Justin Swapp's Blog

Interest Rate Report

Justin Swapp (Reliant Financial Group) — Wed, 11 Apr 2007 18:07:44 -0700

As a mortgage professional its always important to stay abreast of what the market is doing, and where the interest rates are going. I feel that its our duty to inform the potential borrower honestly. To help me do this I have found a good resource. This article below is posted at http://www.realestateabc.com/rates2.htm and included below for your convenience.

Interest Rate Report - April

Mortgage Rate News

During March, fixed mortgage rates remained remarkably steady, after about a 1/8th percent decline in February

Analysis

Iran needs money.

Since the Iranian government owns the oil companies in its country, having nationalized them back in 1951, what better way to get some extra cash than having the ability to charge more for oil?

Of course, you need a crisis.

Kidnap a bunch of British sailors and voila! Instant crisis. Oil prices were lower than $50 per barrel back in January and now they are about $66 per barrel, perhaps heading higher. Iran gets its money, honey.

Americans pay more for gasoline, of course -- and prices were already on their way up for eight straight weeks because summer driving season is coming soon and, as always, our refinery capacity is very tight.

It costs a LOT to fill up one of those big SUVs with Super. Heck, if you have one of those rice burner sports cars with maybe a 15-gallon capacity, it almost costs $50 to fill up the tank on that. Even if you DO get 30 miles to the gallon when driving sensibly.

Spending more money on gasoline means less money to spend on other stuff, and adds to inflation. Merchandise costs more, because LOTS of stuff gets made with petroleum products and consumers have less money to spend on it.

That could lead to a slower economy.

So Bernanke should lower short-term interest rates, right?

Well, if he does that, the value of the dollar goes down. Imports cost more. Higher costs means more inflation and perhaps a slower economy. Higher inflation also means higher interest rates.

So Bernanke won't do anything (we think).

The dollar may ALREADY be heading down, anyway, thanks to the new trade sanctions against China.

Plus, China owns a lot of U.S. Treasuries and if the dollar goes down in value, so do the value of those securities. If China ever sells a bunch of them at once, the dollar will go down even more. They don't want that and we don't want that, but it is a possibility.

What a complicated world we live in.

Interest Rate Future

Don't expect Bernanke to do anything with the Federal Funds rate. That will be seen as anti-inflationary by long-term interest rate experts. Couple that with a potential for a slowing economy and rates should continue to drift lower, though very very slowly.

Or remain about the same.

No guarantees, as always.

View Current Mortgage Rates
View Report on Existing Home Sales and Prices

Real Estate Report

Justin Swapp (Reliant Financial Group) — Wed, 11 Apr 2007 18:05:01 -0700

I found this report interesting, and perhaps you might too. This article can be found at: http://www.realestateabc.com/outlook.htm

Existing Home Sales - April Report

Home Sales Pace Summary

Sales of existing homes were UP 3.88% in February, when compared to January. Good news for three months in a row. Seasonally adjusted, we are on a pace to sell almost 6.7 million homes this year and that is more than last year.

What housing crisis?

Actually, we don't mean to be flippant, but 2005 was an extraordinary year in the housing market and so many "experts" are comparing today's "good" market pace with a year that was out of whack. There are plenty of buyers in most local markets. In markets where there is a problem, it is generally a problem of too many sellers -- not a lack of buyers.

Sales were down 3.6% compared to a year ago, though, when the pace was still in the stratosphere from 2005.

We will report on March sales near the end of April, when figures are released by the National Association of Realtors.

Sales Pace by Region

For month to month comparisons, sales were flat in the West, up 1.57% in the South, 3.95% in the Midwest, and soaring 14.15% in the Northeast.

Compared to last year at this time, sales are down everywhere except the Northeast, which showed an increase of 3.42%. Sales were down by 9.59% in the West, 4.44% in the South, and 1.86% in the Midwest.

Inventory UP Slightly

At the current sales pace, it would take 6.7 months to sell all homes currently on the market. Though we are not seeing a shortage of buyers, there are currently too many homes on the market in most areas of the country. Eventually, that will resolve itself.

Price Appreciation

Nationally, the median average sales price fell again, this time by 1.34% from last year to a median average price of $212,800. Prices declined 1.37% in the Northeast, 2.92% in the South, 1.26% in the Midwest, and were actually UP by 2.24% in the West. Of course, the west coast has had an exceptionally mild winter and that may have an impact on sales activity. Traditionally, smaller homes sell during the winter and larger homes during the summer, and the good weather may have skewed some of that activity.

Median Average

The median average is the "midpoint" sales price. Half the home were sold above that price and half below.

Home Sales Pace Defined

We report on the annual sales pace. What that means is that the National Association of Realtors calculates how many homes were sold, makes adjustments for seasonal factors like weather, school, vacations, and calculates how many homes would sell in a year at that given pace.

All figures in this report are for February closings. March figures will be released near the end of April.

Click here for the Month-to-Month Appreciation Graphs

Mortgage Professionals - How Borrowers should be treated

Justin Swapp (Reliant Financial Group) — Wed, 11 Apr 2007 18:02:39 -0700

This information is great for mortage professionals. It was originally published on loan.com, but I place it here because its a credo that I think all mortgage professionals should live by.

Competitive Rate Quote
You are a victim of price gouging when you are entitled to a better loan rate than you receive. Ethical lenders price according to your individual credit and price the loan competitively.
Rate Quote That Won't Change
"Lowballing", also called bait & switch, is too common in the mortgage business. You have the right to a rate quote that won't change. If the quote does change, it should only be for valid reasons (such as underwriting issues).

To learn more about rate lowballing and how to avoid it, consult: Is my broker/lender ethical?.
Accurate Explanation of Credit Status
An ethical loan provider will help you obtain and understand your credit report, assess any issues in the report (without blowing them out of proportion) and help you fix those issues.

See: How do I interpret my credit report? in our Truth About Loans Center.
Fair Fees
Unethical lenders charge borrowers excessive fees. Because these costs can be financed, they are easy to disguise or downplay. Since they're based on your credit profile and financial profile, fees vary from person to person, but they usually run around around 1% to 1.5% of the loan amount for prime borrowers and 2% - 4% for sub-prime borrowers.
Upfront, Full Disclosure of All Lending Fees
You have the right to full disclosure of all fees. Some lenders may try to spring additional fees on you at the closing, when you feel pressured to close. An ethical lender will provide and abide by an upfront, accurate disclosure of all lending fees.
Accurate Closing Date
Your closing date shouldn't slip. If you're purchasing a home, closing on a specific date may be critical to the timing of your move. If you're refinancing, delays might cost you money (in terms of higher rates) or delays getting the funds you need. An ethical lender meets the closing date.

See: How long should it take - why so long?
Immediate Notification of Underwriting Issues
You have the right to immediate notification of underwriting issues. This allows you to address the issues or look for another lender. An ethical lender will work with you to address any issues immediately to keep the closing date from slipping or causing the rate to change.
Confirmation of a Rate Lock
You have the right to lock a rate. An ethical lender will lock your rate at your request and provide confirmation in writing. See: When to Lock?
Exceptional Customer Service
You have the right to exceptional customer service. An exceptional lender provides world class service. They should:
- Be reachable at your convenience (ask for a cell number)
- Have a "back up" contact at their office if they are unavailable
- Help you complete all of the paperwork
- Use overnight or courier services to expedite your paperwork
- Have convenient notary services available (some come to your home/office)
- Have a simple closing process
- Answer all of your questions, referring you to other experts as necessary
Advocacy With Lender/Underwriter
You have the right to a lender that acts as your advocate with the loan underwriter. Your broker/lender should effectively manage the process with this person for you by:
- Pushing for fast approval
- Getting feedback on what's missing in your file to complete the process
- Getting a rate lock ASAP (see: When to Lock?)
- Helping you address any issues that arise from the underwriter
No Surprises at Closing
You have the right to no surprises at closing. While things can always change, with an ethical lender there shouldn't be any unwarranted surprises at the closing -- no changes in loan terms and no previously undisclosed fees.
Help After the Closing
You have the right to assistance after closing. After the closing, an ethical lender will continue providing prompt and clear answers to your questions and concerns as they develop over the life of your loan.

Mortgage Terminology

Justin Swapp (Reliant Financial Group) — Wed, 11 Apr 2007 17:54:40 -0700

I know when I first started in the industry there were many words that I needed to learn. Like in any industry, there is slang and certain terminology that one must know in order to feel comfortable moving amidst professionals.

Here is a link to a good site that has an html glossary of mortgage industry terms. This is a great resource.

http://www.mortgagenloan.net/content/view/33/42/

Thanks

Justin

Mortgage Calculators

Justin Swapp (Reliant Financial Group) — Wed, 11 Apr 2007 17:51:41 -0700

In case you have been looking for a one stop shop for mortgage calculators and related resources, here you go:

http://www.mortgageloan.com/calculator/

This site has a lot of great information in addition to the financial calculators that you can use on their site free of charge. Feel free to post back if you know of any other good resources that we can use in this industry :)

Justin

Online Marketing

Justin Swapp (Reliant Financial Group) — Thu, 15 Mar 2007 17:42:12 -0700

I have been looking for different resources to do online marketing of our brokerage firm and am curious as to what other people / firms are doing out there. I know that you can use pay per click advertising, and search engine optimization, but what else is out there?

Thanks for any thoughts you may have.

www.reliantfinancial.org

Justin

Marketing Material

Justin Swapp (Reliant Financial Group) — Tue, 06 Mar 2007 17:54:05 -0800

I recently found a company that provides, what I have found to be, the best looking and most professionally designed marketing materials that can be used by mortgage advisors and realtors. I don't know if you have had a chance to be exposed to this site, but I really like the material. Also, it may be note worthy that they do offer a couple of free templates so you can experiment with their work.

http://www.stocklayouts.com/

Anyway, enjoy!

Justin

Loan Officer Success

Justin Swapp (Reliant Financial Group) — Fri, 02 Mar 2007 12:00:50 -0800

I found a site yesterday where an experienced loan officer has created and posted a set of free CDs on how to go about the mortgage loan industry as a loan officer. The links to the different sections of the CD are listed along the left side of the site.

www.loanofficersurvival.com

Rate Shoppers

Justin Swapp (Reliant Financial Group) — Thu, 01 Mar 2007 13:06:41 -0800

L/Os...

Here is an article that I got in a newsletter from www.loanofficersuccess.com. I thought I would give credit and share.

By Brian Sacks

www.loanofficersuccess.com

How to Handle Rate Shoppers

-----------------------------------------------------------------------------------

One of the things we all hate are buyers who call us asking us
"What are your rates and points?" before we even can say "Hi"
or know what program would be best for them. Well, I know this
is going to upset you, but this is really your own fault. We are all
offering the same programs and products so the buyer has no
other way to compare us other than price.

As I have mentioned in the previous parts of the course, when
you are seen as the problem-solver in a specialized area of
mortgage banking the price issue disappears.

When my clients come to me they know that I am able to get them
into a home with very little money down and low rates, even if they
have had a bankruptcy or other credit issue. They never ask what
my rate and points are.

They just want to know how much they will need to buy the
home and how much they will be paying each month. They are
excited and overjoyed that they can become a homeowner even
though they have had issues in the past.

Here is a situation that happened to me that will clearly show you
how to deal with rate shoppers when they call you.

An accountant once called me. He introduced himself and said,
"Brian, I've been referred to you by Mrs. Smith, the realtor down
the street. She says you're the best, and that's what I'm looking
for - the best rate in town." I responded, "Howard, I wish you
good luck."

After he collected himself he asked, "Well, what do you mean?" I
said, "We don't have the best rate in town. If that's really what
you're searching for, I'm going to save you some time."

I guess he thought I was interesting enough to talk to, so we
became engaged in conversation. After a few minutes I said,
"Howard, as long as I have you on the phone, I have some
rental properties and some other business ventures that I'm
involved in, and I'm trying to get my taxes worked up. If you
have a couple of minutes, would you mind if I asked you a
question or two? He said, "Of course not, go right ahead." He
decided to give me some of his time because he felt that he had
a potential client on the line.

After I explained my scenario to him and he answered a few of
my questions, he said, "You know, it sounds as if you have a fairly
complicated tax return, Brian. Who do you use for your
accountant?" Here he goes trying to close me, and I basically
switched the tables on him. I said, "You know, Howard, I use H&R
Block." He couldn't believe it: "You're kidding-how could you
possibly use H&R Block?" I replied, "Well, Howard, they're the
cheapest. They're far cheaper than anybody else I've seen. I'm
sure they're much cheaper than your services. What I do,
basically, is I call around to various accountants that I know, get
the answers to my questions, give it all to the H&R Block guy,
and he fills it out."

After a short pause, he goes, "Ohhhh, I get it. I understand."
Well, not only did he use me then for his loan, but he has since
been a tremendous source of referrals for me. What I did was
put it back into his lap in a situation where he could actually
understand it-and he understood it all right!

I now have a standard reply to people who call me and say that they
are just rate shopping that you can start using in my systems.
Although this response confuses them at first, as it did Howard, it
is actually a respectful reply. If they truly were searching for the
lowest rate, or the cheapest price, then we would be wasting each
other's time to let the conversation go any further. Usually my
response kicks off a discussion in which I can learn a bit more about
their situation and determine what I might be able to do to serve
them. I make it clear that I can't guarantee the best price, but I can
guarantee the best service. In the end, almost everyone
appreciates this up-front honesty.

Of course when you are viewed as the problem-solver, the rate
question should not come up to begin with.

Mortgage Officer Best Practices

Justin Swapp (Reliant Financial Group) — Thu, 01 Mar 2007 13:02:27 -0800

I have compiled some tips I have recently gotten from some kind Realtors on Active Rain for developing relationships with Realtors and earning their business.

Tips from Realtors:

1. Face to Face Appointments with realtors that are doing a lot of business.

2. Send leads to them

3. Offer to speak about new products (loans) at their weekly sales meetings.

4. Provide food for brokerage open houses in exchange for face time with area agents.

5. Follow through with everything you say you will do.

6. Constantly keep yourself in their face.

7. Offer to look over a deal that might be going bad.

8. Offer to help fix someone's credit so that they can purchase a new home.

9. Offer to pay postage on a mailer with both of you featured.

Hope this helps! I know I am going to try some of this.

Justin

Working with Realtors

Justin Swapp (Reliant Financial Group) — Thu, 01 Mar 2007 02:29:55 -0800

I'm going to go out on a limb here and be quite honest. I am newer to the mortgage business, and it seems that everyone recommends that I partner up with realtors to drive my loan origination business. That makes sense, but it seems as though for every realtor there are ten mortgage officers beating down their door to get their referrals.

So, the question is, why am I different? Can anyone shed any light as to what I can do to earn a realtors partnership?

Thanks for your thoughts.
Justin

Giving Real Estate Network a Try

Justin Swapp (Reliant Financial Group) — Wed, 28 Feb 2007 12:41:14 -0800

Hello out there!

Well, I must say that I am glad that I found this site. I am impressed with the features that it offers, and for the promise it holds. I look forward to making connections with the right people so that we can jointly help our clients better their circumstances.

I hope to hear from you soon.

Justin