Fourth of July Message From David Marr

This is a guest post written by Clarion Mortgage CEO, David Marr. David is nice enough to allow us to re-print internal emails and commentary that he sends out to Clarion LO’s and Management. Company specific and proprietary information have been removed.

David Marr

Hey everybody,

Well we made it through the first half of the year. That wasn’t so bad, was it? Ha ha. Since I’m in the mode of predictions, I’ll give you my two cents and you can save it and see how I did. Make sure you don’t bet the farm on anything I say.

I strongly believe that the economy is significantly worse than the media is playing up. Commercial real estate is about to hit pretty hard times due to the huge contraction in consumer spending. That means that banks won’t be lending to small businesses any time soon. Inflation isn’t an issue whatsoever since there is wage deflation with the high unemployment, the cuts in salaries in the private sector and government salaries amongst the states about to get cut back. Most of the tarp money went into bank balance sheets thereby going back to the Fed as balances. Again, very little lending. Unemployment will climb past 10% this year. No huge guess there. I think we’ll see 11.5% this year.

So there is a huge contracting in spending coming that will impact retail real estate which will affect banks on that end. Option arms could be an issue, but not so much if rates are down. With this 125 Refi Plus, there’s a real opportunity there as people in that category would want a 30 year fixed over their low option rate. If rates bump up, Option Arms will be a huge problem. Of course Alt A loans hardly have a home which will continue to contract money from the system.

So with no inflation emerging and unemployment being a major 2010 election issue if it’s over 10%, I think rates are too high right now. A major component of the solution is for rates to spur refi’s and purchases. The bond traders could easily get comfortable below 5%. So as I said before, I think rates will range .25% above and below 5%.

AMC’s are on average, the worst thing since communism. Ok, maybe a bit harsh, but I don’t think the HVCC has many fans. I will start an AMC if this moratorium doesn’t look like it’s going to go anywhere. There’s lots of hurdles, but I’ve received about a million complaints so far.

Hey, it’s been a tough road of late, but even still, this is the best country in the world to live. I am blessed in so many ways. I’m just glad to be able to share my life with you wonderful, wonderful LO’s, a fantastic staff, great partners, and a family sent directly from God.

Bless you and your family on this spectacular Fourth of July Holiday. Go Rockies.