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Free Webinar Targeting Realtors Increase Your Purchase Market Share Weds, Aug 21 2:00 pm to 3:30 EDT Register Here As rates increase, more originators will be concentrating on purchases and this will translate into higher levels of competition. In the long run a diversified marketing plan includes both purchases and refis. You can't just flick a switch from one to the other. The question is -- how are you differentiating yourself from the competition in order to succeed in a Realtor market? Even if you have been in the mortgage industry for a long time, chances are that many real estate agents you have served have left the industry. Therefore, you will need to develop new relationships. ***************** Free Trial OriginationPro Marketing System ⇒Personalized weekly email newsletters; ⇒Library of real estate & finance articles; ⇒Library of personalized sales articles; ⇒Hundreds of personalized emails; ⇒Weekly personalized mobile alerts; ⇒Print newsletters, flyers and more; ⇒Certified Mortgage Advisor webinars--including webinars for your Realtors; ⇒Free downloads such as the Book of Home Finance, seminars, First Time Buyer Marketing Kit and more Sign Up For Trial Now Click Here *********************************** Don't Throw Prospects Away With rates rising, you must close every prospect. A compliant credit repair company you can rely upon for advice and service -- Credit Repair Resources was voted the best small credit repair company in America! Get your prospects qualified with the best service available. Credit Repair Resources Chad Kusner 888.927.7760 chad@crr760.com CRR Site August 20, 2013 ⇒ Obama Lays Out Housing Plan ⇒ Credit Standards Loosen ⇒ HUD Working on Reverse Letter ⇒ Homeownership Rate Shrinks Again ⇒ Sponsoring a Broker's Open The Price of Oil With all the attention focused recently on rising interest rates, we still have recognized the fact that rates remain near historic lows. On the other hand, as rates have risen and the stock market has climbed, oil prices have headed above $100 per barrel once again. Yet, there seems to be very little concern or news regarding this latest spike. In the past, the rising price of all set off alarms as analysts expected higher oil prices to lead to a slower economy because consumers will be spending more of their budgets on the cost of energy. Of course, a slower economy can lead to lower interest rates. What is really interesting is the fact that this summer higher oil prices have not lead to significantly higher gasoline costs. Why is that? While it makes sense that oil prices will directly affect the price of gas, one should remember that a variety of other factors will affect the price of gasoline. These factors include the amount of taxes levied upon gasoline, the amount of local refinery capacity, the cost of shipping and also the availability of potential alternatives to gasoline. For example, U.S. oil and natural gas reserves are increasing dramatically because of new technologies such as shale oil production. Regardless of what the politicians will tell you, while this increased production may help make the U.S. energy independent, it will not necessarily affect the price of oil world-wide. However, because the oil is extracted locally, it has the potential to reduce the price of producing gasoline. This does not mean that gas prices will fall precipitously while oil prices rise. Eventually, the relationship will be reestablished. With regard to interest rates and real estate, the price of gasoline does affect trends in the real estate sector. As a matter of fact, a major real estate trend has been influenced by these prices. We will present more on this trend in an upcoming issue. Rates were stable for the second straight week -- however, rates trended up as the survey was released. Freddie Mac announced that for the week ending August 15, 30-year fixed rates remained at 4.40%. The average for 15-year loans was up slightly to 3.44%. Adjustable rates increased, with the average for one-year adjustables rising to 2.67% and five-year adjustables increasing to 3.23%. A year ago 30-year fixed rates were at 3.59%. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac -- "Fixed rates have been bouncing around over the past few weeks on market speculation that the Fed will taper some of its monetary stimulus. In fact, 65 percent of economists surveyed by Bloomberg expect the Fed to reduce the amount of bond purchases at its September 17th and 18th monetary policy committee meetings. Currently, rates on 30-year fixed loans are 1.1 percentage points above their all-time low set on November 21, 2012, which translates into $125 more per month in payments on a $200,000 loan." Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Current Indices For Adjustable Rate Mortgages Updated August 16, 2013 Index Aug 15 July 6-month Treasury Security 0.08% 0.07% 1-year Treasury Security 0.13% 0.12% 3-year Treasury Security 0.70% 0.64% 5-year Treasury Security 1.54% 1.40% 10-year Treasury Security 2.77% 2.58% 12-month LIBOR 0.684% (July) 12-month MTA 0.153% (July) 11th District Cost of Funds 0.954% (June) Prime Rate 3.250% The Ask The Expert Column is sponsored by NACSO. NACSO –- National Association of Credit Services Organizations -- advocates for strong industry standards, consumer protection, and ethical business practices for the credit repair industry. For more information of NACSO's Standards of Excellence and NACSO membership, Click Here. To read the latest blog article on NACSO's site, Why Disputing Credit Report Errors The Way The Experts Recommend Could Hurt, Not Help, Click Here Part II of the answer to this question--I have been asked by a Realtor to sponsor a "broker open" in which other agents will visit her new listing. Do you recommend I spend the money to sponsor this event and is it legal for me to do this? I work for a small bank and my manager is not sure. Janice from New York Last week we addressed the legal issue and the idea of sponsoring a broker open. This week we will delve into the issue of making the event more effective with regard to the hosting Realtor and the attendees--adding value. For example, the loan officer can actually help advertise the broker open to their Realtors--either by email and/or by bringing flyers to real estate offices. Delivering flyers regarding an important event is more important than delivering rate sheets as far as value is concerned. In this case you are adding more value to the Realtor holding the broker open AND your other Realtors. The home which is listed also represents an opportunity to add value. The loan officer should make sure there are plenty of marketing materials specific to the home. For example a "listing spreadsheet" giving financing alternatives. Or perhaps an article which is germane to the price range or geography of the neighborhood. Keep in mind that you don't have to write the article--just personalize it. For example, the OriginationPro Marketing system contains an entire library of real estate related articles automatically personalized. Add a special offer for those who visit the house as well. We will go deeper into the question of adding value to Realtors in our webinar tomorrow which is free...Targeting Realtors to Increase Your Purchase Market Share on August 21. Register Here. Dave Do you have a reaction to this commentary or another question you would like answered? Email us at success@hershmangroup.com. Breaking News: President Obama’s plan to ease the path to homeownership for struggling Americans involved reducing the thicket of red tape standing between many would-be borrowers and a home loan. A key facet of his plan is aimed at helping responsible victims of the crisis to get approved for a loan, even if their credit took a hit during the recession “We should simplify overlapping regulations and cut red tape for responsible families who want to get a loan, but who keep getting rejected by banks,” Obama said. “And we should give well-qualified Americans who lost their jobs during the crisis a fair chance to get a loan if they’ve worked hard to repair their credit.” Housing and Urban Development Secretary Shaun Donovan explained the proposed initiative, dubbed “Back To Work,” in more depth. Donovan said many of the 7.3 million Americans hired in private-sector jobs over the last 41 months had lost a job or seen their hours slashed during the recession. Some lost their homes or saw their credit scores plummet. Under current rules, borrowers must demonstrate three years of solid credit before qualifying for a home loan through the Federal Housing Administration. “They're now getting back to work,” Donovan said. “What we're saying is if they've had a full year of being able to show they're back to being able to have very strong credit, pay on their home loan, we ought to take additional steps to help them be able to buy a home or to refinance.” Donovan said the administration is intent on “streamlining duplicative regulations, simplifying those; setting clear rules of the road for enforcement going forward.” Source: The Hill Freddie Mac earned $5 billion from April through June, the seventh straight profitable quarter for the mortgage giant. The second-quarter gain reported Wednesday compares with net income of $3 billion in the same period of 2012. Freddie says its earnings were due largely to increased profits from investments made to hedge against rising interest rates. That helped offset losses on home loans during the quarter. Freddie, based in McLean, Va., will pay a dividend of $4.4 billion to the U.S. Treasury next month and is requesting no additional aid. The government rescued Freddie and larger sibling Fannie Mae during the financial crisis in 2008. Together, they received loans of about $187 billion. A housing recovery that began last year has made both profitable again. Combined, they have paid back roughly $136 billion of their government loans. Those payments are helping to make this year’s federal budget deficit the smallest since President Barack Obama took office. Once the second-quarter dividend is paid, Freddie will have repaid $41.4 billion of the roughly $71.3 billion it received from taxpayers. Fannie and Freddie own or guarantee about half of all U.S. home loans, worth about $5 trillion. Along with other federal agencies, they back roughly 90 percent of new home loans. Source: The Washington Post The NAR recently wrote to HUD’s assistant secretary of housing about the FHA certification and recertification process for condos. The letter was also on behalf of the National Association of Home Builders and two other organizations. The purpose of the letter was to recommend setting up a new less burdensome FHA condo program structure to improve the cert/recert process. It turns out that only about 10% of condos nationwide are FHA approved (“certified”). More disturbing is the statistic that in 2013 approximately 60% of the 3,500 condo projects seeking FHA approval were denied. Surprisingly FHA condo loans are some of the strongest performing in the FHA portfolio by a large margin. NAR’s letter goes on to outline three steps that HUD could consider to help ease FHA condo requirements. Currently, a condo has to get recertified by FHA every two years. This is an administrative burden and costly. NAR suggests a recert process of every five years. Other ways to reduce costs would be to only require changes to the existing condo documents be filed and setting up an electronic filing system. According to the NAR, this would increase the number of condo boards seeking FHA approval. Lastly the letter encourages coordinating with the GSEs and other federal agencies. According to the NAR, these suggested changes would help lenders to unload their foreclosure inventory because it will increase the pool of eligible buyers. Easing the condo cert/recert process would also help unload vacant condo units which will increase the owner-occupied ratios in condos. This all sounds logical so hopefully HUD will be listening and implementing. Source: National Mortgage News Americans overwhelmingly believe owning a home is a good financial decision and a majority of renters say homeownership is one of their highest priorities for the future, according to a survey by the National Association of Realtors®. The 2013 National Housing Pulse Survey also found that renters are thinking more about purchasing a home now than in past years, while the number of people who say they prefer to rent has declined. “Homeownership matters to Americans who consistently realize the many benefits it provides to communities, families and the nation’s economy,” said NAR President Gary Thomas, broker-owner of Evergreen Realty, in Villa Park, Calif. “Due to high housing affordability and today’s rates it makes sense for people to consider homeownership over renting. In fact, in many parts of the country it’s cheaper to own a home than to rent one. Therefore, it’s no surprise that renters recognize that owning a home offers tremendous long-term benefits and is an investment in their future.” The survey, which measures consumers’ attitudes and concerns about housing opportunities, found eight in 10 Americans believe buying a home is a good financial decision and more than two-thirds (68 percent) said now is a good time to buy a home. Since the last survey in 2011, more renters are now thinking about purchasing a home, up from 25 percent to 36 percent, while those who say they prefer to rent dropped from 31 percent to 25 percent. Half of renters say that eventually owning a home is one of their highest personal priorities, up from 42 percent to 51 percent. When asked for reasons why homeownership is important, respondents’ top reasons underscored basic American values and freedoms; they were building equity, wanting a stable and safe environment, and the freedom to choose where to live. While these reasons have remained virtually unchanged since 2011, they do vary slightly according to demographics. The top scoring reason for African-Americans and Hispanics was that homeownership provides stability and a safe environment; women also placed more emphasis on environmental factors than men. Non-college graduates placed stronger emphasis on public schools, owning a home before retirement, and living in a safe and stable environment. Source: NAR The quarterly rate of past-due payments on residential loans improved again, and the rate is expected to fall to the lowest level in five years during the current quarter. Delinquency of at least two months came in at 4.09 percent as of the end of the second quarter. The rate declined from the end of the first quarter, when it stood at 4.56 percent. TransUnion, which reported the figures, said that the rate of decline has been at a record level for three quarters in a row. As of June 30, 2012, sixty-day delinquency was 5.49 percent. TransUnion Group Vice President of U.S. Housing Tim Martin said many of the past-due loans have been delinquent for a quite a while. "Improving house prices and low interest rates have helped some homeowners across the country refinance or sell their way out of housing payments they were having difficulty affording," Martin stated in the report. "While we expect these positive factors to continue reducing the residential delinquency rate throughout 2013, the recent and sizable increase in interest rates may eventually slow the progress." Delinquency is projected to finish the third quarter at less than 4 percent -- the first time since 2008. Source: Mortgage Daily