Times are tough, there is no doubt about that. Interest rates are inching up and much of the hub-bub of the refinance boom is over. It's the difficult loans that remain, amongst them mostly purchases. It's time to face facts. The A-paper good credit refinance loans are over. There is little chance that you'll be able to convince anyone to refinance, unless they are in extreme dire financial straights and have a tremendous amount of debt to...more
I get a lot of emails from loan officers who are currently working for a mortgage company, but are looking to advance their career and go out on their own. When they see the kind of money that can be made in this business, it's no wonder they aren't satisfied with their 50% commission spread (or even less!). When I first started in the industry, my commission spread was 20% of the yield spread premium or YSP. And, if that wasn't bad enough, we...more
First there was the refinance boom--historic super low rates where every loan was a vanilla slam dunk. Quick and easy cash and the loans sailed through unscathed.Then came the regular ARMs--because rates were rising and people still wanted those low "bragging rights" rates. They simply had to have a rate below 5% so they could one-up the Joneses at the next BBQ and prove how smart they were.Next were the 4-payment plan loans and option ARMs--because people wanted flexibility and needed to keep their monthly payments low but still wanted the big house. Who cares if these were possibly indexed to a foreign exchange (The LIBOR) and extremely volatile?! With a choice of four payments every month what could go wrong?Then there were the interest-only loans which became very popular--heck the rich and famous have known about these for years. They only pay interest and invest the extra equity in the stock market instead of paying the principal money to the bank. It's the ultimate leverage. But the interest-only loans came with a dark side--negative amortization. People didn't exactly know what they were getting themselves into. They wanted to play fund manager and, of course, they...more
Words are fun. But how you use them can be extremely powerful. They can immediately change your image from a rookie loan officer into a top producer instantly. Here's how; the words you use when dealing with a mortgage prospect affect the conversation, and can even be the deciding factor in whether or not you get the loan. Yes, what you choose...more
Owners of mortgage companies, please forgive me. I'm about to let your employees in on a little secret—they have to option to leave you at any moment. And, many of them will. New career opportunities are abundant in the mortgage industry. And unless you start treating your top producer's differently, they may look elsewhere. The loan officer...more
One of the most profitable low-cost investments you can make in your business is to have a mortgage website that not only creates your company's online presence, but also up-sells the customer on your products and services. But finding a website provider that does the job effectively is not always easy.To create a mortgage website you have three choices:1. Go it alone and design it yourself.2. Hire a web design firm to custom build a mortgage site for you.3. Use a ready-made instant website from a design company that specializes just in the mortgage industry.There are advantages and disadvantages to each. Yes, you can create a website yourself from scratch and maintain full control over is, but how much time will this really take? How professional will your homemade site look? And, if it takes you 30 to 40 hours to create the website and get it up and running, this is time taken away from your existing business and potentially lost sales. The total cost to design your website, isn't just the site itself, but also the "opportunity cost" of losing your time. Not to mention, the frustration of dealing with unfamiliar technology.If you decide to hire a firm to design your site as...more
With the present downturn in the market and home prices dropping faster than a lead balloon, I thought it best to share with you what I've learned regarding property appraisals.Here is the cold, hard truth on valuations and what appraisers will NEVER...more
The news isn't good. Over 30 subprime lenders closed their doors this year so far, with many more to come in the next few months. And, one of the biggest subprime lenders, New Century is ready to bite the dust. With all this and more, I would...more
In my last article, I covered some of the reasons why loan officers join net branches and what their motivations are. I also covered some of the personal questions one should ask themselves before they decide to make the jump and join a net branch. ...more
Good as gold. That's what I call a processor that knows how to get the job done, and quickly. I'm met many loan processors in my career, and I can honestly say that many of them were not very good. It's not that they didn't "work hard". They did....more
One of the most common objections a loan officer hears is "Your fees are too high!". All too often, customers become fixated on price and closing costs alone, as the determining factor in making their decision. But price is just one small thing to...more
Every year around this time, my business increases. Loan officers, mortgage brokers, and branch managers--in a flurry to set goals and make resolutions for the New Year-- look for training services to improve their skills. They have high...more