A good friend who has been in the business for many years asked a simple question of me today. It had mostly to do with credit score and what can be done. The answer was black and white - no room for gray - and his response was, "took the mortgage broker 3 months to figure that out. that's how long they tied up my listing!!!"

I have always given the truth even when the response truly does sting. When you give someone the facts and they say, "I'll just go somewhere else" or "well MY lender can ...". What I want to say is, "oh shutup you nitwit idiot" (because I'm human) but instead I say, "Best to you I wish you all the luck."

I can also tell you luck doesn't close loans. Neither do loan officers who lie to you, string you on and cost you time and resources. Not to mention end up pliffing off your customers.

I know for many years loan officers have "said anything to get the deal". I know this because I have had literally hundreds of people over the years come back to me, at or near closing or after the closing has been postponed umpteen times, saying, "You were right. They can't do what they promised." Of course the worst thing of all is when they promise you one thing, end up not being able to do it and countering with what I offered originally and you still going through with the deal ... that dignifies the way they treated you so they'll lie to the next person in hopes they'll settle for that treatment.

YOU CAN WALK AWAY AT THE CLOSING TABLE and the earth will not collapse around you. I know your agent wants their commission they have earned, the seller wants their money from the house they just skipped the last mortgage payment on and you have to be out of your rental house tomorrow. Guess what? You'll pay for that "bad" loan for many years so just calmly stand up, walk out, call the local lender who has an office you can drive to and go see them. Stop rewarding these liars for bad business.

Three common lies loan officers tell today:

1. I'm as busy as I have ever been
2. No problem I can get that done
3. We can close in two weeks (on a purchase)

Of course there are times when those are the correct answers. Here is a litmus test - if two or more experienced professionals give you one answer and the loan officer at mega-bank out in some state a thousand miles away tells you "sure, we can do that - we can do things nobody else can do" be very suspicious.

I have a sale closing coming up soon. Just after I locked the FHA rate at 5.25 (no dicount) on this purchase the father emailed and said "Everhome can do it for 4.75 with no discount and no origination". I knew that was not true because that rate was long gone. I also knew it wasn't true because that was about the best par rate ever and EVERYBODY gets paid. So I called Everhome and spoke with Jeff. Jeff was very helpful and curteous and laughed and said, "Sometimes the rates they advertise are a little outdated." I said, "Outdated? When did you ever do that rate with no points and no origination?" He said, "Me personally, never."

I used Everhome because I have the data to back it up in case somebody wants to challenge me on it. Not to throw Everhome under the bus because it is almost everyone who advertises (adverlieses) rates. If you see a rate or service advertised online you can almost certainly not believe it. Supposedly the FTC is taking care of that but I haven't heard anything lately. There are other names, too, who have promised the sky and couldn't even deliver a crack in the sidewalk.

BUT YOU DO IT TO YOURSELF - I know, I take the phone calls:

Me: "Thank you for calling Novation Mortgage, Georgia's FHA Loan Experts. This is Ken how may I help you?"
You: "I just want to see what your rates are today."
Me: "Fantastic, are you looking to purchase or refinance?"
You: "Uhm refinance. So what are your rates?"
Me: "Is this a home you are living in or an investment home?"
You: "Uhm it's the home I live in. What are your rates?"
Me: "That's great are you looking to take cash out or just rate and term?"
You: "For Pete's sake, dude! Just tell me your rates!!!"

What you just did was tell me nothing more than a lie was going to help you at all. What if you wanted cash out? Waht if you're looking for an FHA streamline? What if you want to go to a 15 year loan instead of a 30 or vice-versa?

RATES ARE SUBJECT to many variables. You need to be shopping for much MUCH more than the rate. So when you're really serious about service and cost that beats anyone you can name you're ready to deal with a mortgage professional and get the quality service you deserve. Or you can keep dealing with order taking operators at some mega-bank three states away. I digress.

So how are you to know?

Find someone you can trust in your LOCAL area.

Find someone who can give you CUSTOMER references (not just agent references).

Find someone who has a LENDER's LICENSE PERSONALLY (not crucial but helps).

1

Laptop running low on memory space because of all those photos or PDF's? Here is a cure for you. Mozy offers TWO GIGABYTES of free online data storage. Seriously, no credit card needed. Upgrades are reasonable, too. I find the free service just fine for most of my needs but you can go unlimited for a small fee.

Mozy Online Backup

2

Many of you know I co-host a show with Jason Crouch and now Mike Mueller and Jeremy Blanton have regular segments as well. What you may not know is we actually do (a little) planning! We use Google Docs to do our planning because we can share access and co-edit the notes. Google Docs is free and all you need is a free Google account.

Google Docs

3

This one may look like a shameless plug because it is! If you are not using LANDING PAGES to capture online (and offline) leads you are missing a huge opportunity. I have done ONLY online business for the last 20 years and lead capture and contact management is essential to my continuation in business - it should be yours as well. If you just give someone a link to your website how will you know they visited? What will they do when they get there? Landing pages capture information even when people don't enter it. For example you may have seen links in email that look something like http://ilandings.com/dp.php?acc=10421&vis=192892&camp=18

Broken down that tells me account holder 10421 had a visit from user 192892 regarding campaign 18

The database will tell me account 10421 belongs to Heartland Real Estate, Mortgage and Tire Care. It will also tell me visitor 192892 (entered into the database by Heartland) is Mary Smith (along with all of her details). Lastly it will tell me campaign 18 (also entered into the database by Heartland) is for information about an upcoming open house and all the related information. Behind the scenes the iLanding will also track time, date, geographic location (if resolvable) and other information passed to the server.

The landing page will store that information into a database so you know that user clicked that link in that email - then the page will capture any information you ask for and store it in the database: name, address, phone, whether they are buying - selling - or building (whatever you want) and then allow you to follow up with them either automatically or manually right through that page. It will even tell them when they responded and why you are contacting them - of course it also allows them to opt-out.

The data can be emailed to you, or downloaded in CSV format to be imported into your favorite offline CMS. Or you can have a fully functional online CMS developed exclusively for you.

Here is a sample custom landing page:
http://novationmortgage.com/quickapp.php?acc=12&vis=10911&camp=34

Coming Very soon http://iLandings.com custom work available NOW from $99.

4

There are tons of online tools to convert Word docs to PDF but not so many to do the opposite. Have you ever received a PDF file that you wanted to incorporate into some other work? Now's your chance UNLESS the PDF file is secured.

http://convertpdftoword.net/

5

Heatmapping of webpages is relatively new and something I am still experimenting with. The website I'm giving the link to will describe the purpose in more detail but essentially it looks for "visual hotspots" or eyecatching regions on your web pages. All you do is upload a screen shot and it will do the rest. Something like this:

The purpose of this tool is to help you maximize the first 5 seconds of your visitors time and make sure your message is getting into their eyes quickly!

http://www.feng-gui.com

No, it's not a joke. I came up with this idea and my friends Jason Crouch ("heck ya, let's do it") and Jeremy Blanton ("I'm all over it") kind of kicked me into gear with it when they jumped on board so quickly.

Times are tough and there is no denying it. Sure we can have "positive thoughts" and "draw in good energy" and one way of doing that is by joining Jason, Jeremy and myself along with thousands of others to put this into motion.

Instead of completely rewriting the hundreds of words already written please take just a moment and read the Social Media House website. Here are some excerpts ...

(Updated) I WILL SHAVE MY HEAD! If we raise $10,000 by Sunday, June 21 I will shave my head on YouTube! (If we raise $15,000 I will shave my face, too). If we raise $25,000 I will do it wearing an orange diaper with the Twitter bird drawn on my very white chest!

Here is what we are doing - we are going to restore this home to good living conditions. Once the renovation is complete we are going to advertise for people to recommend a family or individual who they believe deserves the opportunity to live rent and utility free for a maximum of one year in the home. We, the Social Media Community are going to prove to the world that we believe in giving. We believe in “paying it forward”.

Not only will we provide the home rent free but, provided donations are high enough, we will also pay generously toward the utilities. Since there are no or very limited management fees all contributions after the rehab will go directly to covering the costs of the home.

The home is already in my possession, rehab has already begun and we three are already itching to do the next one. Essentially we'll be helping someone or a family of someones to have a respite from the damage they have endured in this collapsing economy.

Who Will Live There?

Someone one of you recommends perhaps. You may have a family member or friend who has been devastated financially because of circumstances which blindsided them. They may have recently experienced a personal tragedy or be in greater need for some reason truly outside of their control.

The selection process is quite simple and I will detail it in another post. Submissions will be screened and you will be allowed to vote for the final candidates. For this first project we will accept applicants from local community and faith organizations. Selection will be blind meaning you won’t know anything about the people except why they are in a hardship. Since it is NOT a charitable organization there are a lot of hoops we will not have to jump through until it becomes a charitable organization but for complete fairness sake you will only see a few paragraphs about the people excluding names, ages, etc.

Who Will Not Live There?

Drug abusers, people abusers and anyone who is in their situation because of abuse of the system, self or others.

When Does This Happen?

Now. Right now. We must have the home ready for the back to school season in the even you select a family with school children. Target date for selecting the occupants is August 1 which is approaching rapidly! Meanwhile the renovation must be completed. I have already started but there is much more work to be done. We already have volunteers standing by to get it done.

Partners and Friends

We are working together with the Georgia Coalition to End Homelessness and the many institutions they serve. We will also accept applications from local faith based organizations as well as individuals. The most important criteria is that we find applicants who are not and have not been abusers of the system. Help us raise $25,000 on Twitter, Facebook and others as you see fit. All we need is 1000 people to give $25 each and the house will be finished and ready for people of greater need. Feel free to give as little or as much as you can.

For underwriting this project you will receive the following:

• Donations of $10 will receive a text link back to your URL from the Social Media House web pages.
  
• Donations of $25 will receive a 200x200 graphical link.
  
• Donations of $50 will receive an editable entry with graphics and text.
  
• Donations of $100 will receive an editable page and a mention on Social Media Edge Radio.
  
• Donations of $250 will receive an editable page and a 5 minute guest appearance on Social Media Edge Radio.
  
• Donations of $500 will receive a 25 megabyte blog account for 12 months, an editable page on the Social Media House web pages, and a 5 minute guest appearance on Social Media Edge Radio.
  
• Contributors who donate more than $1000 each will be promoted during the 2 hours plus of video including selection of the first recipient of the 12 months free living grant.
  
• If you want to name the project a contribution of $25,000 will get that done (the Your Name Project). Call for details, we’re flexible. You also get everything mentioned above
  
• If you want to name the home for 3 years (the Your Name House) a contribution of $50,000 and it’s yours to name plus you get everything mentioned above: hosting, radio show, project name and exclusive Major Sponsor credits on the video.

Video post production is being handled by Robert Lewis of The NBA Channel.

Ken has flipped his lid! What in the world could a title like that be attached to? Simple enough: yet another article about Social Media and what you should and should not write. Actually the title came from a little inside joke between Jason Crouch and me. We were actually joking about content of blog posts and what makes people read them and enjoy them. If you listen to our show you already know we spend an hour every Tuesday sharing information about how we use Social Media to keep our businesses rolling and interviewing guests who bring their own opinions and experiences to the show.

Many people like to tell you there is a secret to what, when and how often you post. My experience, and it certainly works for me, is simply to interact. Here on AR, for example, I always try and respond to every comment and have been doing so for 3 years. While I'm not one of the highest ranked posters on AR the friendships I have made here are priceless and many other side ventures have resulted from some of them.

Interaction is more the key to social media than most people credit. Sure, some of the advice the gurus give is good for shear numbers but would you rather have 10,000 names on a list or 100 true associates who know you, how to contact you offline, and do so regularly?

Take the dinner party for example. If you are invited to a dinner party you will likely be with a small, core group of close friends and maybe a new couple invited to grow your circle. If you buy a ticket to a garden party at the Museum, however, there may be hundreds or even thousands of people in attendance whom you neither know nor interact with at the event. Don't get me wrong - the garden party event has its value and its place but you need to understand the difference exists in Social Media as in "RL" or "Real Life". I always chuckle at that because for me, and many of you, Social Media IS Real Life ... and Real Business!

Never let anyone scold you or make you feel bad about posting anything you want to post. I love comments about people who post semi-personal things here on AR or who tweet about eating a donut on Twitter. The truth is there are as many "techniques" as there are people. In fact the other day on Social Media Edge our Tech Tips Expert, Mike Mueller, noted that with my personal Twitter account I tweet about a wide variety of things. He is correct, I do! With my business Twitter account, however, it's strictly business.

The real bottom line with Social Media is to understand WHY you participate and WHAT you expect from it. Then you can determine WHAT to say, WHEN to say it, HOW and to WHOM.

By the way, if you're in the Atlanta Area please join Lane Bailey and me at the first Atlanta Social Media Breakfast at the Duluth Diner at 7AM on July 23rd. We have the entire diner to ourselves and certainly a great time meeting people from many different industries.

If you have never tuned in you can still hear all of the shows ... why you would want to, I don't know! But if you DO please let us hear from you and try to join us live where the chat room gets VERY active.

Thanks very much to Jason for putting this post together.

People THINK! If your income was too low for the previous year according to your tax returns DO NOT FILE AN AMMENDED RETURN just for the sake of making your income appear higher. (A) that is mortgage fraud and you will be caught - just like we caught the lady today and (B) it may be tax fraud. I don't care if the local Sherrif, your real estate agent, or the underwriter at the lender told you to do it.

Normally when someone comes to us from 2 previous lenders and "have no idea why the loan would not close" and I ask them all the questions and get all the right answers I stay suspicious - just as I did yesterday when Madame M called. We finally narrowed it down, at least we thought, to the fact that she was dealing with a broker who only does Conventional and are not licensed for FHA. She needed an FHA 203(k) renovation loan because the home had been vandalized and all the copper stolen along with the a/c units.

They were pushing for a prequal because the home had been under contract for more 60 days and the contract was expiring .... yesterday. I told the buyer's agent (a very nice lady) there was no way I could give even a pre-qualification under the circumstances without seeing all of the documentation from the borrower to substantiate their assets and income. That's when the trouble started. When she gave me her tax return for 2008 all we got was an ammended return and not the full original return. The ammendment date? March 13, 2009. The original application date? Prior to March 13, 2009. Later she divulged to me the loan officer, allegedly, told her she needed to file an ammended return and make her income higher on her tax returns so her Debt to Income ratio would be in scope.

First, let me tell you, we spotted this in about 15 seconds just by seeing an ammended return and no original with it. Even if we had not caught it here the lady had not yet even filed the ammended return but only completed the form - or had someone complete it for her. That means when we would have done ALL the work, put the agent through all the time - both agents - locked the seller's property down for another 30 days when we got to the end we would have seen from the results of the 4506T that the taxes did not match!

Do I turn people in for this? YOU BET I DO! Why should two agents, a title company, an attorney, a broker, a loan officer, a processor, underwriting assistant, underwriter, quality control officer, and an underwriter (and those are just the minimum number of people involved) do all of their jobs - none of which are easy - just to end up finding this fraud AFTER all the work is done? Am I miffed??? YOU BET I AM!!!

You can NOT file an ammended return just to make your income look higher and expect that to work. What you can expect is to get convicted of mortgage fraud and maybe tax fraud, too.

ATTENTION EVERY ONE OF US: Mortgage fraud is going to be a really big issue over the next few years. When almost anyone could "qualify" to buy a home almost nobody felt compelled to commit application fraud. Most fraud then was committed by agents, loan officers and investors looking to make more quick bucks than they were already doing legally. Now you can bet fraud for shelter is going to be a BIG issue and you better prepare yourself to spot it.

Anyone who thinks they know the mortgage industry - especially well enough to predict it - is like someone saying they know which star has a planet in orbit that can support human life. Seriously, everything anyone knew about the mortgage industry just six months ago is completely different today.

Yesterday, May 27, 2009, interest rates at par went from about 4.75% to a par at about 5.25% between lunch and five PM eastern. Did anyone see it coming? Well, the indicators were there that's for sure so some people did call it. Many completely blew it like Dan Green who wrote on his blog on May 14, and I quote, "I am predicting that rates will decrease over the next 30 days." Oops.

Not to make an example of Dan but if you read his blog you would think he is a pretty sharp individual and his website certainly gives the impression that he is a consummate professional worthy of trust.

Well - he missed it. Either way I would have never predicted rates decreasing over the 30 day period between May 14 and June 14 and I don't know of anyone in my national mortgage professionals groups who would have. But this is an example to show you that even people who look, sound and act like they know exactly what they are talking about. (Insert big honking buzzer sound here.)

Recently there was a big flap over some things Lenn Harley wrote about pre-qualifying her customers. I can see how she riled a few and ruffled a few feathers but I still believe what she was saying was she doesn't want to waste her time with people she believes to not be qualified. On the broad spectrum that may be okay but when it gets down to actually getting an approval from a lender there are multiple factors examined and weighted algorithms applied. In fact I am often surprised when certain borrowers are approved and flabbergasted when others are not approved.

Every day, literally every day, something changes in underwriting guidelines or lender overlays. Even the underwriting engines, the automated decisions making software, are tweaked and changed every day. Nobody - not one person - whether they have 3 days or 30 years in the mortgage industry can know for certain if an apparently qualified median borrower will be approved or denied until they have exhausted the correct protocol. Just having 800 plus credit scores is not all you need, just having the right income or reserves is not all you need. Even combining 800+ scores, good income and good assets is not all you need.

Now you can even factor in the HVCC and the wild results overstressed, underpaid appraisers are likely to bring to the table. And who knows when that will change? Not me and not you.

Follow Novation Mortgage on Twitter

We have hashed and re-hashed what the First Time Home Buyer's Tax Credit (FTHBTC) is and is not. Some are still confused and I am not even about to breech that subject of whether or not it can be used as a down payment. If you look good in orange feel free to try that out yourself. What I do want to tell you is, as of this date, an indisputable fact:

If a buyer does not close on their first home before December 1, 2009 they will not be eligible for the Federal First Time Home Buyer's Tax Credit of up to $8000.

Mark These Words

In November of 2009 (this year) my phone, fax, email, copy machine, and front door will all get a work out of people having to close before the end of the month. Many of these people will miss the deadline because underwriting will get jammed, loan officers will be backed up and probably appraisers, title companies, closing attorneys, etc., will also likely be over loaded.

If You Are A Buyer

#1 - Before you even pick up the phone to call an agent call your local FHA lender. Local ... let me repeat that LOCAL. Nobody will be able to answer your questions more accurately and anticipate any bumps you may experience and you can drive to their office look them in the eyes if need be. Your agent may know some basics about prequalifying you but they do not know what the underwriting engines may say once your information has been input into the automated system.

#2 - Start making offers as soon as possible. I know everyone wants to close in 14 days but in today's economy and real estate market that is pretty much unreasonable. We have had purchases close in 28 days and we have also had them go over up to as long as 45 days mostly due to valuation issues. That's another thing you have to consider if the appraisal comes back lower than your offer you'll at least have to go back to the negotiation table with the sellers which could add another 2 weeks to the process.

If You Are An Agent

Most of us do not like to be "pushy" but your First Time Buyers are going to need to be helped along if they want to take advantage of this offer. Whatever you do, do NOT let your offers go over into November. I can all but guarantee you will miss the deadline. Beyond that you better not be calling any loan officer on November 15th pressuring them because I can guarantee they will be swamped trying to get all the late comers closed on time.

A Closing Word

Someone reading this post will be involved in a transaction with an FTHB who will not close in time and will not get their FTHBTC. Someone will want to blame it on the lender even though they waited until the last minute to submit. Between you and I you better have your full package including an executed and legible copy of the sales agreement to the lender before November 1, 2009.

Don't say you were not warned.

How many phone calls have I had over the last 12 months from "mortgage modification companies" promising thousands of dollars to me if would have my loan officers refer to them people who could not refinance but were in trouble. I said no, every time. Sometimes I had some laughable conversations with the people calling. Why did I not want to get involved?

(A) I'm a lender and have my own business I need to focus on. (B) Because I knew better and I knew this would be a headline in the very near future:

"Federal and State Agencies Crack Down on Mortgage Modification and Foreclosure Rescue Scams"

Right, your company isn't a scam. I know because that's what you've told me when you called me.

So what is the litmus test for a scam?

71 companies are using "deceptive ad practices" and are being sued or are under investigation

22 companies gave the impression they were associated with a Federal Agency (such as HUD) they are shut down and may be facing Federal criminal charges.

100's of companies charge upfront fees and are under investigation

Dozens of companies advertise a false success ratio and are being sued or are under investigation

Who is being investigated? Everyone from the originator to the mid-level employees and the company principles. If the originator made false statements, even as a result of training or information provided by the company, they can be held accountable under the law.

You can bet when activity like this is discovered by attorneys they are going to source out any people who feel they were harmed or slighted and create a class for a class action suit. Who can be named in the suit as defendants? All those same people from originators to company owners.

So, for all you loan officers and real estate agents out there who allied yourself with one of these companies (and the investigation list is growing daily) you may want to re-think your alliance, ask yourself if your company or you made any false statements, took money in advance, failed to deliver on guarantees or promises, and anyone has applied but not been issued a modification but you still made money.

Attorneys are able to take modifications as a case. They are allowed to charge a retainer fee. The only attorney I ever referred clients to asked for a $500 retainer fee which HE RETURNED TO THE CLIENT if the modification did not go through. There are a lot of modification companies out there who are owned and run by attorneys. That alone would never make them legit. How many attorneys are disbarred or sent to prison every year just for real estate fraud? Investment fraud? Insurance fraud?

Reader, if you are facing foreclosure call 1-888-995-HOPE or your local HUD office if you have already contacted your lender and they are not working with you. DO NOT STOP when the little hourly paid operator who answers the phone at your servicer says, "no". They do not have the authority to say anything else. The company hopes you get off the phone and find some way to fulfill your covenant to repay the loan you promised you would - that's why the first few people you talk to say "NO".

I will also post something about scamming from the other side, dead beat losers who just refuse to repay their mortgage even though they have made a life covenant with the lender to do so. But that's for another time.