Speaker 1: 0:00

The following program. The ENT , mortgage and Realty Show is paid for in full by ENT mortgage, LLC and equal housing lender consumer access.org number 2 5 5 3 6 8. The advice and opinions expressed during the Academic Mortgage and Realty Show are solely that at the hosts and guests of ENT mortgage, LLC, and not WTMJ or Good Karma Brands.

Speaker 2: 0:20

Welcome to the Accu Net Mortgage and Realty Show, getting you inside information on buying, selling, and financing your home with expert advice from Accu Net Mortgage and Realty. And now here's Brian and David Wicker.

Speaker 1: 0:35

Welcome to the Aced Mortgage and Realty Show. I'm Brian Wicker, the licensed real estate broker with ANet Realty Advisors and majority owner of ANet Mortgage, along with my son David, who's our Chief Client Experience Officer and senior loan consultant at at the Mortgage Company. If you have a question or a comment, you can call or text us on the WTMJ talking text line , which is 8 5 5 6 1 6 1 6 20. And remember, you can get a podcast of today's show wherever you normally get your podcast. So, David, a big week for , uh, economic Reports. Uh, last week, what were our two items on the menu?

Speaker 3: 1:11

The two big ones included the Federal Reserve's Open Market Committee, met Tuesday and Wednesday, and they, and then Chair Powell does his normal press conference then in the afternoon, we can come back to what he said, but the real , uh, market mover was the Friday jobs report every Friday, nearly every Friday, unless the first Friday is maybe the first day of the month. The Bureau of Labor Statistics releases their non-farm payrolls expectations for this January was the American economy was going to add 180,000. That was the forecast. And it came in at , um, basically double 353,000 new jobs created in January. And that sent rates the wrong way.

Speaker 1: 2:07

Yeah, and the whole reason for that is that , uh, we're looking to fight inflation here. Inflation is the enemy of interest rates. And so we've had the Fed jacking up rates on fear of inflation. 'cause what did we touch in the summer of 20? Was it three or two?

Speaker 3: 2:24

Yes . Maybe 8.9 or, yeah .

Speaker 1: 2:26

And that's bad because if you're a , a bank or any other investor holding onto mortgages or other long-term interest bearing , uh, investments. Hey, if you're lending money at six and inflation is at nine, you're losing money. And so that's the real underlying problem. We had the fed crank up short-term rates called the Fed funds rate. And what that affects for you and me is the prime rate, which is, is it a eight and a quarter right now, David? I think , uh,

Speaker 3: 2:54

Yes. Either

Speaker 1: 2:55

Eight and a quarter or eight and a half . And that's the rate that people pay eight and a half on their home equity, eight and a half. Okay. On their home equity lines of credit, on their credit cards , uh, things like that. So, you know, you're trying to put the pinch on consumers. 'cause remember, consumers make up two thirds of America's economy and you're trying to get 'em to spend less money. How do you do that? Make it more expensive for them to borrow money to buy a car, to buy a home, to carry debt on their credit card. 'cause you're trying to cool off the demand side of the supply and demand equation. The other thing that the Fed wouldn't mind and has definitely not happened, is if a few more people lost their jobs. 'cause that takes steam out of the economy too. We're sitting, what was it, 3.7% Yes. For a unemployment rate. In other words, flip that around 96.3% of people who want jobs have 'em . And, and so, you know, you take that plus 353,000 more people getting jobs and that's not good for inflation. Uh , David, did you see they also , um, the government revised its November , uh, December jobs report. Yeah. And said, yeah, you know what? We thought there was like 200 and thousand new jobs. It's really 333,000. So I can't emphasize enough how smoking hot a 353,000 new job report is. It's hot.

Speaker 3: 4:20

The , uh, can I just tell you my other new favorite tool? So the Federal Reserve is made up of, I'm gonna just call 'em branches. Uh, and the Atlanta branch has something called GDP now, which is a calculation of like, what do we think right now the economy is growing at? And their February 1st estimate was a 4.2% GDP growth, which is smoking . Yeah .

Speaker 1: 4:50

There was a time I remember where, I think it was during the Obama administration. They're like, we can't get this economy to grow faster than 2% no matter what we do. Yeah . So now here we are . Double that. Another thing that was not good for interest rates was wage inflation. You had year over year hourly , uh, earnings, average hourly earnings were up four and a half percent against an expectation of 4.1%. The only little interesting nerdy thing is that, well , the , uh, average hourly work week went down by two tenths of an hour per week. So maybe that was a neutral. But by and large, what happened was with all these changes, we, we had been having a good week , uh, in interest rate land. But then on Friday, this is on a $310,000 purchase price, which happens to be the i median sales price for January, which we're gonna get to in a second. Uh, if you're gonna borrow 75% of that purchase price, low overhead Audet could deliver still a 6.625% 30 year fixed rate. That's if you're willing to pay three eighths of a point in points, which is only 872 bucks. Uh , so still a hail of a lot better than it was when we were tickling 8% back in the fall, but not as good as we had before the jobs report. David, I was on Wisconsin's afternoon news on Thursday with John Mercure talking about baby boomers not willing to list their homes for sale. Let's talk a little bit about supply and demand in the real estate market when we come back. You are listening to the Academic Mortgage and Realty Show on Wisconsin's radio station AM six 20 WTMJ

Speaker 2: 6:32

Home buying advice from the guys who know it best. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1: 6:41

Welcome back and thanks for tuning in today. That's , uh, David, the younger over there. I'm Brian the Elder over here, Wicker, last name. And , uh, David, last Thursday I was on Wisconsin's afternoon news with John mcc . And you know what, earlier in the week I was on WBBM in Chicago, they must have read some similar article that was out there about how boomers are not willing to sell their homes and that's causing problems for, you know, first time home buyers and others that wanna move up the property ladder. And , uh, that is known as, do you know the name that I'm gonna say right now for the effect

Speaker 3: 7:18

Interest rate lockup?

Speaker 1: 7:20

Yeah. Lockup or lock in effect. You know, and it just stands to reason if you , uh, you know, were lucky enough to lock in a 30 year fixed rate , a 2.5 or 2.75 during the height of the pandemic. Mm-Hmm . <affirmative> kind of hard to let go of that and trade it in for something else. Um, you know, and so if you're a boomer sitting there with a cheap mortgage, you know, it's just kinda like, you know what, maybe we just close the doors and we don't heat those three bedrooms upstairs in our big colonial that we raised our kids in. Yeah . Uh , you know, and , and so that is an issue. But here is the silver lining. Uh, if I look at , uh, 2023 , uh, total sales in the five county Milwaukee metropolitan area, and I compare that, I'm gonna compare it to a normal year, which is 2019. Home sales are only down 22%. It's not like they're down 50% Sure . Because of the interest rate lockup. Right? Yeah. It's , it's , and the numbers are, we're off 4,800 sales , uh, last year. Uh, transactions handled by realtors who are members of the National Association of Realtor totaled , uh, just under 16,900. Again, that's 4,800 fewer than what occurred in 2019, a normal year. You want to take a guess at how much the median sales price is up from 2019?

Speaker 3: 8:48

Like 44%.

Speaker 1: 8:51

Good guess 36%. We are up $82,000 for the median price. That's for condos and single family detach combined.

Speaker 3: 8:59

And that's, yeah. But, and you just described a five county , you know, big to , to describe it in such a large bucket. Broad. Yeah. Yeah. Well , it's

Speaker 1: 9:11

Better than the nation.

Speaker 3: 9:13

Yes.

Speaker 1: 9:14

Or the state, which is what, you know, Hey, I sent you an email, maybe we can talk about it later in the show. You know, talking about the latest case , Schiller home price index numbers, and they're like, oh , prices are down. Well, not really. Whoa . They're only down in like San Francisco and at one other place or something. But, you know, all real estate is local and the, the other, I guess , um, fact that I wanna share is let's, let's talk about the supply side. 'cause that's what this reason for this interview that I did. And hey , what's the supply side looking like? And so if I were to tell you that in , uh, January here, this month just passed, we , uh, saw listings with real estate agents of 1,129 homes. Uh, that's only 75 fewer than January of 2023. But, you know, do you think that had anything to do with the Sub-Zero temperatures and I mean two feet of snow?

Speaker 3: 10:12

Yeah. Which means that January could have been you , you're , you're , you're painting January, 2024 as positive as can be in Yeah . At least in comparison to last year. Last year, last

Speaker 1: 10:24

Year. But let's talk about a normal year, like 2019 mm-Hmm . <affirmative> were 600 listings light in 2019. We saw a little over 1700 new condo and single family detached homes coming on the market. So this is all about comparison. What are you comparing to? The bottom line is that it's, it's a starting out to be another tight inventory year. And even though Fannie Mae and Freddie Mac are predicting lower interest rates throughout 2024, hopefully getting down to under 6%, Fannie Mae's most recent forecast we mentioned last week, says, Hey, 5.8% , uh, by the fourth quarter of 2024, we are telling people do not wait. Because what's gonna happen when rates come down, David ,

Speaker 3: 11:11

Uh, more buyers, it's it , you're , what you're asking me is, will buyers rush back into it more or will sellers rush back into it more? And the answer is, buyers are gonna come back to the table , uh, in bigger numbers. Should rates come down, even if rates come down, like you said to sub six, I don't think it's going to dislodge the number of sellers it would take for a one For one, correct. Um , yeah,

Speaker 1: 11:41

Yeah, yeah. The gonna go up marginally, whereas the demand could go up a lot. Alright, when we come back, let me give you the numbers , uh, for the end of last year and also this year, I'm gonna give you, call it the hotness index. Yeah. How many people are paying over ask , uh, what percentage of people are paying over asking in the five county Milwaukee metro area. And then we got some stories to share too. I got a boomer story of somebody who did give up their 2.625 interest rate, all that more coming up right after this break. You're listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ,

Speaker 3: 12:13

Getting

Speaker 2: 12:14

You into the home of your dreams. Here's more of the ACU Net Mortgage and Realty Show with Brian Weer on WTMJ.

Speaker 1: 12:22

Welcome back and thanks again for spending some time with us , uh, on your Sunday morning. So, you know, David, you know, I like pivot tables in Excel and grinding data. And so I downloaded, I've got all the data here up on my screen looking at , uh, the five county Milwaukee metro area home sales over the last many months, going all the way back to 2022. And what I've done is I've, I've sliced and diced it to tell myself and anybody who cares to listen, you know, what percentage of people are paying over asking. And guess what it is seasonal. Uh , it's a lot different number when you're talking about, and and it's eerily similar. I'll give you this nugget. In July of 20 23, 60 4% of home buyers paid over asking . And that includes almost half paid $10,000 or more over asking in July, oh, let me go back to July of 2022. Oh , 63% paid over asking and 44% paid 10 grand over asking spookily similar, what do you think it was so far for recorded sales in January of 2024, David? Mm ,

Speaker 3: 13:35

37%.

Speaker 1: 13:38

And the answer is 33%. You're a pretty good guesser. Okay . And only 12% of people paid 10 grand or more of asking, that's kind of similar to December. I mean, you can literally, if I were to chart this, it just starts sliding down through the fall, you know, so buying a home when it's cold out, and by the way, lemme just tell you, February of last

Speaker 3: 13:58

Year, seller need it more Yeah. In when it's cold out. And they'll, they're , they wanna say yes, quick , faster to anybody.

Speaker 1: 14:09

And just to say it again, eerily similar to last January of 20 23, 30 2% of people paid over asking , um, the corollary of that. Of course, there's two thirds of people paid at or under asking in January, then that starts to climb in February, goes to 43% last year, then 50% in March, 59% in April, and then kind of stuck at 64% throughout the summer before it starts to come down again. So the other cool thing about Wisconsin, unlike other markets that we serve, is that it is relatively inexpensive , uh, to refinance in the Badger state. And so that's why with a prognosis for interest rates coming down over the rest of this year and into 2025, you know, our our best advice is buy as soon as you can, as soon as you can find a home that you want to call your own. And then let's not overspend on closing costs. I mean, we will if you want us to, but you know, the chances are

Speaker 3: 15:14

That I've had a couple clients on , on the, on the, you know, do we invest to get the rate lower that I've had some clients choose that because it made them feel more comfortable that that was a sure thing more than the anticipation of rates coming down. Whatever their , you know, whether it was one year or two years. For them, what made them comfortable was, you know what, I know I got this , um, in hand,

Speaker 1: 15:43

That's an emotional, you know, an insurance company would never do that. Right? Correct. And , and that feeds right into everything we know about financial decision making is Yeah . A lot more about emotion than it is about facts. 'cause if you look at

Speaker 3: 15:56

The numbers, well , but , but again, I'm the neither you nor I are gonna argue with people. We're just gonna , we're gonna present and be like, are you asking me my personal opinion? I'll tell you. Yeah. Well, no,

Speaker 1: 16:06

It's more than a personal opinion. It's a, a data informed professional opinion. You know, that , that I can't guarantee it. Right? 'cause you also might lose your job,

Speaker 3: 16:16

Right ? Well , right. Yeah.

Speaker 1: 16:18

A lot of things can happen, but you know, the numbers, the statistics would , uh, and I've got a story to go along with that here, coming up after the news break at the bottom

Speaker 3: 16:27

Of the app . Can I , before we get, before we get too far removed from your, on your baby boomer thing, by the way , uh, just talking about dislodging that inventory, the only rate that is better than the two or three or 4% that that cohort might have on their borrowed money is the 0% that they would pay on the proceeds should they sell that property and use it, you know, as part of getting to whatever their next chapter might be. Equity is a tool and it's being mindful of, you know, when you have a good enough reason to go onto your next chapter. You've got tools, whether it's equity or the borrowed money to figure out what that next chapter is.

Speaker 1: 17:14

That's a good point. And let's also not forget David, that's 60, only 65% of Wisconsin households have mortgages on their property. Right ? So 35% of people don't care, right? Yeah . It's again , interest rates, whatever. And to your point, if you're a boomer that's downsizing, you know what you have going your way and we're happy to help you do the math, is, you know, if you're selling that $600,000 home and you're downsizing to, you know, what , three 50 or $400,000 condo, you know, your monthly payment may not be that much different because you're gonna have a smaller mortgage having rolled over. Exactly . All that equity. Alright, when we come back, I've got a couple stories , uh, in helping Florida clients that I'll share with you. But right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2: 18:06

Don't break the bank to get into a house. Back to the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1: 18:14

Welcome back and thanks again for tuning into today's show. I'm Brian Wicker, the Elder, and that's my son over there. David Wicker, the taller , uh, more handsome and younger , uh, of the wicker , uh, duo on the morning radio show. And so David, I was lucky enough to talk to a couple of , uh, pa well they are actually past customers. Uh, but one of 'em didn't know that we loaned the money in Florida. And so we had helped this person like 12 years ago and on the refinance of their Wisconsin Home primary residence and they had paid that off. Uh, and so now they, our guess what, wanna spend some time in the sunshine. And so they are buying a new construction home in the Naples area. And what is true about builders in a lot of places, but nowhere more than in Florida and probably Arizona too and other, you know, place with lots of new construction. They have affiliated lenders. And so he says, you know, I just don't know what I should do about my mortgage. And he's a retired attorney, so it's like awesome. One of my other clients who is a friend of mine as well, who we helped buy last year in Florida says, you gotta call Brian Wicker . He said , well I got my loan from Brian, you know, 12 years ago, but I didn't know the loan money in Florida. So hello world . We lend the money all throughout the state of Florida. And so he sent me the loan estimate from the affiliated , uh, finance company. And you know this 'cause you're a licensed Florida originator, David, what is different about getting a mortgage in Florida than getting a mortgage in Wisconsin?

Speaker 3: 19:56

The quick answer is it's more expensive. The longer answer is Florida doesn't have estate income tax. They still need to raise revenue via other means. And real estate transactions are, is one bucket that they reach for in order to generate that tax revenue.

Speaker 1: 20:15

And specifically mortgages. There are these two taxes that you pay only if you get a mortgage. It's literally a mortgage tax. And then the other thing that's true is title insurance is way more expensive in Florida. Uh, furthermore what these builders do in Florida and probably lots of other places, they say, Hey, we're gonna give you this $5,000 closing credit , uh, but only if you use our title company and if you get a mortgage on this property in Florida, you also have to use our affiliated mortgage company to get that 5,000 To get to

Speaker 3: 20:46

Get the credit. Yeah.

Speaker 1: 20:47

Yeah. So, so the good news is that it was an either or . So as long as we don't put a mortgage on the Florida property, he still gets the $5,000. 'cause we're still gonna use their affiliated title company. Oh . So he doesn't give that up. Mm-Hmm. <affirmative> . But are skipping all the expenses of mortgage lending in Florida. And what's the other thing? Did I mention that Florida is , it's just secondary residence?

Speaker 3: 21:13

Hmm .

Speaker 1: 21:13

What's the difference between that and Wisconsin? Well ,

Speaker 3: 21:17

A secondary residence now does not get as good a pricing as if it could be classified as your primary. And from what you're from , from your client, it sounds like they're not in a position where they could classify the Florida House as their primary.

Speaker 1: 21:33

That is correct. They have no intention of, you know, being out of Wisconsin for more than six months. I got you . So, so, you know, I started looking at the numbers and, and it's like, you know what we're gonna do, did I mention his house in Wisconsin is free and clear. We're gonna pull all the cash out of his primary residence. 'cause then we don't have the taxes on the mortgage. We don't have the high title insurance costs . It's his primary residence. Now we're gonna get a little less favorable pricing because it's gonna be a cashout refinance up to the maximum. But the refinance costs in Wisconsin are really low. So all we have to do is wait six months until this cashout transaction loses its scarlet letter I'm gonna call it, of being a cash out refinance. Which hopefully will correlate with interest rates coming down. So we're gonna do a big cash out refinance , um, on his Wisconsin house and , and use that money along with some cashews already intending to use to buy the house in Florida. Now what is the other possible fly in that ointment of doing a huge cash out refi relative to your tax return? Well ,

Speaker 3: 22:46

Relative to your tax, well, relative to your tax

Speaker 1: 22:49

Home equity debt is no longer tax deductible.

Speaker 3: 22:52

Oh yeah, yeah. Okay.

Speaker 1: 22:53

Under the 2017 Tax Reform Act. But I asked him , do you itemize your tax, your deductions? No . Lemme look. Nope. I take the standard deduction. Oh well okay . Awesome . That's a Yeah , which means it doesn't matter. The tax deductibility of your mortgage interest does not matter 'cause you're not writing that down on your, on your report. So we're gonna save him , I estimate at least $6,000, probably closer to 8,000. 'cause we're gonna angle for a no loan cost refinance in anticipation. He, you know, he's more of an insurance minded, you know, an analytical guy. Yeah . So he is , you know, I've got him thinking the same way I am, which is don't spend the money on this cash out refi. We wanna hold those down because we're gonna have another kick at this can and lower your

Speaker 3: 23:41

Carrying costs . It may be more than one too, you mean

Speaker 1: 23:43

Possibly. That's right. Yeah . We might have multiple kicks at that can . Alright. When we come back, I don't know David, if you've got a story, I got another one in my hip pocket about , uh, somebody who did give up their 2.625% mortgage with an interesting twist. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 24:02

Important home buying questions and answers you can count on. This is the Accu Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1: 24:12

Thanks again for tuning in and joining us on this uh , Sunday morning. I'm Brian Wicker, the , uh, majority owner of Accu Net Mortgage and also a licensed real estate broker. Although I should probably point out that I really don't go out and show people houses or, you know, try to get listings. I get my license so that I can legitimately talk about it. Yeah . Uh , on the radio. And we don't have any other agents so it's not like we're out there putting for sale signs in front yards. Although I did sell, did I sell two of your own one one house I helped you buy, I don't know . I did something for you. I , I do family deals. Yeah. Always a fun time. Alright . So , um, you know, we're fortunate we're going to uh , notch 25 years in business coming up this July. And so we've got a lot of long time customers. And this is a client who I first financed when he moved to Wisconsin. Uh, then he moved out to California, couldn't help him there, moved back to Illinois. It's one of the states we're licensed in. So we helped him a couple times there. Then he moved to Minnesota to be close to his grandchildren and we're licensed in Minnesota. So we were able to help 'em there. And now here they are. They had a 2.625% 30 year fixed rate on their Minnesota home. And they had been visiting , uh, have you heard of the villages, David? Of course. That's this huge development near Orlando and they have more land. They are just, I had talked to somebody there 'cause that's where these people are now buying their new primary residence. Um, they're closing like 400 transactions a month. Oh yeah. Of new construction. You don't have shovel, sunshine. No, no. And, and everybody that I talked to who lives in in the , uh, villages loves it. Um, and it's all owned by a family, which is amazing that has developed this land. And so, so this client , uh, has a house under contract and we had talked a while back and I said, well maybe you just wanna pay cash. You know, 'cause rates are kind of high. This is when rates were in the high sevens back in November. Mm-Hmm . <affirmative> . And, but this particular person has a secret weapon. Uh, he is an ordained minister now. He hasn't like had a church in a long, long time. He's done other philanthropic uh, kind of fundraising stuff for various institutions. But he has this special tax advantage Yes. Where he can designate , uh, some of his income as housing expense and then he pays zero tax on that money. And so it's to his advantage to carry a mortgage. 'cause that counts as a housing expense. And so what that does is take his 6.6 2 5 30 or fixed rate and crush. Oh . Because then guess what? He can also on top of that, deduct the actual mortgage interest. He pays just like a regular human. So this crushes his effective Yeah . Interest rate down to like 3.5. So , uh, so I help him do all that math 'cause he's like, I'm not sure. And I'm like, well let me help you run the numbers 'cause I love numbers and I come up with this check with your tax advisor, but I'm pretty sure these numbers are good. So he's proceeding with a $400,000 mortgage , uh, with , uh, academic mortgage. And again, we're up against the house lender, but we're gonna save him like at least three grand. Okay . Uh , in, in closing costs . And we did fortunately lock in his interest rate , uh, before the jobs report. Uh, so he's, he's getting in his particular scenario, 6.625 and we're able to actually chip in $2,000 towards his loan costs . Rather than that , uh, affiliated lender down there was gonna know , charge him at least that much in fees. Uh , plus, plus probably some points too . But now it's interesting. Um, they have their own title company down there, affiliated title company. And I'm talking to the real estate agent late last week. He's like, oh, they gotta use that company. And I'm like, well, I don't wanna argue with you, but in Florida, if the buyer is paying for all the title services, they can shop and shop around and , and get this, this, this title company has such a lock on the business in that community that when I called him in order to , um, try to get a quote when I called the captive title company, they're like, we aren't quoting you anything. We don't have a file open on this yet. And until there's a file open on it, and that'll probably be in March. We're not gonna give you any information. Like , oh , thanks a lot. I guess you have, what do you call that? All the business you can handle. Monopolistic. Monopolistic. So that's a , that's a mafia hold. Yeah. Yeah. So, so we got that. Uh , feel good about that. We're gonna help them, you know, realize their dreams and hey, as much as they loved living by their grandchildren in cold and snowy Minnesota, they're really looking forward to several years in the sunshine. Yeah . And this is now gonna be their primary residence. 'cause oh wait, one more little thing on that. They, in the beginning of December made this decision and they're like, yeah , we probably shouldn't list our house for sale here in December. They're talking to their agent. The agent calls 'em up and says, I have somebody who would like to buy your house as long as you can, can be out the week before Christmas. So they loaded up

Speaker 3: 29:45

The truck for the right price . For the right price . Price , absolutely.

Speaker 1: 29:47

So they

Speaker 3: 29:48

<laugh> make me an

Speaker 1: 29:49

Offer. They put all their sold whatever they had to do in two weeks

Speaker 3: 29:53

Christmas at the Ritz.

Speaker 1: 29:54

Exactly. Yeah , exactly. So there's a baby boomer who is breaking the trend and is willing to , uh, pack it all up and move. Hey, why Sunshine swap out when we

Speaker 3: 30:05

Swap out two and a half percent for sunshine? A lot of folks are gonna do that

Speaker 1: 30:09

<laugh> . Yeah, that's right. Alright. When we come back, David is gonna decide what we talked about in the last segment. You're listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 30:20

Find a place to call home without the headache. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 3: 30:28

Welcome back to the ACU Net Mortgage and Realty Show. I'm David, that's Brian . Uh, dad, I wanted to circle back on a story that we had told about one of Tim's clients who , uh, was proceeding with divorce. But I wanted to first begin with a, like a happy outcome of some clients of mine who are splitting up if that's, you know, possible so they Oh

Speaker 1: 30:52

Yeah. Tell us that joyous tale of splitting.

Speaker 3: 30:54

Well, I mean , because it's , it's gonna work out. Uh , so this is amicable at least as far as I can tell. And last year , um, man and a woman, he was the only one on the note that borrowed money, but they both were on title as owners of the home that was,

Speaker 1: 31:13

But not married.

Speaker 3: 31:14

But not married. That was, that is a key actually , uh, uh, detail that they were both on title to the home because when I got the call to, you know, Hey, you know, I, Bob am leaving the property, but Sally would like to retain the home. Well, she wasn't on the borrowed money. And, and so to do this in the clean way that they had in mind, we needed to refinance to rebar the money to prove well can Sally, she wasn't on our borrowed money when you bought this a year ago, does her income and other debts allow her to afford the borrowed money? Yeah . Um , that thankfully the answer was yes.

Speaker 1: 32:07

Okay .

Speaker 3: 32:07

And they were able to execute the term as a rate and term refinance because Sally was already an owner on the property.

Speaker 1: 32:20

Otherwise it would've been the less favorably priced cash out refinance.

Speaker 3: 32:25

Or she would, or it would've had to been some because they weren't married. Some kind of Yeah . Weird acquisition, you know, something. Uh ,

Speaker 1: 32:33

What about the equity in the home? Is somebody getting equity out of it? Or is that somehow

Speaker 3: 32:38

No , that is, well because they're not married, there's no mechanism by which they need to figure that out. I think privately they're gonna figure something out, but that is not the purview of how we're helping them put the house in her name.

Speaker 1: 32:55

Uh , so, you know, we conveniently the whole world, including us, we say we're in the mortgage business. Well, what we're really in is the note, the promise to pay back the money. Yeah. And the mortgage business, which is if you don't pay back the note, we get to take your house away. So what we're talking about here, and this happens a lot, and that's the situation with Tim's , uh, divorcing , uh, client as well. The husband was the only person on the note. Mm-Hmm . <affirmative> . But because they were married and Wisconsin's a marital property state, she had to sign the mortgage to give permission for the property to be used as collateral , uh, for the note. And what I never really paid attention to before until I got involved in this situation a couple weeks ago, was that on the mortgage document, it refers to the people who sign it as borrowers, even if they're not borrowers. Yeah.

Speaker 3: 33:50

They should be

Speaker 1: 33:50

Called on the note collateral. It should be called owners.

Speaker 3: 33:53

Yeah,

Speaker 1: 33:54

Well they should be called owners. But you know, I'm gonna have to send an email into Fannie Mae to see if they'll change that form for me. But, and so in this particular case, the um, wife's attorney was insistent that she be legally removed from the mortgage document because as an owner who signed the mortgage, if the guy ever went delinquent and the lender had to , um, file a foreclosure that county, it's Waha County would report to the credit bureaus, Hey, there's a foreclosure action against both of the owners. And the contention was, and that would ruin her credit, I could not get a straight answer as to whether a public records reporting of a foreclosure would actually impact the FICO or credit score. Because in her situation there would be no line item on her credit report reflecting the loan. There's no ingredients that went delinquent in and into foreclosure. So someday I hope to find out the answer. But here's the good news I got on the phone. 'cause this is the kind of service you get from a local lender. I got on the phone with our client, the husband, and got through to Wells Fargo, hit all the buttons, got to the right person and said, oh, it's somebody from their land acquisitions team that has to call our client back to talk about officially getting his future ex-wife legally relieved of her obligations on the mortgage. I didn't think that they would be willing to do that, but they called him on Friday and said, we're gonna do that and we'll have it, it done. It'll probably take us four weeks. We'll let you know if that really happens. But that was a nice , so now he doesn't have to refinance. Yeah. Or you know, because otherwise you give up his two point something, right? Yeah, exactly. So he's a happy camper. I think it's gonna work out well. That's all the time we have for today's show, folks. Please tune in again next week for another edition of the Academic Mortgage and Realty Show Heard exclusively on Wisconsin's radio station AM six 20 WTMJ. The proceeding was a paid program. Advice and opinions expressed during the ANet Mortgage and Realty Show are solely that of the host or guests of academic mortgage and Academic Realty advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.