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Author: Dan Green (page 2 of 2)

Mortgage Planner

August 2, 2007

My Pictoral Highlights From Inman Real Estate Connect

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It was an interesting three days in San Francisco for Real Estate Connect 2007. I’ll leave the commentary to people more funny than me.

Courtesy of Palm Burgandy, here’s my brief pictorial:

In SFO, it's better to spare a square

You know you’re in San Francisco when the airport tells you to only use one square.

The view from the podium at Bloggers Connect 2007

This is the view from the podium during my panel session. 12 minutes after this photo was taken, Joe from Sellsius tumbled from the stage and sprained his left wrist.

Bird poop on my shoulder

I met an old friend for drink in Haight-Ashbury. The cab dropped me off in the wrong place. I use Palm Burgandy’s Google Maps feature to get back on track and have to walk through Sketchville Golden Gate Park. As soon as I am in the clear, I walk under a tree and a bird decides to crap on my shoulder. Look at the size of that poop. In hindsight, I think it may have been a pterodactyl.

Trulia pranks Zillow

My favorite gag of the week. Thursday morning, I walk through the exhibit hall and see Zillow’s stand. As I walk past, I look at the computer screen out front. Now, that’s comedy. Meanwhile, it’s 9:30 A.M. and I frantically looking for somebody else to laugh at this with. There’s a woman about 8 steps behind me. For as much excitement there was in my voice, there was an equal disinterest in hers. Clearly, not everyone knows who Zillow and Trulia are in Real Estate.

Union Square Concert

Thursday night, I felt like adventuring so I walked to Union Square. There, I found a city-sponsored jazz concert. The area was packed with people and a lot of them had taken to dancing. Pretty cool stuff and a nice night to be outdoors.

June 7, 2007

Where Did Your $40,000 Go? , or Why Your Buyer’s Prequalification Needs A Refresher

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Mortgage Planner

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Just a quick note to the real estate agents that read Bloodhound Blog: now would be a terrific time to have all of your buyers re-prequalified for a home.

Mortgage markets are suffering through an old-fashioned beatdown and some rates for some products are now sitting 0.750% higher than they were just 10 weeks ago.

The last 48 hours account for 0.250% of that increase.

Your buyer’s prequal from even two weeks ago is likely worthless.

As a real-life example, consider a client that can afford a $2,100 monthly mortgage payment and wants an amortizing loan.

  • April 7: $350,000 loan size = $2,100 payment
  • June 7: $310,000 loan size = $2,100 payment

That’s a $40,000 difference — poof!

(Image courtesy: American Museum of Natural History)

June 4, 2007

Game Time: What Are Your Favorite Real Estate Slogans?

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Mortgage Planner

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Vacuuming pun from Cambridge NowI’ve always liked good puns in marketing because they’re cerebral and that’s the arena in which I like to engage my clients.

You can understand, therefore, why I am partial to my own mortgage-related tagline:

You’re not a loan with The Dan Green Team

Joke grenades work on Madison Avenue and at The Improv. I love when I get a call from a client months after our relationship starts and he says: “I just got the ‘You’re not a loan’ thing!” That kills me.

What are your favorite real estate-related slogans?

(Image Courtesy: Cambridge Now!)

May 8, 2007

What Barenaked Ladies Taught Me About Scripting And Delivery

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Mortgage Planner

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The most important part of my job as a loan officer is helping clients understand how mortgages work.

It’s a tall order sometimes and that’s why I spend a ton of time crafting answers to common questions and then rehearsing them until I can recite them backwards, forwards, and from any point in the middle.

This is called Scripting and Delivery.

Why do I do it? Because over the course of my career, I have heard the same questions from my clients thousands of time. Naturally, that’s fine with me. The more times I am asked a particular question, the more I know just how important it is to people.

  • “I’ve heard that interest only loans are dangerous. What do you think?”
  • “Our family is about add another baby. How should we incorporate that into our mortgage plan?”
  • “I just paid off a credit card. Should I close the card?”

Each of these questions is a springboard to bigger, more important discussions about mortgage planning. That’s when I am thankful that I know what I am going to say and how I am going to say it. A carefully-crafted answer makes a far greater impact to my clients that if I just spoke off the cuff.

But, scripting alone, though, doesn’t cut it. It has to be backed up with flawless delivery, too.

This is where a lot of mortgage and real estate professionals fall short. They rely on their experience/expertise and just figure that they’ll wing it when the time comes to respond to a client’s question.

Look: It doesn’t matter if you know what to say if you don’t know how to say it clearly. And I’m going to prove it.

Below, are the lyrics for the Barenaked Ladies tune “One Week”, courtesy of Rock It Old School. Look them over, print them out, put them on an adjacent screen, whatever — just get a copy you can reference while you watch the embedded YouTube video above.

You’ve got the “script” in-hand so how hard can it be to just sing along?

If you failed on your first go around, try again. If you fail on Read more

April 3, 2007

Making A Case For National Mortgage Lending Standards

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I live in Illinois and hang my mortgage license in Illinois. The licensing process was not simple.

I have family in Ohio and want to be actively licensed to lend in Ohio. The licensing process is even harder.

I have spent more than 100 hours (yes, I’ve clocked it) trying to prepare my application for the state of Ohio. To be fair, though, the 100 hours includes 24 hours of introductory training that I was required to take within the Ohio state lines on the basics of mortgages and mortgage lending.

I like the training aspect of licensing, but by “professor” had 20+ years of experience and — aside from using a slide rule to calculate payments — was flat-out incorrect on most mortgage facts. For example, Jumbo Loans are not more expensive because they’re more risky; they’re more expensive because the cost of securitization is spread across a smaller pool of loans. The brand-new loan officers in the room had no idea they were being fed misinformation.

But all of that aside…

In order to be licensed as a mortgage broker in Ohio, I need to do the following:

  • Register Mobium Mortgage as a business in Ohio
  • Register Mobium Mortgage’s main office in Chicago with the state of Ohio
  • Lease physical space for and then register that as the Mobium Mortgage branch office that will be located in Ohio
  • Register myself as a loan officer

On the surface, not so bad. But, looking deeper at the requirements, you see these steps:

  • State police background check for all officers, the operations manager, and loan officers wishing to be licensed
  • FBI fingerprinting for all officers, the operations manager, and loan officers wishing to be licensed
  • 24-hour in-state training for the operation manager and all loan officers wishing to be licensed
  • Provide W-2 statements dating back 10 years for the operation manager
  • Open and maintain a checking account in the state of Ohio for paying third-party costs (i.e. appraisal) that does not earn interest
  • Maintain all financial records on-site in the Ohio branch office

You read the list and it looks fine, but then you contrast it to New York, Pennsylvania, California, Texas and other states and you wonder: Read more

March 19, 2007

From Mortgage Company: [Personal Introduction], [Sell Stuff Here], [Warm Closing]

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Mortgage Planner

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SPAM via emailSo, I get a lot of spam. Maybe you do, too. Usually, my filter stops them. Sometimes, it doesn’t.

Today, an email from “Mortgage Company” got through the gate. It doesn’t happen often and I nearly fell off my chair laughing when I saw the subject line:

“Hurry to lower your credit rate!”

Oooh! Who wouldn’t want that? I figured this would be the worst spam email ever so I opened it (blocking all images, of course).

Here it is. My comments are in boldface.

Dear Client!
(Hey, how did they know my name?)

Do you want to save? Do you not know how?
(Save what? Money? Water? Ferris?)

We will help you! Our company is inviting you to participate in limited time event!
(Limited time? I better act NOW!)

The lenders will lower the rate at your property credit!
(What’s a property credit?)

The lenders will fight for you and offer you all the beneficial variants!
(Oh, it’s like LendingTree — when lenders fight for me, I win. And, who wouldn’t want all of those “beneficial variants”?)

The lowest rates in America will be at your disposal!
(I just realized… these people are serious! Every sentence ends in an exclamation point!)

You need simply to fill in the 30 second Information form and our brokers will contact you immediately!
(All it takes it 30 seconds and beneficial variants can be mine? I am ALL over this! Exclamation point. )

http://companyname.com/
(The company name SOUNDS legit…)

With deepest respect,
Manager Joesph Campbell
(How nice. The manager offers his deepest respect. But he made a spelling error — his own name.)

Yeah, this was a bad one. And yet, all kidding aside, the spam email seems to follow a very predictable (and productive) pattern:

  1. Compelling subject line
  2. Personalized salutation
  3. Identify pain point
  4. Offer solution to pain point
  5. Create a sense of urgency
  6. List three benefits
  7. Call to action
  8. Formal closing

Unfortunately, the sender botched all eight steps and we can learn something from Mortgage Company.

It’s not following a formula that makes for good marketing — it’s writing compelling copy.

With deepest respect,
Blogger Dan Green

(Image Courtesy: Mark Drew)

March 17, 2007

Barry Ritholtz’s Rules for Real Estate Agents, or Don’t Be Surprised If You’ve Never Heard of Barry Ritholtz

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Mortgage Planner

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The Big Picture LogoI was reading Barry Ritholtz’s The Big Picture earlier today.

The Big Picture is an economics-based blog that is every bit as cynical about financial markets as the the writers at BHB are fanatical about real estate markets.

Both blogs have cult-like followings.

Barry recently “moved-up” and used his blog to share his experience selling and buying. Summarized, here are Barry Ritholtz’s Rules for Real Estate Agents (and smart move to not call them REALTORS?):

  1. Don’t try to sell me something I don’t want
  2. Answer my questions with the truth and in full, even if it will cost you the sale
  3. When showing a home, don’t point out the things I can see for myself. Point out the things I may miss.
  4. I told you what I can afford. Respect that.
  5. Ask questions that matter such as “What are you looking for in terms of architectural style?” or “How close would you like to be to the water?”
  6. Be a conduit to good negotiations, not an obstacle
  7. Sometimes, you just need to know when to stop talking

Good stuff, for as Greg properly called me out in public, I am selling my home right now and can understand Barry’s thought process.

But, the reason why this post stood out to me was something buried in the comments from Pat Kitano. Real estate bloggers and even casual readers know that Pat is the brains behind the Transparent Real Estate Blog.

Pat wrote:

Spot-on… what I find unusual about your purely real estate article is the lack of participation by real estate bloggers in commenting. I author a real estate blog and I don’t recognize any names of my colleagues. It’s evidence of blogging’s reader segregation.

I have been an avid reader of Barry’s blog since 2004 and The Big Picture was part of my inspiration to start blogging (along with Alex Stenback and Dustin Luther). Barry and I used to correspond now-and-again until he went Big Time.

But, as Pat points out, Barry’s world of economics and our world of RE blogs are so far separated that when an insightful real estate industry post shows up on the largest economics blog in the country, none of us don’t Read more

February 26, 2007

The Sunday Real Estate Section Advertisement Problem

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REMAX Listing Sheet from papersLet’s all agree on the following:

  1. Most home buyers begin their home search on the Internet
  2. Most home buyers use Web-based software to “preview” homes online
  3. Most home buyers receive regular email/web updates from their agent about new homes worth previewing

If we know all of this to be true, why does my local newspaper’s Sunday Real Estate section get larger and larger every weekend?

If it’s to reach home buyers, I am going to laugh. That’s like advertising White Sox Gear for sale in a Cubs fan magazine — your target market is not in the audience.

So, I think you can make one of two arguments about Sunday Real Estate advertising: that the advertising is there is to make the seller “feel good”, or that it’s there to promote the brokerage’s brand.

Either way, it’s worth a re-evaluation.

For the money that is spent on newspaper advertising weekly, real estate agents could be providing more personalized services for home sellers including single-property listing URLs with custom Web design, better videography of the home, and higher-quality signage.

These are all items to which a buyer would respond favorably. In theory, that should lead to higher sales volume and nothing builds a brand name better than having “SOLD” hanging from a listing sign.

Image courtesy: The Village News

January 25, 2007

Anonymous Posters Can Be A Destructive Influence, or How Communication Is The Difference Between Good PR and Bad PR

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Mortgage Planner

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657 MLS Closed Listing Sheet

Sometimes, the difference between good PR and bad PR is communication.

In October 2006, I blogged about a condo building in Chicago that was more than 19 months late on delivery. To me, the story wasn’t that the building was delayed; that happens all the time. What was most interesting to me was that the contracted buyers actually started a blog to share information with each other about their experiences.

Because the developer’s team was not disseminating information as fast as the building’s buyers wanted, a blog looked the perfect choice to disseminate information quickly and efficiently. I can’t think of a better use of a community-like blog that this.

I also found it nice that the blog host including the following text:

Thoughtful comments and respectful opinions on the status of 657 Fulton are welcome. Off-topic, slanderous, disrespectful or abusive posts will be removed at the host’s discretion.

What I didn’t find nice? The host’s not-so-subtle decision to allow anonymous posting.

At the start, the blog behaved quite well, providing a community-like atmosphere for scores of buyers just wanting information about their building. The developer and his team chimed in, too, with updates and notes about permits and progress.

Slowly, though, the tide began to turn. As the delays grew longer, communication from the developer’s team grew more sporadic. Buyers visiting the blog were clamoring for information but all they found was each other.

Before long, with anonymous-like names like “657 Fulton”, “Angry Buyer on the 4th Floor” and “Frustrated on Fulton”, buyers in the building began to voice their anger and unrest. They wrote whatever they wanted and knew that there was no recourse. Who would ever find out the name of the real author? Libel and slander? Why not — it couldn’t be traced anyway? As I think back, even the blog’s host was never publicly named on the site.

The 657 Fulton blog then became a breeding ground for nasty remarks, rumor and conjecture about the developer, and his team. One derogatory remark led to another and led to another and led to another. Sarcasm and mean-spiritedness ruled. And, given the choice Read more

January 4, 2007

What Isaac Newton Knew About Mortgage Lending

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Mortgage Planner

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I recently wrote about sub-prime loans for the first time in a long while because the sector should start taking more headlines in the papers.

I’d hate for you to be unready for it, of course. Sub-prime loans are a big part of mortgage lending.

“Sub-prime” is a broad-sweeping term for the large percentage of loans that won’t get bought by the quasi-government agencies Fannie Mae and Freddie Mac. The opposite of “sub-prime” is “conforming”, as in: these loans conform to the guidelines set forth by Fannie Mae and Freddie Mac to be eligible for purchase.

Typically, the credit profile of a sub-prime borrower includes one or more of the following characteristics:

  • Low credit scores
  • History of derogatory credit (i.e. bankruptcy, foreclosure)
  • Currently delinquent on their home loan
  • Lack of credit history or credit depth
  • Low asset levels
  • Low income levels or non-verifiable income levels
  • High loan-to-value combined with low income versus debt
  • Contains “random” circumstance that introduces risk

Just because a person exhibits one or more of these traits, however, doesn’t mean that he is automatically a sub-prime borrower. This set of guidelines is very general.

Even though “sub-prime” has negative connotation to it, sub-prime loans serve a very important purpose. Sub-prime loans provide home financing to people who otherwise would not be approved for a loan at all. Remember: they don’t conform to the government guidelines!

Recently, sub-prime lenders have fallen into a world of hurt because the default risk that is inherent in every sub-prime loan is being realized with alarming frequency. Lest you think these defaults are surprising the markets, this is a problem two years in the making and industry insiders know it.

See, the one very important difference between conforming and sub-prime loans is that conforming loans are eventually bundled and sold on Wall Street as long-term bonds called mortgage-backed securities. Sub-prime loans, by contrast, are short-term. Conforming loans are overwhelmingly of the 30-year fixed variety, but sub-prime mortgages are of the 2-year ARM variety.

To understand why this matters, it’s important to review how adjustable rate mortgages work.

With all ARMs, the lender agrees to collect interest at a fixed rate for some period of time. When that period Read more

December 31, 2006

My 3 Blogging Resolutions for 2007 (Bloodhound Blog Edition)

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Mortgage Planner

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I am not a big fan of New Year’s Resolutions for a lot of reasons. Mostly, it’s because when I identify a part of my life that I want to change, I don’t wait until January 1 to change it. I do it right away.

So, it’s December 31. Here are 3 things I resolve to do on the Bloodhound Blog in 2007… starting tomorrow.

  1. I resolve to discuss “big picture” items that impact real estate and mortgage lending such as government oversight and international economics. If I can help you understand why it’s relevant to all of our businesses and livelihoods, you’ll be the hit of all of your cocktail parties. Not really.
  2. I resolve to respond to comments as often as possible. Even the ones that are clearly trying to bait me. Ask good questions and you’ll get my answers.
  3. I resolve to write clear and concise blog entries. Sometimes it’s easier to watch the commercials than the show.

See my other resolutions on my other blogs, The Mortgage Reports and Bring the Blog.

December 14, 2006

Remembering the past and choosing to forget it?

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Mortgage Planner

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As George Santayana said, “Those who cannot remember the past are condemned to repeat it.”

Okay, so what about the people the can remember the past, but choose to ignore it? There has to be a famous quotation for that, too, right?

On the front page of today’s Wall Street Journal, the headline reads: Housing, Auto Slumps May Defy Usual Role as Recession Harbingers. The authors note that home construction is “plummeting”; new car sales are “weakening”; and, long-term rates are “well below” the short-term rates — three major readings that preceded economic recessions of years past.

The authors then tell us that Wall Street is “betting that the old rules don’t apply”. A recession is possible, but not very likely. Says the head of a major economic forecasting group:

“This time will be different”.

I am not a smart man, Jenny, but I know what hubris is. The signs are all there, folks. So, keep your eyes and ears open because you’re going to hear the word “recession” quite a bit over the next six months. The more you hear it, the more chance that it will happen. It’s the self-fulfilling prophecy in action.

December 12, 2006

Why The Fed Matters to Real Estate

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Mortgage Planner

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Ben Bernanke HeadshotThe Federal Open Market Committee meets today and will keep the Fed Funds Rate unchanged at 5.250%. It is not what the Fed does, however, that should concern Americans. It’s what the Fed says.

First, a clarification. The Fed Funds Rate is directly tied to Prime rate which impacts lines of credit for businesses and homeowners. Ben Bernanke & Co. do not control mortgage interest rates which are determined by the mortgage-backed securities markets. This is another conversation for another time.

When the Fed adjourns this afternoon, it will issue a press release in which it will discuss the economy and inflation. The statement — not the interest rate — is the news worth watching because inflation can unravel markets and push mortgage rates back to their highest levels of the year.

The chain of events is pretty logical:

  • If inflation is growing at a faster clip than the Fed wants, it will tell the markets
  • If it tells the markets, markets will know that the United States Federal Reserve expects the dollar to lose value over time
  • If the U.S. dollar is expected to lose value over time, the U.S. dollar will be “worth less” to foreign nations
  • If the U.S. dollar is “worth less” to foreign nations, foreign nations will buy fewer U.S.-denominated securities because the relative returns will be less, too
  • If foreign nations buy fewer U.S.-denominated securities because the relative returns is less, the demand for mortgage-backed bonds will drop
  • If the demand for mortgage-backed bonds drop, the price of mortgage-backed bonds will drop
  • If the price of mortgage-backed bonds drops, the yield of mortgage-backed bonds will increase
  • If the yield of mortgage-backed bonds increases, then mortgage rates go up for Americans

It’s a long road to get to the conclusion, but this is the manner in which the Fed impacts real estate and mortgage lending. So when your local daily shows the headline “Fed Leaves Rates Unchanged”, don’t think the coast is clear. Read the article and dig a little deeper — it’s not what they did, it’s what they said.

December 7, 2006

Never show up at someone’s home empty-handed

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Mortgage Planner

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Hello, world.

It’s a pleasure to meet everyone, and I thought I’d bring you some flowers to warm you over. I am thrilled to be a part of BHB, but can’t tell for the life of me who our true audience is and — without knowing the audience — I don’t know what you want to read from me.

My “other” blog is The Mortgage Reports. It’s easy for me to write TMR because I know my readers and what interests them.

Writing here, however, is a little different. Would you believe that I started my inaugural BHB post three separate times and then decided to write this introduction instead of something meaningful?

Even though Bloodhound Blog is getting larger, my inclusion as the first (only?) mortgage lender adds a new element. I need to be reponsible to the existing readers, though.

So, I ask the crowd: What do you want to read about from a mortgage lender? Macro issues like government regulation and home loan products? Micro issues like what drives mortgage rates each day? I wax poetic on a variety of topics so just lay it on me and I’ll make it happen for you.

It’s important that I know what you care about so I can give you meaningful insight. If I can’t do that, I become just another pretty face in the BHB lineup.

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