Art's Blog

www.academymortgage/artmarine

Thanksgiving 09

Art Marine (Academy Mortgage) — Mon, 23 Nov 2009 17:12:10 -0600

Reflecting on Thanksgiving

A lady was picking through the frozen turkeys at the grocery store, but couldn't find one big enough for her family. She asked the stock boy, 'Do these turkeys get any bigger?'

The stock boy answered, 'No ma'am, they're dead.'

Big Turkeys and Little Turkeys
If a big turkey is called a gobbler, what do you call a little turkey.
A goblet.

Young Simon was sitting in his grandmother's kitchen, watching her prepare the Thanksgiving meal.

'What are you doing?' Simon enquired.

'Oh, I'm just stuffing the turkey,' his grandmother replied.

'Wow, that's cool.' Simon remarked. 'Are you going to hang it next to the deer?'

Thanksgiving has always been a favorite holiday of mine. To our family, which is large, it would be the family reunion holiday. All of my aunts and uncles and cousins and sisters and nieces and nephews would gather at the lucky host's home and we would feast. Often our Thanksgiving gatherings would bring together nearly 100 people. Many of which I would only see that one day each year. The program was usually the same

•1. Eat

•2. Watch football

•3. Eat

•4. Play poker or black jack

•5. Eat dessert

•6. Play more poker

•7. Eat turkey sandwiches

•8. Go home and pass out from over indulgence

This is a simple formula to Thanksgiving success that I hope will be repeated again this year!

Where Have all the Lending Professionals Gone?

Art Marine (Academy Mortgage) — Fri, 20 Nov 2009 14:51:04 -0600

It is getting more and more common that my company is asked to save a real estate transaction at the 11^th hour. I got three calls in the last two days from listing agents that have had their sales put in jeopardy by pure incompetence from the lender handling the transaction for the buyer. Two of the loan officers that work for me have also rescued deals this week! It is worth a few minutes to analyze what is happening.

Often, these transactions were originated by either mortgage brokers or credit unions. Brokers are at a real disadvantage because their chain of communication to underwriting is usually filtered by a wholesale loan rep who may or may not have a good relationship with the underwriter decisioning the loan. In the past, the communication problems that are inherent in the wholesale lending world were often masked by the endless supply product options (both Alt A and Subprime) available to brokers. Since those product offerings, for the most part, have been eliminated, these loans that were not packaged correctly in the beginning turn into failed sales.

Credit Unions are wonderful institutions to get a car loan or use in lieu of a bank for a checking or savings account. Some even do a great job of making home equity loans but, for the most part, they are not experts at mortgage lending. Credit Unions often outsource their mortgage lending to brokerage or banking operations that are more capable of handling origination volume. This in turn just adds another layer of communication to an already challenging process. Add to this the problem of cross training in most CU operations. The same loan officer that is working on a mortgage loan was standing in a teller line that morning or working in collections that afternoon. They often don't have the experience or the knowledge to handle a difficult loan transaction.

I am always ready and willing to step in and save a deal. I only wish consumers would save themselves the grief and come to me first. 4,869 registered loan originators are all that are left on Oregons registary from nearly 20,000 that have been registered at some point. Many of those are from out of state. The numbers have declined significantly over the last couple of years. I can only hope the quality goes up as the quantity goes down.

Art Marine

Branch Manager

10220 SW Greenburg Road, Suite 250

Portland, OR 97223

503-764-4005 direct

503-799-7085 cell

1-866-510-4716 fax

It is Playoff Time for Oregon High School Football

Art Marine (Academy Mortgage) — Wed, 18 Nov 2009 15:55:13 -0600

State of Oregon 6A football playoffs

As those of you who read my blog know, I am a huge football fan. I love it on every level! I will watch peewee football, middle school football, high school football, or NFL football. Heck, I am such a football nut that I will even sit down and watch a CFL game (even though they have goofy rules). You should also know that I live in Canby and belong to the "Canby Booster Club". So go Cougars beat Sprague this weekend. That would setup a showdown with the Centenial - Clackamas winner ( I am guessing Clackamas) After that win we would face a real test in what will probably be either Sheldon or Lake Oswego.

This weekend is week two of the Oregon 6A football playoffs and I thought I could do a great service by posting the bracket here:

South Medford	20
Oregon City	13

Nov. 20th, 7 p.m. - Spiegelberg Stadium
Preview \| Box Score
South Medford	---
Jesuit	---

Nov. 13th, 7:30 p.m. - Jesuit High School
Preview \| Box Score
McKay	0
Jesuit	41

Nov. 13th, 7 p.m. - PGE Park
Preview \| Box Score
Newberg	34
Central Catholic	56

Nov. 20th, 7 p.m. - Lincoln High School
Preview \| Box Score
Central Catholic	---
Grant	---

Nov. 13th, TBA - Grant High School
Preview \| Box Score
Grant	---
BYE	---

Nov. 13th, 7 p.m. - Tualatin High School
Preview \| Box Score
Westview	16
Tualatin	14

Nov. 20th, 7 p.m. - Westview High School
Preview \| Box Score
Westview	---
West Linn	---

Nov. 13th, 7 p.m. - West Linn High School
Preview \| Box Score
Gresham	28
West Linn	31

Nov. 13th, 7 p.m. - Roseburg High School
Preview \| Box Score
Barlow	8
Roseburg	47

Nov. 20th, 7 p.m. - West Salem High School
Preview \| Box Score
Roseburg	---
West Salem	---

Nov. 13th, TBA - West Salem High School
Preview \| Box Score
West Salem	---
BYE	---

Nov. 13th, 7 p.m. - Canby High School
Preview \| Box Score
North Medford	24
Canby	62

Nov. 20th, 7 p.m. - Sprague High School
Preview \| Box Score
Canby	---
Sprague	---

Nov. 13th, 7 p.m. - Lincoln High School
Preview \| Box Score
Sprague	41
Lincoln	14

Nov. 13th, 7 p.m. - Southridge High School
Preview \| Box Score
Clackamas	31
Southridge	23

Nov. 20th, 7 p.m. - Centennial High School
Preview \| Box Score
Clackamas	---
Centennial	---

Nov. 13th, TBA - Centennial
Preview \| Box Score
Centennial	---
BYE	---

Nov. 13th, 7 p.m. - Cleveland High School
Preview \| Box Score \| Recap
Aloha	45
Benson	36

Nov. 20th, 7:30 p.m. - Aloha High School
Preview \| Box Score
Aloha	---
Sheldon	---

Nov. 13th, 7 p.m. - Sheldon High School
Preview \| Box Score
Tigard	26
Sheldon	71

Nov. 13th, 7 p.m. - South Salem High School
Preview \| Box Score
David Douglas	13
South Salem	37

Nov. 20th, 7 p.m. - Lake Oswego High School
Preview \| Box Score
South Salem	---
Lake Oswego	---

Nov. 13th, TBA - Lake Oswego High School
Preview \| Box Score

If you need a mortgage loan (in Canby or anywhere else for that matter) please give me a call for the best service around with very competitive rates.

Art Marine

Branch Manager

10220 SW Greenburg Road, Suite 250

Portland, OR 97223

503-764-4005 direct

503-799-7085 cell

1-866-510-4716 fax

My Profit VS A Happy Customer

Art Marine (Academy Mortgage) — Tue, 17 Nov 2009 07:56:31 -0600

Yesterday I faced a common dilemma for business; was it better to give my services away and have my customer leave the transaction happy or make a profit and risk a potential failed sale?

Let me first explain the circumstances. I had received a loan application from a couple about 6 weeks ago for a USDA guaranteed loan. In case you don't know, these loans are zero down and the seller is allowed to pay closing costs. The USDA charges a 2% guarantee fee that can be financed. The seller (Metlife) had agreed to pay 5% of the buyers closing cost. We had our work complete in about 2 weeks, including order and receipt of the appraisal and all other required documents, underwriting, and completion of the file per USDA requirements. USDA in our area is overwhelmed to say the least. They took nearly 4 weeks to complete their underwriting for the simple guarantee. The performance (or lack thereof) of the area USDA field office would be a good source for another blog. The delay by the USDA caused us to deliver our docs on the date the contract call for closing instead of a week or so early as is our usual practice.

Here is where the trouble started. The title company was busy when the docs arrived on Friday afternoon and couldn't get the buyers into sign until the following Monday afternoon. The seller, per the purchase agreement, charged a $100 a day late charge, which in this case added up to $400. Additionally, because we were funding in November, the taxes were paid at closing but the buyer had 7 months in tax pro-rations to pay back to the seller which was a month more than I had originally estimated. The title fees ended up being more than customary and there were some HO transfer fees we hadn't anticipated. When everything was all done, the borrowers were required to bring to escrow about $1000. The borrowers are a young married couple, the husband was a laid off engineer. When the escrow officer told them (without my knowledge) that they were going to need to bring in $1,000 they freaked out! They were anticipating bringing in less than $100. This is a small loan and my commission is considerably less than $1000.

What would you have done? Give your services away and maybe have a happy customer or hold you ground, risk alienating the customer and hope they could come up with the extra money? I chose the former. I am not a charity, but I refuse to risk this young couples dream of homeownership over money when I have the power to fix it. I promptly ordered the escrow officer to give the borrowers a $1000 lender credit!

I suppose you are curious what happened next. Yesterday afternoon the borrowers signed their loan documents. They were quickly converted from scared and angry first time buyers to happy homeowners. Today they get the keys to their new condo! I may have worked for free on this one...but it was worth it.

Art Marine

Branch Manager

Academy Mortgage

503-764-4005

Where do we go from here?

Art Marine (Academy Mortgage) — Tue, 10 Nov 2009 13:20:17 -0600

Where are we headed from here?

This real estate market continues to confuse and perplex. One day I am so busy that I do not have time to eat lunch. The next, nobody calls, and my outgoing marketing efforts meet with deaf ears. One day I am encouraged by a drop in rates that should create refinance opportunities, the next day I am met with lending guidelines that are more restrictive and property values that have dropped in turn discouraging refinances. Last week the "home buyer tax credit" was extended and improved but this week we face the reality of tougher credit qualifying on FHA. This is a brutal merry-go-round and I want off!

All we want to do at Academy Mortgage is help our clients find affordable home ownership...that goal is getting more and more difficult be we are finding tools to help. We are also dedicated to the congruent goal of helping our Realtor partners succeed. Again, our unique tools are helping. Ask me about "Buyer Acquire", "Score Guardian", and "Credit Xpert". Watch the video here for a taste of how I can help you build your business at no cost to you:

www.buyeracquire.com

Art Marine

Branch Manager

Academy Mortgage

10220 SW Greenburg Road, Suite 250

Portland, OR 97223

503-764-4005 direct

503-799-7085 cell

1-866-510-4716 fax

Curve Balls

Art Marine (Academy Mortgage) — Mon, 02 Nov 2009 18:52:02 -0600

Every once in a while you have to hit a curve ball. Last month my father-in-law, who is 81, had triple bypass surgery. After the operation we moved him into a facility in Lynnwood, Washington call Manor Care. The correct name should be "Manor Could Care Less", but that is a different story.

Last week we finally decided Frank needed to move out of "Manor Could Care Less" so he moved in with us. It has been awesome having him at our home. He loves our 5 kids dearly and shares all kinds of fascinating family history and stories with us. It has been a bit of a disruption from our normal lives but I am of the belief that is what family if for!

I just got a call from my wife while at the office to tell me he isn't feeling well. So she is packing up and taking him to the emergency room. Since it is the end of the day, I am going to go along too. This is not how I had planned to spend my evening but with five kids I have learned to be flexible over the years. I expect to spend the next two or three hours sitting with him in emergency learning more fascinating history and helping him gain the confidence he needs to recover. All I can say is thank god for Medicare. I cannot imagine how families deal with medical ordeals like this without insurance (good insurance) not the kind of care denial that you get from Aetna or United Health. I expected my day and circumstances to be different this time of year but in life as in business, you have to be able to hit a curve ball.

Call me if I can help even out your credit life with a new home loan.

Art Marine, Branch Manager

Academy Mortgage art.marine@academymortgage.com

503-764-4005

Cheese ball for the holidays

Art Marine (Academy Mortgage) — Thu, 29 Oct 2009 10:57:48 -0500

With Halloween, Thanksgiving, Christmas, and New Years heading our way soon. It is time to make some cheese balls :)

The Best Cheese Ball Recipe

From the kitchen of Audrey Howe

Handed down from my mother

My recipe is just from memory - from watching and helping my mother make this for every holiday. There are no exact proportions.

Use about 1 pound of cheddar cheese. (If I have leftover cheeses of different varieties - I mix them.) One package room temperature cream cheese. Begin by grating the cheese. Mix the cheese and cream cheese in a food processor, or with a mixer, or by hand. It needs to be blended well. (I usually blend it, then let it sit for a while, and blend it again; repeating this

several times.) Add a liquid (7-up, Sprite, wine, etc.) to moisten. Sprinkle with garlic powder to taste. Roll into a ball. Roll the ball in chopped walnuts. (Any kind of nut would work). Wrap with waxed paper or plastic wrap. Refrigerate. I usually make it a day or two in advance, so the flavors blend together. Serve with crackers.

Also, don't use garlic salt; be sure it is garlic powder.

Call me if you would like help with your cheese ball or have any real estate finance questions.

Art Marine

Branch Manager

10220 SW Greenburg Road, Suite 250

Portland, OR 97223

503-764-4005 direct

1-866-510-4716 fax

Fall means football, hunting, fishing and a change in the weather

Art Marine (Academy Mortgage) — Mon, 26 Oct 2009 17:31:09 -0500

Fall is my favorite time of year in Oregon and it always has been. I am not a fan of hot temperatures so the fall brings relief. Nothing is better than a cool crisp October day to bring about that euphoric feeling of all things macho. Of course, I speak of college football, a deer, elk or bird hunting trip, or a day on the river chasing the elusive salmon or maybe a big sturgeon. Nothing rivals the pastimes of fall for the outdoorsman in me.

My best weekend would be spent leaving early on Saturday for an OSU football game in Corvallis. These days start with a hearty breakfast at the Peacock; several hours tailgating with friends, then settling back to watch the beavers win a conference game in the Skybox. This is college football at its finest...nothing else compares. After the game, a quick trip to camp in a luxury motor home or fifth wheel in the cascades or maybe the coast range to go deer or elk hunting on Sunday morning. Up early Sunday morning with meat hanging in camp by noon. A weekend like that would be one I could savor for years.

It is rare to be so fortunate as to experience the perfect fall weekend...but at 51 I still have hope that I will live long enough to experience it.

On Monday I am ready to work for my clients getting them the perfect home with the perfect home loan. That is almost as good as a football and hunting weekend.

Art Marine

Branch Manager

10220 SW Greenburg Road, Suite 250

Portland, OR 97223

503-764-4005 direct

503-799-7085 cell

1-866-510-4716 fax

http://www.flowerfarmer.com/index.php?CategoryID=11

The best pumpkin patches in Oregon

Art Marine (Academy Mortgage) — Fri, 16 Oct 2009 15:50:39 -0500

Looking for a good pumpkin patch opportunity for the kids? Some of the best in the Portland metro area are in the vicinity of Canby. I good way to start your Saturday adventure would be to head cross the Willamette River on the Canby Ferry. This is always a thrill for the kids and at the bargain basement price of $1.25 you will have money left to buy pumpkins.

First stop is the Flower Farmer on Holly Street in Canby. It is less than a mile from the ferry dock!
The Flower Farmer is one of the more unique pumpkin patches anywhere. The kids board a small train and ride around the circle to pick out a pumpkin then board the train to return to the main depot. The kids just love this place.

Next stop on pumpkin day is Hoffman Dairy Garden on Knights Bridge Road just outside of Canby. Hoffman's has a very very good Haunt. They turn their old large dairy barn into one of the premiere haunted houses/barns that I have seen. Not for the faint of heart. Hoffman's also has several exotic animals to view. They feature a lion, a tiger, a bear, a camel and several other unusual animals for a farm in Oregon.

Lions Tigers and Bears (Real)

Come visit our exotic animals from all over the world!

Open everyday starting October 3rd through October 31st

Hours: Monday - Sunday 10:00 am to 6:00 pm

Bring the family to pick your pumpkin and enjoy the activities.

Pumpkin Patch, Pony Rides, Petting Zoo, Merry-Go-Round, Giant Slide, Bounce House, Castle, Obstacle and Climbing Wall.

Walk on the Wild Side

A Great experience for the whole family!

Reptiles in a Jungle Atmosphere

Plus Exotic animals from all over the world!

Haunted Barn

Friday and Saturday nights 7:30-11:00 pm

School Tours and Party Room by appointment!

Farm and Reptile parties available all year round!

Email: Allevents_1@msn.com

Hoffman's Dairy Garden

Harvest Festival Information 503-737-4921

You final stop on pumpkin patch day should be at Fir Point Farms on Ehlen Road in Aurora. This is a very traditional and large pumpkin patch. Fir Point is a 35-acre farm that is near the freeway. They have a nice nature path, hayrides, fresh apple cider, corn cannon, hay maze, corn maze, a very nice hay slide, and lots of great food. One of my favorite features of Fir Point is the Hazel Nut House. This is simply a small cabin filled knee deep in hazel nuts. It is an incredible feeling to walk through and play in thousands of pounds of nuts!

Fir Point Farms is a great way to end your day and feel the tradition of the pumpkin patch experience.

http://firpointfarms.com/events/harvestfestival

Art Marine Branch Manager

Academy Mortgage Corporation

10220 SW Greenburg Road, Suite 250

Portland, OR 97223

503-764-4005

http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=119616&discussionID=7281287&commentID=6615555#commentID_6615555

Fall and Flu

Art Marine (Academy Mortgage) — Tue, 29 Sep 2009 16:56:33 -0500

It seems to happen every year...the kids go back to school and withing two weeks they are sick. Typically I seem to catch the bug the following week. Why should this year be an exception? Of course it is not! Last night I woke up with a terrible cough. I can feel the wave of this virus coming over me like sliding into a hot bathtub. The aches and fever are hitting now and I am sure in won't be long until nausea sets in. I am just hoping it is not the swine flu. Here is my dilema: I have work to do and loans to close. Tomorrow is the last day of the month!!!!!!!! So here is sit in deaths door writing my blog because I am too light headed to do anything else. At least four, maybe five of my fellow loan production staff have suggested I go home. While I am trying my best to avoid infecting anyone, the things are so ultra contageous that I fear it may be too late. So, tonight I am taking home my computer and working from there tomorrow. I won't have all the resources of the office but I really don't want to infect anyone else. Art Marine Branch Manager 10220 SW Greenburg Road, Suite 250 Portland, OR 97223 503-764-4005 direct 503-799-7085 cell 1-866-510-4716 fax www.academy.cc/artmarine art.marine@academymortgage.com Click Here for Online Free Credit Approval

Fall is in the air and its time to get serious

Art Marine (Academy Mortgage) — Mon, 21 Sep 2009 18:30:49 -0500

Now that the dog days of summer are past, it is time to get serious with this business. I have always had my best months in October, November, and once in December. I have always felt there were just a few factors:

I am not as distracted so I work harder - back to the law of attraction
Customers are not as distracted so they stop putting off their purchase ore refinance decision
Kids are in school and people know they need to get stable
September and October is perfect house hunting weather

These may all be reasons in my own mind, but year after year my best months have always been in the Fall. This is one Loan Officer that welcomes the end of summer and welcomes the new season.

Changes in the mortgage industry

Art Marine (Academy Mortgage) — Thu, 17 Sep 2009 16:35:19 -0500

I came across a great blog that is worth the read. It is short:

The author relates Darwin's theory of evolution to the evolution of the mortgage industry and especially as it relates to small brokers vs. large lenders. It seems to me that he is correct in his assertion that we are in a period of survival of the fittest.

Mortgage and Real Estate Professionals need healthcare too

Art Marine (Academy Mortgage) — Tue, 11 Aug 2009 13:37:38 -0500

I hope my story will help you understand why I support Healthcare reform with a strong public option. Although anecdotal, my situation is being repeated daily by thousands of Americans.

I work in the mortgage industry, which as you know has been quite volatile. Because of the employer based healthcare system we have, it is important to the story to know my employment history. I offer it here as exhibit 1:

2005 - 2006 Central Pacific Mortgage Company declared bankruptcy

2006 - 2007 American Home Mortgage Company declared bankruptcy

2007 - 2008 Indymac Bank Company taken over by FDIC...placed in receivership

End of 2008 Prospect Mortgage Company closed my branch due to lease expiration

2008 - Present Academy Mortgage

In less than 5 years, I had to change my health insurance 5 times. It was never a matter of choice; I simply had to take whatever plan my employer decided to offer. Some of the plans were good, most were expensive, and in every transition, there were issues. Some small, some large but always transition issues.

My largest frustration comes from Aetna. Our medical provider has, for many years, been the Doctors in the OHSU system. Although we have a primary care doctor, it is the practice at OHSU to have student Doctors or Nurse practitioners provide needed services when appropriate. When these practitioners provide care, OHSU bills in their name even though they are under the supervision of the primary care physician. Aetna has consequently denied all the claims that were submitted while our services were being provided by these practitioners. Please understand that we made the appointment with our primary care physician. We showed up at the appropriate time, were escorted to an examination room and the provider that showed up to offer service was a nurse practitioner or a student Doctor in several instances. I am here to tell you, when you are sitting in pain in a waiting room and someone offers assistance that is not your regular Doctor, you do not say "go away I will wait for my regular Doctor". You thankfully accept the help. In this case, the pain comes later when Aetna refuses to honor the claim. This same scenario played out three separate times before I ever realized I had a problem. So now, I have paid large insurance premiums for the right to spend hours of time on the phone fighting with Aetna and eventually being told I was out of luck. The amount of the bills are not financially devastating, they total less than $300. It is the time and energy I wasted trying to be treated fairly that frustrates me the most. I just thank God that these were small medical bills. The situation could have easily been financially ruining. The Aetna response would have been the same if my bills were $30,000.

Corporate greed will always prevail in a situation where there is no free market. The only free market in the medical insurance world comes when the insurance companies are negotiating with the large corporate employers for the contract to provide group coverage. Once the employer chooses an insurance carrier all competition is locked out for the duration of the contract. Service is no longer a consideration and corporate profit dominates the decision making process. Aetna will not pay my bills because they do not have to compete for my business. Please help create a public option to restore the free market competition that is necessary for our system to work!

CreditScore 101

Art Marine (Academy Mortgage) — Fri, 31 Jul 2009 14:39:35 -0500

In a world of shrinking mortgage options, I have found a way to grow my market. I call it CS (credit score) 101. Many consumers do not meet minimum thresholds to get a mortgage loan in today's world of FNMA/FHLMC/FHA/VA/USDA only lending. Often I find that credit scores are unnecessarily low because consumers do not understand their rights under the "Fair Credit Reporting Act" or they do not keep close enough tabs on their credit report and scores. CS 101 uses several tools to help consumers understand the components that effect credit and provides strategies to improve their score and correct errors on their reports. I hold these classes in small groups or individually in my office.

An extremely valuable tool that we use to help consumers is a product called "Score Guardian". This credit monitoring system is offered free of charge to Academy Mortgage clients and prospects. The system will, with the client's permission, pull, on a rotating basis, one of each of the three credit bureau reports every 4 months. This way, we can stay on top of changes and catch any errors. It also gives me the opportunity, as their mortgage advisor, to call them and discuss their credit and mortgage objectives. If you are interested in enrolling in Score Guardian, simply click on the logo below. I believe this system would be a benefit to any consumer!

The Future of the Mortgage Industry

Art Marine (Academy Mortgage) — Fri, 24 Jul 2009 14:39:30 -0500

Yesterday I posted a blog titled "The Death of an Industry" and it obviously struck a nerve. The Mortgage Lending community has been put under the microscope lately and tensions are running high. My blog discussed how changes in business practices by large commercial banks and mortgage bankers, combined with new government regulation could conceivably spell the end of the Mortgage Broker industry.

Most of the posts I got were Mortgage Brokers defending their business and their business practices. This was understandable and expected. I did however underestimate the loyalty that many real estate agents held for their Mortgage Broker lender partners. As an originator, I have always enjoyed a lot of loyalty from my strategic partners but I didn't realize the sentiment would run so strong. I admire those agents for such robust loyalty and believe that it will serve them well in the end. Even if my predictions come true and Mortgage Brokers fade into the sunset, the good originators will rebuild their business under a new model that works in the current environment.

For those of you that I offended yesterday, I apologize. I hope you all take it as a wakeup call to evaluate what you are doing and how you will proceed in the future.

Death of an Industry

Art Marine (Academy Mortgage) — Thu, 23 Jul 2009 18:22:42 -0500

I opened my first mortgage brokerage company in 1991. The industry trend was away from banks and toward brokers. Brokers had several intrinsic advantages:

•1. They could shop the market place for price. While most lenders pricing is very close, mortgage brokers could find that one lender that was buying the market on a given day and take advantage.

•2. They could move the loan to another wholesaler when rates went down. Although not an ethical approach from the standpoint of the wholesalers, it was common practice for mortgage brokers to lock a rate with one investor and deliver the loan to another with a better price when the loan was fully processed. This way they could make additional profit on every loan in a declining rate environment.

•3. They could offer virtually every quirky gimmick loan product around without fear of repercussion from defaults or credit quality problems since their job's done once the loan closes.

•4. They could rack up huge profits by focusing their business around origination of less price sensitive subprime and Alt A loan products.

•5. They could streamline operations by originating nearly 100% "stated income" loan products. Companies like Countrywide (America's Wholesale Lender) thrived on their "Fast and Easy" product line. Other large wholesalers followed suit and many mortgage brokers originated most of their conventional loans on these products.

•6. Their business model was often flexible with low overhead. One loan officer with a computer could be a mortgage broker. When originations were down, they would simply layoff their processors or go to contract processing. They could make a profit in almost any market.

In 2006, mortgage broker market share peaked at over 70%. That meant that the large retail lenders were buying most of their loan originations from third parties rather than from their staff. Obviously, the mortgage broker model was working well for everyone. But what a difference a few years make. When house values were increasing, sometimes by double-digit percentages, yearly, defaults were rare and loan origination quality was not called into question. But with the collapse of the mortgage lending industry everything started to be called into question. www.ml-implode.com lists all the mortgage lenders that have closed their doors since late 2006. One of the biggest lenders on the list was Indymac Bank. Before closing, Indymac discovered through portfolio analysis, that a loan originated by mortgage brokers was 8 times more likely to default than one originated by their own retail-lending group. You read that correctly 800% higher rate of defaults from TPO's (third party originations). To be fair, this number did include a some Correspondent originations, but mostly wholesale.

With the dismal performance of loans originated by brokers, it is no wonder that wholesalers either have gone out of business or put defense mechanisms in place to create advantage for their retail lending departments. Sometimes these defense mechanisms are price related others are underwriting related. Make no mistake, any advantage once enjoyed by brokers is now GONE. The latest report I heard on "mortgage broker "market share is it has dropped to around 20%. This could be going down further in the near future.

The last shoe has yet to fall on the Mortgage Broker world...the HVCC. For those not familiar with the acronym, it stands for the Home Valuation Code of Conduct. To summarize, it says that appraisals must now be ordered by the lender (not the broker). This means that the practice of last minute shifts in investors will be a thing of the past. Gone are the days when brokers can lock with Wells Fargo on day one and deliver the loan to Bank of America on day 20 when the rates have dropped. Wells Fargo in this hypothetical example would own and have exclusive rights to the appraisal. The only way a broker could pull the old switcheroo would be to start the process all over and incur the cost of a new appraisal.

If you are a consumer shopping for a loan; run, don't walk away from any and all mortgage brokers...the deck is now stacked against them. If you are a Realtor advising a buyer on financing choices, do them a favor and send them to a Mortgage Banker or a Bank. It is tempting to support your old mortgage broker friends but they simply cannot perform as well in today's environment as a Banker or a Bank.

Some of my best friends are Mortgage Brokers. I used to be a Mortgage Broker. Some of the best professionals in the industry are Mortgage Brokers. Regardless of this, I would not use them. They are a dying breed and it is already impacting their ability to serve their clients!

If you would like the advice of a professional Mortgage Banker, do not hesitate to call me.