I was talking to my mom today while she was leaving for work.  She is 74 years old, just retired from working for the government after 20 years and she started her new job today (she's a nurse, by the way).  She asked me how business was (as she always does) and I gave the normal canned response -- business is great, I'm busy and things are moving forward.  I mean, what else are you supposed to tell your mom?

  Every time she sees something on CNN about the housing crisis, she calls and asks if I need money and that she's bringing over groceries.  I'm a first generation American and my parents came over to the United States in 1959.  My dad still speaks broken English and still speaks as if Nixon, Carter and Reagan are still in office.  My mom speaks very good English, but still has a very pronounced accent.

  Today, my mom asked me if she is allowed to give me some business advice.  How can I possibly say no?  She's mom for godssakes!  Truthfully, though, I'm sitting here thinking, what in the world can she possibly tell me about running a mortgage company? 

  She tells me that she has seen my television commercials and she knows that I have done my seminars all over the country.  She goes on to say that I need to try to talk to fewer people more times.  That statement scared the life out of me!  For a few months now, I have been telling people that I used to believe that if I simply talked to more people, I would do more business.  I have since changed my philosophy to speaking to fewer people more times.

  It is that exact philosophy that I have been focusing in on -- speak to fewer people more times as opposed to more people fewer times.  How in the world does my mom, who is a nurse, who I have never explained my business plan to or method of getting business know the exact thoughts that I have been thinking for the last 6 months? 

  It is moments like that which makes me want to put my head in a vice and seek professional help.  It seems that I have spent more of my life trying to learn on my own and prove my parents wrong than simply accepting the fact that they know more than I do and I need to just shut my big mouth and listen to them (even if they do speak with accents).  The greatest lessons I have learned in life have come from my parents first, my wrestling coaches, my school teachers and my friends (with my friends, it's kind of like the blind leading the blind though (lol)).  The sickest thought of all is that none of them have ever charged me a nickel for their worldly advice.

  Mom's words have, once again, only cemented my thoughts on business and sparked the fire inside of me to again keep traveling down the road I am traveling.  Thanks again mom!!!!

  Especially in these times, sometimes keeping your chin up and re-confirming your confidence and belief in what you are doing is more important than reading guidelines and going through your to-do list.  Four weeks ago, I decided to visit the same 10 real estate offices once every Tuesday and drop off something in their office with my name and/or picture on it.  I simply walk in, "litter" at the front desk and walk out.  Each time, it has only been an hour-and-a-half of driving around (not a lot of time out of my day).  Suffice it to say, this past Tuesday, the 'ole engine was just not firing up.  Here were my thoughts why I did not want to do this:

1)  I didn't have time this week because I was too busy.  I have 2 seminars this week and I just didn't have the time.

2)  There is barely anyone ever in these offices and I know that the lady at the front desk is just throwing my stuff out so this is just a waste of time.

3)  I'm sick of the grind and chasing people and who knows, it's about hitting the "right" people so maybe I have picked the wrong 10.

4)  This industry is dead and who am I fooling thinking that this is going to work.

  So I'm laying in bed and I remembered this story, I think of it all the time and it never stops firing me up:

  I graduated from Normandy High School, a nice high school on the south side of Cleveland where I wrestled.  I was never anything great, but I believed that I could achieve more and that I wanted to be around other people who shared my goals, so I decided to go to the #1 wrestling school in the country -- Oklahoma State University.  In the first couple of weeks of practice, I'm working out with my teammate T.J. Jaworsky (who, by the way, ended up winning 3 NCAA titles (you could say that he was decent)).

  So I'm working out with T.J. just getting the daylights beaten out of me.  I was never beaten this bad in my life and he was hammering me.  I was laying on the mat feeling sorry for myself, my eyes were welling up with tears, I was questioning whether or not everyone was right and maybe these guys were out of my league and boy, was I feeling sorry for myself.  The whole time, TJ is using my face as a mop just cleaning the mats.

  Suddenly, Kenny Monday, one of my coaches, throws TJ off of me and grabs my whole body and picks me up, standing me on my feet.  Kenny, by the way, won an Olympic Gold medal in 1988 and an Olympic Silver in 1992 and was a 3-time world champion along with 8,000 other awards.  Kenny stood at about 6' tall, 210 pounds with, god knows, no body fat -- he was chiseled out of stone.

  He smacks me in the face and tells me to look at him in a very authoritative, stern voice (I was terrified and yes, I was getting ready to cry my eyes out).  The whole wrestling room stops and it's dead silent.  Coach Monday says this to me -- he says, "Get your chin up!  You have 2 choices right now...RIGHT NOW!  You can quit and go back to Cleveland and get the hell out of here OR you can stop feeling sorry for yourself, get your a** up and do something about it!  You fight damn it!  NOW WHAT'S YOUR CHOICE!".

  Honestly, what were my choices?  Quitting was simply not an option -- it simply wasn't.  I put my chin up, stuck my chest out and marched back onto the mat.  I was ready to run through a brick wall and I was gonna' pound TJ.  TJ and I slapped hands, I was fired up and here I come!  Coach Monday said, "Wrestle!".  In about 2 seconds, TJ proceeded to pick me up and slam me on my head again and the beating continued...BUT -- I fought.  I fought.  I fought.  I fought.  Ever since that day, ever since that moment, I have never felt sorry for myself again.

  Today, when the chips are down, I look at my options:  there are only 2 -- I can quit and go home, but that is just not an option...it just isn't; OR, I CAN GET UP AND DO SOMETHING ABOUT IT.

  This past Tuesday, I went to 8 offices (2 closed (lol)).  I hit all 8.  And this is the best part -- The broker from one office with 80 agent licenses sat me down and told me that he wants to get an "in-house" lender for his company.  He proceeded to tell me that he was impressed that I have been back every single week and he has seen me coming and going every time.  We spoke for over an hour.  We are meeting next week to discuss options.  How's that?  I didn't want to go.  I had every reasonable reason why I didn't have the time and should not go, and now I might be able to be the "in-house" for a very large office. 

  Even as I type this, my adrenaline is flowing, I'm fired up and I'm ready for today!  I have a seminar today and this is going to be the greatest day for me.  I can't help but say this to Coach Monday -- Thanks Coach for helping me.  It has been 18 years since that September day in 1991, but I could still feel the smack on my chin and I could still hear your voice like it was yesterday.  I didn't know it then, but you were giving me something that helped way above and beyond that practice on that day.  I will not disappoint you and I will not let you down.  Business might be slow.  The industry might be dead; but today, I am getting up and I am going to do something about it.  Thanks Coach!

  Everyone today asks me if I am busy with refinances.  The truth of the matter is pretty much, no (lol).  The media is creating a frenzy much in the same way that they helped with the frenzy of homebuying 3-4-5 years ago.

  If you are considering refinancing, there are 3 very important aspects to the process which must be taken into consideration:

  1)  Will the house appraise properly in order to make the transaction work? 

Of course, this question can only be answered by paying an appraiser to come out and do an appraisal.  Does the appraisal cost money and can you, in the end, pay for something that does not end up working out?  Of course; however, relative to what you are looking to save, it is a very small cost to pay in order to get a solid answer.

  2)  How much money are you saving monthly?

Ask yourself this question -- does the amount of money that you are saving help your overall lifestyle and make sense for you to do?  Every single dollar counts, but be sure to measure your savings vs. your fees.  This will help you calculate your break even point.  Don't forget that if you have had your mortgage for 3 years, you are going back another 3 years again.  I had a customer recently tell me that the loan officer who she was speaking with told her that she was saving $18,000 over the next 30 years. 

Ok, now $18,000 is a ton of a money, but let's do some quick math.  $18,000 over 30 years?  That is $600 per year, $50 per month.  To save $50 per month while adding another 4 years to your mortgage (she had already paid on her home for 4 years) does not seem to add up.  Also, how many people today keep their mortgages for 30 years?  As you can briefly see, the numbers do not always add up when you start scratching below the surface.

  3)  How much longer are you planning on staying in your home?

Now I understand that no one can guarantee that they are even here tomorrow; however, you do want to ask yourself this question since it will, when coupled with your break even point, help you to determine if the refinance makes sense.

     If you are looking at refinancing so that you can run around your neighborhood and brag about your 4% interest rate, you are refinancing for the wrong reason.  If you are interested in thinking through a very important financial decision, taking your time and understanding what you are doing, then you should definitely consider refinancing.

  I can be contacted anytime at 1-440-838-5291 to help answer those questions for you.

  Every single person out there, no matter what they are buying, wants the lowest rate, the lowest fees and the lowest payment.  When it comes to mortgages today, they would typically like a 30-year fixed interest rate.  In order to properly compare different lenders, a customer needs to get their hands on a Good Faith Estimate.

  We all know that there are mountains of papers to sign for a loan application, very few (if any) ever read every single page and the same number do not even know what they are signing.

  There are 4 basic questions every single homebuyer has on a loan:

  1)  What is the interest rate?

  2)  What are the fees?

  3)  What is the payment?

  4)  Is this fixed or adjustable?

  Through all of the mountains of papers, there is 1 single sheet of paper which answers all four questions -- the Good Faith Estimate.

  At the time of loan application, every single client should received a Good Faith Estimate.  They should also ask the following question -- is every single fee that I can expect to pay estimated on this document?

  As an example, are all title fees, state taxes, escrows & impounds, lender fees, surveys and any others listed?  I cannot tell you how many Good Faith Estimates I look at in which the Loan Officer has left out the title fees and the escrows / impounds.

  Now to be fair about it, at the time of loan application, there is no title / escrow company picked out; however, those fees can still be ESTIMATED.  This, of course, is the reason that they call it a Good Faith Estimate.

  If you are not receiving a Good Faith Estimate immediately, call someone else.  If you are beginning a transaction and have questions which are not being answered, call me at 1-440-838-5291 and I will walk you through the only document that you have to pay attention to -- the Good Faith Estimate.

  1 out of 752 applications when it was slated to help 400,000!  Yes, the most sweeping housing rescue plan in world history signed into law by President Bush which was supposed to help 400,000 homeowners from being foreclosed on only helped 1 family (they should write a book - seriously (lol)).  That is the latest statistic of how many this worthless program has helped.  What a joke!  So how great of a job did you do to help solve the housing crisis Mr. Frank?  I would like to hear Barney stutter his way through the answer to that question.  A spokesman for the FHA stated, "...the program isn't working terribly well."  Call it like it is -- it failed miserably and those who took credit for that legislation should voluntary tender their resignations for being miserable failures at their jobs. 

  It was crafted by a bunch of people who were more interested in getting elected than getting the job done.

  It was signed into law by someone who could not care less about what happens with housing in this country. 

  It became a theme for a political 'change' in America which has thus far done nothing to help housing.

  It has helped mislead homeowners into believing that the Government is actually doing something to help.

  The Congressional Budget Office now estimates that the program will help up to 25,000 homeowners over the next 10 years.  Where in gods name do they come up with these statistics?  Let's see --- 1 homeowner in 6 months is 2 per year.  2 x 10 years = 20 homeowners.  Ok Harvard graduates and young einstein's, where did you get 25,000 from?

  Senator Chris Dodd, one of the chief architects of this failed program, still wants to keep HOPE in any future bills since it could still 'possibly help someone'.  If any of these politicians worked for a private company, they would be fired.  Oh, wait a minute, I forgot -- they would receive million dollar bonuses for running the company straight into the dirt.

  Well, just as the President and ALL of our beloved politicians go onto television and tell everyone that they are going to force banks to start lending and helping homeowners and our economy get back on track during this time of crisis, I guess someone forgot to mention all of this to the Secretary of HUD while coming up with this little present for homebuyers / homeowners:

  This is a brief summary from Mortgagee Letter 2009-09 which takes effect April 1st, 2009 -- HOLD ONTO YOUR HATS EVERYONE!!!!:

Here are the 10 things your appraiser must do or provide for all FHA appraisals done after April 1st, 2009:

  1. The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71)

  2. At least 2 comparable sales within 90 days of appraisal date

  3. A minimum of 2 active listings or pending sales in addition to the 3 closed comparables

  4. Bracketed listings using both dwelling size and sales price when possible

  5. Adjust active listings to reflect the List To Sales Price Ratio

  6. Adjust pending sales to reflect contract sales price when possible

  7. Include original list price and any revised list prices

  8. Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales

  9. Absorption Rate Analysis

  10. Known or reported sales concessions on active and pending sales   This update includes an often stated warning that..."Direct Endorsement Lenders are reminded that if the appraiser they selected provides a poor or fraudulent appraisal that leads FHA to insure a mortgage at an inflated amount, the lender is held responsible equally with the appraiser for the integrity, accuracy and thoroughness of an appraisal submitted to FHA."   If the above appraisal guidelines look foreign to you, that's okay, because this update is intended for Appraisers and Underwriters. I sent this to you so you can take the following actions below to make yourself an FHA resource in your market.

  If you have any questions on this, please feel free to contact me at 1-440-838-5291 for additional reasons why this is really, really bad for everyone.

  I just came home from one of my best friends house who is a police officer and we were talking about the four Oakland Police Officers who were fatally shot by a loser in every sense of the word.  Those 4 officers were John Hege, Sgt. Daniel Sakai, Sgt Ervin Romans and Sgt Mark Dunakin.  This post has absolutely nothing to do with real estate, but you know what -- it just might.

  First of all, God Bless those officers.  I have a lot of friends who are police officers and put up with more trash and garbage in a weekend than I will listen to for the rest of my life.  They are good men.  They are like me -- they lose their temper sometimes a little too quick, sometimes they say the wrong thing, they don't always make everyone happy, but all-in-all, their good guys.  I read an article which said that while the initial manhunt was beginning, there was a crowd of 20 people gathering around where the first 2 officers were robbed of their lives.  And do you want to know the disgusting aspect of this?  "About 20 bystanders taunted police" stated the Associated Press's article off of the newswire.  Let me state that again, "About 20 bystanders taunted police"!

  What kind of sick b*stards taunt police after some disgusting cockroach shoots and kills another man?  Here are some other words which describe the fallen officers -- father...husband...brother...friend...coach, and many others that I am sure I am missing.  This stuff absolutely pisses me off.  Ok fine, your a loser and your life is worthless because of your pathetic choices YOU decided to make.  But why do you have to take someone else into your pit of hell?

  Worst of all, who were the 20 cockroaches milling around the scene who were 'taunting' the police?  Those people need to learn the meaning of respect and authority.  And if you do not like that, tough.  I am so absolutely disgusted about this, I could not help but write something.  I think, to an extent, I still have to refine my language skills for blogging and sometimes have to correct my neanderthal ways of talking; having said that, screw those losers who were 'taunting' police.  Take them to jail and let them live behind prison walls for the remainder of their insignificant lives.

  It is stories like this that remind me to watch my tongue when I say that I have it "tough".  I get somewhat "depressed" about where this industry is going and it's sometimes "difficult" to get up and face the day.  You wanna' know something -- God bless the families of those four MEN.  They have it "tough".  This year and the years to come will be "difficult".  There is no amount of financial stress in my life which compares to the tragedy in Oakland.  I can be in foreclosure, dead broke, bankrupt and do you wanna' know something -- I am blessed by God to be here.  I'm not even religious, but I am blessed by God to be here.

  By the way, when I left my buddies house, I told him to make sure that he is safe tomorrow while he's at work.  I don't always say that to him and it's sad that it took this story for me to remember to tell him that, but I did.  God bless those officers and their families...

  Back in 1985, I attended my first wrestling camp put on by St. Edward's High School, a very storied high school wrestling program in Cleveland.  The name of the camp was "Back To The Basics".

  In 1991, I entered college at Oklahoma State University.  My wrestling coach, John Smith, was the biggest name in the sport at the time.  At that time, he had already won 1 Olympic Gold and 5 World Championships.  He later won his 2nd Olympic Gold in 1992.  I would constantly call my friends back home at the end of everyday and they would ask one question -- did he show his super duper secret move yet?  About a month into it, here was my conclusion to everyone -- he just keeps it basic, he has no super duper secret move and he does the same things that Coach Flores showed us in 7th Grade.

  Today, it's a battle every single day and it's hard to keep your chin up and smiling all the time.  For the last four years, I have exhausted my savings and everything that I have saved to try to find the 'secret' that is going to break through in this market.  Thanks to a $50 wrestling camp back in 1985, my junior high and high school wrestling coaches and my College Coaches, I have arrived at this conclusion for my business -- it's Back To The Basics.

  There were so many customers four years ago, I treated everyone like a number.  I was definitely preparing for a decline, but not bomb hitting.  I have now re-analyzed my method of business and this is where my focus has been for the last year and this is my focus more and more everyday as I move forward (with my chin up and looking ahead).

1)  Talk to fewer people more times as opposed to more people fewer times.  Instead of doing seminars all over the country, I have circled the wagons here in Cleveland and I am pushing harder on the attendees at those venues.

2)  Focus in on my existing database and work them more.  I joined sendoutcards.com and created 7 campaigns to mail my existing database this year in 2009.  It costs $1.03 per card mailed out and now my old customers will see my grill 7x this year.  Hopefully, in one year from now, I will be at the top of their mind when someone they know is buying or refinancing.  Right now, I have 493 people loaded in which will cost me approximately $3600 this year.  I am going to pay $3600 to mail 493 people 7x this year.  I used to pay $5,000 for one hotel, one time in Southern California (by the way, I put on 5 seminars a month out there).  This campaign will brand me better, last longer and be much cheaper.

3)  I am speaking slower, breathing deeper and looking to position myself in smaller and smaller places as the expert in my market.

4)  I definitely believe that the 'old school' ways of sales are the way to go; however, they must be woven in with the technology of today (ActiveRain, blogging, email drip campaigns, etc.).  Those who do not transition into today will be pushed out of the market.

5)  Every single time I speak to someone, I ask for a referral.  Not in a pushy way and the conversation has to be in the right place at the right time to do that, but I am now "asking" for the business.  I have been told for years by agents that I need to "ask" for business.  I never believed that I should have to "ask".  For as dumb as it sounds, I always figured that people know what I do and if they know someone, they will send them.  I was wrong.  I was wrong.  I was wrong.

Today, it's Back To The Basics.  It only took over $400k in Southern California (some of which was spent at Fashion Island and South Coast Plaza), $200k in Florida and the liquidation of my 401k to remember the $50 that mom spent in 1985 (I love you mom :-) ).  If you know of anyone refinancing or purchasing a home, I would love an opportunity to answer their questions and work with them.  100% of my business is referral business.  Call me ANYTIME at 1-440-838-5291.  (By the way, I had to force myself to type those last few sentences (lol))...

  Are you thinking about refinancing?  One of the most important things that it takes to get a new mortgage loan is getting your home appraised.  Now before you say that your neighborhood has not experienced a decline in value and you just put $20,000 into upgrades of your home, you must first understand how the 'value' of your home is determined for your transaction.  How a Bank perceives the 'value' of your home is SIGNIFICANTLY different than how you perceive the 'value' of your home.

  There are 3 approaches which an appraiser can use to determine your property value (I am sure the appraisers on Active Rain can add more specifics to these approaches, but these are the basic, eeeeeeeasy to follow ones):

1)  The cost approach -- how much does it cost to re-build or replace the house?  This is where your fancy windows, countertops and other indulgences will help you out.  Unfortunately, Fannie Mae does not use this approach when determining value, so throw this one out the window.

2)  The income approach -- This approach is used to determine the value of a home using market rent and some other fancy schmancy words.  Again, Fannie Mae does not use this approach (so do not waste your time telling me that this would be a great "income" property).  Toss this one out the window.

3)  THE SALES COMPARISON APPROACH -- ding ding ding.  This is the approach used by Fannie Mae to determine the 'value' of the home. 

The guts of the Sales Comparison Approach are these 4 key factors.  Here is my disclaimer -- there are definitely other factors involved also, but these are the most important, blah blah blah.

a)  Comparables 'should' be within 20% of the square footage of your home

b)  Comparables 'should' be the same style as your home

c)  Comparables 'should' be within a reasonable distance of your home relative to where you live (urban, suburban, rural)

d)  Comparables 'should' have SOLD within the last 90 days even though it is possible to use sales from 6-12 months back.  Due to the sharp decline in home values, sales from 90-180 days ago are not considered accurate sales relative to today's 'values'.

  Notice that I keep using the words "should".  There are no absolutes and every single person can always find an exception to the rule.  As for 99% of America, those are the 4 main criteria to help an appraiser determine your property "value".  On refinances, everything pretty much rides on the appraisal.  Understanding the basics of appraising can help you better understand the refinancing process. 

  If you have questions or are wondering how home improvements help the 'value' of your home, feel free to call me anytime at 1-440-838-5291!

  This is something that I am asked constantly -- is a Pre-Approval any good?  Let's first start with me stating this -- you, as a buyer, want to make sure that you are as solid as possible without going through the whole process only to be declined later.  As a realtor, you want to make sure that you are not driving someone all over the place only to find out that they are not qualified to rent!  SO, a Pre-Approval or Pre-Qualification is going to give you the best 'idea' whether or not the borrower is qualified.  Now let me state a couple of simple FACTS:

  1)  There is no difference between a Pre-Approval or Pre-Qualification.  Maybe in 1975 there was, but there is not today.  The word "Pre" is latin for "before".  Knowing this, Pre-Approval or Pre-Qualification means "before" approval or "before" qualifying.  Many times, loan officers will tell realtors and buyers that there is a difference because it makes them feel warm and fuzzy, but in the world that I live in (called reality), there is no difference.

  2)  In order to truly know whether or not a borrower is qualified, an UNDERWRITER needs to review the file.  By the way, the underwriter is one individual who makes the final decision on whether or not you win the biggest debt of your life.  The underwriter is ONE individual.  It is not a board, a group, or a committee.  There is not a bunch of people sitting around the 100th floor of some skyscraper smoking cigars debating over your $70,000 dream.  Typically, underwriters are sitting in desks that you can buy at Office Max for $150.  Their desks are cluttered with papers and files.

  3)  In order for an ACCURATE decision to be made in regards to a borrower, these are the documents which must be reviewed -- recent paystubs, 2 years of w-2's, 2 years of tax returns (in many cases), 2 months of bank statements, full verification of employment from current and previous employers, verification of rental payment history, "acceptable" explanations and verifications of any and all derogatory accounts which show up on the credit report.  Oh, did I mention divorce decrees, bankruptcy papers and child support verification?  Now you tell me -- when I get called on a Sunday from a buyer who needs to make an offer on a home because there are five other offers about to come in (even though the house has been listed for 3 years), do you think that I have time to do all of those verifications?

  If a Pre-Approval was worth the paper it was written on, then why do I typically pick up 2 loans per month in which a Bank or Mortgage Company Pre-Approved the borrower only to find some reason to decline them which they could have figured out on day one?  I will give you the reason -- THE LOAN OFFICER SCREWED UP AND THE PRE-APPROVAL NEVER SHOULD HAVE BEEN GIVEN.

  If you are an agent, I would love for you to share your horror stories of Pre-Approvals that went bad. 

  There are very specific questions that one can ask in order to 'best' ensure that you will not be declined following a "Pre-Approval"...I will list those questions in Part II of Pre-Approval:  Fact or Fiction?

  By the way, if you are currently having problems getting answers from your current lender or have been declined and you are in contract -- call me today, tonight or whenever -- 1-440-838-5291.