This is big for our Florida Friends!  Here’s a message from Florida Association of Mortgage Professionals President Richard Peek (thanks for passing this along to me Donnell Smith!):

In-House Loan Processor Bill Signed
by Governor Scott

June 1, 2011

Greetings Fellow Mortgage Professionals:

We have learned that the loan processor bill, SB1316, which was sponsored in the Florida Senate by Senator Nancy Detert and in the Florida House by Representative Ritch Workman has been signed by Governor Scott and will become effective on July 1^st, 2011.  This law removes the requirement for licensure as a mortgage loan originator for in-house processors.  It also addresses the requirement for lenders to complete the call reports mandated under the SAFE Act of 2008.

We want to thank Senator Detert and Representative Workman, both of whom are members of the Florida Association of Mortgage Professionals, for all of the effort they have put forth for Florida’s mortgage professionals.

We suggest that you read the bill to ensure that you are in compliance.  If you need assistance, please be sure to obtain competent advice.

We hope to see you at our annual convention and trade show in Orlando in July.  We will be offering all of the continuing education you will need to satisfy your licensure renewal requirements this year.  For information, please visit our Convention Page on our website at https://m360.famb.org/event.aspx?eventID=22711&instance=0 .

Sincerely,

Richard E. Peek, CRMS

President

7 Simple Goal-Setting Tips for a Successful 2011

Good goal-setting techniques help you clarify what you want out of life, organize your time, focus your actions productively,  and keep you motivated.

Here are seven great goal-setting tips to keep in mind as you set your long and short-term goals.

1. Be Specific
Being specific about your goals helps you focus more powerfully and allows you to create very clear steps to get you where you want to be.   Wanting to ‘be healthy’ is a great thing, but what does that mean? Maybe you want to lose weight or change your fat-to-muscle ratio, run a marathon. Maybe you just want to feel vital and alive. If so, what does this mean? How many miles will you walk, how often will you exercise, what kind of food will you eat? Be as precise and clear as you can.

2. Be positive
By framing your statements positively: “I have a loving and communicative relationship with my spouse” is much more powerful than “we don’t fight or argue.”

3. Be realistic
We’re all different, each with our own strengths and weaknesses, likes and dislikes. While many things are possible for each of us, some are more probable than others.

4. Write them down
By writing your goals down you make a clearer commitment to them (and yourself), giving your goals more power and you more motivation to achieve them.

5. Prioritize
Multiple goals can feel overwhelming so it’s helpful to prioritize. It’s okay to give different goals more or less priority over time.

6. Keep each step small
By breaking down each lifetime goal into smaller sub-goals or steps, you make them achievable. When goals seem too big or complicated, it’s hard to see when you’re making progress. Goals that are too big can also be discouraging.

7. Performance over outcome
It’s better to establish goals that are within your control to accomplish. If your main objective is an outcome – say winning a specific sporting event or falling in love with a specific person – you’re relying on external circumstances such as other competitors, the weather, or a specific person, in order to achieve your goal. But if you aim for performance – to beat your best time in a marathon or create a loving relationship, achieving your goal is in your own hands. 
 

If I like it I clip it…

Finally, how to explain the new GFE:

 How to Consistently Originate Loans
Perspectives by David Marx

Mr. Marx, principal at DaCor Financial, San Bruno, Calif., has written an opinion piece on how he believes he has been able to originate the same annual volume of loans over more than 25 years regardless of market conditions.

I became a mortgage broker in August 1983, when fixed rates were at 14.5% and by April of 1984, I was succeeding in the business, well beyond my expectations. In the 26 years since, I’ve closed an average of 100 loans a year. Recently, a friend suggested that I take the time to list how I achieved this success. This essay is the result of that introspection. It starts with a discussion of my general philosophy and ethics. Then I present how I handle interaction at the point of sale, followed by marketing both to referral sources as well as directly to principals, and finish with a few specific thoughts. These ideas are applicable for all sales professionals.

General Philosophy:

• That every client or prospective client with whom I meet is better off for the experience. I never recommend action unless I think the action is in the client’s best interest. I never hesitate to state that a client is better keeping his/her existing loan rather than refinancing, if that is the case. My evaluation of every situation is based on what benefits the client and never depends on receiving commission. As a result of this ethic, the source of my business is 100% referral, solely derived from repeat clients and those they recommend me to.

• I live in a constant state of insecurity, and still view each loan as the last one I will ever get.

• I never forget that I am only as good as my last loan. If a real estate agent refers 30 loans to me and I do a fantastic job on each, but less than stellar work on the 31st, I’ll never get the 32nd.

• I don’t work with rude or abusive people.

• I don’t promise to have the best interest rates.

• I won’t work with a borrower that wants to "double-app" me. I don’t solicit business that is already in process with another broker.

• I keep my promises. When I commit to locking a rate that goes up by the time I’m able to lock, I keep the promised commitment and cut my fee. Conversely if there is an improvement in price, I pass the difference to the borrower, usually in a check after close of escrow.

• I under promise and over deliver whenever possible to exceed expectations. It’s a great feeling to be a hero to a customer.

Returning Telephone Calls:

• Even though competition in our industry is massive, many loan agents don’t return phone calls promptly. I return telephone calls immediately, unless I am eating, or in a meeting. Even if a client calls several times and I still don’t have an answer, I return each call, because I know that the borrower will feel better knowing I’m working on the issue.

"When I commit to locking a rate that goes up by the time I’m able to lock, I keep the promised commitment and cut my fee."

• When things go wrong, such as an unanticipated condition or a denial, the first thing I do is let the borrower and the Realtor(s) know right away. It’s best if they hear it from me first. Then, if possible, I take the blame. By taking responsibility the other parties will respect and empathize with me and focus on fixing the problem.

• Many sales trainers recommend closing every letter or discussion to a prospective borrower with the verbiage: "Oh, by the way, do you know of anyone that could use my services?" etc. I don’t believe in asking for referrals every time I see or write someone. If I do a fantastic job they are likely to send me anyone they know. It’s like my auto mechanic. He does a great job at a great price and provides great service. He doesn’t have to ask me to extol his virtues to everybody I know; I love telling my friends about him. And when I do a fabulous job for my clients, I don’t need to ask them for referrals; they can’t wait to tell their friends about me. I know that if someone constantly pestered me for referrals, it would turn me off. Of course I do make mention of my quest for referrals in my closing letter, which says, "I’ve enclosed several of my business cards. As you know all of my business comes from referrals. If you think that I did a good job for you, feel free to give a card to someone that needs real estate financing. Of course if you didn’t think I did a good job, please dispose of the cards safely."

Interaction with Borrowers in the Transaction:

• I meet every borrower or prospective borrower in person. My sole objective when I receive a phone call asking for loan information is to set an appointment for a face-to-face meeting where my goal is primarily to form a friendship with the prospect. A typical meeting takes about an hour, most of which is spent becoming acquainted and finding out commonalities. Often the first question that I ask is if the borrowers are native to the Bay Area and if not, where? Other things I ask about include where the borrowers grew up, what school/college they attended, whether they have children, what sports team they follow, and what literature they read. What people do for a living is always interesting. I enjoy getting to find out people’s stories and discovering what we have in common. Another benefit of doing this is that it demonstrates that I am a person, not a loan machine. If it turns out that the prospective borrowers doesn’t qualify, or for some other reason are not in a position to utilize my service, I never think of the meeting as a waste of time, instead I’ve cultivated new friends and advocates who someday may be buying and in the meantime will be extolling my virtues to their friends.

Sending Letters:

Once a transaction is underway, send the borrowers a series of letters starting with a thank you, which includes an expected timeline of events. A day later, send a letter from the president of the company praising the agent and congratulating the borrowers on choosing him/her. The following day send a discussion of ways to hold title. Also send a letter to the selling agent as well as the listing agent.

Marketing Ideas:

These marketing ideas are not only good but they don’t cost much money. The key is using them on a regular basis.

• Two-dollar bills: Guess how much they cost. When you send one to a prospective Realtor, along with a request to meet for a cup of coffee, the odds that you will get that meeting are far greater. Success in prospecting is based on percentage and two-dollar bills are a cheap way to increase that percentage.

• Luggage tags: I have a machine that makes luggage tags from business cards. The machine cost $50 and tags themselves are inexpensive and easy to make in our office. And who wouldn’t appreciate receiving them? The way to do this is to get a few business cards from a Realtor at the first meeting. Then at the second meeting, give the Realtor the luggage tags. He/she will remember you and doing this increase the odds that he/she will call.

• Change of address cards: On a purchase transaction, we make postcards for the borrower. On one side is a photo of the house that we scan from the appraisal and on the other is the announcement along with the name and logo of the Realtor as well as my name and logo. I either bring them to the signing or give them to the Realtor to give at the signing. It’s a nice inexpensive touch and the Realtors like it because their name is on it as well.

• Newsletter: I send this to approximately 600 past borrowers. I’ve been doing this for the past 12 years and it’s well read. It’s not one of those canned products; my newsletter writer, Janet, sits down with me and together we write every issue. It’s not fancy, but people who know me can tell it’s my "voice." I don’t e-mail it, or send it bulk rate; it goes out first class mail every two to three months. I hide the name of three past clients in the text and if they spot their name and call me, they win a prize. Some people complain that I haven’t put in their name, as if the names were selected at random. Where does it say I have to select at random? I hand pick clients out of my database that need to refinance. I do know that the newsletter has paid for itself many times over, especially in a refinance market.

• Binder: At close of escrow I send out a loose-leaf binder that has "DACOR" written on the cover. Enclosed are a copy of the settlement statement, the appraisal, the note and deed of trust. Also a thank you letter from me (with attached an evaluation form with SASE and business cards.)

• One promotional thing that I do every year is to host the real estate agents that give me business to a party on a private yacht. It takes place on the day that the Blue Angels are flying and doing stunts over the San Francisco Bay. I serve lunch and beer and the basic thing that everyone on board has in common is that they all use me as their mortgage broker.

Refinance:

• Skin in the game: On a floating refinance, the borrower is less likely to shop around if they pay for the appraisal up front. One concern is the length of time that the appraisal is valid; to alleviate that I state that I will pay for a subsequent report if the first one expires.

• I don’t predict rates, and I insist that the borrower make the decision if and when to lock or not. But I do have a few pet phrases that help the borrower make that decision. When asked whether to lock I have two responses that inject a bit of humor. "If you lock today then rates will drop like a stone tomorrow, but if you don’t then they will shoot up like a rocket. So lock if you want to do a good thing for the rest of the population." Another metaphor is the old TV game show, "Let’s make a deal." At the end of the show the contestant had to choose between door No. 1, No. 2 and No. 3. Door No. 1 was open, so the contestant knew what was behind that door, but not what was behind door No. 2 or No. 3. So it boiled down to the borrower deciding between the known, which was door number one and the unknown: doors No. 1, No. 2 and No. 3. Whatever they choose, it’s their choice and I’m not at risk to be blamed for coercing them to lock a rate.

• A good way to meet prospective borrowers: Take classes on a topic that has nothing to do with mortgages or real estate. It’s a way to meet and get to know people without using the hard sell. Consider a cooking class.

A Few Other Ideas:

• Vocabulary and phrases: Use "transaction" instead of "deal," or "issue" instead of "problem." Rates took a "bounce" instead of "went up." Use "eased" instead of "went down."

• It’s crucial to thoroughly screen loans and say "no" to ones that you’re not sure you can do. Otherwise you will end up with a "toe-loan." What is a toe loan? Imagine your pipeline has 20 loans. Nineteen of them are doing just fine but it’s that 20th that dominates my life. It’s like waking up one morning feeling just great, getting out of bed and then someone takes a hammer to my baby toe. All I think about is that toe.

• Resist letting real estate agents or borrowers put words in your mouth. "When can we get approval; when can we get docs, when can we get funds?" I answer, "I don’t know," but they reword the question and ask, "When do you think? etc." So just to get them off my back I say, "We should have docs by Wednesday." Of course that’s not good enough. "But I need them no later than Monday," they say. "I’ll do my best," I say. Then Monday comes around and there are no docs. Wednesday the same thing happens. And the phone rings and I hear someone say, "But you said…" I can’t tell you how many times I’ve had this conversation.

• Remember that we represent lenders as well as borrowers. Some people have the mindset that the lenders are our adversaries, and that underwriters throw in absurd conditions just to make life hard for us. I’m not saying that this never happens, but despite the apparent lunacy of some conditions, we need to treat underwriters, funders and loan reps with respect, especially if we want them to respect us.

• I have a small shop, but our loan quality and pull through rate is better than most other brokerages. Because of this we get better pricing and service from many of our lenders.

• Finally, it’s all about using time. This is a job and as such each block of work time should be planned and logged. Weekly, perhaps every Sunday, write a detailed plan for the week, based on how many hours you plan to commit to the upcoming work week, whether it’s 20 or 60. Of course one needs to be flexible, but if an agent commits to working 20 hours then that agent should be prepared to show a log that demonstrates he/she has fulfilled the commitment. One way to do this that has worked for many successful agents is to hire a coach and be accountable to that coach. Another idea is to work on the buddy system.

Be Careful with Those Buyer  Prequalification Letters  by Tim Brown, Academy Residential Mortgage

Having done hundreds of prequalification letters over the last 7 years, I recently came to the startling realization that providing a letter that says a buyer qualifies to purchase a home of up to a certain price point may not be entirely accurate in today’s real estate environment.

Since it seems half the buyers I work with are making offers on foreclosed or short-listed properties, the taxes and association dues are almost always out of alignment with the property’s current list price.  With foreclosures you have the double whammy of a property tax rate based on the previously assessed home value plus the absence of homestead exemption because the property was empty at the start of the year.  The problem is even worse with condominiums where association dues are also out of alignment. I had a recent closing where a $145,000 condo purchase (2006 sale price of $265,000) had monthly payments of $310 for taxes and $175 in association dues.  When providing the prequalification letter for this buyer, I had assumed much lower taxes and dues. Luckily the buyer was strong enough to qualify at the higher payment this home would require.

The important take away is for agents to confirm their buyer’s qualification at the inflated tax and association dues rates in today’s market particularly with the current difficult lending environment.  I would recommend you email or text your loan officer with the actual tax and association dues information for each property on which you intend to make an offer to confirm your buyer’s qualifications.              Tim Brown, Academy Residential Mortgage

March 8, 2010

FHA to the Mega-Lenders: Loosen Your Quals for Minorities

The Federal Housing Administration commissioner wants the nation’s largest originators to loosen their underwriting standards, allowing more minorities to qualify for government-backed single-family loans.  Many top ranked lenders voluntarily imposed a minimum 620 credit score in 2008 as subprime borrowers rushed to refinance into FHA loans. Commissioner David Stevens told minority real estate professionals that the lenders’ action has improved the performance of FHA loans and reduced defaults. However, the commissioner is now urging lenders to consider borrowers with lower FICO scores. "The one thing I will tell you, the difference in approval rates for African-Americans and Latino borrowers between 580 and 620 is significant," Mr. Stevens said. The commissioner noted that FHA is taking several steps to reduce default risk. But the agency does not want to raise the FHA 3.5% down payment requirement to 5%, despite congressional pressure. "If we had increased the downpayment to 5% we would severely impact the ability of a good family" to buy a home, he said. The FHA commissioner made his comments at a recent conference on minority home ownership.  National Mortgage News…

March 5, 2010

Study Sees FHA Taking More Risk

By NICK TIMIRAOS

The federal government’s mortgage-insurance agency is understating how much risk it has taken on, says a group of economists from the New York Federal Reserve and New York University, increasing the likelihood the agency may need taxpayer funds.

The economists warn that the Federal Housing Administration—which has jumped to fill the void left by the collapse of the private mortgage market—is overlooking factors that signal higher losses, according to a working paper released Thursday.

The agency has traditionally turned a profit for the U.S. government. But the economists warn that by underestimating the risks it faces, the FHA has increased the likelihood that it will have to ask Congress for money for the first time in its 75-year history.

The study doesn’t say how likely that now is, but "it’s hard to imagine that they won’t be returning to Congress several times," said Andrew Caplin, one of the authors and an economics professor at NYU. "It’s just inconceivable that the loans … will not cause very large losses."

The FHA says it would need taxpayer money only in a worst-case housing-market scenario.    more…  Wall Street Journal

If I like it, I clip it…       Let me know what you think.  Also, let me know if you find some good articles so I can pass them along here.  

Here’s a great overview, explanation  and perspective on the GFE 2010…

Where o’ Where Does My YSP Go? by Joshua Weinberg

As of January 1, 2010, YSP will ONLY be considered a credit to the borrower. The concept of “front-end” and “back-end” compensation disappears, and all compensation the Originator expects to receive must be clearly indicated upfront, and may not change. This means Originators are required to enter any and all amounts they desire to be compensated in Block 1, “Our Origination Charge” of the GFE.    more…

The mortgage broker-share of home loan originations hit a new low of 12.9 percent in the third quarter, according to an exclusive survey from National Mortgage News.   The publication said loan originators funded a total of $443 billion in the third quarter, with retail lenders grabbing 48.3 percent of the market share and correspondent lenders accounting for 38.8 percent.    more…  

  THE WORD ON LOAN BROKERS: "A lot of firms have no interest in our broker research," said David Olson who runs Access Research of Columbia, Md. Earlier in the year Access was called Wholesale Access and you can pretty much figure out why he removed the word ‘Wholesale’ from the firm’s name. In an interview with National Mortgage News Mr. Olson said the only large bank wholesaler that still believes in brokers is Wells Fargo. "We’ve been having a debate with Wells," he said. "They think the channel is coming back."  more…  National Mortgage News Online