BloodhoundBlog

There’s always something to howl about.

Month: April 2007 (page 8 of 8)

April 3, 2007

Making A Case For National Mortgage Lending Standards

by

Mortgage Planner

Author website

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

April 2, 2007

I want a LOT of money – would you tell me how to get it?

by

Mega-Producing Realtor

Author website

Late last night I received THIS from a form filled out on my website:

I read about Russell starting Realtor Training, I would like to know if he can set up an automated program for me to follow and use here in Victoria Bc. I sold 11 million dollars worth of real Estate in 2006, I would like to double that over the next 12 months or more. Cheers, hope to hear from you soon!

And tonight see this post from Greg, where the question is:

I would like to know if anyone has a great listing generation system that works, day in and day out. My goal is to gross $600,000 over the next 12 months. I know this is a big topic. I am keen to to see what you respond with.

Both questions are basically the same – how can I easily NET about 500k a year. Please send me the answer. Thanks!

Free MoneyThere are a number of things you can do to generate leads. The effective things require either your time or your money. For example, I use radio and TV advertising to generate lots of “come list me” calls. It is very expensive. Last year I paid over 600k just for my media ads. You can start with less – when I started, the first year on radio I paid about 20k. The next year about 40k. Geographic farms are a common way to generate leads. Some agents buy them from companies. Working one’s sphere of influence is another common lead generation method – contacting a “known database”. One way or the other you will spend time, money or both to generate leads.

To go big one must do one of these two things: prospect effectively or market yourself effectively. Pick one.

Do I plan to ever attempt to put together some sort of package of “steps” – kind of a one-size-fits-all to provide to other agents? No. You can get one here if you are interested in such useless crap. Is there a way to become really successful in real estate with a small amount of effort? It can look that way Read more

April 2, 2007

Ask the Broker asks the audience: What do you use for a listing system?

by

Suburban Phoenix Real Estate Broker

Author website

Another wide-open Ask the Broker question came in over the transom:

Very rewarding and refreshing to listen to Russell Shaw. Wow, I wish I lived nearby. I’d love to see Russ live in April. Having said that, I heard Russell say listing homes is my future. It really sank in.

I would like to know if anyone has a great listing generation system that works, day in and day out. My goal is to gross $600,000 over the next 12 months.

I know this is a big topic. I am keen to to see what you respond with.

I have no good answer to this — for now. What we are learning from Russell is that what we thought was a listing system is, in fact, a halfasstrophic mess. We’re rebuilding everything from the ground up, and we may have some good, market-tested answers to these questions in a few months. For today, what about you? Do you have any good advice to proffer to our financially ambitious questioner?

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April 2, 2007

Redfin.com’s Real Estate Consumer’s Bill of Rights: A wolf in sheepskin clothing . . .

by

Suburban Phoenix Real Estate Broker

Author website

I am a hardliner on the subject of reform in the real estate industry. Over the last nine months, I have written at great length about, among other things, the skill-set required to survive in the future of full-service real estate, empowering buyers, dual agency, how the NAR makes war on the free enterprise system, divorcing the buyer’s agent’s compensation from the listing agent’s fee, rebuilding the MLS without the co-brokerage fee, eliminating the IRS safe-harbor for real estate brokers to induce them to take responsibility for managing head-count, and getting rid of real estate licensing laws — or at least the broker’s level of licensing — to promote better competition among agents and better due diligence among consumers in hiring agents. There’s all that, plus much, much more.

Why am I going through my bona fides as a reformer? Because I am about to denounce a failed, flawed, fractured, false reform that is to be proposed today by Redfin.com. At first blush, this “Real Estate Consumer’s Bill of Rights” sounds like a good thing — and it easily could have been a good thing. Instead, it uses a treacly moral suasion and calls for new legislation to ram the corrupt Redfin style of doing business down everyone’s throats.

Start at the beginning. Yesterday, Kris Berg, Ardell DellaLoggia, Kevin Boer and I had this email from Redfin.com CEO Glenn Kelman:

Hope you’re having a good weekend. We wanted to let you know, under embargo until tomorrow at 9 a.m. (or whenever Inman goes live with the news), that we’re launching a program on Monday called the consumer bill of rights.

It doesn’t argue the issue of commission rates; we don’t consider it our business what others charge. It mostly focuses on simple reforms that would ensure that consumers get complete and open access to information about properties and the process of buying or selling properties.

The reason we’re asking you guys about it is that we want other brokers to support these rights. This is something constructive and positive, not antagonizing and negative — which itself is a result of coaching you’ve given us.
Read more

April 2, 2007

Wow! You Saved 4&162; A Gallon? What’re You Doing With The 60&162;?

by

Real Estate Investments Broker

Author website

Now I’m not talking about the student or the guy with four kids, a mortgage and $98 in savings. I’m talking about the majority of people. It’s a phenomena that translates into real estate investment on a huge scale. But first, let’s look at what I call the 4&162; savings logic.

15 gallons results in a savings of 60&162;. If the average person fills up their tank every 10 days or so, that’s a whole buck-eighty a month as Grandpa used to say. In a year that’s a savings of less than $22. And that’s why they would waste time looking for that 4&162; savings?

gas station

Think about how people do this in so many areas of their lives. They’re like the blind man who only touches the elephant’s trunk and concludes it’s snake-like. Situational awareness combined with rational thinking and the long view, will almost always produce better results than behaving as if you’re blind.

Yet that’s how a surprising number of people consistently make their decisions when finances are involved. It never ceases to amaze me. Real estate investors often think this way, costing themselves hundreds of thousands of dollars — sometimes millions.

Here’s an example.

Cher and John are clients of mine, and are very successful investors. They were very quick learners. As a matter of fact Cher is sought by investors all over for her new found expertise in property management principles.

About three years ago I told them it was time to not only exchange out of four of their San Diego properties, but that they should take their net proceeds to the Phoenix area. They were fine with that. I also gave them the same speech I gave them before we embarked on their last exchange.

Don’t focus on how much you get for your properties as long as it’s in the reasonable range of value. Whether in fact you could have held out for another $10K on that triplex is a good conversation to have at Starbucks with your $5 cup of Venti Whatever and a cookie. Otherwise, as I tell my clients, “You won’t be able to find that 10 grand Read more

April 1, 2007

A Farewell to ARMs: One Less Option

by

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

Author website

Are Option ARMs the next casualty in the non prime mortgage meltdown war? Wall Street fired the shot heard ’round the world in the mortgage default war by demanding repurchases from subprime lenders. Lenders either closed their doors or waved the white flag and allowed the conquering army to annex them.

The next battle in the mortgage default war may have already been fought and decided long before the soldiers have time to lace up their boots. That battle is the “dirty bomb” that we call the Option ARM. I think Friday afternoon was the equivalent of Paul Revere’s midnight ride.

I received an e-mail from IndyMac Bank, a respectable non-prime and prime lender and leader in the negative amortization loan products, that said:

1- IndyMac Bank is retiring all 12 MAT products over the next few weeks. This is the traditional low start rate, negative amortization loan.

2- They are increasing the minimum payments and reducing the max price. No more four point rebates for mortgage brokers on an intentionally vague product.

3- They cite the popularity of the FlexPay 5/1 ARM for the 12 MAT demise. The Flex Pay 5/1 ARM has a fixed rate for five years with an option to pay less than the interest due which does defer interest. The advantage to the Flex Pay 5/1 ARM is that the potential negative amortization is completely predictable and not subject to the whims of interest rate fluctuations.

Now, three initial thoughts cross my mind:

1- Option ARMs are dead. That’s hard to believe. Jeff Brown states a great case for alternative loan products last week when he says that builders build and lenders lend. He’s been around long enough to know that opportunists capitalize amid fear and vacuums. Lenders with high exposure and nebulous underwriting guidelines will be decimated when the piper comes calling in the form of higher defaults. Lenders with cogent underwriters will survive and cherry pick the good borrowers with this useful loan product.

2- Wall Street is not at war with lenders but is betting on Read more

April 1, 2007

Free Real Estate Leads

by

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

Author website

I am a regular contributor to the Active Rain Real Estate Network. I was perusing the posts on Active Rain the other day when one jumped out at me with the title

FREE REAL ESTATE LEADS

This is an advertisement, but important that you read:

Real Estate Agent Directory
The most beneficial feature of this directory is that all leads generated in your area will be forwarded to you in real-time at no cost -ever. You can add a link to your website in the directory (more search engine exposure) and receive the leads that way as well.

*A FREE directory listing for 3 months (and only $9.00 per month thereafter-you may cancel at anytime)
*FREE LEADS from buyers and sellers (This will never change/completely free leads)
*No further commitments listed by county

This drew some fire from the good people at Active Rain. The real estate agents didn’t like the idea of a lead aggregator advertising their wares on the network. A few of us pointed out that advertising was permitted by the network and that many of the critical comments were coming from serial advertisers on Active Rain. Nonetheless, the lead aggregator was criticized for deceptive advertising and everyone poked holes in her business model.

Everyone knows that lead aggregators are the scourge of the industry; why do I defend them?

I thought back to my Principles of Promotion class from business school and I remembered the importance of having a mix in your promotional efforts. The appeal to a mortgage originator is that he might capture potential homebuyers before they contact a real estate agent; it allows him to control his destiny. There are many ways for a mortgage originator to promote his business: direct mail, telemarketing, hosting a web log, search engine optimization, seminars, co-hosting open houses, and even the old method of buying donuts for the real estate office and handing out rate sheets.

I started thinking that I might be falling victim to the old “ivory tower syndrome” that success sometimes breeds. I’ve had good results with writing articles for Active Rain. Myspace, and Bloodhound. It has generated 20-30 loan inquiries each month which Read more

April 1, 2007

Ask the Broker asks the audience: What should a brand new agent do to get traction?

by

Suburban Phoenix Real Estate Broker

Author website

This is another Ask the Broker question best thrown out to everyone:

It looks like I did Project Blogger one better. I actually hired on a new agent yesterday. As in brand new. The guy is an attorney, formerly in-house counsel for a non-profit, he just got his real estate license and wanted to hang it with us.

So what things would you say to a brand new agent in this market? What are the “New Basics”? I plan to tell him BloodhoundBlog is must reading. But whither from there?

I’ll lob a softball to get things started: I don’t want to seem to endorse Tom Hopkins, because too much of his real estate sales advice turns on what I consider to be deceptive tricks. But something he said has stuck with me forever:

Am I making the most productive possible use of my time right now?

That may not be an exact quote. The point is to make sure that, when you’re working, you’re working on things that will improve your present or future income potential, not spinning your wheels. The other end of the argument is, when you’re not working, make the most productive possible use of that time, giving your spouse, family and friends your undivided attention.

There’s much more than this, of course. What say you? Should a new agent go hi-tech — or go door-to-door. Farm and pray for rain or pay for leads? Go it alone or fill a hole on somebody’s team?

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