Video Closed Captioning:
good morning good afternoon good evening
folks michael zuber one ritz line of
time back with his wednesday guest matt
the mortgage guy how are you doing buddy
i’m doing great mike how you doing oh i
love the fact that we get together every
week we get to share our multiple
decades of experience and really what i
like is when we can put together the
little pieces that are going on in the
business
and call out something early so i think
we’ve got one today but before we do
that how can people follow you both on
youtube how can they reach out to all of
that first because i almost forgot last
time yeah no worries we’re we’re happy
to help so if you’d like to reach out to
me and the team go to
greatmortgagebroker.com fill out a quick
form tell us where you’re at how we can
help we’ll be in contact very shortly
matt the mortgage guy on youtube gosh i
must be approaching 600 videos i think
we’re 560 something um dude come on you
got to do five a day come on what’s up i
know i looked the other day i was
looking for something on your channel
and it was like 5.6 000 videos like 5600
i’m like man this guy’s an absolute
animal well i haven’t i haven’t edited i
have never edited one it’s just
just go publish yeah
but check out the youtube channel and do
me a favor i got this feedback i’d love
to hear people’s comments um about my
sound they said matt we really enjoy
watching you on mike’s channel but you
got to get a better microphone so i
think since i
can move this microphone i think it was
too far away from me yeah i think it was
echoey last time yeah and so i think if
it’s closer let me know on this video
specifically sounds good how is the
sound i want folks to be able to hear me
clearly when i tell them if you like it
lock it we’re not waiting for rates to
come down like you got to hear it and
it’s got to be clear yeah well hey one
of the things that i want to put
together kind of tying things together
right
so let’s just have this kind of let me
just i’m going to walk people down how i
see the dominoes and you you tell me
what what’s going on so um
one of the things that a lot of people
do
over the last three or four years is
they come to a guy like you and they get
a second home loan right it’s a vacation
or a second home
the reason they do that is it’s cheaper
financing right because it’s a second
home
is that technically considered owner
occupant like a second home it’s it’s
not really it’s not a primary but it’s a
second right but the terms are
relatively similar right yes pricing
wise it’s not an investment you don’t
need 25 right right you can put 10
percent down so so the so that you know
it behaves like a right and a rate right
you might have a half a point or or more
in rate difference between primary and
investment
the second home is almost identical to
primary yeah a little up but not much
it’s it’s within a and the reason this
is important is the next step so one of
the things that i’ve seen a lot i’m sure
you’ve seen a lot over the last three or
four years is people are going to but
we’re buying a second home
frankly with the intention whether they
declared it or not i’d be interesting to
know i bet you a lot of people didn’t
but the real thing that they were trying
to do is they were trying to game the
system and create an airbnb yeah and
truth be told lenders weren’t
necessarily
poo-pooing it right if it was a true
second home where you said listen i plan
on spending two three four six weeks a
year here yeah the other 48 weeks i
planned to airbnb it like it wasn’t a
disqualifier right and so like they
weren’t they’re they’re still playing
within the rules of the game but it was
one of those things where like this
thing’s primary function was a was a
rental right it was a cash flow and
asset and they were getting great terms
on it yeah and that’s that’s the wrinkle
right so they were getting terms quasi
owner occupied which is the reason this
is important because that’s the least
risky right
but they were really treating it like an
investment because again 48 out of the
52 weeks it was going to be available
for rent for other produce income all of
that so i what i’m thinking is coming
is that the masses went that direction
i’m going to guess that fhfa at some
point cries uncle and goes hey
suddenly we have too many second home
loans
and really they’re not second homes
they’re investments we need to treat
these things
differently you see something like that
coming down the pipeline well yeah i
mean it was actually announced today no
[Laughter]
and and
in in my circles of you know mortgage
folks and i get these masterminds where
i talk to mortgage
brokers that are producing at a high
level right and so like but you could
you could be in a room where you’ve got
you know a billion dollars a year
in mortgage production amongst 10 guys
you know even the ones that don’t work
with as many investors as i do we’re
seeing the same thing right if if if
everybody i talk to in the mortgage
industry is writing more of these i’m
writing more of these i know it’s a
thing across the board right fhfa
my guess 20 and 21 said oh my gosh we’ve
got a lot of these on the books yeah and
again let’s say a lot so i um i just
want to i want to get the scale like if
if you were doing you know if your book
of business was a hundred
you might do in a normal year like 18 or
19 like seven second homes right some
people do it the rich would do it but
it’s not for everyone and what i’m gonna
guess here as we said in 2022 now which
still hurts my head to say it went from
seven to like 37 it’s just like it’s a
way for people to make money now versus
have a place to vacation
right yeah and i think that you know the
numbers for the average loan originator
might have been closer to two or three
percent you know
pre-2021 and then you know
there was could you try again my watch
is talking to me
siri yes i’m not sure i understand it’s
okay siri we’ll talk about
more stuff later i’ll educate you later
yeah yeah i’ll fill you in on fhfa stuff
later um
you know and so it at least
tripled or quadrupled right and and
folks especially
you know the pandemic change things
right where people could work remotely
and and like
probably you know a lot of it was was
true second home where it’s like hey i
want to live in this area for eight
weeks or 12 weeks out of the year i’m
going to buy a house there i can work
remote
you know part of it was airbnb as well
so it’s probably multiple different
things that were happening to cause this
huge uptick and so you know today fhfa
announces and here’s the the wrinkle um
they announce and people should be aware
of this that come april 1st 2022
is when
they’re going to start implementing
price increases right when they see too
many of something or they’re trying to
adjust due to risk that’s interesting
all they do is adjust pricing and so
they say um and this is actually in the
announcement it was
um upfront fees for high balance loans
okay so that would be like 90 ltvs well
no no no no no that’s the ballot stuff
just
just general like you know if i’m doing
a loan in in the bay area for 900 000
it’s not conventional but it’s high
balance got it um for owner rock stuff
and for second homes
me reading it
the hit to high balance is 25 to 75
basis points not a big deal for me
when i see the hit for second homes
we’re talking about 112
to 387 basis points and just to clear it
up for people when they say upfront fees
and i say 112 to 387 basis points
we’re talking about
um
you know to get this rate it’s going to
cost you
an extra point to four points
or
you’re going to get
you know an eighth to
probably
three-fourths of a percent higher at
that same cost right and
everybody buys investment homes not 10
down everybody yeah yeah
when when rates are this cheap you don’t
put a bigger down payment than you have
to most of the time especially investors
yeah of course capital was yes capital
is the thing right yeah but go out and
buy two before they put 20 down on one
yeah and so
so when i look at this and i see that at
the highest ltvs the the 90 the 10 down
it’s gonna be a 387 basis point
difference
that’s like okay you could get it 3.375
today
if and when this goes into effect
it’s now four and eight like
that changes the game right that changes
the equation yeah and here’s the thing
when they come out with this
announcement they say the new pricing
framework will take effect april 1st
um and this is this is their line to
minimize market and pipeline disruption
um
first thing to think about is that april
1st for them means that lenders right
now that are writing these loans and
know that they’re selling them in the
future
might adjust in my opinion like
immediately yeah that’s where i was
going to go with this right fhfa is
giving you a heads up that this is
coming it goes into effect april 1st
people that are again creating loans now
to box them up and sell them to them as
an in-buyer if they don’t think they can
close the loan by april 1st they’re
going to adjust today right so they may
do the loans by the 15th of january but
after that they’re like nope we’re gonna
they’re gonna change the fees early
right at least get halfway there right
and and i don’t know
what’s gonna happen so i won’t speak on
it if there’s a little bit of a
of a period then it’s gonna be like hey
you want to buy an airbnb close it by
february 15th because this lender says
they’re going to accept them until that
date yeah but know that like you’ve got
a close date and then you’ve got a
package sell on secondary date for the
lender so they’re going to you know
probably do it at least 30 days in
advance maybe even have it immediately
um hit the the pricing and again the
fhfa again you got to think about them
right they’re up here being this uber
kind of puppet master and they’re like
why the hell are we getting so many
second homes
they’ve probably dug into that going
holy cow this airbnb thing has taken off
and again i invested through the last
crash and i remember them looking at all
these adjustable rate mortgages there
was a time pre-crash where adjustable
rate mortgages were like 90 10 right 90
percent fixed 10 adjustables what
happened right around 06 is they got to
50 50. and i remember fha going
something’s wrong
and lo and behold
something was really wrong but yeah so
so they have a lot of data and sometimes
they put it out there early this is
interesting that they’re pointing at
second homes which you and i know as
investors for a lot of people is airbnb
money so yeah well i mean and it’s like
as i read this this housing wire article
you know it it allows enterprise to
better achieve their mission of
facilitating equitable and sustainable
access to home ownership
if they’re going to charge somebody more
they’re going to look at investors and
say listen you guys are the rich folks
right yeah we’re going to charge you
we’re gonna make it more affordable for
for first time home buyers for for
people buying a primary residence which
on a certain level makes sense right and
um
uh it’s it’s something that you know
mortgage industry is always changing we
keep our eyes open well that’s why you
and i talk every wednesday and if you
are on one rental at a time you need to
reach out to matt the mortgage guy have
a discussion don’t fall for these slick
high pressure big box online mortgage
folks they do not have your best
interests in mind please reach out to
matt the mortgage guy how do you want
them to do that go to
greatmortgagebroker.com quick and easy
form let us know where you’re at and how
we can help and we’ll be in touch very
shortly and i know just in the last 48
hours he’s looked at your statements
from other people one you said oh seems
right the other one’s like dude they’re
screwing you you didn’t use that word
that’s my word right so you really do
you really are just evaluating other
stuff so thank you for being great to
the channel the service and helping
people all this time for sure happy to
help thanks bud yeah