Mortgage Rates

I came across a funny article and just had to laugh at it.  It's title: "Mortgage Rates Rise Despite Fed Intent".  What made me laugh was the comment that rates "jumped" up in the latest week 10 basis points from a national average from 3.52% to 3.62%.

I mean this is hysterical; we're seeing sub 4% interest rates and it's crazy busy in this business right now and a fraction of a percent raise is considered a "jump".  This kind of talk is just nonsense.  The problem is that rates have been so low for so long that people are just immune to it like they are to advertising messages.  Ever notice how many messages are thrown into our face everyday through several media modalities and outlets? You have some that catch you eye every now and then but for the most part, we ignore them.

Same philosophy here; people are immune to the low rate environment but a 10 basis point increase is no where near a jump.  To give you a perspective on how much of an increase that is; 1 basis point is 1/100th of a percent.  So we're talking 10/100ths of a percent increase in rate.  On $165,000 loan you're talking $9 a month.

That's not exactly breaking the bank here folks.  The article you can find here.. I don't care what they say, and of course I could be wrong, but artificial low rates are here to stay.  They can't lower them.  I think the FED has done so much for so long; they're all in now baby...We'll be riding this wave for a while.

If you're in the market to buy or refinance it a good time but keep in mind that lenders are slammed right now and loans are taking longer to close and documentation requirements are still heavy so make sure you see both of my posts on Today's Mortgage Environment and Mortgage Application Tips...

These will help get your mindset right, explain a little bit about what's been transpiring on the back end and how to be full prepared at application to help improve the processing, underwriting, and closing of your loan.

D...out..

Today's Mortgage Environment

This will be a quick post but wanted to just give you a little insight on today's mortgage enviornment. It's NOT the same as it was 3 and 4 years ago.  Loans are harder to get done; they are taking longer; and quite frankly we have a shortage of experienced people in the industry right now which complicates things.

We have people who have left the business for other jobs during the downturn and really don't want to come back for something that could be temporary.  Or you had people leave who won't come back no matter what.. 

The problem we find ourselves in now is the heavy regulatory compliance environment coupled with low rates and massive refinance and purchase activity... the lenders just can't keep up.

One crazy statistic I came across was Wells Fargo actually employs I think 60% of the underwriters in the industry in the US.  Just think about that for a moment..

Wells holds about 30% plus market share and 60% of the underwriters roughly..that doesn't leave a whole lot for the rest of the market.

The point I'm trying to make is these days we have last minute changes; last minute closings; and frustrated borrowers and realtors because deals are taking too long and the amount of documentation needed.  I understand completely and borrowers and realtors are not the only ones frustrated with that process.

What people fail to realize is on the back end, lenders are being heavily scrutinized on paperwork and are experiencing high levels of buybacks.  I've even heard some deficiencies (paperwork, etc, missing from the file) can carry fines as much as $15,000.

That's insane!  But as you can see, this is why you see some of the documentation requests being made; it's not to be a pain in the neck, it's to make sure no deficiencies are found that carry huge fines.

There are even some lenders raising rates to price themselves out of the market because they can't keep up with volume.

Now you'll have some people screaming they are not having issues or can just slam your loan through no problems; make every closing with no last minute clitches and I would argue they are full of it.  With this market the way it is right now problems are bound to happen. 

That doesn't mean I'm being negative - it just means I set the right expectation with people upfront as we all have the same goals - close on time, make the customer happy, and get referrals.  Our business grows from referrals and we want the experience to be the best for the borrowers and referral partners.

I think the most important thing to remember, regardless of the issues we face, is communication..
 Communication, communication, communication -  I think this would eliminate a lot of frustration if people would just communicate property, quickly, and be solution oriented.

Remaining calm and cool is crucial.  Anybody can be calm and cool under good times; but under pressure and stress it's important to remain professional and solution oriented.

See my post here regarding mortgage application tips for consumers to make sure you are prepared at application to improve the processing and underwriting of your loan..

The more prepared you are at application the smoother the process will go.

Just rest assured your loan officer is very motivated to get your loan done quickly, smoothly, so you can move in or get your refinance done and have a great experience.

If you find that you're in a situation where multiple requests for documentation or extra time is needed just remember what I've said in this post regarding the back end and regulators because the ultimate goal is not to upset the customer or realtor; it's to make it a great experience so you come back, send friends and family, and deepen your relationship with the lender (purchasing other products and services)

To your success,

D..out..

More Fiscal Cliff Talks

My Quick Rant On This Topic

You know...this crap of fear mongering by the media is so elementary and obvious it's sickening.  This whole show about the Fiscal Cliff and taxes, and the wealthiest Americans paying more, and blah blah blah, is such a racket that is designed to divide us all.

When really looking at the numbers the top earners don't pay as much in taxes as you think they do folks.  Warren Buffet even said openly that he pays less in taxes in terms of percentage of income, than the average person does.

The very top earners pay people to find ways to reduce their taxes. Don't get me wrong I'm not against being wealthy and making money and living a very good life - who doesn't want to live a rich and fulfilling life? Everyone does that's a no brainer.. My point is this is a sneaky way to divide people through social stratification.

If you have money and ran a business or several businesses your goal would be to reduce your tax expense..duh.. Who likes to pay taxes? Nobody does.  The real people who pay taxes are the ones in the middle.  They carry the load which is why the soundbites are always targeted to "middle class" Americans which again the labels create a huge problem as it divides people into groups which leads to warfare...which is what they want!

If we're too distracted fighting a false paradigm, we can't actually come together as a nation and figure out a way to fix the problem.  "Class warfare" they label it ensues only worsening the problem.  It's trickery and is designed to keep us distracted, fighting, and living in fear and confusion.

What you fail to realize is that inflation is a silent tax and is way worse than what we're dealing with here on income taxes.  Have you noticed your food bill lately?

Oh but they want you to think that's a good thing because if prices are going up then that means your incomes will go up to match and plus the stock market is doing good and home prices are rising so just shut up and "feel" more wealthy when in reality you're income is not going up and the only ones profiting from the rising prices are the ones that control the lever...

If it's not a war on drugs, it's terrorism or taxes, or a bad economy, or murders, shootings, rapes, car wrecks, environmental calamities...It's a constant stream of bad news designed to keep people distracted, scared, confused, and worried all the time..

Jesse Ventura says it best when he describes our Congress as the world federation of wrestling as in front of the camera's they hate each other we have division, they're fighting it out but behind closed doors they're all buddies.

What you need to do is educate yourself and don't be fooled by what's going on around you.

This economy isn't going to get any better any time soon.  You need to decide how you are going to utilize your skills, talents, and brains to create extra income you can convert to stores of value like gold and silver and protect your family from the worst case scenario.

There are many ways to get started now in creating additional streams of income in your part time and start protecting yourself now - create your own economy and don't let this trash talk distract you or rob you of joy, happiness, and peace in your life.  Spend time with loved ones and cherish the special memories.

God Bless,

D...out...

Secretary Donovan Questioned By Senate Banking Committee

Earlier this month Secretary Donovan was questioned by the Senate Banking Committee on the financial health of the FHA Mortgage Insurance Fund.  A report released in November showed the agency was in the red $16.3 Billion dollars and it appears will need a bailout..

When Donovan was questioned, he could not promise FHA would not need a bailout but rather said we'll know more when the President's budget is released...

So in others words..like I said in my previous post HERE FHA is in deep doo doo..

Donovan however cautioned the committee not to make too drastic of changes to how the fund insures mortgage's as to not stall the recovery. "We are seeing a recovery, but it is still fragile," Donovan told the Senate Banking Committee. "We don’t want to hurt the market and in turn the FHA fund by going too far and stopping that recovery."

The agency's capital reserve account has dropped significantly since 2006 to -1.44% ending fiscal year 2012.  Under law the ratio needs to stay at 2%.  If that's not insolvency folks, I don't know what is... and clearly I don't know anything..

Sen. Richard Shelby (R-Ala.). "It is time for serious reform of the FHA before it needs a taxpayer bailout, if it isn’t too late already."

What types of changes need to be made? "A determination would not be made until the end of the 2013 fiscal year", Donovan said.

Haha...that means kicking the can down the road a bit and worrying about it later.  This seems to be the answer to all the issues we face is...let's just kick it down the road a bit and "see what happens".

Donovan said Congress could help the FHA by making some changes that the agency is unable to do on its own such as lowering max loan amounts (which Donovan is in favor of) as he noted, loan limits were reduced for Fannie and Freddie but not FHA which is putting more pressure on the fund in higher costs areas. 

What's interesting is nobody really thinks there is a problem but Wharton School of Finance Real Estate Professor Joseph Gyourko, thinks otherwise... "FHA is currently leveraged 41-to-1 -- which is higher than either Lehman Brothers (31-to-1) or Bear Stearns (38-to-1) when they collapsed"

Not to mention FHA is backing a proposal from the President to have Congress open up the Streamline Refinance to borrowers with non GSE and FHA mortgages and allow them to refinance into FHA insurance.. The min credit score? 580..

So not only is the fund in trouble but we're planning on expanding the refinance program that will further deplete funds, open up to more riskier borrowers, and then what? None of it makes any sense it will only  allow the banks to make even more money hand over fist which is what they've done since this whole thing began..

Yes - we've had a lot of banks collapse but those were competitors to the big mega banks and is the same thing that happened in the 1907 Panic; thousands of bank failures occurred but all that really happened was consolidation into bigger banks.   At that time private capital was taking profits away from the banks so something had to be done about so a widespread panic was induced which eventually led to the passing of the Federal Reserve Act (further consolidating power into the hands of the mega banks in New York) just a short 7 years later..

The name of the game is power folks..We as consumers pay more to keep FHA afloat so banks can continue to make money hand over fist.  They are purging the system of all its life until nothing is left bankrupting it all.

Just keep that in mind..

You want real truth..visit here.. Stop living in the matrix..

D...out..

New Housing Market

The days of fast money and anybody and their mama getting into the real estate business and hitting it big is over obi one kenobi...

And you know what I say?

Thank God!  The reason is we need a marketplace of professionals; leaders; trend setters; and customer service oriented champions who know what they are doing and can take their business to the next level.

Don't mean to be so harsh here (actually I do and I hope the wannabe's feelings are hurt) but this industry suffered greatly by people being able to get in so easily, and do to all the fast money, booming economic conditions, title companies, brokers, realtors, everybody was just jumping in for the quick buck, ran around and caused a muck.

See my post on building a brand or chasing a check because I dig into this by talking about what kind of value you bring to the marketplace and pose the question are you just in it for the money or are you in it to build a brand and a presence or chasing a check?

The new housing market; the new economy; the new way of doing things will be far different than what it was before. We'll be in a wet, sloshy, and muddy waters for some time to come. Call this cycle the "cleansing"...

Because while the wannabe's are going to be stuck in the mud, trying to figure out why the same things; the same talk; marketing schemes, advertising; and using old tricks that work in a booming economy where EVERYONE gets a piece... are not working anymore.

The Champions are flying above looking down for just a second then back up focused on achieving their next level.  See there are walkers and talkers ladies and gentlemen and their are people who talk a lot of "stuff" but are not getting the results.

What are you going to do in this new housing market?  Are you going be those stuck in the mud or are you going to build your brand and following, and create your own economy out of the ashes and prosper for the next year?

Ignore the governments numbers - people will always need housing.  Ignore the FED and the news talking about interest rates - interest rates can't and won't go anywhere for a while.  Stop focusing on where the market is everyday - unless you're a stock broker; investment adviser or something because that's just  a distraction...

What you need to do are these simple steps:

1. Have a clear vision
2. Decide on a strategy
3. Simplify and implement the strategy at the same time building value
4. Take MASSIVE freaking action.

Want to know the secret?....

That's it, there is no secret... YOU are the secret...

Clock's ticking....every second you let pass by with indecision is another second lost that you could be working on becoming the person you want to be. 

So in conclusion; we are in a new housing market, a new economy, but the best part is WE make our own economy.. so lets get to it.

Are You Building a Brand Or Chasing a Check?

Building Your Brand

Are you working toward building a brand and a following OR are you just chasing your next commission check? 

The truth is if your focus is on the money and not building your brand or following; you'll always be chasing the money.  What do I mean? I mean you'll be the hunter ALL the time...

The goal is not to be the hunter but the hunted.. You want people that are coming to you practically begging to do business with you because they are "know" you; have heard of you; when people talk about real estate; condo's, houses over a million, whatever your niche is --- when you have a brand you'll be the hunted.

Stop focusing on the check because this is where your emotions start to get the best of you.  When things pop up or go wrong; you become upset easily because the only goal you have is the check at the finish line.  When you have a brand; the money takes care of itself because money then chases you and not the other way around.

See this is hard for us to understand because we know we need money to buy things.  We need money to pay bills, take vacations, and quite frankly having money in your bank account makes life a whole lot easier.  

The truth of the matter is when that's your focus people can see that and you seem desperate.  Focus on building your brand and following, creating value to your marketplace and.....

....... you'll have all the business you'll ever need or can even handle.  

You can't be everything to everybody; you need a laser sharp focus on what you want.  

Steps To Building Your Brand

These 4 simple steps I swear, if you follow them, will change your business and bank account like magic.  You just have to decide and take action.  

That decision can be tough; I know because I was there.  I struggled a lot deciding because I thought "oh, well what if this doesn't work"; "what if I waste all this time and effort going for this and it doesn't pan out." 

You absolutely CANNOT think like this because you've already punched a hole in your boat and as soon as you set sail, shortly after you'll sink...

Your mind has to be convinced in your decision that you will make it work no matter what it takes.  

Who says it won't work? 

Who gives you permission to live your life and chase your dreams? 

Stop looking for permission; just decide and do it.  Build your brand and following and trust in the process you've laid out for yourself...

And Then...

Take MASSIVE freaking action.  So here's the steps:

1. 1. Decide and pick your focus and intention and see it clearly.
2. 2. Pick a strategy or two, or combination, or whatever the case may be but pick one
3. 3. Simply and break down to actionable steps
4. 4. Take MASSIVE freaking action

That's it.  When you do this the magic will happen.  

So are you going to build your brand and following or chase checks the rest of your life?  Decide; pick your strategy, simplify, and then ACT...

Let the magic happen baby...

Strong Warning From CFPB On Misleading Mortgage Advertisments

CFPB- Consumer Financial Protection Bureau

Just last week a warning was sent out regarding misleading mortgage advertisements.  You can read full release here.. What this is saying is they've found some recent advertisements are misleading to consumers and not disclosing all the information about true costs and terms of the loan agreements. 

I actually think this is a good thing.  All the ads out there that show 1% interest rate or super low fees or whatever the case may be is very misleading and I can't tell you how many times customers tell me about these deals and I let them know that those are just bait and switch ads but you won't find out until deep into the process or it's too late and by that time you're pissed off.

Sometimes it works and sometimes it doesn't and they have to go and find out for themselves the truth.  The problem is...now they don't trust anyone and that makes it hard to do business in the future...

...and we wonder why consumer confidence is low with lenders and loan officers in general.  

Now all companies don't do this type of activity but you do see some "creative" advertising to get people to pick up the phone and call.  

I take a different approach because what I have found is people just want you to be real with them.  

They will do business with and buy from people they like and trust and if I can develop a relationship with them; they will not only do business with me but will send referrals. 

Most companies are just in it for the quick buck and that should not be the approach.  

You'll make money and get some business in the short run, but this isn't how champions and professionals do business and it surely will kill you in the long run.  

Anyway...that's my two cents on it. 

I aim to build value and confidence so that customer has a great experience.  And truthfully, if you just explain things to people in plain English; all the terms, go over the benefits of how the loan will solve their problems and have a solution based presentation, people will come chasing you to do business with you.  

I don't really have to prospect anymore I just get referrals from clients, agents, and other sources because they know I'm for real; I don't sugar coat, I know what I'm doing, and I give realistic expectations.  

It's not rocket science here folks...

Just a little warning...for those of you who buy leads from these crap companies, I would stop because they have ads on the web for all kinds of ridiculous things that are misleading to get people to click and give up their information.  

So as the CFPB comes cracking down if you're buying from them ---guild by association.

Plus their sold to multiple people and companies.  The best way is to build your business organic which takes time.  

Check out the release above on the CFPB site and look out for more announcements like this as the CFPB gets up and running on all cylinders inspecting the practices of the all the lenders and brokers out there.  

Get ready we're headed for more changes in the future.  

Who will win in this environment? The Champions will... all the weanies will be pushed out and quite frankly...can't wait to see ya go...