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Higher Rates Means More Competition For Every Prospect Converting More Leads & Leveraging For More Referrals Weds, September 11 2:00-3:30 PM EST FREE TRIAL HERE Note: registration for this webinar is nearly full. The remaining slots are open only for subscribers & trial members of the OriginationPro Marketing System. Those signing up for the free trial get complete access to the system for 14 days with no obligation. After signing up for the trial, you will be registered for the webinar automatically and given access to the recording if you can't make it. The competition to attract and close prospects is greater than it ever has been before. Today the average prospective homeowner or refi prospect receives daily notifications from mortgage companies via the Internet, email, cell, snail mail and from their present bank. When you produce a prospect, you are using your most precious resources: time, money and energy. Every time you produce a prospect and you don't close, your resources are wasted. What does it take to close more prospects? In this webinar, we will be going over six keys: 1. Create a great first impression 2. Get the right prospects to respond 3. Sound great over the phone (or email) 4. Exceed expectations -- deliver value 5. Follow-up -- in the right way 6. Leverage for more referrals Industry expert Dave Hershman of OriginationPro has invited Chris Carter of MortgageQuest to be a guest speaker. Together they will give you the sales, marketing and technological strategies to convert more leads and get even more referrals from those leads *********************************** 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 September 3, 2013 ⇒ Great News on QRM Proposal ⇒ FHA Gives Rebound Buyers a Break ⇒ Rates Affecting Affordability ⇒ VA is Booming ⇒ Energy and the Real Estate Rebound Back to Oil Prices and Real Estate A few weeks ago we discussed the effect of higher oil prices on the economy. We know that as energy prices rise, it saps strength from the economy because consumers have to use more of their income to pay for the cost of energy. In the past few months oil prices have risen to over $105.00 per barrel--and that was before Syrian crisis hit the headlines last week. The price of oil has escaped the forefront of discussion this year because we have not seen gasoline prices spike at the same time. In the long run we know that higher oil prices will lead to higher gas prices as well as increased costs for other forms of energy. Our focus today is not on the short-term effects of energy with regard to the economy. Today our focus upon the long-term effects of higher energy prices on real estate. If you look at the real estate recovery we are experiencing more recently, the price of energy is a factor. The present real estate recovery is uneven in many ways. Lower priced homes are hot and the luxury home market is not recovering at the same pace. Some states are hot while others are still languishing. Another trend shows that inner cities and close-in suburbs are doing better than outlying areas. It is here where we think energy prices are a factor. We have reported previously that the Millennial Generation does not want long commutes. Many prefer to use mass transit or live walking distance from work. This has become an important factor in this decade because for a generation, inner cities have suffered as the suburbs boomed. Now the tide has turned in many cities. Will this trend continue? Any future spike in energy prices will certainly serve to reinforce this new trend. We think that this story bears watching with regard to the future of real estate. Meanwhile, back to the present. This week comes the all-important jobs data which will make it an interesting back-to-work and back-to-school week. The most recent run-up in rates could be reinforced or reversed by employment data that surprises in either direction. Rates trended lower during the past week. Freddie Mac announced that for the week ending August 29, 30-year fixed rates fell to 4.51% from 4.58% the week before. The average for 15-year loans decreased to 3.54%. Adjustable rates were mixed, with the average for one-year adjustables decreasing to 2.64% and five-year adjustables increasing to 3.24%. A year ago 30-year fixed rates were at 3.59%. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac -- "The Fed is monitoring the housing market closely after the run up in rates over the past few months. The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed rates on home loans to decline over the week." 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 30, 2013 Index Aug 29 July 6-month Treasury Security 0.06% 0.07% 1-year Treasury Security 0.14% 0.12% 3-year Treasury Security 0.79% 0.64% 5-year Treasury Security 1.60% 1.40% 10-year Treasury Security 2.75% 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 Two of The Answer To This Question. I know that you sell newsletters for us to send to our clients. My question is--how often should I send newsletters? Right now I mail newsletters one time per quarter, but I feel that is not enough. Mark from Colorado Last week we spoke about what type of newsletter you are sending out--both format (print or email) and content (fluff, mortgages or real estate). This week I would like to talk about targets. First, regardless of the target -- the more value you include -- the more often you can communicate. For example, if you send a postcard or email every week saying -- are you ready to purchase or refinance? -- that will get old quickly and the communication will be directed to the round file. If it is of interest, regular communications are possible, whether weekly, monthly or quarterly. To determine value, you need to know what is important to your target. If you are communicating with Realtors, then real estate and selling real estate is their main concern. So, sales articles and current news regarding real estate are right on the mark. Recipes and secondary charts are not on the mark. One will be welcomed with open arms. The others will be hit or miss, which means a few will love but many others will send to the round file. Don't be influenced by the few who really love (I loved that recipe) versus the majority who thing that it is junk. Dave Want to view examples of our newsletters and other marketing materials? Click Here for free samples. Do you have a reaction to this commentary or another question you would like answered? Email us at success@hershmangroup.com. Breaking News: The market has been calling for regulators to focus on synching the Qualified Mortgage rule with the Qualified Residential Mortgage standard to ensure safe and sound lending policies remain without stalling market innovation. The mortgage industry got its wish Wednesday when a new proposed QRM rule came out, lessening the requirements for lenders who want to sell mortgages off to the secondary market without having to retain a slice of the credit risk. Six regulators, including the Federal Deposit Insurance Corp., Federal Reserve and Office of the Comptroller of the Currency, announced two approaches to redefining the QRM rule. The first approach is simple: A loan already classified as a qualified mortgage by CFPB standards could move forward with no downpayment requirement under QRM, allowing these loans to escape risk retention requirements. The alternative approach would require lenders to retain a stake in the credit risk when home loans sold off are originated without at least a 30% downpayment requirement. The two approaches are very interesting. On one hand, the market seems to get a much easier standard, but on the other, a higher downpayment would take effect. The first approach, or no downpayment requirement, is the preferred approach at this point. "QRM equaling QM is a very good thing because it’s recognition that the system in place actually works," explained Mortgage Bankers Association CEO and president David Stevens. He added, "Without a downpayment restriction in place, it’s going to alternatively be a good thing to make sure we do not throw a road block in a housing market seeking to recover." The revamped QRM proposal is seen as a victory for homebuyers in the country, said National Association of Realtors president Gary Thomas. "The new standards, which align with those applied to Qualified Mortgages, are stringent enough to protect consumers from unscrupulous lending practices while also creating new opportunities for private capital to reestablish itself as part of a robust and competitive residential finance market," Thomas stated. After listening to commentary, regulators are now willing to do away with the 20% downpayment standard and are asking for feedback on the two new approaches by Oct. 30. Source: HousingWire The Federal Housing Administration is making it easier for once-struggling homeowners to qualify for a home loan backed by the agency. For borrowers who meet certain requirements, the FHA is trimming to one year the amount of time that homebuyers must wait after a bankruptcy, foreclosure or short sale before they may qualify for a FHA-backed home loan. The waiting period had been two years after the completion of a bankruptcy and three years after a foreclosure or a short sale. But only certain consumers who've been in those circumstances will be able to meet the criteria attached to the eased restrictions. Borrowers must be able to show their household income fell by 20 percent or more for at least six months and was tied to unemployment or another event beyond their control. They also must prove they have had at least one hour of approved housing counseling and, among other things, have had 12 months of on-time housing payments. "FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a home loan," said FHA Commissioner Carol Galante, in Mortgagee Letter 2013-26 announcing the changes. FHA-backed loans are a popular option for first-time buyers and for consumers with lower credit scores who might not otherwise qualify for a loan backed by Fannie Mae or Freddie Mac. However, the agency has recently increased the fees tied to FHA-backed loans. Source: Mortgage Daily Nationwide housing affordability slipped several notches as recovering markets witnessed significant firming of home prices in the second quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). In all, 69.3 percent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $64,400. This is down from the 73.7 percent of homes sold that were affordable to median-income earners in the first quarter, and the first time that the measure has fallen below 70 percent since late 2008. "Housing affordability has been hovering near historic highs for the past several years, largely due to exceptionally favorable rates on home loans and low prices during the recession," observed NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. "Now that markets across the country are recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor." "Rising home prices signal the improving health in housing markets, and the median price of all new and existing U.S. homes sold in this year's second quarter, at $202,000, was well ahead of the second quarter 2012 median price of $185,000," observed NAHB Chief Economist David Crowe. "Together with rising rates, this contributed to affordability slipping to the lowest level in more than four years. Such movement would be less concerning were it not for ongoing discussions regarding potential changes to the home loan interest deduction and federal support for the secondary market, both of which play enormous roles in keeping homeownership affordable." Source: NMP A “great debt divide” exists between men and women, a survey from Experian, Costa Mesa, Calif., reported yesterday, with women clearly stretching their dollars and using credit more wisely than men. The Experian analysis of credit scores, average debt, utilization ratios, mortgage amounts and home loan delinquencies of men and women in the United States showed that while national credit scores only vary slightly--a one point difference--other differences demonstrate that women make much more creditworthy customers. On average, the analysis said: Men have 4.3% more debt than women; Men have a 2% higher credit utilization amount; Home loan amounts for men are 4.9% higher; and Men have a higher incidence of late housing payments by 7%. “Women working full-time in the United States earn approximately 23% less income than men, but…women are taking steps to manage their finances better than men,” said Michele Raneri, vice president of analytics with Experian. “The most notable difference is that men are taking bigger individual home loans than women, but it would appear that they are having a slightly more difficult time making those payments on time.” The residential finance data in particular stansd out. Experian said on average, 72% of consumers have joint mortgages (a home loan given to more than one party); the remaining number represents men and women who borrowed on an individual/independent basis. The data shows that throughout the United States, men have 18.3 percent more independent home loans than women, except in Washington, D.C., where women take out 33% more loans than men. Source: MBA Financial and RE News The 69-year-old home loan program run by the Department of Veterans Affairs is on track to have its best year ever. Department officials estimate that VA lenders will originate 640,000 loans in fiscal year 2013, which ends Sept. 30. That would top the current record of 600,000 VA loans set in FY 1994 during a huge refinancing boom. “Last year we were guaranteeing 2,400 loans a day. This year, it’s around 2,900 loans each ACME Co . day,” according to Michael Frueh, the director of the VA Loan Guaranty Service. At this rate, “it will be our biggest year ever,” he said in an interview. The director noted the VA is the last national no-downpayment program standing. Nearly 90% of VA borrowers put no-money down to purchase a home. “That is a huge driver of VA loans in the past several years. The average veteran or service member comes to the closing table with $7,000 in liquid assets,” Frueh said. VA used to have a loan limit of $144,000. But Congress relaxed the loan limit in 2003 and now veterans can purchase $1 million homes. While VA serves a deserving but risky population with generally limited financial resources and low credit scores, it manages through its loss mitigation regime to keep foreclosure starts and actual foreclosures low. VA keeps watch over its servicers and intervenes when necessary to help a veteran who’s getting too far behind in their payments. “We prevent foreclosures much better than anyone,” the VA director said. And this record shows up in the quarterly delinquency reports issued by the Mortgage Bankers Association. The foreclosure starts on VA loans was 0.47 basis points in the second quarter, compared to 39 bps for prime loans and 81 bps for Federal Housing Administration-insured loans. However, looking at completed foreclosures or foreclosure inventory, VA has a lower rate than prime loans. Foreclosure inventory as of June 30 was 1.88% for VA, 2.13% for prime and 3.68% for FHA loans. Looking at the foreclosure inventory, “we have been in front of prime for the past 21 quarters,” the VA director stressed. Due to this loan performance, VA is drafting a qualified mortgage rule that will largely reflect the agency’s current underwriting standards. “We basically believe that our underwriting standards as they stand should qualify a home loan for the QM standard,” Frueh said. At the same time, VA is reviewing its restrictions on fees and charges so they don’t hinder a veteran’s ability to purchase a home. “We are trying to make it more negotiable between the veteran borrower and seller,” the VA director said. For example, a veteran can’t pay for a termite inspection. VA also has limitations on what the seller can pay. “We don’t want VA borrowers to be overcharged,” he said. But the limitations should be reasonable so veterans are not disadvantaged compared to other buyers. Source: National Mortgage News Global regulators have toughened up standards for insuring home loans after defaults in U.S. home loans sparked a global financial crisis and an industry shakeout six years on. Some insurers have filed lawsuits against banks, accusing them of falsely representing the quality of loans they were asked to insure. Many of the loans were subprime and began defaulting in 2007, triggering a chain of events that led to a global markets meltdown. The new rules have been compiled by the Joint Forum, a group of regulators and central bankers after a request from the G20 group of top economies. "Residential origination and mortgage insurance were at the very core of the financial crisis," said Thomas Schmitz-Lippert, the group's chairman. The rules say regulators should require MIs to build long-term capital buffers and reserves to cover claims properly. Insurance and the banks whose loans they insure should also maintain strong underwriting standards. The crisis hit insurers particularly hard in the United States where many subprime home loans were made. Two U.S. insurers, PMI and Republic, were placed under state supervision due to mounting losses and the resultant capital shortfalls. Three others still have sub-investment grade credit ratings, the joint forum said. U.S. contingency reserves were nearly exhausted over the past five years, plummeting to just $615,000 by the end of 2011 compared with $13.4 billion in 2007 when the crisis began. Credit rating agency Standard & Poor's said in October 2012 that new business looks highly profitable but many insurers face the harsh reality that mistakes they made before the financial crisis may yet lead to their demise. Despite a recovery in the U.S. housing market an industry shakeout is already underway with reinsurer Arch Capital Group announcing in February it will take over CMG Mortgage Insurance Co and the operating platform of PMI Insurance. Source: Reuters