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Mortgage Update Fall 2021

Scott’s Perspective

Just about a year ago, I had the distinct privilege of listening to a gentleman who is quite inspiring. You see, I am involved in a national coaching program for mortgage professionals, and we have two retreats each year. Jesse Itzler spoke at our fall retreat and challenged all of us to live our life with purpose. Jesse is a successful entrepreneur, author and the husband of Sarah Blakely who founded Spanx here in Atlanta. He is also a dynamic speaker and is all about living in the present moment. One thing that he touched on that struck a chord with me was the concept of what he calls a Misogi Challenge. He said, “The notion around the Misogi Challenge is that you do something so hard one time a year that it has an impact on the other 364 days a year. Put one big thing on the calendar that scares you, that you never thought you could do, and go out and do it.” This challenge is designed to help us uncover what we are capable of as individuals and to tap into possibilities we don’t see now. Once we complete the challenge, it’s a reminder that we are stronger than we believe and that more is possible then we can imagine. So, of course our coaches decided that we all needed to develop our own Misogi for 2021. Jesse made it very easy for me because he and a partner had developed an endurance contest that just happened to have an opening. It’s called 29029 which is the elevation of Mount Everest (www.29029everesting.com). Being that I climbed mountains anyway, I felt like it was right up my alley. But the more I read about it, the more freaked out I became. They rent a ski area and then you proceed to climb the ski mountain enough times to equal 29,000 vertical feet and they give you 36 hours to complete. My event was held at Stratton Mountain, Vermont in mid-October and you had to climb the mountain 17 times to accomplish the mission. The good news was that we did not have to walk down, just take the gondola. It turned out that I had to friends in my coaching program that decided to do it with me. And really you have a whole community of people trying to accomplish the same lofty goal and everyone cheers everyone on; it was quite inspiring. I trained for 3 ½ months based on a workout regimen they provided but still had all kinds of doubts about my readiness. As we started out on Friday morning with headlamps on at 6 AM, I was about to see what I was up against. They told us the night before not to worry about putting any kind of a strategic game plan together and until we had 6 out of the 17 summits out of the way. That would give us an idea of the pace we were setting and whether we are going to have any chance of sleeping that night. At 1 PM that day, I had climbed my sixth time up. We were feeling pretty good at this point because it was clear that we should have no problem getting some shut eye. Our new goal was to get through 12 summits by 10 PM that night and that would allow us to sleep for seven or eight hours and then just finish up the next day. We beat that by one hour and were in bed by 9 PM. I started at 7 AM the next morning and then finished by 1:30 PM that afternoon. It was very emotional, and I was much stronger than I gave myself credit for. So, I challenge you to find your own Misogi Challenge for 2022. Think about these 3 things to help guide you1) Whatever your goal is, there should be a 50/50 chance that you will succeed. The whole point is to stretch yourself to tap into something you didn’t know for sure you were capable of. 2) It should scare you a little bit, push your limit, and it should make you uncomfortable. 3) This is for you not for anyone else. The whole point of this experience is to learn something about yourself. Even if you do it with someone else or a group, the experience is still very private. Happy Misogi!!

THE LOOMING STUDENT LOAN CRISES

Four years ago, the US Department of Education unveiled an ambitious proposal to transform servicing of federal student loans. Under the new system, all borrowers would go to a single website to manage their loans. The department would also create a common software platform for the companies it contracts to service the loans, making it easier to hold servicers accountable for helping borrowers pay down their debts. This would have been a significant improvement over the nine different sites and four platforms that exist today. The problem is the whole thing has been a complete disaster and is nowhere near completed as they had intended. Many of the servicing agreements that were in place are scheduled to expire by year-end or in some cases the first part of next year. Because of all the mismanagement and lack of a new servicing platform, it would be wise to take precautions if you have a student loan to make sure that you have all the proper documentation for your loan before this transfer takes place. Two of the servicers that are impacted by the end of the year are Fed Loan Servicing and Granite State, but really everyone that has a Federal Student Loan would be wise to heed these 5 suggestions: 1) Update your contact information. Log into your current servicers website and confirm your contact information is correct, this applies even if you are still in school; 2) Open your mail and email from your servicer. It is important to read any communication they send carefully; 3) Save copies of your payment history. Print or save as a PDF any documents or statements on your current servicing portal just in case you need them later; 4) Set a reminder. Once you receive a transfer date, consider making a calendar reminder so you can be sure to log into your new servicers website and verify your information is accurate; 5) Beware of scams. Common scams include promises to reduce or eliminate your student loans, request for your federal student aid information, pressure to pay upfront fees, and individuals claiming to be affiliated with the Department of Education.

THE HIDDEN OPPORTUNITY

The last three or four years and provided homeowners the opportunity of a lifetime in terms of the gain in equity they have been blessed with. We are helping more homeowners than ever take advantage of this to do a cash out refinance to pay off pesky debt, remove private mortgage insurance (PMI), remodel their house, or buy a second home. Even if you can’t lower your rate, oftentimes restructuring your financial picture can make all the difference in the world. Call us to see if this makes sense in your situation. We can get very creative when we need to.

INTEREST RATE UPDATE

Rates bottomed out backing in early September and then started inching up through late October. But when I say inching up, I mean just that. The first week of November we saw rates start to inch back down again and we are currently holding in the very high twos to low threes depending on many factors on a 30-year fixed rate. The trajectory of rates has been in the hands of the Federal Reserve Bank and what they say or do. The most recent move was to scale back their purchases of treasury bonds and mortgage-backed securities which they have been purchasing to artificially keep rates low. They were doing this in the hopes of getting the employment back close to where it was prior to COVID. They still have a long way to go in this department, but we are making strides. Their other mandate is to ensure inflation does not get out of control. They have been telegraphing for the last six months that they believe that the inflation we are seeing is “transitory”. Because of supply chain issues, inflation is proven to be harder to contain in the short term, but they still believe that we will see this normalize later in 2022. Apparently, the bond market agrees. Rates have stayed insanely low. While nobody can predict where rates head, we have probably seen the bottom, but it is unlikely, at least in the short term, (let’s say next six months) that they will jump dramatically.