I still consider myself a newbie here relative to many very creative & seasoned bloggers that make ActiveRain such a great community.  Every time I log in I learn something new.  The-ever growing membership here is a definite sign that more and more people in the real estate industry agree.  When I joined I made the commitment that I am not going to just create a profile and do nothing--too many people do that.  Even if I haven't racked up 100,000 points  :) (someday I will though) I'm going to make this useful and I'm going to share it with others.  I guessed I haven't blogged everyday due to my perfectionistic tendencies to craft those ideas I get whenever it strikes me into words and topics I find useful. 

Using myself as an example, I think of ActiveRain as an opportunity.  Opportunity to shape and mold however I'd like.  Converted from my start as a local loan officer into one with the ability to market nationally if I so choose, creates a tremendous opportunity.

I've realized that when opportunity knocks...some people open the door and welcome it.

Some people however,  do not even take a quick glance through the peephole before they deadbolt and chain the door shut!

 

With ActiveRain invitation, not necessarily through the site to get points, I've started seeking out others who I feel could really benefit by joining the ActiveRain community.

My idea is fairly simple, just takes a little homework on my part:

To contact a select group of agents in small market communities where ActiveRain and Localism are severly underutilized and invite them to discover all there is to offer here.  I figure if you are in a community of 20,000-30,000 residents  with a small university or college, a few employers of some scale and there is only 1 ActiveRain member there who is not even active there's a whole bunch of good 'ol Search Engine Optimization going to waste now isnt it.

I've only just started but I decided this is worth the time because frankly, I'm really not big on "spam-blasting" and I know most agents really are not either!  How many of you get numerous spam blast e-mails from brokers or lenders claiming they have the best rates or the best programs or the best service?  Shouldn't I really be marketing myself not just marketing loan products?  If you want to do business with me that's oustanding of course :) but why in the world would a spam-blast e-mail to 500+agents make you want to do business with me.  Wouldnt you like at least something in return?  (I sense that you're nodding your heads yes here!)

If you were going to refer a client to me and I'm 3 states away from you shouldn't there be something about me & and my ability that makes me worthwhile.  I feel that a personal invitation and a genuine interest in mutual success is defintiely worth investing in.

For those who simply do not respond to my e-mail or a phone call invitation, I guess I'll have to assume they've got more business than you can handle already or that you're not "Built to Blog"  With more and more homebuyes especialy relocating homebuyers doing their research online, you simply cannot afford not to at least take a sip of the Google Juice right?  Especially if you realize your competition is not doing so.

For those of you reading my blog for the first time, please check out my other posts on web-marketing, etc....I always love to get new ideas and opinions and your ideas for future blog topics relevant and useful here.  My readership has increased but I dont expect to get 100 comments or anything--Feel free to prove me wrong is you find my commentary useful!

Thank you for very much for reading!

~Kevin

One of my favorite places to visit in Lexington, KY sustained some significant straight-line wind damage yesterday as severe storms raked the area. Impressively enough though, they expect the field to be playable tonight....Quite an impressive clean-up effort I must say! Kudos to all those who are putting Lexington's beautiful stadium, the home of the Class A South Atlantic League Lexington Legends, back together again. The weather's been a tad rough for many this week! Prayers go out to all those who've lost so much due to Mother Nature's wrath here lately...

To all of you who read and e-mailed me about my marketing do's and don't s post here on 4/29/08 I wanted to thank you for your kind words, additional insights and I also enjoyed the opportunity to look at some of your pages.  Definitely some great stuff out there--happy selling to you! 

I've talked with some agents who are just getting their website started or are just thinking about it...trying to choose a domain name, how to get started.  I did some comparison shopping on just that and you'll notice here I have some links to the right. 

I found that in ease-of-use, and cost/benefit there is a lot of value to Domain-It.  I wouldnt have become an affiliate & posted them here to share with the entire ActiveRain community if I did not believe in them. 

You can also transfer your domain name here and set-up auto renewal which is a great feature to have!  There are actually software programs out there designed to crawl the web in search of domain names getting ready to expire with active traffic on them to buy them up and re-sell them or I guess make you buy them back or lease them.

I'd always wanted KevinWeaver.com but I guess I'll have to wait a while longer until the veteran dirt late model racer retires:)  I've picked up a couple others to use in the future and brainstorm on ways to promote them.

It's kind of fun brainstorming about what names you could use, promote, specific to you, your community,  your business and of course, seeing if your idea is taken.  You can buy multiple names and have all them forward to your main page also. 

Just as an example in a large metro area you could promote different suburbs/neighborhoods with a number of domain names for your marketing materials and have them all tie in your main page for MLS search and to view your listings in each of those areas.  Not sure of all the technical aspects for that depending on your web host but I've seen more and more doing this type of thing.  Being creative could be a rewarding way to find what works for you!

CNN Money featured a great article yesterday about home buying for those who are on the fence out there. I'll post the link at the bottom....

Amanda Gengler hit the nail on the head when she stated that #1: You simply cannot time the bottom.  Fact is even if you could buy the same house a few thousand cheaper in 6 months but rates climb you do not gain anything and likely end up losing.

In fact, talking with some agents in the Cincinnati Ohio market as an example, they are noticing significant improvement in marketing time in several parts of the metro area.  Many more listings are pending in less than 30 days over the last few weeks.  For Cincinnati in general, the bottom may have already been reached.  I'll be curious to see when some new sales figures come out for May there. 

Amanda goes on to point out what many of us have been saying all along "...fixed mortgages don't directly follow the Fed"  (Thank you Amanda)  I get so tired of these idiotic cartoon banner ads all over the web with teasers for 4% loans.  The fact is rates in the low 6's are still near historic lows and many economists voice the opinion this may not continue regardless of what the Fed does going forward.

Here is the link: http://money.cnn.com/2008/05/01/real_estate/new_rules.moneymag/index.htm?postversion=2008051213

 

Thanks for reading

Kevin

 

Time to get back to blogging a bit. Many ideas lately seemingly so little time to address them!

I've been doing some research lately: looking at realtor websites, mortgage company websites both locally and around the nation and talking with my clients, brainstorming on ways I can make my website presence more effective and my realtor friends can do the same. 

I guess I shouldn't be too surprised but there are just so many poorly designed, incomplete websites out there that it's no wonder that homebuyers find it hard to trust the information they are given be it from a real estate agent or a loan officer.  My personal page is by no means perfect, it's a never-ending work in progress :)!

Do's:

1)A home/ main page that really attracts the interest of the reader:  No matter how much text you have built into there to attract those almighty search engines, the fact is, you need "meat" and "potatoes"! If its all obvious text there to lure in search relevance with nothing to offer, it will not take long for that back arrow to get used real quickly creating a high bounce rate.  A high bounce rate drops you way down in search relevance even if your keywords are solid.  Remember, If no one sees your site any longer your efforts will go to waste.

2) Ease of Navigation:  Have friends or family members test drive your page and ask for their honest opinions.  (Make sure they spend some quality time here to help your bounce rate too!)  You'll be amazed at the things they might pick up on.  Little things they can add or suggest to make it user-friendly from the layman's perspective could make a big difference.

3) Interactive features:  Offer quick contact forms without asking for too much information to make it easier for the shopper who isnt ready to commit to anything at least express their interest.  Hone your skills of converting that casual interest into a sale.  (We're all still working on that right?  There's a whole other blog in and of itself right there!)

Dont's:

1) Outdated information: HUGE turnoff.  You know how many sites I see with stuff like "Date last modified 12/1/06" on the bottom of them?!  This screams: "I dont care".  If you dont think it's worth the time to update your site don't expect it's worth anyone else's time to spend reading it!

2) Dead Links: Make sure the links/pages work and work properly!  I test my application and page-to-page links regularly to make sure they are fully functional.  In my case, with the online application I have it is absolutely essential that 1) it be secure and 2) that it promptly forwards all information accurately and completely.  Make sure those "e-mail me" and "contact me" links are good to go.

3) Information access: Real estate agents: I'm of the mindset that a house shopper should be able to browse listings without having to register to do so.  You want the buyer to use your site to do this so they contact you when they are ready to see something.  And, if they spend all their time browsing your site to do this, this helps you out on that ever-important bounce rate we talked about now doesn't it?!  The fact is if someone doesnt want to register on your site they can just Google "your city here MLS listings" and find a competitor's site where they do not have to.

4) Functionality:  OK, we've established looking at listings now let's make sure that looking at them is as user-friendly as possible.  I've found numerous sites where accessing the list of all listings that meet search parameters is no, problem but when you click on it to view details and see photos it displays all the text in an impossible-to-read color like bright yellow on a white background! That mouse is moving toward that back arrow really fast...If your site makes the listing browsing easy and enjoyable that shopper is likely to bookmark your site and come back there and use it again & again and more likely to contact you when they are ready to move forward.

Please share your experiences and comments here....we can all benefit to become better e-marketers!

Thanks for reading

~Kevin

Hope everyone in ActiveRain land had a Happy Easter!

Thought I would take a moment out of my Monday afternoon tofeature a local business owner who merits some recognition as some of us do from time to time here. Being a guy who likes food and likes to cook I have to give some credit to a local restauranteur who rises to the top of his class!

Since my wife & I  chose not to cook for Easter this year, I must say Clay's Family Steakhouse in Paris, KY made our family Easter dinner a memorable one with their absolutely outstanding Easter Buffet!   Deep fried turkey, marinated pork tenderloin, ham, with all the fixins and some oustanding desserts was well worth it. 

Of course, I must say I ate way too much of all of it :)

Frank Clay and his family operate the restaurant and deserve a lot of credit for offering fine food and great service.  Way above the chain restauarants!  If your in the Lexington area, Clay's Family Steakhouse is well worth the short drive out Paris Pike to visit them for dinner (4241 Lexington Road).  Give them a call at 859-988-0031.

 

Kevin

As we've seen on other cut days,  it didnt take long after the Fed rate cut this afternoon for the bond market to kick in and see a pricing adjustment for the worse.  All of 9 minutes after word of the 3/4% cut was posted on CNN.com my inbox started receiving pricing adjustments.  Some lenders have already made 3 rate sheet changes since 2:30 ET and it's only 4:15 right now.

With the Dow up over 400 points today I wouldnt be at all surprised to see it fall after open tomorrow. Some of those euphoria day-traders might just want to cash in quick with all the gloom and doom still circling.

I'm still not convinced that a 3/4% cut today was what we really need.  Inflation worries, runaway oil prices and the weak dollar hurts us all. The market has continued to fall after the last Fed cuts, of course only after the quick spike.  Can you imagine the market reaction if the Fed had NOT cut today?!  they actually expected more than this...

Ejoy the roller coaster ride!

 

 

You may have read some other posts on ActiveRain about mortgage rates in recent days/weeks wondering exactly what's going on and speculating on where we are headed.  First I will reiterate that what the Fed does will not necessarily translate into what long-term interest rates like mortgages do.  The end of January did offer the best rates we have seen for quite some time but since about 2/10 rates have worsened from one day to the next about 80% of the time.  If you are "floating" right now, you might feel like you're playing a game of "Deal or No Deal" gone wrong and you're opening all the cases with the big amounts in them. 

So what's going on?

First off, the yield on the 10-year bond is having a significant effect.  As I type this post it is sitting at 3.87%.  Generally speaking, as the price drops the yield goes up and so do mortgage rates.  A drop of 11/32+ or more  to the bond is often an omen of a mid-afternoon price/rate change.  If the yield were to spike up to say 3.93 or 3.94 this afternoon we would most likely see a rate hike before the close of business Easten time.  If the yield drops, lenders are a little less quick on the trigger to improve rates (just like gas prices right!?)This leads us to the second part of the equation...

Second, underwriting volume and turnaround time on loan packages---particularly FHA and VA loans are stretched right now with many of the nation's largest FHA lenders/servicers.  They see no need to drastically improve pricing for loan applications they can barely accommodate.  Government loan demand is up and the capacity/number of mortgage companies to handle the demand is down.  There are only so many DE certified underwriters to approve these loans and you cannot just add more of those overnight.  If you have a loan in the backlog at Taylor, Bean, and Whitaker right now you know exactly what I mean here!  Wells Fargo has gone from 3 to 5 and now to 7 business days on new submissions in the last 2 weeks.  With clearing conditions for month-end closings this week, it might just get worse before it gets better.   On top of this, these lenders are seeing a lot of loans that simply do not come close to qualifying with poorly-completed submissions just trying to throw something against the wall to see if it sticks. Volume that would have gone, dare I say "Subprime" (beginning to hate that term and its overused generalizations) is being funneled into the FHA pipeline too...the magnitude of processing denials creates an additional burden.

If you are an agent working with a buyer pre-approved for FHA, patience will be a virtue.  Don't steer buyers away from FHA though--For many buyers it is the best option available to them.  (see my previous blog post on FHA vs Conventional pricing).  Do advise them to be watchful of rate locks and aware of when they expire.  If you are writing a contract today a 15-day FHA lock just isnt going to cut it with many FHA lenders right now.  If an FHA loan is the best scenario for my borrower, I will gladly explain to them exactly why it's worth the little bit of extra time in their case.  If more loan officers had done this over the quicky subprime loans a couple years ago, let's face it...we wouldn't have as many problems in the lending industry as we do right now.  The Option ARM's thankfully never got popular around here in Kentucky but there sure were a ton of those 2 and 3 year ARM's with high margins!

Best wishes to all out there---Thanks for reading and I appreciate your feedback.

-Kevin

Buying a house in Kentucky or wanting to buy a house in Kentucky soon?

I am following up to my post yesterday about the credit score adjustments on Conventional loans where I mentioned that for scores under 620,  FHA is most likely the best means to achieve affordable financing.

Even many real estate agents I have spoken with lately still have misconceptions about FHA financing and worry it's going to take too long or they have to jump through too many "hoops". The appraisal/inspection processs is truly simplified in the last couple years.  Working with someone who originates a lot of FHA loans really helps,  We know the common pitfalls and can make suggestions while you are shopping for a home.   Its almost certain that more banks and lenders who havent historically handled FHA loans will & currently are adding this product. 

So let's get back to the 620 score for a moment...Scores under 620 face the highest PMI (Private Mortgage Insurance) costs on Conventional loans and now, the highest cost or fee from Fannie mae or Freddie Mac built into the loan terms as well.

FHA loans presently have a level PMI cost: 1.5% of the base loan amount which is financed and 0.5% monthly.  So how would you calculate this?  Let's use $100,000, nice round number to illustrate this:  $100,000 x 0.5% = $500, then divide that by 12 and you have a $41.67 monthly PMI payment.  Conversely a conventional loan rated as A- can have a PMI rate 3 or 4+ times that amount.  On $100,000 you could end up being charged well over $100 more per month.  I recently witnessed a refinance applicant here with a 7.50% interest rate but a BANK-issued PMI of 4.18%----this made their APR on their existing loan 11.66%!!

FHA Loans are not score-driven as a rule....Yes, some lenders do set their own pricing tiers for certain scores but as a rule, credit score alone does not dictate pricing.  There is an FHA Total Scorecard system used for automated underwriting but manual underwriting is available if not approved this way (yes, a human being actually looks at everything and is expected to use a common sense approach)  There are some guidelines a Direct Endorsement Underwriter cannot bend on but there are many areas within FHA Credit Policy open for interpretation and left to the discretion of the underwriter. "DE" Underwriters are accountable for their actions and defaults are tracked very closely.  Defaults pointing to underwriter oversight are closely monitored and defaults with common loan characteristics are tracked accordingly for potential guideline updates and revisions

I will talk more soon on the potential of FHA for refinance savings

Wow it's mid-January already...Time seems to fly as I try to get caught up on all the things I've been meaning to do and seem to always put off around Christmas!

Before I get into credit score and pricing issues, I've been looking back at 2007 over the last couple weeks and how the real estate and mortgage industry has changed and affected us all.  Of course, the media has been painting that picture for the world and has turned the word "subprime" into an albatross on the industry.  I looked up the definition of albatross: besides being a large web-footed sea bird it is defined also as being "something burdensome that impedes action or progress".  How true this description is!

Is the economy looking a little down? sure...Are foreclosures higher than normal? sure... but the albatross here as we begin 2008 is the fear instilled by the media that further impedes the action and progress of home-buying beyond the natural economic factors we are facing in the US today.  The domino effect equity crunch starts with all the buyers who owe more than their house is worth right now.  Homeowners looking to upgrade may not have the equity to do so. And, Prospective buyers are trying to figure out where the bottom is for their area....and that sure varies considerably depending on where you live! 

OK, now on to my thoughts on the Fannie Mae and Freddie Mac Conventional pricing adjustments for 2008:

First off: This is going to make programs like FHA and USDA Rural Development a better choice for many buyers entering the market this year....Why? Credit Score  Due to the losses Fannie Mae and Freddie Mac are facing,  they are trying to find new ways to offset risk and build capital.  While Conventional rate offerings for some will be down from just a short time ago, Conventional rate offerings for many will be higher despite market conditions that dictates falling rates. 

First, keep this in mind:  A rate reduction by the Fed does NOT automatically been an immediate decline in fixed mortgage rates.  (google Kevin Weaver along with the words interest rates and you'll probably find my comment referenced by bankrate.com's Holden Lewis about this)

For borrowers with credit scores greater than 680, there is no pricing penalty adjustment.  The next 3 tiers are 660-679. 640-659 and 620-639.  For borrowers under 620, Conventional simply is not the way to go unless there is considerable equity or are making >20% down payment.  From the top of the range to the bottom, 30 year Fixed rates which were really almost equal for all these prospective borrowers before may and likely will vary as much as 1 full percent. 

Why you may ask?

Fannie Mae and Freddie Mac are now charging the banks and mortgage lenders securitizing to them fees ranging up to 2.00% of the loan amount.  Naturally, to remain profitable they have no choice but to pass these fees along.  For a bank that sets their rates to make a profit margin of 2% they have to price the loan's rate up to 4.00% gross now to net out 2.00% for scores under 620, up to 3.75% gross for 620-639, up to 3.25% gross for 640-659 and up to 2.75% gross for 660-679.  Each tier means anywhere from .25 to .375% per score tier to the borrower depending on market fluctuations with most lenders.

Why does this bother me?

This leaves even more room for bait-and-switch tactics.  Frequently, we get calls asking, "What is your current 30-year Fixed rate?" 

Then think about this: 

If you called a Ford or Chevy dealer and asked, "How much is a truck?"  The price sure can vary there can't it?  There are many different websites promising competing rate quotes from banks and lenders.  Most borrowers are not aware how, why, or when these changes occured.  Honest loan officers can easily lose a potential client who doesnt take the time to ask the right questions, listen, and understand the how and why and merely shops blindly for the "best" rate.  I've had real estate agents try to tell their buyer what rate they should get...Now, that can confuse things even further.  (I do not tell the buyer what price they should get the house for, how much commision the real estate agent should get, so please leave the rate quotes to me).

Knowledge TRULY is power!