The state of today’s mortgage lending is characterized by three major factors: market volatility, accountability, and challenges in selecting the right mortgage lending source.

Market volatility refers to both mortgage rates and home prices.  Mortgage rates, which depend on publicly traded bond markets for mortgage backed securities (MBS), fluctuate daily, if not several times a day, due to global and domestic economic events.  Threats of inflation, government borrowing, economic trends, foreign debt and trade, political unrest affecting commodity prices, stock market activity—all of these cause reactions in the bond market that affect mortgage rates.  Although rates are at all time lows, it is now virtually impossible to time the market, so a rate quoted at 9am could be drastically different only a few hours later.  A trained professional should be able to show you how the bond market is performing, analyze trends, and be a “personal shopper” for their clients in the volatile rate environment.

Home prices are scrutinized like never before.  The appraisal, and, indirectly, who performs the appraisal, becomes one of the most important factors in loan approval.  Many large bank lenders use third party appraisal management companies to assign appraisers, and this creates a risk that the appraiser is not knowledgeable about the trends in the local market.    Home prices in a given neighborhood could also vary widely depending on the existence of distress sales (foreclosures and short sales), and sifting through the relevant comparable sales can be a challenge.  Some areas are actually appreciating in value, despite what you might have heard in the news, but you need a local, experienced appraiser who really understands the market to provide the most accurate evaluation.

Accountability applies both to borrowers and their loan originators.  Borrowers must now provide more documentation than ever before—tax returns and bank statements are required for all loans—as well as be expected to sign more disclosures and forms than any other time in mortgage origination history.  Cash flow is much more important than assets, and newly self-employed or retired people need to plan carefully if they intend to purchase a home with income sources that they have not drawn upon for appropriate lengths of time.

There are still many low down payment options for home buyers as well, including USDA, FHA, VA, and, yes, loans with private mortgage insurance.  Such loans are appropriate not only for first time homebuyers but also people relocating to new areas who have had to sell their previous homes for lower prices, and hence, have limited funds for down payments.

Borrowers should no longer expect to get a rate quoted without providing important information and allowing their credit history to be checked.  Borrowers with lower credit scores may either pay higher rates or find themselves ineligible for any loan until they take steps to raise their scores.

People who pay their bills on time, have steady incomes, and have good credit scores (720+) can get loans at unprecedented low interest rates.  Self employed and commissioned people have to show track records of success in their work and not deduct so many expenses that their cash flow becomes too low to qualify.  People who can’t prove their income can’t get loans.

A loan originator must now be an expert in coaching his or her clients in gathering and presenting a loan application package that is comprehensive and addresses any issues up front.  That originator also needs to work for a lender who can offer quick turn times for loan decisions and make all decisions in-house.  Many large bank lenders can no longer close loans quickly, and have very little accountability to the borrower in keeping track of their files.  Loan originators should have in place a disciplined regular communication program for every loan that keeps every party (borrowers, realtors, attorneys) proactively informed.

Thus choosing the right lender becomes critical.  While rates are important, most lenders tend to have rates in a similar range as their loans all ultimately end up in the same secondary bond market.  Minor pricing variations could result from quotes at different times, different lock periods, or levels of service.  Many low-priced lending sources such as internet lenders will not offer the personal attention, service, and accountability that a local loan originator will provide, not to mention the on-the-ground local problem solving necessary to get things done properly.  Finding the right lender is as simple as asking 7 questions; for more information on this, watch the video at http://vimeo.com/25821745.

In summary, to properly navigate today’s lending environment requires working with trained, experienced local professionals to help prospective borrowers understand the market, use local appraisers, compile a solid loan application, and remain accountable to the borrower throughout the process.

DO YOU KNOW WHAT QUESTIONS TO ASK WHEN YOU’RE SHOPPING FOR A MORTGAGE?  MOST ASHEVILLE LENDERS WILL BE PRETTY CLOSE TO EACH OTHER IN RATES AND FEES.  RATES MEAN NOTHING IF YOUR LOAN IS NOT APPROVED OR CAN’T CLOSE ON TIME.

Today, with all the uncertainty and strict loan guidelines, you really need to work with an Asheville Lender who can get your loan approved and closed quickly and efficiently.  But how do you find such a lender?  Here are 7 Questions to ask a prospective lender.

1.      Are you lending your own money?  Alpha owns the process from application through closing and funding.  We lend our own money, so we make the decision to lend. 

2.      How many people will be involved in the loan process? For Alpha, it’s the loan officer, processor, and underwriter.  That’s it.  You will always know what is happening.  We are ACCOUNTABLE.

3.      Who will do the appraisal and how will they be assigned?  Alpha still uses experienced, local appraisers whom we assign on a rotational basis.  Many other Asheville lenders use third-party appraisal management companies that put the appraisal out to bid; in many cases, the appraiser with the lowest bid, regardless of experience or local knowledge, get the assignment.

4.      How fast can you close?  Alpha owns the loan process, so we can adjust priorities if necessary.  This is particularly important when purchasing short sales where the time frame to close is short after the servicer of the existing loan agrees to the short sale.

5.      Can your loan officer work directly with underwriters?  Alpha has in-house underwriters who answer questions and resolve issues instead of just declining loans.  Every loan has individual characteristics that DESERVE PERSONAL ATTENTION and understanding from everyone involved.  Underwriting should not be an impersonal machine.

6.      Who prepares the closing package and arranges funding?  Every Alpha loan processor closes her own files.  Many other Asheville lenders have centralized closing departments who are unfamiliar with the file and who have multiple conflicting priorities with getting packages out.  If your processor is your closer, then she has a commitment to get that file closed.  It’s her job.  SHE IS ACCOUNTABLE.

7.      How many days in advance do you typically have the package to the settlement attorney?  Alpha strives to get the package out at least 48 hours prior to closing.  Many other Asheville lenders end up sending packages at the last minute which leads to a lot of stress.  Settlement attorneys LOVE Alpha because we make their jobs easy.  They have a single point of contact (the processor) to get the package, approve the HUD, and resolve any last minute issues.

Today, it's all about EXECUTION AND ACCOUNTABILITY.  This may be one of the largest financial decisions you will ever make, so you need to find an Asheville Lender who will put your needs first and get things done fast.

Click here to request a checklist of the 7 Questions to Ask Your Asheville Lender.  And if you'd like to share this information with a friend as a video, click on the picture below:

In today's market, we often show willingness to work with anyone who can fog a mirror, but at some point, we need to recognize that we must focus on the right clients and referral partners.  If we don't, we lose the opportunity to work with people who help  build our business rather than waste our time.

Your time is the one precious commodity that you can never recover if spent unproductively, so being selective about the people with whom you will invest your time and effort.

I recently read a great coaching article by Tim Davis in The Niche Report magazine in which he laid out the qualities he wanted in a referral partner.  I was inspired to create my own list, below, for the types of clients I want to work with.  I strongly recommend that anyone in sales do the same for himself or herself.

1. I will choose to only work with clients who will provide information cooperatively.
2. I will choose to only work with clients who have a strong desire to gain knowledge and education.
3. I will choose to only work with clients who have a sense of urgency.
4. I will choose to only work with clients who believe in building long term relationships based on mutual respect.
5. I will choose to only work with clients who are ethical, have integrity, and are open and honest.
6. I will choose to only work with clients who understand how value is more important than price.
7. I will choose to only work with clients who treat me with courtesy, appreciate my expertise, and honor my time.

Tim says, "I am not looking for anyone, instead I am looking for someone.  You do not have to work with everyone.  You can choose.  When you understand that principle, you will feel empowered, confident, and your business will grow."

If ever you're at a loss on creating a video, you can always make one by simply writing a script and using a simple web-based editor.  I was amazed at how quickly one can produce a short cartoon with just a little bit of effort.

I've watched a lot of movies in my time, and never fully appreciated the importance of the script and directing until I made my tiny screen debut.

If you're shy about being in a video, you can still produce video without showing your face. So here's to you, creative Rain members, another outlet for your inner Scorsese!

The answer is...yes it will, and it might be best for them to go under contract before October 4.

With the passing of H.R. 5981 and the resulting Public Law 111-229, FHA was given authority to change the amount charged to borrowers for both the Up Front and the Annual premiums. These changes as outlined in Mortgagee Letter 2010-28, are effective for all case numbers assigned on or after October 4th, 2010.

Here are the 6 things you need to know about these changes:

1. The Up Front premium is now 1.0 % for all standard FHA programs (purchase money mortgages, full credit-qualifying refinances, streamline refinances)
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2. The Annual premium is now .90% for LTVs GREATER than 95% on 30 year loans
   
   
3. The Annual premium is now .85% for LTVs EQUAL to or LESS than 95% on 30 year loans
   
   
4. The Annual premium is now .25% for LTVs GREATER than 90% on 15 year loans
   
   
5. The Annual premium is now .00% for LTVs EQUAL to or LESS than 90% on 15 year loans
   
   
6. These premiums apply to purchases, regular refinances and streamlines

Please note that this new law also gives FHA the authority to raise the Annual premium at will up to 1.5% for LTVs at or below 95% and 1.55% for LTVs more than 95%.

Here's how it affects a hypothetical purchase of 200,000 with a 3.5% down payment, giving a loan amount of 193000 (96.5% LTV):

Current FHA Up Front Premium is 2.25% of 193,000 or 4342, so total loan amount is 197342.  The monthly principal and interest is 999.90, MI is 87.81, so the total monthly payment (principal+interest+MI) is 1087.71 at 4.5% interest.

Revised FHA Up Front Premium is 1% of 193000 or 1930, so total loan amount is 194930.  The monthly principal and interest is 987.68, MI is 143.69, so the total monthly payment is 1131.37.

So the monthly payment will go up by $43.66.   Using standard qualifying ratios, this would mean the borrower's income to qualify would have to be about $110 more per month. 

Another way to look at it is that $43.66 would have allowed them to borrow about $8600 more if they can go under contract prior to October 4.

If you have FHA buyers, and their income to qualify is tight, or they want to be able to spend a little more now, then they should go under contract and have their lender pull an FHA case number prior to October 4, 2010.

Contact your lender if your borrowers are looking in a particular price range, and have them run the numbers for you for that specific case so you'll know the monthly savings for your borrower if they act now.

This is a continuation of a conversation I had with Sarah Benoit, an internet and social marketing expert based in Asheville, NC.  This set of questions is more advanced and complex.

We talked about the history of social media, how to make this type of marketing effective, and what to look for andhow best to prepare for working with a social media marketing consultant.

Sarah's web page is at www.creative-original.com.  I've found her to be very responsive, accessible, and knowledgeable. 

Q. How long has this social media marketing existed?  What is its future, practically speaking?

A. Social media as it exists today is the evolution of what we call the social API (application programming interface). Without getting too technical, this means that a service provider (Google, Facebook, eBay, etc.) provides the tools to outside parties to build new applications on top of that service to add more value to the user experience.  

A good analogy would be the apps you can download for your iPhone or aftermarket accessories you can buy for it.  Apple makes the internal specifications (application interface) available for outside parties to create new products.  Similarly, Facebook has apps, eBay and other sites have "plug-ins" and so forth, all of which extend the basic service in new directions.

It wasn't until the last 3 years that what we call social media marketing began to emerge. And it is a form of marketing that many people still do not understand simply because it forces us to think about business very differently than we have in the past. The line between what is personal and what is professional is blurred. Customer experiences are easily shared worldwide. Social media marketing is only successful when you have a plan and clear goals. 

According to www.Socialnomics.net "over 50% of the world's population is under 30-years-old and 96% of them have joined a social network." This is why social media is going to be part of the future, because it has become an easy, fast, and affordable way to communicate and it has changed the media landscape in a way that it has never changed before in human history. Social media marketing will continue to develop and grow because it is a fast, easy, straightforward way for businesses to communicate and build relationships with their customers, as well as for customers to share info about products or services they like.

Q. What kind of resources do I need to really make this type of marketing work for me?

A. There are a few things someone who wants to do their own social media marketing needs to do in order to produce a result.

• First, you must want to learn. Like any technology, social media changes every few months and it is important to keep up. If you don't like technology and you don't have the time to learn new skills this may not be the right avenue for you.
• Second, you must know all marketing requires a plan, clear goals, execution of that plan and then tracking and evaluation of the results. Marketing on social media is like all other marketing, it is a process and all parts of the process must be given attention.
• Third, you need to be excited and enjoy building personal relationships for professional purposes. You must also have the time required to build those relationships and reap the benefits of them.  If you can not get excited about your social media you will not make the time and if you don't make the time you will not see the results.

Q. What questions should I ask a potential social media marketing consultant to help me decide whether or not to hire her?

 A. The first key to hiring the right social media consultant is that you need to be clear about your needs.  Some questions to ask yourself:

•  Do you want to learn how to execute a social media campaign or hire someone to manage it?
•  What role do you want to play and how do you see this person assisting you?
• What are your expectations and goals and can you communicate them clearly?  For example, do you want more online sales, more attendees at an event?

The second key is that you hire someone you feel can truly understand your business, your company image and your marketing message. This person will be speaking for your business on a regular basis, you must place your trust in them that will represent you in a way that is true and accurate. I also believe any social media consultant should be passionate about your business. If they are passionate about working with you this passion will carry over and others will see it shine through. This passion often attracts others via social media. Also remember even if you hire someone they should always be communicating with you in order to share ideas and to clarify what kind of content you want on your social media.

Q. How should I prepare for a meeting with a social media marketing consultant?

A.  Do your homework and be prepared:

1. Write out your goals and expectations.
2. Be clear about your marketing message and brand image. If you are not sure what these things mean speak to the social media consultant about potentially exploring these topics in more detail before a social media campaign is launched.
3. Be open-minded and listen to their ideas, decide if what they are saying resonates with you. Don't ever be afraid to ask questions.

Q. Can social media be tied in with my other marketing efforts?

A. Social media must be tied in with your other marketing efforts. Your website, blog, social media profiles and more should have a cohesive look, consistent messaging and all be linked to one another.  Traditional forms of media like print, radio and TV can be used to drive traffic to your social media as well as your website. Social media can also be used to promote events, coupons, contests and more.  You must always think of your marketing as a whole, as a single plan and every form of media has its role based on your goals.

 Q. What kind of results can one expect?  Are they measurable?

 A. Results differ for every industry. The best thing you can do is see who is out there in your industry and see how well they are doing. When you find someone that is getting a lot of attention on social media observe the way they interact and behave. If you have clearly outlined what our goals are you want to develop some systems for tracking the results.  Google Analytics is best for tracking the effects of social media on our website.  Google Webmaster Tools can also be helpful.  Using coupons, discount codes, promotional giveaways, contests etc can also help create a trackable result. 

This concludes the interview.  If you've gotten this far, you realize how interesting and complex social media can be, and how we've only scratched the surface.  I hope these will give you a roadmap for investigating this marketing approach.

The following story was sent to me by accident by someone who really meant to send it to someone else.  Or was it something that was actually intended for me?  I'm not religious by nature, but I do believe that things happen for a reason.  Hope this was intended for you, too!

A blind boy sat on the steps of a building with a hat by his feet. He held up a sign which said: "I am blind, please help." There were only a few coins in the hat.

A man was walking by. He took a few coins from his pocket and dropped them into the hat. He then took the sign, turned it around, and wrote some words. He put the sign back so that everyone who walked by would see the new words. Soon the hat began to fill up.

A lot more people were giving money to the blind boy. That afternoon the man who had changed the sign came to see how things were. The boy recognized his footsteps and asked, "Were you the one who changed my sign this morning? What did you write?"

The man said, "I only wrote the truth. I said what you said but in a different way." I wrote: "Today is a beautiful day but I cannot see it." Both signs told people that the boy was blind. But the first sign simply said the boy was blind. The second sign told people that they were so lucky that they were not blind. Should we be surprised that the second sign was more effective?

Moral of the Story: Be thankful for what you have!

Be creative.  Be innovative.  Think differently and positively.  When life gives you a 100 reasons to cry, show life that you have 1000 reasons to smile. Face your past without regret.   Handle your present with confidence.  Prepare for the future without fear.  Keep the faith and drop the worry. 

It is a beautiful thing to see a person smiling.  And even more beautiful, knowing that you are the reason behind it!!!  Catch yourself when you start complaining about what you don't have.  Enjoy your day with a heart of gratitude.

A couple of weeks ago, I had the opportunity to interview Sarah Benoit, an Internet Marketing Specialist based in Asheville, North Carolina.  We met for lunch at one of my hangouts in downtown Asheville.

Sarah's web page is at www.creative-original.com.  Sitting down with her, one feels a level of energy and enthusiasm.  She's spent a lot of time thinking about how best to use social media technology, and her commitment and breadth of knowledge are impressive.

Many of us have a presence on AR, LinkedIn, Facebook, and Twitter, but have not tied them together as well as we could.  Others of us are bewildered as to where to start.  The first part of this interview is designed as a primer, answering some of the questions we all have had before getting started.  I've taken the liberty of emphasizing parts of the answers.

Q. There are so many different choices of social media Twitter, Facebook, MySpace, etc. Where do I start?

A. Social media is just like any other Internet technology. As time passes existing programs improve their functionality and user friendliness, while new programs are launched all the time with innovative new options. This makes choosing your social media tools at time very confusing. There are some key questions that need to be answered before you commit to using any social media tool.

1. Set up an account and surf around. See if you feel comfortable using the interface or if you feel lost and feel the system is difficult to follow. Also see if the applications and tools they offer are of interest to you.
2. Find out if your audience is there. Use the search feature to look for groups or discussions happening on topics related to your industry. Think carefully about how you can identify your target market and what information you can use to encourage them to interact with your company.
3. When you are first starting out limit yourself to 2 or 3 social media sites you think might work for you. Don't try to do everything at once. Also, mainstream social media sites like Facebook and Twitter are not the only places your audience can be found. Be open to more niche marketed social media sites or online communities that may have great value for your business.  

Q. Social media seems extremely time consuming--can someone help me set this up and manage it for me?  How much would that cost?

A. Social media can time consuming if you do not have a clear plan. You must have a strategy for what social media tools to use and how often, as well as to track and evaluate results. Set up can be extremely affordable, ranging between $100 to $500 or even more depending on:

•  the number of social media accounts you want set up,
•  the level of customization you want on each account, and
•  the time spent on additional tools you need to streamline your accounts into a single system.

It may be beneficial to ask for training along with set up if you are not familiar with social media sites and how they operate. There are a variety of companies that can assist with social media set up and management, as well as social media marketing.

Be sure you have thought clearly about what you hope to accomplish with this kind of online campaign.  Set some goals before you speak with a professional so that when you meet with them to discuss social media marketing you can explain clearly how you expect to see your business benefit. It will also help the social media expert to implement an appropriate tracking system for your social media campaign. Cost for social media management varies depending on the goals you have and the role it plays in your business's overall marketing plan.   

Q. How computer literate or savvy do I have to be in order to manage my social media? Is it important that I know how to write well and spell?  

 A. In any professional setting writing and communication skills are essential, social media is no different. Although social media appears at times to be less formal than other marketing you must express your business's credibility and relevancy to any potential client, customer or referral source.

If you are not a great writer, or find spelling and grammar difficult, find someone to edit or monitor your content.  Many social media sites include automatic spell check that will usually alert you to any misspellings. Remember, most messages on social media tend to be short and to the point so they don't have to be traditionally grammatically correct.  You can abbreviate, especially on sites like Twitter.

As to computer literacy, social media sites are some of the easiest site to navigate on the web. They are made for less technical people and ease of use. Therefore, I do not believe a high level of computer literacy is required.  Social media requires a person who likes to learn new things, who likes to share information and ideas with others and who enjoys using technology like texting on their phone or exploring on the Internet. 

If you don't find pleasure in these activities and in connecting with others on a daily basis then social media may not be the best choice. Other kinds of marketing may work better for you or hiring someone to manage your social media may make more sense.  Just remember that, even if you hire someone,  they will still come to you for help developing your social media content and company message or brand.      

Part 2 of our discussion will focus on more advanced questions for the experienced social media navigator.  Stay tuned!

Here's what I like best about living in downtown Asheville, North Carolina:

Shopping in quirky, locally owned stores.  All along Lexington Avenue and Broadway street are great local shops offering, among other things: wigs, gifts, household decorating and furniture items, used books, high-end and inexpensive clothing, a real general store, groceries, natural foods, handmade art, and so much more.  It's not a mall with mega-chainstores, but a real unique downtown shopping experience.  Asheville store owners encourage people to buy local, and with so much to choose from, you won't be disappointed.

Dining on the foods of many nations, just steps from my home.  Living downtown means you never have to cook, ever again.  Within a 5 block radius of Pack Square, the heart of the downtown, you can dine on Japanese, Indian, Chinese, French, Caribbean/South American, Cuban, Thai, Italian, Cajun, Mexican, Southern, Continental, New American.  I'm sure I've left off a few cuisines here but you get the idea.

Drinking locally brewed beer.  Asheville is second only to Portland, Oregon, in the number of microbreweries per capita.  Several local bars and restaurants serve dozens of beers on tap, and three new brewpubs have opened within the last year, all in downtown Asheville.  There's also a great specialty beer store on Broadway Street that specializes in high-gravity brews and has a tasting every Thursday evening.

Sharing coffee and dessert.  It's not quite the large rainy city in the Northwest, but Asheville has numerous independent coffee shops and delectable locally baked desserts.  For chocolate lovers, we have at least two specialty chocolatiers; pastry and cookie mavens can choose from several bakeries (one specializing in dog cookies!), and some outdoor cafes for people watching with your coffee.  Ice cream fans have a couple of tasty options too.  Sitting outside on a sunny day in Pack Square sipping something nice and sharing a dessert with someone special is pretty unbeatable.

Those of us who living downtown can find both new and historic condos, from the spartan to the luxurious, city and mountain views, small and large spaces, traditional and modern floor plans, high and low rise buildings.  In short, if you can't find a condo that fits your needs, you're not looking in downtown Asheville!

This is the best summary I've seen on this topic.  Only one thing to add: if your buyer is contemplating a purchase, get a condo questionnaire completed by the management company or a condo board member before writing any offers.  This questionnaire will help identify some of the killer issues.