Mortgage & Economic Update - An Interview with Jason Bochniak

Summary

The transcript covers a podcast discussion between host Ralph Estep Jr. and guest Jason Bochniak, a mortgage expert from New Fed Mortgage. Key topics include analysis of current economic conditions and mortgage industry trends in light of rising interest rates and inflation. Parallels are drawn to high interest rates under the Carter administration during the 1979 Iran hostage crisis. Impacts on housing affordability are examined, highlighting constrained options for first-time home buyers. Specialty lending programs from Compeer are outlined for unique properties like hobby farms and vacant land.

Chapters

Introducing the Podcast and Guest

Ralph introduces his podcast focused on personal finance topics and welcomes returning guest Jason Bochniak, a mortgage expert at New Fed Mortgage.

Economic Analysis and Mortgage Industry Trends

Jason provides an overview of key economic trends including rising mortgage rates and inflation. Tightening of quantitative easing policies is noted as a contributor. He sees mixed signals in current data and doubts forecasts of imminent rate declines.

Drawing Parallels to 1970s Period

Historical data on interest rates is analyzed, drawing parallels to extended period of high rates under the Carter administration during the Iran hostage crisis.

Impacts on Housing Affordability

First-time home buyers are facing major constraints on purchase prices they can afford. Tight inventory is also forcing buyers to accept undesirable purchase terms in competitive seller markets.

Introducing Specialty Lender for Unique Properties

Jason outlines niche lending programs from Compeer for unique properties like hobby farms, vacant land etc. Key features and guidelines are covered regarding acreage, outbuildings, income requirements and appraisal approaches.

Action Items

1. No explicit action item identified.

Welcome to the Ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions current headlines and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting.

As Ralph makes the complex simple by sharing his real world knowledge with all things financial. Now here's your host, Ralph Estep Jr. Well thanks for joining us today. I've got a very special guest coming up today and that is Jason Bochniak.

He's a mortgage expert with New Fed Mortgage and Jason and I get into a great discussion about the state of the economy and the mortgage industry and how that directly impacts all of our listeners. So stay tuned for a great interview with Jason and some real economic ideas that we discuss.

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So check it out when you get a chance. And now back to the podcast. Welcome back to another episode of Ask Ralph, the podcast where we dive deep into the world of finance and bring you expert insights to help you make informed decisions.

I'm your host Ralph Estep Jr. And today we have a special guest joining us. Please welcome Jason Bochniak, a mortgage expert from New Fed Mortgage. Jason, it's great to have you on the show. Man Ralph, thanks for having me back.

It's been such a long time since we talked. Have you been? I've been good my friend. It has been a while. You know we took a little hiatus on the podcast but we're bringing it back now so that we can give our listeners something useful for them to listen to and to hopefully gain some insight from.

So Jason, let's jump right into it. I'd like to start by discussing the current state of the mortgage industry. What do you see are some key trends or changes you've observed in the industry, especially in light of the ongoing economic challenges we're all facing?

Well, I'll tell you, you know, it's a great question and it's such a broad and open question, but you know, some of the key trends that I'm seeing right now is, you know, just the volatility in the interest rates.

So I think the best way to answer that question would be to go back to some of the historical things that have happened. So if you go back to say 2022, 2022 is a very interesting year. If you look at the beginning of 2022 coming out of that refi boom right around January, things were looking really strong and then going into February, there was some indications of things were going to get a little tough.

And then February 2022, it looked like the government was going to stop quantitatively easing and that's when the 30 year fixed interest rate kind of shot up. And that was when the beginning started happening.

And that's really had a huge impact on the market too. I mean, I've seen it in my own client base. You know, it really took the affordability factor of mortgages and really took it off the table for some people.

It did. It did. It was it was traumatic on a bunch of fronts. You know, there was a lot of retooling. I guess you could say there was a lot of changes that had to happen within mortgage companies and it's a trickle down effect that it affects everybody as far as people fixed staff and mortgage companies, big changes that have to happen all across the board.

If you look at it and you look at, you know, why these things happen and we're going to go kind of deeper into it as we go through the interview. But if, like I said, if you go back to 2022 and you look at just the Fed raising the prime rate, it's so much more than that.

You know, it looks like if we go back 20 plus years ago or even shorter than 20 years ago, if you go back into when the crash of the economy happened. in 2008 and the government got involved. It looks like that quantitative easing helped out with keeping the rates down and quantitative easing is where the government kind of goes in and buys everything.

They kind of just make it a level playing ground so that, you know, things are cheaper. But Jason, do you feel like the government intervention has been a little too heavy handed at this point? I feel it has.

I feel it has. And I'm not, I wouldn't say I'm the forefront person to talk about it, but I know enough to be a little bit dangerous. So I can say that I would feel that at one point. the Fed rate would have to go up.

And I would say that that, you know, I feel that they waited a little bit too long to raise the Fed rate, you know, but I feel that raising it at the last minute to try and stave off inflation, I think that they waited just a little bit too long.

What do you think, Ralph? But now I think, well, I think you're probably right. And I think they may have been a little too aggressive in the amount that they increased things. But now I think we're seeing a trend of some downward, you know, seeing the things going down.

Do you see that in your industry as well? Well, I'll tell you what, here's, and that's a great point that you bring up. So there's a couple aspects to that. The problem that I see or what I do see, I think it's more smoke and mirrors.

I think that because of the totality of what's happening, we have an election year coming, it's the holiday season. I think that we've got a spike in consumer confidence because on the retail side, people are purchasing more due to the holiday season.

And I think that that's giving a false hope of reassurance in our economy because some retail numbers are coming out pretty good. But I think when that settles, and we see that, okay, purchasing is just abruptly stopped, and now it's time to start making payments on that real high interest rate credit card debt that's been acquired due to all the purchasing for gifts due to the holidays, I think that that's when we're really gonna get the punch again for the inflation.

And I think you're absolutely right. I was telling clients two years ago, listen, I really feel like mortgage rates are gonna triple. And they've gotten close to that. And I was telling clients, I felt like we were in line for another great depression.

And I still feel like we're on the cusp of that. You hear this in the news, talking about how the economy is getting better. I just don't see the fundamentals in it. Yeah, well, I have looked at some things.

And if you're open to it, I have a viewpoint. I kind of talked to you about this before the call. Yeah, absolutely. If you're open to it, I'd like to tell you, something that I've looked at. And this in no way is political.

This is just a viewpoint that I've taken. And I've always been a fan of looking at the historical data and looking at the past and seeing, can the past be a measure to see or be a lesson of, should we look at the past and, and have it as a lesson so that if it does repeat itself, are we aware and open to seeing if we can learn from it, right?

So if we go back and look. Yeah, let me just interject one thing. As long as we don't have to put our tinfoil hats on, I'm all aboard. Yeah, we don't have to do that. This is a conspiracy theory. This isn't any of that stuff.

We're not going to be back to the future, right? But there is something that just happened recently. It's controversial and everything, but it happened. And it was broadcast all over. It was traumatic, right?

But it's repeating itself almost identical. And anyone can go and research this, right? So there's this beautiful document. It's called the Primary Mortgage Market Survey Summary Page with all rate types, US averages.

And Freddie Mac publishes it. It's an Excel spreadsheet. And all you have to do is go on to Google Chrome and just Google it. Do Freddie Mac historical rates. And it'll give you an Excel spreadsheet from the last 50 years.

And if you... And Jason, if you'll send me a link for that, I'll make sure I add it to the show notes for this particular... Absolutely, yeah. I'll shoot you a link for it. And if you scroll back all the way back till when Jimmy Carter was president, and what I want to do is set the stage.

So I want to just show that history's repeated itself. Okay? Absolutely. So when Jimmy Carter was president, he had a situation with Iran where there were some hostages taken. Everybody knows about it.

There was 54 hostages, 53, 54 hostages that were taken. And they were held for 444 days. And if I remember history right, it was two days after he left his administration, two days in the Reagan's presidency that the hostages were released.

And there was an amount of money, about $8 billion that was released from or to Iran that was given back. And it was all related to oil, right? So if we look at the interest rates, given that scenario, and I don't want to bloviate or go into the dynamic, of all of it, but let's just take three pieces out of it.

Hostages, Iran, and oil, okay? And let's look at where the rates were. So on the chart that I have in front of me, if I look at the interest rate where it was during that whole crisis, because that happened somewhere around, you know, early 79 and it wasn't over until 8081.

So if you look at it, the interest rates were at 10 .4% in January 19th, 1979. When the hostages were released, the interest rate was in 1981. Thank you. Same time right around 15 .4% so I'm not implying the interest rates are gonna go that high But I'm talking about the elasticity of how long the rates stayed high So you know and I remember that Jason because as I was about eight or nine years old I remember going to the bank and getting what they called a passbook Savings account and it was the coolest thing ever because it was making money I mean, it was really it was it was making money.

You don't see that now No, you don't see that now these aren't bank rates those Ralph these are the 30 year fixed mortgage rates I understand about you. Yeah, but the prime rate was up, right? So if you look at this chart that I'll send you interest rates didn't start falling down into the single digits until 19 I'm looking at it right now probably 1989 Going through 89 90 Still scrolling down.

Yeah, they didn't get into the single digit rates until 1990 going into 91 so we had double digit mortgage interest rates as a result of this Crisis that happened with Iran and and what had happened and I started digging deep the other day I started reading about it and there's all these freedom of information act articles and you can go into Jimmy Carter's library and you can pull up Specific documents related to that crisis that are in his library It's almost like a biography of what happened and and how he dealt with that crisis And there's a couple documents related to a Windfall tax that was levied upon domestic oil production in the United States.

So again, I'm not talking conspiracy theory I'm talking about factual things that happened and regardless of what side of the spectrum on fossil fuels You're on if I am a person that's just talking about basic high school economics Here you have an administration that stymied oil production domestically while there was a global oil crisis going on with a windfall tax to prevent the US oil production from happening.

So let's fast forward now all the way through to the Biden administration. And it was all under the guise of there was issues with Iran, there was issues with oil, and then we mix in hostages. So let's- And I completely remember that because my family was in the gas station business at the time.

So I completely remember that as a kid. It's crazy, right? And the first, if you go back even further, 1973 is when the gas shortage just happened. That's when the gas lines were happening in fights and stuff like that.

But this was later on. This was in 79. So now fast forward to when we cut this $8 billion check to Iran to release some funds to them about, I don't know what was it, four or five months ago, six months ago.

But just look at how history is repeating itself. Okay. We have this file situation where- Hamas, back by Iran, invaded Israel, took 200 and some odd hostages, and now we have this global fight again.

And here we have an administration that has under the guise of global warming and the climate, once again, stymied domestic oil production. And they'll say, well, we're pulling more oil out of the ground, but they're not refining it, right?

And under the- Absolutely, you're 100% on point on that. Yeah, and under the EPA, they're punishing refiners for violations, this, that, and the other thing. And they're stymying the one thing that's made our country wealthy.

And again, I'm not an economic professional, but it's basic high school economics. Oil's what made this country rich. It's part of our GDP. And if you're at one point, a handful of years ago, if you're the global dominant producer of refined fuels and you are energy independent, and then something changes and you become not energy independent, and then everything catastrophic happens to your economic sphere, and it has a global effect, and it kind of points to one thing, it's a pretty easy fix.

So, you know- Oh, you're absolutely right. So not to cut to the chase, well, let's cut to the chase. So what exactly are you saying, Jason? Like, how are you extrapolating it out? And what is that telling people?

Well, so here's the data that I'm pulling. You remember that movie, The Big Short, right? You know, the actor that Christian Bale played, it's kind of like that kind of moment. And I'm in no way saying I'm that guy at all.

But what I'm just saying is I'm sitting here looking at these rates, and I'm looking at the elasticity of it, meaning how long was that rate high, right? So I listen to radio shows all day long, and they're like, hey, the rates are coming down and I'm listening to all these bobbleheads talk about, man, the rates are gonna come down.

This is what's gonna happen. But, I go on every day to a website called MBS Live. Amazon, Mike, B, is in Bravo, S is in Sam. It stands for Mortgage Back Securities. MBS Live, it illustrates the coupon and how the coupon trades for investors.

And the coupon is basically the beginning of a mortgage back security. So it's an indicator for us on where rates are gonna be for that day. And I'll talk about that in a second. So to answer your question, if you look at how long the rates were double digit and how long they were high.

And again, to break it out, I'm not talking about the fact that rates are going to go double digit. I'm talking about a measure about how long I feel personally these rates are going to stay up. So if I look, what you're talking about is what you would consider what I would consider the recovery period.

Yes, exactly. Exactly. Right. So you're talking about what is the recovery period for when we get the back into some sanity in the rate market. Yeah. And look at look at just the paradigms here. Look at the characteristics, the parallels, the parallels, not the paradigms, the parallels.

So here we had back in in 79, we had Democrat rule hostages. I ran, we had those categories, right? And we had a situation where there was a windfall tax against domestic oil production. All right. We'll call that DPA.

Here we have the same taxed up different names, different flavors, but it's happening today. The domestic oil has been stymied and the whole world is not better because of it, right? And we're involved.

Yeah. And the truth is, I mean, without getting too political, it's back to the Iranians again. Let's just be blunt about that. It is. It is, right? But check this out. It's the same exact thing as the Jimmy Carter years.

Just bullet point for bullet point, right? So if I look at this chart for how long the rates stayed high, yeah, we're probably looking at seven, eight years for rates staying up before they start coming down again.

Now I could be wrong and I hope to got them wrong, right? But within these rates, if I look at them, there was some good days, you know, and it was right around the holiday season. It was right around when Christmas was.

It was right around when, when gift giving happens. If you go back and look and I'm going to send you this and when we get off this call, you'll see some of that, right? So I hope to got them wrong, but it also corresponded when there was Republican elections like Ronald Reagan became president, but it wasn't until after a good 12 years of Republican rule that the, that the rates started coming down after everything came back.

And I do remember as. a younger person when Ronald Reagan came into office, I remember him being very good for jobs, him being very good for building contractors. I remember him being very stern on the global stage.

I remember him sinking ships. I remember him- And the truth is, I mean, everyone says when he was leaving his tenure, it was morning in America. And the truth is, I mean, looking back at it as a kid, and a teenager, I'm thinking exact same thing.

It was morning in America. And he really had to start from scratch and kind of rebuild. It did. It did. I mean, I'm a U .S. Navy veteran, and I just, I talked to my, we have some Navy veterans that are on a, you know, just a long, long message board that we have in Messenger.

And it's, you know, some of the stuff we talk about is just we're, you know, we're just disappointed, you know, we're disappointed at how the military is gone. You know, your military is your defender out there and just the woke nature of how it's gone.

It's, you know, it's just terrible. Not to cover that today. No, you're absolutely right. And listen, I want to say this, I appreciate your service. You know, my son's in the Coast Guard. So I told you where you're coming from.

And without getting too political, the wokeness has gotten to an extreme. That's tough. That is absolutely true. China is not worried about, you know, how a person feels. They're just, they're just churning out people to go defend their country.

But let's talk about that MBS website, right? So here is, here is, uh, do you know what the word juxtaposition means? It's, it's a fancy word, right? But it's, it's a, it's a beautiful word, right? So if you look at, uh, when, when, when things started getting really crazy, I went and looked at the mortgage backed securities or the MBS live website, and I'll send you a couple of pictures of this after the, uh, interview.

But there's the five and a half coupon and you could pull up one screen that shows a graph of what the five and a half coupon looked like during the 2008 crash. And the five and a half coupon was, uh, would cost or it had a price of 97 .09.

And basically what that means is if you were trying to, you were an investor and you were trying to buy a hundred million dollars worth of that coupon, it would basically cost you 2., um, 2 .97 or $3 million.

Let's round up and say $3 million that would cost you of your hundred million to buy that, to buy that block of loans, mortgage backed securities. Well, the other day, I want to say, and I'll give you the date and I'll tell you what, uh, what I mean by this, uh, on November 13th, it would have cost you roughly $6 million to buy that same block of loans.

Now, wow. Now, nobody talked about that. Nobody said anything about that. But if you look at that, that's a measure of how bad that coupon is. Well people will say well, you know the rates are higher well if you look at it, you know 2008 back when 2008 happened that was supposed to be the worst cataclysmic thing that's ever happened to our Market, you know to our financial sector.

That was the worst thing ever that's happened and that coupon only went down to 97 point You know 97 .09 or 03 and then right and then the other day it went down to 94 and some change So what what I'm talking about is you know the the hush hush by the media and the hush hush by So many outlets covering up how bad things really are it's and you're truly and like I are sort of on and we're on the same page Yeah, so you're seeing that the economy is not in good shape is what you're saying.

It's not, man. I'm seeing things that are just not pointing towards healing. And it's a product of the fact that we're spending so much money and not, and it's not just the spend, it's the future allocation of the money.

And it's the legislation where we've allocated the spend over time. And I think we have to undo a lot of that in future, you know, future. I got you. So let me allow me to circle back a little bit. And because we're talking about, your particular industry, how does this impact my listeners?

How does that impact the person who is potentially looking to refinance their home? Or let's say it's, how does it impact the person who's looking to buy their first home or buy their first farm or something like that?

Great questions. And we'll talk about the farm stuff in a minute, right? So I've done some calculations to prepare for this call. If you're a family that makes about $85 ,000 combined to your first time home buyer, let's say you're just a couple, and you've got a combined income of about $85 ,000, and that's a pretty stiff combined income.

Incomes have come up. You know, let's say that you're, you know, you're both making, you know, 18 to 20, 20 hours an hour somewhere in there. Well, incomes had to come up because the cost of everything has come up.

I mean, the inflationary pressures have been brutal. Yeah. You can afford with about 85 grand, your max purchase price, unfortunately, is about 300 ,000. And to put things in perspective, you're familiar with Newark area, correct?

Absolutely. Yeah, so you know, Brookside, there was homes that have just sold for $324 ,999 at Brookside. And that's a concrete pad, 1300 square foot, three bedroom home that's aged, you know, built in the 50s.

Yeah, as I was gonna say, they were, those were built, you know, soon after the Second World War, if I remember correctly. Yeah, yeah, and then Newark Estates, second war gardens, you know, these homes, were sold originally for $5 ,000 to $8 ,000 back in the late 50s or 60s.

And here they're selling in the low threes. So this is definitely not going to change. And my biggest fear is home values and home prices, they're not going to go down anytime soon, just because of supply and demand.

Um, what's going to have to change is mortgage interest rates are going to have to go down, you know, will the government start quantitatively easing again? I don't know if that's going to happen. And that, that component is something that was definitely in place for a very, very long time.

Are you familiar with the term quantitative easing? Yes, I'm certainly not an expert on that, but I think the biggest concern a lot of experts have is it could cause, you know, that whole deflation. Yeah.

Yeah. Well, let me just tell you, I'll give you and forgive me if there's anybody that's going to be critical of what I'm saying, forgive me if I'm using the wrong term. But the, the treasury came in and the treasury was buying or purchasing.

They were one of the biggest investors that were purchasing mortgage backed securities bonds, all that good stuff. And it was pushing the price for the coupon down very low. And it was taking off a lot of risk for a lot of the bad paper as a result of 2008 and a collapse in the crash.

And it was very, very helpful. And March of 2022, they just stopped buying that as one of the provisions of raising the prime rate. And when they raised the prime rate, the idea was, let's raise the rate in order to stop the increase in prices and increase inflation and all that.

But it backfired and it backfired. I can't tell you why it backfired, but it backfired and it's, it's, it's a tough thing. Now home buyers are facing great challenges because in my opinion, for greed, you know, sellers are getting top dollar.

And in my opinion, are getting it for all the wrong reasons. You know, the real estate agents are working in conjunction to try and smooth some of the tougher ways to go about selling a house. But if you're a home buyer, your options are really, really tough on how to buy the house, because in some cases you're forced to buy a house with your, with limited, limited benefits.

Like you're forced to buy a house with the contingency that you have to pay the difference between what the house is worth and what the seller wants to sell the house for. You're sometimes often forced to buy the house with inspection for informational purposes only.

You know, there are just some things that you have to accept that you normally wouldn't accept in a buyer's market, but that's the sad side of fact of buying a house in a market where there isn't a lot of inventory.

On the other side, you know, there is new construction out there. There are some good builders that are building some good homes, but, you know, the, the wait time for that is going to probably be greater than a year or a little over a year.

There are some good builders down south that have a lot of communities that are building but then we have you know a Logistical issue with supply and demand shortages as a result of some things that are going on with building materials I just off topic, but I just heard the other day the Panama Canal is Experiencing one of the biggest droughts that they yeah, that's a huge They don't have enough water to use the lock system I just nuts like coming in coming into our winter.

It's there. It's their drought season. Isn't it? Isn't that crazy? Yeah, and it's kind of like the whole world I like to use this term has gone caddy wampus caddy wampus and It really has you know and so many things that we considered in our you know in the professional industry is being fundamentals Just don't make sense right now.

It doesn't and here are some here are some facts and this is Something that I look at if if you go three years back given If you take all the emotion out of it you just look at some factual information.

If we go three years back and we compare the administrations that we had in place, take the pandemic away from it. Nobody can control the pandemic. That was why that happened or how that happened. Let's just take that off the board.

But during the Trump administration, there was, these are things that you can look up and you're an account so you can validate these right on the spot. There was more income tax money coming into the Treasury than ever in recorded history.

You can validate that, correct? Absolutely. And the truth is, you know, regardless of your position, whether you're a Republican or a Democrat, I have very few clients, most of my clients are business clients or, you know, a little bit higher wealth people who can't, who wouldn't tell you that during the Trump administration, the economy was the best they'd seen in years.

Yep. And that's fact. That's just fact. Now, there's a lot could be said about personalities and all those other things that go along with it. But but the truth is factually, the economy was so much better.

It just true. It's just better, right? And then if you if you look like I can say this, when I was a small child, I was about five, six years old. I was a short -scrolling little kid. I remember walking in, my dad was my dad was an engineer for a company called Specialty Composites over on Darwin Drive in the Delaware Industrial Park there.

And I remember walking in back into the factory or not the factory, but just back into the area where they were making the product that they make. And I remember my dad stepping into a gentleman and just really giving him a tough time.

And I looked at my dad, I was I was kind of I'm five, I don't know anything. But I was emotionally upset that my dad had yelled at a person the way he yelled at the person and held him to account. And then I, you know, I got in a car with my father and I was like, dad, why did you yell at that man?

And my father said, he's a good man. He gets off track sometimes, but son when you get older you'll understand when you run a company You know you have to run it sometimes like a velvet hammer But you got to let the people know that who have promise and who have hope Sometimes you have to step into them really hard and remind them that you know That their job is important, but but oftentimes that they can be replaced if they're not performing up to Standards and in this case here this man has to understand that his job is so critical and so important that we need him in this Position and as a leader of this business I have to make hard cuts sometimes and you know I had to enlighten him that I will replace him if he doesn't show up to work on time And I will make hard cuts and I had to use hard language because that was the only way that he understands how to do things.

And I often sometimes think about, you know, how Trump ran the country and, you know, everybody's all soft these days. And, you know, Trump sometimes uses hard language, calls people's names and stuff like that.

But, you know, the country has an EIN number. You know, the country is a business and a business should be run by a businessman, in my opinion. The country shouldn't be run by a politician, it should be run by a businessman.

So, you know, going forward, you know, I just hope whoever gets elected has the ability to run a business. You know what I mean? No, Jason, I absolutely, I, you have spoken the truth here, my friend.

I couldn't agree with you more. That's absolutely true. Absolutely true. So listen, we don't have a whole lot more time, but I wanted to give you some time to talk about what's going on there with New Fed mortgage and what kind of programs you're offering.

Yeah, that's a great segue. Yeah, and I appreciate the time you've given me. So, two things that I wanna talk about. So, New Fed, any W, F is in Frank, ED. New Fed Mortgage, it's a company based out of Danvers, Massachusetts.

It's a great company. I could tell you one of the beautiful things about the company, and if I could use one word to describe them, it's stability. And in talking about the company, they have a four digit NMLS number, and it begins with a one.

And the NMLS number is nationwide mortgage licensing system number. I might have slaughtered that, but that's what it is. No, I got you. That means they were early to the party. Early to the party. It's 1 -881.

There are some others that are smaller, but if you go online, you'll have a tough time trying to find them. So, they're very stable, meaning they service their own mortgages. They're a Fannie Freddie seller servicer.

They have a considerable amount of money in servicing, and that servicing covers the operational costs for the business. They're fiscally sound. And they have, I want to say, probably anywhere from 50 to 60 loan originators, I may forgive me if I'm wrong on that, maybe slightly more.

But from the ground up, it's a family of loan originators, support, underwriters, management team that are all consumer -centric and like -minded in the fact that they want to help the general public get through this tough time and make originating a loan from A to Z.

be a very smooth process. And most of the folks that are in our company have been in a business for a very, very long time and understand how to treat a client, how to talk to a client and have earned the intuition to understand what questions to ask and, you know, the timing on those questions to get that file through Underwriting, which is really cool.

And that's what it all comes down to, because if I'm looking to buy that house, the biggest obstacle is getting through the mortgage process. I mean, I've been through it a few times myself. And, you know, it's nerve wracking at times.

I mean, it really is. It really is. So the reason I had reached out to you a couple of days ago, I know that you've got a hobby farm of your own. I don't know if your listeners were aware of that. I don't know if you wanted me to air that out there.

No, that's absolutely fine. No, I'm not a we, we have the E -Step form, which we raise black Angus beef on the micro level. Sure. Absolutely. That's not a secret at all. So in doing that, there is a company out in Illinois.

It's called Compere Lending, and it's a C -O -M -P -E -E -R lending. And they allow us to wholesale their products. And to my knowledge, I'm the only company on the East Coast that has access to their program products right now.

And I'm very happy about that until other companies get signed up with them. I'll just give you some of the highlights. They do 15 and 30 year fixed rate financing. Some of the products that they have, they work with single family residences, purchase, refinance, cash out.

And the big part is they'll do 160 plus acres, large acre areas. You can have outbuildings, barns, silos, stables. You can have livestock, cattle, goats, horses, pasture land or tillable acreage, schedule F income and up to three dwellings on the property.

So I'll give you a scenario. Let's say you had a property that's got a 56 acre hobby farm, and then you have a barn for animal shelter with an equine facility with about 10 stalls. and then you have a pasture and tillable acreage.

That's something that we could finance as long as that tillable acreage or maybe some of the animals, like goats or something produced about $500 a year in income, that would be the signifier. So like if you're- And Jason, what people don't know, and I've been through this process, if you go to your average mortgage company, they're gonna send you in another direction because they're not gonna touch that.

They're gonna have no concept of how to- They don't know anything about it, right? And there's a couple of examples of it. There's a property, and I'm not gonna die in the address out, but there's a property down in- Middletown right now that's so functionally obsolescent.

It's off the grid. It's beautiful. It's selling for about a million eight But it's got a beautiful house. It's got a huge equine 10 stall Stable with an arena inside of it and it's got you know some tillable land and then it's got a auto shop in the back of it I ran this through the company and you know, it's perfect.

It's a million eight. I can finance the whole thing in one loan Now we can't do the whole million eight There's got to be an offset of what you have to bring in so we'll be willing to go to 80% on that You have to bring 20% of your own funds, but we can use in that case some of the money From some of the earnings on it to facilitate The payment for for the mortgage, but that that gets tricky, but you just have to call me and I'll work through it I know so Jason I have another example though, too So it just doesn't have to be hobby for him, right?

Let's say you have 20 acres of I'll use the word hobby farm Let's say you have 20 acre hobby farm with acres dedicated to a vineyard, right? And then you have a second guess on one property with the 3 ,000 square foot insulated building Let's say that you don't want to mess with the vineyard, right?

And they don't want you to be the income producing person for the vineyard But if you had someone that wants to run a vineyard on your land, but you just want to live in that beautiful Chateau overlooking the vineyard that would be what I would do You know, so if you look at Chateau Boudet over there over by the behemium now I've brought that property to these people for consideration, but it's too large.

It's 10 million dollars They just don't want to go that high. They'll go they'll go to say 5 million, right? Similarly, if you want to live in that big house and someone wants to manage a vineyard They could potentially do that.

Barnum miniums are now some of the hottest things out there They'll do a shed home a shouse. They call it or a barnum minium steel side at home Living area must be a thousand square feet, but you can't have any livestock in the bottom any some some of the things and they're absolutely beautiful I just built one on my property they're absolutely stunning now I can't do now I have products to do the construction Ralph you know so you know if your listeners want to reach out to me for any type of product whatsoever I'm a mortgage person first I'll figure it out regardless but but at the end with these people here if you have huge acreage and stuff this might be the program the things that we cannot do I can't do a full time farm operation commercial business where you've got a thousand head get their you know next locked in and we'll milk in them and you got you know thousands chickens I can't do that you know that's that's not right now I have nor can I do like a veterinary clinic or anything like that now it Hey listen, I know how that is listen yesterday this tells you like so I'm gonna count by tree But yesterday I had to put my farm hat on because it was vet day on the farm So we're out running the herd through the the head catch You know making sure they're up to date and we do all organic stuff But making sure they're all looked at by the vet and all that sort of thing so I totally get where you're totally cool Right.

I can't do unique downhomes or you know investment properties But we are getting into vacant lands and lots currently right now They don't have it formulated, but they're working on releasing that to me bottom line, you know Just just getting it over to me.

Here are some of the highlights though for the credit I can do a 680 minimum credit score for all borrowers on that as far as debt to income for the listeners debt to income is the amount Of money you have in relation to debt for liabilities in relation to your gross monthly income So they want to see 39 DTI up to 43% So if you if you're on $10 ,000 a month They want to see that your debts no more than 3900 in relation to 10 and you're talking about there the back The back ratio yet not the front and no bankruptcies or foreclosures Within the last four years, which isn't too bad and then now that's now huh?

And then I can do some cash out and stuff for for hobby farms, you know There's some stuff there and then if you know, I may and then here. Yeah, so sorry about that. Yeah Hey, but here's here's some good things about the appraisals and this is good for the listeners if they want to do a hobby farm thing So check this out.

So comparable properties and this this may hit home with you Ralph Comparable properties. I can use comps within a 50 mile radius of the subject property within the last 12 months So that is beyond and that's huge because a lot of times people are looking at these particular financing deals There are no comps clues.

They're just So that's you yep, and that's it. That's it for that one right there, man. I mean, that's a Cool Jason will listen. I'm going to bring this to a close here, but it's been a pleasure having you on this show So I just wanted to leave you a second to let us know how our listeners can get in touch with you.

Yeah, absolutely So my cell phone, it's a three zero two nine eight three six seven three one and then you can find me on Facebook or you can find me on the web at Give me one second. I'm gonna have all this in your guest profile.

Yeah, you'll have it in my guest profile I'll be there. Yeah, I think the best thing would be just to go to my guest profile or just google search Jason JAS I went in my last name is boy. Oh CH N I a K I show up on the internet everywhere Awesome Jason will listen.

It's been great. And I thank Thank you all our listeners for tuning into another episode of the AS Ralph We hope you found today's discussion informative and valuable. I certainly did If you have any questions or topics you'd like to cover in future episodes Please feel free to contact us and remember this episode was brought to you by Saadjo accounting Choose Sajjo Accounting for all of your tax and accounting needs.

You can visit askralf .com to learn more about how Sajjo Accounting will help you achieve your financial goals. Thanks again, Jason. We really enjoyed you being on the program today. Absolutely, man.

Anytime. Take care. Thank you for joining us on the Ask Ralph podcast. With a simple click to subscribe, we'll invite you back to our next episode. Remember, financial issues don't have to be complicated.

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