Archive for November, 2007
Nice Package! Make Sure Your Mortgage Has The Best Chance of Getting Approved
November 20th, 2007 Categories: Mortgage News
How to Make Sure Your Mortgage Has The Best Chance of Getting Approved.
Times are tough to be in the mortgage industry and consumers are feeling the trickle down effect. The (obvious) reason is that lenders have really tightened up their approval standards. While this may be generally interpreted as an actual change in underwriting criteria, i.e. raising minimum credit scores and lowering maximum loan to value (LTV) ratio’s, there are also other standards that have been raised. While mortgage origination is more of a science than an art nowadays, clean documentation and other proper file aesthetics can mean the difference between a potential borrower being approved or denied.
Mortgage Origination is the process of creating a ‘file’ or ‘package’ that has all of the required paperwork for a lender to underwrite the mortgage for approval, in a specific order…Underwriting is the task (usually by the lender) of insuring everything that has been represented by a consumer (and broker/banker) is backed up by proper validation of required documentation. RESPA (compliance), income, asset, credit etc docs must all be in a specific order, dictated by the individual lender that will fund the loan.
When I ran a mortgage brokerage, we were sticklers (and known) for what’s called a ‘clean package’…a file that was in meticulous order and easy for an underwriter to navigate through. We removed all staples, sticky notes, paper clips, and placed each required set of documents behind their own labeled tab within the file. Once in order my originators and processors sat down and wrote a summary letter about the client, file, and specifically anything about the situation that was in any way out of the ordinary. When you picked up one of our files, not a single piece of paper would or could fall out.
This is quite contrary to how many mortgage outfits submitted their files to underwriting. It was/is not atypical for an originator to loosely throw all the docs into a manila folder, cram it into an overnight carriers envelope and send it off…then wonder why it took 3 weeks for the client to get underwritten. Underwriters are human, they gravitate toward the easiest path to complete their job. Sitting at their desk, they look at two files: One that reads like a book and one that falls apart like a newspaper in a windstorm. Which would you want to work on first?
During the refi-boom, a mortgage outfit could get away with such sloppy practices. Investors were frothing at the mouth to write and book new business, so pretty much anything flew. Underwriters (UW) would work through what they could and stip the originator for what they couldn’t find (stip: re-request missing documents). A UW was also a $10/hr temp position, which brings $10/hr temp talent. Well, times have changed. Lenders have downsized their staffs considerably, axing most all of the phat, and lets just say that investors are no longer beating doors down to fund mortgages. As a result of these events, lenders and their permanent UW’s aren’t putting up with any more sh*t files either.
You hear more and more about ‘qualified borrowers’ getting denied a mortgage. A big factor in this is mortgage originator sloppiness. If the file isn’t stacked and packaged right the first time, it’s likely to get the smack down. Lenders are getting real tight on re-submittals too…as in they’re not allowing them, a one and done scenario. New systems are in place to check on multiple consumer submittals to multiple lenders. Multiple submittals will get a qualified borrower turned down too. Today it’s entirely possible (actually more of a regular reality) for a perfectly qualified borrower to get denied a loan because of mortgage originator ignorance. Lenders simply aren’t putting up with what looks like second hand junk, regardless if the consumer is truly qualifiable…where lenders used to look for reasons to approve a loan, they now look for reasons to deny them.
How can a consumer insure to the best of their ability that their mortgage professional does business, well, professionally?
- Ask if they use a processor and how much experience they have together. A good processor is almost as important as a good loan officer/ mortgage originator. My business stayed in business because I has a great processor (actually two). A good processor can make a marginal loan officer successful, a bad processor can make the best loan officer a failure. Good processors are often the unknown success factors behind great mortgage company’s.
- Go to their physical office. Look around, is it neat and tidy or does it look like the floor of the New York Stock Exchange at 4:30pm? If you see files stacked on the floor and paper everywhere, walk out.
- Inspect the RESPA package you receive to sign, it’s likely to reflect the type of package that will be sent to the lender. Is it orderly and easy to follow, or a bunch of papers clipped together with wrinkles and folds?
- Look for general signs of practical professionalism. A broker/banker that is quick to say ’sure, no problem’ to all of your questions, wants, and needs, is probably one to stay away from. A mortgage professional should represent their abilities with caution, carefully stating and addressing expectations with a conservative tone.
Mortgage origination is a profession that deals with tens of millions of dollars, it’s about time that those in the industry treated the position with the dignity and professionalism that it should command.
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Dan Green Productions Presents, I am a Blogger…
November 20th, 2007 Categories: Mortgage News
Dan Green Productions Presents:
I am a Blogger…
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Dan hands me (everyone) a bunch of flash cards and says ‘Look in to the camera, read the card and fill in the blanks with whatever you feel.’So, trying to be true to ‘my blog’ I spit out words like ‘disruptive’ and ‘piss people off’…Man I crack myself up.Blogging is also:
- Therapeutic
- Fun
- Addictive
- Narcissistic
- Good for Business
- Dedication
- Real
Keep it up Dan, Spielberg ain’t got nothin on you…BTW, Whats up with the Wellcome Matt guys outfits? I missed them at the Expo…Looks like they’re Ghostbusters 2.0.
The Cast:
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Threatening Emails to The XBroker
November 17th, 2007 Categories: Mortgage News
It’s been awhile since I received an email like this. Way back when I started promoting transparency in the mortgage industry they were alot more common…
Emails (and other communication) of this sort are remarkably consistent. An attempt at anonymity with some sort of mafioso like threat. In every case, they make me smile because it means the end is near for the sender…its a last ditch, lazy swing before they’re down and out for good. While their words sound tough, with a Tony Soprano like accent, the person (or people) behind these messages are flat-out cowards..or in the spirit of The Sopranos: Big Pu****’s
From: Richard Pate <dick.e.pate@gmail.com>
Date: Nov 15, 2007 2:54 PM
Subject: By the way
To: jeff.corbett@gmail.com
You better look behind you c***sucker because I saw you today. Havefun eating the s***burger that I am going to serve to you later tonight.
Followed by:
From: “Richard Pate” <dick.e.pate@gmail.com>
Date: Thu, 15 Nov 2007 15:48:36
To:jeff.corbett@gmail.com
Subject: Hello
Just wanted to check in and see how things are going for you. So
what’s it like be a low life? Is there enough time in the day to be a
total sh** heel or do you dope it up so you can be a tool for extended
periods of time? Why am I asking when I already know the answer.
I’ve never seen a person that acts like their picture and that is my
way of saying that your picture makes you look like an uncircumcized
co** and you act like one too. Congrats on being a f***face and best
of luck on future plans.
The genre, words, and context in which Dick writes makes his identity glaringly obvious (to me). I engaged Dick with a series of replies, alas he has since gone dark. What this Dick didn’t know (but does now) is that there are more than a few agencies (Federal and otherwise) watching him and his key strokes…See Dick run, See Dick try and hide, See Dick get castrated. Stoopid Dick.
I generally have two sides to me…One that is amenable, will give you the shirt off his back, and is fiercely loyal…which is me 97% of the time.
Then there’s a side that only a very few people know, which is reserved for those who blatantly and repeatedly ‘cross the line’. I can count on one hand who belongs in this special group. It takes alot of hard work to obtain membership here, but once you’re in, you’re a lifer…
You’re a lifer Dick…Many Things Wicked, Your Way Comes…
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NAR Convention in Las Vegas
November 17th, 2007 Categories: Mortgage News, NAR Las Vegas 2007, Social Networking
The NAR convention in Las Vegas was an experience of deafening ‘white noise’. Not quite sure how many people attended the event but as I walked through the Venetian, meandering my way to The Sands Expo Hall, I passed at least 5000 individuals wearing neck passes tagged with ribbons that demonstrated NAR’s continued affinity with acronymia.
The exhibit hall reminded me more of a State Fair rather than a convention for real estate professionals. I swear I saw an exhibit with a guy demonstrating how his product could get ’stains out of anything’. At least 5 booths had a Nintendo Wii to play with. One of the more popular exhibits was selling ‘gold by the inch’ and fake pearls (I’m dead serious, ask Dan Green).
My purpose for being there was to chat up some folks at Incredible Agents booth as a ‘blogger’ but ended up having a bunch of one on one convo’s with people from the greater blogosphere and Inman TV. Were all minor celebrities to each other. I stuck around for about 2 hrs then went back to my hotel room for a quick meal and nap before heading to The Palms for Active Rains swanky soiree in a private suite.
Things got real fuzzy after about an hour or so in Da Crib (open bar…*ugh*). Many thanks to the guys and gals at Active Rain for a great time and a bangin hangover. I’ve got pictures (boy do I have pictures) but they’re on my wifes camera. She’s in North Carolina and I’m in Dallas, so probably won’t be able to post them until after T-Giving. Getting her to understand how to quickly download them and email to me would probably end up with her hanging up on me with no pix sent…so marital logic says to just wait.
A quick reflection on the trip:
Anyone who spent money on an exhibit probably won’t see a positive ROI. Besides the ‘gold by the inch’ and Incredible Agents booth, nothing else really stuck out to me.
‘Blogging’ is still a pretty ambiguous novelty to most Realtors, most think its only about writing articles. Incredible Agent’s product encompasses about 10 other exhibitors products for a fraction of the cost and is exponentially easier to integrate, but I digress.
Mike Simonsen is a party animal, if you see him at one of these events, be careful or you too will get sucked in to oblivion.
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New Marketing Strategies Via Social Networking Optimization for Real Estate and The Big Push for Compensation Reform
November 13th, 2007 Categories: Mortgage News, Real Estate News, Real Estate Technology, Realespace, Social Networking, social networking optimization
New Marketing Strategies Via Social Networking Channels for Real Estate and The Big Push for Compensation Reform.
‘We are the fossils, the relics of our time, we mutilate the meanings till they’re easy to deny…be ashamed of the mess you’ve made.’
- William Corgan
I hear many mortgage and real estate professionals within the industry still spouting off about how no technology will ever replace them…no, technology won’t, but the professional that leverages technology properly will eliminate the agent that doesn’t.
Today, I’m hyper-focused on two issues that are effecting both the mortgage and real estate industry’s:
- New Marketing Strategies via Social Networking Optimization
- The Big Push for Compensation Reformation
Both issues are intimately connected via the advent of progressive Technology (proper).
SEO vs SNO…
SEO is an eyeball catcher that brings potential buyers to your front door, however, what you show them, the level of service you provide, and the subsequent chance for referrals is rooted in proper SNO strategy, a strategy that involves giving a network the ability to spread your seed for you.
As a service provider, there is no higher compliment than a referral from a satisfied client that generates a new client. All the SEO in the world isn’t going to help a company foster satisfied clients. If you think about it, a bad service provider with good SEO is dangerous, it’s very indiscriminate in this way… Proper Social Networking Optimization is where it’s at for the future of real estate and mortgage marketing and will pave the way for future compensation reformation.
Side note: Real estate and mortgage professionals should stay away from technology providers who are in the business of selling you ‘SEO solutions’. Chances are they have no idea WTF real estate and/or mortgage is about, and are solely in the biz to make money off of your ignorance. They’re the type to buy a house on emotion, try and get you to commit fraud in the process, get it financed any way they can, then blame you for paying too much and having an effective interest rate in the 14% range. These are the same people who will tell you blogrolls are bad, although sites with PageRanks of 7 and higher routinely have home pages with hundreds of links on them.
SEO is getting to the point of ‘fire and forget’, and is getting easier for the laymen to implement…here watch, I’ll demonstrate:
I use WordPress for my website and a few free SEO plug-ins (and here too) that automate those ’secret strategies’ that are supposedly the proprietary wares of other so called company’s.
Use this plug-in so Google and Yahoo can crawl your sites ’site map‘.
One-click makes it easy install and activate any of these plug-in’s, with, well, one-click.
Want great SEO and/or blogging advice? Get it straight from the sources, like SEOMoz, Copyblogger, Pro Blogger, and HubSpot.
Want a
cannedproven and ‘packaged’ solution provider? Check out Real Estate Tomato, Incredible Agent, and Realivent.Need ground level, top notch, hands on education and consulting? The fellas at Domus are second to no one…
There, you have 97% of the resources you’ll ever need to maximize your sites potential SEO. Now you just have to write (or aggregate) some compelling content to keep those unique visitors coming back for more…
Please excuse the following ’self-promotion’, I’m going to make a point as to how SNO can serve as a new marketing strategy through compensation reformation in the mortgage industry…
I’m currently working on a few initiatives for the mortgage and real estate industries, one of them is called RateSpeed. If you’re a regular reader of The XBroker, you have heard me talk of this ‘tool’ before (many delays with many reasons that really don’t matter at this point). RateSpeed has absolutely nothing to do with SEO, it’s all about SNO.
For those who haven’t heard of RateSpeed, real quick…It’s akin to a ‘black box’ that aggregates a mortgage professionals wholesale lender interest rate pricing feeds, organizes and redisplays them according to best case results dependent on the consumer end-users credit and financial risk data.
Mortgage professionals will have no ability to manipulate the data between the wholesale lender and the consumer using the application and MUST disclose up front a flat fee (of their discretion) for services…These are the issues at the core of the problem to today’s mortgage mess, IMHO. RateSpeed displays raw rate pricing, showing the exact YSP down to the $.01, and how it can be applied to closing costs, if that is the consumers want, but most importantly it shows this directly to the consumer.
It’s also happens to be a an efficiency and lead generation tool for mortgage pro’s willing to embrace transparent philosophies. RateSpeeds ability to auto-price and sort through the myriad of lenders they’re approved with stands to save a mortgage pro’s inordinate amounts of time and related cost. RateSpeed, at it’s core, stands to alter how mortgages are sold through compensation reformation. By showing consumers exactly how mortgage professionals make money, reform will (is) be(ing) demanded, evidenced by HR 3915. (Nod to Brian Brady for his copious amount of research and opinion on the issue).
I know many mortgage professionals who practice this level of transparency in their day to day business, but there are too many who don’t, and they’ve screwed it up for the rest of us. Some will say it’s too confusing to the consumer, others just want to continue the practice of personally enriching themselves through consumer ignorance. Anyway, how RateSpeed specifically works isn’t what this post is about, so I’ll move on.
RateSpeed will be distributed via a network mortgage professionals as a widget, a chunk of code that is embeddable on current web/blog sites to professionals who embrace transparency and ‘do business’ in such fashion. Real estate professionals can also embed RateSpeed on their sites because it will (must) be directly connected to their selected (and approved) mortgage pro(s) who are ‘in the network’.
From a Social Networking aspect, it will seam together hubs of like real estate agents and mortgage professionals who appreciate, practice and preach a common, open philosophy when it comes to providing mortgage services. To take it a step further, RateSpeed will have the ability to permeate existing social networks like LinkedIn and FaceBook (if think you are reading between the lines here, you are).
*Pause* (Switching Industry’s)
After reading Brian Larsons piece last year and (at about the same time) engaging in a mile long comment thread on Redfin.com(s) former ‘Wall of Shame’ category that involved the ethereal term ‘Procuring Cause’, I was drawn to Greg Swann’s perspective on the issue of divorcing real estate commissions. It is voluminous, the most comprehensive resource and reasoning of it’s kind. I’d be lying if I said I read it all, though I’ve been a proponent of much of the content within the diatribes I’ve speed read. What’s most compelling about the topic for me is two-fold: A. Who is tirelessly arguing for it…a practicing real estate professional, and B. The argument is synonymous to calling for the end of the MLS as it still stands today, a dinosaur of a database that was meant to guarantee inter-broker compensation.
Compensation reformation or divorcing real estate commissions is coming, since inter-broker compensation can be handled outside of the traditional MLS (as Greg and company tirelessly articulate). There have been a plethora (more than I care to link to) of proposed solutions, albeit most of them still require prohibitive adoption methods and maintain confinement to, and within, a defined box. A different version of the same thing isn’t a viable solution and mass adoption of isn’t probable considering the openness of the technology landscape, 2007-08 forward.
Zillow and Trulia aren’t it either, nor are their widgets. Why would an agent want to feature an application on their website that leads a potential client away from their website? Both well funded 3rd party destination real estate information websites business models revolve around advertising. Advertisers pay money to players like Z & T because consumers are carousing their sites, not an agents or brokerage, so it would seem fair to say that both entities would like to keep the consumer there. This isn’t a knock against either company, they do what they do and make no bones about it, however their respective agendas don’t line up with the individual agent. Both company’s (I can hear David G. coming now) will maintain that they exist to improve the consumer experience and send visitors (back) to the individual professionals. This may work in theory, but in the end both are pretty much destined to become Phone Book 2.0…which is fine.
An application (technology, widget, et al.) that allows for a real estate professional to ’share’ their valuable information and market their services to others within similar spheres, while insuring an acceptable assurance of reciprocity has yet to be identified…though it should involve a strategy that implements an open Social Networking Optimization framework that allows birds of a feather to flock and fly together…
More on this later…I wanted to get at least this much out before I left for NAR…*whew*
I’ll be at Incredible Agents Booth #3444 in The Sands on Wed, 11/14 @ 1pm…
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