Brian's Blog

Mensa Tweeks the Dictionary

Brian Papaccio (Wells Fargo Home Loans) — Mon, 20 Aug 2007 09:10:11 -0500

New Words
        The Washington Post's Mensa Invitational once again asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition. Here are this year's winners.
          Each is an artificial word with only one letter altered. Some are terrifically innovative. This would be a great party game - maybe. (Are we up to this?)

1.    Intaxication: Euphoria at getting a tax refund, which lasts until you      realize it was your money to start with.   2.    Reintarnation: Coming back to life as a hillbilly.
3.    Bozone (n.): The substance surrounding stupid people, who stops bright ideas from penetrating. The Bozone layer, unfortunately, shows little sign of breaking down in the near future.
4.    Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.
5.    Giraffiti: Vandalism spray-painted very, very high.
6.    Sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.
7.    Inoculatte: To take coffee intravenously when you are running late. 8.    Hipatitis: Terminal coolness. (?) I don't get it.
9.   *Osteopornosis: A degenerate disease. (This one got extra credit.***) 10. Karmageddon: It's like, when everybody is sending of all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer. 11. Decafalon (n.): The grueling event of getting through the day consuming only things that are good for you. 12. Glibido: All talk and no action.
13. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.
14. Arachnoleptic Fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.
15. Beelzebug (n.): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.
16. Caterpallor (n.): The color you turn after finding half a worm in the fruit you're eating.

-original author unknown, received via e-mail

First Home? Read This First

Brian Papaccio (Wells Fargo Home Loans) — Mon, 02 Jul 2007 12:48:09 -0500

First Home? Read First!

Our New Guide Helps You Achieve Your Homeownership Goals

Put the expertise of a leading lender on your side, and see how soon you’re in a place of your own! Our comprehensive FREE guide offers must-know information, inside tips, plus step-by-step suggestions that help you make all the right moves.

Discover where the bargains are

Maximize your purchasing power

Find home financing that’s the right fit

Build home-centered wealth

Home-buying Advantages

I can also provide written preapproval and tailored home financing that simplifies your first move in a lifetime of financial well-being.

MANAGE YOUR FIRST MOVE LIKE A SEASONED PRO

Your Price Range – establishing how much home you can comfortably purchase

Beyond the Classifieds – innovative ways to find properties

Determining Potential – what to look for – and avoid – in a home

Down Payment Strategies – buying with little or no money down

The Art of Negotiation – how to get the best deal

Your Support Team – selecting Realtors, contractors and other key experts

Fix It Up or Pass It By – how to recognize a home worth renovating

Financial Tools – using your home to achieve other investment goals

Call me today for a complimentary consultation.

Brian Papaccio
Home Mortgage Consultant
Wells Fargo Home Mortgage
111 Continental Drive, Ste. 102
Newark, DE 19713
302.731.1400 Tel
800.390.8919 Toll-free

Apply online at my website ApprovedByBrian.com

Information is accurate as of the date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2007 Wells Fargo Bank, N.A. All rights reserved.

First Time Home Buyers

Brian Papaccio (Wells Fargo Home Loans) — Mon, 02 Jul 2007 12:12:52 -0500

Having A Dream Is Good. Owning One Is Better!

Our Flexible Home Financing Programs Reflect Your Personal Needs and Goals

We understand there’s nobody quite like you – with your individual needs, your dreams and goals. Our special programs make home ownership simpler and more affordable, with features as unique as you are.

With a dedication to excellent service, we can tailor a program to your needs, and provide personal attention every step of your way home.

Programs

FHA / VA

100% Financing

Relocation

Renovation

Call or E-mail me now and we can start to make your DREAM a Reality!

Brian Papaccio
Home Mortgage Consultant
Wells Fargo Home Mortgage
111 Continental Drive, Ste. 102
Newark, DE 19713
302.731.1400 Tel
800.390.8919 Toll-free

Apply online at my website ApprovedByBrian.com

For more information on the Delaware Bond Program, visit the Delaware State Housing Authority.

Credit is subject to approval. Some restrictions apply. This information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2007 Wells Fargo Bank, N.A. All rights reserved.

Basics of Home Buying

Brian Papaccio (Wells Fargo Home Loans) — Mon, 02 Jul 2007 12:11:07 -0500

The Basics Of Buying A Home

If you know what to expect – and have a trusted team of real estate and mortgage-lending professionals guide you – finding and financing your first home can be an exciting and rewarding experience.

There’s great personal satisfaction in having a home you can call your own and pass on to future generations. We’re committed to helping you enjoy every benefit of home ownership.

Moving from “Renter” to “Owner” Is Easier than You Imagined

We offer a broad range of programs that help first-time buyers achieve your goals – including low- and no-down-payment programs, Purchase & RenovateSM loans, programs for credit-challenged customers and more! With a dedication to excellent customer service, we can tailor a program to your needs.

Here’s What You Need to Know:
Obtain Mortgage Preapproval Before You Begin House Hunting

Learn how much financing is available to you

Strengthen your bargaining position with sellers

Choose a Real Estate Agent

Ask mortgage lenders to recommend agents they work with

Select a reputable professional who’ll listen to your needs and make you feel comfortable

Ask agents for references from former clients

Find the Right Home

Determine the needs of you and your family

Create a wish list of desirable features

Take notes as you preview homes

Make an Offer

Your real estate agent presents your offer to the seller, who will accept, counter or reject it

When the price is settled, you and the seller sign a Purchase Agreement, defining the terms of the sale

Have the Home Inspected

Hire a professional home inspector after the offer has been accepted to provide an in-depth look at the basic systems of the house, to reveal any safety hazards and give you a chance to reconsider the deal

The Home Will Be Appraised

An appraisal, required by your mortgage lender, is a formal, written estimate of the home’s current market value

Obtain Title Insurance (where applicable)

This guarantees that the property you are purchasing is free of liens or confusion in rights of ownership

The policy insures against any losses to the property that result from defects in the title or deed

Close On the Property

Ownership of the property is transferred

A closing agent coordinates and distributes all the paperwork and funds

And you become the proud owner of your new home!

We’re ready to help. With a dedication to excellent customer service and a broad range of programs, we can tailor a mortgage to your needs.

Call me today for a complimentary consultation.

Brian Papaccio
Home Mortgage Consultant
Wells Fargo Home Mortgage
111 Continental Drive, Ste. 102
Newark, DE 19713
302.731.1400 Tel
800.390.8919 Toll-free

Apply online at my website ApprovedByBrian.com

1.Consult your tax advisor regarding deductibility of interest.
Information is accurate as of the date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2007 Wells Fargo Bank, N.A. All rights reserved.

Low or No Money Down

Brian Papaccio (Wells Fargo Home Loans) — Mon, 02 Jul 2007 12:09:07 -0500

Wish You Could Purchase A Home More Easily?

Stop Wishing and Start Shopping with Low- and No- Down Payment Programs

We understand saving up for a down payment can be an obstacle for many first-time homebuyers. We’re ready to help, with low- and no- down payment programs that put a home well within your reach – like our innovative Home OpportunitiesSM program and flexible combination loan options.

With a dedication to excellent customer service you will benefit from as much guidance as you want or need. Wells Fargo Home Mortgage is ready to tailor a program to fit your needs.

GREAT FEATURES HELP MAKE HOME OWNERSHIP ATTAINABLE

Less Cash Required – Low- and no-down payment options available, and closing costs from a gift, grant or unsecured loan allowed with some programs

More Borrowers Can Qualify – Expanded qualifying guidelines and flexible credit considerations can help get more borrowers into a home

Greater Purchasing Power – Down payment Assistance Programs and home equity financing may provide additional funding needed to purchase a home

Income Flexibility – Income from seasonal employment, secondary income and rental income may be acceptable

Call me today for a complimentary consultation.

Brian Papaccio
Home Mortgage Consultant
Wells Fargo Home Mortgage
111 Continental Drive, Ste. 102
Newark, DE 19713
302.731.1400 Tel
800.390.8919 Toll-free

Apply online at my website ApprovedByBrian.com

Credit is subject to approval. Some restrictions apply. This information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2007 Wells Fargo Bank, N.A. All rights reserved.

New Marketing Idea.... Sponsor some one else's cards PART 2

Brian Papaccio (Wells Fargo Home Loans) — Wed, 27 Jun 2007 08:30:08 -0500

Ok, here is a summary:

The original blog :New Marketing Idea.... Sponsor some one else's cards had an idea to sponsor those little business card size reminders you get at the dentist, doctor, salon, etc. negotiate with the owner to pay for the cards in exchange they put a line like "this reminder sponsored by..."

So last time I got my hair cut I mentioned it to the lady who cuts my hair (also the owner, and the same place I have gotten my hair cut at since I was 10) She loved the idea and made a funny comment about how she can't believe her husband, an insurance agent, didn't think of it.

The Snag: She orders those reminder cards by the CASE, she gives out around 30 a day, and she has enough to last her for at least 6 months or more.

The Triumph: She is creating a "menu" to have all the other service they are starting at the salon (masage, waxing, make-up, etc.) She offered for me to have my info on that. We even thought of a great tag line, "sponsored by Brian Papaccio of Wells Fargo, customer since 1987"

The Dentist: It is a big office I have yet to hear back from an owner, or person incharge of marketing, or person who orders the cards. my next appointment isn't for a couple months.

Junk Mail, Telemarketers and Opting Out

Brian Papaccio (Wells Fargo Home Loans) — Mon, 04 Jun 2007 09:14:24 -0500

A new wave of junk mail and telemarketing that consumers are starting to become aware of are "Trigger Leads". Trigger leads are leads that can be bought by lenders, mortgage brokers and others who want to solicit to consumers who are already interested in a mortgage. Here is how it works, you want to buy a home or refinance, so you go to your mortgage professional who gets you approved. Part of that approval process usually includes checking your credit.... BAM... it has happened, the credit bureaus see that a mortgage company pulled your credit so they sell your information off to other lenders and mortgage professionals. That is when you start to get the calls, e-mails, and mail. The foxes have entered the hen house.

There is a way to avoid those annoyances, a way to protect your self and your personal information from companies you don't know and don't want to talk to, you can Opt Out. Similar to the Do Not Call list, there is a website and phone number you can use to prevent your information from being sold.

(888) 567-8688 or http://www.optoutprescreen.com/

To read more about Trigger Leads, and how government agencies are trying to ban them read Mortgage 'trigger leads' might get shot down; Delaware News Journal

SPAM Hits the Q&A section

Brian Papaccio (Wells Fargo Home Loans) — Fri, 13 Apr 2007 07:54:44 -0500

Besides the ability to edit and/or delete our own answers in the Q&A section as Rob suggested. We need to get some moderators who have the ability to delete other's posts. We should even consider banning some members who are just SPAMing.

http://activerain.com/action/question/view_question_consumer?question_id=896

doug anisky (sun group) response in the above Q&A is nothing but spam and makes the rest of us look bad to that customer, and anyone else who is looking for Answers and sees this post.

Pay Attention to me for 1 Minute

Brian Papaccio (Wells Fargo Home Loans) — Thu, 12 Apr 2007 12:00:49 -0500

Ok besides the rest of this blog, what is your opinion on the title, I was debaing between this and "Love in an Elevator" you will see the connection shortly.

Do you need to work on your "Elevator Pitch"?

If you only have one minute to tell some one who you are, what you do, and why they should use you does your 1 minute get that message across and capture that prospect's attention?

What do you include in your elevator pitch?

Off Line Response sharing suggestion

Brian Papaccio (Wells Fargo Home Loans) — Wed, 11 Apr 2007 08:22:57 -0500

If you do get a follow-up contact from the original poster of the Question and there is more detail that comes out or a more well defined solution to the question, add an additional Answer with the follow up information.

This will not only help us learn from eachother but it may also provide an answer to another potential customer. Visitors to the Localism site have the ability to read through past questions and answers. So if they do that, they can see a similar question that has a final detailed summary of what the problem was and what the solution was.

Welcome

Brian Papaccio (Wells Fargo Home Loans) — Wed, 11 Apr 2007 08:18:29 -0500

Welcome to the Q&A Feture Group. Please do not use this group to blast eachother about responces in the Q&A Feature. This group should be used to openly discuss ideas for how to make this feature better and to share thoughts on etiquette for responces.

Where to spend 3k on advertising?

Brian Papaccio (Wells Fargo Home Loans) — Tue, 03 Apr 2007 13:03:51 -0500

Ok I am looking for ideas, and suggestions.

I work for a small company, we do little to no advertising. The owner has been in business for about 15 years so all of his business now is repeaters, referrals and he has a couple realtors, financial planners and LOs at banks that refer him deals.

I do ok between networking, referrals, internet (my site, and blogging), and the few referral sources I have. I want to move my business to the next level. I have 3-6K I can spend on advertising so let me know what your opinion is

Print Ads in local papers, real estate sections, etc. (no Idea how long 3-6K would last)
Direct mail piece (that is probably one good mailing)
Radio Ad (it is about 3 months with one ad a day for two weeks a month)
Any other suggestions....?

So my appraiser just called me....

Brian Papaccio (Wells Fargo Home Loans) — Mon, 02 Apr 2007 15:29:00 -0500

Ok, I know this is asking a lot from people but,...

When some one tells you something, Listen.

When you get something in writing, Read it.

My appraiser just called me to ask me if I knew the property my borrower is buying has no kitchen. "No Kitchen?", I ask. Yes there are no appliances, only a few cabinets, no sink, no plumbing, and an under counter dishwasher that is not under a counter.

This is after explaining to my borrower who asked about Bank Owned/HUD/As Is properties, they need to be able to get a satisfactory appraisal. I told him it has to have the basics in every room, can't be huge holes in the wall, etc. the property has to be habitable as is.

This is also after explaining and putting in writing on the approval letter to the realtor that the loan is contingent on a satisfactory appraisal. And after talking to the realtor because she was concerned about the price range and properties that the buyer wanted to see, which I explained the house has to be habitable.

So now I call the realtor and the buyer. "So my appraiser just called me and basically the house doesn't have a kitchen"

Not surprisingly I get the exact same response from both of them, "Yea.... Why... Is that a problem?"

SubPrime Ripple Effect; is your closing date safe?

Brian Papaccio (Wells Fargo Home Loans) — Fri, 30 Mar 2007 13:59:14 -0500

The problems in SubPrime lending are starting to take a toll on the rest of the lending world. As fewer and fewer lenders exist to approve, underwrite, and fund loans the remaining SubPrime AND Conforming lenders have to pick up the slack. Well this sounds great for them... at least at first.

The new problem is that lenders have to figure out how to fit "80 pounds of [loans] in a 5 pound bag". The result is that underwriting times are becoming extended. Long gone are the days of 24 hour turn around times. Some lenders are running at 5 or more business days between the time the loan is submitted and the time it is finished, add in another 3 days at least between when conditions are submitted and when it is cleared. What used to be a couple days to a week process has become at least a two week process.

So what is the solution?

Keep on top of things, be proactive not reactive (get it done ahead of time, don't wait to be asked).

Or find a lender that can still get things done tomorrow... literally. If you know who to work with you can submit a loan today and fund it tomorrow.

"a plague on both your houses"

Brian Papaccio (Wells Fargo Home Loans) — Tue, 27 Mar 2007 14:05:48 -0500

Ok. I am confused is this a Real Estate Blog or a Shakespeare blog....

"As concerns about subprime mortgages plague the nation's leaders and lenders, America's homeowners are confused and worried about their own mortgages, according to a recent poll commissioned by Bankrate.com."

From Bankrate.com Mortgage ignorance rampant

Could some of the subprime woes and mortgage industry changes and record foreclosures be the responsibility of the consumer too?

I was shocked to read in this article that when "asked what type of mortgage they had. A stunning 34 percent of the homeowners had no idea."

That means 1 of every 3 people in the United States did not pay attention to anything they were told in a 1 month process consisting of hours of conversation concluded with a potentially 50 page stack of papers they signed.

Even more perturbing is that another 1 of every 3 people in the United States do not know what they will do when their Adjustbale Rate Mortgage starts to Adjust. This is why the media has story after story of people suffering from payment shock. Those people surffering most likely either didn't know they had an ARM, or didn't know what to do once it adjusted.

I don't know about everyone else, but if I have a borrower going into an ARM I make a plan with them. I make sure they know they know what they are getting into, why they are doing it, what the plan is, and how to get out of it.

Chicken Little Visits Pennsylvania

Brian Papaccio (Wells Fargo Home Loans) — Tue, 27 Mar 2007 13:22:38 -0500

While consumer groups are constantly trying to pass legislation, with the current atmosphere in our industry and the media perpetuating fear, now is when consumer legislation actually has a chance of getting passed.

I recieved the following announcement from the Pennsylvania Association Of Mortgage Brokers (PAMB).

"We now have a crisis upon us. One that needs immediate action and understanding from each and every one of you. There have been two bills introduced into the state by consumer groups that will drastically alter how business in our world will be conducted. It does not matter if you are a broker, banker, loan officer, A.E.(rep), realtor, or title person, we must stop these bills.

House Bill 38 & House Bill 40 will prohibit "Stated Income" & "No Doc" loans. A "Cautionary Notice" must be given stating that the rate and fees could vary based on which LENDER and which BROKER is selected. You must be able to document and verify "Current and Expected income" of the borrower. A Brokers NET worth must be verifiable and begin the first year at 50 thousand, the next year 75 thousand and the next year 100 thousand, etc. For each Loan Officer, there will be a fee of $200.00 per year. You must chose between a YSP or Up Front Fees, not both, unless you first give the borrower all possible options. Lenders Fees will be limited to 1% of total compensation and Brokers Fees to 3% which includes the Lenders Underwriting fees. You must meet with borrower(s) and have an agreement signed that state you will do a "suitable" loan for the borrower (s). Unfortunately who decides what a suitable loan may entail is not explained."

Here are the complete copies of the House Bills: HB38, HB40

Only Slightly better than Completely Useless.

Brian Papaccio (Wells Fargo Home Loans) — Fri, 23 Mar 2007 10:44:20 -0500

Did you know, you are not the only one who needs a copy of the signed agreement of sale (AOS)?

That is right, the title company needs it, the mortgage broker and lender need it, and the appraiser even needs a copy of it!

If you are a real estate agent you should know why the Title Company would need a copy of the AOS. The appraiser needs a copy, because believe it or not, there is a little spot where they need to say they reviewed the AOS. I as a mortgage broker need it for many reasons 1) I need the agents contact information, listing and selling, 2) I need to know when your commitment date and closing date are, 3) I need to know if there is a seller assist, how much is on deposit, and any other financial impacts on the loan, and 4) the lender needs it for underwriting.

Did you know, a legal size document faxed back and forth more than 2 times that ends up on a letter size paper is only slightly better than completely useless?

So if you are addicted to negotiating, and I am guilty of that too, then you need to learn some new technology, the FAX MACINE IS NOT FOR YOU! If you don't want to get with the new millennium and get some electron power in your communications, then you need to think of the rest of the people in the process. I can not use a copy of the AOS that has been: (1) Faxed to your buyers to sign (2) faxed back to you (3) faxed to the listing agent (4) faxed to the sellers (5) faxed back to the listing agent with counter offers (6) faxed back to you (7) faxed to your buyers to sign (8) faxed back to you (9) faxed to me.

You have some options:

Keep legal size documents on Legal paper, so if you are addicted to faxing, get a fax machine that has two paper sizes.
Electronic documents. There are PDF copies of sales agreements that you can type in all the information... I know, I have seen them my self. They are great.
e-fax / e-mails. If you need a magnifying glass, or in the electronic world you need to zoom in more than 100% in order to read the AOS.... it is not clear enough for me.
Hand delivery. You are out on the road most of the time, most of the deals you work on are with local agents with in driving distance. If you have gotten to the point where your AOS is a Rorschach type smudge a quarter the size of a letter size page of paper... Re-write the entire thing on a new AOS, get it signed (delivered in person), and deliver it to the listing agent and get them to do the same.

In short if you are going to go electronic go all the way and keep the faxing to a minimum, OR go old school and "press the flesh"

What do you sound like on the Phone?

Brian Papaccio (Wells Fargo Home Loans) — Tue, 20 Mar 2007 10:45:07 -0500

Public speaking is a difficult skill to master but is ESSENTIAL TO ANY KIND OF SALES. Public speaking isn't just what you do, and how you sound in front of a group of people. It is any interaction you have with the public in general. Do you know what you sound like on the phone, what you sound like when you sit down one to one, do you know how you read on e-mails or blogs?

For those of you who have not taken the time to "proof read" your public speaking skills. Here are some simple ways to find out what you do wrong:

On the Phone: Find some one who makes you nervous, but is some one you know and trust. Tell them you want to give them your pitch, or go through some sales presentation with them. Ask them to give you honest, constructive criticism. Then actually call them and pitch them, if you can record it or if they can record it then that is even better, record it and play it back later.
One to One: Again find a mentor, some one who makes you nervous, or intimidates you. Ask them to sit in as an observer on your next client meeting, or do a role play and have them pretend to be a client.
E-mails and Blogs: This one is considerably easy. If you don't proof read... start now. If you don't do multiple spell checks in different software platforms... start now. Sure there is a spell check in Active Rain, but not all spell checks are perfect. Copy and Paste into MS Word or some other program and check it again. Nothing looks more foolish than poorly prepared e-mails, blogs, and news letters, anything in print. Technology is a tool not a crutch.
Criteria for the person who makes you nervous, or intimidates you: This should be your mentor in your office, a parent, the most successful sales person in your office, etc.

Think of all the telemarketing, advertising, sales pitches you get on a regular basis. Start to critique them, make notes of what your own pet peeves are and see if you do it your self.

My Pet Peeves: The use of the word or phrase "like", "basically", "um", "you know". I get tons of sales calls at our office from lenders, lead providers, etc. The sales people are HORRIBLE. I have actually said to a sales person after 1 minute, "I am sorry to interrupt, but I have to tell you this is a horrible sales call. I have counted and in one minute you have said "um" at least two dozen times. I'll make a deal with you, if you can get through the rest of your pitch with out saying "um" I will buy what ever you are selling." Surprisingly enough the response was, "Um... Ok. Um, where was I?"

I know it is particularly difficult for those of us under about 35 years of age who were brought up on the work "like". If you can work at your public speaking and remove that word from your vocabulary you will see an increase in your capture rate.

FHA vs Subprime: default and foreclosure rates

Brian Papaccio (Wells Fargo Home Loans) — Fri, 16 Mar 2007 09:25:41 -0500

The mortgage industry has been self regulating and making guidelines for SubPrime lending stricter for at least the past 6 months. Now with the pending "implosion" of the subprime market, congress is looking at other ways to further regulate the lending practices and guidelines for "risky, higher-interest home loans made to people with blemished credit records"

Tougher rules eyed for high-risk home loans Delaware News Journal

The article above also has some interesting data for the default rates on loans held by various types of lenders including Prime loans, SubPirme loans, FHA, and VA. SURPRISE! While the news is concentrating on the subprime market, and congress is looking to play the blame game thinking it will help to correct the current market issues, no one is paying any attention to the default of FHA LOANS, the higest default rate. Total loans with any late payments is high at 12.87% for SubPrime loans, it is even higher at 13.54% for FHA loans. These are loans that are already regulated and INSURED by the government. So when lenders take losses on these loans the government covers those loses..... I mean tax payers cover these losses.

So why is the concentration on the SubPrime market?

Because while the number of people with late payments (30, 60 or 90 days late) is higher for FHA the foreclosure rate of 2.19% is less than half of the foreclosure rate of SubPrime loans 4.53%. This is due largely to the fact that FHA was able to negotiate various workouts and estimates for 75,000 borrowers or abut 60% of the defaults. Were these borrowers in Subprime loans they would not have had similar representation negotiating for them.

Mortgage woes may help revive FHA Wall Street Journal

I just foreclosed and want to buy a new home

Brian Papaccio (Wells Fargo Home Loans) — Tue, 13 Mar 2007 09:16:34 -0500

I just did a loan for some one in this situation. They had some major hardships, divorce, family member with addiction problems, etc. which caused them to loose their home 6 months prior. They were getting a divorce, and wanted to buy a new home instead of renting. They were prepared for the worst and they got approved for 100% financing and the rate was over 10%. They were greatful to just get a loan (they had been turned down at least 5 times before they got to me)

I get a similar call on Monday. "I was in foreclosure and lost the home 2 months ago. I want to buy a new home, and I need 100% financing can you help?" Me, "Well their have been some major changes in the subprime market. However I can check with the lender that does those types of loans and see if they still have that program." She sounds like she is shopping so I start to probe a little, "Have you gotten any other quotes?" Her, "Well I am under contract to close on the 31st [yes in 2-3 weeks], and I had a pre-qual done, but that person couldn't get me approved, and some one else told me they might be able to do it, but I didn't like their rate." Me, "What range are you expecting for the mortgage?" Her, "Well I am not sure, do you know what it might be?" Me, "Well considering the market changes, the recency of your forecloseure, your credit scores, and that you need 100% financing... It will most likely be in the 11-13% range." She then explodes, "THAT IS REDICULAS, I WILL NOT PAY THAT MUCH. Interest rates are like 6% how dare you try and take advantage of me like that!"

Yes. There is one lender that could do 1 day out of foreclosure 6 months ago. I have no idea if they can still do this, but what do people expect. Your credit is shot, you have already proven that you are a huge risk by not making payments to the point of foreclosure, you have no money to put into the deal. But you expect to be treated the same as some one who has 700+ credit, has 20% equity, and has never made a late payment in their life?

She has chosen to walk away from the deal and try to fight to get her deposit money back.

Now I know why I am tired

Brian Papaccio (Wells Fargo Home Loans) — Fri, 09 Mar 2007 12:31:43 -0600

For a couple years I've been blaming it on lack of sleep, not enough
sunshine, too much pressure from my job, earwax buildup, poor blood or
anything else I could think of.

But now I found out the real reason:

I'm tired because I'm overworked.

Here's why:. .

The population of this country is 273 million.

140 million are retired

That leaves 133 million to do the work.

There are 85 million in school.

Which leaves 48 million to do the work.

Of this there are 29 million employed by the federal government.

Leaving 19 million to do the work.

2.8 million are in the armed forces preoccupied with killing Osama
Bin-Laden.

Which leaves 16.2 million to do the work.

Take from that total the 14.8 million people who work for state and city
governments.
And that leaves 1.4 million to do the work.

At any g iven time there are 188,000 people in hospitals.

Leaving 1,212,000 to do the work.

Now, there are 1,211,998 people in prisons.

That leaves just two people to do the work.

You and me.

And there you are, sitting on your ass,

at your computer, reading jokes.

Nice, real nice....

More Airplane Humor - Maintenance logs

Brian Papaccio (Wells Fargo Home Loans) — Thu, 08 Mar 2007 13:23:25 -0600

Here are some actual maintenance complaints/problems, generally known as squawks, recently submitted by QANTAS Pilots to maintenance engineers. After attending to the squawks, maintenance crews are required to log the details of the action taken to solve the pilots' squawks.

Problem - Left inside main tyre almost needs replacement.
Solution - Almost replaced left inside main tyre.

Problem - Test flight OK, except autoland very rough.
Solution - Autoland not installed on this aircraft.

Problem - No. 2 propeller seeping prop fluid.
Solution - No. 2 propeller seepage normal. Nos. 1, 3 and 4 propellers lack normal seepage.

Problem - Something loose in cockpit.
Solution - Something tightened in cockpit.

Problem - Dead bugs on windshield.
Solution - Live bugs on backorder.

Problem - Autopilot in altitude-hold mode produces a 200-fpm descent.
Solution - Cannot reproduce problem on ground.

Problem - Evidence of leak on right main landing gear.
Solution - Evidence removed.

Problem - DME volume unbelievably loud.
Solution - Volume set to more believable level.

Problem - Friction locks cause throttle levers to stick.
Solution - That's what they are there for!

Problem - IFF inoperative.
Solution - IFF always inoperative in OFF mode.

Problem - Suspected crack in windscreen.
Solution - Suspect you're right.

Problem - Number 3 engine missing.
Solution - Engine found on right wing after brief search.

Problem - Aircraft handles funny.
Solution - Aircraft warned to "Straighten up, Fly Right, and Be Serious."

Problem - Target radar hums.
Solution - Reprogrammed target radar with words.

Problem - Mouse in cockpit.
Solution - Cat installed.

Defect: The autopilot doesn't.
Action: IT DOES NOW.

Defect: Seat cushion in 13F smells rotten.
Action: Fresh seat cushion on order.

Defect: Turn & slip indicator ball stuck in center during turns.
Action: Congratulations. You just made your first coordinated turn!

Defect: Whining sound heard on engine shutdown.
Action: Pilot removed from aircraft.

Defect: Pilot's clock inoperative.
Action: Wound clock.

Defect: Autopilot tends to drop a wing when fuel imbalance reaches 500 pounds.
Action: Flight manual limits maximum fuel imbalance to 300 pounds.

Defect: #2 ADF needle runs wild.
Action: Caught and tamed #2 ADF needle.

Defect: Unfamiliar noise coming from #2 engine.
Action: Engine run for four hours. Noise now familiar.

Defect: Noise coming from #2 engine. Sounds like man with little hammer.
Action: Took little hammer away from man in #2 engine.

Defect: Whining noise coming from #2 engine compartment.
Action: Returned little hammer to man in #2 engine.

Defect: Flight attendant cold at altitude.
Action: Ground checks OK.

Defect: 3 roaches in cabin.
Action: 1 roach killed, 1 wounded, 1 got away.

Defect: Weather radar went ape!
Action: Opened radar, let out ape, cleaned up mess!

Not the Bubble Burst you were Expecting

Brian Papaccio (Wells Fargo Home Loans) — Tue, 06 Mar 2007 08:56:24 -0600

For the past couple years, the media, and financial forecasters have been predicting that a housing bubble would be bursting soon. As it turns out in most areas the housing market didn't come crashing down as expected, but rather is softening up. Most areas while still seeing home prices increase, they are not the double digit increases of the past couple years. Homes are staying on the market longer and inventory is up. In spite of those market changes homes are still selling.

It seems that the bubble that is bursting is not the one everyone expected, it is the Secondary Subprime Mortgage market.

The Secondary Market is where the servicing of loans is sold off and/or securitized by Real Estate Investment Trusts (REITs). So now that foreclosures are hitting record levels, the investors are putting the pressure on. They have money invested in a REIT, the REIT holds the loans, the loans are not making money because people are not making payments.

So they look at the loan demographics to determine who isn't making payments. What is being found is that the majority of the delinquencies are coming from the low credit, high LTV loans. All those first time home buyers, with 580-600 credit scores, no down payment; no rental history, etc. are starting to have trouble making payments. Since there is no equity in the house, they can't refinance, and if the house gets sole in a sheriff sale the lender will most likely loose more than just the missed payments (which is the justification for PMI in conforming loans above 80% LTV)

So the REITs stop buying loans from Lenders that fall into those guidelines. The lenders in turn change their guidelines and credit requirements, and pass the word on down to the mortgage brokers. So what is the problem, where is the bubble bursting... it is in the timing. Investors react and stop buying the loans. But the lenders have already lent that money out; they need to sell those loans off in order to have money to fund the loans that are being originated now. So the lenders are "stuck with the bill." That is why the Lenders are dropping like flies.

My Prediction: What does this mean for our market... well if you are a true fan of Danny DiVito and you saw "Other People's Money"... it means nothing. The rules of the game are changing, but the game is still being played. We just have to adjust, adapt, and survive.

People can still get Low Down Payment loans with Low Credit Scores. There are still some lenders out their doing these loans. There will be an increased number of FHA loans for people with lower credit. There will be more credit repair companies, there will be more grant programs for down payments, people will still be able to buy homes.

With all of the foreclosures out there, the market will start to have more property investors who buy distressed properties. Since they are getting the property at a reduced price, and less people can buy homes some will realize that it makes sense to keep and rent out the property rather than fix and flip it.

Real Estate Commissions VS Mortgage Points

Brian Papaccio (Wells Fargo Home Loans) — Fri, 02 Mar 2007 09:07:47 -0600

I went back and read through this after I was done, and it is a bit of a rant, I apologize in advance.

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This is probably going to spark a huge debate, and I may not make many friends because of this post, but I am putting it out there any way.

I have seen several blogs on here and I hear similar complaints from real estate agents I work with regularly. The complaint is that there are new companies in the Real Estate Industry that are challenging the way business has been done for years. There are Real Estate Companies that refund portions of the commission back to the buyer, companies that charge low flat rates instead of percentages, agents who cut the traditional commission of 6% or have a range of fees related to different services provided. These new companies are giving more options and alternatives to sellers and buyers. The result is that the more traditional agencies/agents have to deal with a new form of competition for business. Some agents are loosing deals to these new companies and it seems to spark some resentment or entitlement from the agents I work with and have spoken to about this issue.

So where does the Mortgage Points section of the title work into the picture? Well I think the resentment and entitlement attitudes I hear a hypocritical. Now, before you start the attack let me explain why. The answer is two fold.

The first half: Many times I get referrals from real estate agents I know, and just as often the buyer comes to me first and I refer it out. On several occasions when the buyer came to me first this is what happens. I work with them on their credit, get them approved, we agree on the rate, terms and points, etc. I have spent a couple hours with them, going over options, and we have chosen what is best to meet their goals. I write up a detailed approval letter and give them some real estate agents to contact.

Then I get the call. It is one of the real estate agents, "Why are you charging my client points for such an outrageous rate!?!?" Well first of all it is MY customer that you should be thanking me for sending to you. Second you don't know what their entire financial situation and history is. Third just because rates are in the 6% range doesn't mean everyone can qualify for that? Fourth where do you get off questioning my 1-2 points I make from a buyer when you make 2%-3% on a seller and 4%-6% if you get the buyer too. Fifth, I have been working with them for anywhere from a couple hours to a couple months, if they are happy with the rate and points we negotiated and they are approved what concern is it of yours, they are an approved buyer ready to go, show them some houses.

This inevitably leads to the second half of why I think it is a little hypocritical. While I am thinking everything I mentioned above, I would never be dumb enough to say any of it to the agent. After I explain as nicely as I know how the history with the agent, go over all their potential issues regarding credit history, rental history, or any number of other problems I work through with my borrowers, the agent some times accepts it and moves one. Ok great, you were surprised, now you know why and you are ready to go.

Then there are the other ones, "Well, I think they can get a better rate or less points." And WHAM!, I just lost the deal. Of course after I have worked with the buyer, gotten every thing in order, educated them, and spent my time with them, they can go anywhere else. And here is where I find the hypocritical aspect of the situation. There is always some one willing to work for less, or who is willing to lie to a buyer and do a bait and switch. It is no secret that the mortgage industry is so competitive, that when you shop for a lower rate or less fees, you either find what you want, or you find the biggest liar. I have stolen my own deals like this before. "Oh, Mr. Buyer my competitor down the street told you they would do it for 2 points, I can do it for 1"

The irony and hypocritical part of the whole situation is that now that the Real Estate Industry is starting to experience the same ugly side of competition, it is something to cause major turmoil. So I can certainly sympathize with you, even empathize with you about what your industry is going through. Maybe there is a lesson in there for some of you agents who are more concerned with "helping your buyers" by telling them to shop a mortgage when you should be helping them by showing them some houses and negotiating their purchase price. Believe me I have already actually helped them with their mortgage, now I would just like to get paid for my time.

And let me acknowledge again that this is not every real estate agent, it is probably not anyone in this community, but I have encountered this several times. (Needless to say these agents never got another buyer from me)

So now I will start the debate and ask the real estate agents out there for some responses:

What is your side of this little rant, why would you stab a generous loan officer in the back?
Also I am not fully versed on both sides of the issue in the Real Estate Industry, so please explain to me what is so horrible or great about competition for listings and buyers that ultimately can save those customers money.
What is it about the work that I do that doesn't justify me making up to 3%? Why shouldn't that be the Mortgage Industry Standard?

This is the Blog that inspired mine

Another How to / Why Question

Brian Papaccio (Wells Fargo Home Loans) — Wed, 28 Feb 2007 12:06:29 -0600

What do you have to do to get a blog post featured on the blog home page, or what do you have to do to get some more people reading and commenting on your blogs?

I put plenty of good, related tage in my posts. I Post them to several different groups I belong to. Is there another piece I am missing? I think some of my posts are relevent and I would think that more poeple would post to them, example