The Mortgage Cicerone - The Loan Attraction Coach - Con

Geez...Get over it, accept it and expect it

2009-07-15T00:41:01-05:00

A New Post By The Mortgage Cicerone
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Bottom line...I love being around mortgage professionals. Subsequently, it should come as no surprise, I'm often referred to as being an originators originator.

Fortunately my job allows me to talk to literally thousands of mortgage originators each and every year. That said, I have developed an ability to predict with uncanny accuracy the production level of an originator after speaking with them five minutes or less (without broaching their production numbers).

Do I have a sixth sense...heck no. Rather, it's a recognized pattern how an originators attitude plays a critical role in either their success or failure. I call it "The Attitude Factor."

The Attitude Factor

The Attitude Factor denotes the correlation between ones attitude and the level of success they experien. Yet the most telling point is; "The Attitude Factor" is most evident during a down market.

When talking about having a winning attitude in a down market, I'm not asking originators to put on their rose colored precious moments glasses and ignore the market realities . Rather, I'm asking them to:

Get over it, accept it and expect it
Recognize the loan opportunities the market IS presenting them
Change their business and marketing activities accordingly and then
Work their new plan with a charged positive attitude that is focused on the most productive actions possible

If you can successfully implement the four steps noted above, you will instantly put yourself in the top 50% of originators in the marketplace.

Why do I say that?

To say that at least 50% of originators are struggling is an understatement.

According to Dave Savage;

"For about 50% of the loan officers in the marketplace, to say they are struggling is an understatement. The stress behavior and the mindset they embody are creating a self-fulfilling prophecy for these folks that they’re going to be out of business soon. The reason: They’re not focusing on the best strategies in the market. They’re all over the place. If they could just adjust their attitude and get a very clear game plan — that is, the right game plan — they could all be successful.

Another 45-47% or so of these loan officers are not having a good year, but they’re okay with it. They have a ‘cool’ attitude and talk about riding out the year and things will be better next year.

Then the last 3-5% I speak with are having a great year. They’re having the best year they’ve ever had…and a big part of that is attitude. But with that attitude, they’re also mastering the strategies necessary for being successful in this market. If you can master those strategies, you can absolutely kill it and become a multi-millionaire in a future market."

Whether managing, coaching or lecturing loan originators, I have three goals for them:

To reach and maintain the top 3-5% level
To understand, embrace and become professional mortgage planners
Improve the quality of their lives spiritually, personally and financially

Nevertheless, the reality is that most loan officers are too transaction-focused and not career focused. Rather than building future business and creating long-term relationships by providing advice and ongoing services to clients, most are soley focused on closing transactions. It’s no wonder that most loan officers are perceived as commodity providers rather than financial experts.

Fortunately, there’s a simple way to overcome the commodity trap and negative borrower perception—become a Mortgage Planner.

Mortgage Planners are mortgage professionals who look at their clients’ lifetime financial goals and integrate their mortgage into their overall financial plan. They have the unique power to earn the trust and respect of their clients and secure their patronage not only for one transaction, but for many throughout their clients’ lifetime. By helping homeowners to increase their savings rate, stop wasting money on the wrong debt and position them into strategic mortgages, Mortgage Planners have the power to help homeowners reach their “Freedom Point” faster—the magical moment in time when a homeowner is either debt free or when their assets exceed their debts and paying off their mortgage becomes a strategic financial planning decision.

Mortgage Planners change the game on typical application-taking loan officers. They do this by taking on the professional responsibility of helping homeowners to make informed decisions that ultimately increase their tax benefits, increase their wealth, and help them reach their Freedom Point faster.

If you help your clients, they will help you. By building trusting relationships with your clients and giving them advice and services that are clearly superior to what other loan officers are offering, your clients’ business will generate tremendous residual income for you. Where a typical loan officer depends on new leads and quick, generic service to create business, Mortgage Planners get the lion’s share of their business from ongoing client relationships and valuable referrals from clients and referrals sources.

As a result of this strategy, Mortgage Planners typically experience predictable and growing income streams.

So the ultimate question is, what comes first; "A Winning Attitude" or Mortgage Planning success?

ANSWER - "A Winning Attitude"

If You Chase Two Rabbits, Both Will Escape

2009-07-02T10:04:01-05:00

A New Post By The Mortgage Cicerone
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Every originator I know wants to be valued and appreciated by their clients and referral partners. We all know the answer lies in increasing your value with your clients and referral partners above and beyond that of your competitors...right!

We all want to increase our value, yet how does one do it?

I believe two of the key elements is tied to FOCUS and putting the needs of others before yours.

By focusing on the business you want, the people you want to connect with and the behaviors/actions needed to succeed, you are drastically increasing your value and loyalty.

There is a saying:

"If you chase two rabbits, both will escape."

What this means is, you have limited time and resources and by trying to be everything to everyone and not focusing your activities, you become like a rudderless ship in the ocean.

The problem with most loan originators is the marketplace does not see them as special, rather most are viewed as commodities. Actually the real problem is, deep down most originators put their needs first (before their clients) while also viewing themselves as commodities to both their clients and referral partners.

Todd Duncan teaches the need to focus on three things:

The right priorities
The right relationships
Both should be supported by the right purpose

He also teaches the purpose that carries the highest level of influence is:

"Be a giver and not a taker"

One of the greatest ways to change you personal influence is to change your thought process from TAKING to GIVING!

When you know:

What your doing and the purpose behind what your doing is because you want to make a difference (and)
You want to give something to a client or referral partner they are not getting from any of your competitors

You are increasing your loyalty by increasing your value.

Ten Key Strategies Every Originator Must Master

2009-07-01T01:46:00-05:00

There are three tenets to successful business development:

The purpose of marketing is to differentiate yourself from the competition in a positive way so that your prospects are strong.
The purpose of sales is the conversion of these strong prospects who are motivated to act because they like and trust you.
The purpose of customer service is to exceed these customers' expectations and thus place you in position to build your business through referrals.

Is there an alternative? The alternative business model is more likely to resemble a treadmill as you start over again and again. Those who are the top producers and long-term players in our industry have a foundation model of success rather than a treadmill. Every step they take in the industry is built upon the previous step.

Sales and marketing training is truly worthless if you are not able to implement the entire model into a comprehensive fashion. Ninety percent of your training should be part of a comprehensive curriculum designed to help YOU understand what it takes to become an expert within the mortgage industry. You should not be merely interested in helping yourself become competent, rather an expert. Only an expert can implement the concepts outlined above.

We must start with differentiation. Those who succeed in the long run are those who elevate themselves above and beyond their competition. Because the mortgage industry has few barriers to entry and no significant training after you arrive, the mortgage industry is one of the few industries in America in which you can achieve differentiation by becoming an expert in your field. If you are an expert and a CPA, you are one of many thousands. This is not so in our industry.

Wouldn't you rather lead rather than follow with the masses? Wouldn't you rather advise customers instead of competing on price or other promises? Only experts can advise. We must remember that we are helping people make the most important financial decision they will ever make. Our industry must start treating this decision with the importance it deserves.

It is said if you don't know what you don't know, you won't improve. Too many of us enter the industry and we have no idea where the road leads, let alone if we are moving in the right direction. A loan officer can have two weeks experience in the industry or twenty-five years. It does not matter. If you have not been shown the right road, you are not likely to have found the way. Ask yourself, how many hours and dollars have you cost yourself heading in the wrong direction? Isn't about time the real road was laid out for you? Unfortunately, even when you have mentorship in this industry, some of it leads us the wrong way. When we travel too far in the wrong direction, it is sometimes a long way back. A perfect example would be a loan officer forgoing their long-term market to feast on refinances. While making a few extra dollars, that loan officer is now hurting their long-term changes of success.

The purpose of this post is to give a delineation of what it will take for a loan officer to become an expert and thus differentiate themselves from the competition. If you are interested in just getting by, I would suggest you stop reading at this juncture. If you are truly interested in learning what it will take to succeed, this will at least give you an outline for the road. It certainly does not include every facet or course I would recommend, but it gives you the idea of how varied and comprehensive we must be. Our industry touches upon many facets of people's lives and we can't help people without taking into account all aspects of the real estate finance transaction.

1. Learn the real estate process. I know of loan officers who say they don't like working with real estate agents and still others who have never bought a home. With regard to the first situation, I say simply-get over it. You cannot afford to ignore what can be anywhere from twenty-five to seventy-five percent of the market in a given year. You are in the real estate industry and agents are a major player. Your refinance clients will purchase a home sometime in the future and an agent will be involved. You need to learn how to deal with the right agents and how to control the sales situation. Not only should you play in this market, you should take a real estate licensing class. Not to sell real estate but to understand what agents do. In other words, you must become an expert in not only your field, but in your targets' field as well.

Regarding the absurd situation of someone selling mortgages and never owning a home, I listen with amusement when someone tells me that they can be effective without being a homeowner. If I were a real estate agent trying to convince someone to purchase a home, why would I send this person to someone who can't convince themselves to purchase? A vital aspect of sales is empathy, and you can't empathize with prospects that have experienced something you never have experienced. Perhaps you can sell real estate as a commodity, vying for the lowest bid, but you are never getting off the treadmill in this way.

2. Learn the three economic reasons to own a home. It is truly amazing both loan officers and real estate agents are not experts calculating and explaining the economic benefits of homeownership; leverage, rental equivalency and inflation protection, because these concepts because are the basis of our whole industry. It is why the industry is called the American dream. Not mastering this is akin to selling with your hands tied behind your back. Imagine teaching Realtors these concepts, instead of pushing products. Believe it or not, real estate agents are not taught these concepts in real estate school. What a way to differentiate yourself by teaching them the most important concepts they will ever learn.

3. Learn the economics of your rate sheet. This is another way you can distinguish a bit player from an expert. We try to make loan officers competent by teaching them how to read rate sheets. But do they know why one program costs more than another? Do they understand spreads? Most loan officers are reduced to general statements such as "it costs more because of risk." It is not always because of risk. And sometimes this statement sounds and is ridiculous. I always have a great time giving examples of this in class while I get loan officers to understand the relationships of pricing. One of my first seminars to real estate agents was titled "Everything a Realtor Should Know about the Secondary Market." Do you think I had a hard time convincing them I was an expert when everyone else was delivering rate sheets and doughnuts?

4. Learn important economic concepts of real estate finance. We are not selling a bunch of loan programs. We are selling financial instruments. We need to understand how these instruments can be used to achieve financial goals. Concepts as the efficacy of different levels of prepayment and debt consolidation come to mind at this juncture. How can you call yourself a trusted advisor without mastering these? Our goal is not merely to give people what they want, but to help fill their short-term and long-term needs. Note this requires more than knowledge of loan programs. A loan officer learns programs. An expert learns how to utilize these programs to help their clients achieve their short and long term economic goals.

5. Learn how to compare loan programs based upon future scenarios - including ARMs vs. fixed, points vs. no points, one loan vs. two loans, negative amortization and more. For example, do you know the three major scenarios to describe the possible future patterns of interest rates and what they mean? You need to understand the historical case, the worst case and FIAR case scenarios and how to work them into comparisons for your clients.

6. Learn how to underwrite as well as process a loan - including the intricacies of taxes and self-employment. I laugh at trainers advising loan officers to call upon CPAs, knowing full well that when the CPA starts talking about intricate tax returns the loan officer is completely lost. You don't have a right to call on CPAs unless you are an expert in tax return analysis. To this end, I don't think you should just learn how to read a tax return, I think you should take a tax preparation course.

A loan officer should not just learn how to process, they need to learn how to underwrite. How can you take control of service levels if every time you send a loan to an underwriter it is as if you have sent it into a black hole? You should know more than the underwriter knows with the goal of underwriting each file BEFORE it goes to the underwriter. That includes reviewing the appraisal.

7. Learn how to control your customers and the process. If you want to deliver great service with less stress in your life, you must take control of the process. If you don't you will start with an imperfect product and an imperfect product will result in an imperfect process. How can you exceed your customer's expectations if you can't even deliver adequate service? Experts are well beyond this juncture.

I once closed closed over sixty loans in one month. Do you think I could have done this without taking control? If you are meeting with clients two and three times during the process and real estate agents are running after you to get status, you are reacting and are certainly not in control. Not taking control causes the treadmill or "roller coaster" model of production and subjects you to countless hours of stress every month. The long-term result? Lower production levels or complete burnout.

8. Learn how to market from within the loan process. Taking control of the process puts you in a position to avoid costly and inefficient marketing methods such as cold calling or purchasing leads. Do not expect a referral base to start appearing after a few years of going in the wrong direction. Every time you leave the process to market, you take yourself further away from a successful business model. Experts learn where the opportunities are. What the foundation model does is help open your eyes so you don't miss these opportunities. When you are running around out of control and then marketing all over the place you will miss so many of these opportunities that are right under your nose.

9. Learn what is right and what is not. If you want to lead, you can't do so moving in the wrong direction or coming from the wrong side of the line. You may close a loan and make more money tomorrow or next week, but you will never leave the treadmill because you will not qualify to work with leaders. Leaders understand the importance of relationships. Rate shoppers do not. I firmly believe that much of the fraud that occurs in this industry, including predatory lending, occurs because we have not clearly drawn the line for loan officers. Experts are not wondering where the line lies.

10. Become an expert in sales and marketing. Over the years I have spent an inordinate amount of time correcting much of the training most loan officers and Realtors receive. What sounds like good advice such as "you have to ask for the business" and "you must overcome objections" actually can be counter-productive. For example, the secret to getting referrals is not asking, it is positioning yourself to ask. This is why so many of us find asking so uncomfortable. If asking were the secret, I believe many more loan officers would be out there asking instead of saying, "oh, I know I should be..."

Even traveling one step beyond being an expert in sales and marketing within your industry, you must become an expert in sales and marketing within the industry of your target. Loan officers should not actually be attending "loan officer" marketing seminars. They should be attending "real estate agent" marketing seminars. My first rule of synergy says that everything you do must achieve a second objective, even your educational plan. Why not surround yourself with your targets while you learn how to help them?

Yes, it will be a lot of work. But if you try positioning yourself as an expert you will achieve what many keep searching for. Finally your efforts will help you get closer to your long-term goals of a satisfaction within your career. Those who know that they can deliver more value not only are in a great position to ask for the business, those seeking counsel approach them every day.

Loan officers hear questions every day such as "what is your rate?" Experts hear questions such as "what do you recommend I do?" How would you like to spend the rest of your career, answering the first question every day or the second question? This is the choice you have. Unfortunately we are so busy trying to chase down the next deal and becoming competent, most of us never reach that position. I am here to tell you that not only is reaching this goal possible, it can be achieved with the right road map.

The "Acres of Diamonds" in Your Own Backyard

2009-06-30T01:36:00-05:00

Yes, you have heard me say it before and you will most likely hear me again numerous times in the future. Today while speaking to Mark Green at Top of Mind, he inspired me to get back on my soapbox again. Why? Because Mark is the top CRM guy I know around and he just plain gets why originators need to keep in front of their database.

So, I have a few questions!

Loan Originators, do you have an automated system that consistently keeps your name and services in front of your clients and motivates them to:

Come back to YOU for their refinance or purchase needs?
Refer their friends and family to YOU for their refinance or purchase needs

No Loan Originator has a more valuable asset than their customer base

Customers who have done business with you or your company represent potential gold mines. Unfortunately, most mortgage companies and originators focus their marketing activities on winning new customers. Instead, they should focus on client retention and not leave their treasured past customers unloved and available for the competition to come in and snatch them away.

Acres of Diamonds- Your customer list

Many originators have recognized the need to have a customer or client list. However, very few know how to truly cultivate their customer list into a constant source of new business. Think about the fact that every customer you have has friends and family that can use your service, either now or sometime in the future. On top of that, many of your customers will come back into the mortgage market for a new real estate purchase, to refinance their present mortgage or for a home equity loan. Plus, banks and credit unions have another huge advantage in that they have additional services that they can cross sell.

The National Association of Realtors stated that 27 percent to 32 percent of homeowners will purchase another property within first two to three years after their initial purchase. Additionally, the Mortgage Bankers Association found a homebuyer will average 8.3 first mortgages (purchase & refinance) over the next twenty years.

That is a huge percentage of your customers coming back into the market in a relatively short period of time.

You Have Control of Your Leads

Another obvious advantage to the "customer for life" concept is the control it gives you. Rather than having to rely on the real estate agent base, the mortgage originator is now the front-runner. Most every loan officer would love the opportunity to be able to call his or her real estate agents and tell them that they have a past customer who is back in the real estate market, and ask if the agent would like to work on that customer's next real estate transaction.

Turn satisfied customers into loyal customers and don't let them get away

Continue reading "Are You Mining the “Acres of Diamonds” in Your Database? " »

Mortgage Pricing Report - 6/19/2009

2009-06-19T09:26:00-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Hedge	Hedge	Floating	Floating

Market Update as of 2:39 pm (EST) - Market trading upward (green)in the 5 to 10 basis point range and some lenders have made mid-day price improves. Here's a market snapshot:

FNMA 5.0 100-26 +0-08

FNMA 5.5 102-16 +0-05

GNMA 5.0 101-02 +0-10

GNMA 5.5 102-23 +0-08

The Bottom Line (9:19am) - Yesterday afternoon, traders joined in profit taking and the market went into red. I'm expecting lenders to price rates with tighter margin today; along with the MBS market trading in the green (positive) anywhere from 5 to 10 bps for the better. If lenders do price tighter and the MBS market rebounds slightly into the green 5 to 10 bps, it could possibly lead to mid-day price improvements with some lenders? Thus, I'm recommending (with some hesitancy), you hedge your locks in the 1 to 20 day lock period and not lock SOME of your loans if the price-improvement comes today. Be very mindful of movements that could possibly have you lock your loans immediately. Just my educated guess!

Checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

Mortgage Pricing Report - 6/18/2009

2009-06-18T08:28:00-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Hedge	Floating	Floating

Market Update as of 2:17 pm (EST) - As advised, I hope you locked early this morning. As you can see, the market losses have even exceeded the minimum 13 to 17 bps predicted this AM. Subsequently, lenders are making mid-day price changes for the worse. I also recommend taking a hedging strategy on loans closing in the 8-20 day range.

30 Year MBS Coupons

FNMA 5.0 100-21 -0-27
FNMA 5.5 102-14 -0-19

GNMA 5.0 100-28 -0-26
GNMA 5.5 102-22 -0-16

The Bottom Line (8:26 am) - Yesterday afternoon, after five straight days of rallying in the MBS market,traders started selling and participated in profit taking. Hopefully the readers followed my advice at 3:24 pm (EST) yesterday before the tradeoff reversed rates for the worse. My guess is the MBS profit taking will continue today and go at least 13 to 17 basis points into the red.

Checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Daily Market Commentary

Robert Ashby - Mortgage Market Update

MBS Commentary

Daily Market Commentary- WesCorp

Mortgage Rate Commentary - Moving.Com

Weekly Economic Commentary - Dr. Raymond James

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

_____________________________________________ Subscribe to The Mortgage Cicerone Email Update Club To get FREE and fresh high-content information like this post emailed directly to you, simply fill in your name, email address and submit!
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Mortgage Pricing Report - 6/17/2009

2009-06-17T07:32:00-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

Updated Lock Recommendation - 3:24 pm (EST)

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Floating	Floating	Floating

While the market did increase this afternoon as thought, after five straight days of the MBS market rallying, it appears traders are now profit taking before the market closes. I would recommend locking/hedging your pipeline for at least seven days while the market is still in the green.

7:29 AM (EST) Recommendation

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Floating	Floating	Floating	Floating

The Bottom Line - Yesterday morning I went contrary to most mortgage market analysts and predicted rates would improve in the afternoon and they did. I think that trend will continue and MBS coupons will remain in the green with a very slight chance of rates improving this afternoon (don't count on it though). My guess is coupon pricing will continue picking up mojo and improve 5 to 10 basis points today.

For current MBS pricing, checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Daily Market Commentary

Robert Ashby - Mortgage Market Update

MBS Commentary

Daily Market Commentary- WesCorp

Mortgage Rate Commentary - Moving.Com

Weekly Economic Commentary - Dr. Raymond James

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

_____________________________________________ Subscribe to The Mortgage Cicerone Email Update Club To get FREE and fresh high-content information like this post emailed directly to you, simply fill in your name, email address and submit!
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Great Thoughts To Ponder (6/17/2009)

2009-06-17T04:30:00-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

"If I work on a certain move constantly, then finally, it doesn´t seem risky to me. The idea is that the move stays dangerous and it looks dangerous to my foes, but it is not to me. Hard work has made it easy." -- Nadia Comaneci

"Be a problem detective; look for customer problems that your product or service can solve." -- Brian Tracy

"A professional is a person who can do his best at a time when he doesn't particularly feel like it." -- Alistair Cooke

"As soon as you trust yourself, you will know how to live." -- Goethe

"One must be fond of people and and serving them if they plan on being successful long term in the mortgage or real estate profession." -- Dennis Geist

"A man who doesn't trust himself can never really trust anyone else." -- Cardinal De Retz

"Trust men and they will be true to you; treat them greatly and they will show themselves great." -- Ralph Waldo Emerson

"A person will not buy from you until he is convinced that you are a friend and are acting in his best interest. You must make this clear." -- Brian Tracy

"We have not wings we cannot soar; but, we have feet to scale and climb, by slow degrees, by more and more, the cloudy summits of our time." -- Henry Wadsworth Longfellow

"A man who works with his hands is a laborer; a man who works with his hands and his brain is a craftsman; but a man who works with his hands and his brain and his heart is an artist." -- Louis Nizer

"People who have good relationships at home are more effective in the marketplace." -- Zig Ziglar

"It isn't the people you fire who make your life miserable, it's the people you don't." -- Harvey Mackay

"Lack of homework shows up in the marketplace as well as in the classroom." -- Jim Rohn

"Some people serve with pride -- because they 'want to' do and be their best; other people serve with disdain because they 'have to' do their job. Which person do you think will end up running the show?" -- Jeffrey Gitomer

"Take time to listen to your people when they want to talk. This is a real motivator." -- Brian Tracy

"People are your most valuable asset. Only people can be made to appreciate in value." -- Stephen Covey

"Good people are found not changed. Recently I read a headline that said, 'We don´t teach people to be nice. We simply hire nice people.' Wow! What a clever short cut." -- Jim Rohn

"Few things help an individual more than to place responsibility upon him, and to let him know that you trust him." -- Booker T. Washington

Mortgage Pricing Report - 6/16/2009

2009-06-16T09:29:00-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Floating	Floating	Floating

Check MBS pricing here.

Market Update as of 1:17 pm (EST) - Prices improving and into green this afternoon.

30 Year FNMA MBS Coupons

FNMA 4.5 99-02 +0-05

FNMA 5.0 101-10 +0-05

FNMA 5.5 102-27 +0-07

30 Year GNMA MBS Coupons

GNMA 4.5 99-07 +0-06

GNMA 5.0 101-16 +0-05

GNMA 5.5 103-02 +0-06

The Bottom Line - I know some analyst are predicting to lock for 21 days with slight movement into red this morning, however I feel prices will move into green this afternoon...just my gut feel.

For current MBS pricing, checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Daily Market Commentary

Robert Ashby - Mortgage Market Update

MBS Commentary

Daily Market Commentary- WesCorp

Mortgage Rate Commentary - Moving.Com

Weekly Economic Commentary - Dr. Raymond James

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

_____________________________________________ Subscribe to The Mortgage Cicerone Email Update Club To get FREE and fresh high-content information like this post emailed directly to you, simply fill in your name, email address and submit!
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Mortgage Pricing Report - 6/15/2009

2009-06-15T10:08:57-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Floating	Floating	Floating

Check MBS pricing here.

Bottom Line - The march in the green continues for MBS coupons as rates continue to improve. I'm putting a soft recommend for locking 1-7 days. However, keep a eye out for movement in the reverse direction as key economic reports are being released tomorrow.

Pricing as of 10:14 am (EST)

30 Year FNMA MBS Coupons

FNMA 4.5 98-30 +0-25

FNMA 5.0 101-04 +0-19

FNMA 5.5 102-20 +0-13

30 Year GNMA MBS Coupons

GNMA 4.5 99-05 +0-25

GNMA 5.0 101-16 +0-20

GNMA 5.5 102-29 +0-12

For current MBS pricing, checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

_____________________________________________ Subscribe to The Mortgage Cicerone Email Update Club To get FREE and fresh high-content information like this post emailed directly to you, simply fill in your name, email address and submit!
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How to Get Off the Boom-Bust Roller Coaster of Mortgage Origination

2009-06-15T01:14:00-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

One of the most common complaints I hear from mortgage originators is the boom-bust roller coaster component to the business. While it is real and happens to a large contingent of originators, there are mortgage professionals that seem to be immune from the fluctuation their peers experience.

Why?

Bottom line is there are a few key critical elements or fundamentals these mega-producers practice that make their business and income more predictable. One of them is they treat and practice the art of building a consistent annuity of referrals and make it part of their everyday processes and practice. In fact, I have found they get down-right obsessive about building and service their annuity client base when times are good, because they know and expect the market to turn. So while most of their peers are focused on funding the loans in their pipeline (and subsequently not marketing their database of clients), these top producers are a bit contrarian in they are like squirrels and are building up a storehouse of food for the winter months.

It's about referrals from both clients and referral partners.

We always hear about building a 100% referral based business. While I don't think very many can claim 100% of their business is referral based, I know numerous superstar mortgage and real estate professionals who's business is in fact at least 90 to 95% referral.

The Best Time To Get A Referral

What do people talk about with their friends when they're buying a new car? About new cars! Better yet, what do people talk about when they are buying a new house or refinancing a mortgage? That's right...houses and mortgages.

More importantly, when they talk about mortgages, are your customers talking about YOU?

Your goal as a salesperson is to maximize your referral business. To do that, you MUST make the process systematic and so easy that every client working with you will recommend their both family and friends exclusively TO YOU.

Yet, most mortgage and real estate professionals don't live on referrals - WHY NOT?

I've found they are either embarrassed or they get so busy with the transaction details during the mortgage process they never get around to asking!

How I Turned One Transaction Into 72 Closed Loans

Yes, you read that correctly...72 closed loans.

It all started with taking the application and consistently asking for referrals throughout the loan process and loan management period after the loan closed. In fact, from the time I took the loan application and the loan closed, my client referred six other family, friends and neighbors (they all closed). Long story short, within the next four years I closed 72 loans that stemmed from the original six referrals provided me by my client....talking about a referral tree with a lot of branches!

Mortgage Pricing Report - 6/12/2009

2009-06-12T11:13:07-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Floating	Floating	Floating

Check MBS pricing here.

Market Update - 6-13-2009 @ 3:02 pm (EST) - As predicted, many lenders made mid-day price improvements to rates.

30 Year MBS Coupons

FNMA 4.5 98-10 +0-26

FNMA 5.0 100-21 +0-17

FNMA 5.5 102-10 +0-10

GNMA 4.5 98-14 +0-26

GNMA 5.0 100-29 +0-17

GNMA 5.5 102-17 +0-11

Update - 12:47 pm (EST) - Pricing for the better could possibly be looming?

30 Year MBS Coupons

FNMA 4.5 98-03 +0-19

FNMA 5.0 100-18 +0-14

FNMA 5.5 102-08 +0-08

GNMA 4.5 98-08 +0-20

GNMA 5.0 100-27 +0-15

GNMA 5.5 102-15 +0-09

Bottom Line - MBS Coupons as of 11:41 am (EST) are trading in the positive (green). Watch for rates to possibly go slightly lower if trend continues.

FNMA 4.5     98-03         +0-19
FNMA 5.0     100-18       +0-14
FNMA 5.5     102-08       +0-08

GNMA 4.5     98-08        +0-20
GNMA 5.0     100-27      +0-15
GNMA 5.5     102-15      +0-09

For current MBS pricing, checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

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Are You Self-Reliant or Reliant...A Case Against the Latter

2009-06-12T01:31:10-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Note: Nighttime satellite photo of Korean Peninsula and the contrasting illumination between North and South Korea.

I'm guessing Milton Friedman would have loved this picture.

In fact, this satellite picture provides a powerful metaphor highlighting the difference between two deeply contrasting political. social and economic systems. Subsequently, it also represents the difference between individuals who are self-reliant/industrious and those who promote entitlement policies that eventually subordinate personal freedoms and produce a citizenry dependent upon the state.

Back to Korea.

While North Korea is ethnically homogeneous with their brethren in the South, there are stark gaps between the two countries separated since the Korean War (1950 - 1952). For example, North Korea developed into a communist dictatorship with a strong centrally planned economy while South Korea became a democracy with a thriving free-market based economy has thrived domestically and globally.

In addition, isn't it amazing even the fishing fleets in the waters surrounding Korea throw off more light than all of North Korea.

It is my sincere belief we as individuals, an industry and nation can learn from the example of these two countries. It is up to us as citizens and mortgage professionals to take responsibility for both our actions and that of the industry we operate.

Mortgage Pricing Report - 6/11/2009

2009-06-11T09:50:48-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

Updated lock recommendation as of 2:38 pm (EST)

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Floating	Floating	Floating

Morning Recommendation at 9:50 am (EST)

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Locking	Floating	Floating

Check MBS pricing here.

Update - 2:31 pm (EST) - MBS coupons still trading in green or positive territory.

FNMA 5.5 102-01 +0-13
GNMA 5.0 100-08 +0-14

Update - 11:33 am (EST) - MBS coupons trading in green or positive territory.

FNMA 5.0 99-28 +0-10
GNMA 5.0 100-04 +0-10

The Bottom line - I'm bordering on locking for 7 or 20 days or less. While I'm leaning towards a 20 day lock recommendation, I would keep my eye on the MBS coupons for further movement into the red, however there is good chance the MBS will see green. Jobless claims released this morning came in 14,000 less than expected at 601,000 and decreased 24,000 from the previous week. Retail Sales (minus auto sales) also came in stronger than expected (.02%) with and increase of .05%. As expected, MBS coupons are taking directional lead from MBS yield curve fluctuations. However, expect traders to begin taking advantage of the deeply discounted rate sheet influentials thus leading to yield spreads tightening. Again, I recommend watching the MPS coupon pricing today.

For current MBS pricing, checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

Mortgage Pricing Report - 6/10/2009

2009-06-10T09:27:03-05:00

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

If a family member asked my advice and they were scheduled to close on a mortgage purchase or refinance in the time periods indicated below, I would recommend...

1-7 Days	8-20 Days	21-45 Days	46 Days Plus
Locking	Locking	Floating	Floating

Check MBS pricing here.

Bottom line - A large portion of the red in Class A MBS coupons today will be due to coupons being rolled forward from June to July...thus the typical settlement that occurs in coupon pricing. However, some of the losses could be occurring with the Russian Central Bank announcement they will be moving funds from US bonds to the IMF issued debt due to concerns US dollar will eventually lose its status as the global reserve currency.

For current MBS pricing, checkout the "MBS Price Data" chart in the far right column (underneath Subscription & Contact Links).

Other excellent sites providing insightful market commentary:

Important Note: These recommendations to lock or float constitute solely my opinion and are not represented nor should be taken as a guarantee of mortgage rate direction.

_____________________________________________ Subscribe to The Mortgage Cicerone Email Update Club To get FREE and fresh high-content information like this post emailed directly to you, simply fill in your name, email address and submit!
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