New Day in Real Estate

Real Estate Investor's QuickStart Workshop - This is Powerful!

Novation Mortgage — Wed, 23 Jul 2008 20:30:37 -0500

GOOD NEWS! For a decade I offered the "Real Estate Investor's QuickStart Workshop" which was attended by literally thousands of investors, prospective investors, new investors and seasoned investors. It is a 3 hour workshop designed to help the new investor understand the possibilities and options ahead of them and to give the seasoned investor the opportunity to confirm their activities and review the changes in the market. JULY 31, 2008 - 7:00PM Sharp!
2501 E Piedmont Road, Suite 111
Marietta, GA 30062
Only EIGHT Seats Available
Real Estate Investors QuickStart Workshop

Real Estate Investors QuickStart Workshop

Send To Friend

This may sound like a proud statement but I don't mean it that way. People who have attended this workshops and applied the principles in them have fared better than any of my other clients who have "done it on their own" or attended many other so called "Investor Institutes" or "Bootcamps".

These are not principles I conjured to sell books and CD's, these are actual street level techniques, processes and attitudes I have observed for many, many years. Funny, the only people that you may know who have criticized me for saying the techniques I teach are better than almost every guru, regardless of how flashy their presentation or how expensive their seminar, are the ones who have made some terrible mistakes in investing.

The cost of the QuickStart Workshop? Only FIFTY DOLLARS

Why is it ONLY FIFTY DOLLARS? Even though it's worth hundreds of dollars if not thousands I expect to be your lender. I'll even refund you the admission price towards your first closing with me.

What Do We Cover? (Not necessarily in this order)
Buying with no money down, still possible? Make sense?
Using hard money, private funding
Building for profit
Long term hold mechanisms
Ordinances, laws and investment activity
Owning in you IRA - tax free
Getting the most return on your investment
Rent for more than your competition
Getting distressed sellers to call you
Equity harvesting from your investments - when and how
Threading the taxable income needle
Beating your short sale competition
Selling before you close on your purchase
How to get paid as a bird dog (finder, consultant)
Quit claims and security deeds, what?
Calculating profit BEFORE you make your offer (yes it CAN be done accurately)
Learn to be a wholesaler without spending a dime
How to flip and flip fast even in today's market
Building a solid exit strategy in today's market
Hold vs. flip - you need to know these numbers!
What crooked wholesalers don't tell you
Identifying ten year market potential
Retire on 2 homes per year
Much, MUCH more.

You will leave having created or reviewed your Real Estate Investment Model and a Business Plan. You will leave knowing how to qualify for the best loans Real Estate Investor's Trainingfor real estate investment strategies. You will have Ken's direct contact information including his Personal Cell Phone Number! You will be included on Ken's regular email list that goes out to over 2800 people with information from dozens of contacts around the nation.

Seriously, it's 3 hours of non-stop, jam packed accurate and up to date information. I could easily stretch this into a weekend and charge $2000 or more for it. The $50 is just to cover the reservation of the space, the snacks and drinks, and the printed materials you will leave with. Maximum class size is 8 people so you will get individual attention. Classes begin at 9AM and end at Noon or begin at 1PM and end at 4PM. If you're lucky you'll get me one on one like many people have in the past.

You will get a copy of the presentation and all of the Excel formulas and spread sheets used in the workshop. You will get them printed and on a CD-ROM which includes the PowerPoint presentation and links to hundreds if not thousands of resources on the web.

Listen friends, there is no way for someone outside of the mortgage banking industry to keep up with all of the changes. It even takes my full staff to keep me posted on just a narrow majority of the changes. We learn many new things every day from various sources inside the banking and investment industry. This information will give you the edge in today's market!

Wachovia Ceasing Wholesale - Drawing In Tenticles

Novation Mortgage — Mon, 21 Jul 2008 17:07:34 -0500

Wachovia has decided they only want to do mortgage business with people who have an existing banking relationship with them.

Starting to smell a bit like IndyMac in here?

The announcement wasn't really a surprise since it has been hinted at several times over the last few weeks. It's just always nice to get a really personal, ahem, email that your Account Executive is now looking for a job just like the rest of us.

And I cut and paste ...

"As you know, the mortgage industry is experiencing a very challenging market environment. Declining housing values, increased foreclosures, disappearing mortgage lenders, and a struggling secondary market are all symptoms of this market turmoil. Wachovia Mortgage has evaluated its business model and decided to reposition its mortgage business. Going forward, we will primarily focus on customers who have relationships with the bank, and who are located in geographies where Wachovia branches are located."

I've been called a "stoned monkey", an "idiot", a "marble brain" and a few other words on a couple of other blogs because I've been predicting this for MONTHS (not just Wachovia but bank withdrawal and collapse). I haven't published too much of it here on AR because I've always tried to keep it positive.

Well, the public is still sitting on their ...

See you at the polls in November. I dare you to vote for inexperience in a time like this.

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Copyright©2008 Ken Cook. Georgia and Florida real estate investment loans, FHASecure and FHA Home Loans, nationwide commercial hard money and small business loans, non-recourse loans for real estate investors

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender

Free Gas? Yes! For The Rest Of The Year*

Novation Mortgage — Tue, 15 Jul 2008 13:06:55 -0500

KEN COOK 678-946-0101
Close Your Loan With Me and I'll Buy Your Gas For The Rest Of The Year*

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062. Georgia Residential Mortgage Licensee #20014. Equal Housing Lender.

You Thought It Was Bad Before? Buckle Up, I've Got News ...

Novation Mortgage — Thu, 10 Jul 2008 12:49:47 -0500

Now most of my writing is not about how bad things are. In fact it was I who said, "If you think the market is so bad get the hell out and let the rest of us make a living." Well, I'm thinking about getting back into Internet Services - I programmed the online catalogs (shopping cart systems), message boards [an old name for blogs], online contact management and information delivery systems, online databases for The NRA, Loomis&Fargo, Hunter Engineering, Shari's Restaurants, CrossGen Comics and many more - in fact, I programmed and developed one of the first online video streaming sites back in 1999 for a company called PCVision - bug I digress.

It's bad today from a finance standpoint. It's very difficult to get funding even for decent credit, income and asset folks. Many lenders just flat out say "no real estate agents with stated income at all".

It's about to get worse ... maybe much worse. Unless ...

Ben Bernanke and the Fed Board have control over Fannie and Freddie wherein lending guidelines are concerned. One of the many lines of "sweeping changes" they are planning on making whether you like it or not is the complete elimination of stated income loans. Shhhhh, if you oppose them you don't know what their real purpose is but I'm about to hit you with an exact scenario from my office this morning.

My client makes $60,000 per year that she can demonstrate on her taxes. Her husband makes $80,000 per year that he can demonstrate on his taxes. The home mortgage is in her name, his truck is in her name, he pays all of the utilities and contributes to the other cost of living expenses in the home. He has a middle score in the mid 500's and just came out of bankruptcy - basically nothing really available to him as a borrower. In fact, if we put him on a loan application it would cause the application to be denied because of his credit history. Now if she can state her income as her salary plus 1/2 of what he contributes to the expenses (1/2 of the house payment, the truck payment, living expenses) then she can qualify for the refinance they need to get out of the ARM they are in.

Do you think it's fair to deny her or should she be able to state her income to include her husband's contribution to expenses?

Either way the Feds plan on eliminating Stated Income loans for any purpose or reason within a very short time.

Down Payment Assistance for FHA Homebuyers. I know, some of you just went, "Well, Ken, what's the problem with that? If they can't save enough to make a 3% down payment they don't deserve to own their own home!"

Consider this: Mary and Phil are renting an apartment for $1200 per month. They have no tax advantage at all from renting. They have built no equity and no mortgage credit history. I know, that genius Kyosaki or whatever his name is tells you this is smart ... why does he own his own home then? But again, I digress.

Mary and Phil have never owned their own home but a nice Realtor™ who is also an Active Rain member has found the perfect home for them. It is a nice 3 bed, 2 bath ranch right in their area and it's a steal because it was a foreclosure. They can get it for about $110,000 and all the comps are in the $140k range. Best of all their principal and interest payment will be only $688 per month!

But wait, they haven't been able to save any money because they've been working so hard to pay off their cars and student loans and they've been paying such high rent. Their DTI will be only 31% with the new home but they have NO DOWN PAYMENT.

Still think it's a good idea to deny them the opportunity to own their own home because they haven't been able to save when they can get the home for pennies on the dollar, have great credit, good income but no down payment?

The government, by it's very design, cannot make regulations that treat everyone fairly. The best they can do is to make regulations that either treat the majority fairly or punish the majority equally.

A year ago or more I wrote "The Baby, The Bathwater, And The American Dream". It's somewhere on AR.

Lastly, at least for this blog post, interest rates are Going To Go Up. It's a necessity. Inflation is in the process of running away. Fuel costs are out of site, unemployment is up sharply, Americans are using their credit cards to buy gas and food, housing values have tanked and loans are difficult to fund. The balance is to raise interest rates. I don't have time to explain why just Google rates vs. inflation or something.

It's not going to get better soon and, in fact, it's going to get even worse before it gets better.

I wrote this to tell you to act now, urge you clients to act now. If you know anyone who has not refinanced who currently needs to or soon will need to they better do it NOW. I mean N.O.W.

Peace, ya'll

I am available for public comment. 678-946-0100

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender

Last Chance For A Decent Mortgage? Fed Changes Will Impact Your Ability To Borrow

Novation Mortgage — Wed, 09 Jul 2008 20:19:53 -0500

Chairman Bernanke is about to change the face of mortgage lending and it could affect you. In fact, they have already tipped their hat to let economists know they will be raising interest rates in coming meetings.

For several months before the fallout began I literally begged people to refinance into a fixed rate mortgage before the lending environment changed drastically. A few called me and we were able to help them. Since then literally thousands have called who could not qualify under new lending guidelines and are now stuck with adjustable rates they can no longer afford and they are in or facing foreclosure.

Listen carefully to what I am about to tell you and act on it NOW: Interest rates are going to begin going up in the very near future. This is a step necessary to control inflation. What you don't know is that the Federal Reserve Board has the power to change lending guidelines at Fannie Mae and Freddie Mac without any control stops.

The lending rules are about to change again and many of you who qualify today to purchase or refinance will not be able to do so after the changes and the rate increase.

Call me, Ken Cook today and let's look at your current situation. I am not a "loan officer" who will cram you into a loan just to get a commission check. I will listen to you, help analyze your needs and situation, and give you my recommendation. You can act on it or not. I have helped thousands of people in Georgia get into better properties or better loans for their existing property since 2001. We are a lender and a broker so we can help assure you get the best loan available to you. Best of all, we beat the "banks" and "big lenders" on every point of our combined service: more loan solutions, more personal service, honesty, integrity, and accuracy.

KEN COOK 678-946-0101

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062. Georgia Residential Mortgage Licensee #20014. Equal Housing Lender.

Happy Fourth ALL! God PLEASE Bless America Again ... wait ...

Novation Mortgage — Thu, 03 Jul 2008 14:48:02 -0500

We have to be WORTHY of God's blessings

Peace to you all ....

One Hundred and Forty Four years ago the Union Army under the leadership of General William T. Sherman entered my home town. They left in November and burned hundreds of buildings and homes on their way to Atlanta.

We need something to change the course of America today as badly as we needed something to change the course of America then. We need a STOP to wasteful spending on special interests. We need LEADERSHIP not afraid to be "run out of town on a rail" for standing up for what is RIGHT and condemning waste, arrogance and selfishness. We need a righteous and worthy leader who will NOT BE SILENCED and who will dare any opponent to "cross this line".

We need the liberal scum lawyers to be STOPPED once and for all - they have cost the economy BILLIONS upon BILLIONS with their frivolous suits. Any judge who hears any frivolous suit should be disbarred for wasting time and resources. It's a JUDGE's BOX people NOT A THRONE! Special interest NO MORE! This is AMERICA - we believe in FREEDOM, OPPORTUNITY, EQUAL JUSTICE and LIBERTY - every tax dollar spent, every public vote cast, every government deal inked should be done so with THAT and THAT ONLY in mind.

DOWNSIZE the government, DOWNSIZE spending, DOWNSIZE taxes. REWARD people for INVESTING and SAVING. REWARD first time HOMEBUYERS with tax incentives like never before. REWARD welfare recipients for getting off the government teat.

We need BLUE BLOODED AMERICANS of all colors, races and beliefs to STAND UP, SPEAK UP and GET MOTIVATED! We CAN turn this country around because it IS headed in the WRONG DIRECTION and we are "headed down a slippery slope fast".

This is NO TIME to be silent about your dismay, distrust and displeasure. It's also not time to VOTE AGAINST something - it's time to VOTE FOR something. Attention Bush haters: he's gone, you don't have to vote for the inexperienced power whore to get him out of office. Vote with your intellect if you have any, your pride for America if it exists, your desire for change, and your hope for resurrection of Greatness.

WE CAN RESTORE AMERICA STARTING RIGHT NOW! TODAY!

- Yes, I am available for comment :)

We Want Stability And We Want It NOW!

Novation Mortgage — Wed, 02 Jul 2008 15:02:47 -0500

Chrysler in June down 36%. Ford is down almost 30%. GM is down 18%. Nissan is down 18%. Toyota is down 21%. Honda actually increased sales by 1% and Hyundai increased 3.5%. Daimler is up 13% and Subaru had an increase of 5%. But all in all the auto industry went from 1.455 million down to 1.189 million sales in June.

Crude 143.76 and heating oil 407.70- up 13% !!!!

Unemployment 5.5% in May. (BLS)

"GM sank $1.53, or 13 percent, to $10.22 for the biggest retreat in the Dow. The automaker was cut to ``underperform'' from ``buy'' at Merrill on bankruptcy concerns. GM, battered by the slowest U.S. sales market in 15 years, may need to raise as much as $15 billion" - Bloomberg online.

Payrolls probably shrank by 60,000 workers as employers cut jobs for a sixth consecutive month, according to the median estimate of economists surveyed by Bloomberg News.

The sky is falling, the sky is falling!

Yet all the while:

Interest rates are still historically low - only about 1.25% above their all time low. Housing prices are down as much as 30% on the retail market and many of these are newer, more energy efficient homes which can save hundreds per month in heating and cooling. There are literally hundreds of thousands of homes for sale so not being able to find "one you like" is a bad cop-out.

Fear is the most paralyzing emotion there is and right now we are an entire nation caught in the bright beams of oncoming traffic.

Chances are, later this year, the Feds are going to start bringing the target rate back up. It's not an absolute but it's of high probabillity.

Here is what you can do to stop your personal crisis:
Turn off your cable.
Get rid of the extra telephone.
Turn off your satellite.
Start eating at home more often (or out less often).
Read books or get videos from the library.
Go camping instead of shopping.
Turn your A/C off until it is absolutely necessary.
DO NOT CHARGE ANYTHING!!!!!
Pay off your credit cards that have 12, 15, 0r 20% interest rates and stop using them!

VOTE FOR SOMEONE WHO HAS RESEPECT AT WHATEVER LEVEL OF GOVERNMENT

Hey, I'm a conservative and I am NOT 100% happy with my choices. I would probably vote for Bob Barr but I'm not going to vote for the party he is running with.

Mount your own campaign to your representatives and let them know we are fed up with the high cost of energy and the excessive government spending programs. We want CUTBACKS in government spending and we want them NOW!

http://www.usa.gov/Contact/Elected.shtml

Ah, that's it. Just sharing with all my friends. I'm available for comment. I'm also working around the clock to run a mortgage business, a web development business and a rental property business. I need a nap ;)

Bankers Advertising for More Unlicensed Brokers

Novation Mortgage — Mon, 30 Jun 2008 08:42:18 -0500

It angers me - it really does. You may not see the ads or notice them as quickly as I do but they are there and in large quantity. I recently posted about FHA lenders advertising for unapproved brokers and loan officers to submit FHA loans to them. Seriously, this angers me deeply for several reasons not the least of which it is a grave violation of an approval process which is designed to help the people using and needing to use FHA insured loans. We spend thousands of dollars and hundreds of hours preparing for our HUD audits then these rogue lenders and brokers who are approved advertise saying, "No FHA approval? No problem! We will close your FHA loans and pay you up to 2%"

But here's another to add to the pile: reverse mortgages. I constantly see ads saying things like, "Tired of huge splits with your broker? Originate reverse mortgages without a license and keep all the commission for yourself." So now we are subjecting senior citizens, albeit the most scam aware group of seniors in my lifetime, to unlicensed, unregulated, wild west shoot'em up financial rogues. Be careful about who is offering you a reverse mortgage.

No thanks.

I know there are people who read, and post on, Active Rain who participate in these ventures. Shame on you. Shame. On. You. Our industry is in turmoil because of cowboy style rawhide lenders, advertisements that are flat out lies like the "we'll pay your closing costs for you" or "no one can do what we can do" lies. The House and Senate are calling for more and stricter regulations and here you are flaunting your loopholes to get by the regulations already in place.

Shame on you.

Homeowners and homebuyers looking for mortgage financing do yourself a favor. Ask your "loan officer" if they work at an office or out of their kitchen. If they say they work from home ask them how many hours of direct training they have had in the last month and if they attended a class or did it online. Ask them for their license number and how long they have been licensed.

Why is this important? Because if they actually took the time and expense to get licensed it means they care about you. If they prefered to be sleezy and dance in the shadows it means they don't care about you or the rules - they just care about stuffing their pockets. They probably aren't even familiar with the laws that are intended to protect you and most of all if they are unlicensed to whom do you report them when you get what many people get for dealing with an unlicensed practitioner. Doctors, lawyers, dentists, plumbers, real estate agents, and mortgage brokers are all required to be licensed for a reason: so you will have some recourse should you be ill treated.

So for your own sake as a borrower deal only with a lender, broker or loan officer licensed in your state. In Georgia you can look up licensees at https://dbfweb.dbf.state.ga.us/WebMBData.html - starting in 2008 you will also be able to look up loan officers there. Don't look for your bank's loan officer if they work for one of the big guys - they get a "free pass". That's right, your big bank loan officer, once again, does not have to be licensed in your state just like the big bank doesn't. They are "exempt" from state regulation. Amazing isn't it?

Walking the Violation Tightrope - Ethics Gone Missing

Novation Mortgage — Wed, 18 Jun 2008 14:12:01 -0500

I have a rule of thumb: avoid any process that involves a loop hole in regulatory matters.

There are three things happening today in the wide open that I predict will be completely eliminated with or without federal prosecution of violators in the near public. In the mean time just because everyone else is doing it doesn't tempt me in the slightest. Surely some who read this will be either supplier or consumer of these services and I have no intention of personally offending you if you do. I do, however, call these practices into question and lobby for their cessation. They each are ethics violations from the get-go. And yes, thank you, I am qualified to be the ethics police.

Negative Number 1 - Approved FHA Lenders Paying Unapproved Brokers for "Referrals"

True, you can pay a broker who is licensed in the state where the property is located, an origination fee. However, there is a reason FHA wants their originators to be approved - and yes, they DO want their originators to be approved regardless of what that lender told you. My guess on this one is that it will end with one big bang and a fizzle. Chances are nobody will be hugely fined ... but they may. Currently I know of at least 5 mid-sized pass-through lenders using this tactic. One says, "Oh we have HUD's stamp of approval." That's not HUD's statement. HUD's statement is, "yes, we are aware of this and there are some loopholes that will be closed soon." Why would it be okay since it is fairly difficult to get approved with HUD to accept a loan application from an unapproved party - ever? The REASON there is an approval process is to make sure the ORIGINATOR is held accountable for what they say and do.

Negative Number 2 - You Only Pay For Leads on Loans That Close

This one I know for a fact will end up with fines, loss of license and criminal prosecution. It is a direct violation of RESPA and anyone who says it isn't doesn't know RESPA. Yes, I know what you do, there are a couple of ways to do it and neither one are ethical. So you create a "marketing account" and you get all the lead you want for free. However, when one lead closes then you deduct $200 or $350 (whatever the negotiated rate) from the marketing account but it's not tied to one specific closing. WRONG! It is very tied to one specific closing and you even indicate it in your emails and marketing material. You and the lead buyer will eventually meet the reaper on this one.

Negative Number 3 - Referral Rewards Paid Through Marketing Company

Someone very dear to me phoned the other day and said she wanted to check out an opportunity she had been approached with. It's a new type of title company that will allow the mortgage broker, who is also a partner with the company, to order and manipulate title on line. According to the people behind it this is new and no-one else does it - they indicated during her "interview". First they are not correct, there are other title companies already doing this and have been for some time. But they have a magic way of rewarding the loan officer for using there services that they say doesn't violat RESPA. They have a marketing company and that marketing company will pay the loan officer $100 directly for every referral. My advice to her? Act like you are walking on a thread across the top of a volcano because that one will not hold up in court.

Now, to those of you reading this and steaming out of your ears let me relate a little history to you. I have long taught real estate investors and consulted lenders in the methods of real estate investing and the use of the "subject-to" acquisition of a property. I have had heated exchanges of information with so-called (self-labeled) gurus who cite the Garn-St. Germain Act as a protective shield agains the lender accelerating the debt on a Quit Claimed property. I use this example just to say, "I'm always right when I type or talk." Here, from the supreme court, is the final word on Quit Claimed properties and the acceleration of the debt:

The right to cure a pre-petition mortgage pursuant to § 1322(b) does not grant a debtor rights which the debtor did not have pre-petition. The Garn-St. Germain Act’s prohibition of enforcement of a due-on-sale clause does not operate as a means to modify the rights of a creditor with respect to a debtor who was not a party to the mortgage. The Supreme Court’s holding in Johnson should not be extended to third parties attempting to cure mortgage defaults. Thus, § 1322 cannot be implemented to cure defaults of a mortgage to which the debtor was not a party. Therefore, cause exists to modify the automatic stay. Source: http://www.ilnb.uscourts.gov/opinions/JudgeBarbosa/Henderson.pdf

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender

Name Every Industry Required To Disclose Their Profit Directly to the Buyer

Novation Mortgage — Mon, 16 Jun 2008 13:57:57 -0500

Challenge: let's list every industry whose participants are required to fully disclose all of their profits PRIOR TO or AT the time of the sale directly to the client ...

1. Mortgage Brokers
2.

Well, I just can't seem to think of any others. Here is a list to choose from - see which of these can be added to the list above:

1. Dentists
2. Doctors
3. Lawyers
4. Auto Dealers
5. Airlines
6. Movie Theatres
7. Banks
8. Home Builders
9. Clothing Retailers
10. Restaurants
11. Phone Companies
12. Computer Retailers
13. Sears, Macy's, Belks, etc.

I really get sick of the YSP bashing. Here are some YSP/Mortgage Broker facts:

1. YSP does NOT increase the interest rate the borrower qualifies for. YSP is added to the WHOLESALE rate which the borrower does NOT qualify for. Compare rates to rates and closing costs to closing costs and you'll see that mortgage brokers are on the average with the bank and direct lenders.
2. Banks and direct lenders make MORE PROFIT per loan than brokers. It costs nearly $2800 to originate a loan and that cost is absorbed by the broker.
3. Banks are foolish for wanting to shut down brokers because of the two preceeding facts. The men and women who ran the banking industry in the 70's and 80's when brokering became popular had experienced banking BEFORE brokers as had the general public. The little peewees running the banking industry today have no idea what the industry was like BEFORE brokers and think they will end up capturing some huge profits ... boy are they dumb.
4. Mortgage Brokers can only submit the loan to the final investor for consideration. Yes, there are scumballs in the mortgage industry but the banking industry is loaded with them. Mortgage Brokers do not create loans - they only match their applicants with what is made available by the banks and lenders.
5. Brokers work FOR THE BORROWER - not the bank and not the seller. This is one reason some big bankers are lobbying so hard and spending millions of dollars to eliminate mortgage brokers..
6. ONLY mortgage brokers are required by federal law to fully disclose all of their profits directly to the borrower at or before the time of the "sale" (closing).

I am available for public comment. 678-946-0100

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender

FHA Down Payment Assistance Under Fire ... Again

Novation Mortgage — Mon, 16 Jun 2008 12:28:16 -0500

It has just been a short while since Nehemiah, the not-for-profit corporation who has long helped families and single borrowers get into a home using FHA and their 3% down payment assistance. According to FHA chief, Brian Montgomery, said, "In these transactions, home sellers - or any entity that would profit from a sale - give 10% or 20% of the sale price to buyers, who can then use that cash as a down payment."

10%? 20%? Wow - we never did one over 3%

So what do you think? Should programs such as Nehemiah, be allowed to continue? If allowed to continue should they be capped at 3% or some other number?

In case you are not familiar with DPA like Nehemiah they essentially raise the sales price by 3% and use that amount as a down payment on the property which is simply refinanced into the loan. It's not a grant like some people call it - it's a loan and the buyer repays it.

What are your thoughts?

Get Rich Quick: Flipping Pre-Foreclosures: Build Your Mega-Fortune Over Night!

Novation Mortgage — Fri, 13 Jun 2008 10:31:52 -0500

Use my package as seen on TV and make millions overnight in this crazy real estate market! Come to my FREE FREE FREE seminar tonight in your town and start cashing checks tomorrow for tens of thousands of dollars! Download my FREE FREE FREE audio conference and learn how I started with NOTHING, I was flat broke and homeless - living in my car - and now I flip hundreds of homes every hour for millions in profit every day!

It's so simple even I did it and if I can do it YOU CAN TOO! Go from RAGS to RICHES in just 1 month by following my fool proof plan for creating mega-wealth in FLIPPING REAL ESTATE even in this down market. While others are going broke you're going to the bank!

Sound tempting?

Let me give you some advice: If commercials like that excite you chances are you're a big old sucker fish with a number #0 hook through your lip and you're being reeled toward the surface. There are at least countless millions, if not billions, wasted every year given to fast talking, slick motivators who literally are stealing money from investors who could have used that money (as much as $20,000 to $50,000 to enter these "as seen on TV programs) to start a very successful investment career.

Kind of funny, isn't it, how these people say you can do this "without one penny of your own money" yet they charge from $2000 to $5000 just to attend a weekend boot camp and then sell you more things just because you really need to know these other $20,000 worth of tools and strategies to make it? Well, it is funny and they are laughing all the way to the bank.

REAL ESTATE INVESTING IS NOT A GET RICH QUICK SCHEME

Can it happen? Rarely, VERY rarely. Especially in today's market. This is probably the best buy and hold market of your lifetime. I haven't seen an opportunity like this since the late 1960's and interest rates are lower today than they were back then! In fact, today you can buy an investment property at rates and down payment amounts that it took to buy a primary residence back then, rates are even lower!

THERE ARE MORE SCAMS TODAY THAN I EVER REMEMBER!

Everything is advertised everywhere today from "Become A Certified Loss Mitigator" to "Flip To Get Rich Quick" (those phrases are used generically and not intended to indicate any particular individual or company of scumball scam artists). Wrap around mortgages are now openly despised by Fannie Mae and, in fact, FNMA has given lenders an ultimated to initiate acceleration on properties which have been transferred subject-to without a new mortgage. Even on the ones that are not being foreclosed when the subject-to owner goes to refinance the loan they can't do so using FNMA money -the refinance MUST be done by the person who's name was originally on title when FNMA made the loan to purchase the home.

CAN YOU GET WEALTHY IN REAL ESTATE?

MASSIVELY! And now, while properties are at a very low price and a huge number available, is the time to start building your investment empire. Financing IS available to real estate investors and the rates are reasonable. You can even hold properties in your IRA!

Don't get me wrong, there are flips happening today (one of the Flip stars happens to be a client of mine and let me just say Flip is a television show made for entertainment and you really need to look at his website and see that the houses that supposedly flipped are still flopping around on his website). We all know the Sam Leccima show was full of lies - you think the other ones aren't?

DON'T GET CAUGHT UP IN THE EMOTION

Emotion is your biggest enemy in real estate investing. The time to get excited is when the deal is done and your plan has succeeded! What's that? You don't have a plan? Don't laugh - most don't. And of those who do most don't have it written down. Write down your plan and your model. Write down WHAT you want to do (your model) and HOW you want to do it (your plan). Then get with an industry professional who isn't charging you to look at your plan and see if it makes sense. There are great people all over this Active Rain website who can help you.

Get with a MORTGAGE PROFESSIONAL who has done at least 20 investment deals in the last 6 months and find out what they have available to you AFTER you give them ALL of your information. If they are like me they won't work with you if you're trying to "work the system". You be 100% honest with them and they can help you. Companies like my NOVATION MORTGAGE are much more than just a mortgage company they are real estate investor support systems offering training, support, analysis, consultation, and finally the mortgage (and that's the only way we get paid - the rest is timely, accurate and no extra charge!)

Get with a LICENSED REAL ESTATE PROFESSIONAL who has been in the industry in that particular market area and understands you don't want paint, carpet and azaleas, you want rust, leaks and mud puddles and you want them below market value. Seriously, there are agents who simply cannot conceive what you are trying to do. Ask around town with other investors or your loan officer. DON'T TAKE MORTGAGE ADVICE FROM YOUR AGENT (sorry friends) because there is NO WAY they can keep up with all the changes like a loan professional who is in the industry and on the job FULL TIME.

By the way, there are part-time loan officers - RUN! FLEE! GET AWAY! Work only with legitimate loan officers from legitimate companies who actually have an office and history of performance. In Georgia you can look them up on the Department of Banking and Finance website.

This could go on and on but I'll stop it here. If you have any questions you can always email me through this system. Don't email me with opportunities or MLM's or a chance to be a part of the biggest boom in mortgage payoffs in history (Money Merge) because I will report you to SpamCop. Sorry - I had to add that - I have been inundated with that one opportunity through Active Rain lately. I'll write my article on that soon enough - another HUGE waste of money for most of you.

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender

Lender Update - LTV Changes are HERE ;)

Novation Mortgage — Thu, 12 Jun 2008 16:18:22 -0500

I alluded to this several weeks ago (sorry for my absence I was quite sick for nearly 3 months) and now the time has come. The Mortgage Insurers are broke and have to fix it. This is nationwide regardless of the strength of your market area. According to most Mortgage Insurers the entire nation is in a declining market. What a great time to be a real estate investor!

General Specifications:

As previously notified, after today you will no longer be able to obtain commitments for mortgage insurance on loans with LTVs greater than 97%. Therefore, the following 100% LTV programs will be discontinued:

· FNMA Flex 100
· FNMA MyCommunityMortgage
· FNMA MyCommunityMortgage Community Solutions
· FNMA HomeZown
· Freddie Mac 100
· Freddie Mac Home Possible
· Freddie Mac Home Possible Neighborhood Solutions.

Please note that programs and mortgage insurance are still available for loans with LTVs up to 97% for qualified borrowers and properties.

This is not forthcoming - it is here NOW.

"Bird Dogs", Assignment Fees and Greed

Novation Mortgage — Wed, 28 May 2008 12:43:50 -0500

Okay - let's start this one out the easy way. If you are a "bird dog", "locator", "consultant" or whatever name you use to call your unlicensed, uninsured, no background check business I don't care if you like my words, ever recommend my company to your "clients" or want to get in my face for what I have said for years and will say again and again so long as it holds true. Your greedy numbers and fees are a bane to this industry and I want you OUT. Oh you tee. OUT. Your fees blow deals and make the buyers look like complete fools. Yes, I have a case in point to be submitted here today.

Phil Foolish called me back in February wanting to do a non-seasoned cash out refinance on an investment property into his IRA. After the initial interview I found out he had rehabbed the property out of pocket as well as having paid cash for the property to start with. The property is worth about $78k - a very cheap investment anywhere - and he paid $65k for the property and put another $10k in it for rehab. Not a good deal but it's his first one and he has never red my book Ten Mistakes Every Idiot ... er ... Real Estate Investor Makes. He made them all - and there are actually about 23 mistakes in the book today.

The really sad part for Phil Foolish is we didn't discover his biggest error until today - three days before closing. A few months ago we would never have investigated this far on a property which was originally purchased with cash. However, because the values are so tight and the property is located in a declining market area, we followed all the trails back to the listing. Our goal for looking at listing prices on properties that are being refinanced is usually to discover if there was any "cash back at closing" - another foolish mistake of greed that costs deals. In this case we thought we may have found it but it wouldn't make sense for a cash transaction to receive cash back at closing unless there was a more sinister plan to artificially inflate the resale value. So I asked Phil Foolish why he paid $65k for a $50k listing when he was paying cash.

"Oh, that included the $15k assignment fee", Phil beamed.

Okay so get this straight - Phil paid an UNLICENSED third party FIFTEEN THOUSAND DOLLARS (30 percent of the price of the property) for doing nothing more than assigning the deal. OH MY GOD PEOPLE! Get OUT of my industry. Buyer - you are a FOOL if you do this. NEVER pay an assignment fee of more than $1000 or 1% of the sales price whichever is less unless you just want to be an idiot. ASSIGNERS - greedy, scum of the earth low life trash. I don't care if you have been a fan of mine your whole life and I just lost you forever - you are SCUM.

Phil is not getting his refinance - well, he is, but he's getting $50k the original listing price. "It's not enough", he says.

"Okay, fine. Go away, " I reply. "You're an idiot anyway so goodbye."

"No, I need the money desperately, I'll take the $50k", Phil sheepishly replied.

So what is Ken's issue with this? Why is this a problem if the value is supported and the buyer was foolish enough to pay a 30 percent (or ten percent or 5 percent) assignment fee?

1. Assignment fees cannot be refinanced. Fannie Mae, Freddie Mac and most institutional lenders disallow those from a refinance.
2. They artificially inflate the sales price of the property actually turning this into prosecutable mortgage fraud (yes, the MBA is working on this).
3. There is no or little recourse against the collector of the assignment fee unlike a licensed, insured agent who has passed a criminal background check and met minimum requirements to obtain and possess a license.
4. There is no protection under the law for the buyer for excessive fees - such as THIRTY PERCENT.

Basically unlicensed agents make their living from emotion and greed - the two biggest killers of real estate investment wealth.

Subordinate Lien Foreclosures - Quick Clarification

Novation Mortgage — Wed, 21 May 2008 12:58:58 -0500

It comes up often, "can the second mortgage holder foreclose?"

Yes - but it's not so simple. In order for a subordinate lien holder such as a second or third mortgage to foreclose they must first satisfy the superior encumbrances. In plain English if I loaned a home owner $150,000 against their $250,000 home and someone else comes along and loans them the other $100,000 they did not buy the first rights to the home. I have those. If the borrower is not satisfying their loan then don't really have much choice but to file a judgment and take the borrowers income and assets - if the judge will so grant - or to satisfy my loan then take possession of the property.

The inverse is a bit frightening to the subordinate lien holders because of the way foreclosure sales work. The first lien holder (first mortgage usually) has complete foreclosure rights and does not need to satisfy any additional liens to foreclose. In fact when the property is sold at auction the first lien is satisfied in whole before any additional funds are distributed. If we use the example from above and I foreclose but the sale only brings in $150,000 - I keep it all except the fees associated with the foreclosure and sale. The subordinates get nothing.

So how do the subordinates seek relief? The borrower still owes the money. If the sale happens and the subordinates receive no relief they file for a judgment against the former borrower now become defendant. Chances are the judge will award the judgment to the plaintiff who is free to collect according to the laws of the area wherein resides the defendant.

Friends don't let borrowers become defendants.

(I am not an attorney, I just keep their kids in BMW's and Lexuseses.)

Yes, It Is Real - No Money Down for Rural Properties DOES Exist

Novation Mortgage — Tue, 13 May 2008 15:57:53 -0500

If you are selling a home or shopping for a home in most areas of Georgia outside of the I-285 counties you may be able to qualify for one of our American Dream Home Ownership Program Solutions that will allow you to get to closing with little or nothing out of pocket and get into a decent 30 year fixed rate loan with no monthly private mortgage insurance.

Unlike most other offerings from lenders and banks in the areas this loan even allows the buyer to finance up to 10% or $10,000 in repairs and/or upgrades.

This loan also allows the seller to contribute an unlimited amount to the closing costs - perfect for first time homebuyers and those moving up as well. It must be supported by the appraisal.

This is for PRIMARY residences only (no second homes or investment homes) and the buyer can be a first time homeowner. No down payment or reserves are required. Borrower must have fair credit (better to have no credit than bad credit), have been in the same line of work for at least 2 years and be able to document their income.

THERE IS NO MONTHLY PRIVATE MORTGAGE INSURANCE!

Call my office but please don't ask for me it may be months before I get back to you - sorry! Call 678-946-0100 or 866-946-0120 and ask for information on The American Dream Home Ownership Program.

Thanks!

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062. Georgia Residential Mortgage Licensee 20014. Equal Housing Lender.

Seller's Agent To Me: Your Services Are Horrible, You Don't Communicate, I Will Never Recommend Your Company

Novation Mortgage — Fri, 09 May 2008 12:23:24 -0500

This is a story based on actual events and a listing agent who thinks my company, my service and my employee stink. My company and my service do not stink but the situation certainly does. Because of major federal laws against sharing private information I have to just take the heat ;) This is not a "rant" about a situation but rather a look behind the scenes at why one agent, based on one incident, made a sweeping negative judgment. It is also an invitation for comments so I can better serve the entire industry while avoiding the rare circumstance such as this. Frankly I don't ever want one person to think our service is substandard based on anything and certainly not when I know we have done and will do the seemingly impossible (within the law) to work on files other people would simply have denied. It's a thin line between making it happen and "should have denied them".

This really is about giving a little credit to professionals across the industry - a little mutual respect. Sure, I know every loan officer isn't a super reliable closing machine and it doesn't matter where they work. Same as every real estate agent isn't a conscientious adherer to sound business principles and practices. Slackers are found in every walk of life and every profession. I suppose there are even lazy hookers and drug dealers.

If you've read my blog(s) for long you may already know my policy on (a) screamers and (b) communicating with the seller's agent when the buyer is our client. This deal is a short sale. It goes to the courthouse steps on Tuesday regardless. The lender (according to the selling agent) will NOT extend. We've had the file since April 8th - plenty of time to get the file closed.

It's not cleared to close even yet at 1:04 PM on Friday, the 9th of May. Are we sitting around in a daze waiting? No, we're bugging the dew out of everyone who can get us the letter we need NOW. We're possibly jeaopardizing relationships we have built for years in pushing for what we need. This blog is to put some light into those nasty lenders, loan officers, and operations managers who just won't communicate and let you sniff around a bit behind the scenes of a real cluster. I'll show the things I said and the things I would like to have said and explain why I cannot.

The subject property (town home) is located in a declining market. Neither agent knew if this was a town-home or condo ... we had to dig that information up ourselves. There have been 7% foreclosures on that street. The young couple living in the home have not made a payment in 4 months. Our client, a repeat client, is in his late thirties ... I think he's thirty-twenty-seven ... and living with his mom after his third divorce. He is self-employed and always has been. He files his taxes really screwy but he does pay them, thank God. We didn't go stated because he doesn't pay his taxes we went stated (stating the actual amount on the tax returns) because he owns a business but doesn't have a business license because he does trade shows and, if you've ever sold at a trade show you know you have to buy a temporary business license at the venue. He doesn't use a tax preparer OR a CPA and files his own taxes. Said all that to say we still had to go stated because there are no W-2's.

It took almost a week to get the fully executed contract back. Yes we were already working on the file and that's a violation of one of our Operating Procedures essentially because until there is an executed contract in our hands there is no deal. However this is a repeat client so we started the process. Once we got the fully executed contract we ordered the appraisal from a third party national appraisal company who said, "We'll get to it on Wednesday". Keep in mind we ordered the appraisal on the previous Thursday - so one week.

The appraiser did not show up on Wednesday and did not contact the seller or their agent for access. We phoned the company and they didn't know anything either. On Thursday my staff member handling the transaction called every 15 minutes for an update on the appraisal. Drop dead date Friday May 9, 2008. Date we were waiting on the appraisal April 24. Still we have plenty of time. We have our DO approval and all of the stips it asked for.

The appraiser finally shows up on Friday to do the appraisal. We expect to have it emailed to us over the weekend - Monday morning, no appraisal. We begin calling the national dispatch company, since we have no direct connection with the appraiser, and explaining we're running out of time and if there is anything abnormal with that appraisal we need to know so we can make the appropriate decisions.

There was something abnormal with the appraisal we finally got on April 30th. The property is in a declining area. SOMETHING WE COULD HAVE KNOWN WEEKS AGO IF WE USED A DIRECT LOCAL APPRAISER WITH WHOM WE HAVE A RELATIONSHIP. The loan amount had to be lowered by 5% meaning our client had to come up with another 5% which he did not have ... he was already bringing 10% down to the closing. He has commodities so he had to sell more commodoties to get the 5% then we had to prove the source and show that he had been in possession of the commodoty long enough to call the funds seasoned. I won't tell you what the commodity is just to say - "there ain't no paperwork on it" and it's totally legal. Some of you may even own some.

This put us in denial status with the major national bank to whom we were selling the loan. So on April 30th we scramble to resubmit the file to two different lenders along with a new set of underwriting stips. All this to buy a cheap little townhome from a little couple who got in too deep.

Meanwhile my employee is livid and upset. Unbeknownst to the cheery little broker who is soon to enter the picture my employee has litterally done enough work on this one file to have easily closed 8 others. I have left out hundreds of details - the teeth pulling with the banks to get the correct VOD, the previous rental history from the apartments where he lived before moving back in with mom - unbelievable the extent to which my employee had to go to have a shot at saving this home from foreclosure which she takes extremely seriously.

Then it happened.

On of the new lenders, a national bank which just announced the closing of it's wholesale mortgage division, repulled credit and there was a new lien, a new eviction notice and a new 60 day late. This is the part I really want to tell the happy little Re/Max listing agent who soon found herself speaking with me - which is usually not good. More on that in a moment.

My associate had been very openly communicate with our client and his buyer's rep - whom I only recently discovered is the SON of the LISTING AGENT. Because we have WRITTEN AUTHORIZATION to share personal information with the buyer's rep we openly communicated with this man about what had happened. It seems the apartment complex had erroneously filed an Eviction for Failure to Pay which totally trashed his credit. However he did manage to go to court IMMEDIATELY and get this dismissed. Unfotunately, however, they would not dismiss the late payment which brought his middle score well below the minimum required for a stated income loan. Remember, we can't go full doc because he has no paystubs and no W2's. He makes $30k one month and nothing the next two.

So now we've been fighting these issues AND MORE that I didn't bother to include because this is already a book and it's Thursday May 8th. We're at two new lenders. One denied it in the morning and the other will not LOOK at the file until Friday. We call and explain this in detail to our client. Then we call and explain it in detail - I'm talking about a 30 minute conversation - with his agent who is the son of the seller's agent. Five minutes after my employee ends her call with the buyer's rep I hear her take a call on speaker phone that starts out like this: "Hi this is Blam Blogers (fictitious) with Re/Max (actual) I am the listing agent for the (buyer) deal. I need to get some straight answers from you."

So far that's kind of okay except I have a policy implemented EIGHT years ago that says, "Without explicit permission in writing on a specific Borrower's Authorization Form the only information we provide to selling agents is: status of the loan and expected closing date." But my associate is very concerned now that her client will essentially be out on the street, out $2000 earnest money and will almost certainly not qualify for another home with these new things he is fighting but she is sick to her soul about this house going to forclosure.

Needless to say she's on pins and needles (not to mention her pawltry commission check on this deal with a total revenue to us of only about $1300 went down even more when we switched lenders but held the rate the same) and she just finished explaining the full details to the two people we are supposed to communicate with. When I heard Blam Blogers say, "Ma'am you don't need to be short with me I'm just trying to get some answers" I picked up the phone and explained, very calmly but in no uncertain terms, that the information had just been dissiminated to the buyer's rep and my employee was not permitted, by law and by corporate policy, to go into any more detail.

What I wanted to say was, "Ma'am, you have NO IDEA what this client has put my employee through. You have NO IDEA how many nights and weekends she has worked on this file. If you only knew that we just discovered some major, MAJOR issues with his credit and he files his taxes in such a weird way and pays himself even weirder." But I can't - I mean I legally CAN NOT. All I could say is, "We are waiting on a clear to close from the THIRD lender to whom we have submitted the file with a DO approval."

So, Blam Blogers, don't judge my company and our service based on what you think because you don't even know the 100th of what hoops and pains my staff has gone through to get this file closed. Believe me - if they were all like that we'd just get out of the business.

My employee has communicated with the borrower no less than four times every day and with his agent at least every time some important event has ocurred meaning a dozen or so times in the last 2 weeks.

So if you are reading this the next time you think the loan officer is crappy remember this story - the vast majority of them don't just sit there and play solitaire when they aren't talking to you on the phone. They, like you, get paid when the deal funds. In fact you leave the closing with your check. Theirs goes in to the system and depending on when the deposit is made could be two to three weeks before they see their measly little commission. I don't write this as an attack on any person or component of the inudstry. In fact I will write Blam Blogers a letter (not an email) and apologize for everything that I possibly can - legally. All I can say is "I wish I could tell you the things I know and the order in which we discovered them - but I can not."

Obviously I'm hoping we get a CTC today and we can give it to her to give to the sellers. But who knows - loans don't close just because the underwriting engine says they can.

If you were sitting in my chair, what may you have done differently?

How can I better improve my communication to third parties without violating any of the very strict privacy laws?

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Can I Get A Side Order of Realistic Expectations?

Novation Mortgage — Wed, 30 Apr 2008 10:21:29 -0500

Have you ever been to a restaurant and ordered a nice meal only to have the entire thing just dumped on your table with no plate, no utensils and no respect? I mean the least you would expect would be a plastic plate with divide compartment like in a cafeteria, right?

How many times have you dealt with a customer who was like that restaurant? What I am talking about is the foundation of realistic expectations. Let us call it FORE for the sake of this article. And don't you wish the customer had the common golf courtesy of shouting FORE just before they hit a line drive at your head?

Two weeks ago Mr. Shah telephoned and pretty much demanded to speak with me personally. He had heard my name used repeatedly in a seminar he had attended and he had heard me on the radio. Normally when a "fan" calls and asks to speak with me the gate keeper is able to convince them I'm really not the person they need to speak with about a loan but he was persistent somehow and got through to me. It's not that I mind speaking with clients it's that I'm usually (in reality) not available to work a deal with a client directly because I am constantly juggling as many as 30 deals with my staff members.

Mr. Shah and I spoke briefly, rather let me say Mr. Shah spoke a lot in a very short period of time and I listened, and I indicated I would be assigning his transaction to Aaron Carter who has been in the business for a little over five years and will help you find the right direction. Mr. Shah sent in his documentation - he had 3 foreclosures in 2006, filed bankruptcy in 2007, changed careers in late 2006 and is looking to purchase a $35,000 investment property that needs $11,000 in rehab in a small town in Georgia and he wants no money down including the appraisal and other costs.

Okay stop laughing.

Aaron told Mr. Shah we would not be able to help him but we referred his deal to a private equity funder who would be contacting him. Aaron tried to follow up with Mr. Shah 5 times (fully documented) and the next message I get is about how terrible my services are and how he will never recommend my services to anyone. Of course we took the time to assemble his package (put it in the proper order) and send it to a third party at no gain to us .. not even a co-broke fee. Oh, and that "rokie" that I "give himto my loaned" doesn't have any business in the industry.

I want my plate, please!

I'm illustrating these to let you know you are not the only one who gets full blown idiots to deal with and for you would be full blown idiots who would be clients to check your expectations before making a complete fool of yourself - liek this next example.

I use Meebo. It's there to the right of your screen. It's an instant message system tied into my websites and blogs to let people communicate with me instantly. I get the messages on my work station, my laptop or my awesomely powerful Treo 700 (free plug but it beats Blackberry in about 20 major ways), so I am available most of the time. However at the time I received the following message I had my Meebo set to "Away From My Computer" which means you can leave a message but I'm not sitting there waiting on it:

Guest: "Can you please tell me if you have any programs for people who have credit scores of 418, 430, & 439? No Money Down!!!"

Guest: "Hello????????"

Guest: "ARE YOU THERE!?!?!?!?!?!?!?!!!!!"

Me: Sure, call my buddy Danny Thornton lol.

What are realistic expectations in financing?
1. You should reasonably expect that if you have a credit score in the 400's the lender can reasonably expect you to default on your loan so you should reasonably expect to NOT even get approved for a loan at all much less no money down.
2. You should reasonably expect that if you are buying an INVESTMENT property in a declining market to put skin into the game of at least 10% if not 15%.
3. You should reasonably expect your Loan Officer to be LICENSED and have at least 3 years of experience in the industry and not work out of their kitchen even if they work for a big bank (yes, some big banks have 'associates' who work from their bedroom).
4. You should reasonably expect to be treated with dignity until you lose site of reality with your expectations and demands.

We all have challenges. As a client of the mortgage industry you generally have no idea how many moving parts there are in a mortgage - same as for what real estate agents do. With mortgages most people think it's just about the rate and nothing else. One day I will list the moving parts just to a pre-qualification and I bet there are at least 25 moving parts to even a real pre-qualification.

This is really a kind of tongue-in-cheek post using real situations. I really do love people and love dealing with them. The things Mr. Shah said about my company to me could be libelous if he said them to someone else or published them but he is probably frustrated and expected me to pull a hat out of my rabbit.

It's a Racket! It's a Ripoff! It's a No Brainer! It's a LIE!

Novation Mortgage — Tue, 29 Apr 2008 15:25:38 -0500

The Georgia Code states:

7-1-1016.
In addition to such other rules, regulations, and policies as the department may promulgate to effectuate the purpose of this article, the department shall prescribe regulations governing the advertising of mortgage loans, including without limitation the following requirements:
(1) Advertisements for loans regulated under this article may not be false, misleading, or deceptive. No person whose activities are regulated under this article may advertise in any manner so as to indicate or imply that its interest rates or charges for loans are in any way 'recommended,' 'approved,' 'set,' or 'established' by the state or this article;
(2) All advertisements disseminated in this state by a licensee or a registrant shall contain the name, license number, and an office address of such licensee or registrant, which shall conform to a name and address on record with the department; and
(3) No licensee shall advertise its services in Georgia in any media disseminated in this state, whether print or electronic, without the words 'Georgia Residential Mortgage Licensee' or, for those advertisers licensed in more than one state, a listing of Georgia as a state in which the advertiser is licensed.

You and I, most insiders, know there is no such thing as a free loan. The only person who pays your closing costs is you. There is not one bank, lender or broker who can truly demonstrate they pay your closing costs for you. One obnoxious little prick has made millions convincing feeble minded people that's exactly what he does when the majority of AR readers know it's not even close to the truth.

Countrywide tried it for a minute and from my understanding the Feds got into it and CW stopped - or maybe it was when BofA started taking the reigns ... either way I haven't seen the No Closing Costs adverts lately.

But there is one particularly rude and obnoxious advertiser who has been advertising in almost every state for a few years and calling every other broker/lender every name in the book. I can't imagine why that little pipsquek never shows up at any lender functions ... hmmm. But I digress.

Keep the Georgia code number from the opening paragraph in mind and then view the following image:

Now I don't know the exact reason for this C&D order but I do know claiming to pay closing costs and not charge the client for them is misleading at best. Essentially the commentary here is my business practice: Honest, Open, Transparent, and High Integrity.

THERE ARE CLOSING COSTS AND YOU PAY THEM

They may be taken from the YIELD SPREAD. They may be taken from the SERVICE or RELEASE PREMIUM but NOBODY does loans for free.

Funny how a couple of years ago I heard this particular BROKER advertising that he, unlike any other broker, lender or bank all of who are smell green sewer scum pays your closing costs for you and it doesn't cost you one thin dime. He claimed they don't "roll it into the loan". Well, the only truth is that he pays it out of the commission he makes on your loan. Anyone can do it - we do but we don't mislead you and tell you exactly how it is accomplished. The real kicker is that immediately following his ads a couple of years ago he was advertising for help offering positions for as much as $300,000 per year. Hmmmm, hard to not make any profit and still have employees making $300k per year.

Well, what goes around comes around.

It's no secret that I think he's a bung faced roach and one of the biggest detriments to our industry still operational. But that's my opinion - he still gets a bigger number of applications and is much more successful than I measured on the dollar volume scale.

THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

The Trouble With "National Appraisal Companies" And The Future of Real Estate

Novation Mortgage — Tue, 22 Apr 2008 09:31:10 -0500

If you have followed along you know that FNMA and FHLMC will be required to use a third party appraisal "company" on all loans purchased by the GSE's effective 2009. Some lenders are already requiring this - Flagstar, for example, to whom we sell a couple of loans per month - and we'ver already uncovered what is bound to be a huge comedy of BS when this goes in to full swing.

Getting a contract with a national appraisal dispatch company seems to be to appraisers what getting a government contract is to closing attorneys. You can take the best, most customer service oriented closing attorney in your area and let the be awarded the HUD contract and almost overnight they become the most horrendous, arrogant, and brainless bunch of babbling flops you've ever dealt with. Let them lose the HUD contract and a couple of years later they're back to good again. I've seen it happen far too many times not to call it a constant.

It seems that many appraisers treat being dispatched by a national dispatcher the same way. When we order an appraisal directly it costs our client about $325 to $350 and we generally have it back within 3 days. If any updates are needed in underwriting we email or fax the appraiser and get the updated appraisal back usually within a couple of hours. Not with nationally dispatched appraisers.

In our most recent PITA moment we ordered an appraisal from Flagstar's happy little approved company on Thursday, April 10th with a due date of April 15. We hadn't heard anything by April 16th so we called the company which could provide us no information except to say the appraiser had been given the order ... on the 14th. By the 17th our client still had not been contacted to allow entry to the home so we started our every 15 minute calls to the national appraisal dispatcher until we got results. Finally on Friday the 18th the appraiser calls our client AT WORK and says, "I'm at your property and I need to get inside." WTH? Right NOW??

I'm anxious to see how long it takes to get the LEGAL DESCRIPTION corrected using the ACTUAL legal description instead of the bogus paragraph of obviously concocted information used on the actual appraisal that our client paid $450 for which from any direct appraiser in our market area would have cost only $325 for a better job. The appraisal we got is not the worst I've ever seen but for that price and that amount of time I do expect it to be perfect.

I write about this not because it happened once nor has it happened twice but over the years it has happened many times when we use a nationally dispatched appraiser. One company does stand out about the rest but their prices are 25% higher than going direct so we've spent more time over the years developing relationships with approved appraisers in every market area where we operate.

So once again a REGULATION to "FIX" what already broke is costing the end user in time, money and level of service. Way to go you scumbucket pieces of hog poopie who caused this to become a mandate.

HOW TO FIX IT

You, appraisers, you're the ones to really fix it. Demand your dispatches immediately. Demand customer service from your dispatch company. Not much you can do about the higher prices and that really stinks but WORSE service for the same product isn't going to help your cause. Stand up for your industry and tell national dispatchers if they are going to get into the business the services must be BETTER for a HIGHER PRICE not crappy like we usually get.

I am not throwing off in individual appraisers but I am biting down on the OPERATIONS DIRECTORS of these national companies. If you don't do a better job I'll open a national dispatch company and show you how to do it right. (lol as they say)

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Where Have I Been?

Novation Mortgage — Mon, 14 Apr 2008 10:52:23 -0500

In an answer to the emails sent to me by many of you, and thank you, for noticing my decline in posting to AR let me respond. Occasionally I take a hiatus from blogging to do other things like run a business, write a book and get over being sick *cough* *hack*. Evidently I am not immune from whatever went around a few weeks ago and it took a lot out of me but I'm pretty much back on track now.

Also, as many of you know, I have been examining better ways to "spread the good news" and that includes multiple ideas for streaming audio and video. I now have a full audio/video studio in my home ready to connect to the network but I want it to be as good as I can possibly make it and it's simply not ready.

I have been reading though! Just because I haven't posted doesn't mean I haven't been reading. In fact I have spent far too many hours laying on the sofa (something I rarely do) with my lap-top on my lap reading AR and seeing lots of new great postings.

But I'm okay, thanks for your concern!

Over the next few postings I really want to focus on "Square Watermelons" and get some tried and proven marketing plans infused with something to really make them viral.

YSP All Over The Place ... Revisited ... Again ... Once More ...

Novation Mortgage — Wed, 02 Apr 2008 09:11:48 -0500

Look, everyone is missing two very important points about YSP. By everyone I mean even NAMB is misstating. Forget YSP. Look at the RATE. I just priced a brokered loan from a wholesale only lender and included 1.5% YSP (which does NOT raise the rate the borrower QUALIFIES FOR). Where anyone gets the notion that a borrower has EVER qualified for the WHOLESALE rate is completely beyond me. But I digress. With 1.5% YSP and a little more than 1% origination and all the other fees included on a $250,000 loan I compared it with advertised rates from Bank of America, Suntrust, Countrywide and Ditech and the interest rate was similar (within .125%) and the APR on the same loan was within .05% on even the best among those when compared to the rate I could easily offer.

YSP is the brokers. The broker can do anything they want to with it. If they want to give the loan away they can. I watched dozens of brokers start doing that when the market went soft and every single one, without fail, is gone today. The idea that banks and direct lenders don't make the same or more profit on loans as legitimate brokers is asinine. This is the second point everyone is missing about YSP. They tell you and tell you and tell you to compare rate and APR. So if the rate is the same and the APR is the same should YSP even be considered?

I admit I operate mostly in Georgia where the banking and broker regulations are tougher than they are in most states. We're pretty much limited to about 2 points in YSP and Origination on loans under $200k because of the way the laws are written. When I price the way I want to price my rate and APR beats all of my competitors - locally and nationally - and I still meet the minimum required income to remain operational and serve my market area.

Licensing for originators working at BANKS, LENDERS and BROKERS must be the same. The perpetuation of thought that just because a Loan Officer works at a bank instead of a broker makes them any less likely to put the screws to the borrower is the type of thought that will quickly lead us back down the same path. In fact we're just a small local lender and I'll put our screening, training and certification program up next to ANY big bank ANY day.

The problem is STILL a significantly large uneducated home buying public. That segment of them does not even WANT to learn the truth they just want to buy a home at any cost and let the rest of us (abbreviated G.O.V.E.R.N.M.E.N.T.)

EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.

Pay For Closings - Lose Your License, Your Savings and Possibly Your Freedom

Novation Mortgage — Wed, 26 Mar 2008 16:00:28 -0500

Some of you have been reading my blabbering for years and may remember the death threats from a certain real estate agent in Corpus Christi for challenging him about the legality of a $50,000 rebate to the buyer on the purchase of a $200,000 home. Funny, I sent him my photo, a map to my home and office, told him to call me from the Corpus airport and I would pay for his ticket here then get him a limo from the Atlanta airport to my home or office depending on the time of day. Evidently he wasn't arrested by the local Sheriff to whom I forwarded his somewhat graphic email. But here we go again. Different day, different topic, same people trying to skirt the

As long as there is a nickel there will be a crook. Today, more than ever, there are more and more "pay per closing" lead pushers hawking their illegal services. Of course they really like me because not only do I non-anonymously report them to HUD I tell them I am going to and why I am going to. Why look, here's one now:

Stop Paying per Mortgage Lead Today!

1. Join The P_F Network

Sign-up and start getting a constant flow of fresh mortgage leads added to your P_F mortgage lead account. Only pay for leads that turn in to a deal. With P_F you know what your ROI will be with no risks.

2. Start Receiving Hot Mortgage Leads

We add dozens of mortgage leads to your account on a daily or weekly basis that are in your area/state. You can contact these mortgage leads using the LEADS System which we provide.

3. Only Pay For Deals That You Close

When you get a mortgage lead that turns into a closing, then our "Per" close fee is deducted from your account. You only pay per closed loan deal.

And you, too, can violate RESPA just by joining and playing the "per closed loan deal" game.

I know what they say in response because I heard the speech when I called and asked if they are nuts: "Well, you don't actually pay per lead. You join our network for $1500 and when you have closed three loans you just renew your membership." And Bill Clinton did not have sexual relations with that woman, Miss Lewinsky.

Two scenarios:

Billy is not in the real estate business. He sells leads, that's all. He has several websites and buys time on the air for his LendingSpree.nut website and he generates a few thousand leads per month. He sells hot leads (less than 24 hours old) for say $50. He sells 3 day leads for say $25, and month old leads for $5. So if the lender deposits $1500 with the company they can pick and choose which leads they want.

Billy's brother Gordy is also not in the real estate business. Gordy worked for Billy for a while and heard all the complaints from clients that they are tired of paying for leads that never close so he starts his own company called the PBF Network. He doesn't want you to pay for any leads that don't close but he heard he can't charge you that way so he starts a "Membership Club" where members have unfettered access to leads ... until the close enough of them to eat up their membership at $500 per whack every time a lead closes. But he's not charging "per closing" if you ask him. His advertisement, however, is not worded that way. It reads "Only Pay For Deals That You Close".

You can research HUD - it's pretty plain and simple that on deals to which RESPA applies this is a direct and blatant violation. Of course Gordy's attorneys are criminal attorneys and corporate attorneys and don't even know what RESPA stands for. I don't always agree with Jack Guttentag but on this I do. Jack writes, "Although the economics is much the same, the law sees the two approaches very differently. The $500 payment contingent upon a loan being closed would be an illegal referral fee under the Real Estate Settlement Procedures Act (RESPA). In contrast, the sale of a lead is not directly related to a real estate transaction, and is not therefore subject to RESPA."

Next on the chopping block: FHA lenders who allow brokers to originate FHA loans without being approved. (Sorry Mike, I know you're my buddy but I'm coming after this ... )

* Thumbnail of the image of the "Barney Fife" character used in parody which falls under Fair Use.

Today's Mortgage Interest Rates

Novation Mortgage — Tue, 25 Mar 2008 10:47:53 -0500

Marginalized. Annualized. Economically isolated. Indicators. Mean reversion. Seasonally adjusted. Negative growth. Queuing ... now there is an interesting economic term. About two years ago a colleague suggested to me and a small group of three or four others that he believed the prime lenders may be positioning to wipe out all the mid level lenders and take all the marbles. I suggested that I didn't think the controllers and economists at these larger lenders had the ability to communicate well enough to pull off such a massive undertaking. But today I ask myself, "Where have all the mid level lenders gone?" And in the infamous words of Ray Davies and The Kinks, "Where have all the good times gone?"

When Bear Stearns needs bailed out you know something is funky in Eden. But I digress ... just a little teaser thought for you today and now on with the good stuff. Today's mortgage interest rates ...

Daily Mortgage Interest Rate Updates Always Available at NovationMortgage.com

Based on a $240,000 loan with 20% down or 20% equity on rate and term refinance. Middle credit score of 680 or higher on a Georgia primary residence single family detached home. Borrower must meet standard conforming (FNMA/FHLMC) loan guidelines. This is not a commitment to lend and rates are subject to change without notice. FHA F30 based on $150,000 loan and Jumbo based on $1,000,000 loan at 70% LTV. NOTE THERE ARE NO DISCOUNT POINTS ON THESE LOANS. 15 day lock, fully documented income and assets. Total settlement costs less than 3%. Does not include pre-paid items such as appraisal, taxes, insurance or government related fees. Not responsible for typos or HTML results. * on Flex100 PMI of 35% is required (ask about the Flex97/3 with only 18% MI) † Jumbo loan amount of $1,000,000

Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062
Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760
FHA Lender - Equal Housing Lender

How To Get Ripped Off In One Step

Novation Mortgage — Mon, 24 Mar 2008 12:06:58 -0500

I teach real estate investing to beginners and seasoned professionals. Last Saturday I had a class of 18 seasoned investors with varying degrees of success and experience ranging from over 30 years down to just over a year and one guy who has never actually bought anything but has been to virtually every class I have held and read all of my booklets and articles. So today he sends a deal to me to "look over" and give him my opinion. As he is an ongoing student I always look at what he sends me an point out the obvious and let him make his own decisions.

This morning I received an email from him with several pages of documentation attached and the very last page, which was from his 90,000 dollar rehab project was this. This is now my example to the masses of what to NEVER do. And yes I mean NEVER.

Okay, Ken, since you are so smart what is wrong with this and how does one make it right? The first thing that is wrong with is is the contractor wanting 50% up front. You say, "They all do, right?" I say, "No, wrong." In fact when you are borrowing money as a renovation loan from a legitimate lender they will protect you by escrowing the renovation money and the contractor must submit a draw request and wait for the job to be inspected before the funds will be released.

Now I am in no way insinuating that this contractor has any evil intentions or that he will take the client's $49k and never returned but it happens every day. So even if you are not using a lender to fund the repairs here is what you do: find yourself an escrow agent, agree to a draw schedule based on percentage of completion or stage of completion, HIRE AN INSPECTOR TO INSPECT THE WORK INDICATED ON THE DRAW REQUEST BEFORE RELEASING THE FUNDS FROM ESCROW, and don't let the contractor whine you out of ONE PENNY until the work is done.

Contractor's like to say, "I can't get started unless I have the materials and I can't buy the materials until I have the initial payment." To them I say, "Use YOUR credit to buy the materials and when you finish the job I'll pay you and you can pay off the materials."

Rule one NEVER PAY ANYONE FOR ANYTHING UNTIL YOU HAVE CONTROL OF THE PRODUCT OR SERVICE.

New Day in Real Estate

Real Estate Investor's QuickStart Workshop - This is Powerful!

Wachovia Ceasing Wholesale - Drawing In Tenticles

Free Gas? Yes! For The Rest Of The Year*

KEN COOK 678-946-0101Close Your Loan With Me and I'll Buy Your Gas For The Rest Of The Year*

You Thought It Was Bad Before? Buckle Up, I've Got News ...

Last Chance For A Decent Mortgage? Fed Changes Will Impact Your Ability To Borrow

KEN COOK 678-946-0101

Happy Fourth ALL! God PLEASE Bless America Again ... wait ...

We Want Stability And We Want It NOW!

Bankers Advertising for More *Unlicensed* Brokers

Walking the Violation Tightrope - Ethics Gone Missing

Name Every Industry Required To Disclose Their Profit Directly to the Buyer

FHA Down Payment Assistance Under Fire ... Again

Get Rich Quick: Flipping Pre-Foreclosures: Build Your Mega-Fortune Over Night!

Lender Update - LTV Changes are HERE ;)

"Bird Dogs", Assignment Fees and Greed

Subordinate Lien Foreclosures - Quick Clarification

Yes, It Is Real - No Money Down for Rural Properties DOES Exist

Seller's Agent To Me: Your Services Are Horrible, You Don't Communicate, I Will Never Recommend Your Company

Can I Get A Side Order of Realistic Expectations?

It's a Racket! It's a Ripoff! It's a No Brainer! It's a LIE!

The Trouble With "National Appraisal Companies" And The Future of Real Estate

Where Have I Been?

YSP All Over The Place ... Revisited ... Again ... Once More ...

Pay For Closings - Lose Your License, Your Savings and Possibly Your Freedom

Today's Mortgage Interest Rates

How To Get Ripped Off In One Step

KEN COOK 678-946-0101
Close Your Loan With Me and I'll Buy Your Gas For The Rest Of The Year*

Bankers Advertising for More Unlicensed Brokers