Every morning at 6AM I am roused from sleep by an old-fashioned electronic alarm clock. The one that goes ‘WAH!’ ‘WAH!’ ‘WAH!’. After three rounds of snoozing, I convince myself it’s time to get up and head to the office. When I arrive, I unpack my journal and read the notes I took during the previous trading session. Was it a range day or trend day? Who was buying? Why were they buying? What events disrupted the market? What price levels were frequently tested? How far did momentum carry valuations? What were closing marks?

Next I mull over the day ahead. What’s on the economic calendar? Who is speaking? What’s happening on Capitol Hill? What might move money? How far will it go?

I spend a few minutes chatting with friends on instant messenger. We compare yield spread levels, share current coupon values, discuss prepayment assumptions, and poke fun at each other’s home town hockey teams. (Easy for me to say, Alex Ovechkin wears my home team’s jersey)

In last month’s column, I spoke about effort and how it applied to success. I could spend an entire book’s length, cover to cover, on success and the philosophies that have been rendered over the years. But about 1,000 so called Gurus have already done so in varying degrees of success. So let’s not beat a dead horse. However, the key element to success is effort. No matter how anyone can slice, dice, mince, and puree success, it never happens by divine intervention. Some sweat and thought needs to be integral ingredients to this recipe. 

 

The mental aspect is almost synonymous with motivation. Everyone has a point of motivation. I have written about “where is the pain” and how to assist your customer in finding this sore spot and by eliminating this, you can successfully close a sale. Well, close the sale on yourself, so to speak. A famous baseball manager was once quoted as saying, “fifty percent of the game is ninety percent mental….” Gotta love baseball for a great source of writing material. 

FHA is the big news this month, with 7 updates (well really more than that) under their belt—and they have a huge impact if you are a HUD lender. Because of column space, we will give you the top 3! Of course, a month can’t go by without a couple of Fannie & Freddie updates either. 

 

 

·        FHA-approved lenders are prohibited from accepting appraisals prepared by FHA appraisers who are selected, retained or compensated in any manner by a mortgage broker or any member of lender’s staff who is compensated on a commission basis tied to the successful completion of a loan.

·        Appraiser who performed appraisal MUST be correctly identified in FHA Connection or administrative sanctions will apply.

·        Lenders must ensure that appraisal and Appraisal Management Company (AMC) fees comply with the following:

o       FHA appraisers are not prohibited from recording the fee the appraiser was paid in the appraisal report.

o       FHA appraisers are compensated at a rate that is customary and reasonable for the market area.

o       The fee for the completion of the appraisal may not include a fee for management or any other activity other than the performance of the appraisal.

It was late last July when mortgage servicers participating in the Home Affordable Modification Program (“HAMP”) were summoned to attend a meeting in Washington D.C. The administration had decided it was unhappy with servicer performance as related to loan modifications, both in general, and specifically as related to HAMP, and they were calling the servicers to a summit meeting so they could be read the riot act. There was a new sheriff in town and his name was Timothy Geithner.

 

After the meeting the statements from Treasury made most people believe that Tim had indeed laid down the law… or at least we were led to believe that he was rather irritated. He set a wonderfully arbitrary goal for 2009: 500,000 HAMP modifications by year’s end.

 

Then, I remember hearing numbers going up almost daily. Within a week, Bank of America announced that it had initiated tens of thousands of modifications. Not to be out-fibbed, Wells Fargo, Chase, and the others followed suit and I remember thinking to myself… “Wow, that’s much too fast. They should be lying slower.”

 

DALLAS, Nov. 23, 2009 – MRG Document Technologies (MRG) (www.mrgdocs.com), a provider of mortgage technologies to banks, credit unions and other lenders, announced that it has completed the drafting of new Good Faith Estimate (GFE) and Settlement Statement (HUD-1) forms required by the upcoming Real Estate Settlement Procedures ACT (RESPA) changes and is prepared to have institutions in compliance by the Jan. 1, 2010 deadline. 

            The RESPA changes were enacted by the Department of Housing and Urban Development (HUD) to ensure consumers receive more accurate estimates of closing costs, as well as a clearer comparison of the GFE and HUD-1 forms. The GFE will display the estimated total settlement costs on the first page, and lay out the terms of the loan in an easy to understand manner. These steps enable consumers to better comparison shop among loan originators and match up the estimated costs to the actual costs at closing, creating a more transparent, and better overall lending experience. 

WALLA WALLA, WASHINGTON – (November 23, 2009), NetMore America, Inc. (“NetMore”), an expanding next generation mortgage banker, announced today the hiring of John Cassell as Senior Vice President of Retail Production.  Mr. Cassell brings to this newly created position over 20 years of experience in the financial services industry with executive management responsibility for a variety of functions including finance, sales, operations, technology and human resources. Mr. Cassell will be based at NetMore’s operations center in Clackamas, Oregon and will report to Mark Freedle the Company’s President and Chief Executive Officer.

I am going to keep this short and just rant a little bit about a situation I have encountered recently as a loan originator with the assumption that many of you have experienced this same thing – and I’m curious how you feel about it. Here it goes.

 

So recently, I’ve caught myself “selling” a title company’s fees to various clients. This is a title company I have used for quite some time simply because they offer decent service.  I explained to the various borrowers that these particular fees were NOT my fees and they should perform their due diligence and shop around for a title company if they believe they can find a better deal. However, what I quickly realized is that stating this to the borrower really does not matter – the fees were on the Good Faith Estimate I presented them and the bottom line number was the only number that mattered. As a result, I ended up losing a couple of deals due to the title fees on the GFEs.  I quickly realized what a phenomenal strategy this title company (and I am sure many more with similar relationships with LO’s) had deployed. Title companies have an army of loan officers explaining and rationalizing – and more importantly – selling the title company’s fees to the client! This is precisely when I called one of the advertisers in The Niche Report – Entitle Direct – to receive a quote for a borrower who wanted to shop for more competitive title fees/rates. My mouth dropped when I tripled checked and questioned the representative’s quote. Yes, like their advertisement stated, they beat my local company’s fees/rates by over 35% (I actually pulled out the calculator). I then started to see RED – I was fuming – I lost deals over THEIR fees (remember, I was going to bat for them and selling their fees). I quickly turned over my entire pipeline to Entitle Direct. I will also add that to date, their service has been excellent. Please take this as an objective helpful tip. You may call this an endorsement of one of our advertisers, however, I call it a “call to arms” driven by pure disappointment. Again, I would use any company that advertises in TNR – and this episode just strengthened my belief in our advertisers.

 

Keep up the fight,

 

Robert Pegg

 

SAN DIEGO, Nov. 18, 2009 – Cogent Road, a provider of Internet-based applications for the mortgage industry, announced the latest enhancements to AVAIL, an automated applicant recovery management system enabling mortgage originators to provide ongoing mortgage-qualifying services to prospective borrowers.

CredStar, a leading credit information provider for credit unions and the mortgage lending industry and a member of the First American Family of Companies, today announced the availability of the ENCORE report from First American CREDCO. As an exclusive reseller, CredStar can now offer ENCORE – the industry’s only comprehensive consumer reporting solution that delivers FCRA-compliant risk analysis for all critical elements of the mortgage application and servicing processes – to its credit union and mortgage lending customer base.

 

The ENCORE report, which delivers a 100 percent decisionable, 360-degree risk view of the consumer and lending transaction, features applicant credit risk, identity verification, applicant income and employment verification, subject property and market data.