Subject:                          Your May, 2010 Originator's Network News

 

Amy K. Slotnick, CMPS                                                                

amy@amyslotnick.com

www.amyslotnick.com 

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See Amy Slotnick's article on Strategic Partnerships!

ONN

from David Robinson

The Originator's  Network News

May, 2010  

Vol. 2, Issue 5

 

The sales and marketing newsletter published for loan originators, mortgage brokers, loan officers, mortgage planners, their teams and everyone else involved in providing residential loans to worthy customers.

Inside This Issue

*Short-sale Guidelines,              by Linda Davidson

*Building Your Referral Business, by Kerry Johnson, Ph.D.

*Marketing Successes

*Bridal Marketing, by Larry Montani 

*The Economic Crystal Ball 

*More

 

 

 

 

 

 

 

 

 

 

 

 

 

The Monthly List:  

 

  10 “Different” Places   

        to Advertise

1.       Church bulletin

2.       Restaurant menu

3.       High school athletic program

4.       Stadium scoreboard

5.       Attorney association newsletter

6.       Grocery cart

7.       Movie (screen) theater

8.       Bus bench

9.       Pizza box coupon

10.  Bus/trolley car

  

 

 

 

 

 

 

 

 

 

 

    

 

Another Fine Tip

   A veteran originator added to her already distinctive image by offering to assist customers with their special home-related needs. For example, she encourages them to call her should they need suggestions for local businesses for remodeling, flowers, catering, housekeeping or other services. She maintains a “best of the best” list so she can quickly make references. She noted that this is another way to be a presence in customers’ lives, beyond her mortgage services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Care:

Special Mailers &Events

 

    Looking for special snail/e-mail ideas or occasions to promote in June? Of course, Flag Day (6/14) and Father's Day (6/20) are obvious choices, but if you are searching for a few options to send greetings or otherwise recognize customers or prospects, consider these dates:

 *6/8-Best Friends Day

 *6/18-Go Fishing Day 

 *6/21-Finally Summer Day   

 *6/26-Forgiveness Day 

 Send a card or e-mail to past customers, Realtors, builders and others.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

 

 

 

 

 

   

Critical Calendar

June 30, 2010—Deadline for all first-time buyer and repeat loans to close, in order to receive tax credit.

July 1, 2010—Deadline for loan originators to be licensed.

 

 

 

  

 

 

 

 

 

 

 

 

GSE News

FNMA Has New Standards—Fannie Mae announced new standards for the purchase and securitization of adjustable-rate mortgage (ARM) products. For ARMs with initial periods of five years or less, Fannie will require that borrowers be qualified at the greater of the note rate plus two percent or the fully indexed rate (index plus margin). It is changing eligibility criteria to “protect consumers from potentially dramatic payment increases and to help ensure that borrowers who hold these types of mortgages can sustain them beyond the initial interest rate period.”  Fannie Mae will also continue making available an interest-only product, but will modify the qualification criteria.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

Info Source

  HUD offers its updated Settlement Cost Booklet that you can provide to customers and prospects. The 49-page booklet covers the various parts of the new GFE and reviews fee provisions. You can print the booklet from the RESPA page at HUD’s Website (www.hud.gov).

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 Timely Quote

   "Home prices and sales are beginning to recover, inventories are down, private capital is beginning to re-emerge, investor confidence is coming back and the job market is showing signs of improvement. These all show renewed confidence in the housing market. We need to finish the job now and make the housing recovery sustainable and keep the economy on the right track.”

David Stevens

FHA Commissioner

 

   

      

 

 

 

 

  

 

  

 

 

 

 

 

 

 

 Thanks, Sponsors

  We appreciate this month's ONN sponsors:

 

*The Turning Point

 

*Doug Smith & Associates

 

*Upfront Mortgage Brokers Association

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Letters & Suggestions

 

 

  We would like to hear from you. ONN welcomes letters and e-mails regarding an article idea or industry hot topic.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Sites to Behold

  These Websites are suggested by loan originators who have found them to be informative and helpful for ongoing business/planning activities.

  +National Assn. of Realtors www.realtor.org

  +Real Estate Services  Providers Council (RESPRO) www.respro.org

  +Mortgage Bankers Assn.

www.mbaa.org

+Mortgage Market Guide www.mortgagemarketguide.com

  +National Assn. of Mortgage Brokers www.namb.org

 

 

 

 

 

 

 

 

          

  

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

   

 

 

    

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Coming Attractions

  Future issues of The  Originator's Network News will feature:

+Marketing Strategies

+Insider Q&A

+It's Your Theme

+Strategic Partnerships

+One Question

+Borrower Perspective 

+Much More

 

 

 

 

 

 

  

 

 

 

 

 

 

 

  

 

  

   UNSUBSCRIBE??-- We believe this e-letter--designed to inform LOs/others and help increase their production--will be of interest. You may be receiving it after someone in your office shared your e-mail address.    However, if you would prefer not to see it again (and risk not hearing about next year's Top Producer ranking and a variety of other "hot" topics), please e-mail daviddrleon@aol.com and we will delete you from the mailing list.

 

  

 

 

 

 

 

 

   

 

 

 

 

 

 

 

  

 

 

Give ONN

 

   Yes, this is a free e-newsletter; however

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it to a colleague or other mortgage pro. Just send their name and e-mail addresses and we'll

make sure they are on

this year's gift list.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertise in ONN

 

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The Originator's

  Network News

is published monthly

by David L. Robinson

daviddrleon@aol.com

          blog: rwaywords.wordpress.com 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Originator Network News

Copyright 2010

Reprinting contents

not allowed without

permission of ONN.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Looking Forward

   A successful originator recently commented that about 20 percent of the current loan originators might leave the industry when the LO licensing requirement is enforced later this year. That seems high, but the national licensing reg will certainly have an impact. Some won't want to bother with the testing-application (or renewal) process, perhaps because they lack the sufficient knowledge and experience to be a professional loan originator/mortgage planner. A few may have something to hide. But the majority of originators consider it one more challenge to master in order to continue providing quality service to deserving borrowers. Your commitment is impressive.

   This issue of ONN covers a variety of topics, from short-sales to referral techniques. As always, we’re interested in addressing other areas of interest to you and your teams. Please share your comments and suggestions. We look forward to hearing from you.

Meanwhile, read on…

David Robinson, ONN Publisher

 

News…Briefly

   Top Ranked Metro Areas—Kansas City, Mo. and Houston are the two best places for borrowers, according to a recent Forbes.com survey. The survey rated areas based on their interest rates and the percentage of people with delinquent loans or foreclosed homes. Other Top 10 metro areas for homebuyers were Dallas; Virginia Beach, Va.; San Antonio, Texas; Boston; Pittsburgh, Pa.; Denver; Seattle; and Portland, Ore.

   Home Prices Stabilizing—Stabilizing home prices are encouraging, according to Lawrence Yun, chief economist with the National Association of Realtors. “This flattening in home prices is something we’ve been seeing in all of the home price measures lately and quite clearly in this metro area price report,” he said. “The tax credit has been very effective in drawing down excess inventory, with about one million additional sales resulting directly from the stimulus.”

   Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 5.14 million in the first quarter, down 14.0 percent from a surge of 5.97 million in the fourth quarter, which was driven by the initial tax credit. However, first quarter sales remain 11.4 percent above the 4.61 million-unit level in the first quarter of 2009. “Year-ago comparisons are more meaningful in this report due to sales swings from the tax credit,” Yun said.

   Sales increased from a year ago in 44 states and the District of Columbia; 31 states and D.C. saw double-digit gains while two were unchanged and four were down.

 

   Builders Are Confident—Builder confidence in the market for newly built, single-family homes increased for a second consecutive month in May, to its highest level in more than two years, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI gained three points to 22 in May, its highest point since August of 2007. “Builders surveyed for the HMI at the beginning of May were undoubtedly reacting to the heightened consumer interest they had just witnessed as the deadline for home buyer tax credits arrived at the end of April,” said Bob Jones, chairman of the National Association of Home Builders (NAHB). “Builders are also hopeful that the solid momentum that the tax credits initiated will continue even now that those incentives are gone.”

 

Trends Watch

   Reverse Mortgage Warning—If  you include reverse mortgages in your service menu, be sure to pay attention to a warning from the Financial Crimes Enforcement Network (FinCEN). According to a recent report, there has been an increase in fraudulent activity with the FHA’s Home Equity Conversion Mortgage (HECM). The FinCEN advisory stated that reports of financial crimes against seniors involving the FHA reverse program have become more prevalent. The schemes include: cross selling, the theft of a senior’s HECM loan proceeds through cross selling of financial products in violation of HUD rules; property flipping, a straw buyer transferring ownership of a low-value or problem property to an unsuspecting senior without going through a mortgage sale; and  power of attorney, involving a perpetrator who may use a power of attorney for the senior to apply for and close HECM loans without the complete knowledge or participation of the victim.    

 

Becoming a Short-Sales Expert

  The short-sale market continues to expand and it’s essential that originators and their teams are up to speed.  Linda Davidson, senior loan officer with The Davidson Group at Service First Mortgage, Garland, Texas, is well versed in short-sale transactions and emphasizes the importance of educating borrowers and others on the key factors involved. They have created a “Top 10 Points to Know When Purchasing a Short-Sale” list that is helpful for LOs, borrowers, Realtors and others. Following are a few critical areas:

  Be Realistic About Timing—Discuss the time frames with your buyers and Realtors so that they know when the lender is going to order the appraisal, survey and other documentation. “The lender doesn’t want to order these items (and start spending the buyer’s money) until the short sale is approved,” Davidson noted.

  Have Realistic Expectations Regarding Cost Negotiations—“Loan officers need to understand what the short sales lender will and won’t allow the seller to pay,” she stressed. “A buyer with limited cash doesn’t want to put a contract on a property that is a short sale unless they know up front what the short sale lender will allow to pay in closing costs/prepaids.” 

  Know Repair Rules—“Originators need to discuss the property condition with Realtor up front,” Davidson explained.  (In most cases, banks holding foreclosed properties won’t do any repairs, regardless of what is requested. The buyer will be asked to purchase the property “as is.”)

   Understand Lender Appraisal/Inspection Requirements— “You need to discuss this with the buyer and Realtor up front. For example, it’s important to be certain utilities are on for the appraiser when he goes to the property (otherwise additional costs could be incurred).”

  Clarify Closing/Funding Time Frames--In most cases, it takes a minimum of three-four weeks to close on a short sale once a contract has been accepted. Closing papers typically must be sent by the lender to the title company a minimum of 72 hours in advance. In addition, there are 10+ companies/positions that are involved in the transaction. It is important to understand that it takes time to purchase a short sale property and it is a team effort to make certain that a smooth and easy closing happens. “It’s critical that originators don’t over-commit in suggesting time frames,” added Davidson. “Early on, you need to be very clear what your customer should expect.” 

 

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Building Your Business with Referrals

By Kerry L. Johnson, Ph.D.


   If you're still making cold calls to get business, you undoubtedly don't enjoy it. There is a better way. Learn how to use referrals. You've probably heard these often-used excuses for not getting referrals: "If my client really wanted to give me a referral, he would have offered it," or "If my work was really outstanding, I would be inundated with referrals."  The truth is that your clients think you are already extremely successful. You project this image as you sell yourself. As a client once said, "I was shocked when my mortgage broker asked me for a referral. I never before realized he wanted or needed them." Many salespeople use effective referral-generating techniques.

Referral Tips

   One successful originator’s technique focuses on asking for referrals during the closing process. At the point Ron closes the prospect, he takes an application from his briefcase and explains that he needs some information. He admitted to me that he usually has enough details already to fill out the app, but the request sets the stage for gaining referrals. When he's working with a married couple, he usually asks the husband to answer selective details, and then gives the wife a piece of paper and a pen. He asks, "Would you please fill this out listing four or five people you know who might be thinking about moving in the near future, would like to save some money on their next mortgage, and might benefit from my help." Ron then turns back to the husband and completes the details.

   Ron has often been interrupted by the spouse asking, "Exactly who do I put down?" He replies, "Just four or five people you know socially or professionally with good common sense, are thinking about moving in the near future, would like to save some money on their next mortgage, and might benefit from my help." Ron usually receives three or four names. His closing average of 85 percent on referrals is probably due to prompting even the most reluctant clients for referrals. He softens his close by explaining how he will deal with the names. For instance, Ron may state, "I want to meet with people like yourselves so that I can share some ideas on how to save money on their next mortgage. I will respect the fact that you are friends and there won't be any high pressure. I will strive to help them in much the same way as I have helped you."

Some general rules in asking for referrals are:

1) Tell your clients why you want them.

2) Mention that you will respect their relationship with the referral, as well as the referring client's financial privacy.

3) Be specific. Instead of requesting "a few names," ask for five referrals. You are much more likely to get what you ask for when you give an exact number.

4) Learn something about each referral's personal life. Does she play tennis? Is his hobby interior design? You will be able to develop a high level of trust and rapport by initially saying, "Jan tells me you're quite a tennis player." Using personal knowledge like this will also position you as a friend of a friend. It will make it very difficult for a prospect to say no to an appointment request.

5) Ask for the referral before the closing paperwork is done. Have you noticed how quickly busy customers want to get back to their office or home after business has been completed? If they sense that giving you referrals is part of the sales process, they'll give you more qualified names.

High Visibility

   Ron uses another effective device for gathering referrals. He asks his clients to hand him their personal telephone book. Ron then turns the book to "H" and writes in "Ron Howard" and his telephone number. He also turns to "F" for Financial services and writes in the name of his company, Investors Financial services, with his name and phone number. Ron reports the average client will refer another 20 to 30 of his friends and acquaintances using this method. He has even been called from cocktail parties by clients who want him to schedule an appointment with their "good buddy" (they just met).

 

Call Quickly

   Referrals are not like old wine and aged cheese. They do not improve with time. Call referrals within 48 hours. The first person to ask about your referral progress will be your referring client. If he knows you pursued his lead, you are likely to get other names. If he thinks otherwise, gaining more referrals from him will be tougher than arm-wrestling a grizzly. Also, remember to copy your first letter of correspondence to the client who gave you the referral. He might help sell you with a telephone call. It is very important to get your client involved in prospecting. You might, in fact, gain five percent more business just by virtue of letting your client know that you've actually contacted the leads he gave you.

 

   Your clients will be your best source of business. All you need to do is ask them to refer you. But more importantly, let them know that you didn't just take the leads and throw them in your briefcase. Your clients want to see you become successful. They want to see you become wealthy. Let them know that you are appreciative and that you have followed up on the leads they gave you. They will give you many more in the months and years to come.

 

(Kerry Johnson, MBA, Ph.D. is a best selling author and frequent speaker at mortgage conferences around the world. Peak Performance Coaching (his one-on-one coaching program) promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, click on www.KerryJohnson.com/coaching and take a free evaluation test. Or call 800-883-8787 for more information.)

 

 

  Marketing Successes

  Family Photo Day—Jeff Lake wanted to do something special for his past customers and felt they couldn’t resist a family photo day. He was right. Lake and team (Guaranteed Rate) sent regular/e-mail invites to his database, asking them to join him at a scenic Chicago botanical garden on a Saturday afternoon. Forty families came to have their portraits taken and later received a free 5 x 7 print. They could also purchase a photo package after the event. The kids received balloons and the parents got discount coupons for $300 off their closing costs.  Lake noted that everyone enjoyed the day and his total investment of $750 (photographer and photos, park rent) was definitely worthwhile. “It was a soft sell,” he said. “However, we got four loans immediately from those attending—netting our team $6,000—and a lot of leads for future loans.” Lake added that they’re already planning a similar photo day in October at a pumpkin farm.

   Advanced Basics—Many originators emphasize marketing to customers, Realtors, builders and a few other key groups. Jack Lieberman, USA Mortgage, Austin, Texas, has  developed a simple, effective approach involving a select network that includes five Realtors, two moving companies , two insurance agents, three CPAs, five attorneys, three financial planners and two tax preparers. “We’ll call these ‘partners’ and offer to contact their clients to provide a review of their mortgage and when we do so, remind these customers that they’re working with a highly professional advisor (CPA, attorney, etc.),” noted Lieberman. “The insurance agent, CPA and others understand the power of leverage. The benefit to the advisors is the increased business they receive because of our interaction with their clients.  Not only do we ‘rave” about the advisor, we plant seeds of further services or products that they might need.  Such as, if they have homeowners insurance with the agent, we find that they may be missing Umbrella, Life and Jewelry riders; then we refer back to the agent for additional sales.  Our main objective is to provide greater value to the clients besides what the advisor sells.  This has been very successful.  Remember, referrals received from key advisors are golden.  It’s always easier for someone else to promote our expertise then bragging about ourselves.”   Lieberman stressed the value of this ongoing contact campaign. “Statistics have never changed,” he said. “Eleven percent of the people you call need to do some business in the next 90 days, 14 percent of the people know someone who needs to do business in the next 90 days and so on. Every four people you talk to turns into a deal.”

 

A Few More Top Producer Strategies

   Superstar originators (who close major volume) aren’t necessarily any smarter than the rest of us, but they frequently develop some distinctive marketing approaches.  Here are a few of their proven strategies (more next month):

  *When he does a loan that involves a CPA, divorce attorney, home improvement contractor, or Realtor, this LO sends them a brief thank-you letter and a box of chocolates. He also asks that they send information about themselves. This encourages both parties to share referrals.

  *Places banner ads on Realtor Websites.

 *Sends customers an annual "life letter" that focuses on personal development, such as having a positive focus.

 *E-mails Realtors bi-weekly loan question/scenario and solution. The notices help establish a stronger brand image.

  *Sends information form to past clients (requesting updated contact details) and asks for their preferred form of communication (letter, e-mail, call etc.).

  ___________________________________________________________________

   Give Your Team The Skills They Need

                          to Survive....and Succeed!

                         Douglas Smith & Associates     

   Nationally acclaimed mortgage industry speaker, author and sales trainer Doug Smith is helping companies find customers and make money in these challenging times. Invite Doug into your organization to build the skills, talents and confidence of your loan originators.

   Visit www.DougSmithOnline.com or call Douglas Smith & Associates at 877/430-2329 to find how he can help you.

__________________________________________________________

 

Bridal Marketing Creates Awareness, Leads

By Larry Montani

 

   Next month begins the bridal season, and originators looking for another effective niche should consider reaching out to brides, grooms and their parents. Every year, I participate in approximately 15 bridal shows. I distribute fliers, hand out cards and discuss financing options, all with the same goal of developing a new group of enthusiastic first-time buyers. It gives me an opportunity to meet with some prospects who are interested in buying a condo or first-time property now and others who will be ready to purchase in another year or two.  Here are a few tips:

 

  *Talk to Chamber of Commerce, other organizations to learn of upcoming bridal shows in your area.

   *Prepare a special flier that emphasizes the benefits of homeownership.

   *During the show, discuss first-time buyer options with the future bride and groom and their parents. 

  *Have everyone who stops by your booth sign a registration list so you can follow up.

  *Immediately after the show, send a letter or card and continue sending updates for the next year.

  This can be a very profitable niche. I average three “hot” leads per show and close a reasonable number of refis (couple already own their home) and purchase transactions each year. I also use the prospect list in another way—inviting them to our regular homebuyer seminars.

 You can’t expect instant results from this marketing; you’ve got to be willing to maintain contact for at least a year. However, during and after the shows, you’re also building brand awareness—a new group of prospects will get to know you.

(Larry Montani is a mortgage consultant with GMH Mortgage Services, Shrewsbury, N.J.)

 

The E-mail Marketing Advantage

By Mike Baker

   We must find a way to get in front of (and educate) our clients and referral sources. The goal is to have them see us as an expert and “go to” professional. As such, e-mail marketing is one of best the ways to expand our online business network. It is one of the fastest and most personal ways to leverage client connections. Customize it with their name, first, last, or both, and you have a captive audience.

   There are three reasons to market this way. First, personal e-mails work well as pre-sellers. Auto-responders are wonderful in that you can load up your messages and set them to go out at certain intervals. You do this once, and they continue to go out for each new potential customer that signs up, without you lifting another finger. Basically, it will be warming up your potential clients while you are free to do other tasks. Second, done correctly, e-mail marketing can have a much higher close rate than other marketing. Your potential client is hit with a sort of “in your face” strategy, whereby you are talking directly to them. Unlike an ad in the paper or a commercial on TV that is generic, e-mail is personal. Get their attention by including their name. Write as though you are addressing their particular problem, and you have the battle half won. Finally, you can reach ten or 10,000 people at the touch of a button, and will have no more time invested to reach them all, no matter how big your list grows. Simply type your message, load it into your formatter or broadcast service, hit send, and every one of your clients or potential clients are notified of your message. And the best part is it costs nothing more than your subscription.

   You’re probably already using e-mails to update and educate your customers/Realtors with follow-ups and related notices. Here are a few other options:

   *E-newsletter--with either a single or multiple page format.

   *Product of the month bulletin--showing the popular loan programs or services that you provide.

   *Greeting cards--Rather than send via snail mail, you can use www.AmericanGreetingCards.com  to send regular birthday and holiday cards.

   *E-invites--Encouraging Realtors/others to attend monthly luncheons, seminars, other events.

   There are many available services. VerticleResponse and Constant Contact are two that I have used with great success. They are marketing companies providing self-service e-mail marketing, online surveys and direct mail for small businesses to create, manage and analyze their own direct marketing campaigns. These services enable you to get your business e-mail marketing campaigns up and running within minutes, regardless of technical expertise. It’s best to make a list of the features you want and see which providers offer them in your price range. They start at $19 a month, so this should be affordable (even in this market).

 

(Mike Baker is sales manager at Resource Lenders, Fresno, Calif.) 

 ________________________________________________________________        

           Where Borrowers Find Brokers.

                            

                       www.upfrontmortgagebrokers.org  

___________________________________________________________________________

 

Strategic Partnerships

 

Realtor Rapport

By Amy Slotnick

   Realtors are an important strategic partner; I continually seek different ways to enhance this important relationship. For example, I have recently been holding “Lunch and Learn” sessions with my Realtors.  Once a month I have been reserving a table for eight at a local restaurant. I e-mail a brief invitation to all of my Realtors that reads: “I have reserved a table for 8 at (name/location of restaurant) for Monday (date) at noon. Please join me for excellent food, networking and insightful conversation about the industry and mortgage-related topics. I hope to see at least seven of you there!” Each time I have sent this, I have had more requests to join me than I could accommodate.  It has been an opportunity for agents to network with one another as well as get more insights into the mortgage industry.  The Realtors seem to not only appreciate hearing the current information about mortgage guidelines and issues, but also the chance to network with one another. At the most recent lunch, there was a group of agents from different offices and from different towns and they started networking over how they were blogging. That was interesting. The luncheons have resulted in referrals and also strengthened our relationships.

Other Realtor marketing strategies include:

*Using e-mail to keep Realtors up-to-date on the flow of loan transactions in which they’re involved.  I have had the opportunity to meet a lot of listing agents because they have been impressed with my auto-updates throughout the process.

*I use a weekly auto e-mail campaign on Friday afternoon to advise Realtors of the rates for four or five programs.  I choose Friday for the obvious reason--being right before the weekend.

*When I close a loan, I send a thank you note to the referring Realtor.

*I continue to establish myself as the go-to person for information about changes in the mortgage industry.  When there is a guideline change I do an e-mail blast that briefly highlights the change and tells them how it impacts their business.  I have received several invitations to speak at Realtor offices as a result of doing this.

   Realtors have always been and will continue to be integral to our business. Developing and maintaining these relationships by providing quality service as well as current information about our industry is critical to the success of these partnerships.

(Amy K. Slotnick, CMPS is vice president/originator at Fairway Independent Mortgage, Needham, Mass.)

 

 

Market Tech

There will be an App for That

By James Hennessy

   Don’t doubt it: one of these days you’ll be taking loan apps on an iPhone app.   Or on an iPad or an Android phone, but it’s an innovation that is coming soon to a handheld device near you.  Sophisticated handheld devices are here, and as their installed base grows, so will the apps available. 

   Will it improve your life and help you do more deals?  It could.  It will certainly allow lenders to bring more uniformity to the borrower experience by standardizing what happens in the field.  For example, borrowers can watch streaming video on disclosures, APR and other matters on the device while you are there.  Payment calculators and loan program scenarios can be delivered instantly, with disclosures prepared on demand and sent via secure link to the loan interview.  Much of this can be done now on laptops in the field, but the iPad-type device will make for a slicker presentation.

   There are already some apps available, such as a real estate calculator from Skynetric that will give you good estimates on mortgage payments, income needed to qualify (with front and back end ratio capabilities) and other features.  First American has recently launched an app called AgentFirst, which gives you complete property characteristics, sales history, tax information and other useful items.   At least one loan doc provider has an app for e-signing via mobile device.  It’s just the beginning.

   If you’re not using a smartphone or other mobile device, consider obtaining one.  Put in your action plan to investigate the apps that are being developed and see how they can help you gain a competitive advantage in the eyes of Realtors, borrowers and referral sources.  According to the N.A.R., 85 percent of real estate agents are already using smartphone apps in their business.  You’ll want to keep up.

(James Hennessy is managing director for Strategic Vantage Marketing and Public Relations.  He has more than 30 years of experience in the mortgage business as a lending executive, a technology consultant and a writer for most of the industry’s publications.  JimHennessy@StrategicVantage.com.)

 

 The Economic Crystal Ball

   Conclusions/observations about the economy that might impact you and your customers on a short- and long-term basis.

    

Some Economists Encouraged

   If you’re looking for another reason to be positive about the economic picture, consider the latest report from the National Association for Business Economists. Seventy percent of the economists surveyed by the NABE believe real GDP will grow by more than two percent in 2010, up from 61 percent who said the same in January. In addition, 24 percent are forecasting that real GDP will grow by more than three percent this year, up from 14 percent earlier.

MBA Economists—May Report

  “The performance of the U.S. economy since the middle of last year has exceeded most forecasters’ expectations. Led by sharply rising inventory investment, the economy has rebounded from the deepest recession of the postwar period to record an average annualized growth rate of 3.7% during the past three quarters. The resurgence of the manufacturing sector has been particularly notable; since the trough in June of last year, manufacturing output has risen at an annual rate of 9%. While weak employment growth and moderating wage rates have depressed aggregate real wage income, consumer spending adjusted for inflation has nonetheless strengthened, rising in the first quarter at an annual rate of 3.6%, although much of that increase was due to a jump in spending on durable goods. Business investment in equipment and software has also contributed importantly to growth, and orders for non defense capital goods point to continuing gains in the months immediately ahead.

   “These developments suggest that the recovery is likely developing a self-sustaining momentum, and if this were an ordinary business cycle expansion, one might conclude that the pace of economic expansion could accelerate considerably—particularly with interest rates at abnormally low levels and a huge budget deficit adding additional stimulus to the economy. But these are no ordinary times. Despite inventory investment rising to one-quarter of one percent of GDP, not far below the long-run average of 0.4%, it still cannot be counted on as a major source of stimulus to aggregate demand going forward. The housing industry faces multiple obstacles to recovery—tight underwriting standards that limit access to credit, an already large and rising inventory of homes in foreclosure, and continued pessimism among builders. State and local government budget constraints are leading to layoffs, selective increases in taxes, and sharp cutbacks in expenditures. Lending by banks to individuals and businesses remains constrained.

   “Even under the best of circumstances, the pace of economic expansion seems likely to remain moderate—a little more than 3% over the four quarters of this year but picking up considerably next year as obstacles to growth recede. The unemployment rate is likely to remain essentially flat this year, with progress in lowering that rate limited by a large number of workers sitting on the sidelines, ready to re-enter the civilian labor force as employment opportunities improve. Through the first four months of the year, the size of the labor force has risen by almost 1.7 million; even so, the labor force in April was barely above the level a year earlier.”

Moody’s Economy.Com Forecast

   Mark Zandi, chief economist and co-founder of Moody’s Economy.com, forecasted an improved demand for housing, but with foreclosures rising later in 2010 before easing in 2011, during a recent presentation at a National Association of Realtors meeting.  He said home prices may weaken this year. “The housing crash is over—nearly. We are now near the bottom,” he said. “There will be no real price growth in 2010 or 2011. Whether home prices weaken is unclear, but it will take two more years to work off excess housing inventory at the current sales pace. Of course, if demand picks up, it would take less time for prices to rise,” he said.

   Zandi said that the Fed won’t raise interest rates until the unemployment rate is heading south, but that deficit spending is the greatest threat to the U.S. economy. “The debt-to-GDP (gross domestic product) ratio is extremely high and troubling, meaning we could have measurably higher interest rates in 2011 and 2012.”

 

 

 

One Question

ONN-What is your biggest challenge (industry) now and how are you handling it?

Bill Haines--The biggest challenge I face in today’s market is maintaining a winning attitude. Today we face countless challenges in our profession: negative press, new regulations, ever-changing program guildelines, new disclosures that often do not make sense (to us or the client), extensive underwriting conditions, and every loan is a challenge.  It seems like being an originator just isn’t fun anymore. It has gotten to the point that we are so focused on “Did we disclose properly and at the correct time?” that our focus has shifted away from customers.

  With all this happening, it is often difficult for us to maintain a winning attitude. In this market I believe that you have to work at being positive. Some things that we can do to maintain a winning attitude:

1. Set goals. There are still many opportunities in today’s market. Decide what it is that you want to achieve, write it down, and go after it.

2. Make a “to do” list every evening for the next day and prioritize each item,

3. Make a list of non-negotiables that you will accomplish each day no matter what (i.e.: contacting three past customers, sending five thank-you notes, calling on a new real estate agent); whatever is key to growing your own business.

4. Watch the talk in your office. There is a lot of negativism these days. Choose to walk away and not participate or offer a positive solution.

5. Recognize your team, your processor, your underwriter, your order out person and your closing agent. Let them know how important they are to you.

6. Take the time to really listen to your customers. Find out their goals, concerns and fears. Focus on helping them achieve their goals and you will achieve yours.

7. Volunteer your time. Nothing will improve your attitude better than helping someone else.

(Bill Haines is an originator with Guild Mortgage, Bellevue, Wash.)

  

 

Product Spotlight

   Ellie Mae Announces Compliance Service—Ellie Mae has introduced the Encompass Compliance Service. This new comprehensive compliance service provides automatic compliance checks for every mortgage in an originator’s pipeline, throughout the entire mortgage cycle, via the user’s Encompass360™ system.  The Encompass Compliance Service is powered by an automatic compliance engine from Mavent, which was acquired by Ellie Mae in December 2009. With the integration of Mavent’s technology into Encompass360, users get the “convenience and security of seamless, automated compliance checks from point of sale through investor delivery.” The services can be accessed via any Encompass360 system, and can run at preset points in the cycle or configured to accommodate other loan stages, according to each company’s needs. Encompass360 will be able to export files in formats that are compatible with the compliance technologies used by the regulators. For more information, visit www.elliemae.com

 

 

             THANKS FOR READING ONN.

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