Blue Skye Guy's Blog

Thou Shalt Not Murder Thy Credit

Mike Tullio, Blue Skye Lending — Thu, 22 Oct 2009 08:10:05 -0500

For the longest time, I thought the credit scoring model was 2 parts magic, one part fairy dust, and three parts pi times the square root of the sum of the numbers in your social security number. But now I know better; it's all magic.

Black magic for a lot of folks these days. But there are some things we can do to lift the curse of sub-600 scores from our land. Stop killing your credit!

IV - THOU SHALT NOT MURDER THY CREDIT

THE SIN- Ignoring the factors that influence your credit score is like ignoring that pesky rash that keeps coming back. Stop itching and start treating the cause. There are some obvious things that murder your score like foreclosures, bankruptcy, judgments, collections, late payments, maxed out credit cards, and lack of accounts. But some of the silent wolves have snuck their way into the hen house and those are the ones that many of our clients are victims of.

I present to you, Exhibit A. Those evil credit card companies are really sticking it to the consumer these days. Borrower with a 750 FICO score has a $1500 balance and a $12,000 credit limit. No big deal. The fine folks at CITI Cards, switch this fellow's interest rate from 7.9% to a floating rate linked to prime; let's say Prime + 24.99%. Not only that, they lower his available credit from $12,000 to $2500 despite the fact that he's paid on time for the past 6 years. His debt ratio on this particular card goes from nothing to 60%, and in turn, his FICO drops 25 points. I'm sure you've seen this and if anyone has a HELOC, it's either been frozen or the credit limit has been cut to the current balance. Can I get an AMEN?

THE WIN - If your credit score has dropped or it's been low for as long as the Cleveland Browns last played in the Super Bowl, it's time to bring your FICO back to life! For folks in the Bradenton-Sarasota area, I urge you to sit down with me and do some mortgage planning. We can figure out why your score is low, look at the obvious and not-so-obvious contributing factors and scheme how to create a better chance of running your credit through Experian's 10 top-secret algorhythms and coming out on top. If you're reading this on Active Rain, find a professional in your area to be your credit score bodyguard; they can help protect you from outside forces that can assassinate your beacon, and sometimes, they'll even protect you from yourself.

Thou Shalt File Thy Taxes With Foresight!

Mike Tullio, Blue Skye Lending — Wed, 21 Oct 2009 20:15:49 -0500

"But I make $60,000 a year!" No, according to your 2008 tax return, you make $12,000 a year and that $250,000 home in Sarasota might be just a bit out of your price range.

It's a bitter pill to swallow but there's a lot of pill-popping going on these days and the self-employed borrowers are feeling a bit sick to their stomachs. If only they would have obeyed Lending Commandment III:

III - THOU SHALT FILE THY TAXES WITH FORESIGHT

THE SIN - What am I talking about? A classic case of poor planning. As a self-employed individual myself, I can completely understand writing everything off on my taxes from my home office to the box of paperclips I bought last week. You want to show as little income as possible so you pay the least amount of tax. But of course, when you want to buy a home, you want to show as much income as possible. It's a painful catch 22, and I'm sure a lot of brokers in mortgageville are feeling your pain as well.

THE WIN - Plan ahead. If you know you are going to buy a home soon, claim more income if you are self-employed. Rental income, second job income, capital gains. Bring it on. True story. Had a borrower this year that was working for his dad's pool company. He wasn't making enough to qualify for the loan he needed, so I suggested he increase his W2 pay and decrease his monthly bonus. He did just that and in 3 months, he quailified for an awesome USDA loan with no problems.

Now, it may take a bit longer for some. Real estate investors need to have two years rental experience for the most part. And mortgage underwriters are looking at the past two years for a lot of types of income. Talk with your CPA as well because they can help you strategize on how to meet your goals. If you plan appropriately, you'll be on your way to saying "10-40 good buddy" in no time!

Honor Thy FICO and Keep It 620

Mike Tullio, Blue Skye Lending — Wed, 21 Oct 2009 09:10:15 -0500

Shazaam! Kaboom! OK, enough pseudo-expletives. It's time to revisit the Ten Commandments of Lending as I see them from the top of Mount Mortgage. Wow, it's apparent I've had too much coffee this morning. Let thee read on!

II - HONOR THY FICO AND KEEP IT 620

THE SIN: I've pulled hundreds of credit reports and it seems like it's a case of the haves and the have nots these days. Either folks are near 800 with flawless credit, or they are closer to 550 with a report that's riddled with judgments, collections, and late payments. If you don't know what your score is, call a mortgage broker and we'll be glad to run a FREE REPORT. Or you can hit www.annualcreditreport.com once a year to get your free credit report. There are a lot of simple things you can do to get your score up, but it comes down to getting rid of the bad stuff and adding good stuff. Most government loan products require at least a 620 these days, so don't be left behind with a sinful score.

THE WIN: Fix your credit! Mortgage brokers and realtors, can I get an AMEN? There are reputable services out there that can improve your FICO score hundreds of points in a couple of months. True story. I had a client with ONE judgement from our friends at Verizon. It was only $144, but his score was a 696 because of it. Not bad you say? If he had at least a 720 FICO score, his rate would improve by .5%! He called Verizon, settled the matter once and for all, had it removed from his report, and 21 days later, his score was a 790! Amazing! It can make the difference between a RATE and a GREAT. A deal or no deal.

So honor thy FICO and you'll be walking on holy ground!

The TEN Commandments of Lending, Circa 2009

Mike Tullio, Blue Skye Lending — Wed, 02 Sep 2009 08:47:27 -0500

Last night, I had a vision of a burning bush. OK, maybe it was just heartburn, but in any case, the fiery shrub spoke to me in an authoratative voice and told me that there was a new set of lending laws I must bring to the people. They are wandering around the dry wilderness of delayed closings, suffering through plagues of bad appraisals and frightening underwriting, and they are simply looking for the promised land: The closing table.

In this vision, I was given a cumbersome slab of granite to bring to the borrowers of today. Unfortunately, it was inscribed in Hebrew and I have no idea how to translate. I think you actually read right to left if I'm not mistaken. Enough! It is time to bring to you, The TEN Commandments of Lending, Circa 2009! Each of the ten lending "plagues" can be defeated by honoring and practicing these precepts, so if you are looking for divine intervention, heed these words!

I - HONOR THY DOWNPAYMENT OR GIFT

THE SIN - By now, it's clear there are some amazing deals on homes, but some people still can't scrape up the funds to come to closing with. In the Bradenton/Sarasota, Florida area, there is less than a 6 month supply of homes under $200K which tells me, people are doing what it takes to get a home. And with the government offering first-timers an $8K tax credit, time is running out on what may be the best buying opportunity we'll have in history.

THE WIN - If you haven't heard, Uncle Sam is footing the bill on an $8K tax credit for first-time homebuyers: I've got a countdown on my FREE Sarasota Mortgage Info site. And with mortgage products like FHA, VA, and USDA, there are plenty of low to no money down loans available for folks. Many of these programs allow the downpayment to come from a gift. So think of someone that loves you, and hit them up for money. Or pray for check in the mail from a rich relative!

Loan Lessons From My 3-Month Old Daughter

Mike Tullio, Blue Skye Lending — Tue, 11 Aug 2009 09:29:29 -0500

If mortgage truth can be found in the sprawling vastness of Internet and tucked away in the blurbs of the Bradenton Herald, then surely it can be discovered in the life of my little daughter, Chloe Sky. I suppose the "experts" would tell you that you need to be intimately acquainted with mortgage backed security trading to know which way rates are going to go, you must study the new MDIA and HVCC guidelines to predict turn times, and you have to be familiar with your 19 different lenders to understand whether or not you can write a loan on a manufactured home in the middle of a giant iceberg. But the truth is, all that matters is sleep, milk, and attention.

Follow me for a second. Abraham Maslow, in his 1943 paper entitled, A Theory of Human Motivation, basically ranked our needs as a human. We will always revert back to curing deficiencies in our lives at the most basic level, starting with physiological needs. If the needs of the body aren't met, then we can't pursue more intangible needs like love, truth, security, and self-esteem. My little girl needs food, and if she doesn't get it, the alarm goes off and she responds (usually about 3 AM). Once she gets those needs met, a peaceful bliss settles throughout our household. Smiles galore.

So how do we make our clients smile? Meet their needs. They could care less about the 50-day moving average and how long their appraisal is going to take. They are looking for shelter. 4000 square feet of it in some cases, but shelter none the less. And if we can create a way for them to get this or stay in this home, we are going be successful. We are the ultimate pacifier in how we handle the process and the information we provide our clients. Our words and e-mails are binkies and blankies.

So despite the Taylor, Bean, and Whitaker disaster, slow turn times, narrow-minded underwriters, teaser rates on every Internet pop-up ad, chameleon guidelines, whacked appraisals, and the rest of the chaos we are in the midst of, we can create peace and treat people with respect and attention. I'm drifting off to sleep just thinking about it. Time for some coffee.

Garage Salonomics

Mike Tullio, Blue Skye Lending — Wed, 15 Jul 2009 13:50:38 -0500

Our neighborhood held their annual "no-holds-barred" bargainmania called the GreyHawk Rummage Sale. You know the drill. Find your junk. Tag your junk. Sell your junk. Get up at stupid-o-clock, start the IV drip of coffee, and hit the up button on your garage door to find a half dozen cars lurking curbside waiting for you to display your wares.

And then the negotiating that would put a hostile corporate takeover begins. Will you take 10 cents for this 25 cent item? Throw retail out the window; this is the land of resale and everything must go. As a seller, you hold on to the believe that your stuff is special and you price accordingly. By the end of the day you realize your garbage is just like everyone else's and it's buy one get one free. Or buy none, just take this lime green lamp off my hands. Ultimately, it's an economy of one thing: CASH.

We are living in a time of Garage Salonomics. Everything in Florida is being liquidated and the only form of payment that consistently works is green and made of this funny looking paper (I was going to come up with something a little wittier, but I didn't have any bills in my wallet to look at for ideas). Here's some garage sale principals that are playing themselves out right now:

1. A slap in the face pricing structure. Zillow did a survey a while back and something like 67% of homeowners in the country still felt their house was worth more than it was. That number is down close to 30% now. Price is 95% of what sells right now and if you can suck up your pride and be realistic with your numbers, you'll end up selling your goods.

2. He who has the cash fills up the back of the SUV with the prizes. If you've played the markets well and didn't follow the trends or do what was popular, then you're in an incredible position to create massive amounts of wealth. You can buy whatever you want at a deep discount whether that's used baby toys or real estate which in some cases is selling for clearance rack pricing.

3. No plastic please. Forget about liquidity and credit. No matter how much money we throw into the system, it's getting harder to borrow. If the ATM spits out money, take it. But otherwise, expect to pay in gold dubloons, yen, euros, or wampum.

4. Negotiate like Trump. Pretty sure I read in one of Trump's books that he uses a very simple negotiation technique that works at garage sales or land sales. He asks the question, "Is that the BEST you can do?" Keep asking it until the seller says YES! He's saved millions of dollars with those words and I've tried it myself and it works.

5. Think outside the driveway. During my garage sale, I was selling this mini-fridge for a friend, and a guy came up to me and really liked it. BUT, he had just bought a bigger one down the street. I said, "Well, why don't we just trade?" It really confused him and he thought about it for a while and eventually, he bit. I then turned around and sold the bigger one for five bucks more. The point? If you can think creatively, look for ways to get deals done, and just try it, sometimes it works. Barter if you don't have cash. Buy and then sell; take the profits and buy more.

There are probably a million more Garage Salonomic principles to cover, but it's past 2 PM and we're shutting the driveway operation down until next year. Feel free to chime in on your favorite insight and I'll see you at 6 AM parked outside your home soon! (OK, that sounded kind of creepy).

Mike Tullio is a Managing Partner at Blue Skye Lending and he's got a pocket full of quarters just waiting to be spent this weekend in a driveway near you.

$8K No Way! $15K Hip Hip Hooray!

Mike Tullio, Blue Skye Lending — Thu, 18 Jun 2009 08:58:02 -0500

Have you heard about Sen. Johnny Isakson, a Republican from Georgia (and a former real estate professional) who has introduced legislation that would beef up the tax credit that currently exists for first-time home buyers? The news just emerged like a baby chick pecking its way out of its shell and the big idea is to nearly double the tax credit for buying a home this year to $15K AND make it available to anyone buying a primary residence, not just first time homebuyers. Wow.

Why not just make it an even $20K? And while the US Treasury prints another $2 trillion, why not step it up to $50K? The intent is to encourage the step-up buyers to enter the marketplace and start buying homes along with the FTHB that have already flooded the open houses and model homes. Will it work?

Maybe. It's a pretty simple equation. Free money + low rates + cheap houses = More sales. The ultimate variable though is the emotional aspect of buying. The paranthetical components of the above equation are (confidence) and (motivation). Can money really move people to buy homes? Enough of it will. People spend millions on lottery tickets and humiliate themselves by eating sheep brains on TV all in the name of winning the ultimate prize: cash. Isn't a home an even better prize?

An Officer and a Gentleman (or Woman)

Mike Tullio, Blue Skye Lending — Tue, 16 Jun 2009 05:18:45 -0500

I got nothing else! It's been some time since I've seen Richard Gere win Debra Winger over and prove to Louis Gossett Jr. that he wasn't some sniveling little punk. It seems to me that finding a a good loan officer is equally as challenging these days. We're a small company of 6 full-timers in the mortgage industry and for the past 6 months our search for mortgage consultants has been our own version of a Dan Brown novel: A lot of looking but not a ton of finding.

Right off the bat, we haven't advertised or posted a position. No Craigslist, Monster.com, local paper. We haven't run a table at the local Bradenton/Sarasota job fair. But we have had 3 promising prospects walk through our doors and like what they saw. Business cards, laptops, a plan to conquer the world one loan at a time, a full-doc gleam in their eye. They were professing their love of Blue Skye Lending and knew that NOW is the time to position yourself as the lending expert in our local market.

And then, they didn't show up for 3 weeks. Oh, something "more stable" came along. Come to find out, finding a loan officer and a gentleman/woman is a little tougher than it would seem. Overcoming the obstacles of offering someone a straight commission position with no guarantee or draw option is quite a task. And mortgages are just plain tougher to get done these days; you actually have to be a good salesperson and not just an order-taker.

So how are you finding A Few Good Men? If you have any suggestions, please let me know as we are looking to grow our company in the next 30-90 days. Appreciate your advice my fellow officer and love lift us up where we belong!

Are We Headed Toward 7% Mortgage Rates?

Mike Tullio, Blue Skye Lending — Thu, 11 Jun 2009 21:07:54 -0500

Seriously, I'm holding out until rates goes to 4%. The newspaper and media experts all told me it would happen. Heck, even the US Treasury Department talked about it.

But here we are at 5.75% (in a matter of a few weeks, after being closer to 4.875% for months) and there's a pretty good chance we are headed toward 7%. Many blogs ago, I predicted we'd hit 5% (rates were about 6.25% at the time) and just this evening a fellow brother in the mortgage industry, KEVIN HANCOCK, commented on my lucky prognosticating and asked where I thought we were heading. Back to the 4%'s or up, up, and away? I figured it was worth posting my response to him in a separate blog entry, so here we go. Crystal ball time.

Hey Kevin! So funny that I wrote that blog post in September of 08 and so much has happened since then. We had that massive stock market correction and banking world avalanche. Rates did go to 5% and below. Depsite the blindfold we all wear, I may have hit the pinata on my predictions.

Now what? The recent rate run-up concerns me. We were skating on thin ice for months with the low rates and we've finally broken through and it doesn't feel all that good. With the commodities market, bonds, and treasuries selling at an insane pace, the fundamentals aren't good for a return to 4.875%. Not good at all. The FED spending $1.25 trillion on mortgage-backed securities seemed like a good idea until the novelty wore off and everyone else stopped buying.

Here are my predictions for the rest of 2009:

1. We'll have another temporary run at 5%. It will mainly be in response to the FED's announcement to buy EVEN MORE mortgages, probably to the tune of another $1 trillion. This will be in tandem with some good economic news that will give foreign investors a little more confidence in our lending system. This will last a few weeks, so blast your database your concerns and let them know this may be their last chance to get into the 5% range. Lock on the dips, there may not be many left.

2. Rates will be in the low 6% range by the end of the year; maybe even 6.5%. The FED's mortgage-backed security purchase program will run out of cash and then all bets are off. Prime will also be at 4% after some concerns about inflation emerge and the FED decides in their infinite wisdom that printing money like bonkers should be tempered with a little bit of fiscal responsibility.

3. Money will be flowing out of mortgages and into everything else. Gold, oil, muni bonds, T-notes, annuities, and even coffee cans in the backyard. This can only have an adverse effect on interest rates. There will be a natural pull higher and higher and higher still. Amen.

Will we hit 7%? There a pretty good chance we will in the next 12 months. Hopefully my next post will be sooner than that.

The Quest for the Holy Sale

Mike Tullio, Blue Skye Lending — Wed, 18 Mar 2009 12:18:01 -0500

Imagine this. You've toiled and traveled months, years even, and you feel as if you have come to the end of your rope. You look to the heavens in outright desperation, and then the clouds part, and it appears. The Holy Sale. Angels sing.

It seems like that is the tale of every mortgage consultant these days. We are working so hard to get things done. Transactions aren't just a stroll through the countryside, they are brutal journeys through the most treacherous landscape known to man. Underwriting.

We are now in the world of appraisal reviews, guideline changes, rising credit score requirements, and bailing MI companies. Depsite best efforts by President Obama, Congress, the Treasury, and the Fed, it's still a small miracle to get a purchase loan closed. But to solve our lopsided housing supply/demand curve, we need to get more buyers qualified to buy. To do that, we need to do a couple of things:

1. Confidence. You can't legislate fear out of people. We need a concerted effort by lawmakers, the media, and the real estate community to bring back the love for loans. When we start hearing the word "bottom", we are well on our way.

2. Credit. A lot of folks are in a serious liquidity crunch. Just last week, my credit card company cut my limit and raised my rate. Just plain evil. With less money, things start getting paid late. Mortgages stop getting paid. With the avalanche of short sales, foreclosures, and loan mods, people with great jobs and plenty of assets can't get a loan. These are the very people we need in the market as buyers. By year's end, we will see some type of sweeping credit legislation that somehow allows borrowers to wipe the slate clean on late mortgages and accounts with qualifying hardships. If this happens, we could see sales back in the black.

3. Common Sense. Right now, lenders are just plain dumb. If they'd work with people who are late on their mortgages, we'd have less people trying to short sale. Less people walking away. This would normalize property values and you wouldn't have a neighborhood of comparable sales that seem to be dropping lower by the nanosecond. And on the lending side of things, MI companies and lenders are trying to drink sushi through a straw. Stop this nonsense with declining markets. If there were any time to take a risk on using a house as collateral to lend, now is the time. There just isn't much more room on the downside. Bring back some reasonable guidelines and the sales will follow.

There are no easy answers, but the Knights of the Closing Table could use a little assistance. I see brighter visions ahead, so let's continue to pursue the Holy Sale!

Will Rates Go to 5%? They Just Fannie Mae.

Mike Tullio, Blue Skye Lending — Mon, 15 Sep 2008 10:58:52 -0500

OK. Time to get out the crystal ball. We've been hovering in the low 6% range with the 30-yr. fixed interest rates (despite what all of the pop-up ads on Internet proclaim) and a few bits of news lead me to believe we may hit 5% by the end of the year.

1. I see, I see. I see wheelbarrows full of money being rolled into the farmhouse of Mortgage-Back Securities (MBS). With the FED stepping in and bailing out, I mean, backing, Fannie Mae and Freddie Mac, our mortgages have become attractive again and investors are lining up to buy. Especially China. More buyers means better rates for us.

2. I see something else. I see stocks continuing to tank with bad news in the financial sector (e.g. Lehman, Merrill, the list goes on). This is good news for bonds and MBS. Rates MUST go down as a result of this higher demand for a stable investment.

3. AH! Another vision. I see a nailbiter of an election with one of the key issue being our economy. Both sides have their take on how to get us out of the housing mess, but in the interim, all of the attention on lending solutions will benefit us.

4. One more scene has appeared through the fog. I see more legislation coming out that will favor the homebuyer and encourage the purchases of foreclosed homes. With rates in the 5% range, more people can get into those homes, so we may see (and already do see with the FHA 5/1 ARM) some cheap money available to help us recover from this housing bust.

OK, maybe it's not as mysterious as gazing into a crystal ball, but in the words of The Little Drummer Boy, "Do you see what I see?"

FHA (In)Secure

Mike Tullio, Blue Skye Lending — Thu, 07 Aug 2008 17:02:04 -0500

All signs are pointing to FHA as the savior of this market. Numbers don't lie. FHA originations were in the 2-3% range just a year or so ago; now I wouldn't be surprised to find it closer to 20% of the market share. Amazing loan programs, no minimum credit score (sort of), and 3% down. It's a sweet deal. We got our FHA approval about a month ago and I can't tell you how excited we are about their programs. All but one of them.

FHA Secure. I'm still trying to figure this one out. You have a borrower whose ARM loan resets, the payment goes up, and they get crushed trying to keep up. FHA Secure was orginally established last September to help these folks out and put them in a fixed loan with a lower rate. In July, FHA updated those guidelines and now you can refi any loan, fixed or adjustable, into an FHA Secure loan. Makes sense so far.

But what happens when you owe more than the house is worth? What if you have two mortgages? Now your work is cut out for you. What if you're late on your payments? New guidelines allow lates, allow you to write down or short pay a borrower's current loans. and allow unlimited CLTV's. But is anyone actually doing these loans? After calling all of my wholesale AE's, I've only found one lender (Taylor Bean) that is writing FHA Secure loans. What good is a program if no lenders are on board? I'm trying to figure this one out, so any input would be appreciated. For now, I'm getting mixed signals and I'm looking for a better sign!

Type Nay Personality

Mike Tullio, Blue Skye Lending — Wed, 06 Aug 2008 14:27:35 -0500

I am ashamed. It has been weeks since last posting and it's amazing how quickly good habits can be obliterated. A diet can be crushed in one sitting when placed in front of a package of Oreo DoubleStuff cookies. A hasty trip through a school zone whilst running late for an appointment can mangle a perfect driving record. A day of flossing missed and suddenly you're in for a couple of root canals.

So here I type in a bed of my own remorse, covered with a blanket of guilt, back propped up against a pillow of missed opportunity. How do I get out of this mess and back to AR greatness? One letter at a time. I peck away at the keyboard. I start over. Nothing I can do about the blogs of June and July. Just keep typing and set some realistic goals moving forward. 3 posts a week. 20 comments a week.

That's the beauty of our business. You can pick up where you left off. People are still buying houses and getting mortgages and you and I can be the ones to meet those needs. It just takes disclipline, motivation, and creativity. As soon as I click "Post Blog Entry", I'm back. Determine what it takes for you to get back where you need to be, and soon enough, you'll have Type Yay Personality.

Cleaning Out the Lint Trap

Mike Tullio, Blue Skye Lending — Mon, 12 May 2008 11:14:17 -0500

Face it. Lint is one of the last things we think about on a daily basis. You may shove your hand in your jeans pocket and pull out a mysterious wad of mangled paper and fuzz, maybe even wonder if it was an important note that went through the wash, but whether you sock it back in your pocket or toss it, lint just doesn't matter. It's annoying on black pants or in your navel, but it doesn't hamper your quality of life. Until the dryer doesn't shut off.

I thought it rather odd that my clothes had been drying for about six hours the other day and after pulling my scorched jeans from the heat, I decided it was worth taking a closer look at the problem. Turns out, if you don't clean the lint trap on your Maytag, the lint travels up the vent stack and starts to accumulate. Eventually, this forms a lint clot on the vent grate and it jams the air flow up better than a guy swallowing too big a bite of a porterhouse. If left on too long, the intense heat can actually cause a fire and do some major damage to your home.

So after playing appliance man, hopping on my roof, and clearing the fuzz clot, I decided to be a little more conscientious about cleaning out the lint trap before I burned my homestead down. Which made me think: What are the lint traps in my business that I have been neglecting?

Maybe it's the stack of personal, hand-written thank-you notes I've been meaning to get to. Could be the log-jam of unorganized e-mails collecting in my inbox. It just might be visiting those realtors' offices that I used to do business with. I've certainly accumulated a pile of program guideline changes I've been meaning to look over. Whatever the case may be, the little things add up and start constricting the flow of your business. They can even potentially cause fires that could've been avoided.

So take a look at things you've been meaning to do in your business today. And as the zippers and buttons and wet clothes of your work clank around in the dryer of your mind, remember to ask yourself, what's in my lint trap?

Divorcing Your House

Mike Tullio, Blue Skye Lending — Tue, 15 Apr 2008 13:46:16 -0500

It's over. The love is gone. We've drifted apart. Sure, there was a time when everything seemed wonderful. How crazy were we having our first lien right away? Remember when we'd spend the weekends together, you, me, a paintbrush, some power tools? You gave me worth and value and it felt so good.

I was so giving in the past, in fact, I gave until it hurt. Our beautiful second lien came along a few years later. I took you on that amazing 7-day cruise through the Eastern Caribbean. I put your kids through boarding school. We put in that pool you always wanted. I even helped buy the boat of your dreams and the Escalade SUV. It was so good for so long.

But something changed in the past few years and I feel like we're strangers. All you want to do is take, take, take and I've got nothing left to give. I thought you knew me and what I worth, but it turns out I was wrong. You look at me with regret, contempt, and sadness. You wonder why you ever got involved with me. And that hurts. Irreconcilable differences.

So the paperwork has been started. My attorney will be contacting you shortly. The relationship is beyond repair and it's time for both of us to move on. And in case you wondered, you're the one that's going to leave. You get the debt, and I get the house.

Is Foreclosure A Fad?

Mike Tullio, Blue Skye Lending — Sat, 12 Apr 2008 10:56:39 -0500

It's getting interesting out there. The foreclosure rate is increasing exponentially and the media is eating it up like a Chinese buffet. You can't turn on the tube without a well-polished reporter spewing forth another factoid about the topic, and rue the day that an evening news broadcast doesn't mention the floundering housing market.

But is this compounding the problem? Foreclosure was the dirty word of the lending world just a few years ago. You had to be on the brink of financial ruin or the victim of a traumatic life change to walk away from your home. It's getting easier now. Heck, millions of people are doing it, so why can't I? It's the lender's fault anyway for sticking people in bad loans to begin with, right?

I remember back in high school (the mid 80's) when my history teacher said that one out of four of us would be divorced in our lifetime. It was shocking. Decades before, divorce was an abberation, a social blip. Now look at the marriage statistics. Half of everyone joined in holy matrimony end up breaking their vows. Did our society create this monster by making it more socially acceptable to divorce? I drive by this little office now and again called ASAP Divorce, and for $199, they can make it happen.

I'm starting to see the same thing in the lending world. People signed promissory notes; they gave their word that they'd pay back the money they borrowed, and now they're starting to walk away. And for $995, you can get a company to help you do it. Yes, there are consequences, but I can repair my credit in 9 easy steps, wash my hands clean of a bad situation, and life will go on.

What will be the lasting effects on our country's financial fiber? Is the foreclosure boom just beginning? Does anyone have any answers? Or are we headed for moreclosures?

Are They Leads or Bleeds?

Mike Tullio, Blue Skye Lending — Thu, 03 Apr 2008 09:02:21 -0500

I just hired a new loan officer that has been successfully working Internet leads for the past few years and he has requested that I look into purchasing a batch of these things. I've never bought a lead and it feels kind of weird to me. All of my business is referral-based and that's the way I like it; I enjoy relationships with my clients and if I treat them well, they come back.

Leads seem very cold. Some potential customer fills out a bunch of Internet quote forms one night and these companies running the websites harvest the information and divvy the leads up to paying customers. I know there's no such thing as an exclusive lead, but I wanted to see if any of you in the AR community have had any luck with buying leads. Ultimately, they're only as good as the individual working them, but I'm sure it helps to have a quality source of leads so that my loan officer isn't the 50th person to call these folks.

My loan software Encompass is affiliated with LoanBright, ReallyGreatRate, Key Leads, and BigMortgageLeads. Do any of you know anything about these companies? Are there other lead companies I should look at? Any advice you can provide would be huge. Hopefully you can lead me in the right direction!

What's All the Bracket? NCAA Tourney Thoughts

Mike Tullio, Blue Skye Lending — Tue, 01 Apr 2008 14:25:13 -0500

Big week in the Men's College Basketball world. The field has narrowed from 63 teams to the Final Four. Interestingly, the four teams that were seeded #1 are the four teams that are left. There's usually some surprise team in the final couple of games; some underdog that rose from obscurity to greatness in the course of a few weeks. But not this year. The four best teams have outlasted the rest of the field.

Kansas, UCLA, Memphis, and North Carolina. At the last second, I joined a pool with 9 other guys, threw in my $20, and hoped for the best. Literally. I picked the four strongest teams to win. And they did.

Which led to me to this: Many times, only the best survive. As we live out this period of real estate Darwinism, the strongest realtors and mortgage professionals will emerge. The industry is consolidating and rather than get eaten by the bigger, faster animal, our goal is to become the one doing the eating. We must call back, prospect, cooperate, communicate, network, study, innovate, and change better than anyone else in our market.

Here's what I've done:

1. Call other mortgage companies and ask them how we can help each other.

2. Look into Internet Leads companies to provide a new source of business.

3. Set daily goals of the number of clients I hope to talk with.

4. Create a foreclosure bus tour that takes qualified buyers directly to bank-owned properties here in Manatee County (see: Foreclosure Bus).

5. Volunteer to facilitate a local real estate investor club in Bradenton, FL.

6. Hire new loan officers that share the same business philosophy as we do.

The big game is here. Teams are dropping out and getting beat. But there will be winners and I'm hoping we all fall into that bracket.

The Truth About Traffic

Mike Tullio, Blue Skye Lending — Mon, 25 Feb 2008 10:27:00 -0600

I've been seeing these things a lot lately. Those black tubes stretched across the various roadways I drive. At first I thought they were some kind of traffic enforcement device and there were cops lurking nearby waiting for suckers like me to fly over them at unlawful speeds. But no, they are actually there to measure traffic counts. As the tires pass over the rubber tubing, the change in air pressure registers on the digital readout.

I guess road planners use these readings to strategize traffic flow. I'm sure other folks use them to provide information for commercial real estate purposes, enticing would-be investors with impressive vehicle traffic numbers. It makes me wonder what kind of counters I have set up in my business?

1. Web traffic. Do I have ways to measure how much business is being driven my way through my web-based efforts? If I know that 85% of people are checking me out on the Internet, doesn't it make sense to put some kind of counter there so that I can figure out how to make changes if needed? Realtors are so good at utilizing websites, but as a mortgage guy, how can I do better?

2. Phone traffic. I've at least started keeping a phone log of who I talk with everyday. I'm surprised I haven't grown a third ear from the amount of time I've spent on my cell phone lately. If it's ringing, then I'm doing something right. Question is, how fast am I returning calls? How efficient am I on the calls I do make and take? And how much I am using my phone to connect with past clients and referral partners?

3. Foot traffic. Ultimately, I want to meet with many of my clients. I realize there are some that do everything over the phone. They buy leads, work them, quote rates, and they enjoy this type of work. I don't. I am part of community and I am in the business of forming relationships. So my end goal is to drive business to my 1,800 sq. ft. office space. Why? It involves committment. If someone takes the time to meet with me, I go to work for them. So am I getting enough clicks through my doorway? If not, what do I need to do to make that happen?

So how's your traffic today? Is your road bustling with vehicles or is it closed for repairs? What are you doing to study the patterns in your business? If you aren't doing anything, then your street's a dead end.

Running a 10K Only Took Me 6 Weeks!

Mike Tullio, Blue Skye Lending — Fri, 08 Feb 2008 17:15:18 -0600

10,007. Every point, every blog, every step has been worth it. A huge thank you to the AR community for your help in reaching my first 10,000 points. Yeah, it's about more than that, but as we all know, we are in a goal-oriented industry. We are measured by our performance. Closed loans. Closed homes. Sales. How do we know if we are achieving what we have set out to do unless we write out our goals and then set deadlines in which to meet them?

I have made a lot of friends and developed some fantastic daily disciplines during my first 10K on Active Rain and I'm looking forward to much more of the same moving forward. Blogging. Connecting my brain and my keyboard. Checking out what other people are doing and saying. Establishing a dialogue. So thank you for reading what I write and for being part of this wonderful community of professionals trying to be part of the solution. The first few miles of a marathon are some of the hardest, but you can't finish unless you start. Here's to the race and my fellow runners: I hope the next 10K is even better! (I also hope to improve my time.)

Don't Forget to Flush!

Mike Tullio, Blue Skye Lending — Thu, 07 Feb 2008 21:56:54 -0600

No, this isn't a Texas Hold 'Em advice column. I pretty much stink at cards because as soon as I get a good hand, my ears turn red and I start laughing. Needless to say, I've lost a lot of $20 bills in friendly games with a group of guys gathered in a garage around a bowl of cheese puffs and piles of brightly-colored chips. But not last night. Last night, I won the entire tournament.

OK, it wasn't really a tournament, but it was a local networking event called a poker run. You show up, get a card, and then you hit up four of the businesses housed in this large office building to get the other four cards to complete your hand. At 6:30 PM, the best hands get into the finals. One twist in the game was that you could trade with other people. I guess that's the idea at a networking event, right? To talk with people?

Through the luck of the draw, I ended up with a jack, queen, and king of spades. Not too shabby. I then bumped into web traffic expert named Merv and had a great conversation with him about his business and SEO ideas. I noticed he had the ace of spades and he generously offered it to me for my king of hearts. Funny what happens when you just talk with people. find out what drives them, and listen. They may hold the ace up their sleeve that you've been looking for.

Now I had a really good hand. All I needed was the ten of spades to have the best possible hand you can have in poker: a royal flush. I spotted the card in the hand of a realtor, Angie. She had her guard up from the moment I approached her and after a minute of talking, she had revealed to me that she had never gotten a referral from a mortgage broker. She already had a good friend she was working with at Regions Bank, and she wasn't interested in giving me her ten or really even the time of day.

I started asking questions. Funny how people let down their defenses when you take an interest in them. Next thing I knew, she had invited me to come speak in front of all of the realtors in her office. Still no ten of spades though, but I was fine with that. I had made some new friends, so I was already a winner. As the emcee came over the speaker announcing that it was time for anyone with a royal flush to come up to the front and play in the finals, Angie walked up and gave me the ten of spades. She smiled and said, "I guess you need this more than I do."

I went on to win the whole contest (my wife is thrilled with the manicure/pedicure/Swedish massage I won). Now I'm not claiming to be some networking wizard or the Dr. Phil of the real estate world, but what I do know is this: there is a better way to play the game. You hold your cards close, don't take any risks, and refuse to have fun, well, I think you'll end up getting royally flushed. But if you put yourself out there, truly enjoy people, and give with no regard to getting, it is then that you'll head straight to the top. It will certainly suit you well. OK, I fold.

The Leaning Tower of Me-za

Mike Tullio, Blue Skye Lending — Wed, 06 Feb 2008 23:17:21 -0600

About a month ago Kate Bourland bestowed upon me the wonderful honor of a Me-Me nomination. In true loan officer fashion, I closed this transaction in 30 days. Here we go folks.

A Handful of Things You May or May Not Want to Know About Me:

1. A life supply of red pens. Before the mortgage biz, I actually taught high school English for 12 years. Loved almost every second of it and I miss it every day. It's tough for me to read the blatant improper use of the word pairings there/their and your/you're from Active Rain members, but I'm learning to let it go. Or is it goe?

2. What lovely book ends. I've written a book. It's called GET BIG. I even got a publisher in Atlanta to pick it up, but I haven't had time to revise it. The main character is a skinny high school kid that gets bullied and then begins to lift weights to exact his revenge. Yeah, I know. Just finish the thing.

3. The sound of music. I've composed a CD of grammar rap and guitar songs. See #1 and you'll know why. Eventually, my disc Grammar Tyme, will be released and such hits as Capitalize Me, Silent E, Dear Webster, and It's All About the Dickinson will fill the airwaves. I even have a rapper persona named Tic Tac. Scary I know, but my students loved it. And I know the rest of the world will too.

4. Keep it in the family. I have an amazing wife of 8 years named Meadow, and a 10 month old son named Tyson. They are the drivng force behind everything I do. I really couldn't ask for anything more in life. We enjoy boating, tennis, snowboarding, drooling, eating with our hands, playing peek-a-boo, and swimming.

5. Get a job. I've been a lot of things to a lot of people. Just to name a few: hotel dishwasher, camp counselor, golf course maintainer, dental assistant, grocery store clerk, lifeguard at a Days Inn, personal trainer at Bally's, snow shoveler, restaurant manager, copy writer for a novelty item company, teacher, tutor, mold injection machine operator, door to door greeting card salesman, newspaper subscription telemarketer, housesitter, floor sweeper for a steel factory, rock remover on a horse racetrack, and even a professional model. OK. I lied about the last one.

And now, in the glorious tradition of Me-Me-ifying, I am tapping the virtual shoulders of the following fine folks:

Jim Skal of Oxford Mortgage

Jeff Fullmer, Idaho's Loan Expert

Rich Sweum of Homestead Mortgage

One Down, Twenty-Five To Go

Mike Tullio, Blue Skye Lending — Tue, 05 Feb 2008 09:11:30 -0600

I just read an article about the 2007 Chicago Marathon and my calf muscles cramped just thinking about what these 25,000 people went through. In case you hadn't heard about it, Chicago had an unseasonably warm race day, to the tune of 82 degrees and 78% humidity at the start of the race. Not a cloud in the sky either. Extra watering stations were added, misting tents were set up, and thousands of volunteers lined the streets to help the runners on their way.

A couple of hours later, the marathon was in full disaster mode. Runners were collapsing, fainting and falling headfirst into the pavement, and water and food supplies were running out rapidly. It was chaos. The organizers of the race didn't expect things to get that bad, but hundreds of folks ended up in the hospital and one runner died that day.

First off, I can't imagine running 26 miles in the first place. I hit the treadmill for 2.5 miles this morning and I was spent. But in those conditions. They tried to cancel the event mid-race, police began diverting runners, but some 15,000 still finished. The average finish time was up 75% over years gone by.

So how DO you run a marathon? One stride, one block, and one mile at a time. Running has always been an apropo metaphor for life, work, and discipline. A picture of consistency, focus, and persistence. Not so much in the real estate market the past few years. I almost pictured a throng of tank-top wearing, athletic-shoed realtors and mortgage brokers lined up at the starting line in, say, 2005. How hard could it be to run 26 miles? Everyone was doing it. We were full of unfounded confidence and came out sprinting the first mile.

Then the heat was turned up. We found out how underprepared we were. You mean, people train for this thing? And the runners cramped up, passed out, got sick, dropped out, took up a different sport, got angry at the people who organized this race (lenders, appraisers, investors), and the other runners (other real estate agents and mortgage brokers). It's was a catastrophe.

So who's left? Who is still running? You and I. We're on Active Rain. We're calling clients and referral partners. We know the rules of the race are changing, but instead of getting angry, we adjust to the new course. We work, talk, track, goal-set, and run with the finish line in mind, but realize each step counts. So stay hydrated, pace yourself, tap into your inner strength, and run my friends, beacause the way you finish the marathon is to keep moving forward. One step at a time.

Mutant Carrier Pigeons, Dancing Lizards, and Cashew Perfume

Mike Tullio, Blue Skye Lending — Mon, 04 Feb 2008 14:09:57 -0600

The Superbowl has come and gone, but the memories of the commercials linger in the air like the smell of wet socks. From what I heard, a 30-second time slot ran the advertisers something like $2.7M. Or $100,000 a second. Just you reading my first three sentences would've cost $500,000, if you're a fast reader. Sure, there was some memorable moments like the E*Trade commercial with the baby who talked and spit up after buying stocks online, but for the most part, I'm not really sure that was money well spent.

Which made me think of my 30 second commercial.

I've heard when you meet someone, you have about a half a minute to make an impression. To communicate what you're about. The Superbowl commercials this year reminded me that my message is just as important as my delivery. In those thirty ticks of the clock, I have to get someone's attention, say something that reveals what I do, and create a desire for them to connect with me.

Countless hours go into the marketing department think tanks for the Superbowl commercials. I imagine a cluster of coffee-swilling, bleary-eyed PR execs filling a room and throwing out the most ludicrous ideas hoping something will resonate as a homerun of a concept. Do I spend that much effort on my 30 seconds? I get a lot of marketing program e-mails, and many of them have to do with templates and scripting and despite clicking the delete button every time, I know there is some truth to those spams. It would do me good to write out my half-minute message.

I need to know my script. My ad. I need to be able to sell myself (no, that doesn't involve taking my clothes off or harvesting an organ). I must be ready for the elevator test. If I meet someone in an elevator, what am I going to say in those moments to create a future client? Or do I just stare at the numbers? Our business is one of opportunities, and if we're not ready for them, then we're just another bad commercial with a talking panda or meaningless celebrity appearance.

I'm Mike Tullio and I Endorse The Following Message

Mike Tullio, Blue Skye Lending — Thu, 31 Jan 2008 15:25:18 -0600

I laugh every time I see a political ad on TV and at the end, the candidate's mug pops on screen, they offer up a cheesy smile, stare sincerely into the camera, and tell us how they endorse the commercial. Really. Oh, now I believe all of the political wrangling and posturing that just took place for the past 30 seconds now that you've put your stamp of approval on it. I find myself thinking: Does it really matter that they endorse the ad?

A few hours ago, I had a mental dot connecting moment. Endorsements. Ultimately what these folks in the ads are striving for is credibility. Legitimacy. Trust. I spent my lunch today with a good friend of mine that runs a branch of a local community bank. I've sent a lot of equity line business his way because I know he will take good care of my clients and give them a fantastic product as well. He took me by a dentist's office on the way to the restaurant and made some introductions and told this dentist that I was the person to talk with regarding mortgages.

Turns out the dentist needs to refinance his home and he wants to get started today. With me. Sure, it makes headlines when Schwarzenegger endorses McCain, but what made my headlines today was my banking buddy endorsing me. Which brings up two questions:

1. Am I endorsable? Do I run the kind of business that people talk about with their friends and family? Do I offer something of value? Do I have a unique selling proposition (USP)?

2. Who do I endorse? Am I associating with the highest caliber professionals? Would I feel comfortable referring my friends and family to my business associates? Who has my vote?

We have a lot of power in the places we live and work. Our vote counts. Our endorsements matter. So next time one of those annoying ads come on the tube, don't change the channel, be reminded that the business world runs on credibility, loyalty, and trust. And be the candidate that delivers on their promises in this election year and you're guaranteed to be a winner at the polls.