🌞 Stir Crazy – March 18 2020



Happy Wednesday. Everyone has a friend who heard something about something. There are a lot of rumors floating around, let’s bring you the facts.

The Pope’s Message. Italy’s death toll jumped above 2,500. Pope Francis sent a message this morning to try and make the most of this crisis by re-discovering the joy of family. I like that message. I’d also add that now is the time to start that project you’ve been putting off. And yes, enjoy your family. But I can only do so many dance parties with my three year-old before I need a glass of wine.

Housing. This is a newsletter for real estate investors but we’d be remiss if we didn’t address the larger market conditions. So until this coronavirus crisis subsides we’ll be casting a wider news net.

In Today’s Newsletter:

  • Americans might get paid
  • Europe closes borders
  • Taxes get delayed


Program Rate Change APR Change
30 year 4.29% 0.25% 4.41% 0.22%
15 year 3.70% 0.07% 3.94% 0.12%

The U.S. Election

credit: bloomberg

Vice President Joe Biden came up big with decisive victories in Florida, Illinois, and Arizona on Tuesday effectively put closing the door for Bernie Sanders.

The former vice president won all three states by wide enough margins that he now has more than half of the almost 2,000 he needs to secure the nomination. Just pause for a minute and remember February, when his campaign seemed on the brink of collapse. A lot can happen in a month.

Biden has received positive reviews for his sure-footed response to the COVID-19 pandemic. That’s in contrast to President Trump, who struggled in the early days with his crisis response, even fielding criticism from fellow republicans and conservative commentators.

In the early days of the campaign, Democratic voters wanted a rebel, an anti-establishment voice. Now Biden’s campaign believes that’s changed with voters looking for steady leadership and experience during a crisis.

The former vice president has other advantages as well. He is better positioned to snap up the white, middle-income men in the industrial Midwest who four years ago voted for Trump over Hillary Clinton, even if they were Democrats. They’ve shown up big for Biden in the primaries.

Message of Unity

Biden delivered televised remarks from his house in Delaware rather than give a victory speech in a crowded hotel ballroom. He called the pandemic, “a national emergency akin to a war.” But he also called for unity from Sanders supporters. All but asking them to join him in his quest for the White House.

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Taxman Gets Delayed

credit: getty images

The April 15 deadline for tax payments has been extended for 90 days. Don’t get too excited though. You still have to file your taxes. You don’t have to make any payments owed until 90 days later.

This, of course, is a response to the economic fallout from the coronavirus pandemic. It allows individuals to defer up to $1 million and corporations up to $10 million in liabilities without penalty or interest. This is a loan of sorts for businesses that will suffer from the world that stopped in place.

Treasury Secretary Steven Mnuchin estimates that this could free up $300 billion of liquidity in the economy. The administration is also considering a delay of the estimated quarterly tax payments, typically due on April 15 as well.

Stimulate My Wallet

credit: giphy

The US government is frantically trying to figure out how to pay all Americans stimulus money of between $1,000 to $2,000 in the next two weeks due to the economic fallout from the coronavirus. The Trump administration has asked Congress to approve this effort, a marked shift from the administration’s previous attitude of it’s-not-that-bad.

How this works is unclear, but those of us who are old enough to remember the Bush stimulus checks remember the delight of getting checks in the mail. But this isn’t for fun economic stimulus. This is because many of us will not be able to earn income with a global shutdown, and the government wants us to be still able to pay rent and buy groceries.

The Trump administration is also asking the military to build pop-up MASH-like hospitals and imploring people to stay home as much as possible. There is still no federal directive on what “stay home” means.

Congress is currently voting on measures to ensure paid sick leave, emergency food, and free testing. Senate Leader Mitch McConnell promises that they will not adjourn until all of these measures are finalized.

It is impossible to say if this will be enough. The world is changing too quickly to predict anything, but with tax payments extended and stimulus money coming, we are about to see how resourceful we all can be.

Refinance Bait and Switch


credit: giphy

Do you know how we all got excited about those super low mortgage rates? Well, it turns out, they are not that exciting because most homeowners are not able to lock them into their loans.

Homeowners have found that when they go to apply for refinances, they are being quoted higher rates than those 0–1% numbers we all got worked up over. It seems lenders are not able to offer these bargain prices because they have too many applications to process, and the secondary market that buys securities on mortgages is frozen with not enough liquidity.

You see, your mortgage is not just secured by the bank that gives it to you. There is a market behind it that buys and sells the debts, and if that market is frozen, that effects lenders.

Also, the banks are too overwhelmed. You can apply for a refinance, but even if you go forward with it, you are still weeks away from locking in a rate. You’ll have to produce a boatload of documents along with a home inspection. And what if that business shuts down for the foreseeable future? There is no guarantee of a new loan or a low rate in a world where there is no guarantee of anything.

Still, it can’t hurt to try, and a lot of people are. According to the Mortgage Bankers Association, refinance applications are up 479.2% from this same time last year.

News By The Numbers

1 year. That’s the length of Tom Brady’s new contract with the Tampa Bay Buccaneers. The six-time Super Bowl champ shocked the sports world yesterday by announcing his departure from the New Englad Patroits after 20 years.

911. People in California are inundating 911 operators by complaining that their neighbors are coughing.

20%. That’s the percentage of unmeployment America could hit if the government doesn’t step in. The warning came from Treasury Secretary Steven Mnuchin to fellow republicans yesterday. President Trump is calling for a $1 Trillion stimulus package to make sure that doesn’t happen.

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