Inflation Finally Takes a Drop, Thanks to the Feds?

Inflation took its first significant drop since the Biden administration took the reins. Does that mean the Feds persistent rate hikes finally did what they intended to do? According to, well, pretty much everyone, not so much. Unless those rates hikes were meant to push mortgage rates much higher, make car loans more difficult to obtain, send credit card rates and consumer goods like groceries through the roof, tank stocks and retirement funds, and send the economy into a near recession. In that case, they succeed spectacularly.

From USA Today:

Inflation is finally falling sharply. But the Fed shouldn't take credit, experts say

Legitimate Businesses Don't Demand Payment with Gift Cards!

It’s been around for years, but people are still falling for it. You get an urgent call from the IRS, your utility company, a hospital or police station, Amazon, or other companies or agencies claiming you owe money. If you don’t pay them this instant, they will shut down your service, arrest you, lock up a loved one, take your house, your car, your hamster, your first born. Payment must be made now, and it must be made with a gift card. A gift card? No. No legitimate organization works that way. Only scammers want gift cards. They take it, spend it immediately, and poof, they’re gone.

One of the banks I close for has info cards in their lobby regarding these scams. For some people, it seems obvious. For others, not so much:

The Housing Market Sends Mixed Signals - So What's Next?

Thanks to relentless Fed rate increases over the last couple of years in an attempt to cool spending, year-over-year house prices finally declined in February for the first time since 2012. But the dip was short-lived. Month-over-month house prices increased in February and March, with April predicted to follow. Lack of inventory is the likely culprit. So, what’s the future hold? It depends on the market:

The Fed's inflation-fighting tactic was effective in cooling the housing market. What now?

As Expected...

The Feds raised their short-term rate another quarter percent, while removing previous wording that “some additional policy firming may be appropriate,” signaling it could pause future hikes if inflation continues to ease. But hey, no promises.

Two years of rate hikes have:

  1. Helped put Americans in more debt than ever.

  2. Made buying a home more difficult.

  3. Put several banks and lending institutions out of business or on the brink.

Two years of rate hikes have not:

  1. Eased inflation.

Read more about today’s rate increase at USA Today

It Is Not 2008 Again

In the last two days, we’ve seen two large banks go under in lightning quick fashion. The shuttering of Santa Clara, CA based Silicon Valley Bank (SVB), and New York based Signature Bank are the second and third largest bank failures in U.S. history, respectively, topped only but the 2008 crash of Washington Mutual.

But, unlike 2008, these failures weren’t due to sub-prime loans, lax lending standards, or over-inflated home values. In the case of SVB, they catered to the tech industry. More specifically, their clientele consisted of a large number of start-up tech companies that needed more cash than expected over the last year. In addition, SVB held billions of dollars in Treasuries and other bonds. Though not uncommon for banks, the bonds had to be sold to cover the rush of withdrawals, and thanks to the Feds aggressive interest rate hikes over the last year or so, those bonds were sold at a huge loss.

In the case of Signature Bank, they lent to commercial real estate companies, which have obviously taken a hard hit due to the pandemic and a shift to work at home models. In addition, they were a digital assets bank, with a quarter of their business related to crypto currency. Not a great combo.

There’s no bailout coming, but the Federal government has announced that all funds have been guaranteed. Bank stocks took a sizeable hit in trading this morning but are rebounding as the day goes on. And the Feds have once again hinted that they might slow or pause their aggressive interest rate hikes (that have accomplished basically nothing good). So, breath. It’ll be okay. This is not 2008.

"Disinflation" is the New Buzzword

How quickly things change. A month ago, we were talking about a slowdown in inflation, a cooling economy, a drop in mortgage rates, and an easing of the Fed rate. But now, with the economy still growing, spending still strong, and hiring continuing (all bad things in the eyes of the Feds?), the inflation picture isn’t so rosy. “The disinflation momentum we need is far from certain,” Mary Daly, president of the Federal Reserve Bank of San Francisco, said in a speech Saturday. “It’s clear there is more work to do." And higher rates, “maintained for a longer time, will likely be necessary."

More from the Detroit News:

Inflation pressures put Powell in spotlight before Congress (detroitnews.com)

Down, Up, Up (No, This Is Not a Video Game Cheat Code)

The Federal Housing Administration (FHA) is about to lower the cost of mortgage insurance for most new homebuyers. It’s expected to affect 850,000 new homebuyers at a savings of about $800 per year:

https://www.usatoday.com/story/money/personalfinance/real-estate/2023/02/22/mortgage-insurance-premium-new-homeowners-fha/11324173002/

Homebuilders’ confidence is up:

https://smallbiztrends.com/2023/02/nahb-wells-fargo-housing-market-index-february-2023.html

Unfortunately, after a brief drop, so are interest rates:

https://www.cnn.com/2023/02/23/homes/mortgage-rates-february-23/index.html

Another Fraud Alert - Are We Sensing a Theme?

Even if you’ve never worked with MIT Federal Credit Union, this is still a relevant warning. I sometimes receive emails that look like they’re from a lender or title company asking for information or directing me to click on a link or open an attachment. The emails look exactly like an email you might get telling you to download docs here or to see the attached closing disclosure. It looks legit in every way. But the two red flags for me are, one, none of my companies would send me docs in that way, and two, I know what’s on my schedule and if I don’t recognize the title company or lender, I’m not opening diddly.

From MIT:

MIT Federal Credit Union has been informed that you may have received a phishing email from Christian Lazowy at MIT Federal Credit Union. If you received an unexpected email asking for information and provided it, your information could be at risk.

Steps to take:       

Change your email password.

Contact your Information Technology department or IT security department.

 There is no threat to any member accounts, and no information is at risk. We take security very seriously and ask you to do as well. Here are some precautions to take:

Confirm the sender's identity before replying to email requests and before opening attachments or clicking on links, even if they appear to come from a legitimate source.

Consult your Information Technology department about any phishing attempts.

Call us to validate communications from MIT FCU.

 No MIT Federal Credit Union employee will ever contact you by text or email requesting you enter confidential information to open an attached document.  

Predicting Housing Trends for 2023

Housing prices will continue to trickle down…unless they don’t. Either way, it looks like a soft landing.

Interest rates, already trending lower, will continue to drop. But, if you’re expecting the kind of rates we saw a year or two ago, well, you’ll probably be disappointed. Yet, historically speaking, rates we’re seeing now and are expecting to see in 2023 are still quite good. We’ve just been spoiled.

Spring is usually the time that the housing market picks up some steam. Expect that trend to continue, as inventory continues to rise. Lenders are already seeing an increase in their pipeline.

See more at YahooFinance:

https://finance.yahoo.com/news/housing-market-6-trends-know-181453096.html

Have Mortgage Rates Peaked?

In February, the Federal Reserve raised their interest rate another .25%, marking the 8th rate hike since March of 2022. This followed a .50% hike the previous month, and four straight hikes of .75% prior to that (the Fed Rate is the interest rate banks and credit unions borrow and lend to each other). While the Feds appear to be winding down their rate increases, mortgage rates, which are not directly tied to the Fed Rate, are already coming down. In fact, they’ve dropped a full point since November.

From the Wall Street Journal:

Housing Market Shows Signs of Thawing

Falling mortgage rates are beginning to stir demand in the housing market.

The average 30-year home loan rate has come down by just about a full percentage point from a 20-year high above 7% in November, largely in response to signs that the Federal Reserve is nearly finished lifting rates. That has brought some new buyers into the market.

Mortgage applications are up by about a quarter since the end of last year. A measure of signed real-estate contracts rose in December after six months of declines. And the number of people contacting real-estate agents to start the buying process has rebounded from a November low, according to brokerage Redfin Corp.’s internal data…

See the rest at the Wall Street Journal (paywall):

https://www.wsj.com/articles/housing-market-shows-signs-of-thawing-11675617472

Major Fraud Alert!

This came yesterday from one of my signing services:

FRAUD ALERT!
HELOC SCHEME

We have recently been made aware of a very serious fraud scheme circulating.  A third party is pulling information from the recorded documents and calling the notary to pretend to need more information from the closing. They are then going to the bank branches to draw on the HELOC. 

If you receive a call from anyone asking for Non-Public Personal Information (NPPI) regarding a closing you completed, do NOT give it to them under any circumstances. 

Examples of NPPI

  • Names, Addresses, Phone Numbers

  • Account Numbers

  • Loan Payoff Amounts and Statements

  • Credit Card Statements

  • Closing Disclosure and Settlement Statements

  • Insurance, Drivers License, Tax Information

  • Social Security Numbers & Date of Birth

  • Title Related Items Such As: Sales Price, Commission Amounts, Loan Fees

  • Anything Listed on the Loan Application

Why would a notary signing agent EVER think they have a reason to share that kind of info with ANYONE?! The legitimate lender and legitimate title company would already have that info, so there would be no need to ask the signing agent. The borrower certainly wouldn’t, and if they did and they were really the borrower, you would refer them to title or their loan officer. No other party has a right to private information like that, be it an attorney, creditor, realtor, or government official. Even if they did, it’s unequivocally not your place to provide it. Stay in your lane! There’s ZERO reason to provide that info to anyone.

Flagstar Layoffs - Morgage Company Cuts Workforce

Many of my title companies have reduced staff during these slower times. The hope is that these layoffs are temporary, and they can begin to hire back staff when interest rates begin to come back down (Some estimating from 6 to 18 months from now depending on your level of optimism). Obviously, mortgage companies are feeling the pinch, too. Michigan based Flagstar is one. After a 20% cut last summer, Flagstar is making another adjustment to its workforce:

Report: Flagstar Bank lays off hundreds in mortgage division (freep.com)

Another Phone Scam - And It's a Good One

I am, by no means, easily suckered in by phone calls claiming I’ve won money, qualified for a loan, or had my personal info hacked. But I’ve recently been receiving phone calls claiming to be from my bank. And they’re EXTREMELY convincing. Here’s how it goes:

It starts with the caller I.D. The call displays the name of my actual bank or their fraud department number. It spoofs the actual number shown on the back of my debit/credit card. The caller introduces themselves as part of the fraud team from my bank (They actually know my bank and my name). There’s been some suspicious activity on my account, they say, and they’d like to know if I just made a large purchase on Amazon (Who doesn’t use Amazon?) and another purchase shipping to a location out of the country. Well, no, I haven’t. I quickly look at my account on my phone app. I tell them there’s no such activity on my account. They say it just happened a few minutes ago and they haven’t processed it and won’t unless I say it’s ok. So, they’re going to cancel my card and reissue a new one. It’ll be arriving in a few days. I test them. I say, “Which card, I have a couple?” They proceed to tell me the first eight digits of the card. Dang, that’s good. To summarize, they know my name, my bank, where I might shop, what kind of card I have, and the first eight digits of the card. I’ve told them nothing. And now….the fishing expedition. Before we can cancel the card, they say, we need your pin number for security purposes. Ahhh, there it is! My bank would only ask for my pin if I called THEM. I say no, my bank would never ask for that. He gets mad, starts making threats. The second time they called, they asked for the last eight digits of the card. They already know the first eight. So now I know, they have an old card number. The first eight numbers always stay the same, but my last eight change whenever a new card is issued. That’s what they’re looking for.

It’s a really good scam. It’s convincing until the point that they ask for info. They know a lot of info already. They keep trying, subtly changing their tactic with each call. Don’t fall for it. Hang up and call the fraud department of your bank directly. Or do what I did. Drag them along for a while until they realize that you’re on to them. Then they’ll reveal themselves in a fit. The last time they called I told them they should really move on because they’re not going to get anything from me, and I just let them talk to waste their time. They’ve since lost my number.

Availablity for Mortgage Signings

I know. With interest rates rising and home sales slowing down, many people have gotten out of the mortgage/title/closing business. It’s hard to navigate the ups and downs of this industry, but after 20 years as a signing agent, I’ve learned to prepare for and expect just about anything. Despite being quiet on the posts over the last few years, I’m still here buzzing around Metro Detroit. I enjoy this occupation immensely (well, most of the time) and can’t imagine doing anything else. I’ll ride out the roller-coaster, like I’ve done many times before. So, if you’re in need of Mobile Signing Agent for loan signings in Metro Detroit, I’m available as always.

Alex

The Mortgage Report - Mortgage Tips & News

I am constantly contacted by mortgage and title related businesses wanting me to add a link to their website or tout the services they offer.  I'm extremely picky about what I put on my web pages or mention here.  I only want truly relevant information.  I want information that's useful for others in the mortgage/title industry, other signing agents, or consumers.  One site that I'm happy to mention here is The Mortgage Report.  They provide daily articles and tips for consumers looking to purchase a home or refinance a mortgage.  Their articles are well-written for consumers.  Plain English without overwhelming mortgage jargon.  Check them out here:

The Mortgage Report

UPS Box vs. UPS Store

A few title companies that use UPS are strongly urging signing agents to return documents by taking them to the UPS Store instead of using drop boxes.  At least one title company considers it a signing agent error to use a box and will give you a naughty demerit on your service record with them if UPS delays or loses a package and you used a drop box instead of a store.  The argument for this is that packages are more likely lost using a drop box then using the store.

In my almost 15 years as a mortgage signing agent, I've only had one package misplaced by UPS when using a box.  It apparently slipped behind a seat and wasn't found for two days.  In every other instance (and there have been too many to count), it was the UPS Store that lost or misplaced a package, usually because the desk clerk was busy and ended up setting aside the package and forgetting about it.  So personally I don't agree with their assessment and I have certainly had a different experience.  

However, my biggest beef is the additional time it takes to go to a store.  My UPS Store is 15 minutes away, that's a 30 minute round trip.  I'm then told not to just drop off the package.  I must hand it to the clerk and get a receipt.  Have you EVER walked into a UPS store and NOT had a line of at least a few people?  I haven't.  So another 10 to 20 minutes minimum waiting in line?  And any additional pay for the extra time I'm spending driving past 5 or 6 UPS drop boxes and waiting in line?  Of course not.  So with all due respect, I decline. 

Wayne County Notaries Beware - Wayne County Is At It Again

If you've ever had the pleasure of dealing with the folks at the Wayne County Register of Deeds or other Wayne County offices, you know how, um, challenging it can be.  Service is not their forte, and it seems like they will find any reason to reject recordable docs like deeds and mortgages.  They've recently found a new excuse to reject these documents.  

As most notaries are aware, when performing a notarization in a county other than the county of our commission,  we're required to indicate that we are acting in that county.  Most notary stamps already have a line included in the stamp to address this, we just add the county we're in like this:

Alex G. Yvonnou
County of Wayne
Acting in the County of: Oakland

Simple enough.  "Acting in" is required when you're in another county, but NOT when you're performing the notarization in the county of your commission.  So if I'm notarizing a signature in Wayne County, I'm not ACTING in Wayne County, I'm already commissioned there.  But tell that to Wayne County Register of Deeds.  They are now rejecting documents for not having the "Acting in" portion filled out, even if you are commissioned in Wayne.  Correct?  No.  Logical?  Nope.  Try to fight with them about it?  Don't bother.  It's their way or the highway.  So Wayne County notaries better start filling in "Acting in"  even when you're in Wayne or you'll be getting a call from your hiring party about your "error". 

And dear Wayne County, here's the link to the Michigan Notary Act, specifically Section 55.287, which indicates that "Acting in" is only required when in a county other than the county of commission: 55.287.  Not that you actually care.