounts of gas.  Fuel savings from taking 20 seconds to go from 0-to-60 versus taking only 10 seconds were enormous.

  • Air pressure in the tires doesn’t make that much difference.

As you know if you were watching this space last fall, slowing down to 60-65 on the highway will result in close to 10% better gas mileage for the average commuter.  It’s probably even better with cruise control, but I can’t use the cruise in my car, because it is possessed by the spirit of Dale Earnhardt and immediately puts the gas pedal on the floor if I engage it.  And then it leaves it there.  If you want to know how you get control of an automatic car when the gas pedal is bolted to the floor – without crashing into anything – send me an email.  It was quite an experience.

Mortgage Rates, Housing Markets, and Why It’s Our Turn

Haven’t discussed the market much recently, which is because it’s been trading in the same range for some time, at least as far as the bond goes. For those just joining us, the 10-year treasury bond is the leading indicator for mortgage rates (where “leading indicator” in this case means “absolute predictor”). The bond yield is 5.98%, where we’ve been for a bout three weeks since the market gave up trying to coax any sanity out of the Fed Chair. All economic news is to be interpreted not on its own merits, but according to what the Fed will do with it. Therefore bad economic news is to be ignored and good economic news is a sign that inflation is going to eat us alive. The yield curve, however, is no longer inverted, which over at the Fed Bernanke will take as a sign of correct policy. Unfortunately.

A 10-year yield of 6% means mortgage rates of roughly 6.375% on the 30-year and 6% on the 15-year. The 7-year ARM, interestingly, has for the first time in my career become a serious player in the market, as it is being priced about 1/8 below the 30-year. For most people, 7 years and 30 years are roughly the same, as they don’t intend to be in their houses for even 5 years, let alone 7. So we’re writing some 7-year loans for the first time. One never knows.

On the housing front, no doubt you’ve heard all about the huge real-estate crash that has virtually wiped out Las Vegas and San Diego. You haven’t? Oh, wait….that might be because IT ISN’T HAPPENING, despite pronouncements from everyone on earth that the market is ridiculously overpriced. Without wanting to get too deeply into the reasons that the market cannot get too overpriced (this is assuming that the government does not take “action” to “save the housing market” like they did in the 1980s, which “help” destroyed both the housing market and the entire savings and loan industry of the US), let me nonetheless say that although the vulture media will search for horror stories, the vast majority of people in the US will not have their houses decline in value at all over the next year.

If you happen to live in Utah, not only will your house not fall in value, it will likely rise by some thousands, perhaps as much as 20% this year. More, if you happen to live in one of the hotspots (Midway, for one). Utah, as readers of this column know, has lagged the rest of the country in home appreciation for several years. Well it’s our turn now, baby. The average house bought 2 years ago for $200,000 will appraise between $250 and $275, depending on the area.

If you’re not looking to buy or sell, you really ought to consider a refinance to a loan we describe here. It’s the loan we’re getting on our house. It has the potential to decrease the time to payoff of your mortgage by as much as 14 years without changing your monthly outlays or your spending habits. It is not a biweekly payment system; this is something new. Call us (801-310-3407) or email us and we’ll talk over your situation.