The media has done it once again. Trust me on this one. This past week has seen a surge of mortgage refinance applications as rates have dipped. This will help the beleaguered mortgage industry, the banks, the title companies, the appraisers and everyone else connected with the real estate market that has been functioning on life support for quite a while now. But there is trouble brewing. Trust me. I have received a few calls already from clients I have locked an interest rate in over the past few days saying they want to bail on the deal.
You see, they read in the paper or saw on TV that the Fed is going to make rates go to 4.5% and the world will become a better place. This could potentially be destructive. When a loan originator locks a loan with an investor, for ease of explanation, it becomes somewhat of a "forward commitment" where investors hedge their money on the future market. When rate lock fallout becomes large bad things happen. Investors judge mortgage shops on rate fallout and are actually terminating shops who exceed a certain percentage.
If you delve into exactly what the Treasury Department is attempting to do, you will notice the low rate target is aimed at the Purchase money market. It is also aimed at reviving the big banks. There is no certainty this would even be available for refinances as of yet. Besides, when or if this will ever take place is an uncertainty as well, especially with the new guns coming to Washington to take over in about a month.
Don't take the points off the board! Ever watch a football game where the team kicks a field successfully but there is a penalty and they choose to take the points off the board and try and score a touchdown. Do not fall into that trap. If you have locked into the low rates that are available this very second and are second guessing whether to bail and wait, you better think long and hard. If you have a deal in hand that makes sense, do you want to take the points off the board and risk losing the football?
There is a new disease out there: Fear of Financing (FOF). FOF is a psychological disease that prevents people from buying houses. While we have yet to discover a cure, you as a Realtor can sell more houses if you understand it, and help potential buyers overcome it.
Buyers have already heard that same tired old real estate mantra: "Prices are low. Rates are historically low. This is a great time to buy". They believe that, too. So what's holding them back?
Their secret fear that they won't have the ability to finance the American Dream.
And they probably won't talk to you about this, either. Fears show weakness. Fears are embarrassing.
Sometimes it is easier just not to get in the elevator if you are afraid of elevators. Enduring those few minutes of fear inside the elevator, and getting to the top floor? Just not worth it.
So they just keep walking, and never get to the 10th floor.
Maybe you are losing buyers because they just keep driving (right past that house they love, overcome with an attack of FOF).
Frankly, Fear of Financing is easy for your buyers to justify. It does take more to qualify than it did before. But FOF has reached a frenzy that is out of control and a bit irrational. It is hurting business.
People approach me all the time with this statement: "I hear you can't get a loan on a house anymore......." The statement sort of trails off because they don't want to finish it by saying this: "unless I intend to brave rejection and the possibility I may not qualify".
The media likes to promote FOF...have you noticed?
Let's face it, the fear of rejection looms large in all of our minds. It is why it is hard to interview for a job. To make your sales calls. To try out for cheerleader or the lead in the play.
Rejection stings.
So how do we get buyers to that warm and fuzzy place where they believe the RISK is worth the REWARD?
The Antidote for Fear of Financing
How about selling houses by attaching financing options and quidelines to each listing that you have? Lenn Harley said it best when she commented on Leander McClain's featured post, describing her best marketing strategy for 2008:
Shifting from advertising our services to buyer to offering financing opportunities for prospective buyers has made the difference.
Okay, I will pause here and remind you of something I have written about many times: Financing sells. Look at the car business. When they want to move cars they do this by selling financing, not the car. Does it work? Yes indeedy.
I love looking at flyers Realtors put in those little boxes on your signs. I bet prospective buyers do too. But only one in a hundred I look at has payment options, rates, or a call to action if the client would like to get pre-qualified. Why is that?
If you don't HAVE a mortgage partner to help you with this, you need one.
I know from personal experience that some people will call the mortgage person on the flyer BEFORE they will call the REALTOR on the flyer. Wouldn't you rather capture that lead by having them call YOUR mortgage partner?
Okay, still on the topic of signage: Why is it that I almost never see one of those little signs that hang below the big signs say something like this: GREAT FINANCING AVAILABLE. Or this: SPECIAL FINANCING. Or this: LOW DOWN PAYMENT. Or if you happen to have a really SMART mortgage partner: BELOW MARKET FINANCING (seller has agreed to "buy down" the rate for future buyer).
Do you really think a sign that says "I'M GORGEOUS INSIDE" will do a better job of hooking a buyer? I don't.
And to those of you who send newsletters: do you have a spot on every newsletter for a mortgage update?
Right now it is extremely important that every POTENTIAL BUYER understand that there is still money to loan, and that you as a real estate professional can provide financing direction and assistance.
Make it easy for every person who responds to your marketing to have a clear idea of what they need to do to GET FINANCING
Give them the option of calling the mortgage partner BEFORE they call you (this gives you 2 chances of getting a call instead of just one
Show them payment options on your listing flyers. Tell them you have financing for "a broad range of credit situations".
Don't try to become an expert on mortgage rates and guidelines. Become an expert on overcoming what keeps your customers up at night. That's the way a marketing genius thinks.
Encourage the discouraged. Remain upbeat and positive about financing. Give them that glimmer of hope that they are secretly hoping exists.
Written by Janet Guilbault, Mortgage Lending Expert with RPM Mortgage, Based Out of the San Francisco Bay Area 925-552-3867 (Direct)
In the past month I have worked with a real estate agent with 20+ years experience in the business who supposedly teaches class in college on real estate fundamentals tell me that FHA loans are nothing but trouble. This seasoned realtor also has a cell phone that when it goes into voice mail says “ mailbox full “.
Then I had another supposedly seasoned agent of many years dispute the fact that a non occupant co borrower cannot own another house and sign on an FHA loan. He told me I gave him and his client bad advice. Funny thing is his client is ready to dump him and keep me.
I had another agent call after not hearing from him or the clients in a month wanting to know the status of his client’s loan. This is a short sale and the contract has been with the bank for 6+ weeks and is still not signed. This seasoned agent wants me to update him on the status of the loan. ---I have NO signed contract. You want me to do what and piss how many people off when the loan blows up because I didn’t do my job??? You want me to jeopardize my integrity because you know the loan will be ok…you promise it will…….
And then I have this agent who wants me to chase down his clients, who really aren’t certain they want to buy this house. I have told the clients what I need to write a commitment letter. I have told the agents I am not getting any response. But the agent wants me to continue to request his client send me the necessary income docs because he has a lot of kids and a full time job as well and just doesn’t have the time to chase them down. After all, he gave me the deal.
I have had it with part time real estate agents! I have had it with closed minded agents who refuse to let me sell an FHA or USDA loan because they know it all! I have had it with people that still remain in this business and refuse to put in the time and effort to become experts! I have had it.
I fired 2 agents today. They shouldn’t have lasted as long as they did. Sure it was nice to get looks every day at deal, but listen up close one more time.
MAKE BELIEVE LOANS NEVER CLOSE!
Agents, I will make this real simple. Get me last two years W 2’s ( tax returns if self employed ), 4 most recent paystubs, and three most recent bank statements or 401K statements or whatever you can get to back up the reserves and assets the client provides you. Don’t argue. Don’t underwrite. Don’t tell me why this is such a great loan. Just get me what I ask for. Because this is what the rules say. This is what the underwriter is going to ask for. I have the ability to validate the loan so when I send it to my underwriter it is typically good as gold. Do not ask me to send an incomplete file. Do not ask me to issue a loan commitment until I have all supporting docs and can back up my commitment
This is not a hard job. Just understand the guidelines and stop trying to re write them. It will never work. One more time, repeat after me -MAKE BELIEVE LOANS NEVER CLOSE!
Trust your MORTGAGE EXPERT to handle the loans for you. Make your life a lot easier.......
I have noticed in the last few months that some loan officers and lenders are getting more desperate than ever before. In my 16 years of being a loan officer in regards to mortgages, the consumer needs to be aware of knowing when to seek help from another loan officer and not wait until the last minute. It's one thing to trust, it's another to be lied to or misled to.... and not just by accident.
I so love helping people in general. And even more so when it comes to helping my client get a mortgage, no matter if they are buying a home or refinancing. I will also say that I am not perfect nor that I know everything when it comes to mortgages. But I have some pet peeves and concerns.... please read below.
I could share at least 20 to 30 examples that I have come across in just the last year alone. I get about 5 e-mails or phone calls a week from consumers all across the United States, but usually after they feel that they aren't getting anywhere with their current loan officer/lender. I am licensed in many states and more to come shortly. But if I am not licensed in that state, I know of a true mortgage professional that would be able to help them the same way that I could. Just recently, I had a woman e-mail me because her current lender said that her father couldn't co-sign on her new house because of x, y, z reasons. I said that was not true. And the sad part was that her loan officer said no and would get back to her. It was a whole week and still nothing. I gave her the name of a loan officer that I had confidence in and she still hadn't called him, even after 4 days.I just don't get it? Read below for her answer.
Conclusion to the answer -
I asked this women why she would not seek advice from another loan officer, especially one that was highly recommended, if she truly trusted me. She said..."because her loan officer was nice". People !!!! A nice sales person will not always get you the correct answer or your deal done. Yes, it's our job to be nice. But if they throw at you sweet chit chat, words of encouragement such as, "don't worry", "no problem", "I guarantee", "I promise", etc etc.... then you might be shooting yourself in the foot.
Words of advice -
It doesn't take more than 24 hours to get a basic answer to any type of mortgage question. Go with your gut sometimes. Better yet, go with a very knowledgeable and professional loan officer. One that will educate you about the process and educate you during the process. Advice below....
If the loan officer keeps promising to get back to you, but it's been a few days now, seek help elsewhere.
If they are hard to get a hold of now, even more so when you might have an issue, seek help elsewhere.
If the loan officer keeps using such phrases as I mentioned above, seek help elsewhere.
One pet peeve!!! If your lender misses your settlement date for any reason, seek advice quickly from another loan officer. I have heard some borrowers have their settlement postponed up to 3 times. Don't wait nor trust promises that will more in likely be broken later on. It happens.
If your lender denies your deal the day prior or the day of settlement, don't listen to them telling you that they are working on a new solution. And then for them to tell you to hold tight. Seek help elsewhere immediately.
In regards to out-of-state loan officers? 70% of my business is out of state. It comes down to the ethical and knowledgeable loan officer. It doesn't matter on location....
Excellent advice I wanted to share with everyone. Below post is coming from a real estate agent. I second this as a mortgage banker. Choose em wisely....... read below--- MORTGAGE LOAN EXPERT
As they used to say on Hill Street Blues, "be careful out there". I'll have to confess I really never watched the show much. That show was for old folks. I was too busy watching Miami Vice and trying to pretend that I was Don Johnson/Sonny Crockett. It was 1985 and I was only 15 Years old. Give me a break.
With the current status of the real estate market many agents and title companies are committing fraud in order to stay afloat. You have to be really careful who you do business with. There have been many title companies in Maryland that have been caught stealing escrow monies. One of the title companies that I was forced to work with by the bank (my seller) when I listed REO properties was recently closed. The owner plead guilty to stealing 1 million in client funds. The title company owner was actually caught living in and gambling in Atlantic City casinos with client funds and that is where she was arrested. Truth is sometimes stranger than fiction. http://baltimore.fbi.gov/dojpressrel/pressrel08/ba092908.htm
This market will unfortunately bring out the worst in people. Please make sure that you pick your real estate agent/broker, title company and mortgage banker carefully. Do your due diligence and make sure you aren't dealing with a crook or con. Unfortunately there are title companies out there right now "open for business" that are in the process of being forced to close down by their title insurers.
Be careful out there, pal!
Real Estate Professionals, Inc. is a premier real estate brokerage company in Baltimore, Maryland. Thecompany is more like a private club where successful agents in the real estate industry do business. The company offers affordable 100% commission programs for agents that are serious about the real estate business and want to earn a high income.
The broker, Robert Kaetzel enjoys providing advice, support and leadership to help each agent create their own professional and profitable real estate practice. Many of the agents that Robert has worked with earn $150,000.00, $200,000.00 yearly and more from selling real estate. Those that aren't earning at that level have personal real estate goals that they are working toward.
I get these phone calls more and more these days. I found you on the internet and just had to ask, my loan has been with my lender for a few months now and they are not returning my calls. Listen up people. We are not living in the refi boom of the early 2000's. Loans are scarce these days. Wholesale investors are underwriting loans in three days or less, many of them offering same day turn around.
Man my internet lenders rates are soo good. I shopped and shopped and found the best deal on the internet. I got news for you. If your loan doesn't close, then your rate is make believe. And that is the problem when dealing with internet lenders in 2008. You are most probably dealing with an order taker who doesn't fully understand loan guidelines and is nothing more than a data entry clerk. And what if you have questions during the loan process and your calls go unanswered AND your lender is 14 states away from you????
Margins are so tight these days every lender should be offering very similar pricing. True pricing. Not make believe pricing. there is a difference! Why not deal with your local lender. Support your community. Visit your loan officer personally and get to know them. This is a huge transaction. Get the warm and fuzzy that you have made the correct decision selecting your mortgage company. Visit their web site and make certain they have an " about us " section that describes who the key personnel are and physical address.
Seek high quality advice ----- MORTGAGE LOAN EXPERT
#1 – they allow a purchase loan with only 3% of borrower’s funds in the deal. These funds may come from allowable sources such as mom and dad, employer, church. They also allow up to 6% seller help.
#2 – They allow cash out refinances to 95% of the value of your house – for now anyway.
The myths - FHA loans are for poor people or clients with terrible credit. NOT TRUE!
Think about it. FHA will allow you to purchase a home with NO MONEY out of your pocket. And FHA offers JUMBO loan amounts as well. FHA is the ONLY program that will allow cash out at 95% loan to value. FHA is the hottest loan program on the market!
FHA has mortgage insurance --- ok, so what.
Conventional loans over 80% loan to value do as well and the factors are much higher than FHA, which means on loans over 80% loan to value, an FHA loan payment will typically always be lower.
If you are looking into a loan and someone is advising you against an FHA loan, seek advice elsewhere. Understand your options.
It's back to the basics for me the past few months. I am out calling on agents again and I am lovin it. You see, times have changed. The very same agents who wouldn't give me the time of day in the past now inviting me to have a seat and chat. And that is just what I am doing. You see, I am finding out the agents with staying power, the ones that are "lifers", appear to be like a sponge just longing to learn about the products available in today's market and truly understand the mortgage lending business. This is a wonderful thing for me because these agents will always be on the same page as me and it will ensure we work together instead of against each other.
I called on a particular office today and met with an agent who seemed like a seasoned vet. I asked how business was and he seemed a bit bitter, which is totally understandable.... I suppose..... I went on to tell him my mortgage shop was actually having a really good month and purchase business was heating up. Then I asked him if he understood the USDA loans. He quickly told me he doesn't do those bad loans. He said they were the loans that got us into this mess.....
Hmmmmm... ok.......
I tried another approach. I asked if he did Veterans loans. He told me he would not put a client in a car if they didn't have any money to put down. He said that is what caused this whole mortgage mess.
I suppose in some convoluted way I guess he had a point. But explain this - If I can take someone who is renting and turn them into a homeowner with no money out of their pocket AND a monthly payment the same as rent - well, to me that is a BENEFIT to the borrower. Sure the whacky 100% No Doc loans went way overboard, but those traditional 100%'ers have been around forever.
I am interested to see everyones comments on this topic.......
Media hype is killing the mortgage lending industry! I am approving loans every single day..... keep spreading the word. Banks ARE lending money....... Great post by Active Rain legend Tom Burris
No, the sky isn't falling and the credit crunch didn't get worse....!! The problem is reporting like this. Jay Gormley with CBS 11 News pretty much told all of North Texas that they can forget buying a home. The loans are all GONE!!! And if they aren't GONE, then the financing can be yanked out from under the borrower in the 11th hour.
I sent Jay Gormley an email after reading his article.... And he called me within minutes!! A VERY spirited debate ensued and it pretty much ended up with us agreeing to disagree.
I would like to add that as 'spirited' as the chat was, Jay was very respectul and professional.
Now, I do NOT doubt that he did his research.... But after reading the article, what do you think Joe Six-pack is thinking right now? Do you think Joe will even pick up the phone to call a loan officer or realtor? I DOUBT IT!!
We all need to make a concerted effort to show these authors the positive side of all of this. We need to show Joe Six-pack that there aren't any more hoops to jump through than last year!!
I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!! Subscribe to My Blog and stay informed about current lending changes!!
While I personally focus on Texas Home Loans and First Time Home Buyers.... I do lend in other areas. We are in about 46 States and adding programs to bring full service to an area near you.
.......... I'm having a nervous breakdown... drive me insane .......... ohhh sookie ---- Da Da Da Da Da Da Da Da Da DAA Da Da
Ok - so I stole a piece from the repertoire of what AR legend Jason Sardi adds to his blogs... a bit of musical transition if you will..... now here goes -
I have been working with a realtor for the past 4 months with a client I have been working with for almost a year that I had pre approved and somehow he hooked up with. This agent seems like a nice enough guy, 20 + years in the business, very friendly and engaging on the telephone. But I saw it coming...... Our first conversation started out with him asking if I would honor the rate on the good faith I had supplied these clients --- my clients! - THREE MONTHS PRIOR!
These clients came to me with mid scores in the 400's. I got to give it to them, with great effort, lots of letters to the credit bureau and some slick negotiating with past creditors, their scores got better. Mind you, they are still sub 580 however I can get this loan closed with a manual underwrite as it meets all the guides and there are strong compensating factors. Besides the fact with proof of a few more accounts paid, satisfied and removed I can get them approved through automated underwriting. They are almost there.
Well I tell you, Mr and Mrs Realtor, will you please concentrate on selling houses and leave us mortgage brokers alone when it comes to what rate we charge the borrowers. I apologize in advance to the responses this post will get but listen up people, unless you understand what hits to the price a sub 580 score gets and how much time and effort it takes to submit a tight package to my underwriter, please leave well enough alone. I can open that can of worms on every listing in your pipeline. I elect not to, please do the same. Now my client is asking why can't he get a rate in the 5's like he sees on TV. 97% FHA - 3% gift from mom, 4% seller help, sub 580 scores...... STOP THE NONSENSE!
So that's where I left it six weeks ago. Today I get a call - " hey Lewis, the bank ( it's a short sale of course ) said they will take the deal, can we still close this month? " Well Mr Realtor, yes we can but I need the contract so I can get docs drawn up, signed and submitted. He told me that he can send me the copy that is signed by the buyer and seller but he only has a verbal from the bank ........ I DID NOT FALL OFF THE TURNUP TRUCK LAST WEEK!
How many of you have seen a short sale turned around in - let's see today is the 21st and they want to close the 30th - well, that fast? Can we get it to the table that fast? You betcha! Let me ask are you mortgage gurus a question ---- How many of you submit this loan without the banks approval? Without knowing what the bank will actually accept as a payoff? And without knowing the balance on the property?
It is a short sale people! And neither listing or selling agent knows the balance owed on the property.
THERE ARE REAL LOANS AND THERE ARE MAKE BELIEVE LOANS - do you know the difference? I do.....
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Lewis Poretz - Open Mortgage - Mortgage Banker
The media has done it once again. Trust me on this one. This past week has seen a surge of mortgage refinance applications as rates have dipped. This will help the beleaguered mortgage industry, the banks, the title companies, the appraisers and everyone else connected with the real estate market that has been functioning on life support for quite a while now. But there is trouble brewing. Trust me. I have received a few calls already from clients I have locked an interest rate in over the past few days saying they want to bail on the deal.
Don't take the points off the board! Ever watch a football game where the team kicks a field successfully but there is a penalty and they choose to take the points off the board and try and score a touchdown. Do not fall into that trap. If you have locked into the low rates that are available this very second and are second guessing whether to bail and wait, you better think long and hard. If you have a deal in hand that makes sense, do you want to take the points off the board and risk losing the football?
There is a new disease out there: Fear of Financing (FOF). FOF is a psychological disease that prevents people from buying houses. While we have yet to discover a cure, you as a Realtor can sell more houses if you understand it, and help potential buyers overcome it.
Let's face it, the fear of rejection looms large in all of our minds. It is why it is hard to interview for a job. To make your sales calls. To try out for cheerleader or the lead in the play.
Shifting from advertising our services to buyer to offering financing opportunities for prospective buyers has made the difference.
Right now it is extremely important that every POTENTIAL BUYER understand that there is still money to loan, and that you as a real estate professional can provide financing direction and assistance.
every day at deal, but listen up close one more time. 
FHA MORTGAGE EXPERT 
FHA experts
Maryland Mortgage Expert
Seed Newsvine
;)
;)
