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peter
7512 Posts |
 Posted - 07/09/2007 : 6:35:22 PM
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July is another real slow month for me. I have worked even harder than
the previous months and got about 11 loans in the pipeline. Unfortunately,
I funded only 1 of them after a long struggle with severely tightened underwriting
guidelines and the lender's "pusillanimous *****footing" (quote from an
actual phrase used by a former U.S. vice-president in the 1960's).
My 10 other loans come from borrowers with severely unsolvable problems,
and at best I could fund just one of them if I am lucky to find a bending lender.
I feel like a corn harvester in a corn field full of rotten corns under the sky
darkened by locusts.
The problem is not the lack of clients which I have many. The culprit is
the deteriorating home equity and degenerating credit profiles of my clients.
On top of that, I encountered "flaky" A/Es and also "shaky" lenders who claim
they could but they really can't fund the tough loans in today's market.
Anyone here is sharing my experience? I thought April, May, and June were really
bad months for this business but July seems to be even worse!
Peter |
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homeownerhunter
384 Posts |
Posted - 07/09/2007 : 6:37:59 PM
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Try marketing SOUTH OF THE BOULEVARD.  |
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Douggie
1370 Posts |
Posted - 07/09/2007 : 6:50:26 PM
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| mine hasnt been great...but overall I havent had any time to spend working. Just planning. My father was diagnosed with colon cancer and had major complications after surgery. I spent months in the hospital with him. |
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waynepbright
4281 Posts |
Posted - 07/09/2007 : 6:52:59 PM
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God Bless Douggie,
Hang In There .. |
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hherrm
1419 Posts |
Posted - 07/09/2007 : 7:11:48 PM
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I can't say it is getting worse. I'm actually having one of my best months this month.
What I'm finding is that I spend more time shopping loans. I use to have a few Prime and Subprime Lenders I placed my loans with and knew exactly who was good for what.
Now, most of my evenings and weekends are used up with searching for lenders. During the day calling new AE's, trusting new AE's, if they call you back at all, faxing for pre-quals that supposed to be a sure thing, calling AE's back, leaving messages for a return call, waiting and waiting for a return call, to finally find out that they don't do loans in Texas or guidelines changed and they can't do it any longer.
I have to say that I also found some great gems of AE's that I really enjoy working with.
The constant changes in the guidelines driving me crazy. There you finally have that perfect loan, 785 score, 80/10/10, DO approved. You'll send it in thinking it is a slam dunk, wrong, get a clear to close on the 80% but the 10% denied because ratio is over 50%, guideline change the day I submitted it. Now you have to shop again and this 4 days before you supposed to close. |
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waynepbright
4281 Posts |
Posted - 07/09/2007 : 7:20:51 PM
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That's an All too Familiar Reality each day Hilde .. Unfortunately
It definately is not what it used to be .. |
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keysfunding
406 Posts |
Posted - 07/09/2007 : 7:29:14 PM
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Listen Pete... These are the times that seperate the Men from the Boys (no offense to the Women and girls reading this).
All of the above I have felt, too, but it's life. The day of the "fall-of-the-log" deal is gone (for now anyway). What you didn't mention was the "witch-hunt" that lenders are on trying to arrest mortgage brokers because borrowers couldn't or wouldn't pay thier mortgage payments. (Yeah - there are some who deserve to put in jail for some of the deals they've written (or at least have thier license revoked)) but there are those of us who write good, honest loans to good, honest people who had bad fortune fall upon them and as a result, we've got "the man" all up in our business looking at our files trying to pin it on the Broker. - But I digress....
The point is... this is Darwinian Lending... the strong, smart, hard-working, honest mortgage brokers will survive and be overwhelmed when the market opens back up... The rest will be working selling Insurance or securities or vacuum cleaners door-to-door.
Roll up your sleeves, tell the wife and kids you'll see them at 8pm every night and that you Love them and suck it up. (And PS: Keep your nose clean... don't be tempted to do something stupid to get a loan to work). If you don't trust your AE, get another one. There are plenty of awesome ones out there. Do these things and you'll be one of the great ones on the other side.
Or don't. Whatever. :-) |
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enailor
121 Posts |
Posted - 07/11/2007 : 08:28:46 AM
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Times are definitely tough in this business. With lenders changing guidelines, even refi's are hard to do.
Even though it's tough out there, I do agree that this is when the strong show their stuff. If you don't have a strong marketing program in place, its time to get on the ball.
Check out this post as I think it may be beneficial for you. http://www.brokeroutpost.com/loans/brokers/forum/topic.asp?TOPIC_ID=141019
We are expanding our marketing program across the nation and your area is wide open. Is now the time to make your move?
Best of luck! |
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sc312001
1107 Posts |
Posted - 07/11/2007 : 08:44:31 AM
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| I agree, it's tough. Every deal is like pulling teeth. In 15 years, I have not experienced this type of fragile market. BUT, I do think you have to stay positive, ride it out & keep re-inventing yourself! I try to keep an open mind at all times for new ideas. It is cyclical. Everyone is always going to need money & there will always be people buying homes. Unfortunately, I think this economy will produce more sub-prime borrowers & the problem will be declining home values/tighter guidleines limiting the ability to get deals done....It's a matter of time before new lenders come to the market with "new" programs that replace the ones we lost. |
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Quicksilver
6284 Posts |
Posted - 07/11/2007 : 09:05:35 AM
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No problem getting clients, getting them closed is a different story. I get calls daily with pretty much every deal being undoable. One I got yesterday, Forclosure bailout at 95% ltv 1.4 million...ummm yeh ok
Some of the top Commercial guys were even talking about the Commercial industry faltering in the next 1-3 years or so as its seeing a boom right now similar to residential along with crazy programs that have become available like 97% financing etc. |
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BrokerCA
2448 Posts |
Posted - 07/11/2007 : 10:04:20 AM
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| Yesterday they downgraded ratings on bonds backed by subprime mortgages. This may lead to another round of higher rates and increased lending standards. |
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MarkIFC
1279 Posts |
Posted - 07/11/2007 : 10:11:58 AM
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Commercial stuff is getting scrutinized a lot more closely now it seems. Stuff that would sail through 6 months ago all of a sudden are getting picked apart.
Three of my former commercial multifamily borrowers I followed up with all said the same thing--- lots of vacancies and good property management companies are hard to find. Around here the standard property management fee is 7% plus on average $450 fee when they rent a unit, plus maintenance, plus advertizing. And even at that they are not working that hard at keeping the places up. |
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Quicksilver
6284 Posts |
Posted - 07/11/2007 : 10:32:45 AM
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quote:
Originally posted by MarkIFC
Commercial stuff is getting scrutinized a lot more closely now it seems. Stuff that would sail through 6 months ago all of a sudden are getting picked apart.
Three of my former commercial multifamily borrowers I followed up with all said the same thing--- lots of vacancies and good property management companies are hard to find. Around here the standard property management fee is 7% plus on average $450 fee when they rent a unit, plus maintenance, plus advertizing. And even at that they are not working that hard at keeping the places up.
Watch, give it a couple years and Commercial is going to be in trouble, now instead of everybody and their buying resi properties, now everybody and their mother is gobbling up Commercial. |
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mimicflame
1 Posts |
Posted - 07/11/2007 : 10:35:48 AM
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| I think the key to getting ahead in this kind of market is good marketing. I have 4 websites that run online and this kind of "thinking outside the box" advertising is really helping! |
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1003s.com
4679 Posts |
Posted - 07/11/2007 : 11:04:41 AM
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| The market nationwide is very bad. I recently read an ad for a house for sale that listed it as 100K under appraisal. |
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gabelending
150 Posts |
Posted - 07/11/2007 : 11:06:00 AM
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quote:
Originally posted by peter
Still, unless I can originate loans in adjoining States to California such as
Nevada or Oregon, both of which do have State restrictions, I could not imagine
why a borrower in Utah or Montana would want to do business with an L/O in Los Angeles
unless he is a borrower with an unsound mind.
This is a false assumption you hold. Our physical location isn't much of a factor at all with the majority of borrowers today. If you're good at what you do, then this question will rarely even come into the equation. Although I'm located in Southern California, I have done loans in Washington, Oregon, Maryland, New Jersey, Arizona, Utah, Maryland, Florida, Georgia, California, Texas, Ohio, North Carolina, and Wisconsin. If you buy internet leads, the borrower will actually be surprised if you're local! Shake off these self-limiting ideas and close some loans! |
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MALIZNA
444 Posts |
Posted - 07/12/2007 : 06:56:17 AM
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well I am in total agreeance with the equity/cashout ...I have never done as many equities in my life as I have this year.....This goes for cash out too.
Only thing I fear in this case, is these people will be the next group of foreclosures, taking out all their equity/cash out and then unable to sell, or make payments and there goes your next group of foreclosures |
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Coffee Is 4 Clos
1750 Posts |
Posted - 07/12/2007 : 08:07:54 AM
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FHA I've been told is unofficially not accepting any new broker approvals for the 2007 year. They are accepting apps but not approving them until 2008 due to the overload of new applications. This is what I heard- nothing confirmed.
Rainmand- I've had a couple reverse mortgages pass my way and I've passed on them due to the circumstances... meaning they were shady deals. Both borrowers had crap credit and heavy equity available... irs tax liens, 5oo scores, no job, etc. But, they both had purchased a second home in the southwest a couple years back with the intention of selling home here and then retiring out there... both had local homes on MLS and one had no furniture- but they know that reverse mortgages will get them the $$$ needed and want to claim OO residence. I passed on them but I do agree wtih you about reverse mortgages being very hot right now. Can I ask you who you use- I've heard a lot about freedom mortgage but I am unaware if they offer wholesale. Any other favorites and I am not interested in snapping deals for 1k or 500 bucks... I wanna get paid on loans. Thank you |
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rainmand
5553 Posts |
Posted - 07/12/2007 : 08:34:52 AM
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>>Can I ask you who you use-
We use all of the major Investors; Seattle, Financial Freedom, JB Nutter, BYN, countrywide, etc. When I submit a HECM, my assistant always asks "who do you want to use this time" and my reply is usually "whoever is doing them the fastest". However, if I submit a Jumbo, it's Investor specific because each Jumbo program is proprietary and specific to the Investor.
>>I've heard a lot about freedom mortgage but I am unaware if they offer wholesale
You probably mean Financial Freedom Jude. They offer Wholesale and are the Investor I use the most for my HECM's. Our volume allows us to participate in their FastTrack program. That program ensures I receive my first set of conditions within 24 hours of submittal to Underwriting. I really like that. They also have an awesome Lender Support team. I can call them with any Reverse Mortgage related question and they're extemely helpful. Most new Reverse Mortgage companies start with Financial Freedom because they offer training and support. They'll also sponser you if you need to get FHA approval.
>>Any other favorites and I am not interested in snapping deals for 1k or 500 bucks... I wanna get paid on loans
There are some newer Wholesalers that don't require you to be FHA-enabled. I haven't signed up with them yet but am watching them closely. You won't be able to originate any goverment sponsered Reverse Mortgage programs with them, but you'll be able to originate their proprietary non-Goverment-sponsered programs and receive full compensation. They're PCM and Virtual Bank. Contact Virtual Bank via www.virtualbankseniors.com and PCM via
Anthony McGlade
Pacific Community Mortgage, Inc. PCM
Direct Line: 714-464-5601
Cell Phone: 714-376-6346
Wishing you success Jude!
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rainmand
5553 Posts |
Posted - 07/12/2007 : 08:47:14 AM
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>>How do you get your reverse mortgages leads?
Primarily from my internet sites. I use a common template that's provided from lenderlab.com and modify the content. I use the same template because so many of my clients have said they've contacted me because the website was simple and comfortable. I use google's pay-per-click technology to place the website in specific areas around the country and turn the websites on from 10am-2pm. Then I sit by my phone and wait for the phone calls. It reminds me of fishing Patty because somedays I don't receive any calls and other days I'm overwhelmed. The websites that seem to work best are www.SuperJumboReverseMortgage.com and www.GovernmentLoanDivision.com |
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Quicksilver
6284 Posts |
Posted - 07/14/2007 : 09:49:16 AM
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| Well...6 loans all killed this week so....and just got a call from another purchase that was in and now dead so now 7. |
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servicefirst
3421 Posts |
Posted - 07/14/2007 : 09:53:33 AM
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| I'm very sorry to hear that Chris. I have two more file now than I did a week ago (accepted purchase agreements) and another past client is stopping over in an hour to sign disclosures to get start on a refinance. |
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Quicksilver
6284 Posts |
Posted - 07/14/2007 : 09:59:26 AM
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quote:
Originally posted by servicefirst
I'm very sorry to hear that Chris. I have two more file now than I did a week ago (accepted purchase agreements) and another past client is stopping over in an hour to sign disclosures to get start on a refinance.
3 of them I wasn't sure of to begin with, in Georgia who has insane forclosures right behind Detroit. Appraisals came back actually decent with good comps etc, but b/c of the area and the number of forclosures lenders all killed the value. Lender avm's and reviews all came in 80-110K off the appraisals. Lenders agreed out comps were good, but the number of forclosures in the area is what hurt their review. So basically all 3 are upside down on their homes big time, and two of them are just going to walk from the properties.
The purchase, everything was ready and they just backed out and didn't even care that she had 12K in escrow she just lost to the seller. Have to call lender on Monday and let them know its off. |
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rad
1404 Posts |
Posted - 07/14/2007 : 6:41:09 PM
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quote:
Originally posted by N8WESTON
For those of you driving around in your non American cars, wondering why people have lost ,or are losing their jobs, and houses, go sit in your car and kick the seat back, and gloat that you have yours, for now. The fact that you chose to send your $40,000.00 to Tokyo will catch up to you in the long run.
Nafta, Kafta, Shaftya has done more to to hurt our country than anyone in the middle east.
This downturn has just begun.
What does this mean?
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rad
1404 Posts |
Posted - 07/14/2007 : 6:50:30 PM
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I think it's horsesh$t to tell someone to leave the business as some have suggested. Take your negative vibe and dump it somewhere else.
Peter, there is a boatload of business out there. You have to find a way to look at more deals than you have done in the past. Then when you figure out how to cast a wider net, as you know, there are only two simple questions:
(1) IS THE VALUE REALLY THERE?
(2) IS THERE A BENEFIT TO THE BORROW?
What's the point of working on a loan that won't close. It is like going to Las Vegas. There are hundreds of deals out there waiting for you you to close.
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peter
7512 Posts |
Posted - 07/15/2007 : 10:30:45 AM
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After filering thru equity sufficiency, credit, income, and
overall merits of the borrower, there really aren't many
borrowers who could qualify under today's tightened guidelines.
I do have several files of borrowers with middle scores of
500 to 535, stated income/stated asset, who are at 85% LTV.
Of course, they have 15% equity in their houses. And yet,
under today's new guidelines, I could not find any lender for
them. Likewise, I must have more than 10 files of borrowers
whose middle scores are between 550 to 620 with remaining
equity margin of 10 to 15% and they desperately want subprime
2nds and there is no lender who is willing to lend on these
SISA borrowers.
Sufficient equity is only one of the many factors in
being able to fund a loan in a matrix of several other factors.
If things are as simple as some people say, we wouldn't have
had 99 lenders and countless brokers who have gone out of business
despite their great efforts to sustain their businesses.
It is necessary to come down to earth and have a critical
look at our business model and our industry at the present in
order to decide whether to stay on or to move on. Realism is
certainly not negativism. Realism is supported by logic and
examples while negativism is a state of mind.
Peter |
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