Current Market Alert

Did you get the LOUD mobile alert this morning reminding you the state is on lockdown? Sorry, what I meant was Stay at Home. On Monday Denver Mayor announced the City and County of Denver was on Stay at Home status. Essential workforce added Realtors, Marijuana and Alcohol within hours.. Colorado's shortest prohibition... and somewhat of a interesting pairing??? Additional counties followed suit the next day. Then on Wednesday, Governor Polis changed directions and put the whole state in a Stay at Home position. Is he wrong? I don't think so. But State trumps County.. there's no play on words there... seriously. Right now, financial services are essential.. notaries, banks, lenders. But not Realtors... at least not yet.

Here are three options you can choose from RIGHT NOW to increase your liquidity, and your cash on hand using your home.
Do a cash-out refinance. Yes, a cash-out refinance might have a higher interest rate; but when used as a financial strategy, that does not matter. What if you could pay off all other debts and/or add cash to your savings account right now. Equity in your home is illiquid, locked up and not serving you. If we could instead convert equity to cash to pay off debts, we could save hundreds, if not thousands, of dollars a month. If rates continue to be low, and I feel strongly they will, we can then do a refinance in six months to lower your payment and secure your financial future.
Get a HELOC. A HELOC is a Home Equity Line Of Credit. This is a second loan that sits on top of your current first mortgage. It is typically a variable interest rate and acts like a line of credit you can draw from. You can get a HELOC on a primary home, second home or investment. There are several second lenders who are no longer originating. Don't worry! There are others who are, and I have the list. Feel free to reach out, I can provide the best referral options.
Request a Mortgage Forbearance. This needs to be requested through your Servicer.. the company you write your checks to each month. Forbearance allows you, the borrower, to apply for a pause in mortgage payments without the risk of negative credit reporting and foreclosure proceedings. The length of time available will be determined by the duration of this crisis.

How do you maintain business as usual as much as possible is the question I am asking myself every day. We all can agree.. the last seven days were surreal. The next 7, 14, 21 will be as well. Making sure I have the most up to date information during this time has become even more important, and how I am staying grounded. Last night a member of the Federal Reserve Board, stated that the biggest lesson learned from 2008 was that the Federal Reserve did not act fast enough. We have seen them in action already. They threw everything they had at the problem last weekend dropping the Fed rate to zero and adding another $700B in purchases after committing to $1.5T the week before.
This morning they announced they are going limitless. YEP .. you heard that right. Spending as much as it takes to keep businesses and governments afloat through purchasing treasuries, mortgage-backed securities, commercial securities (ie. multifamily), corporate bonds, and muni bonds. Let's deal with inflation later... game on!

This week has been turbulent at best! During these times, we have to maintain perspective, staying positive! The S&P lost 12 percent on Monday but rebounded Tuesday, up 6 percent. Today futures were down more than 5 percent when they were halted. One word - turbulent. Also, you might just want to stop looking at your stock account,. just sayin'.
​Interest rates have not dropped significantly with the drop of the Fed Rate. I discussed this at length on Sunday and nothing has changed yet except for small movements. Let's look at the bigger picture, the Director of the Cleveland Clinic was quoted as saying he expects this to turn in May. The GDP for 1st Quarter is expected to land at a net zero. 2nd Quarter will be negative given business closures and lack of consumer spending. However, 3rd Quarter is expected to be up 3 percent; 4th Quarter up 4 percent. Think about that for a moment. This is not a long standing economic shift but one that is expected to strike hot and fast.

Yesterday we talked about the Federal Reserve and why they did what they did. They held an emergency meeting only 48 hours before their scheduled meeting. That set the futures market into a panic yesterday, halting futures trading. Again this morning the Dow was down 1800 points before they stopped trading again.
Rates Monday opened up slightly better than Friday by approximately .25 percent. But this is a long game, not an overnight drop.
After recording the video yesterday, a friend told me that Las Vegas closed at 6 pm last night for 14 days. Denver just announced that starting on Tuesday, all restaurants will be closed to dine-in options through May 11th Manufacturing came out Monday morning down 21 percent and this is only the beginning. These are changing times, but we will recover like we do everything else. We have to maintain our calm knowing it is the housing market that will pull us through this.

The Federal Reserve just had an emergency meeting and made three big moves that will affect our markets.
1. They dropped the Fed Rate to 0 percent after dropping the rate by .5 percent last week.
2. They are purchasing an additional $500 Billion in treasury bills and $200 Billion in mortgage-backed securities after opening up $1.5 Trillion to purchase treasury bills just last week.
3. They removed the 10 percent reserve requirement on banks set in 2008 after the recession.