Month: April 2007 (page 2 of 8)

by Morgan Brown

Mortgage Banker

Author website

Here is an email I recently sent to our sales team in regards to the leads that they receive and work on a daily basis. My company uses internet leads to generate new business on top of our referral and repeat business (which makes up about 1/3 of our monthly volume). I received some good response to it from our folks so I thought I’d pass it along here to any new originators who read this blog for advice.

My email:

I love baseball and used to play it (poorly) for the better part of my youth. I was watching some highlights last night and it got me thinking about what we do here.

When I used to play I would really look forward to the 3 or 4 at-bats I would get each game. I knew that I would only have 3 or 4 chances to get a hit and improve my average. In baseball before you are “up” you are “on deck. I remember vividly being on deck going through the following checklist:

Who’s pitching and what have they been throwing lately? What pitches are their favorite? How have they gotten people out before me? What did people who already have hits against this guy do to be successful against him? How many outs are there? What’s the game situation? Who’s on base?

The big question I was asking myself was “What am I trying to do in this at bat?” Was it move a runner over? Was it get on base no matter what? Was it try to get in scoring position? And so on. I KNEW the answer every time I stepped in the batter’s box.

Here you may only get 3 or 4 at bats a day with your leads. Sometimes you’ll get less than that. Do you know what you’re trying to do with each and every at bat you get? What did you think about on deck before you picked up the phone? What were you trying to specifically accomplish with each at bat?

Hint: the answer is not “get a hit/take an app” That is the generic Read more

by Kris Berg

Realtor, Associate Broker

Author website

I have been busy lately, so busy that while my back was turned I missed about 47 Russell Shaw Podcasts. Sorry, Russell. I fully intend to listen in, uninterrupted, when I have a sufficient block of time (say, the month of May?), but I have been too busy with business to learn how to do more business. I have been reading Inman like I read the daily print rag – Headlines only. And only a teaser along the lines of “Greg Swann to Speak at Annual Humility Conference” would have tempted me to get side-tracked.

So, what I have been doing all week is a lot of mechanical real estate stuff (prepare for the listing, take the listing, market the listing, manage the escrow). What I have been doing a lot more of, however, is listening. By Friday, my husband Steve (or, my wacky sidekick, as he often calls himself) may be threatening to have the phone surgically removed from my ear.

What I have learned can be generally categorized as follows:

• A bunch of well-intended people are knee-deep in bad loan doo-doo in my area, far more than I knew.
• Steve and I are finding that Pro Bono work is taking a considerable amount of our time these days, and we don’t mind.
• Lenders and loan brokers are making us look good.

Steve and I, in the past week alone, have met or spoken repeatedly and at length with three different couples in trouble. The situations have ranged from the sad to the tragic. In each case, we have felt it was our obligation and duty to meet with the parties to pencil out scenarios and discuss the implications of the various options. In each case, we knew that we would not be paid for our time, now or in the future. Call it social responsibility.

My “tragic” example involved a military family with three properties totaling approximately $1.7 million in value, all acquired within the past two years, the most recent having closed escrow just a couple of months ago. Each was purchased with or refinanced into a 100% interest only loan with negative amortization. Due 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