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Powerful Education for Real Estate Agents
In a move to strengthen its long running and successful real estate education initiative, Prospect Mortgage is seeking detailed feedback on educational content and delivery methods through an online survey distributed to 150,000 Real Estate Agents across the nation.
"In 2011, we put more resources than ever before into education for our Agent partners," said Todd Duncan, Prospect's Chief Performance Officer. "We had a terrific response, because the very challenging market has many real estate professionals looking for answers and guidance."
Excited by the 2011 success, key Prospect executives from Sales, Training and Marketing resolved to make the company's 2012 Real Estate Education Seminar Series even stronger and more focused. "Prospect strives to execute at an outstanding level in all things and that includes creating value for our Agent partners," said Prospect EVP and training leader Kevin Tackaberry.
To ensure that the 2012 curriculum is sharply focused on meeting the right business learning needs of Agents, Prospect created an online survey that allows Agents to rank a selection of business development topics, mortgage loan information and delivery methods in order of importance.
Prospect distributed the survey to Agents on January 5 and received 200 replies within the first hour. "The feedback has been excellent so far, and responses keep coming," said Matt Tully, Prospect's Chief Marketing Officer.
If you missed the survey that went out January 5, please click here to take it now! We are eager to get your feedback, and all respondents receive free access to an exclusive Prospect conference call in early Q1 featuring Michael J. Maher, real estate superstar and author of the book, "(7L) The Seven Levels of Communication: Go from Relationships to Referrals."
Click Here to Start the Survey
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LAST WEEK IN THE NEWS
Factory orders rose 1.8% in November to a seasonally adjusted $459.2 billion, following a revised 0.2% decrease in October. Excluding the volatile transportation sector, orders rose 0.3% in November.
Retail sales rose 1.2% for the week ending December 31, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 5.3%.
The Institute for Supply Management reported that the monthly composite index of manufacturing activity rose to 53.9 in December after a reading of 52.7 in November. A reading above 50 signals expansion. It was the 29th straight month of expansion.
Total construction spending rose 1.2% to $807.1 billion in November, following a 0.2% decrease in October. Economists had anticipated an increase of 0.5% in November. Compared to a year ago, construction spending rose 0.5%.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending December 30 fell 3.7%. Refinancing applications decreased 1.9%. Purchase volume fell 9.7%.
The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity rose to 52.6 in December from 52 in November. A reading above 50 signals expansion. It was the 25th straight month of expansion in the services sector.
Initial claims for unemployment benefits fell by 15,000 to 372,000 for the week ending December 31. Continuing claims for the week ending December 24 fell by 22,000 to 3.595 million. The monthly unemployment rate fell to 8.5% in December from a revised 8.7% in November and 9% in October.
Upcoming on the economic calendar are reports on wholesale trade on January 10, retail sales on January 12 and consumer sentiment on January 13.
Written by Prospect Mortgage
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As the Nation's Second Largest 203K Lender, Prospect Sees Demand Growing for Renovation Loans
Currently, foreclosures account for about 30% of all home sales in the U.S. Many of these homes have been neglected and are in need of repair. These market conditions have made renovation loans a hot item.
Renovation loans are very attractive for a number of reasons. The Federal Housing Administration (FHA) 203K renovation loan provides the money to both purchase the home and finance the home's renovation. The down payment required on a renovation loan can be as low as 3.5%. Renovation loans are also very convenient. With one loan, there's only one application, one set of fees, one closing and one monthly payment. At closing, the repair money is put into a special account for disbursement as repairs are completed.
Prospect has seen a sharp rise in the demand for renovation loans. To better service these increasingly popular loans, Prospect has put an experienced Renovation Management Team in place; implemented training and certification programs for Loan Officers originating renovation loans; and developed a Fast Track Team to expedite the renovation loan process.
Consequently, Prospect has increased its renovation loan market share in the past couple of years by more than 80%. In fact, today Prospect is the second largest FHA 203K renovation lender in the nation.
Only a limited number of lenders offer 203K financing. With foreclosure sales running six times higher than normal — and many of these homes in need of repair — just knowing about renovation loans may make the vital difference to motivate your buyers to purchase.
If you would like more information about our renovation loans or have any questions about how such a loan may benefit your clients, please call me today.
Written By Prospect Mortgage
Mixed Use Properties financed using FHA's 203(k) Loans
What is Mixed Use? Simply put, a mixed use property is any real estate that has a combination of both residential and commercial units.
Many people don’t realize that they can purchase a mixed use property using FHA's 203(k) Rehab Loan. Many buyers think they will need a commercial loan with a large down payment to buy a mixed use property even if the majority of the income produced is from the residential section of the property.
OK.....Here is the MOST exciting Part:
The commercial space is not counted as a unit in determining if the property is to be treated as a single family, duplex, triplex, etc. Therefore, a property with four residential units above a commercial space is considered a four unit and can be financed using FHA's 203(k) rehab loan with only 3.5% down payment.
One thing to remember, the buyer will need to occupy one of the residential units as their primary residence. They may not already have an FHA loan on a property already owned by the buyer.
This is an amazing opportunity for buyers to buy their primary residence while at the same time investing in commercial property using a residential loan.
If you were to compare general commercial loan terms to an FHA 203(k) loan, you'd realize that the FHA 203(k) loan is much for favorable in most cases:
| Commercial Mixed Use Loans |
FHA 203(k) Rehab Loan Mixed Use |
| Term - fixed rate: 2, 3, 4, 5, 6, 7 & 8 Yrs |
Term- 30 Year Fixed or 5/1 ARM |
| Adjustable rate available |
Adjustable rate available |
| Amortization: 20, 25, and 30 years |
Amoritization: 30 years |
| Prepayment: Multiple options |
No Pre-Payment Penalty |
| Loan to Value Ratios: 75% for most loans |
Loan to Value Ratios: 96.5% |
Eligibility Crtiteria:
· Property must be marketed and currently used as residential. (conversion from commercial to mixed use not eligible)
· The floor space used for commercial purposes cannot exceed:
· 25% for a 1-story building
· 49% for a 2-story building
· 33% for a 3-story building
· Zoning must be mixed use as determined by the appraisal
· Commercial space cannot affect the health and safety of residential occupants.
· Rehab funds can only be used for residential functions of the dwelling and areas used to access the residential part of the property.
· Commercial rent may be used as income IF space is currently being used as commercial enterprise and has a valid lease that will continue.
· Appraisal Requirements
· Appraisal must be completed on FHA Appraisal Form 1025
· Like comparable sales in the area must be available and used on the appraisal
· Appraised value assigned must be completed as if the total property is for residential use
Below is a chart for the "High Cost" counties in California which specifies the MAX loan limit depending on the number of "Residential" units for the Mixed Use Property:
| FHA LOAN LIMITS BY COUNTY |
One-Family |
Two-Family |
Three-Family |
Four-Family |
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| Alameda |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Contra Costa |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Los Angeles |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Marin |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Monterey |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Napa |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Orange |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| San Benito |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| San Francisco |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| San Mateo |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Santa Barbara |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Santa Clara |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
| Santa Cruz |
$ 729,750.00 |
$ 934,200.00 |
$ 1,129,250.00 |
$ 1,403,400.00 |
For additional information about loan limits in other counties please visit: https://entp.hud.gov/idapp/html/hicost1.cfm
Please contact me with questions.... I love to discuss different sceanrios and see how I may make them work for you. I am 203(k) certified.... My motto: you won't know unless you ask.
Make Your Advertising Click with AdWords
In 2010, Google generated a whopping $28 billion in advertising revenues, with the lion's share coming from AdWords — those brief ads or "sponsored links" appearing above or beside Google search results.
As a sales professional, you'll like AdWords for two main reasons: You're advertising to an audience already interested in some aspect of your business, and you pay only when someone clicks on your ad.
When pay-per-click (PPC) advertising began, ad rankings were based on how much you were willing to pay or "bid" for certain keywords. While Google maintained this auction-type system, it added a second "ranking" component — the Quality Score — which weighs factors like the historical click-through rate (the percentage of visitors who click your ad), the quality of your website, and the relevance of your keywords. Like the recipe for Coca-Cola, Google's ad placement formula is closely guarded.
Because Google partners with millions of websites, your ad can reach users all over the web or you can customize the placement of your ad for a local market only.
To analyze the effectiveness of your ads and justify your advertising expense, Google provides Placement Performance Reports. These detail the domain, click-through rate, conversion rate (the percentage of visitors who take a desired action once visiting your website) and cost data for each site an ad appears on.
If you don't want the hassle of constantly testing, tweaking and optimizing your ad campaign, AdWords Express will manage it for you. In minutes, you can create an ad and set a budget, and Google will handle everything else automatically as your ad starts reaching people looking for what you offer.
For more information, visit Google AdWords.
Written by Prospect Mortgage
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Make Accountability a Core Value
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In this month's edition of InsightNOW, Prospect Mortgage's Chief Performance Officer Todd Duncan talks with management consultant and author John G. Miller. They discuss John's trilogy of books, "QBQ! The Question Behind the Question," "Flipping the Switch," and "Outstanding! 47 Ways to Make Your Organization Exceptional," which all emphasize how your success depends on the ability to take responsibility for your behavior and mindset.
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A strong proponent of making personal accountability a core value, Miller stresses how stepping up and owning your actions can offer far-reaching dividends in and out of the office. |
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The most important thing is to avoid what he refers to as the three "traps" of self-limitation: victim thinking, finger pointing, and procrastination. Eliminate these, and you're on your way to improving your behaviors, improving yourself and — as a result — improving your business. |
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Miller's practical, common-sense style breaks down success to something as simple as taking a complaint ("Why is no one training me?") and reframing it into an action ("How can I develop myself?"). Not only can it be the difference between failure and success, concentrating on what you can bring to a situation instead of trying to blame or fix others can enhance all relationships in your life. |
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The key is to develop solutions instead of bemoaning problems; even in a weak market, someone is winning. Todd observes that people who "get out of the excuse zone" and identify positive steps to improve their situation are the ones who win. Enhancing your position with a "can do" attitude is an approach with lifelong benefits, according to Miller. "Change the way you view everything and life will change for the better."
Written by Prospect Mortgage
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Last Week in the News
New home sales rose 1.3% in October to a seasonally adjusted annual rate of 307,000 units from a revised rate of 303,000 units in September. Compared to a year ago, new home sales were up 8.9%.
The Standard & Poor's/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — fell 0.6% in September after a 0.1% increase in August. On a year-over-year basis, prices fell 3.6% compared with September 2010.
The consumer confidence index rose to 56 in November from 40.9 in October, the largest gain since April 2003. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.
Pending home sales, a forward-looking indicator based on signed contracts, rose 10.4% in October after a 4.6% decrease in September. On a year-over-year basis, pending home sales are up 9.2%.
The Institute for Supply Management reported that the monthly composite index of manufacturing activity rose to 52.7 in November after a reading of 50.8 in October. A reading above 50 signals expansion. It was the 28th straight month of expansion.
Total construction spending rose 0.8% to $798.5 billion in October, following a 0.2% increase in September. Economists had anticipated an increase of 0.3% in October.
Initial claims for unemployment benefits rose by 6,000 to 402,000 for the week ending November 26. Continuing claims for the week ending November 19 rose by 35,000 to 3.7 million. The monthly unemployment rate fell to 8.6% in November from 9% in October.
Upcoming on the economic calendar are reports on factory orders on December 5 and wholesale trade on December 8.
Invest in Your Business Culture to Trigger Your Next Growth Cycle
If your sales, revenues or profits are sagging, perhaps it's time for you to spend less time tracking financials and more time improving your business culture. That's the conclusion of Harvard Business School Professor James L. Heskett, who has been studying business cultures at places such as Southwest Airlines and Walmart for 40 years.
Heskett noted that 55% of U.S. workers were unsatisfied with their jobs, according to a 2010 Conference Board study. That's bad news, because as every salesperson knows, nothing sells like enthusiasm. Indeed, Heskett said businesses with unmotivated cultures produce half as much profit as those where energy and morale are high.
The best indicator that your business culture might need a makeover is any time you see a decline in the Four Rs, which Heskett defines as: Employee Retention and Referrals, Returns on Labor (productivity), and Relationships with Customers.
To get sales swinging upward again, Heskett recommends that business leaders focus on four key areas:
| 1. |
Bring on team members who eagerly embrace your stated values and mission. |
| 2. |
Give team members every opportunity to grow and participate in the success of the business, thereby giving them a deeper sense of ownership. |
| 3. |
Don't just talk about values and behaviors; spell them out at every opportunity, including meetings and in a handbook, so team members can see them and live them. |
| 4. |
If your sales numbers still disappoint, accelerate the office's "culture revitalization" program. |
For so many companies, culture is just a word, but for those that create something tangibly positive and live up to their culture, it's an outstanding advantage for higher productivity, better customer service, improved employee loyalty and top-level recruiting opportunities.
Written by Prospect Mortgage
Last Week in the News
The index of leading economic indicators — designed to forecast economic activity in the next three to six months — rose a very strong 0.9% in October, following a revised 0.1% increase in September.
Retail sales rose 0.5% to $397.7 billion in October after a 1.1% increase in September. On a year-over-year basis, retail sales rose 7.2% in October.
Total business inventories were unchanged in September at $1.532 trillion, up 9% from a year ago. Total business sales increased 0.6% to $1.209 trillion in September, up 11.6% from a year ago. The total business inventories/sales ratio in September was 1.27.
Consumer prices fell a seasonally adjusted 0.1% in October, following a 0.3% increase in September. For the year, seasonally adjusted consumer prices are up 3.6%.
The National Association of Home Builders/Wells Fargo monthly housing market index rose three points in November to 20 from a revised reading of 17 in October. An index reading below 50 indicates negative sentiment about the housing market.
The combined construction of new single-family homes and apartments in October fell 0.3% to a seasonally adjusted annual rate of 628,000 units. Single-family starts increased 3.9%. Multifamily starts fell 13.3%. Applications for new building permits, seen as an indicator of future activity, rose 10.9% to an annual rate of 653,000 units.
Initial claims for unemployment benefits fell by 5,000 to 388,000 for the week ending November 12. That's the lowest level since April. Continuing claims for the week ending November 5 fell by 57,000 to 3.608 million, the lowest level since September 2008.
Upcoming on the economic calendar are reports on existing home sales on November 21 and gross domestic product on November 22.
Congress Votes to Increase FHA Loan Limits
Working in concert to meet a tight deadline, Congress and the White House have raised the FHA loan limit in high-cost real estate markets, making it easier to obtain an FHA loan on properties up to $729,750*.
Following passing votes in the House of Representatives and Senate, President Obama signed HR 2112, the Consolidated and Further Continuing Appropriations Act of 2012, into law, renewing the expired higher loan limits for Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans for an additional two years, through December 31, 2013.
The limit to conforming loans was reduced to $625,500 on October 1, 2011, when a previous increase in conforming loan limits expired. With the passage of this legislation, the FHA loan limit has been restored to $729,750. While the loan limit has been increased for FHA loans, the increase does not affect limits for conventional loans backed by Fannie Mae or Freddie Mac.
Higher loan limits give borrowers another home-financing option to consider in high-cost areas of the country, such as California and New York. Borrowers could take out a jumbo loan, which typically requires a larger down payment. They now have the option of using an FHA loan with a lower 3.5% down payment requirement.
Let's discuss the exciting opportunities generated by higher FHA and VA loan limits combined with historically low interest rates. I am ready for your call!
*One-unit, primary, owner-occupied residences determined by HUD to be in high-cost areas.
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Julie Chroust, NMLS# 249458, Direct Lender & Mortgage Banker
Walnut Creek,
CA
More about me…
Julie Chroust, Prospect Mortgage, Walnut Creek, CA
Address: 1910 Olympic Blvd,, Suite 120, Walnut Creek, CA, 94596
Office Phone: (925) 516-5809
Cell Phone: (925) 381-1481
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