| Mortgage Minute Newsletter From Sam Thompson, Senior Mortgage Advisor. August 2007- Vol 1, Issue 11
Try to win my new Realtor Riddle Challenge for a $25 Prize! Keep Reading!
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| Dear Sam, |
The money is in the follow-up!
In sales, following up with your prospect is the key
and now that the real estate market has slowed up some, this is really
important for your business.
A study done by the Association of Sales Executives revealed that 81% of all sales happens on or after the fifth contact. Not following up with your prospects and customers is the same as filling up your bathtub without first putting the stopper in the drain! Enlist some help!
Treat every lead that you get like it is your last one, because, if you don't, it just might be! Sam Thompson
Carolina Mortgage
Senior Mortgage Advisor 843-230-7929
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| I am very excited about the mortgage tightening! |
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Just like the people in the picture, I am very excited about
the tightening of the mortgage markets!! Why? Because PHH Mortgage never got into the subprime arena and now we are doing great while many lenders that dived into this market for the profits, while holding their breath, are now losing their shirts! So far, according to the implodeometer at http://ml-implode.com there have been 116 companies since late in 2006 that have 'imploded' meaning that they are in serious trouble and probably going out of business. Even Donald Trump's mortgage company has recently joined the ranks of the imploded... "YOU'RE FIRED!"
PHH Mortgage is not immune to the changes in the wind and we have tightened up many programs and many are currently suspended but we are going to be okay with our aquistion in the works with Blackstone, the world's largest acquistion company with plenty of cash that is positioning us to be a bigger player in the market. With all of the changes coming about, it shows now why Blackstone quickly gobbled us up a few months ago because they had to know this was coming and they knew we were ripe for picking with our strong brand relationship in the real estate market. So far, we have suspended our No Income, No Asset, No employment program but only tightened the stated programs now requiring 90% for Stated Income, Stated Asset with a 720 FICO and 80% LTV with a 680 FICO for a Stated Income, Full Doc Asset both requiring 4 months reserves and only 80% LTV if the borrower is salaried. Yes,
it is going to be rough going for a while but we are going to continue
to offer you the best programs that we can and hopefully when the dust
settles, only the strong will survive and I plan on being in that
number with you! So,
count on me and call me if I can help you with your borrowers! The
sooner you get them registered with a good lender into a loan, the
sooner you are protected. And, with us, we have a 90-day rate
protection program that does not require a property address to lock in
to so call me as soon as you can as soon as you start working with a
prospective buyer!
Refer all of your buyers to us and you are going to be protected too!
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Stories are long remembered after the presentation is over...
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Not that kind of story! The one that got away...
Thomas Freese, in his book, The Secrets of Question Based Selling,
talks about the importance of telling stories for two reasons. The
first is that you want your audience to remember you and stories stay
fresh long after the data and statistics are forgotten and since your
audience often has to "sell" you to their family and friends and having
a good story they can tell will help them to that.
Stories about other prospects or clients are particularly powerful. Remember the "Herd Behavior"?
Try to include one or two good stories and any of
your buyer interviews or listing presentations and see what a
difference they can make. And, if you will share it with me, I will
pass it on to your prospects too when I am getting them pre-approved
for you.
My office sends me daily "Saved the Day" emails from
Mortgage Advisors like me in the field and I have often thought of
sending them out to you but I refrained from doing that because there
are too many...
But I do read them to see what others are saying and share some with you in my travels.
Here are a couple of the "saved the day" emails...
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We closed in a WEEK Thank you Erin & Mike and everyone who made this closing possible. I got a call on Monday afternoon. The buyers had a house under contract and a loan in place with Country Wide. The deal fell through, but because they had already given their notice they needed a place to go fast. They found another house and wrote a P&S to close by Friday. CW had originally said no problem because they already had all the paperwork any way but then said they needed at least two weeks. Erin went to work, they scored VIP, but still needed an appraisal because it was new construction. Paquette Appraisal did an amazing job getting an appraisal done by Wednesday. Mike Lawrence did a super job processing the loan. WE closed Friday at 4:00. Both agents were very happy. The buyers & the seller were amazed!!!!!!!!!!!!!! ______________I have to let you all know just how much all of your hard work was appreciated on this loan. Not only was it the last Friday of the month, and almost 10:00 AM Eastern time, you guys turned an FHA decline into a Conventional approval AND AND it closed by 5:00 PM Central. THE SAME DAY. THE SAME DAY!!!!!!
The title company said it was not going to happen, and the agent had her doubts, But my buyers had all of the confidence in the world because I had all of the confidence in the world.
You ALL have taught me to BELIEVE. I put you to the test and you always deliver.
Felicia did an awesome job of not only getting this thing turned around, but also kept me calm enough to be able to relay info to the rest of those involved.
They said it could not have been done. It would not have been done any other place I have been in my 22 yrs in this position
You all made BELIEVERS out of everyone in this transaction. I have already given a call to the agent asking for more of her business. And I will call on her next week to remind her of just how special our company is.
I sat and cried this afternoon just out of sheer frustration, but Felicia brought me back into focus.
YOU ARE ALL AWESOME. WONDERFUL, PROFESSIONAL, CALMING, and much more appreciated than you will ever know. THANK YOU!!!!!
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Dream Big and work hard towards that goal to keep you motivated! |
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Weekly Tip - The airplane analogy; a great marketing tool...
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In flight turbulance can be avoided or minimized with a good pilot.
Here's a email you can cut and paste and customize for your prospecting:
Dear (Name of prospect),
Buying or selling a home is like taking an airplane flight across the country. When you start on your trip, you have no idea how the trip will go and neither does the pilot. You could run into 101 different types of turbulence, or other passengers on the trip could pull stunts on you.
Ideally, you should have a smooth flight and land on time. Certainly the pilot will try to use his or her experience to navigate around the storms and go for the smoothest flight plan, but if they're honest, they can't promise a turbulent-free trip. Their job is to get you to your destination in the least time and with the least aggravation, while keeping you informed throughout the trip.
Following this email is a somewhat humorous list of the 101 different types of turbulence or stunts we might run into in any real estate transaction. This list is not all encompassing, but it catches most of the common issues we might run into. While some of the items are "picky" to some, they are very real and fearful to others.
Please take a few minutes to review the list.
If you will choose me as your REALTOR, I will be the pilot of your plane. My job is to assist you in getting your home purchased or sold on time and with the fewest aggravations. I can't promise you we won't have any turbulence, or that other parties to the transaction won't try and pull a few stunts, but I can promise you that I'll utilize my experience and expertise to take you on the smoothest flight that I can. And if we do hit turbulence, I won't bail out on you. I'll be your teammate throughout the flight, until we get you safely to your destination.
Rest assured your advocacy is my number one goal, and that means you must be delighted with the service I deliver beyond your expectations during the process.
As always, should you have any questions or concerns, please don't hesitate to call me.
101 Possible Types Of Turbulence Or Stunts We Could Encounter.
The Buyer/Borrower:
1. Does not tell the truth on the loan application. 2. Submits incorrect information to the lender. 3. Has had recent late payments on credit report. 4. Found out about additional debt after loan application. 5. Borrower loses job. 6. Co-borrower loses job. 7. Income verification lower than what was stated on loan application. 8. Overtime income not allowed by underwriter for qualifying. 9. Applicant makes large purchase on credit before closing. 10. Illness, injury, divorce or other financial setback during escrow. 11. Lacks motivation. 12. Gift donor changes mind. 13. Cannot locate divorce decree. 14. Cannot locate petition or discharge of bankruptcy. 15. Cannot locate tax returns. 16. Cannot locate bank statements. 17. Difficulty in obtaining verification of rent. 18. Interest rate increases and borrower no longer qualifies. 19. Loan program changes with higher rates, points and fees. 20. Child support not disclosed on application. 21. Borrower is a foreign national. 22. Bankruptcy within the last 2 years. 23. Mortgage payment is double the previous housing payment. 24. Borrower/co-borrower does not have steady 2-year employmenthistory. 25. Borrower brings in handwritten pay stubs. 26. Borrower switches to job requiring probation period just before closing. 27. Borrower switches to job from salary to 100% commission income. 28. Borrower/co-borrowers/seller dies. 29. Family members or friends do not like the home buyers choose. 30. Buyer is too picky about property in price range they can afford. 31. Buyer feels the house is misrepresented. 32. Veterans DD214 form not available. 33. Buyer spends money needed for down payment & closing costs before closing. 34. Buyer does not properly "paper trail" additional money that comes from gifts, loans, etc. 35. Does not bring cashier's check to title company for closing costsand down payment.
The Lender/Broker:
1. Changes program or rate from what was originally quoted. 2. Is never available to answer questions about the status of the file.3. Loses paperwork sent in several times. 4. Doesn't order the appraisal or title work in time. 5. Charges too much for application fee and processing fees. 6. Repulls credit and declines the loan. 7. Doesn't allow the property type. 8. Doesn't like the comps and cannot support the purchase price. 9. Doesn't like the explanation of large deposits on the bank statement. 10. Won't allow a gift to help with closing costs. 11. Won't allow the seller concessions to help with closing costs. 12. Is not local and is not available to meet with agent or borrowers. 13. The Loan
Originator was inexperienced and very aggressive and made promises he
could not keep that didn't surface until 3 weeks into the transaction
when the underwriter caught it!!!!!
The Seller:
1. Loses motivation to sell (job transfer does not go through,reconciles marriage, etc.) 2. Cannot find a suitable replacement property. 3. Will not allow appraiser inside home. 4. Will not allow inspectors inside home in a timely manner. 5. Removes property from the premises the buyer believed was included. 6. Is unable to clear up liens against their property - short on cash to close. 7. Did not own 100% of property as previously disclosed. 8. Thought getting partners signatures were "no problem", but they were. 9. Leaves town without giving anyone Power Of Attorney. 10. Delays the projected move-out date. 11. Did not complete the repairs agreed to in contract. 12. Seller's home goes into foreclosure during escrow. 13. Misrepresents information about home and neighborhood to the buyer. 14. Does not disclose all hidden or unknown defects and they aresubsequently discovered. 15. Builder miscalculates completion date of new home. 16. Builder has too many cost overruns. 17. Final inspection on new home does not pass. 18. Seller does not appear for closing and won't sign papers.
The OTHER Realtor(s):
1. Have no client control over sellers. 2. Delays access to property for inspection and appraisals. 3. Unfamiliar with their client's financial position - do they haveenough equity to sell, etc. 4. Does not get completed paperwork to the lender in time. 5. Inexperienced in this type of property transaction. 6. Takes unexpected time off during transaction and can't be reached. 7. Jerks around other parties to the transaction - has huge ego. 8. Does not do sufficient homework on their clients or the property & wastes everyone's time.
The Property:
1. Engineer will not approve septic system or well. 2. Inspection report reveals substantial damage and seller is notwilling to fix or repair. 3. Home was misrepresented as to size and condition. 4. Home is destroyed prior to closing. 5. Home not structurally sound. 6. Home is uninsurable for homeowners insurance. 7. Property incorrectly zoned. 8. Portion of home sits on neighbors' property. 9. Unique home and comparable properties for appraisal difficult to find.
The Attorney:
1. Fails to notify lender/agents of unsigned or unreturned documents. 2. Fails to obtain information from beneficiaries, lien holders, insurance companies, or lenders in a timely manner. 3. Lets principals leave town without getting all necessary signatures. 4. Loses or incorrectly prepares paperwork. 5. Does not pass on valuable information quickly enough. 6. Does not coordinate well, so that many items can be done simultaneously. 7. Does not bend the rules on small problems. 8. Does not find liens or any title problems until the last minute.
The Appraiser:
1. Is not local and misunderstands the market. 2. Is too busy to complete the appraisal on schedule. 3. No comparable sales are available. 4. Is not on the lender's "approved list". 5. Makes important mistakes on appraisal and brings in value too low. 6. Lender requires a second or "review" appraisal.
The Inspector:
1. Too "picky" with conditions and "scares" the buyer. 2. Infuriates the seller. 3. Home inspector not available when needed. 4. Inspection reports alarm buyer and sale is cancelled.
If you want smooth
flight during your real estate transaction, and a pilot who can bring
you in for a safe, smooth landing, trust me. Call me when you are
ready to begin your flight! And,
to help me in this, I'll ask that my Co-Pilot and trusted Senior
Mortgage Advisor, Sam Thompson be involved too because he will work
with us on any mortgage issues that may come up as well... (I had to throw this in!!) ;) |
| Weekly Mortgage Market Commentary | ||||||||
| Don't let the financial markets squash your clients and your transactions! Stay informed by reading my new daily "Daily Rate Lock Commentary" or just call me to find out what is going on! If you want to be included in this distribution, just call or email me. Remember, knowledge is power and the more educated you are in your industry, the higher quality buyers you are going to attract and that means easier closings, bigger houses and more money in your "hip national bank!" And since rates are still climbing, call us to get your clients in our 90 day rate protection as soon as possible!  Rate Lock Advisory - Sunday Aug. 12th
This week brings us six pieces of economic data for the bond market to digest. The first is July's Retail Sales report early tomorrow morning. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economy. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.2%. The next report is scheduled for release early Tuesday morning with the release of July's Producer Price Index (PPI). This index is considered to be an indicator of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for an increase of 0.1% in the overall and 0.2% in the core data reading. A larger increase may raise inflation concerns and push mortgage rates higher Tuesday morning. If it reveals a smaller than expected increase, we could see mortgage rates improve as a result. There are two reports due to be posted Wednesday. The most important of the three is July's Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. As with Tuesday's PPI, there are two readings in the report- the overall index and the core data reading. Current forecasts call for an increase of 0.2% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing. At 9:15 AM Wednesday, Industrial Production data for July will be posted. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of fairly high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% increase in production. A higher level of output could lead to higher mortgage rates Wednesday, while a weaker than expected figure should help push rates lower, assuming the CPI doesn't reveal any surprises. Thursday's only monthly data is July's Housing Starts data. This report gives us an indication of housing sector strength and mortgage credit demand. However, it isn't considered to be of high importance to the bond market or mortgage pricing and usually doesn't cause much movement in mortgage rates unless it varies greatly from forecasts. This report is the least important of the week's reports. Friday morning, the University of Michigan will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday. Overall, look for the most movement in bond prices and mortgage rates the first part of the week. Monday, Tuesday or Wednesday may turn out to be the most important. I still feel there is a possibility of the bond market moving lower than much higher (pushing yields and mortgage pricing higher). This makes it prudent to consider locking an interest rate if closing in the immediate future. If we get stronger than expected results in the PPI and CPI releases, I fear that we may see mortgage rates spike higher fairly quickly. If those reports do further ease inflation concerns, I will likely be shifting to a float recommendation. But, the risk versus reward comparison still heavily favors the risk side in my opinion, therefore, I am holding the lock recommendations for the time being. If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers. |
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