The North East's Advisor for Home Loans

Countrywide Acquired By Bank Of America

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Fri, 11 Jan 2008 15:54:12 -0600

In what will probably be the biggest merger of the year in the mortgage industry, Bank of America has purchased Countrywide Financial Co. at the tune of $4 billion.

I have blogged about the various articles that have been released today about this acquisition in my Loan Officer Tips blog. I would love to hear your comments on this since it will be one of the major factors in the overall economy throughout the year.

Here is a direct link: www.LOTrainer.com

I look forward to hearing from you!

Update MY Secondary Blog

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 09 Jan 2008 21:33:06 -0600

I wanted to briefly let you all know that I have updated my Loan Officer Sales and Marketing Tips blog. I went a little off topic in the past post with the concept of The 3 F's of Sales, but I am back on track with the Pre-Qualification 2.0 Series with today's post!

Also, I will be making this series into a mini-book for Loan Officers. If you would like to get a copy emailed to you, feel free to either leave a comment, or shoot me a quick email!

Here is the Direct Link: www.LOTrainer.com

I hope everyone is having a great 2008 so far!

New Blog Started

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Tue, 08 Jan 2008 10:44:12 -0600

Hi Everyone!

I wanted to give you all a quick update on my blogging world. Even though I love the AR community, I was asked by a couple of people within the industry to start a secondary blog about Loan Officer Training. So, I have started the Loan Officer Marketing and Sales Tips blog.

If that link doesn't work, you can try www.LOTrainer.com. I look forward to all of your comments and ideas, and I will update you all when I update that blog (Typically Monday, Wednesday, and Thursday).

I hope everyone is having a fantastic beginning to 2008!

Getting Into Home Improvements with Your Client

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 26 Dec 2007 23:19:29 -0600

Over the past couple of years, equity has been extremely accessible to our clients. Times in our industry are changing with regard to guidelines and lending ability. However, that shouldn't distract your from creating a relationship with your refinance clientele. I have touched on the refinance with debt consolidation clients in my previous post, and I would like to touch on the refinance with Home Improvements clientele as well for this post.

These clients are just like any other refinance client where they are looking for the loan program that fits their needs and overall goals. They might superficially want the best rates and fees, but it all comes down to relationships and rapport. I stress again, that finding out these goals and true needs in the first contact will help establish a relationship and better rapport with your clients, and most likely make or break them from financing with you!

So, how will you be different from the mortgage broker down the street, and create that lasting relationship? You know...the one you get referrals out of? Simple, right?

Right! We ask the right open-ended questions that will trigger emotionally driven responses!

Put yourself in their shoes and get involved with what are their primary reasons of why they need/want to do the home improvements. Here are some key questions that might help emit poignant answers:

Tell me about the project you're looking to do
What led you and your family to want to do this project?
How will these improvement benefit you and your family (besides most likely adding value to the home)
Tell me about the steps you've already taken for this (estimates, etc)
What do you think are the next steps prior to the improvements? (more estimates, or are they just waiting to close...hint, if you phrase it right, there could be a potential buying sign here)
How long will it take before the project is completed?

Once you start getting into how long the project is going to take and you know overall idea behind the improvements, you can keep a conversation going about pictures they can take with their family in their new living room, or maybe by the new in-ground pool. You can go into how good the barbeque chicken is going to taste and how nice it will be to use a grill on that new deck off the back door. There are a plethora of things that you can bring up in discussion that will help them paint a picture of what is to come after they finance with you!

They, most likely, didn't get this feeling from the other guy down the street which puts you ahead of the game even before you've presented figures or programs, and even before you've taken a look at their credit situation.

It's really that simple; to make a conversation out of this first contact instead a straight up, no-conversation, closed-ended 1003. And guess what? If your rate and fees are off a little bit, the client will most likely come back to you anyway because you truly know the value of their refinance. You've also shown that you care about their home, and you care about their unique financial and living situation.

Be different from the average Loan Officer, and create those relationships! I wish you all the best!

-Andy Scherer (Connecticut Mortgage Trainer)

Happy Belated Holidays, Everyone!

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 26 Dec 2007 22:59:46 -0600

I just wanted to wish everyone a belated Happy Holidays! I apologize for not getting on and posting this sooner, but some unexpected family emergencies had risen. I wish you all the best, and I hope you all had a safe and happy holiday so far (we still have New Year's to go).

-Andy Scherer (Connecticut Home Loans)

Questions For A Client: Refinance With Debt Consolidation

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Thu, 20 Dec 2007 18:07:02 -0600

If you haven't read "Phase 1: Your First Contact With A Client" then please feel free to do so prior to reading this post which is an extension of the first contact.

I briefly mentioned that the first contact with your client should be a relationship building experience. You should be getting to know your client, and your client should be getting to understand that you care about him/her.

With that being said, we have to remember that relationships aren't built on standardized questions from a blank paper (or Calyx Point 1003). Relationships and trust between two individuals are built with the sharing of emotion. Dictionary.com defines a relationship as, "an emotional or other connection between people".

So, how can you stand apart from Joe LoanOfficer who is looking to make a quick buck on these "borrowers"? Simple...ask the right emotionally attached questions in order to establish a caring relationship, and always build toward closing questions.

For a refinance for debt consolidation, instead of asking how much they are looking to pay off and be done with that part, dive into the subject a little deeper. Try asking:

About each individual debt that they want to consolidate (what school was the student loan used at, what was the credit card used for - vacation, etc)
What kind of credit cards are they? (if applicable...Visa, MasterCard, etc)
How high is the interest on each of those debts?
How much money are you paying out per month?
How much of that money that you are paying is actually going towards the balance?
If you didn't pay these off with the refinance, when do you think you could be free of these debts?

All of these questions build to an emotionally-tied closing question prior to filling out the entire application. And, guess what...you just got the liabilities section of the 1003 filled out.

Here's an example of how you can close this topic: "I definitely understand where you are coming from, Mr. Smith. I can see how consolidating that high interest credit card debt is going to relieve quite a bit of stress from your life, and make your life a lot easier with regard to your monthly financials. Along with that, paying off your car loan to make that an added tax deduction is going to be a nice benefit as well. I'm sure you are looking forward to the day of not making those payments anymore and having that extra tax deduction, right"?

Simple questions can lead into some of the most emotionally driven conversations for these clients. The bottom line is to keep driving home benefit and try your best to tie emotion to every question that you ask. Lastly, make sure that your questions are building toward an overall buying sign....a "YES" at the end of a simple closed-ended question.

I will come back to this example in later posts when I will touch on the sales aspect of the process. Each of those questions plays a key role in the proposals, so they definitely hold a huge role in a debt consolidation refinance.

-Andy Scherer (Loan Officer Trainer)

Phase 1: First Contact with Your Client

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Fri, 14 Dec 2007 19:05:57 -0600

Whether your client has called in, submitted something on the internet in the form of a paper lead, or is a referral they all want to know two things: rate and payment. Right?

It's our job in the mortgage banking and loan origination industry to shift our client's focus from rate to service and benefit, and it all starts with the first contact.

How many of your battle with your client to give up an application in the first phone call? I am assuming quite a few (unless you have been listening to David Bartels in action). Let's flip it for a second:

If you were contacted by a loan originator and they automatically started going into the application, or asked only 2-3 personal questions and then went into the full out application, how would you feel? Would you feel comfortable, or would you feel defensive and not want to give out information?

My point is: the first contact is a relationship building experience. You should be trying to get to know your client and build a rapport. Whether it's a purchase or refinance, the person always has a goal. And, no the goal is not just to get cash out to put in a pool or to consolidate credit cards because of high interest. Their goals are to have pictures of their families in the pool and cherish the memories that will create. Their goal is to be able to sleep at night knowing that they don't have to worry about 3 credit card payments making it on time and being able to go out to dinner once a month because of the extra money that they have now.

It is our job as industry professionals to really get to the root of their goals, and to establish that relationship. And guess what: it begins on the first contact.

So, here's what I do since they have already given me enough information in the lead to give them a general idea of what I can do:

Provide the client with an estimate of rates on several refinancing options or purchase money options (up to 10 in some cases)
Provide the client with enough service that they will not need to go shopping elsewhere
Build a lasting first impression so they feel comfortable sending their friends and family to me (even after the first phone call)
Ask Open-Ended questions that reach out and make them respond based on emotion

The bottom line is that the clients truly know what they qualify for, and they will key you into certain aspects without you having to pull a credit report or take a full 1003. My philosophy is that I am willing to help you (the client) out with information (since that's really what the lead is looking for...information).

Here is my closing line for the first contact:

"Here is the information you requested. I am going to leave this with you and follow up with you tomorrow at 11:30am. Look over all the information that I have given you, and please be ready with any questions or concerns that you and your spouse (if applicable) might have. Ok?"

Hypothetically they say "Yes", or "No Problem"

And I say, "Great. Also, please keep in mind that these are average going rates for today's market, and we still have not reviewed your credit to give you a full qualification package. These figures are derived from what you have told me, and when you decide to move forward I will give you a full Good Faith Estimate and full disclosures. At that point, we will lock you in at that rate and offer a complimentary Float Down Option just in case the rates drop you are protected.

Well, Mr. Jones, it has definitely been a pleasure getting to know you. I look forward to your questions tomorrow at 11:30, and if you need anything before hand please feel free to either email me or call me. Think about those options that I sent you, and have a great night!"

In conclusion, all of us in the industry need to get to know our clients on a personal basis, and we need to tie emotion to the process. We will provide better service if we care for our clients and they will take care of us by sending referrals as well. It all starts with the first contact!

-Andy Scherer (Connecticut Home Loan Specialist and Mortgage Trainer)

Come Visit www.wannanetwork.com (we are ranked #1 in Real Estate Networking on Google)

Where Do You Blog

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Sat, 08 Dec 2007 07:49:45 -0600

Obviously, all of us like using Active Rain to get our "blogs" out there. Do any of you take advantage of other forms of Real Estate Networking?

I guess the reason that I bring this up is for SEO purposes. Networking is a form of branding and self-promotion. When you have a series of links coming from higher Page Rank (PR) sites, your PR will also increase and therefore increasing your google-ability. That being said, I want to share other sources of blogs to help you get your links out there and increase your PR.

Obviously, AR
WannaNetwork
My Connecticut Mortgage Website
Yahoo Finance blogs
CNN blogs (usually CNN Money)

There are 5 sources that I try to blog on a consistent basis. So, I ask you and invite you to do the same and blog all over the place to get your name out there! Heck, free self-promotion is free self-promotion no matter how you slice or dice it!

Reverse Mortgage (HECM vs Proprietary Bank Program)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Thu, 06 Dec 2007 23:59:10 -0600

Over the past couple of days, I have recieved several questions regarding HECM/HECL loans vs. proprietary bank Reverse Mortgages. Here's the deal on these:

HECM (Home Equity Conversion Mortgage) or also known as HECL (Home Equity Conversion Loan). These programs are backed by FHA, and typically have significantly high closing costs. These closing costs are standard to the industry (2% origination for FHA, and 2% origination for the bank). However, the HECM's/HECL's typically allow for a higher net benefit (overall cash proceeds) because there is less risk involved when FHA insures the loan. This means that you can use a higher LTV on these than the proprietary programs produced by banks.

However, there is an upside to the bank programs as well. There, typically are less closing costs associated with the loan since there is no 2% being paid to FHA. Along with this, you do not have to adhere to FHA loan limits. So, hypothetically, if you had a borrower in a $2mm home that needed a RM, you couldn't take it through a HECM unless the borrower didn't care about the total net proceeds. The better program for this would be a proprietary program that would yield a signifcantly higher net benefit to the client and therefore relieve a significant amount of financial stress!

Keep in mind that Reverse Mortgages are an educational process with each and every one of your clients! If you need help with any RM questions, please feel free to contact me at any point, and I will do all that I can to help you understand these great products!

Come join us on www.WannNetwork.com

Market Update - Lock or Float (November 8)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Thu, 08 Nov 2007 11:23:02 -0600

Ok, so I am going to be extending my lock recommendation from anything within 60 days to anything with a 90 day period; lock those loans. Here is why:

The bond market this morning opened slightly higher at +9/32 while Ben Bernanke didn't help the stock market out with his testimony to Congress' economic committee. The Dow is currently down by 85 points, and the Nasdaq is down by 82 points. That being said, mortgage pricing has slightly improved this morning from yesterday's.

Unemployment claims were less than anticipated (325,000 expected, 317,000 filed). Even though this is good news for all of us in the working fields, this is not really relevant information in mortgage pricing.

As mentioned in the beginning of this post, Ben Bernanke spoke in front of Congress' Joint Economic Committee this morning, and once again reinstilled the lack of confidence in credit. I cannot give all the credit do Ben Bernanke for this, though, as Senator Charles Schumer from New York stated that the "Four Horsemen" of economic crisis were before us and ready to attack with a recession (defined as two quarters with a decreasing GDP). The "Four Horsemen" as Schumer referred to them are: housing prices, price of oil, credit confidence, and the weakness of the U.S. dollar.

Let's put it this way: The Federal Reserve can go ahead and instill a renewal of spirit in the housing industry by cutting interest rates significantly. However, because of high concerns of inflation, and the current weakness of the dollar, they are very very limited in their "wiggle room".

Tomorrow, we have the final two economic reports of the week being released in the morning. But, as I said before, if you haven't locked your loans yet, please do so. This is only my personal opinion based on the facts and information mentioned above.

Energy Efficient Audits...why should I do that?

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 07 Nov 2007 12:56:31 -0600

With the price of oil and all other utilities going up, we are all scrambling to find ways to cut down on your monthly bills. Well, I found this article that you might want to check out! You can Click Here for that!

There are several ideas of what an Energy Efficient Audit is, but to truly take advantage of this, you need to know that Energy Efficient Audit Makes Cents, and are affordable! James Quarello is an ASHI certified Home Inspector and has great information on how to get these audits done correctly and efficiently for the homeowners!

I want to go briefly into the Energy Efficient Mortgages that are directly affiliated with the Energy Efficient Audits. Obviously, you need to find a way to finance the improvements on your home in order to get the most out of your audit. Here's how:

FHA has a loan program (the 203k) that is directly related to these audits. This mortgage program is very similar to a rehab or construction loan in that a signed and designated contractor needs to be hired and reviewed by the underwriting department to ensure your best interests are upheld!

Here's how it works. The FHA 203k is treated as a refinance on your current property (or you can purchase a property as well with this - Click Here for that blog). Either way, we hold the estimated cost plus 15% over (just in case) in a reserve escrow account to be drawn on as needed by the contractor. You get a discounted rate because of the affiliation with the Energy Efficient Audit/Mortgage, and you only close one time! And, get this...you only pay on the amount that you draw on. So, if you only use $40,000 to do the improvements, but we have $35,000 more in the escrow, you are only paying on the $40,000 plus you original mortgage amount. Makes sense, right?!

So, with that said, you can save several hundreds and thousands of dollars if you are planning on staying the home soon, AND you are adding value to your home in case you decide to sell!

If you have any questions, please feel free to contact me at any point. My email address is Andrew_Scherer@Countrywide.com, and my cell phone is 203-257-5279! I look forward to hearing from you!

And, remember to leave comments!

Market Update - Lock or Float (November 7)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 07 Nov 2007 12:27:45 -0600

Well, folks, hopefully you tuned in to my blog on Friday or Monday where I suggested to lock your rates. Here is what is going on in today's market:

The bond market opened this morning up 3/32 with the stocks down (Dow by 135 and Nasdaq by 30). Because of this, you are probably seeing mortgage pricing similar to yesterday evening's.

The first report of the week was released today by the Labor Department. The publication revealed worker productivity increased to 4.9% during this last quarter. This is excellent news for bonds due to the fact that it is a much higher reading than anticipated. There was also a mention about the unit labor costs decreasing which should take a little stress off the inflation concerns. Even though that should be good news for bonds, they haven't reacted as anticipated because of the Treasury auction (mentioned below).

Today is the first of the two auctions for the 10-year Note sale. Scheduled for tomorrow is the 30-year Bond auction. We have already seen a shift in the bonds going up to 6/32 meaning a strong confidence level in the bond market where investors are moving their money from stocks to bonds. Please keep an eye on this and the stock market throughout the rest of the day today, and I will do the same!

Bernanke will be presenting to the Joint Economic Committee tomorrow; this is regarding the U.S. economic outlook which could potentially cause a roller coaster ride in the market and potentially the mortgage pricing arena as well.

The next two reports aren't due until Friday morning (Goods and Services Trad Balance report, and the Consumer Sentiment report released by the University of Michigan). The Goods and Services report is not very likely to have an effect on mortgage pricing/rates, but the Consumer Sentiment report might have a slight effect. I will update you tomorrow with details.

Again, if you haven't locked already, my opinion is to lock for any loans that you are expecting to close within a 60 day period. This is based on the risk vs reward factor whereas there is a higher risk than reward possibility for floating your loans.

Market Update - Lock or Float (November 6)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Tue, 06 Nov 2007 14:27:12 -0600

Ladies and Gentlefolk, please keep reading as I have a new updated status on whether you should lock or float today! This suggestion might cause some controversy:

The bond market were negative this morning (11/32 down) after stocks had an early rise (Dow up 50 points while Nasdaq up 3 points). You are probably seeing higher mortgage prices today by about .25% of a discount point.

With that said, I can firmly say that I expect a slight downward motion of the bonds over the next couple of days (especially since there aren't any major earthshattering economic news releases scheduled). So, I am going to suggest that you lock your loans and lock every loan in your pipeline if you plan on closing it within the next 60 days.

Keep an eye on the bond market just in case you go against this and attempt to float!

Market Update - Lock or Float (November 5)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Mon, 05 Nov 2007 11:12:23 -0600

Alright, folks, I hope we are prepared for the slow economic week since it was a lively roller coaster ride last week! If you haven't already looked at my weekly preview, please do that so you aren't missing that information.

But, here is what is going on currently:

The bond market is a little stagnant due to the fact that there aren't any reports scheduled for release today. The Dow is currently down 60 points and the Nasdaq now down about 12 points. So, we probably aren't seeing all too much difference in pricing from Friday.

My suggestion to you, and you can read this in my previous blog this morning, is to lock your loans because it is a greater risk to float for this week. I would suggest locking any loans that are scheduled to close up to the 21 day mark.

You can Click Here for my previous blog this morning, and you can always visit my website at www.family-home-loans.net

Market Preview (Week of November 5)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Mon, 05 Nov 2007 09:08:13 -0600

Well, compared to last week's assortment of economic news, this week is going to be a breeze. Being released this week are one quarterly report, and two monthly reports. With regard to importance of these publications, the quarterly takes more precedence. To relate this to mortgage pricing, we will most likely have a flat week (as long as the stock markets don't run the roller coaster ride that they had going last week).

The 3rd Quarter Productivity report is scheduled for release on Wednesday which is anticipated to mirror the second quarter's figure of 3.1%. If this happens, it shows expansion of the economy without inflation (or at least controlled inflation) which is good for the bond market.

Friday morning will be the scheduled date of release for the two other reports. The Goods and Services Trade Balance is the first of the two reports which will gauge the size of the trade deficit (U.S.), but typically doesn't have a significant effect on the mortgage rates/pricing or the bond market.

Index of Consumer Sentiment (University of Michigan) will be the second release on Friday. This is a measurement of consumer confidence, but is expected to reveal lower numbers than October. This most likely will not have that great of an impact on the mortgage pricing.

Also this week are 10-year Note and 30-year Bond auctions (Wednesday & Thursday). These events could definitely swing the bond markets either way, so keep an eye out for these results.

So, in conclusion, there most likely will not be all too much movement in mortgage pricing throughout the week unless something drastic happens in the market. I would recommend to lock your loans this morning, but I do not think that the rates are going to be increasing (as stated above). The reason is because if you look at the risk vs. reward, there is more risk in floating.

Market Update - Lock or Float (November 2)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Fri, 02 Nov 2007 13:06:36 -0500

I hope everyone is having a great Friday so far! There has been a lot of news and happenings with regard to the Mortgage Reform and Anti-Predatory Lending Act of 2007. If you haven't read it yet, or heard of it, please do some research and really look into the subject. It could potentially be the biggest event this year! But, on to the market update!

Today's bond market started out in a positive area (up 10/32) even though there was strong and relevant economic reports/statements released. With regard to the stocks, the Dow is down by 95 points right now, and the Nasdaq is down by 9 points. Of course, this means improvements in the rates (probably by about .25% of a discount point).

October's Employment report was released today which showed 166,000 new jobs were added (surpassing the expectation of 80,000). On a spot of bad news was a 14,000 job reduction from September's jobs as well as insignificant increases in the average hourly wage. With regard to the unemployment rate, the figured stated at 4.7%.

The Factory Orders data was published this morning, showing a 0.2% increase in new orders for both durable and non-durable goods for this past month. Due to the importance of the Employment report, this particular publication has had minimal effect on mortgage rates and pricing.

Next week is not going to be as packed with information and releases as this week. The important reports aren't scheduled for release until Wednesday (and I'll get into that on Monday). So, once agein, watch the stock market and bond market to be the main contributor on the roller coaster of mortgage pricing.

I will give you an outlook on Sunday evening with regard to next week's economic data, and I am going to maintain the recommendation to float your loans. That being said, I might be suggesting a lock at the beginning of next week based on the rest of today's activity...keep your eyes open for significant market changes!

Market Update - Lock or Float (November 1)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Thu, 01 Nov 2007 10:22:26 -0500

I would keep floating your loans today as well. I included some pretty informative articles at the bottom of this as well, but here's why I am floating my loans today:

The bond market started out extremely strong this morning (up 29/32) while the stock market is down (Dow by 225,a nd Nasdaq by 42). Due to the stocks slipping and very weak news for the economy, the bond market is seeing a huge benefit as investors are transfering their monies to a safe-haven. All that said, you probably aren't seeing a huge difference in mortgage pricing today because of yesterday's late bond market slope. However, keeping that in mind, we will see a nice improvement in rates this afternoon if the bonds maintain their morning momentum.

The first report released today was the Personal Income and Outlays for September. The publication revealed a .4% increase in income (which met expectations), and a .3% rise in spending (which was less than anticipated). This may come across like inflationary concerns, but this is actually positive news for the mortgage pricing.

The Manufacturing Index for October (released by the Institute for Supply Management) reported a decrease to 50.9 - much lower than estimations. This is good news for bonds even though it's bad news for the overall economy.

The Employment report is scheduled for release tomorrow. The most important readings/measurements ar unemployment and the collective number of new jobs that were added/lost during the previous month. What would be good for the mortgage pricing/rates would be a higher report of unemployment than the, now, 4.7%, and/or a lesser than anticipated addition of jobs with no bump up in the earnings.

The Factory Orders report is another important piece due for release tomorrow, and is very similar to last week's Durable Goods Orders. The primary difference is that the Factory Orders report consists of orders for both durable and non-durable goods - making it a more complete report. An increase (more than 1%) would not be good for bonds or mortgage rates, and vica versa. That being said, with the Employment report being released right before this, you probably won't see this publication effect the mortgage market.

So, as I said in the beginning, I would float my loans today and see what the afternoon brings with regard to pricing! I wish you all success!

Credit Worries Cause a Drop in Stocks
Consumer Spending slows for the month of September
Foreclosures skyrocket compared to last year's numbers!
Unemployment claims drop

Market Update - Lock or Float (October 31)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 31 Oct 2007 11:30:03 -0500

First of all, Happy Halloween, and I hope you all are getting treats (deals and closings) rather than tricks!! I have to say that I feel a lot more confident from yesterday floating my loans. Here's why:

The bonds opened in a negative territory (6/32 down) this morning due to the stronger than expected GDP report. Right now, the Dow is up by 52 points while the Nasdaq is up 12. The stock markets are showing early gains with the Dow up 50 points and the Nasdaq up 12 points. Today's rates are going to be a little higher (about 1/8 of a discount point) due to this, but that is why you all locked your loans yesterday that are closing in the next week or so, right??!

As mentioned above, the GDP report for the 3rd Quarter was only expected to increase by 3.1%. However, it rose 3.9%, which shows that activity within the U.S. economy is doing very well for itself. With regard to the inflation, reports and statements have come out saying that it is under control. As a result, this should've had a positive effect on the mortgage pricing and bonds. Hoewver, we are seeing a bit stagnant market because of the FOMC meeting that is adjourned at 2:00 this afternoon.

Yesterday, I briefly went into the ECI (Employment Cost Index) for the 3rd Quarter. This report revealed a less-than-anticipated .8% increase. With regard to the effect this has on the mortgage pricing, we should (and would've seen if the FOMC weren't meeting) a positive influence.

If things significantly alter throughout the day, and/or when the FOMC is adjourned, I will update this report, so stayed tuned!

Market Update - Lock or Float (October 31)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Wed, 31 Oct 2007 11:28:54 -0500

Market Update - Lock or Float (October 30)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Tue, 30 Oct 2007 10:56:49 -0500

Welcome back, Folks! I apologize for not updating this over the past couple of days; I was in Central/Upstate New York visiting family! Anyway, here is the update for today!

Flat is the only explanation for the bond market today. Contrary to weak economic news releases and the early decreases in the stock market, the bonds haven't really changed at all today (so far). The Dow is down by about 45 points, and the Nasdaq is down by 3 points thus far. As of right now, the mortgage pricing will probably be left unchanged until this afternoon.

The Consumer Confidence Index for October fell to 95.6 which is significantly lower than anticipated! What this shows is that consumers were less confident in their personal finances than expected. Even though this is bad news for retail areas, it is good news for bonds and the mortgage market because consumers are likely to spend less and/or slow in the very near future. The only reason that we have not seen this release have an effect on the market yet is due to the FOMC meeting that is the "be all end all" for the week's news.

With regard to releases for tomorrow, The 3rd Quarter Gross Domestic Product (GDP) is scheduled for release. I would and will personally keep an eye on this report because it is considered to be an extremely significant measurement of the economy's growth. This report could and most likely will have a huge impact on the entire financial market and will more than likely influence mortgage pricing as well. Here's a heads up on the "what if's": if the estimates are matched rates will most likely rise, but if there is a smaller than expected increase the pricing will improve!

Along with the GDP tomorrow, the third Quarter ECI (Employment Cost Index) is going to be published. The ECI tracks and monitors salaries/bene's for employers, and could greatly impact the view on inflation. If the report shows a significant and rapid rise in costs, inflation will be a huge concern. There is a .9% anticipated increase, but anything lesser than that number will be great news for the mortgage pricing and bond markets! Keep an eye out for this!

And finally, the world is tuning in to the FOMC meeting that started today and will be released tomorrow afternoon. As expectations rise for yet another rate cut, the markets are flattened in anticipation. Honestly, I don't trust the overall outcome of this meeting, and definitely think there is going to be some significant movement tomorrow afternoon when the meeting statements are released.

That being said, I am going to be locking my applications/loans today so they are not affected by whatever is to come. It is just too unsure to float in my opinion!

Market Update - Lock or Float (October 26)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Thu, 25 Oct 2007 12:30:14 -0500

First of all, I apologize for not getting the update out yesterday! I know that a lot of you are reading this, so here is today's:

The bonds opened a little flat even though we experienced relevant economic news yesterday with the existing home sales report. With regard to Wall Street, the Dow is currently down about 102 points and the Nasdaq is down about 36 points. The bond market is currently up by .012%. Due to yesterday's "comeback" on the market, we have seen a very slight improvement in pricing today so far.

The Durable Good Orders for September was released by the Commerce Department which showed a decrease in new orders for larger items of 1.7% (even though it was only anticipated to increase 1.5%). With regard to the bond market, this shows a bit of a weakness in the manufactoring arena in the overall economy; this is good news for bonds!

On a spot of good psychological news today, the New Home Sales report for September was published and showed an increase in New Home Sales of 4.8% which was somewhat anticipated. This report is is also positive news for the bond and mortgage markets. However, the report hasn't had a large influence in trading as much as the durable goods release.

A Labor Department report disclosed 331,000 new claims for unemployment last week; a decline from two weeks ago, but higher than what was estimated. Once again, this is implied as good news for bonds, but most likely will not effect rates all too much.

Today, the Treasury auction is being held (5 year Notes will be sold). As mentioned previously, this will really help measure the investor involvement and interests in the bonds, and could influence a significant rally or decrease in the bonds. The results were supposed to be posted at 1:00, but I haven't seen them just yet. If any adjustments are going to be made in trading, we will see it happen in early afternoon to early evening.

I would definitely look to lock my rates right now prior to the release of the 5-year Note auction numbers. There is too much variance to be sure exactly what they will do. So, since I like security, I am locking my loans today!

Market Update - Lock or Float (October 23)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Tue, 23 Oct 2007 11:41:21 -0500

Ok, folks, I would definitely suggest locking all of your loans today if you haven't done so already! Here's the update:

Stocks are increasing a little which continues yesterday's recovery with the Dow up about 49 points, and the Nasdaq about 20 points up. Today, the bond market is a little stagnant due to hesitation from investors and growing anticipation of this week's news releases. So, the bond market is currently down by about 2/32. You are probably going to see a similar pricing situation that you saw yesterday since there really hasn't been significant news or changes.

As mentioned yesterday, the Existing Home Sales of September will be released tomorrow morning. The estimate for the publication is yet another decline in the housing resales; which also points to a continuous weakening of the housing market. Unless there is a significant difference in the reports from the estimates, this most likely will not affect our mortgage pricing tomorrow.

The Durable Goods Orders will be released for the Commerce Department for the month of September; this is the most relevant and pertinent data being released this week. Here's how we could be affected: Larger than anticipated increase means that rates will probably rise, and vica versa.

The unemployment data is also scheduled for release on Thursday. The second report on Thursday are the New Home Sales reports for September. These really will not play a rold in the mortgage rates or bond markets.

The Treasury auction is also being held on Thursday; during this event, 5-year Notes will be sold. As mentioned yesterday, this auction will help measure investor interest in bonds. If the investor demand proves to be strong, we could see bond prices rise and rates decrease, and vica versa. Look for this report on Thursday morning, and the mortgage rates should be changing based on this information in the afternoon.

So, with everything going on this week, I would lock up any loan that I have closing within 30 days. I will most likely float the loans that are scheduled to close after the 30 day mark. Best wishes, and good luck out there!

New Construction

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Mon, 22 Oct 2007 13:26:24 -0500

I have been getting a lot of requests for New Construction financing. The clients have been telling me that they would have to get the lot first and finance the construction, then they would have to get permanent financing in place. I cannot tell you how relieved they were when I told them they didn't have to go through that entire process!

There is a couple of loan programs that I offer which are designed specifically for new construction. Here are the features:

You only close one time. This means you don't have to qualify two times, and you don't have to worry about permanent financing or losing your home if you don't qualify for that part! This is not only a huge relief to you, but the builder/developer as well!
Conforming loan rates with no add-ons like some competitors
Ability to pay interest only throughout the construction period which saves you on your current monthly living expenses.
Estimated monthly housing costs are waived to help you qualify for this loan program.
Construction terms up to 18 months and down to 3 months
Permanent financing terms of 15, 25, 30, and 40 years which gives you flexibility based on your income and financial situation
Construction periods up to 18 months
Stated income loans are accepted
First and second homes are allowed (sorry investors)
FICO as low as 660 can get this conforming loan financing!

There are quite a bit of details in these features, and I'll go over those in the next few weeks. Please stay tuned for more information, or email me if you have any questions!

*www.family-home-loans.net*

*www.wannanetwork.com/arscherer*

Market Update - Lock or Float (October 22)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Mon, 22 Oct 2007 11:28:16 -0500

And onto this week, folks. Today's bond market is down a little (3/32) contrary to the stocks dropped more this morning. Currently, Dow is down 52 points and Nasdaq is ahead 2 points (for now). Basically, we are looking at similar rates to Friday.

There are no reports scheduled for publication today that would effect our industry, but there are quite a few (4) reports that are scheduled for release later this week along with a Treasury auction.

Existing Home Sales for September is going to be released on Wednesday morning while the New Home Sales for September is scheduled for release on Thursday morning. In general, these publications will shed light on the strenght/weakness of the housing market and also provide a little insight on the demand for mortgages/financing. The reports, most likely, will not have much of an effect on mortgage rates or the bond market if they reveal typical values. However, if there is significant variance from estimations, there could be a slight change in pricing for mortgage rates.

In conclusion, we are in store for a somewhat slow week with reports with regard to the mortgage and finance markets. So, that being said, we are going to be relying on the stock markets and how the investors react to any relevant news reports. With regard to the Treasury auction, it will be held on Thursday and 5-year Notes will be sold. This helps measure investor interest in bonds and could influence a bond increase or decrease. FYI: the most pertinent pieces of information this week are the Durable Goods Orders release and the Treasury sale which both are done on Thursday.

*www.family-home-loans.net*

Market Update - Lock or Float (October 19)

Andrew Scherer - Reverse Mortgages (NRMLA) (Eagle Nationwide Mortgage) — Fri, 19 Oct 2007 13:04:30 -0500

Currently, the bond market is 23/32 up while the Dow is down 204 points and the Nasdaq is down 37 points. With this going on, we could definitely see a good amount of improvement in today's rates; most likely about .25 discount points in our favor.

No reports are scheduled for release today, as I mentioned earlier this week, but the mortgage rates will be heavily weighed by the stocks. The primary reason for the dip in the stock market is the publication of corporate revenue/earnings, apparent credit fears in investors, and the overwhelming price of oil ($90 per barrel). Quite honestly, the price of oil is what is killing me right now - when are we switching to battery and solar power?

Based on the stock market and the bond market right now, we could see more improvement throughout the day today in rates, and I would definitely suggest not locking your loans for the next week (give or take a day). Hypothetically, if stocks continue to decrease throughout the day, we may see an eight to a quarter of a discount point improvement!

That being said, in conclusion, I would advise a float on all of your loans whether they are closing next week, or in 90 days. Keep an eye on the stocks and the bond market!