Author: Brian Brady (page 24 of 27)

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

This came in today:

My Mortgage Broker told us; because of my low credit score (Low 600) and my husband’s higher score (High 600) — he wants to not include me on the mortgage, but put me on the title as a owner. This would mean the mortgage will not show up on my credit.

Can this work? If so, what are the pros and cons???

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

…and start making memories.

Realtors are the gatekeepers of memories. They unlock the potential of participatory drama. They insert the would be homeowner into a chapter of a history book. They beg the buyer to paint the blank canvas in unique colors. Realtors are the stewards of the time-honored American tradition, the “do-over”.

IF…they do it correctly.

I was reading one of my favorite webloggers, Geno Petro from Chicago, tonight. Geno and I grew up in Philly. He grew up in the original suburban housing tract, Levittown and I grew up in the Jersey rendition, Cherry Hill. I’m the product of immigrants’ kids who got out of their ethnic “neighborhoods” and made it to the holy ground; the suburb.

Cherry Hill was great place to live in the 70s because it was the ultimate social experiment. Kids of all colors, creeds, religions, and ethnicities mixed together in a damned good public school system. We celebrated bar mitzvahs and first communions, ate pasta with gravy, danced the polka, and listened to Motown, Disco, and eventually hip-hop music. I call it the ultimate social experiment because you had these kids running around, learning tolerance and cultural respect, amid the conflict of the generational prejudices of our parents and grandparents. The enlightened ones were our parents. They bucked the clannish “trust nobody unlike you” mantras of the ethnic ghettoes in hopes of a better life for their offspring.

Cherry Hill was a white-collar town with blue-collar thoughts. The parents were lawyers, engineers, salespeople, skilled tradespeople, doctors, and middle managers at the RCA plant. They were mostly educated because their parents insisted, through broken English, that “an education was the ticket to the American Dream”. The blue collar roots came from our grandparents. They taught us how to curse in Italian, wax poetically like Joyce, and dance to Marvin Gaye, all while sprinkling in the Yiddish word or two.

THAT is what I remember about Cherry Hill, not the 4 bedroom, 2 bath Colonial on Orchid Lane.

Consider this post about a five-year old biker and his father, “Things You Don’t Forget” by Geno Petro:

A young boy, maybe four or five years Read more

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

This title is a take-off on the famous baseball poem, Casey at the Bat, by E.L. Thayer. It was originally published in the San Francisco Examiner, some 99 years ago.

I’m on a panel in San Francisco on August 1 with two esteemed weblog platform providers. I’m a bit intimidated so I’ve been doing lots of homework. I thought I’d read all their stuff so I can understand what they’re talking about.

One of my co-panelists is talking about free source code while the other co-panelist hints of theft.

I thought I’d discuss how I hustle up some business from a Realtor or two I’ve met on weblogs. Apparently, this game is a whole lot more complicated than I thought it was.

There may be no joy in Bayville…someone’s gonna strike out.

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

MySpace, Active Rain, Trulia, and Zillow. The perfect merger.

Active Rain: The best place for B2B sales in the real estate industry. Mortgage originators, title reps, and escrow officers who aren’t playing in the “Rain” are missing out on an incredible opportunity. I’m not going to expand on that anymore in the interest of greed. Realtors can juice their SEO on Active Rain, trade war stories, and learn the art of weblogging but they really aren’t having enough conversations with a consumer to warrant the time investment to have a presence there.

Zillow: The consumers I’ve “met” from Zillow tend to be “over-educated”. They are the “know everything” engineer-types who value real estate professionals only as a functionary. Contrary to tech culture belief, a business can not be built on commodity shopping; there is no incentive for participation from the real estate professional community. Zillow’s automated valuation model, however, may very well be the best use of technology for real estate. Consumers LOVE it regardless of it’s inaccuracies.

Trulia: Perhaps the best opportunity for a real estate professional to establish a credible web presence is in the Trulia Voices section. Just two weeks old, Trulia Voices is attracting consumers and providing a forum for professionals to answer questions. Buyers flock to Trulia because of the listings. Control the listings and you control the game.

MySpace: Last summer, Myspace just registered it’s 100 millionth user. Critics claim that MySpace is for teenagers and is not to be taken seriously. That is incorrect. Over half of the visitors on Myspace are over 35 years old as the site starts to mirror the population. Any MySpace user can tell you about the cultural shift these “graying users’ have brought to the site these past two years.

Why would I propose this “merger” of RE.net media? Zillow offers tools for the seller (or homeowner looking to refinance), Trulia owns the listings platform with the participation of the professionals. Active Rain has tech-savvy real estate professionals dying to interact with consumers over the web.

MySpace has the consumers. That is who we’re missing.

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Mortgage brokers have been under assault by the extreme transparency advocates these last few years. Very smart people have embraced technology as the catalyst of change. They proclaim that technology will change how the American public compensates mortgage brokers. I think their advocacy has some merit.

Most consumers just don’t care about extreme transparency in lending.

Oh, sure. The engineers who read Milton Friedman and St. Augustine may actually adopt a moral position about the evil greed that permeates our industry. They might vent about the immoral nature of the “secret profits” earned by originators who do business the “traditional” way. These consumers, a very minor subset of the population, are predestined to mistrust anything that smacks of traditionalism. Last decade, full-service securities brokerage firms advised people that their high commissions were actually more effective to get investors to buy and hold rather than to trade incessantly. Still, the engineers distrusted the establishment while they day-traded their retirement accounts away on high-flying internet IPOs through ScottTrade.

This decade’s real estate boom brought out these “efficiency experts” again. They looked at the transaction costs in lending and proclaimed, “Something is awry!” This breed of consumer, is never, I repeat, NEVER going to trust a an originator no matter how inexpensive the service offering is. A mortgage originator can point to the value a trained advisor brings until she is blue in the face and this crew will run to Lending Tree faster than you can say free pocket protectors. This tiny portion of the population is not going to do business with me or you or your cousin Angela. Ever.

Most consumers just don’t care about extreme transparency in lending.

I sent out an e-newsletter to 300 past clients, highlighting a few articles, all dealing with extreme transparency in lending. These were the responses I received:

1- One nuclear engineer e-mailed me proclaiming that he would be processing his own files in the future and insisted that I waive the $495 processing fee. In exchange for the fee waiver, he would order his Read more

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

We’re covering the launch of Trulia Voices with great interest on Bloodhound Blog. Greg took the lead this morning with his initial analysis and I lauded Trulia for appearing to be the more Realtor-friendly choice over Zillow.com.

I started tinkering in the Trulia Voices section. This is where people can ask questions about real estate issues on a national, regional, local, and hyper-local level. I am particularly interested in the Financing section and the cities of San Diego, Phoenix, and Long Beach, CA.

I’m no expert on the Fair Housing Act. However, like Justice Potter Stewart commented on pornography, “I don’t know how to define it but I know it when I see it.”. These questions seemed particularly disconcerting to me on Trulia Voices:

Any red flags I should know about?
There are a lot of listings in Maryvale on Trulia and the prices seem great. What are the downsides to living in this area?

What areas in Phoenix are best for raising kids?
You’ll notice that Jay Thompson, the Phoenix Real Estate Guy, does an excellent job at answering this question.

Where are the best places to buy in Phoenix for a young family?
Would love to learn about an affordable area with great parks and entertainment options for a 30-something couple with young kids. Nothing too suburban, but obviously safety
counts!

Is Orlando good for families with children?
Why or why not?

San Francisco? I think we have a problem. My interpretation of the Fair Housing Act leads me to believe that a professional could get themselves into VERY hot water by answering those questions. I think the Trulians would explain that the questions are REAL and indicative of how REAL people (read: consumers) talk. The questions seem to have been posted by employees of Trulia This leads me to wonder if the Trulians are bigoted bastards or just ignorant of how real estate brokerage really works.

Harsh Criticism? Perhaps…I think if you create a site which relies upon participation from real estate brokerages and you host potential traps for employees of those brokerages, you are culpable. The organizations that sue for damages for violations of the Fair Housing Act Read more

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Loan originators, subprime mortgage blues got you down in the dumps? Let’s talk about a way to get your pipeline phat again. I’m going to give you a step-by-step plan to start, what Todd Duncan calls, the 90-day burn. If you follow these steps, and you don’t close 10 loans in the next 90 days, quit the business.

I’ve long been a believer in campaigning. A campaign is where you focus your promotional and sales efforts on a particular product type. The benefits of campaigning are astounding. You crank up the action volume (calls, door-knocking, mailers, e-mails, etc.) so SOMETHING happens. You learn a specialty because you must study the product to campaign. Consequently, you close a bunch of loans and half of them won’t be related to the campaign. Don’t worry about that.

Step One: Learn the FHA streamlined refinance guidelines. This loan program is designed for the greenest originator. I cut my teeth on this product when I started in the business. No credit scoring, no income documentation, and a current mortgage and you get an approval.

Step Two: Find a bunch of FHA loans . I’d call your favorite title company and get a list of HUD loans, closed within 10 miles of your office.

Step Three: Go on a mission. Go forth and communicate to these homeowners about the FHA streamlined refinance program with the zeal of a newly ordained priest. This is your career your fighting to save so pull out all the stops. Mail a postcard, call the customers (if they are not on the do not call list), even go so far as to knock on their door and hand them your card while explaining that you are an FHA streamlined refinance expert. If you are not an expert, dedicate three hours to this loan guidelines link and you’ll be one.

Step Four: Track your activity items. You should be able to talk to 20 people per day within the first 60 days. You will have Read more

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Strategic Equity Positioning is a buzz phrase in the mortgage industry today. The concept of equity management came from the book, Missed Fortune, by Doug Andrews. Andrews, a life insurance agent and financial planner, discovered a strategy that extracts equity from your home to fund tax deferred investments. The response was nothing short of remarkable. A study by the Chicago Federal Reserve Bank remarked:

“..taxpayers with incomes over $100,000 a year who use mortgage-deductible interest as part of an arbitrage strategy in retirement accounts would appear to have the most to gain, and the authors find it “puzzling” that more people who are in “better financial shape” than the average taxpayer don’t take advantage of this kind of strategy.”

I first heard of the term “equity management” in 2003. I heard Barry Habib discuss this concept at a seminar at the Del Mar Racetrack (critics, please refrain from pointing out the obvious irony). My first thought was “Cool, they have a name for it now!” You see, I am an ARMs dealer and have been since 1996. My background was on Wall Street as a financial consultant for two major wirehouses. I learned about financial planning in Plainsboro, NJ.

I met a man from Wachovia Bank (nee World Savings), Mike Cushing, in 1996. Mike taught me how to properly analyze negative amortization loans. He taught me how to temper the negative amortization with bi-weekly payments. I seized the opportunity and developed the mantra “Go Negative and Invest the Difference“. This mantra was not unlike the one espoused by Art Williams as he built the insurance empire that eventually became Primerica (now owned by CitiGroup). Art Williams encouraged Americans to “Buy Term and Invest the Difference“.

When presented with the idea of extracting equity to fund investments, I was puzzled. It seemed, well…kind of reckless. I was taught that the NASD forbid recommendations that would extract equity to invest when I attempted this arbitrage play for a securities client in 1990. I’ve since learned that the NASD softened their stance in 2002 with a strict admonition that the loan and subsequent investment pass a suitability test.

Let Read more

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

In Southern California, many loan originators are licensed by the Department of Real Estate. Such licensing is unique to California. California was one of the first states to require licensing of loan originators and chose to require that they have a real estate salesperson’s license.

Some bright Realtors realized that they could earn an income from both functions: real estate brokerage and loan origination. In fact, business models were built that center on that unique ability. Utopia Mortgage and Real Estate offers an 80% commission split to agents for such dual agents. It’s not a bad deal for an agent. Represent 3-4 buyers a year, secure them financing, add 4-5 more refinances in the year and you’re a six figure agent!

The problem in the past was that HUD explicitly forbids real estate licensees to engage in loan origination if the lender/broker offers FHA loans. That hasn’t been an issue in California for 5-6 years.

Tracy Nicole posted an excellent article in the Members’ Only section of Active Rain entitled: Jack of All Trades, Master of None. Fact or Fiction? You need to be a registered member at Active Rain to see this article and comments. Get a free membership by clicking this link. The premise is that she opts for the dual function because it (a) gives her control of the transaction over the “so called professional” loan originators (b) it allows her to “drastically cut the mortgage fees” for her customers 90% of the time (paraphrased quote)

I asked the question “Why Can’t Banks Engage in Real Estate Brokerage ?” in a like members-only post at Active Rain. My rationale is that if the consumer benefits, as was presented by the commenters, than it is just too substantial to pass up. True, federal banks are exempt from state licensing laws and that’s unfair. However, pretend that we could force them to license in each state
Will the merging of real estate and mortgage functions benefit the consumer? Can the big banks be more efficient at Read more