Mar 162016

I find this assessment kind of amusing, and I think it’s yet another indicator of the capricious nature of finance forecasting:

The Fed has always maintained that the timing of rate increases would depend on the data, and the data have been uncooperative. Global risks have increased, inflation expectations have fallen, and financial conditions have tightened as equity, commodity, fixed income and foreign-exchange markets have adjusted to the new reality.

Tighter financial conditions are the equivalent of Fed rate hikes.

We shouldn’t be surprised to see more surprises this year. The global economy is not on a smooth path, and it wouldn’t be a surprise to see the Fed adjusting its expectations for the key economic variables as well as the federal fund rate. (Source link:

The “global economy is not on a smooth path” and the Fed’s potential to adjust its path in 2016 in light of the economic variables “wouldn’t be a surprise.” Perhaps the great irony of how things went after the Fed’s December rate hike is that the Dow sunk about 2000 points, The US 10yr Treasury Note yield dropped about half a percentage point, and the per barrel cost of crude oil dropped about 20%. And by February, in reaction to all these “economic variables,” mortgage rates were down to a 9 month low.

So… uh… hmmm… no rate hike announced at today’s Fed meeting… but we may be hiking the rate twice in 2016… unless we don’t… because… uh… “variables.”

Just wanted to remind you guys that a Fed rate hike absolutely does not always result in higher mortgage rates for consumers, at least not in the near term. In this particular case the rate hike appeared to have the inverse effect for consumers. Truth is, there really are a variety of factors (variables) that affect consumer rates and the Fed’s influence is only one of them.

And the great news is that rates right now TODAY are excellent— 30yr conforming fixed quotes consistently under 4%— so if you’re considering refinancing or purchasing right now is still a great time for getting a loan.

Oh, yeah… and the bit about two hikes coming later in the year? Who knows, really? Maybe. Maybe a totally different set of “economic variables” will be in play later in the year; things we cannot know right now… because they’re in the future. What we can confirm though is that right now rates are good. But the stock market and oil prices both appear to be rising now, and if investor funding shifts back to speculating on the higher returns that stocks and futures deliver (versus the security of fixed rate bonds) we could see those consumer rates tick up a bit. We’re keeping an eye on it.

Feb 022016

Treasuries Fall to 9-month Low 

Treasury yields fell to a nine-month low on Tuesday as a renewed selloff in oil and stocks sent investors into assets perceived as safe, such as government bonds. The yield on the 10-year note TMUBMUSD10Y, -5.06% —the market benchmark—fell 10 basis points to 1.864% from 1.966% on Monday, its biggest one-day drop since July 6, 2015. Bond yields and prices move in opposite directions. After a brief divergence between risky asset prices and bond yields, Treasury markets continue to trade in close correlation with oil.  “Oil continues to dictate market direction. We also had some disappointing earnings from big energy producers, which was not surprising but nevertheless is weighing on stocks,” said Ian Lyngen, senior government bond strategist at CRT Capital. Lyngen noted that 10-year yields correspond with macro outlook, however. (Source: MarketWatch)


Mortgage Rates Down To New 8-Month Low 

Mortgage rates only paused for a brief moment of reflection yesterday before continuing with 2016’s trend of improvement.  Today’s gains bring them easily back tonew 8-month lows.  Last Friday, that’s a designation they shared with a few days in October.  Today’s rates don’t need need to talk about sharing the trophy until we get all the way back to April 2015.  The average lender is now easily down to conventional 30yr fixed rates of 3.75%.  The stronger lenders have gradually been moving down to 3.625%. (Source: Mortgage News Daily)


How does the market for Treasury Bonds affect the Mortgage Market? 

The correlation between mortgage rates and Treasury bond rates is ultimately determined by where investors want to invest their money. The structure of the mortgage system in the United States puts mortgage rates in competition with the rates paid on U.S. Treasury bonds. The interest rate trends on Treasury bonds can be used to roughly predict the rate trends for fixed-rate mortgages. (Source: SFChronicle Home Guides)

Jan 192016

Hello everyone,

Heidi and I saw the film The Big Short last night. And while we both thought it was an excellent film that cleverly presents a lot of complicated financial information in an entertaining way, as we walked out of the theatre it was obvious we both felt a substantial pang of nausea. It took Heidi over five minutes after walking out of the theatre to comment, and once she did it was only two words: “Pretty disgusting.” And as I walked out, my thoughts were how the film took me back to many moments that frankly don’t seem that long ago to me. For example, I recall in the midst of the financial debacle learning myself what words such as “tranche” and “CDO” and “credit default swap” and “dark market” meant. I recall recognizing how complicated the mess was and how uneducated I felt I was, especially as one who works in one level of that chain of events we call lending.

Watching the film I felt a resurrection of that anger surging inside me that in those days was just a regular part of my day, every day. I recall distinctly the 2008 Obama campaign’s nearly spiritual hymn of hope and change contrasted with the daily collapse of lenders, the plummeting stock market, and the growing fears of those who seemed most informed in both print and television media. I remember wondering why Obama would want to take on this mess at this moment in history.

But as we drove home from the theatre there was a moment or two when I thought of what has happened since then. Indeed, the Dodd-Frank Act actually did make it through congress and became the most significant update to the government’s regulations over (let’s just call it) Wall Street since the 1930s. It’s of course notable that the senator and the congressman whose names are affixed to that act both retired from public service after completing the passage of this legislation; two democrats whom many see as patriots, whom some see as villains, and whom I see as sacrificial lambs. And while the financial industry fought tooth and nail to prevent, curb, and influence Dodd-Frank (over $100 million alone in 2011, see NY Times 2011) some real changes, including a Consumer Financial Protection Bureau, actually became law— though the efforts to repeal and “defang” the law have been ongoing ever since (see Rolling Stone in 2012, The Nation 2013). And according to this article in Think Progress in 2015, “Financial players have spent three-and-a-quarter billion dollars to influence the government since Dodd-Frank was passed.” which by itself informs us beyond any reasonable doubt what sort of challenge the public faces when going toe-to-toe with Wall Street. So unlike football and basketball, there is no game clock in this contest. The public really can’t claim a victory as the time runs out because the proverbial “overtime” is endless when billions of dollars are spent creating the extension to the game. Any of the gains implemented by the public can be reversed by lawmakers willing to act on behalf of big donors. So to think that the biggest reform of financial regulations since the 1930s is anything resembling a done deal is a fallacy, and its opponents absolutely count on the probability of the public’s waning attention to it. If you take anything away from this post, I would humbly ask that you please don’t let your lack of attention be an asset for Wall Street. They have enough assets as it is.

And lastly, the thoughts that followed after coming home from the theatre seemed to all conform to one question: How did Heidi and I survive in this business in such a disastrous climate? A quote from one of the characters in the film (Mark Baum played by Steve Carell) sums it up very well, I think: “We live in an era of fraud in America. Not just in banking, but in government, education, religion, food. Even baseball…  For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did.”

We survived in this business in no small part because we did do NOT engage in the rampant, epic, f-ing fraud that Wall Street committed upon this nation. And while we both walked out of that theatre last night feeling no less than infuriated, I can assure you it continues to be our promise to all of our clients that our fiduciary duty to serve the interests of our clients is sacrosanct with us. And it always will be.

Please go see The Big Short. It offers the public a very entertaining AND an extraordinarily valuable insight into the biggest and most powerful player in the world: Wall Street.

Dec 162015

Hi guys,

Just a quick note to let everyone who hasn’t already heard know that the Federal Reserve Bank has raised its “Funds Rate” by a quarter point today, from .25% to .50%.
Cutting quickly to the chase, here’s how it can affect American consumers like you and me:
  • Consumers with adjustable interest rates on their loans will see payments increase. Unfortunately, payments will increase and those with adjustable rates will be paying more toward interest. This adjustment will be relatively modest though. For example, a $500k loan with 30-yr term at 4.5% that increases to 4.75% should see an increase of about $75 per month.
  • Savers will see improvement in their interest return. Savers have been hurt over the past six years with record-low rates. Many retirees who draw income from their savings will benefit as higher rates will begin to favor savers.
  • Credit card and Equity Line rates will increase, as credit cards and Equity Lines are linked to the prime rate. As rates increase, so will the interest rates on these financial products. Again, the change should be relatively modest for most folks. An example payment increase for an equity line of $50k pegged to the Prime Rate with an interest-only payment should see an increase of around $11.

Here are some good articles I’ve found that are helpful if you want to learn more:

Best wishes, 
Oct 142015
Hello everyone,

I read an article this morning that got my mind chirpin’ a bit. And while I sure hope things get easier for buyers— and I actually do think we have some evidence to hang some hopes on— I also think we have to view anyone’s future predictions with a healthy dose of skepticism. Typically in finance, the predictions of the future are concocted in a test tube in the proverbial academic laboratory where the capricious nature of life is suspended, leaving the predictions to be made in a virtual vacuum. So, if we look at the future in this way, sure, interesting predictions can be made. But real life is not in a vacuum, and all sorts of events occurring outside that vacuum can change the outcomes predicted.

Those of us who follow finance are aware that there has been talk all year from the highest level of the Federal Reserve Bank that they will increase the federal funds rate, ultimately leading to higher retail mortgage rates. It keeps getting postponed, of course, and the ebb and flow of investment money shifting between the stock market and the bond market in reaction to the predicted moves of the Fed is the most prominent driver of swings in the rates for mortgage loans we’ve seen for at least the last year. Ironically, when the Fed hints it will postpone a rate increase, investor money flows toward the stock market— and away from the bond market— which actually has the short term effect of raising retail mortgage interest rates. Go figure, the Fed says it will keep rates steady and immediately retail mortgage rates increase!

Excerpt from article I read this morning:

Could home buyers in San Francisco Bay Area catch a break soon?

Looking in the rear view mirror … this summer San Francisco Bay Area home prices neared their pre-recession all-time highs as sales soared, according to a recent report by Core Logic. Most Bay Area counties saw jaw-dropping double-digit gains in sales prices. With housing near job centers becoming less affordable, buyers began spilling over into more affordable inland counties. Napa, Contra Costa and Solano counties, posted whopping 31%, 19% and 18% year-over-year increases in homes sold, according to Andrew LePage, research analyst with Core Logic.

Will it last? There’s little debate that for the time being the San Francisco Bay Area housing market will remain strong. However, looking into a crystal ball … seasoned agents believe the period of double-digit appreciation is about to end. Since 2012/2013 low inventory and high demand helped drive up prices in most of the nine Bay Area counties. Home-price appreciation has outpaced income growth to the point that we are beginning to see a tipping point. Inventory is slowly increasing and indications are the playing field is beginning to change.

Many believe the San Francisco Bay Area housing market is approaching a healthy leveling off phase. I see this as especially good news for buyers exhausted from trying to compete for a home. The slowdown will begin to create opportunities for them to obtain homes that were too difficult and expensive to buy in the past. The time is coming where buyers will once again get the opportunity to purchase a home the old fashioned way — by negotiating with the seller.

I really think considering the prospect of rates increasing is as pertinent to the premonition of a “break” for home buyers as any other factor. The very purpose of increasing rates is to slow inflation, and generally it works. Chances are it will work in the bay area too, whenever it happens. And that increase, strangely enough, should actually be a break for homebuyers. While “low inventory, low unemployment, and a strong business climate” all certainly have a significant impact on inflation, demonstrably so has the thus-far-persistent specter of low interest rates. It’s had a huge impact on home sales in our area and will most likely continue to do so for the foreseeable future.

And then there are these trends we can track:


* Anecdotally, we can attest to as much as 20-30% over-bidding in Oakland over the last year.


*Anecdotally, loan demand has been strong all year from our vantage point.


*Anecdotally, we can attest that cash buyers have a sweet-spot price they won’t surpass, and if they don’t get that they’re out!

And these, from just the past couple months:

Jumbo Standards Are Loosening

So while inventory and low unemployment and a strong business climate all carry a lot of weight, it’s important for us to consider a few other factors driving demand. Read what you wish from these graphs, as they are records of the past and not necessarily indicators for the future. But if the Fed does increase rates to slow inflation within the coming year (in an election year, no less!), will the loosening of credit guidelines ultimately make it a wash, keeping demand as strong as ever?

My real answer is I don’t know. Higher rates can, and eventually will, trump looser credit guidelines. But after reading the article in MarketWatch I couldn’t help but think to myself how its author should have given more weight to the prospect of how lending affects our housing market. The truth is right now is a pretty amazing time to get financing for a home purchase. When I first became licensed in the loan business in 1999 the conforming rate for a 30 year fixed mortgage was generally around 8%. Today it’s about half that. Yes, it’s competitive to purchase, but at least here in Oakland the demand has dramatically lifted the renovation investments in many neighborhoods, revitalizing deeper and deeper into parts of the city that haven’t seen that upward lift in decades. Opportunities to buy well below the regional median price are still out there, in increasingly renovated neighborhoods. And then obviously, considering what $1M buys in San Francisco and the peninsula these days, if you’re looking in that range you definitely want to give Oakland a look for its proximity, its style, and its value. Check out this documentary at for just one of the latest indicators of the inherent value Oakland offers.

Hope you’ll think about that when you cast your mind’s eye to the future. Life is capricious, and the predictions of the future may be right or they may be wrong. We don’t know what’s coming down the pike, truthfully. But what we do know is what we have RIGHT NOW is a strong market for lending. Low rates and a loosening of guidelines in certain circumstances are definitely having an impact, and all these factors could actually be an opportunity for you.

Please don’t hesitate to keep in touch with us— our senior loan officer Heidi is at or 510-205-1077— if you’re giving consideration to home financing. We’re watching closely and we’re happy to tell you what the market has to offer you, for both loans and for real estate opportunities locally.

And just one more graphic as food for thought:

Federal Funds Target Rate Since 1980:




May 282015

The difference of 8 months in Maxwell Park


Click pic for current MLS Listing

Had to make note of this property at 3279 Knowland Ave in Maxwell Park as it’s one I toured last summer as a prospect for more than one client. Of course it needed some work back then and when it was on the market the owners were still occupying the property.


Click pic for 9/2014 closed sale MLS Listing

There’s no question that numerous upgrades have been made. The home in the new listing looks absolutely fantastic. But as you can verify by clicking the two pictures and looking at the respective MLS Listings, the selling price in September of 2014 was $441k and the list price in the current market is $649k. Indeed, the home looks much better after its renovation. No doubt. But what’s also not in doubt is this amounts to an almost 50% price increase over the selling price in September of last year. The point I’m making with this comparison is simply that THIS is what’s happening in Oakland. Neighborhoods are changing rapidly. Homes are being repaired, renovated, renewed, etc. Whatever you want to call it, things are not the same as they were even as recently as a few years ago. Taking another example from last year at a home on Bona Street in Oakland’s Hacienda neighborhood just southwest of Dimond we can see that in July of last year the home sold in fixer condition for $270k. And then after a very nice renovation it sold in December of last year for $475k. Pretty quick turnaround there for a nearly 75% increase over the previous selling price.

So what I’m really hoping to illuminate here is how so many of our neighborhoods are changing. Yes, prices are going up quickly in many neighborhoods. But for the shoppers out there who are trying to figure out where on earth they’re going to be able to buy something that’s got that ever elusive combination of appeal AND price the challenge is how to identify where the neighborhoods are that have this great developmental potential. We all already know that if the neighborhoods have already caught on, such as in Maxwell Park, or Dimond, or obviously NOBE and West Oakland, then the prices have jumped by 20-30% in just the past couple years. So the challenge now is to somehow get ahead of the wave a bit so that there’s a chance to benefit. And if I were to speculate on some neighborhoods I’d definitely give consideration to several such as Fairfax and Jefferson, Millsmont and the Eastmont Hills, Mills Gardens and Allendale, Frick, King Estates and Toler Heights— and well onto Tuxedo, School, Bella Vista, Fruitvale and more. Further east you’ll see some prices you’ll probably like in the Foothill Square and Durant Manor neighborhoods, and if it’s the craftsman bungalow you’re after then do yourself a favor and pass through Havenscourt between 73rd and Seminary one afternoon. Then even go check out the Webster neighborhood between 82nd and 98th. These are interesting frontiers for the quickly changing face of Oakland, and the prices are still below the median (which nowadays is well over $500k in Oakland).  Go to Google Street view and look at these areas, of course, but keep in mind that things have changed since the photos were taken in many of these areas. So while it’s a good tool it may be outdated a bit. For an interesting view back in time, check out the intersection of 23rd Ave and E. 15th sometime. Beautiful and classic commercial architecture there. An intersection where you can just imagine the same spot 80 or 90 years ago when these buildings were new. There’s so much of that in Oakland, and we’re seeing the renovations of these classic areas all the time! Hope this info helps in your search.

May 152015

Hello Friends,

Just wanted to take a few minutes to write out some thoughts on our current, extremely heated market. As you look down at your smartphone (where you’re probably reading this) you might note that the amazing innovations we all treasure in computer technology, in mobile apps and connectivity, in the ever advancing fields of social media and on-demand utilities, this is where you can trace the roots of this crazy upsurge in home prices in the bay area in general— and Oakland is right in the thick of it. Many of you who’ve been on the hunt for homes, I know, have had challenging times. Not only is it tough enough to find a home that suits you that at least SEEMS to be in a price range you can live with, but even after reaching that point there’s always the specter of how many others will be competing for that same home. And yes, just in the last 30 days we’re seeing sale prices 30%, 40%, even up to 60% over the list price— which makes it difficult to even recognize what list price range is even legitimate anymore. Some of it seems a bit ridiculous, and some listing agents are quite notorious for pricing their listings well below what is a reasonable selling price for the neighborhood. So how can anyone know what is reasonable to offer? Can an inspection contingency even be requested? How short of an escrow period is required when competing these days? These are all questions that have come up, and the real answer for them truly is that every listing and every offer is different. Frankly, it takes regular observation of the market to even have a clue, and even then some well funded buyer who’s made five or ten unsuccessful offers may come along and blow everybody out of the water just out of pure frustration over shopping for so long. It happens. Some sales that I personally find interesting include a few here, here, and here where the ratios are closer to around 10% over list price and simply seem more reasonable. Some that were on the market for a little while ended up closing in closer relation to the list prices, though the pickings are pretty slim in that category these days. Almost everything is selling for significantly over the list price, and that’s just something you have to figure into your approach. If you’re getting financing and you’re qualified to purchase up to $800k it’s going to be generally unwise to search for homes priced at $750k since those ones will probably end up selling closer to $900k or more in many cases. Probably best to look in the mid-$600s or so for the ones that will end up selling where you’re qualified to purchase. I know it’s crazy. It’s just how it is.

Of course there are exceptions. We are always looking for those individual listings where it looks like there is an opportunity. Yes we have some particular criteria we look for in identifying those types of opportunities. Once again, it really does take very regular observation to be able to recognize those listings. And that’s what we’re here for. We do quite a bit more than just open lockboxes, write up contracts, and meet inspectors for you. We are looking for listings that can actually become good deals! Even in this market. And considering not one local city is included in this recent article of where millennials can afford to buy we know we’ve got our work cut out for us. And just across the bay in San Francisco they’ve reached a new high of over $1.2M as their median price! Crazy! Apparently only 12% of the city’s households can even afford that median price. So hello San Francisco buyers! We know you’re here in Oakland, and we know more of you are coming to Oakland. Please note how number 8 on this list of “10 Ways SF Has Actually Gotten Better” is OAKLAND!

We know you need help navigating the Oakland market. It’s a technical trail. But we’re here for you in both the home search and the financing. So don’t hesitate to contact us, or refer us someone you know. We’ll take good care of ’em! Hope you guys enjoy this week’s picks. Lots of great ones to see this week!

Sep 262013

Oh my goodness…from the East Bay Express citing our friends at Zip Realty:

The price shot up from $245,000 in mid-August of 2012 to $432,000 in mid-August of 2013. Homes are going quicker, too. As of August 15 of this year, median days on the market were 13 compared to 19 the previous year in Oakland.

Be sure to check out the map with median home sales itemized by zip code.  Wow!

Jul 182013

Good news for homeowners with loan balances above 80% or in excess of their home’s value.  From

WASHINGTON – The U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development today announced an extension of the Obama Administration’s Making Home Affordable Program through December 31, 2015. The new deadline was determined in coordination with the Federal Housing Finance Agency (FHFA) to align with extended deadlines for the Home Affordable Refinance Program (HARP) and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac. The Making Home Affordable Program has been a critical part of the Obama Administration’s comprehensive efforts to provide relief to families at risk of foreclosure and help the housing market recover from a historic housing crisis. The program deadline was previously December 31, 2013.

Jul 182013

According to DataQuick, cited in this article, this June is up 33% versus the same time last year.  Sheesh!  From

A record jump in prices was paired with a surprising drop in home sales in the Bay Area in June, according to a report released Thursday.

Prices rose at their fastest pace on record in June, according to DataQuick, increasing 6.9 percent from May and a record 33 percent above median prices in June of last year. The median sales price for all types of homes in the nine-county Bay Area rose to $555,000 last month, according to real estate information service DataQuick.

That’s the highest median price in nearly five years, although it is still below the peak of $665,000 reached in mid-2007, DataQuick said.

Jul 152013

From the San Jose Mercury News:

“Lead poisoning has been the longest-running epidemic in American pediatric history, and is a silent, ongoing tragedy,” David Rosner, a Columbia University professor who will be an expert witness for the governments, said in an email exchange.

Led by Santa Clara County, local governments sued the industry in 2000, alleging paint manufacturers knew of the dangers of lead paint as early as the late 1890s and yet peddled it to consumers without warning for decades. Alameda, Monterey, San Mateo and San Francisco counties are among the players in the case, as well as the cities of Oakland and San Diego and large counties such as Los Angeles.

Public officials will urge Superior Court Judge James Kleinberg, who is hearing the case without a jury, to find five paint manufacturers, including Atlantic Richfield, NL Industries and Sherwin-Williams, liable and order them to remove lead paint from an estimated 5 million homes in the 10 counties — at a cost of about $1 billion.

“It’s all about fixing the problem,” said Joseph Cotchett, a prominent Burlingame lawyer representing the counties.

Unlike cases involving individuals who sue over health hazards, which can be difficult to prove against an entire industry, California officials have alleged the paint makers violated the state’s public nuisance laws. Lead paint, they argue, has created “a substantial and unreasonable injury” to anyone exposed in an older home.

The case has dragged on for years, twice bouncing up through the appeals courts, which have allowed it go forward over the paint manufacturers’ objections.

Jul 082013

Called a “great rotation” from bonds to stocks, the investor money has been consistently turning away from buying US Treasury bonds— resulting in conditions that lead to higher mortgage rates for consumers.  From

The “Great Rotation” from bonds to stocks is well underway. It happened faster than anyone could have predicted, but the exodus from bond funds has been eye opening, almost more eye-opening than the reduction of wealth that has occurred between May and July in both U.S. bond funds and credit funds.

According to the U.S. Department of the Treasury, the public owns about $1 trillion in long-term Treasury bonds (most U.S. debt is shorter term). Using the iShares Barclays 20+ Yr Treas.Bond ETF TLT +0.97% , we can evaluate the percentage change in the value of long-term bond holdings that exist both in bond funds/ETFs and individual bonds. Year-to-date, TLT is down about 12%, which translates into a $120 billion reduction in wealth for bonds investors since the beginning of the year.

Jun 192013

“Dual-tracking” is when a homeowner applies for a modification of his mortgage and a bank pursues a foreclosure at the same time.  Maybe that process needs a little tweaking.  From

Officials said they are considering changing current policy by agreeing with banks to halt foreclosure proceedings when borrowers first apply for loan modifications and provide basic information. Today, banks halt the process of repossessing a borrower’s property once banks deem the applications complete, a process that can take months. During that time, foreclosure proceedings generally continue.

Talks are fluid and the legal language that would accompany a change is still being sorted out, officials said.

But the change, if implemented, may further reshape how mortgage companies interact with distressed borrowers. For years, officials and borrower advocates have complained that the largest banks frequently string borrowers along for months by repeatedly requesting documents — often the same batch of records — before determining that the application is complete and evaluating them for modified loans. During this time, late fees and other charges rack up, ballooning the total amount owed, making a modification more difficult to achieve and pushing troubled borrowers into foreclosure.

Jun 192013

Still propped up by their bucks.  Keep hoping they concentrate on improving employment.  From

At a press conference in Washington, D.C., to discuss the latest policy decision of the Federal Open Market Committee, the central bank’s monetary policy arm, Bernanke said the Fed has seen some improvement in the outlook for the economy recently. If the economy keeps getting better, Bernanke said, central bankers might by the end of the year slow the pace of their program to drive interest rates lower and boost the economy through bond purchases. This plan, commonly known as “quantitative easing,” or “QE,” currently amounts to $85 billion per month in purchases. Bernanke said the Fed would keep slowing bond purchases if economic data keep improving, with a view toward stopping them altogether some time in the middle of 2014.

Bernanke also added that, if the economic numbers don’t improve, then the Fed might not taper its bond purchases until later. And if things get worse, then the Fed might buy more bonds. Bernanke also emphasized that even a slower pace of bond buying is still stimulus, and that the Fed has no plans to actually raise its key policy interest rate, currently at zero, until at least 2015.

Jun 132013

From the East Bay Express this week where you can read the rest of the review:

As for the food, Tribune Tavern’s classed-up reinterpretations of obscure (in the US) pub classics like Welsh rarebit and Irish colcannon won’t disappoint, and the Guilty Fries (topped with carnitas-style roasted pork) are the very definition of a crowd-pleaser. But it’s in the shareable small plates — asparagus topped with hard-boiled eggs and house-made pancetta, say, or silky and unctuous grilled oxtail — that chef Huw Thornton really shows his skill and creativity.



Jun 132013

According to the latest data collected and cited in this article at the SF Chronicle:

With April’s close, the city was left with a new benchmark for San Francisco median home prices: single-family homes, according to the Business Journal, hit a median of $1 million dollars, a price not seen since the glory days of 2007 and a 32% jump from 2012. Further, Redfin data show that in mid-May, the median sold price was $1,030,000. That’s the sold price, readers; the list price median was a comparatively modest $799K, a fact that speaks to the power of too many buyers vying for too few properties.

Jun 122013

Kind of assumes the future in a vacuum, in my opinion, but still worthy of note.  From

Bond yields are headed near 4% and not even Fed Chairman Ben Bernanke can stop the “inevitable shock” that’s coming.

That’s a fresh view from Goldman Sachs’s former chief economist Jim O’Neill, writing an op/ed column for Bloomberg on Wednesday, entitled, “Can Bernanke avoid a meltdown in the bond market?”

His answer? Not really.

“The past few weeks have given us a hint of what might happen when the Federal Reserve starts to reverse its super-easy monetary policy. Expect turbulence in financial markets, especially for assets that have moved far above normal or reasonable valuations,” he writes.

In a separate Bloomberg Television interview he adds that investors should expect “quite ugly days” in the process.

Jun 122013

From today’s SF Chronicle:

Thousands of San Franciscans could become first-time homeowners while also contributing an estimated $20 million for affordable housing under legislation given initial approval Tuesday by theBoard of Supervisors.

The legislation would allow about 2,200 tenancy-in-common unit owners who are currently on a waiting list that allows just 200 conversions to condominiums per year to pay a $20,000 conversion fee that would go toward an affordable housing fund. The units could be converted to condos over a seven-year period, with TIC owners who have lost the lottery several times getting priority. The legislation would prevent the lottery from resuming until 2024.

The 8-3 vote, with Supervisors Mark FarrellScott Wiener and Katy Tang in opposition, is enough to override a veto by Mayor Ed Lee, who hasn’t taken a position on the legislation.

“We have for years had an impasse on this issue on the condo lottery, TIC conversations and tenant evictions,” Supervisor David Chiu said. “I think we have in front of us a balanced piece of legislation.”

Jun 102013

Recall they downgraded the US credit rating to AA+ when we had the first debt ceiling debate in August of 2011?  From

(Reuters) – Standard & Poor’s on Monday removed the near-term threat of another credit rating downgrade for the U.S. credit by revising its outlook to stable from negative, citing an improved economic and fiscal outlook.

The change effectively means there is less than a one-third chance of a downgrade in the next two years.

S&P said a key factor to its revision in the U.S. rating outlook was the agreement reached by the U.S. Congress to avoid the fiscal cliff, which threatened some $600 billion in automatic tax increases and spending cuts.

S&P cut the U.S. sovereign credit rating in August 2011 to AA-plus from the highly coveted top grade of AAA, citing political brinkmanship and gridlock in Washington that delayed an otherwise routine raising of the nation’s debt ceiling.

And worthy of note from the same article:

“Few people actually take notice of the rating on the government’s debt. The change makes sense, though, since the trajectory of the deficit has improved,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

“Of course, S&P should not have downgraded the debt to begin with. If the credit rating is supposed to assess the probability of default, it’s silly to give the U.S. government anything but a AAA,” said Jacobsen.

Jun 072013

Some anecdotal accounts of how buyers are trying to scrape together the funds to enable them to be “cash buyers” rather than using conventional financing, from the SF Chronicle’s blog On the Block:

“It’s an oft-told tale right now,” said Stuart Maus, an agent with Red Oak Realty in the East Bay. “The market is super-competitive. A cash buyer can afford to lay up a little bit, knowing that the terms of all cash and the ability to have a short close may counter a slightly higher offer with a longer escrow period. A buyer with all cash can sharpen their pencil and come in more aggressively with price.”

Consider 3361 Victor in Oakland’s Redwood Heights neighborhood (pictured above). The modernist home closed in late April for $820,000, 19 percent over asking.

“The winning buyer paid all cash with no loan or appraisal contingencies and a three-day inspection period,” said Aman Daro of Red Oak Realty (Red Oak’s Deidre Joyner was the listing agent). “There were three offers. The highest offer had inspection, appraisal and loan contingencies, so the listing agent got the lower, all-cash offer to up their price and the sellers accepted it.”

Jun 072013

Probably the key reason for investors’ stock appetite versus more conservative options in this paragraph from the Huffington Post.  It’s all about the “quantitative easing.”

For the U.S. stock market, at least, the report was perfect. The job gains were better than the 163,000 economists expected, according to a Bloomberg tally. At the same time, the rise in unemployment means the Federal Reserve may be in no hurry to slow down its policy of buying bonds to pump cash into the economy, a scheme known as “quantitative easing.” Anxiety about an end to QE has thrown global financial markets into relative turmoil lately.

Jun 062013

Interesting piece on what’s been fueling the real estate boom from

Bloomberg reports that that staple of mortgage funding, the 30 year fixed rate mortgage, has seen its interest rate increase from 3.48% a month ago to 4.16% as of yesterday. By contrast, the highest rate the 30 year mortgage reached in the previous year as of mid-March had been 3.85%.

One analyst, Mark Hanson, sees evidence that the dropoff in refinancings has been impressive:

After 5 years of interest rates being forced incrementally lower each year — and everybody that qualifies refinancing over and over again allowing the banks to originate and earn several points off of each gov’t loan churn — the jig is up for a while at least…..three large private mortgage bankers I follow closely for trends in mortgage finance ALL had mass layoffs last Friday and yesterday to the tune of 25% to 50% of their operations staff (intake, processing, underwriting, document drawing, funding, post-closing). This obviously means that my reports of refi apps being down 65% to 90% in the past 3 weeks are far more accurate than the lagging MBA index, which is likely on its way to print multi-year lows in the next month.

Now refis provided some stimulus, since lower mortgage payments means more money to spend. But the effect is likely not as great as you might think. The big winners are the banks and the other fee extractors. As MBS Guy explains via-e-mail:

The refi market is, in reality, a vampire business. It’s a way for lenders, brokers, lawyers and other hangers-on to extract substantial fees, over and over, from borrowers, while giving a modest benefit in return. I have no doubt that the stimulus effect of lower rates was substantially less than many people expected because of all of the refi fees extracted along the way. If most loans were adjustable rate, the stimulus effect of falling rates on borrowers (rather than mortgage brokers) would have been much greater.


Jun 042013

From Reuters via Huffington Post:

* NY says HSBC ignored law designed to protect homeowners

* Bank declines to comment

NEW YORK, June 4 (Reuters) – The state of New York plans to sue HSBC Holdings Plc for ignoring a law designed to protect struggling homeowners from being thrown into foreclosure without getting a chance to renegotiate their mortgages.

The lawsuit being filed by state Attorney General Eric Schneiderman in Buffalo, New York, accuses HSBC of ignoring a state law that requires lenders to make a “request for judicial intervention” when they began a foreclosure action.

That process requires a settlement conference to be held within 60 days to allow homeowners to negotiate an alternative to foreclosure.

“Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” Schneiderman said in a statement.

Neal McGarity, an HSBC spokesman, declined to comment. A copy of the complaint was not immediately available.

May 302013

Michael Finney from ABC7 once again doing some quality investigations here:

Hiring movers when it’s time to get into that new house or apartment can be a great timesaver, but beware there are red flags to look out for before you hire a company. Consumer Reports has partnered exclusively with 7 On Your Side with the steps to take to avoid becoming a victim.

The moving season is upon us. More people move in June than any other month. But Consumer Reports says be wary. The Better Business Bureau got more than 8,000 moving company complaints last year, but there are ways to avoid getting ripped off.

May 302013

It’s a very challenging process, mostly because the bank’s incentive to carry out the modification has never been enough and there hasn’t been enough of a penalty for them for failing to do so.  Many people I’ve personally heard of waited over a year and endured lenders perpetually “losing ” their documents.  It has been a mess, but it’s better than nothing.  That’s for sure.  Keep an eye on the actions of the bank lobby if you want to better understand why these programs have such dull teeth.  Hopefully they’ll find a way to be more effective in the coming two years.  From Reuters via Huffington Post:

WASHINGTON, May 30 (Reuters) – The Obama administration on Thursday said it was extending the life of its signature foreclosure-prevention program by two years to help more struggling borrowers keep their homes.

The Home Affordable Modification Program, or HAMP, was to expire at the end of this year.

When it was unveiled in 2009, the administration estimated it would help 3 million to 4 million homeowners avoid foreclosure by reworking loan terms. So far, however, only about 1.1 million homeowners have benefited from a permanent mortgage modification under the program.

“The housing market is gaining steam, but many homeowners are still struggling,” said Treasury Secretary Jack Lew. “Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry.”

May 292013

SF bay area is continuing to see prices pushed up and up by a strong pool of qualified buyers.  From the SF Chronicle:

“Five of the top seven cities in our national report on price appreciation are in California,” Baker said. “We see San Francisco (metro) as the No. 1 city in the country right now for price momentum,”

In the Case-Shiller report, prices for a 20-city composite index were up 10.9 percent in March versus a year earlier. For the SF metro, which Case-Shiller defines as the counties of San Francisco, Marin, San Mateo, Alameda and Contra Costa, the increase was a strong 22.2 percent, second only to Phoenix’s 22.5 percent gain. For an in-depth look at the report and its implications, click here.

May 292013

Yet only about half of US banks reported improved earnings over last year, according to this article:

WASHINGTON — U.S. banks earned more from January through March than during any quarter on record, buoyed by greater income from fees and fewer losses from bad loans.

The banking industry earned $40.3 billion in the first quarter, the Federal Deposit Insurance Corp. said Wednesday. That’s the highest ever for a single quarter and up 15.8 percent from the first quarter of 2012, when the industry’s profits were $34.8 billion.

Record profits show banks have come a long way from the 2008 financial crisis. But the report offered a reminder that the industry is still struggling to help the broader economy recover from the Great Recession.

Only about half of U.S. banks reported improved earnings from a year earlier, the lowest proportion since 2009. That shows the industry’s growth is being driven by a narrower group of the nation’s largest banks.

Those banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Most of them have recovered with help from federal bailout money and record-low borrowing rates.


May 282013

AP reporting on the Standard & Poor’s/Case Shiller housing report:

WASHINGTON — U.S. home prices jumped 10.9 percent in March compared with a year ago, the most since April 2006. A growing number of buyers are bidding on a tight supply of homes, driving prices higher and helping the housing market recover.

The Standard & Poor’s/Case-Shiller home price index released Tuesday also showed that all 20 cities measured by the report posted year-over-year gains for the third straight month.

And prices rose in 15 cities in March from February. That’s up from only 11 in the previous month. The monthly figures aren’t seasonally adjusted and may reflect the beginning of the spring buying season.

Prices rose in Phoenix by 22.5 percent over the past 12 months, the biggest gain among cities. It was followed by San Francisco (22.2 percent) and Las Vegas (20.6 percent).

New York City had the smallest year-over-year increase at 2.6 percent, followed by Cleveland at 4.8 percent.

“Rising home prices may begin to alleviate a lack of housing inventory … by encouraging more homeowners to put their properties on the market,” said Maninder Sibia, an economist with Economic Advisory Service, in a note to clients. “The housing market is clearly improving.”

May 282013

The banking industry has, does, and probably always will need to be closely monitored so that policies benefitting the consumer are what the market demand creates.  That’s as diplomatic as I can put it.  Excerpt from the article below:

Mortgage servicers, such as BAC Home Loans Services – another Bank of America subsidiary – collect fees and late charges on behalf of the bank. Legal analysts Adam LevitinKurt Eggert and Diane Thompson say this business model creates built-in incentives for servicers to keep homeowners in default for extended periods of time, rather than agreeing to a loan modification or setting a foreclosure date.

“For servicers, the true sweet spot lies in stretching out a delinquency without either a modification or a foreclosure,” Thompson wrote in a 2011 law review article. “Late fees and other default-related fees can add significantly to a servicer’s bottom line, and the longer a homeowner is in default, the larger those fees can be.”


May 242013

Although lots of folks within a close radius of Oakland still hold onto outdated opinions of the town, I think.  In addition to diversity I’d credit innovation, green awareness, compassion for the less fortunate, and value for the money as other virtues I’ve personally witnessed within the town and within its citizens.  I hope journalists reporting on Oakland will take time to look deeper into the story.  We all know that “if it bleeds it leads” in our era of media coverage, but Oakland is a community that has endured the growing pains of the American ideal of e pluribus unum.   I’d dare say that Oakland is a unique development in American history— and it’s not just a soap opera about the wealthy people.

From ABC7 News:

OAKLAND, Calif. (KGO) — Those tracking trends say Oakland is getting hot. It may have started with Oakland’s emerging restaurant scene or perhaps it was the buzz created by those First Friday gatherings. Now Oakland is on a list of most attractive cities for tech startups.

In the shadow of Oakland’s Occupy riots and violent crime, the city has been quietly gaining accolades as the place to be.

“The attraction is the diversity of culture,” said Albert Rowe, a new Oakland resident.

The National Venture Capital Association ranks it the 11th most attractive city for tech startups like Power Hive. The solar startup is electrifying remote villages in Africa with micro-grids.