Abe Loper's Blog

Takeaways that aren't taken...why do we even bother?

Abe Loper (Abe Loper) — Wed, 28 Jan 2009 10:12:43 -0800

How many times have you handed out flyers, programs, or informational brochures only to find them sitting on chairs, placed on tables, or falling out of waist baskets shortly thereafter? The hazard is real. I hosted an event last week with almost 100 attendees. After making my rounds, speaking with each person, and thanking them for their attendence, I noticed that one of them was passing out 8.5x11 sheets of paper that had beautifully printed in full color with an advertisement for another local event. The event looked fantastic and I decided that I would not only attend, but help promote it. So, to that end, her strategy worked. At the end of the night, however, the advertisements were laying around the rooms, folded or crumpled. I've been told since then that people didn't really know what to do with the papar. Do you take it home? Put it on your refrigerator? Do you fold it? Stuff it in your pocket and hope that you find it before you do laundry or drop your trousers off at the dry cleaners? Most of us don't carry folders with us. Most of us don't want our pockets full of stuff that we aren't sure we'll ever look at again. And, in reality, most of us need more than a single point of contact before we decide that we want to be a part of any event. Where is that second point of contact? Where is the reminder that would come from reading the advertisement again? If you've chosen to keep the flyer intact and place it under a magnet on your refrigerator, congratulations, you've done more than most people will. What the average person needs is a "takeaway" that is easy to take away.

These are the rules of the road. There are two kinds of people that you will encounter. One person will be too thick headed to be reached by any sort of marketing and the other will be so willing that they can be sold on anything, including your current campeign. Neither of these characters are your target audiance. You cannot gain business from either of them. So who is your audiance and how will you reach them?

Allow me to guide you through this thicket and help your vision become a reality. I have takeaways that are taken and reviewed. I have systems for focusing your efforts into laser-effective campeigns.

I wish you all the best and look forward to hearing from you.

Abe

A Vote of Confidence

Abe Loper (Abe Loper) — Tue, 27 Jan 2009 14:04:04 -0800

By Bryan Gentry

Published: December 14, 2008

Young Professionals of Central Virginia was trying to serve local businesses by helping to attract or keep young, skilled workers in the Lynchburg area.

In its first several years of existence, however, the group has earned a reputation mainly as a social club.

Abe Loper, the organization’s new executive director hired in October, said that’s not necessarily bad because it shows the group’s ability to bring people together. But the organization has to change in order to secure a skilled work force in the region for years to come, he said.

That’s a challenge he was looking for in his career.

“I wanted to be able to cast (a) vision, and take an organization somewhere where it hasn’t been before,” Loper said.

“What we’re trying to do is take our strong social history and pair that with some good social purposes.”

Other leaders in the organization agree YPCV needs active steering to refine its focus and help it reach more potential members. They think Loper is the man for the helm.

“We don’t want to be just a social organization for young people,” said Christine Kennedy, a member of the YPCV board of directors. “We want to give back. We want to get involved.”

In 2006, the Region 2000 partnership took YPCV under its wing. With the baby boomer generation about to retire, the goal was to help the community compete for the rising generation of workers. Region 2000 helped the group hire a full-time executive director for those efforts.

After just over one year with YPCV, that director, Jamie Quetglez, resigned from her post and took a job with a local company in April.

Loper applied for the executive director’s position in July. He was in Chicago working for a telecommunications company, but he was about to become engaged to a woman who lives in Lynchburg.

Loper, age 30, was one of 29 people who applied for the job, according to the Region 2000 partnership.

The next couple of months were a whirlwind: Loper and his fiancée Emily made wedding plans, he moved to Lynchburg, bought a house, and got married in September. All along he wondered when he’d get a job.

YPCV didn’t call him in for an interview until the week before his wedding. “That was a crazy week,” Loper said. Then he was offered the job while he was returning wedding gifts at Bed Bath & Beyond.

Kennedy said Loper has plugged into the region in his first two months on the job.

Loper “has really reached out to our membership and key stakeholders … to find out what they want to see in the organization,” she said. “That’s something we have needed for a while, since we have not had an executive director.”

Loper said attracting young professionals to Central Virginia doesn’t happen by accident. He compared the region to a business that must reach its target demographic.

One of Loper’s early proposals was to have YPCV co-sponsor “The Affair of the Season,” an event that took place Saturday. It was organized by local developer Oliver Kuttner to celebrate downtown Lynchburg revitalization.

Loper wants to work more with local colleges to encourage graduates to stay in the region. There is room for improvement there: Only 15 percent of all Liberty University alumni live locally. Of recent graduates, about 13 percent from Randolph College and 30 percent from Lynchburg College live in the area now.

Loper wants to undo YPCV’s image as a social club by increasing the number of service and professional development activities until they take place monthly, like the social events.

The social activities will continue. Loper sees them as a way for him to meet and befriend more young professionals, and motivate them to participate in events that help the community.

Kennedy said that is one of Loper’s strong points. With young workers being a tech-savvy generation, it’s easy to use mass e-mails to promote events. But Loper goes beyond that by reaching out to people one-on-one.

“He has the ability to motivate and inspire (people) to serve,” Kennedy said.

“If there’s one thing that I really feel is important, (it’s that) people matter,” Loper said.

“My parents are incredibly hospitable,” said Loper. “They have always taught me that people are worth bending over backwards for.”

Loper went to high school in Bowling Green, Ohio. Money was tight, but he remembers his parents feeding many people who needed a meal.

When he attended Albion College in Michigan, Loper joined Campus Crusade for Christ. He worked for that nonprofit for five years after he graduated. Then he took a spin in the commercial world, in real estate, then information technology.

Coming to YPCV was a move back to what he enjoys: trying to make a positive difference.

“I like being able to change people’s perspectives, to change people’s lives for the better,” he said. “If I can do that while I work, I’m happy.”

Foreigh Exchange Rates vs. Mortgage Rates

Abe Loper (Abe Loper) — Mon, 25 Jun 2007 15:38:47 -0700

If you've ever looked over my REI profile page thouroughly, you've noticed that I do a small bit of day trading. That trading is in the currency markets called FOREX (Foreign Exchange). I usually have two laptops in front of me all day long. One is of my forex market positions and the other is where I do my mortgage work. There has been a lot of action this week on both fronts. The fun thing is, they seem to be related. That's not much a surprise, but it's been fun to see exactly how closely they do shadow one another. Here's an example.

When my line graph on my Dell (Forex computer) shows me that the U.S. Dollar is getting strong against the Euro, I turn on my radar for any interesting news in the mortgage world. Sure enough, about an hour later (assuming the dollar continues to stay strong and it wasn't just a spike), I get 10 emails from my company telling me to suspend my rate locks because Chase is pricing for the worse, and Citi is pricing for the worse, and, and, and, etc.

At first, it seemed like a fluke. But then a couple days later I was able to witness the opposite. I saw the dollar get weak. And, sure as can be, I got emails saying "suspend, Citi is pricing for the better", etc, etc.

Now, if you're wondering why high rates come with strength in the dollar, let me put it really simply. When Americans make lots of money and have a strong economy, they spend lots of money. When we spend lots of money, we can afford higher rates. When the dollar is weak, we travel less, spend less, and get stingy with our wallets. When that happens, lenders lower rates.

I think it's fascinating, and I haven't even begun to get into how the Fed perceives the whole situation. Luckily for us, there's very little correlation between what the fed does to interest rates and what mortgage rates do (except for in the case of Home Equity Lines Of Credit). The Fed's rate changes only directly affect revolving credit, not closed end cretid. For a concise definition of closed end and revolving credit, see a future blog of mine.

I look forward to hearing your comments.

Abe

Listen....Do You Want to Know a Secret?

Abe Loper (Abe Loper) — Wed, 13 Jun 2007 12:35:34 -0700

I'm not gonna go on and on here and I'm not going to take out a magnifying glass and wax eloquent on the intricacies of mortgage backed securities. I just want to give you all a little corner of the information that mortgage people like myself use to help forecast the future of our markets. I'm going to work through this deductively and from a very general perspective. So please resist the urge to nit pick me to death if you know of exceptions to what I'm saying.

1) More people buy and refinance houses when rates are low. (I think we can agree on that.)

2) Rates tend to drop when the economy is doing poorly. Take, for example, the post-9/11 real estate boom that was the result of record lows in rates. And, take the 80s, as a decade, as an illustration of the opposite effect of the same rule. When Americans are spending lots of money, rates can be higher because we can afford to pay them. When we are not traveling, consuming, and splurging as often, rates are lowered in order to help us out a bit.

3) Based on what you think the economy is going to be doing in December (or whenever), you can make a decent guess as to where rates are going to be and whether or not you should be locking in your purchases now, or waiting for rates to drop a bit.

I'm not claiming that this is an exact science, but you should consider these things when you're purchasing properties. Especially those of us that do more "buy and hold" stuff and could be at risk of needing a refi in 3-5 years. It may be better to lock into a relatively "high" interest rate of 7% on a 30yr then to sign on a 6.25% loan that will become an 8.25% in 3 years. As always, each transaction and buyer is different. You need to do what's best for your situation, but it wouldn't hurt you to run your scenario through this filter and see what you come up with.

If you have other questions about rates and the economy, I can answer them for you. Shoot me an email or a comment and I'll get right back to you. I just don't want to write anything long on here. I, personally, tend to skip over the longer blogs and I assume that's the case with most of you.

Leave me comments. Let me know if this info was helpful. Let me know what else you'd like to hear a blog on. I'll write it for you. Even if I have to do some homework beforehand. Thanks everyone.

Abe

Agents....Do your Mortgage Broker a Favor!!!

Abe Loper (Abe Loper) — Wed, 16 May 2007 11:11:39 -0700

I'm gonna make this short. It's not a rant against any agent. I love the agents that I work with and they generally do their homework when they start working with a buyer. Now, maybe you can help me out. I don't know what sort of questions you usually ask your clients the first time that you meet with them, but let me make one quick suggestion. Please ask them if they think they are in a position to buy a house. That's it. Some people will be mistaken and misinform you, but maybe this will help sift through some of the clients I've been getting. I had an agent send me a buyer this week that was looking to buy that particular agent's home. So, I understand that he was really hoping the best for his buyer. But after lots of calls and voicemails and emails, etc, I pulled the buyer's credit and found that the buyer has NO CREDIT SCORES. And, to make things worse, the buyer has 8 COLLECTIONS in the last 3 years (2 of which are less than 2 months old). Clearly, this person cannot buy a home. It would have saved us all a lot of time and energy if the agent had maybe deduced some of this info ahead of time.

I can already see some of you getting upset and telling me that it's MY job to find this info out and that it's not the agent's responsibility. I fully agree. I don't want you to think that I'm implying that this is a must. It's just a request...as the title of the blog implies...it's a favor. What do you all think about the predicament? Let me know, I'm excited to hear.

Thanks everyone.

Abe

This is Guaranteed Rate, Chicago, IL

Abe Loper (Abe Loper) — Wed, 09 May 2007 12:36:10 -0700

Welcome to Guaranteed Rate.

Since our founding in 2000, Guaranteed Rate Inc has grown to become the largest independent mortgage company in the Midwest. We’ve been able to achieve this growth by following the simple idea of providing a streamlined mortgage experience for our clients combined with the lowest possible rates.

Outstanding customer service is the benchmark by which we measure our success and our guarantee of the lowest rates available ensure our clients realize their home ownership goals. We are continually investing in technology, training and product development to streamline the entire mortgage process from application to closing.

(for a complete virtual tour of our offices, visit Click Here)

These investments yield high productivity, fast closings and, most importantly, a satisfied client. Our customer surveys have consistently 95+% high-satisfaction scores month-to-month. Our lofty customer service marks are a testament to putting the customer experience at the center of our business model.

With that as backdrop Guaranteed Rate has successfully worked with thousands of clients over the last six years closing over $8Billion in business, and is on pace to close nearly $4Billion in 2007.

We have the lowest rates on a full menu of proprietary programs combined with knowledgeable loan officers that will get the job done. Guaranteed Rate has 400 employees in ten offices and we’re licensed to do business in 30 states.

Guaranteed Rate's Growth over the last 6 years.

"Abe has been one of the best people for me to know in purchasing and
financing my home. He introduced me to my fantastic realtor, helped me
with any questions I had or pointed me to who I could talk to, and
helped make my closing go as smoothly as it could have. With some of the
recent changes in rates, he's even working with me to refinance my mortgage to
take advantage of that and he's eager to do it, helping me all the way
through it."

Chris S., Chicago

How to Find a Renter in ONE (yes 1) Day!!

Abe Loper (Abe Loper) — Tue, 08 May 2007 09:14:23 -0700

Hey guys! I wanted to shoot you all a quick blog about renting out rooms and condos (I don't know if this will work with single family homes).

If you live near a college campus or in a larger city, you have an even better opportunity to take advantage of this advice.

Sometimes, those of us who own rental property have trouble getting people into our rental units/houses. In my case, it's a condo. I've found that, at least in my case, there's a sure-fire way for me to fill the unit in a matter of days.

What I do is pretty simple. I offer the unit as "month-to-month". I don't ask them to stay long term. The lease is month-to-moth and I tell them that if they want to leave, I need 30 days notice and that I'll give them 30 days notice if I want them out. In return for this great feedom that I offer to my renters, I'm able to raise rent by 20%.

I make sure that I take at least one month's rent up front as a security deposit (in case they don't give me the full 30 days notice). Also, I try to keep the unit furnished. Furnishing units is something that my Hawaiian friend Donovan has mentioned in his blogs at realestateinvestor.com as a strategy that he's implemented in order to make move-in and move-out (or evictions) more convenient for both him and his renters. Keeping the unit furnished also alows for the higher asking price for rent.

I had a room open up on Friday afternoon. I listed it on CraigsList as "month-to-month" and had 3 responses within 1 HOUR!!!! I got 9 replies in 24 hours.

Is there more risk in renting month-to-month? Absolutely. But I think that the additional rent that you will get is a great way to help pad that risk.

Hopefully this will help some of you fill your empty houses, empty units, and empty rooms. After all, we all know that empty rental property creates empty wallets.

Good luck guys (and gals) :)

Happy Investing,

Abe

The Gov't is Keeping us on our Toes

Abe Loper (Abe Loper) — Mon, 07 May 2007 08:21:32 -0700

The following is a clipping from a much longer article that can be found at http://www.chicagotribune.com/business/chi-070504mole,1,5235800.story?track=rss. As a loan officer, I think it's great the government is out there, watching us, and making sure that the "snakes" are caught. They're watching out for the consumer and eliminating some of my competition. Which, in a way, is a reward to those of us who do things right.

TRIBUNE INVESTIGATION
Developer was mole for feds
Dealmaker led double life amid financing probe

By David Jackson
Tribune staff reporter
Published May 4, 2007, 11:37 PM CDT

John Thomas bought and sold downtown office buildings and helped other property developers secure multimillion-dollar mortgage loans.

But the high-living dealmaker had a double life.

Thomas, who was convicted of federal business fraud in New York in 2004, has been serving as an undercover government mole in Chicago for at least a year as part of an ongoing federal investigation into fraud in the financing of large-scale commercial real estate deals, the Tribune has learned.

Records made public so far do not identify the targets of the federal probe, and the FBI and U.S. attorney's office declined to comment for this article.

But the case could send ripples through Chicago's huge financial and real estate industries because Thomas' business clients and associates include several well-known commercial and residential developers.

Upcoming Real Estate Events in Chicago

Abe Loper (Abe Loper) — Sun, 06 May 2007 08:04:16 -0700

For those of you looking to enrich your knowledge of history and current chicago markets, these events may prove helpful.

Abe

The Survival of Yerkes Observatory

What: Part of the Eric R. Multhauf Lunchtime Lecture Series, you'll hear from Carol JH Yetken, CYLA Design Associates, Inc. and Walker C. Johnson, Johnson Lasky Architects.
Who: Chicago Architecture Foundation
Where: The John Buck Company Lecture Hall Gallery, 224 S. Michigan Ave.
When: May 2, 12:15 to 1 p.m.
Cost: Free and open to the public, no RSVP required
Contact: 312-922-3432 ext 252
Web site: Chicago Architecture Foundation

brown bag luncheon

What: Palmer House renovation. Will include history of the Palmer House and review of design plans.
Who: Friends of Downtown
Where: Millennium Park Meeting Room
When: May 3, 12:15 to 1:15 p.m.
Cost: Free
Contact: Friends of Downtown, 312-458-9454
Web site: Friends of Downtown

The Palmer House Renovation

What: Mr. Ken Price, Director of Public Relations of Hilton Hotels will offer a history of the Palmer House; Ms. Mary Ann Cronin, Director of Development of Thor Equities, will discuss the challenges of converting a landmark building.
Who: Friends of Downtown
Where: Millennium Park Meeting Room, Chicago Cultural Center
When: May 3, 12:15 - 1:15 p.m.
Cost: Free and open to the public
Web site: Friends of Downtown

"A Conversation With..."

What: Question-and-answer format. Speaker is Penny Pritzker, president and CEO of Pritzker Realty Group L.P.
Who: ULI Chicago (Urban Land Institute)
Where: Mid-Day Club, 21 S. Clark St., 56th floor
When: May 3; 4:30 p.m. registration and networking, 5 p.m. program, 6 p.m. cocktails and hors d'oeuvres
Contact: Cynthia A. McSherry, 773-549-4972
Web site: ULI Chicago

If Jane Jacobs Came to Chicago...

What: In observance of the one-year anniversary of her death, this program focuses on the life and legacy of Jane Jacobs.
Who: Chicago Architecture Foundation, Urban History Seminar, Chicago History Museum and the Center for Chicago Programs, Lake Forest
Where: The John Buck Company Lecture Hall Gallery, 224 S. Michigan Ave.
When: May 5, 9:30 a.m. to 3:30 p.m.
Cost: $55, $45 for CAF members, $35 for students (includes lunch)
Contact: RSVP to 312-922-3432 ext 224
Web site: The Chicago Architecture Foundation

So many Foreclosures......Who's to Blame?

Abe Loper (Abe Loper) — Sat, 05 May 2007 11:32:19 -0700

In the aftermath of the recent storm of foreclosures, I've heard and read a lot of people sharing their thoughts on who is responsible and what caused the problems, how to fix the problem, how not to fix the problem, etc. More often than not, it's lenders and adjustable rate mortgages that take the brunt of the blame. And, certainly, in many cases, that is absolutely the case. But, I want to introduce a new perspective to the mix.

Though I agree that 30yr loans are best, and that there ARE "slick" and "greedy" lenders out there, it's important to note that ARMs have been around for a long time and are not inherently bad. They are NOT good for everyone and they are NOT a way to avoid fiscal responsibility. However, they are incredibly useful if you are a medical resident, or if you've just started a job that will allow you to earn more money in the near future, as well as if you have no intention of living in that home for longer than your ARM term. Most of the ARMs that have been closed in the last couple of years have been 3-5yr ARMs (only about .5% lower than 30yr fixed rates), which provide the client with a good bit of time to get their finances, debt, and income into good shape before their rates change at all. I was the victim of a predatory lender when I bought my first home. I know what it feels like to be the client, and now that I know the industry as a broker, I know what a sleezbag looks like from the inside. Putting people into ARMs isn't bad. Putting people into mortgages that they can't afford is. That being said, it's just as likely that a client will be placed into a 30yr fixed rate loan that they cannot afford as it is that they will be placed in a 5yr ARM that they cannot afford. Without justifying the terrible people who pray on their clients, it's important to realize that the rise in foreclosure has more to do with increasing rates of spending and consumerism in America. We, as a nation, have lost our sense of self control and are living beyond our means. This knowledge should be used by brokers like my self to hlep people understand the gravity of their choices. Those who don't counsel their clients in such a way are irresponsible as lenders. However, I think you'd be shocked to see what sorts of unnecessary things many people charged to their credit and debit cards during the months leading up to their foreclosures.

I hope my heart for the client is heard here and not an attack or defense of any position. I'm just trying to bring some balance to what seems to be an unbalanced discussion. Thanks for reading.

Abe

What I Call Service

Abe Loper (Abe Loper) — Thu, 03 May 2007 23:16:35 -0700

Let's face it. Everyone on here says that Customer Service is their primary focus. If you've been in our industry long enough to earn your stripes then you know that, statistically, that's just not anything close to true. I don't know who's lying or just mistaken, but there are too many bad experiences in our industry to support a 100% claim to prioritizing Customer Care.

It's my guess that many of the Loan Officers on here would define customer service as getting a job done, well, and with a smile. There's nothing wrong with that. I'm learning, however, that my standards are far higher. As I close more loans, I have more and more real estate agents wanting to partner with me. Many of them the seller's agents that I meet at my client's closing table. Here are two very short stories that illustrate why my business is growing and why I insist that you won't find anyone who cares about borrowers more than I do.

Yesterday I had a closing. The wire got lost in the accounting department of the title company. I sent all of the other parties home and stayed at the closing table by my self for 5 hours until they found the wire. I then drove each check to the appropriate party and took the keys to my client, along with dinner and some help unpacking.

On Monday, I helped a different client paint her walls, change the hardware in her new home, and assembled her new tv stand for her.

I do everything that I can in order to bring the best service possible to each and every client. When they think about their experience of buying a home, they will remember that the people around them cared about them as human beings, not just clients, and went far beyond the "call of duty" to pass along a smile and peace of mind.

If you're interested in refering the best services to your clients, then I'd like to invite you to be a part of the great memories that my clients have.

Send me an email/message.

I'm looking forward to hearing from you.

Sincerely,

Abe

New Info About HB4050

Abe Loper (Abe Loper) — Mon, 09 Apr 2007 16:59:14 -0700

If you live in Cook County: House Bill 4050 will affect YOU, requiring mandatory mortgage counseling at a cost of $300, if you refinance or purchase a home that falls into any of the following categories:

1. All first time homebuyers.

2. Anyone refinancing a primary residence.

3. Anyone obtaining an interest-only loan.

4. Anyone obtaining an option ARM, since all of them may result in negative amortization.

5. Any loan where the total points and fees payable by the borrowers at or before closing will exceed 5%.

6. Any loans with documentation type of stated income.

7. Any loan financing the transaction, which includes a simultaneous 100% second-lien loan.

The original HB4050 was suspended by Governor Blagojevich in January 2007, at which time it only affected 10 zip codes in Cook County. The current bill has been expanded to affect all 220 zip codes in Cook County.

The Governor has filed new rules pertaining to the Illinois predatory Lending Database Pilot program, also known has HB4050. There is a 45 day comment period beginning April 6, 2007 (contingent upon publication in the Illinois Register) during which industry groups, advocates and other members of the public may file comments or request a public hearing. Take action and let your voice be heard!

Now, the 5.3 million residents of Cook County want to know: WHAT ARE YOU THINKING, Governor Rod Blagojevich?

I think that ALL Cook County homeowners and first time homebuyers need MANDATORY MORTGAGE COUNSELING (for $300) if they refinance or purchase a home with an adjustable rate mortgage (ARM) or interest-only loan.

I think that if it takes a Cook County homeowner or first time buyer 4 or 5 months to get an appointment to see a counselor, that’s not my problem. I just want the $300.

I have no idea that this new law will impact 100,000 transactions per month, or a total of 1.2 million transactions per year.

I think that there is no way for any State Agency to handle that volume without causing large disruptions in the Real Estate industry. But hey - who cares - I'm getting my $300.

I have no idea that 1.2 million transactions requiring $300 in counseling fees will equal $360 million dollars of increased state revenue per year - or 360 million reasons why I think this is a great law... despite the fact that I ACTUALLY SUSPENDED THIS LAW IN JANUARY OF 2007 BECAUSE I DIDN’T THINK IT WAS SO GREAT.

I don’t care how many developers, Realtors, homebuilders, construction workers, contractors, mortgage industry employees, or Cook County residents this new law affects. If a Realtor can’t close a sale, or if a developer can’t sell his condos, just because the Cook County resident is waiting for counseling - well, that's simply not my fault. I am protecting them from themselves!

I think that this law will only be for Cook County, and for no other county in Illinois. That's because Cook County homeowners and first time homebuyers are inferior (that means dumber - we learned that in school without counseling) to every other county in Illinois. Plus they won’t know what hit them until after the law is passed, because we aren’t going to talk about it!

HB4050.....Details. ALL ILLINOIS RESIDENTS MUST READ THIS!!!

Abe Loper (Abe Loper) — Wed, 28 Mar 2007 16:24:21 -0700

If you live in cook county, or know anyone who does, please email this to them, AND READ IT - it's crazy what the governor is trying to do.

Thank you, Beth

PLEASE PASS THIS ON TO EVERYONE YOU KNOW WHO LIVES IN COOK COUNTY-

They are going to enact the law very quietly so that the screaming doesn't begin until you have to sell or purchase a new home, that is when everyone will find out that they should have screamed at their representatives!

The Governor of IL believes he should be involved in not only taxing us to death but also in our Real Estate deals. Everyone in Cook County will be affected by this ridiculous law. When you refinance or purchase a home and want to obtain an interest only product or an adjustable rate the State of IL will force you to counseling. I have dealt with the counselors a few months back when this law was only for 10 zip codes and now they are rolling it out for all of Cook County. The counseling and the counselors are a waste of everyone's time except for a certain select group of people who truly need counseling!

This law has already past and then was suspended by the Governor, now its back and worse than ever. Call your state representative and raise some hell because it will take you 60 to 90 days to go through counseling when all of Cook County is required. It took 30 days to get an appointment when there was only 10 zip codes and everyone I spoke to who was required to go said it was a complete waste of their time. Call your mayor, your state representative and tell them this needs to be changed.

DON'T LET THE GOVERNMENT CONTROL YOUR REAL ESTATE NEEDS. THIS LAW IS GOING TO HURT THE HOMEOWNERS OF COOK COUNTY, NOT THE MORTGAGE BROKERS. MORTGAGES WILL STILL GET DONE SO WE WILL BE FINE BUT HAVE FUN AT COUNSELING AND HAVE FUN WAITING FOR THE PERSON WHO PUT A CONTRACT ON YOUR HOUSE TO GET THROUGH COUNSELING BEFORE YOU CAN SELL YOUR HOME!!!!

New HB4050 Overview

This week, Governor Rod Blagojevich announced that he will be filing a revised rulemaking in connection with HB 4050. The proposed rule will be officially filed in the Illinois Register on April 6th. At that time the official comment period of 45 days will begin. The IAMB, along with its legal counsel, Larry Gold, will be reviewing the procedures allowed by law for the Association and its members to participate in the review process. We have learned of a process that might force the State of Illinois to hold a public hearing during this original comment period. Executive Director Marve Stockert will be traveling to Springfield next week to meet with senior staff members from the Joint Committee on Administrative Rules (JCAR), to discuss the IAMB's concerns with the proposed rule, and its impact on the mortgage process in Cook County.

The IAMB newsletter for March 30th will have a detailed explanation of the JCAR process and the guidelines for submitting comments on the new proposed rule. The IAMB plans on participating in the rulemaking process every step of the way, and we will use every legal recourse granted us under the Act to make sure our members voices are heard in the most effective way

A) This is not a new law but a new Rule that was proposed by the Governor. JCAR(Joint Committee on Administrative Rules) is a 12 person committee made up of Democrats, Republicans, Senators and Members of the House. The committee will review the information sent in on the comments, have the hearing recommend changes and have the ability to send a revised Rule back for another 45 day comment period and then have another hearing before making a decision to either pass the rule for implementation or override the rule and have it stop at that point.

B) Again this is not a new law so the Legislators and Senators will not be voting unless they are on JCAR.>

C) The implementation of the new rule if it passes will be at least five to six months.

D) All loans taken in the 218 zip codes of Cook County will have to be registered on the 4050 database (Section 346.15) via the internet. This covers all commercial, residential, Heloc> '> s, 2nds and any other type of residential mortgage product. If you do not enter the information, you will not be able to get a Certificate that is required in order to file the mortgage with the Cook County recorders office.

E) All primary residential 1 -4 Family units are covered. Non-Owner occupied are not covered under the counseling requirements but must be entered into the database.

F) Who is required to have Counseling (Sections 346.21 and 346.22)

1) All 1st Time Home Buyer Loans and all Refinances if they fall under anyone of the following triggers. All other purchases are exempt.

2) Any loan that uses Stated Income

3) Any ARM loans

4) Any Interest Only product

5) Any Option Arm or negative amortization loan products

6) The loan financing transaction includes a simultaneous 100% second-lien loan

7) Any loan with a prepayment penalty

8) Any loan that exceeds the High Cost Lending Limit of 5%.

HB4050...Trying to Fix the Problem, They've Made it Worse.

Abe Loper (Abe Loper) — Tue, 27 Mar 2007 14:42:14 -0700

I've written about HB4050 in the past. "HB" stands for House Bill and if you want to know a little more information than I'm including in this blog, feel free to refer back to my previous blog on the topic. Here's what I've learned, in a nut shell.

There are bad people in the world. Some of them work for mortgage lenders and brokers. Sometimes those people take advantage of unsuspecting first time, or even seasoned, homebuyers. Years ago, I was one of those homebuyers. You can read that story in my blog "My True Story of Predatory Lending". The local government is trying to protect those of us who may not be able to protect our selves. I understand that desire and I appreciate the gesture. However, in their haste, what has actually happened is a redlining of minority communities and a more difficult mortgage process for low-income buyers. This new HB (house bill) went into effect less than a year ago and was enforced in 12 zip codes here in the city.

Due to an unpresidented response from communities and professionals who were affected by the bill, the House decided to reconsider the bill. That was a great start, unfortunately, they then decided to "fix" the problem of discrimination, not by putting a stop to the program in those areas that were affected, but by enforcing it in all of Cook county. Brilliant. (some sarcasm there, if you didn't pick it up)

If you want to know what sort of logic was used in the making of this decision, just imagine any other discriminatory situation in history and imagine what would happen if it were handled similarly.

What if Abraham Lincoln would have chosen a platform, not of freedom for slaves, but of slavery for everyone else? That's a rediculous concept that many of the founding polititions in our country knew to avoid. Isn't it wonderful how we've evolved as a society?

I'm a happy person and I'm not letting this get me down. In fact, if you keep up with politics, even a little bit, then, like me, you're probably not surprised by boneheaded moves of this sort.

If you don't live in Cook county, Illinois then you'd be wise to watch your local government for similar moves, as this is a pilot program for other areas of the country.

Have a wonderful day. Enjoy the weather. Work hard. And, by all means, value people and treat them well.

Tax Issues and Mortgage Financing for the Self Employed

Abe Loper (Abe Loper) — Fri, 16 Mar 2007 12:15:01 -0700

Tax season is here. So is the busy season for real estate professionals. This being the case, I always try to get my taxes done ASAP. That means that I get them in by the end of January and I get my return by the middle of February. This way, I have more of my CPA's attention and I'm not killing myself trying to do my complicated taxes during the busiest time of my work year.

For the last couple of years I've filed a 1099 C along with my regular w-2 wages. My other jobs have been sporadic and the self employed income is the only way I can prove a steady job for the last 2 years (which is required for most loans). Still, when I'm getting financing for a loan, be it a purchase or a refi, I can't actually show my tax documents because an underwriter or mortgage professional is responsible for any information that they receive, even if it's not what I intended them to see. (I should know this, I'm a mortgage professional. And, when I'm doing a "stated" loan, I always go out of my way to tell my clients NOT to show me any income documentation, because after that I have to use the numbers that I've seen, even if they are only part of the client's income, etc.)

Anyway, the way that a self employed borrower proves the consistency of thier employment without compromising they're stated income is this: they get a letter from the person that prepared their taxes which states that the taxes were prepared by a licenced tax professional and that there was self employment income filed in a 1099 C. That's all.

This is the case with my situation. And I have a warning for all of you.

Choose a CPA that is willing to write the letter. Find out if they are willing ahead of time. Last year, I had to the letter from H&R Block and there was no problem. This year, a different person with H&R did my taxes and this particular person gave me the sharpest, rudest remarks I've heard in a long time, and insisted that she doesn't write letters of any sort on behalf of anyone, and that she didn't care if it meant I couldn't refinance.

This may never happen to you. But I would encourage you to take steps to insure that it doesn't. For starters, ask about it before you start submitting your tax information. Second, choose a better, more experienced CPA than I did. I won't use H&R block again and I will spend more money next year to make sure that things are done right and that I'm treated with respect. It's no fun to be treated like your nothing more than a number. I wouldn't treat any of my clients that way and I don't think you would either. Unfortunately, there are people who are not a concientious as we are.

And Rates Continue to Drop

Abe Loper (Abe Loper) — Tue, 13 Mar 2007 13:51:57 -0700

I mentioned in my last blog that I was able to get a rate of 5.875% on a 5yr ARM for a client of mine. I thought that was pretty amazing considering the market. But get this....I just got a client a 5.75% on a 30yr fixed loan. Yeah, I know. That's insanity. Mind you, he put 20% down, but it's still unheard of these days. If you wonder where I've been as of late, the answer is simple. Buying season has started and rates are low. Need I say more? Lots of closings and lots of time at the office. I'm locking loans and taking apps more often than I'm used to and it's really a great feeling. I'd love to help you refinance or even buy a first home or investment property. If you give me a chance I'm sure you'll be impressed.

Abe

Inside Scoop on Mortgage Rates

Abe Loper (Abe Loper) — Fri, 02 Mar 2007 23:54:14 -0800

Hey friends,

It's been a while since I last blogged. I've been waiting for something of note to blog about. Well, tonight I thought I'd let you all in on a little secret, just in case you hadn't heard the news.

MORTGAGE RATES ARE VERY FAVORABLE RIGHT NOW

Now, before you run out and buy a house just to take advantage of some fabled, low rate, let me clarify. They're not like they were in 2002/2003. But I quoted a girl 5.875% on a 5yr ARM this week. That's right, I found a loan for less than 6%, and it wasn't a bad loan. There's no prepay or any hitch like that either. Since I got into the business (after the historc lows of a few years ago), these are the lowest rates I've ever seen.

That being said, I'll let you all know that there's no way of knowing how long they'll be down. Many loan officers at my office are working insane hours right now in order make sure they lock every loan they can before the weekend is over. We really don't know what the market is doing or how it will react to the recent craziness in the stock market.

Also, l want to point out that the sub-prime market is an alltogether seperate animal. If you've got credit below 620 or you want a stated loan product, etc, then you shouldn't expect too much. In fact, the sub prime world is more or less in shambles right now, so be sure to do your homework before you take a mortgage through a sub-prime lender. Some sub-prime lenders are Suntrust, First NLC, Delta Funding, Equifirst and New Century. These are not bad lenders, but they're less predictable than conforming (loans that conform to Fanny May guidlines) lenders like Chase, Wells Fargo, 5/3, CitiMortgage, Bank of America, Washington Mutual, National City, ING, etc. You can usually tell a sub-prime lender by the fact that they don't have actual brick and mortar banks. By and large, you can open a savings or checking account with a lender that does conforming loans.

I don't know if this is going to help anyone today or tomorrow, but it's my hope that the knowledge will help you in the future and, at the very least, give you confidence when looking for loans.

Stay smart, motivated, honest and compassionate at all times.

Abe

Why Pre-Foreclusures are my Favorite Purchases

Abe Loper (Abe Loper) — Fri, 16 Feb 2007 14:10:14 -0800

There's a very simple answer. I don't much like banks. And, did you know, that banks often get paid twice on the properties that they have foreclosed on? It's absolutely true. When a borrower defaults on a loan, banks that are members of FDIC get paid an insurance settlement for the loss. Then, the banks turn around and sell the property, getting paid a second time on the same property. If I have the opportunity to buy a property below market value, and I'm gonna beat the bank at their own game, then, by all means, I'd love to do it. Banks are not in the business of hanging on to properties, but they evidently like to flip them. Getting a good deal and still "stickin' it to the man"...It's like a double scoop of mint chocolate chip, rather than just a single. And who wouldn't want that?

Abe

How Negative Cash Flow Can Make You Money

Abe Loper (Abe Loper) — Thu, 15 Feb 2007 04:38:03 -0800

Ok, so I just read a blog (on another site) that was posted by a certain Hawaiian friend of mine that was warning against Alligator Property. It's a great blog.

In it, he explains how an Alligator Property is basically a property that you buy, thinking you're going to have positive cash flow, but end up having unexpected costs put you in a Negative Cash Flow situation. This sucks. But, let me put a silver lining on the situation. And, for the sake of an example, I'll use actual numbers from a rental property of mine.

I have a property that is worth about $175,000. I paid $124,000 for it 3 years ago. I have a HELOC taken out on it that I've charged $17,000 to. The PITI (Principal, Interest, Taxes, Insurance) on the property is $950/month. The HELOC is about $200. And, I'm paying $135/month for association dues. I'm paying $1285/month to own that property. My renter pays me $850/month. OUCH!!

I know. I can hear your thoughts as they enter your mind. Trust me, I can't wait for the lease to be up so that I can raise rent. But, in the mean time, look at it this way.

I'm paying $435/month out of my own pocket to hang on to that property. In my neighborhood the property is appreciating about 15% each year. So, this year, for example, I'll make around $25,000 in appreciation. And, the interest on my loan is tax deductible, as is the depreciation (I'm just learning about depreciation, so if anyone wants to write a blog, I'd be grateful). Assuming I'm paying about $700/month in interest, and I'm in a 25% tax bracket, that means that I'll get about $175/month back. So, $175 x 12 = $2,100. Add that to my $25,000 and I get $27,100. Devide that number by 12....and you get $2,258/month. I'm trading $435/month for $2,258/month. Anyone still saying "OUCH!" ? The end math dulls the pain of the "negative cash flow". Slowly, the HELOC will be paid off and the rent will be raised, bringing me into a positive cash flow situation, but right now, I'm ok to just hang on and collect my equity money.

(Keep in mind that this may not be the case if your area is not appreciating sufficiently)

Remember, just because your monthly budget is in "the red", it doesn't mean that your income is.

Real Estate is such a great investment. We are absolutely blessed to do what we do.

I hope this makes sense to you all and helps someone.

Thanks for the comments and the grades.

Abe

The Reason for the Rise in Foreclosures is.........

Abe Loper (Abe Loper) — Sun, 11 Feb 2007 09:42:22 -0800

Sure, it could be the brokers, and we are likely to take the brunt of the blame. But the rality is, it's not us. Brokers were around 10 years ago when foreclosure rates were lower. I know that there bad brokers out there. I got swindled by one when I baught my frist house. They may aggrivate the problem, but are not the source. In order to find what's making the difference, you have to look for something that has changed. The differences today are market and mindset. Rates have risen almost 2% in the last 5 years and that means that any 5yr arm from '02 is coming due. That's not the broker's fault. It's just the reality of the market. This is the first time we, as an industry, are watching what happens when rates even out after historic lows. Evidently, an increase in foreclosures is part of that evening out.

The other culprit is "The American Dream". People are buying houses beyond their means. Heck, forget houses. People are LIVING beyond their means. Americans are drunk with consumerism and status. That's the real reason that they can't pay their bills. They baught stuff that they couldn't afford. Last year Americans spent more money than they made. This is the first time that has happened since the Great Depression. And during the Depression it was justified because nobody was making money. Today, unemployment is down, pay is up, and we're still spending more than we make. Is it any wonder people are being foreclosed on?

Abe

A Quick Note to Buyers

Abe Loper (Abe Loper) — Fri, 09 Feb 2007 16:24:57 -0800

As the buying season begins, I want to help some buyers understand the implications of the season. For buyers that have been looking for 3-5 months and have found themselves negotiating their contracts AWAY from a sale, they should know that things are going to get worse. There will soon be far more buyers than there were just a month ago. You'll have stiffer competition and sellers will be less likely to give way on their asking prices. Sure, you'll be able to talk them down, but any upper hand that you may have had in the winter is gone in the spring and summer. Am I just telling you this so that I can burst your bubble and rain on your parade? No. I'm telling you this because I hate seeing people loose their dream home over a couple thousand dollars that they're trying to negotiate with the seller. A couple thousand dollars in your mortgage is going to be about $30/month, if that. So put your pride aside and stop pretending you're in Tiajuana. Offer a competitively low price. Take what you can get, then, move into the house that you love. If you didn't love it, you wouldn't be bidding on it. I just saw a friend of mine loose her dream home to another buyer because she was trying to negotiateanother $4,000 out of the asking price and someone else swooped in and gave a better offer. I feel bad for her. I just don't want to see it happen to other people too.

Have a great day and a fun time bidding. I wish you all the best of luck and a house that you can call your home.

Abe

What You Need to Know About Credit Scoring

Abe Loper (Abe Loper) — Thu, 08 Feb 2007 17:02:50 -0800

First, let me say that as I've continued to take classes and learn about this industry, I've become more and more aware of the value of good credit. I've also become more aware of the fact that NOBODY (even my instructors) have the system figured out. None of the three Credit Reporting Bureaus (Experian, Equifax and TransUnion) will tell anyone exactly how they calculate the numbers. However, there are some general guidelines that we should all keep in mind as we shuffle cash and debt from one place to the next.

1) If you have an open end loan (credit cards, helocs, etc) you can count on your credit being hurt if your balance is more than 50% of your spending limit.

2) If you have a credit account that is less than 2 years old it is considered "young" credit and it is hurting your score...but not by much. If you have "old" credit that is more than 2 years old, it is helping your score...so don't close old, unused accounts. Just let them sit there.

3) There is no such thing as "potential debt". You won't be penalized because you have 10 credit cards that each have a $20K limit and zero balance. As long as those accounts are 2yrs old, they're helping you. All it shows is that you're responsible with your spending and you have self control.

4) If you have an old collection (medical, unpaid parking tickets, etc) that was filed against you a few years ago and is not yet resolved. DON'T RESOLVE IT. Wait until after your purchase to pay it off. If you pay it off before the closing then it will pop up as having "recent activity" which will further hurt your score.

5) If you have fewer than 3 trade lines (people you're borrowing from that are reporting you to the bureaus) then you need to open more accounts. Having less than 3 trade lines will hurt your score.

6) If you don't have a wide array of different TYPES of credit, you won't have as high a score as you could. I, for example don't have a car payment. If I had a car payment that was in good standing then I would have a higher credit score.

7) If you are looking to buy a house or a car, or to sign up for a consumer credit card (Best Buy, Macy's or Victoria's Secret, etc) you should know that each inquiry into your credit (happens each time you apply) will hurt your score. HOWEVER, any inquiries that come from a single industry in a 45 day period count as only 1 inquiry. For example: if you're shopping a mortgage with a lot of lenders and you have them each pull your credit in the same month, it will only show up as 1 inquiry. Or, if you get a Best Buy and Macy's card in the same week. That would only show up as a single inquiry because they are also in the "same industry". Now, that single inquiry will still hurt you a little, but at least you can know that after the first pull you don't have to worry about letting other "same industry" companys pull it again.

I hope this is helpful for all of you and I'm happy to answer questions for anyone that wants to direct them my way...especially if you have experienced one of these rules personally and have a story. I'd love to hear it. Below I've posted 2 booklets with links which will each take you to the complete text of the booklet they follow. You can probably find the answers to all of your questions there. Please let me know what you think of this blog and comment liberally.

Abe

http://images.google.com/imgres?imgurl=http://www.consumer-action.org/archives/English/library/credit/2001_GoodCredit_Guide/2001_GoodCreditGuideCover.gif&imgrefurl=http://www.consumer-action.org/archives/English/library/credit/2001_GoodCredit_Guide/index.php%3FEnglish/library/credit/2001_GoodCredit_Guide/index.php&h=600&w=340&sz=6&hl=en&start=52&tbnid=Ht2U2qreSERrnM:&tbnh=135&tbnw=77&prev=/images%3Fq%3Dcredit%2Bscoring%26start%3D40%26ndsp%3D20%26svnum%3D10%26hl%3Den%26rls%3DWZPA,WZPA:2006-21,WZPA:en%26sa%3DN

http://images.google.com/imgres?imgurl=http://www.consumer-action.org/images/library/english/2002_RebuildCred_GuideCover.gif&imgrefurl=http://www.consumer-action.org/english/articles/rebuilding_good_credit_leaders_guide/&h=600&w=340&sz=8&hl=en&start=53&tbnid=DBKjJIygb51PCM:&tbnh=135&tbnw=77&prev=/images%3Fq%3Dcredit%2Bscoring%26start%3D40%26ndsp%3D20%26svnum%3D10%26hl%3Den%26rls%3DWZPA,WZPA:2006-21,WZPA:en%26sa%3DN

A Rant Against my Bank

Abe Loper (Abe Loper) — Tue, 06 Feb 2007 16:42:40 -0800

The other day I was looking at a potential property and I thought to my self that if I wanted to buy it I would have to pick up my credit score a bit. Most of us know what that's like. We pile up debt fixing places or making payments between renters, etc. So, I've got a couple of credit cards that have a lot charged on them. I figured, if I can pay these cards off with a home equity line or a simple cash-out refi, that would help me out enough to qualify me for the kind of loan I would prefer on this new place.

When I talked to a representative at my bank about getting a personal loan or a heloc (instead of refinancing), I was surprised to hear that if you get a loan for the purpose of debt consolidation, the bank will require that you allow THEM to contact your creditors and close those accounts.

I'm not sure if you all know this, but if you've had an account for over 2 years and you're using less than 40% of the available balance, then it's helping your score. So, for them to insist on closing the account meant, in my situation, that any help that the consolidation would provide would be nullified by the fact that they were going to close out my credit card accounts. How does that help me? Heck, how does that help anyone.

I understand that the point is to cripple my ability to create more debt. But anyone who really wants to be a crazy consumer spender can just go out and open new credit card accounts. And, if you're not a crazy consumer spender then you should be responsible enough to handle having all that potential debt. Right?

So, then, I ask you; What is the point of such policies?

It seems like (for most of us) in order to invest you need to borrow money. But in order to borrow money, you can't have debt. But the thing that makes us money is, essentially, the buying and selling of debt. Call me naive, but I thought that banks could tell the difference between a real estate investor who has a plan and is making good on payments so far, and someone who's defaulted on payments for the new hot tub from Spa Depot and the flatscreen that they charged to a Visa at Best Buy. We all know that really big, national banks can't do much to change policy, but the little ones, they should know better.

Oh well. Smile big and say thank you. That's my motto. They lost the interest on the loan and I'll just refi to get my debt consolidated.

We'll all live.

Abe

Why Debt is Wonderful !

Abe Loper (Abe Loper) — Tue, 30 Jan 2007 20:39:24 -0800

As I write this, I'm struck with an accute awareness of my audience. I already know that most of you are reading this blog looking to prove, once and for all, that I am, in fact, nuts. I'll concede that point streight away, so let there be no more discussion of my sanity. Instead, let's turn our thoughts to the capitalist market in which we do business. Our whole lives we've been taught by our parents and others that debt is bad...very bad. And, to an extent, they were right. We've also been taught that compound interest is good...very good. And, in every way, this is true as well. The question then becomes, is debt so bad that it can outweigh the good of compount interest? You see, this is where the beauty of real estate investing truly lies.

Historically, if a person wanted to invest their money in a market that was going to be profitable beyond a national average, they had to have capital. High yield money market accounts had minimum balances. Stocks, bonds, IRAs, etc, all required an investor to take money from his pocket (figuratively speaking) and put it someplace where it would appreciate by 5, 10, or 20% over a 12 month period.

No more! Gone are the days of investing your own money. Today we are blessed with a market where real estate can appreciate just as much as stocks, bonds, or any other investment. And, when done right, it takes absolutely no money of your own. We live in a world where a bank will GIVE YOU $200,000, let you invest it (in a home), and LET YOU KEEP ALL OF THE PROFIT. Sure, you have to pay them for it, in little pieces here and there. But if you're renting it out then it's actually your renter who is paying for the bank's loan.

Do you know of any bank that would give you hundreds of thousands of dollars to invest in the stock market? It would never happen. Even day traders who trade with their company's large sums of money have to give back 50% of the profit they make. Real estate is the only way to borrow money for investing and while keeping the appreciation. So borrow as much as you can and be smart with it. Let the beauty of compound interest dull the pain of debt. The market may not always prove to be so favorable to the guys with no capital.

(let me know what you think. I'd love to hear from all of you)

Abe

Do You Deserve Your Trade?

Abe Loper (Abe Loper) — Sun, 28 Jan 2007 09:17:52 -0800

As I was reading a blog (on a different site) recently, I made a comment that we should all keep in mind. Ryan Dehler wrote a wonderfully inquisitive blog that questioned why we even teach others to do what we do, as it, more or less, creates competition for us. Colin wrote a thorough and well thought out response.

I wrote this:

In my case, I help others succeed, even if they become my competition, because my INTEGRITY and CHARACTER depend on it. If I'm more concerned with making money than I am with helping people then I don't deserve the money I'm making.

We're obligated to back. You and didn't learn our trade via trial and error. We read books and articles that were written by people who shared thieir secrets with us. It's our duty to pass on that passion and the knowledge to succeed to anyone who will listen.

Let me know what you think.

Abe