RTC Mortgage Blog

Applying For A Home Loan From Your Phone - Real or Just Hype?

I was recently quoted in an article by the Los Angeles Times (click here to read articleabout the simplified mortgage application process being touted first by Quicken Loans' "Rocket Mortgage" and now by LoanDepot. Do they really have something faster and unique or is it just another way of utilizing the technology that we all have at our fingertips?

I'm going to take a cynical view.  When you break it down, it's really nothing special! I already have the same technology available as a mortgage broker and I believe I can process a loan faster than these two big originators.

How Does It Work?

Perhaps the biggest complaint among borrowers in recent years is the amount of paperwork that it takes to properly process a loan.  Every page of every bank statement, two years of income history including tax returns, W-2's, current paystubs, recent mortgage statements and on and on.  In an effort to streamline the process, reduce the burden on borrowers and, to take advantage of new technology, Fannie Mae has introduced a system whereby the lender, rather than from the borrower, can obtain certain documents directly from banks and employers, bypassing the borrower, with their permission of course.  Many lenders have already updated their internal systems to access this documentation directly from the source.

Does It Work?

Yes, it works for the simple borrower.  I'm talking about borrowers that are employed, salaried and get paid the same with each paycheck.  And there is no significant moving around of their down payment money, no gift funds, etc.  In other words, borrowers with self-employment, multiple sources of down payment funds, etc., probably won't work.

Does It Save Time?

The early feedback says "no".  What I hear from a friend that originates loans at one of the call centers at Loan Depot, it can take a week or two to get the documentation needed from the banks and employers.  But, I can always get what I need from my salaried borrowers in a day or two.  And tech-savvy millennials can get it to me in a minute or two.  Additionally, many borrowers in our California market are more complex with multiple sources of income, self-employed, etc.  I wouldn't leave obtaining and analyzing even slightly complex files to technology and unskilled processors.

Where's The Personal Touch?

I've learned over the 40+ years of experience that the "personal touch" is needed when clients are making probably the biggest purchase of their lives by getting a mortgage.  Explaining the process, explaining why certain documentation is needed and holding their hand throughout the process is important.  If it's a purchase transaction I can't imagine trusting the details to a faceless internet process.

Posted in:General
Posted by Richard T. Cirelli on March 18th, 2017 2:50 PM

An Update on Rates:

Now that the initital post-election shock is over, what are rates doing?  You'll recall that we had an immediate .75% rise in mortgage rates following the presidential election.  Optimism over the expectation of a stronger Trump-led economy, higher inflation, the assumption that the Fed may raise the Federal Funds Rate three times in 2017 and a super-strong positive reaction in the stock market all led to the rise.

But, as with most news events, the initial reaction was an over-reaction and the markets seem to be settling down.  Mortgage rates have come down about .25% and the market seems to have adjusted to what will probably be a mortgage rate range in the low 4% area for the next few months.

Here's a look at the trend of rates for the past 12 months.


Fannie Mae's chief economist, Doug Duncan, says that rising interest rates will not stop home prices from increasing.  Duncan claims that as long a income is growing, home prices will grow, irrespective of interest rates.

Home-Buying Retirees Shouldn't Overlook Reverse Mortgages

Buying a new home with a reverse mortgage is an often overlooked strategy by retirees who could potentially benefit from borrowing against their home equity instead of raiding their savings to cover the purchase price with a traditional mortgage, according to a recent article from U.S. News & World Report.

Many consumers, and even real estate agents, are unaware of the program or describe reverse mortgages as being useful only for those who cannot get a regular mortgage on thier own.  For retirees who want to remain homeowners, but not in thier current homes, the article notes that a Home Equity Conversion Mortgage, i.e., Reverse Mortgage, may help ease the financial pain of the purchase.

I've been originating Reverse Mortgages for 12 years now.  I've seen lots fo changes in the program, particularly in recent years, and the most recent changes have been to the benefit of the borrower. Financial advisors have embraced the product as an excellent financial planning tool now. Please give me a call to learn more.


Posted in:General and tagged: Reverse Mortgage
Posted by Richard T. Cirelli on February 6th, 2017 8:24 AM

What Drives Mortgage Rates?

Last week I wrote about the Trump Effect on mortgage rates as we've seen about a .50% rise in mortgage rates since the morning of the election. If you missed it, here is a link:


I'd also like to thank the many people that sent such positive feedback on the article.  I always welcome your comments.

The stock market continues to enjoy the "Trump Bump" with the S&P 500 up over 3% since the election as money managers rotate funds from bonds (including Mortgage-Backed Securities) to stocks when the stock market is rising.

Optimism over an improved economy under the Trump Administration is not the only factor that influences mortgage rates. The potential for inflation and the future decisions by the Fed are also weighing on interest rates right now too.

Review the information below for a better understanding of what drives mortgage rates:



Posted in:General
Posted by Richard T. Cirelli on December 17th, 2016 3:37 PM

The Trump Effect on Mortgage Rates

It's been a few weeks since the election and you would think that the financial markets would be settling down.  But, so far that does not seem to be the case.

What Was Expected?

While the election was thought to be close, the financial markets were clearly expecting a Clinton victory.  To the financial guru's, that meant continued heavy entitlements, higher taxes, low GDP growth, low inflation and the possibility of a recession in 2017.  All of this led to ultra-low interest rates.  Prior to the election, mortgage rates were around 3.5% for the benchmark 30-year fixed rate mortgage.

What Happened?

As we all know now, Trump won and, it surprised the market makers.  Now, if Trump's Republican Congress gets their way, we should see lower taxes - both personal and corporate taxes; no more 3.8% Obamacare tax; less regulation; and fiscal stimulus that has so far been absent from the weak recovery over the last eight years.

Initial Market Reactions

Based on the above, money quickly moved out bonds, including Mortgage-Backed Securities, and into US stocks.  The move out of bonds was particularly large with mortgage rates rising .50% or more!

What is Likely to Happen Next?

Was the rise in mortgage rates too much too fast?  Was it an over-reaction?  Only time will tell.  The Mortgage Bankers Association of America (MBA) predicts the interest rate for a 30-year fixed rate mortgage will average 4.2% in 2017, increasing gradually from this year's average of 3.5%.  It also expects the Federal Reserve will raise the federal funds rate in December and three more times in 2017.  They also forecast an increase in home-buying in 2017 as due to the potential for higher home prices and higher rates.

The next Fed meeting is December 14th.  They are expected to raise the Federal Funds Rate by .25%.  That is almost a certainty.  My guess is that they won't give any hints about possible future rate hikes yet.  It's just too soon to tell what the Trump Effect will be despite the optimism over his intentions and a faster-improving economy.  I do think that most of the damage is done for now. And, maybe it will settle somewhere between the lows just prior to the election and where they stand for now.

It is important to remember that mortgage rates can and do change daily and they react instantly to financial news and speculation.  The recent rise in interest rates assumes this already is already happening; therefore; rates can only rise so far before getting too far ahead of the actual economy.


Here is a look at the weekly Freddie Mac Survey of Mortgage Rates this year:

Posted in:General
Posted by Richard T. Cirelli on December 1st, 2016 5:38 PM

Everybody is talking about the Fed’s next move and what that means for rates for the rest of this year and beyond. I guess I can’t help but talk about it too.

The problem is that nobody knows and it seems even harder than ever right now to predict the outcome. Not even the heads of the Government enterprises Fannie Mae and Freddie Mac agree. And their predictions don’t match the chief economist of the Mortgage Bankers Association either.

First, let’s take a look at their forecast, announced just last week at a national conference in New York:

·         Fannie Mae forecasts a flat to slightly declining rate environment for the next 2 years with rates hovering around 3.7% for the standard 30-year fixed rate mortgage with loan amounts up to the national limit of $417,000.

·         Freddie Mac believes rates will rise to about 4.08%

·         The MBA predicts an average rate of 3.95%.

Granted, it’s not a huge difference between the low and the high predictions and rates have remained in a very low historical range for over 8 years now. But small differences and borrower perceptions make a big difference in the volume of home sales and mortgage applications.

And there are factors beside the Fed Reserve that are influencing the markets now such as; the rate of economic growth, the Presidential election, housing inventory, and more.

Rates today according to the weekly Freddie Mac rate survey are at 3.64% with an average cost of .5 points.

NBC Nightly News Spotlights Reverse Mortgages

I’ve been originating Reverse Mortgages for many years but the growth in this product has increased dramatically this year. That’s because various news outlets have reported on reverse mortgages and the program changes that have now made these loan products safer and more effective retirement planning tools. Perhaps none, however, have given reverse mortgages such an enormous viewership platform as a recent NBC Nightly News segment that aired this month.

Click Here to see the news clip:


Highlights of the report:

  • More than half of people over age 55 have little or no retirement savings,
  • While controversial in the past, consumer advocates now say these loans could be a “smart way to bring in more money.”
  • Thanks to new government regulations, reverse mortgages are now actually harder to get, and with tougher lending standards in place, they’re actually becoming less controversial and more popular

Having originated Reverse Mortgages for over 10 years, I agree that it is a much more desirable product. In fact, many of my clients have utilized the Line of Credit feature which requires no initial draw and grows in value over time.

I now have a Jumbo Reverse Mortgage Product too that allows loan amounts as high as $3,000,000

If you think you or someone you know might benefit from a Reverse Mortgage feel free to call me for a free consultation and presentation. 

Posted in:General
Posted by Richard T. Cirelli on May 26th, 2016 12:29 PM

Survey: Mortgage Brokers Best Source for Mortgage Advice?

Financial tech is growing in popularity but when it comes to mortgage advice, a traditional approach wins hands down.  A recent poll found that while most people seek information online for recipes (79%) and medical advice (75%), only (32%) trust the internet with their finances.

Having a great website can help attract clients, but when it comes to mortgage advice 70% of respondents said they would talk to an advisor before pursuing financial advice.  That beats financial websites (41%), parents/family (36%) and real estate agents (25%).

What Turns Them Off?
About 50% said the glut of information online puts them off and although 89% feel it is easier to find information they need online rather than seek it out from other sources, an overwhelming 73% say even though the information is helpful, they will still always seek advice from an expert.

In my 40 years of mortgage experience, I can assure anyone that only an "expert" can provide the kind of advice that consumers can depend on to make what is probably the the largest financial decision of their life.  Mortgage Brokers can not only offer the best expert advice but also have the largest array of products and services to meet their borrower's needs.


Wells Fargo to pay $1.2 billion for hiding bad loans

Mortgage Brokers took the unfair rap for the bad mortgage loans that led to the mortgage and financial market meltdown around 2008.  But it's the big banks that beat the system the most.

It was recently announced that Wells Fargo will pay the US government $1.2 billion for hiding bad loans ahead of the housing market crash.  The mortgage lender's certification of thousands of loans which were given FHA insurance led to taxpayers footing the bill when the loans were defaulted.

A statement from Manhattan U. S. Attorney Preet Bharara said:  "Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust.  Wells Fargo, one of the biggest mortgage lenders int he world, has been held responsible for years of reckless underwriting."

Similar settlements have already been reach between the government and Goldman Sachs, Morgan Stanley and JP Morgan Chase.

Posted in:General
Posted by Richard T. Cirelli on April 23rd, 2016 1:56 PM

What's Hot in Mortgage Lending?

I’m witnessing an interesting continuance of last years’ trends in mortgage demand over the past few months. So, while nothing is really new, certain patterns exist that are worth talking about.

Jumbo Loans
The proliferation of Jumbo lenders and products persist – all for the good. Rates are about the same as they are for their smaller “conforming” counterparts. More lenders are entering the arena as rates remain low, the purchase market remains strong, refinance opportunities rise, underwriting criteria loosens, and the secondary market for securitization of jumbo  loans expands.

Reverse Mortgages
This loan product has seen the biggest increase for RTC Mortgage during the past year for this once unpopular product. The reason is simple: the Reverse Mortgage loan has been re-designed such that it is no longer a product just for the desperate seniors that are out of money. It is now considered a valuable financial planning tool that is being endorsed by financial advisors and accountants that understand and endorse the benefits. The most popular feature being touted is the Line of Credit that grows in value over time.

Reverse Mortgages can be used for purchases too. There are too many features to go over here and with so many options within the Reverse Mortgage program, everyone’s benefits are different. If you or someone you know is interested, give me a call and I can easily work up some figures to demonstrate how it may work for you.

The Domination of Non-Bank Lenders
As mentioned in previous emails, the major banks have lost their large share of the mortgage market to “Non-Banks, including Mortgage Brokers. Market share for Non-Banks has grown from a low of 10% in 2007 to 50%. The reasons are that non-banks have more products; better rates and terms; more efficient and local service; and usually more expertise among the originators.

Loosening of Underwriting Guidelines
Not only have I seen looser guidelines among the Jumbo lenders but now, the Government Agencies of Fannie Mae and Freddie Mac have finally loosened many of the guidelines and restrictions that were imposed during the mortgage meltdown period around 2008. The underwriting changes are long overdue but welcomed. If you didn’t qualify before, you may qualify now.

This was the big Regulatory change that was going to delay all loan closings and scared the heck out of everyone in the business. Now that we have had some time to adjust, it seems to be working out just fine. That said, some lenders are much better than others at performing. But as a broker that can submit loans to many lenders, we know who does a good job and who doesn’t. With borrowers that are pre-approved in advance, we can still easily close loans within 30 days.

Commercial Real Estate
Now that I co-own a commercial mortgage company with long-time commercial lending expert Jeff Redeker, I’m much more aware of commercial real estate and lending. I’ve read many published articles about the strength of the commercial market too. Our company is doing well and has financed quite a few commercial properties including multi-family, offices, restaurants and more. Beach Cities Commercial and RTC Mortgage are located in the same office building. Give us a call if you have an interest in financing a commercial building or business.


Posted in:General
Posted by Richard T. Cirelli on March 3rd, 2016 3:30 PM

Why the Rate Hike Doesn't Matter to Mortgage Rates:

Well, the Federal Reserve finally did it! They raised the target federal funds rate 0.25%, its first boost in nearly a decade. That does not, however, mean that the average rate on the 30-year fixed mortgage will be a quarter- point higher. That's not how mortgage rates work.  

Mortgage rates follow the yields on mortgage-backed securities which are traded in the financial markets. The price of these “Mortgage-Backed Securities”, which are a form of “bond”, change every day and throughout every day, regardless of the Fed. And, they move in anticipation of what the Fed may do in the future. They don’t wait for the actual event plus there are many other factors, domestic and global, that also impact the course of mortgage rates.

As it relates to this week’s rate hike by the Fed, it was expected for a long time and so was already baked into mortgage rates. We may even see a slight temporary decline in rates as a result. The Fed’s comments after the announcement imply that future rate hikes will be slow to come and dependent on future data. They said this:

"The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way." This means that the Fed will continue to buy Mortgage-Backed Securities as they get paid off on previously purchased securities.

I’m hoping the rate hike will decrease the volatility that has plagued the market for some time now and allow it to stabilize going forward – until something else occurs that will move rates or the pricing of Mortgage-Backed Securities. In the long-run though, mortgage rates are expected to rise over time next year, particularly if the Fed get more aggressive with future hikes in the Federal Funds Rate. 

Posted in:General
Posted by Richard T. Cirelli on December 18th, 2015 5:09 PM

Things to Avoid When Applying for a Mortgage:

Buying a house is the biggest investment a person makes in his lifetime.

The 30 to 45 days in escrow are probably the most stressful days because there are so many active parts in the transaction that all lead to the dream of homeownership.

Our job as loan officers is to help families get to the finish line, but we need a commitment from the buyers as well. Here is our list of the Top Ten Things to Avoid when applying for a home mortgage:

1. Do not change jobs, become self-employed or quit your job.
2. Do not buy a car, truck, refrigerator or any other large purchases.
3. Do not use charge cards excessively or let your accounts fall behind.
4. Do not spend money you have set aside for closing.
5. Do not change bank accounts or move money around between accounts.
6. Do not stop making your mortgage payments while waiting for your refinance to go through.
7. Do not make large deposits without checking with your loan officer.
8. Do not let any other entity pull your credit until our loan closes.
9. Ensure that the application is completed fully, accurately and honestly.

Things To Do:

Shout my name and number from the rooftops once our loan closes.

If you follow these easy Top Ten Things to Avoid you will be a homeowner in no time, and the road to get there will be a lot less bumpy.

Posted in:General
Posted by Richard T. Cirelli on December 10th, 2015 9:26 AM


FHA Relaxes Condo Restrictions
Realtors, Homebuyers and Lenders got a welcomed piece of news recently with HUD's commitment to fix FHA's condo policies and broaden opportunities for families to find a home The Federal Housing Administration (FHA) is making immediate changes to its condominium rules to ease its owner-occupancy and recertification requirements for condominiums.

The immediate changes are:  Click Here
 to

Jumbo Loans Nearing Record High Share of Originations
Jumbo mortgages accounted for 20.9 percent of 2nd Quarter 2015 originations, continuing an upward trend line the sector has been on since 2009 and nearing its highest share ever, according to the trade publication “Inside Mortgage Finance”.

Not only are jumbo loans much more prevalent now, but many Fixed and Adjustable programs and lenders continue to emerge as this sector of the market continues to recover. I expect this trend to continue in 2016.

2016 Conforming Loan Limit Changes Announced:
The maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2016 will increase in just four counties. Despite some earlier predictions that the loan limits would rise for 2016, the conforming loan limits will remain unchanged for much of the country because FHFA has determined that the average U.S. home value in the third quarter of this year remained below
its level in the third quarter of 2007.

For most of the country, the Fannie Mae and Freddie Mac loan limit will remain at $417,000 for one-unit properties (or single-family homes) in 2016. Certain High-priced markets have limits up to a maximum of $625,500. In 39 “high-cost” counties in the U.S. the conforming loan limit will be increased for 2016.

Click Here to read more, including California specific information...

Posted in:General
Posted by Richard T. Cirelli on December 6th, 2015 11:47 AM



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