On Monday November 7, 2011, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate Radio show on The Big Talker 1580 AM, hosted by Ryan Sloper.
Listen to the show.
Part 1 (13:55)
Ryan notes that there is a city near Detroit, Hyland Park that has turned off the city’s electricity and pulled out the street lights because they can not pay the electric bills. Louis notes that this is considered “austerity”. Louis notes that local governments should be able to provide the necessities(fire, police, water and lighting) if the money was managed properly.
Instead local governments rely on bond issues and getting money from Washington to pay for government services. Louis notes the irony of hiring local politicians to get money sent to Washington back to the local municipality. Louis also notes that governments generally don’t threatened to cut the non essentials and when they are short on cash, but rather threaten the essential services in order to extract more money. Ryan and Louis discuss the raising of bank fees on consumers and the backlash that it has created, leading to the Bank of America has retracted their intention to charge consumers to use their bank cards.
Louis notes that the entire episode was the unintended consequence of government intervention. Ryan discusses the best way to shop for a mortgage. Ryan discusses factors that impact mortgage interest rates. Ryan notes that the treasury will sell $72 billion of bonds. Ryan notes the change of government in Greece and that the contagion has spread to Italy. Louis notes the the Greek crisis has been lingering because the central bank has been propping them up.
Louis also notes that if more municipalities can not provide services, the Fed may provide a bail out. This would lead to higher interest rates and inflation. Louis predicts that the dollar will out last the Euro in that it can probably print more money and that eventually, entities including sovereigns, must be allowed to fail. Louis notes that the Federal Deposit Insurance Corporation creates a moral hazard. Louis and Ryan discuss fractional reserve banking and its role in creating the potential for bank runs.
Part 2 (12:16)
Ryan discusses the upcoming employment report and predicts that mortgage interest rates should remain steady. Ryan notes that a flight to safety has kept mortgage rates low. Louis notes that the Fed did note that they are thinking of buying more mortgage backed securities, like they did during QE1. Louis notes that Fed buying the 10 year notes under Operation Twist may not have an impact on consumer interest rates, and indeed that interest rates rose after them implementation of Operation Twist. Louis notes, however, that if the Fed bought mortgage backed securities that could keep mortgage rates low. Louis notes that banks have a disincentive to loan money at the current low rates for thirty years. Louis notes that low interest rates really help the banks rather than the consumers. Louis notes the artificial low interest rates are a back door bailout. If they were really meant to help the consumer and the economy we would be out of the recession. Louis notes that spending money doesn’t fix the economy and that spending borrowed money certainly doesn’t help. Indeed the economy can be helped by an increase in production, not spending. Louis notes that low interest rates force people to put money into the stock market and that a better play may be to put money into gold and silver or other commodity assets. Ryan notes that the government factors out food and energy when calculating the inflation rate. Louis notes that these two components are the bulk of a household’s budget. Louis notes that there are a myriad of reasons that the Fed may need or want to print money. Louis notes that the increase in the money supply is inflation. Louis notes that the people who get the first printed dollars (the banks) receive the full benefit. Louis notes that if inflation increases, rents will go higher. In that circumstance, having a low fixed interest rate will be a good hedge against inflation. Louis notes that when there is inflation, wages will rise, perhaps not as much as inflation, but certainly more than your fixed interest rate, which will make make it easier to pay your fixed rate mortgage.
Part 3 (11:49)
Ryan discusses how to shop for a mortgage. Ryan notes that shopping for a loan consultant is preferably to shopping for rates. Louis notes the limitations of getting a mortgage rate or home valuation on line and notes that a mortgage professional and a Realtor are essential in determining rates and values. Ryan notes the difference between a hard and soft pull of a credit score.
Part 4 (11:43)
Ryan continues with the top tips for shopping for a mortgage. Louis and Ryan discuss the misconceptions on how much they spend each month!
Listen to other Real Estate Radio shows with Louis Cammarosano
Listen to the Real Estate Radio show of October 31, 2011
Listen to the Real Estate Radio show of October 24, 2011
Listen to the Real Estate Radio show of October 3, 2011
Listen to the Real Estate Radio show of September 26, 2011
Listen to the Real Estate Radio show of August 8, 2011
Listen to the Real Estate Radio show of July 25, 2011
Listen to the Real Estate Radio show of July 11, 2011
Listen to the Real Estate Radio show of June 27, 2011
Listen to the Real Estate Radio show of June 20, 2011
Listen to the Real Estate Radio show of May 23, 2011
Listen to the Real Estate Radio show of May 16, 2011
Listen to the Real Estate Radio show of May 9, 2011
Listen to the Real Estate Radio show of May 2, 2011
Listen to the Real Estate Radio show of April 25, 2011
Listen to the Real Estate Radio show of April 18, 2011
Listen to the Real Estate Radio show of April 11, 2011
Listen to the Real Estate Radio show of March 21, 2011
Listen to the Real Estate Radio show of March 14, 2011
Listen to the Real Estate Radio show of February 28, 2011
Listen to the Real Estate Radio show of January 24, 2011
Listen to the Real Estate Radio show of November 29, 2010
Real estate radio interviews also available on Youtube
About the Real Estate Radio Network
The Real Estate Radio Network® is a nationwide alliance of real estate related professionals with a common objective: delivering the timely truth about local Real Estate Markets over local radio stations.
The Real Estate Radio Network brings hard-working and ethical professionals in a community together. We provide the media and forum necessary for Consumers to learn the truth about important aspects of their financial life, which is mostly centered around their biggest investment, the home they live in. The Real Estate Radio Network® brings each radio program to the audience with a “live and local” show hosted by well-respected members in the local Real Estate and Financial community.
About Ryan Sloper
As a highly motivated mortgage consultant, with more than nine years of mortgage lending experience, Ryan Sloper has acquired a solid understanding of the local and national real estate markets. Ryan has been investing in residential and commercial real estate for the last 5 years, where he has first hand knowledge of what it takes to be a successful real estate investor. Ryan also hosts a weekly radio show, Real Estate Radio, which airs every Monday on 1580 AM in the Washington, DC Metro Area. Real Estate Radio also streams live nationally @ http://whfs.cbslocal.com/shows/real-estate-radio-with-ryan-sloper/