Tuesday, May 20, 2008

Vitek Customers Borrowing Less On Purpose

The DQ sales data is out for April, as covered in the Sac Bee. Lander covered this yesterday, but this quote from today's article by Michele Dillingham of Vitek Mortgage caught my eye:

"Borrowers are more cautious about what they can afford," said Michele Dillingham, a senior loan consultant at Sacramento-based Vitek Mortgage. "A lot of people are buying at below what they would qualify for. They saw what happened (with foreclosures) and don't want it to happen to them."
Hmmm... Let me get this straight. Borrowers come into Vitek seeking a loan, qualify for more than they're comfortable with, so they borrow less?! This is a company that still offers stated income and interest-only financing by the way.

We have a major psychological shift taking place here, when lenders are offering more debt than customers are willing to take.

6 comments :

Patient Renter said...

Good catch.

I'm still just blown away that stated income, interest only, etc., etc., is still available. When does it end once and for all!?

Deflationary Jane said...

Back when we were looking, we talked with someone at Vitek. We were looking at what we could afford on 1 salary because the waves a layoffs haven't hit yet and they are coming. I've had many a meeting in the last 2 months on how to move people between fund sources so research staff will have jobs for 1 more year. It looks really grim budget-wise come 7/09.

The people who are buying a home to live in are the ones showing common sense. This next wave of speculators are bonkers.

Now I also think there is a info lag of about 3 months that we are seeing. In Jan/Feb, it seemed like anything decent went pending after massive markdowns. Some of them have finally closed while the remaining are still in escrow hell. A few come back onto the MLS.

In the meantime, the inventory in my search criteria keeps going up. It dipped to the mid 50s in Jan/Feb but it's back up to 74 which is higher then it's ever been. Something doesn't add up.

Max said...

It looks really grim budget-wise come 7/09.

My UCD sources are telling me there were a lot of "retirements" announced this week. 2009 might be even tougher. Thankfully, there are a lot of people at retirement age that can afford to leave...

Anonymous said...

I applied for a job at UCD a few months ago, but during the initial screen process a hiring freeze went into place, and the job changed from FT to 1 year contract, and my interest went way down.

Deflationary Jane said...

Max,

June is always a big retirement month. Last year, we lost 3%. It was never announced but that's what it was.

I don't have my HR connection this year so I don't know what the overall numbers look like. I'd also like to know how many are taking the one time cash out vs. the pension. I can say that my dept (one of the largest) is still trying to figure out how they will be paying for research staff.

The feds and the state are jumping up and down trying to get invoices paid before June 30 (sponsored research). The expectation is that after 7/08, research money will be really tight. It used to be that during a downturn, the FT folks went first and the cushion was to find soft money; i.e., research funds to carry employees. This time it looks like the opposite.

I'm also seeing opennings at 85% and 80% time. This was seldom done before because any staff position over 50% still garners a 100% benefits rate. If you were going to pay 100% benefits, you wanted someone 100% to make it the most cost effective.

The short timers are all spending their accrued sick leave like crazy in case they get called to retire early. And yet we still have doctors purchasing crazy things like 1500 for a wall plaque while people like me start work at 6:45 and leave at 7 without overtime pay, just to keep up. Typing this out was my 15 min lunch.

Max said...

The feds and the state are jumping up and down trying to get invoices paid before June 30 (sponsored research). The expectation is that after 7/08, research money will be really tight.

My agency does this dance every year. With the chronic budget lateness and it's accompanying spending freeze, every department front-loads all its spending into May and June. After that, we have to wait until the Ledge gets its act together budget-wise, which means paperwork piles up for a month or so. Then, admin cries and moans while they try and catch up.

(Turnover in our admin group is so high and the managers are so green, the "veteran" staff play little games with each other. They try and time the lateness of the budget, then schedule vacation for right when it gets signed. That way, they avoid the paperwork flood. The managers are too new to catch on. :)

In terms of hiring, we have tons of advertised positions, but all the state exams are frozen so there's no list to pull from.

I actually have an excellent post planned on my agency's very own demographic timebomb. Mish (damn his black heart!) beat me to it somewhat today, but I think my post will complement his very well.