Mortgage Loans Guide

In today’s real estate market, the once lucrative opportunity of being a loan officer or mortgage broker originating loans and refinancing homeowners is no longer so lucrative. The sub prime mortgage meltdown and the mortgage credit crunch has really put a damper on that traditional business model.

 

What all of the mortgage news sources don’t tell you is that the short sale mortgage business is doing fantastic right now. There are more defaulted mortgages in the marketplace right now than we have ever seen before. The transition from a residential mortgage broker business to a short sale mortgage business is very easy. The mortgage brokers and loan officers that use my short sale mortgage system are making ten times more now per file than they used to make by only originating loans. The opportunity to make big money in real estate short sales is now.

 

A mortgage loan officer has to know everything about short sales, defaulted mortgages and foreclosure investing. The short sale mortgage business is the best mortgage business opportunity right now in the mortgage market. The traditional mortgage business is not nearly as lucrative as it used to be. The big money in the mortgage business is being made with defaulted mortgages.

 

You can get started in the Short Sale Business Today with no cash, no credit and no previous experience. Also, there are no licenses needed like there is with a traditional mortgage business. This allows you to get started immediately because you don’t have to prepare for a test or anything like that. You can start making money now and continue learning along the way.

 

Traditional mortgage loan officer training classes do not cover short sales, defaulted mortgages or foreclosure investing. For years the traditional mortgage broker training or mortgage lending training classes didn’t need to cover foreclosures or preforeclosures. Now that the sub prime mortgage meltdown has created this huge opportunity for us, I have prepared a free online short sale course to show you how to make a fortune with foreclosures and short sales in today’s market.

 

Once you implement my strategies that you can’t get from any other mortgage loan officer training program, you will be the envy of all of your loan officer friends. What do you think they’re goanna say why you’re bringing home $40,000 to $200,000 paydays on your deals and they’re still forting around with the same old lifestyle because they haven’t taken the time to get short sale mortgage training. Those who fail to adapt to our new and improved real estate market will fail to get the results you will see once you start using real estate short sales in your mortgage business.

 

If you are just now starting mortgage business, you should skip the traditional mortgage business, and start a real estate foreclosures investing business instead. The market is ripe with foreclosures and you should take advantage of the situation while it lasts. My Free Online Mortgage broker training course shows you how to start a mortgage business with a short sale business model. If you already have a mortgage business, you will discover how to leverage your current business relationships by adding short sales as a service you offer to your customers and referral partners.

 

To get a Free Online Mortgage Lending Training Course in Short Sales, Go here:

in Short Sales

Mortgage Lending Training

 

For more info, go to: www.realestateforeclosuresinvesting.com

 



By: DCFawcett

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2008 has been a very tricky year for all involved in the commercial mortgage business and SBA commercial loans are no exception, to the surprise of many.  Numbers are down across the board and some estimates are coming in that the SBA 7a program (the most popular) will have closed roughly half of what they did in 2007, in terms of loan volume.  Number of closed loans is also way down.

Many industry players have been really shocked by this outcome.  After all, the government set the program up in an effort to help stimulate the economy and many players where betting that the SBA loans would be relatively stable and undamaged. 

There’s seems to be a couple of key issues here that have slowed closings besides the obvious liquidity problems.  For one and this is no surprise, both the SBA 504 and the 7a are expensive compared to conventional loans.  From the broker’s perspective, selling the 2.75% SBA guarantee fee on the 7a program is no easy task.  And it doesn’t matter to a lot of borrowers, especially those that are use to more competitive conventional loans, that the fee is rolled into the loan amount.  Or that this might be their only real option. 

Also, the quarterly adjustable rate is scaring some borrowers away as they contemplate what and where Prime might be going.  We’ve had many borrowers talk about the Jimmy Carter days when Prime was in the 20%.  So many borrowers are passing and just sitting on the sidelines waiting for conventional to come back.  For example, we have several borrowers waiting that have hard money loans and would rather pay their double digit rates than refinance into an adjustable rate.  The issue is that they don’t want to have to refinance again in a few years and pay for the third party costs again.  Of course this assumes that conventional loans will be back.

Another issue has been that the SBA recently rewrote their 800 page manual and made it a more manageable 200 pages.  A great effort for more simplicity and efficiencies have unfortunately caused a lot of confusion as many underwriters have been left with unanswered questions about what the new guidelines are, exactly.  This confusion and doubt has been an incentive for some banks to pass on the SBA programs.  Unfortunately the timing on this couldn’t have been worse.   

What are the liquidity issues?  As many readers are aware most banks that fund SBA loans do so with the intent of selling the debt off onto the commercial secondary market.  Now that this market is so beat up and that there are few buyers, banks have to hold onto the debt on their balance sheet.  For some banks this goes against their business model and for other it’s not even an option as they have their own liquidity issues.   Many banks can’t or don’t want to be portfolio lenders.

However, despite the problems it is worth noting that the SBA loans are still standing and there are banks that are still closing loans with the SBA guarantees.  While conventional is basically out completely for the time being.  For example, try getting a car wash loan done right now without the SBA guarantee.  Or a hotel loan or a restaurant loan.  There are very few conventional loans out there that will even discuss a special purpose property with you if it’s not going through a government sponsored program. 



By: jeff rauth

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Each week, I receive countless emails from loan officers dissatisfied with their small commission checks, looking for something better within the industry. They’ve learned the mortgage business inside and out, and have made the necessary sacrifices to put their career on firm standing. Not satisfied with the measly yield spreads and basis points their current company is paying, they look at other options and a way out.

You may recall in a previous article, I mentioned that:

“When I first started in the industry, my commission spread was 20% of the yield spread premium or YSP. And, if that wasn’t bad enough, we worked on teams of three people—two loan officers and a processor. This meant that any commissions I and my team earned, had to be split three-ways amongst us all. I’m not kidding! My commission after all was said and done was a measly 6.5-7.0% of the YSP. So, on a $3,000 loan, I would make about $200 at most. You don’t want to see what it looked like after they took taxes-out. Absolutely pitiful. Being ignorant (of the mortgage industry), didn’t make me stupid.” –END QUOTE.

If you are currently working as a loan officer, and want to know your career options, here are a few to consider:

Option 1: Become a full-fledged mortgage broker and open up your own mortgage company.

This is really the only way you’ll get 100% commission and be able to dictate life on your own terms. However, there are a few hurdles you must overcome, as well as drawbacks. One of the biggest hurdles is that many states require a certain level of capital to be held in reserves before you can even get licensed.

Many states have personal net worth requirements too and won’t even allow you to do anything under your own license until you can meet the standards they have set. Of course, there are experience requirements as well as a mandatory background check that is part of the process as well.

You’ll also have to not only sell the loans, but process them, market your company, and handle all the back-office paperwork and legal requirements. Not to mention, your choice of lenders you use will be extremely limited as the lenders themselves have their own set of criteria BEFORE they will even approve you for business. Mortgage brokering solely on your own under your own license sounds great at first glance, but only if you have the personal and financial fortitude to weather the inevitable hiccups.

Option 2: Become your own mortgage banker and finance your own deals.

This doesn’t really apply to you unless you are first a mortgage broker trading under your own license. Many brokers become large enough to where they make the transition from broker to lender. The reasons for doing so are obvious. Warehouse lines of credit, if secured from the right source, can provide a banker with an even larger yield spread than if they simply stuck to being a broker and going off other lender rates sheets. In this case, as a banker, you make your own “rate sheets” and set your own commission spread levels. Some mortgage bankers even go into wholesale lending and have other brokers feed loans into them.

Financing for mortgage banking can come from a variety of sources, such as warehouse lines, outside investors, etc. And the state and federal regulatory rules and regulations vary. One of the main advantages of mortgage banking is that you can set your own lending criteria and can approve loans that others deem too risky.

One of the best known examples of a mortgage broker transitioning into a mortgage lender, is Ditech Funding. (I am sure you’ve seen their commercials with the loan officer character!). I was told that their wholesale line comes from GMAC, and that Ditech was their largest client. This could be you some day!

Mortgage banking is certainly something to consider if you are already your own mortgage broker with your own license.

Option 3: Leave your company and join a net branch as your own branch manager.

Becoming a net branch is probably the best of both worlds. You are on your own under your own mortgage branch, but maintain much of the control over the day-to-day operations of the firm. The home office handles all the backend stuff such as accounting, legal and regulatory requirements. They also have established relationships with national lenders, many numbering in the hundreds. They can set you up quickly and provide a structure and support system to help you succeed.

The commission spreads from net branches vary widely and most firms require a minimum past experience of at least two to five years, showing a track record of success. Some firms have a set yield spread split, such as 70% to you and 30% to them. Others give you 90% or even a full 100%, but charge a fixed fee per file, as in between $300 to as high as $600 a loan. Although 100% sounds great, I’ve heard stories of even higher fees fixed file fees out there!

If the net branch doesn’t have a fixed split per loan, they may mark-up their rate sheets they give you and take the extra spread. For example a lender sends the net branch a daily rate sheet, the net branch home office marks it up a tad, and sends it off to you. And you never see what the “real” rates are!!! You are pricing off an already marked-up rate sheet and are never even aware of it! Sneaky, eh?! Not all firms do this, but some do!

Also, with net branches, although you are on your own, you still have to follow their set policies and file procedures. And the firm will have other unknown requirements and miscellaneous corporate rules. However you won’t find these out until you are well underway and committed to them.

It’s funny, many mortgage companies are really net branches in disguise. Maybe even the company you are working for now! That’s right! They probably were once a small little one-person net branch at some point too! But they grew-up, expanded and hired people to work for them. You can do this to! It’s a definite possibility.

Overall, net branches are a great way to “own your own business” without all the headaches and hassles that go along with it. However, a word of caution: research each firm thoroughly before you join and don’t make any rush decisions.

Some of the biggest net branches out there are: Allied Capital Corporation, Carteret Mortgage, Allfund Mortgage, Global Home Loans, Summit Mortgage, etc. (There are literally hundreds of choices, these are just a few!)

Option 4: Stay as a loan officer.

If becoming a broker, banker, or net branch manager doesn’t appeal to you, you can always stay as a loan officer and change firms. If you don’t want the responsibilities of running your own shop, why not simply move onto greener pastures.

There are many mortgage companies–even within your own city–that probably pay a lot more than you’re getting at present. Why not have a little look around and see what the other guys are paying? It doesn’t hurt to ask. Remember, being a loan officer is really being a salesperson. And working on commission, means that most firms will hire you with little hesitation (provided you have the educational and professional background). It’s little risk to them if you don’t succeed, because if you don’t sell, you don’t get paid.

Don’t be afraid to look elsewhere, because if you stay where you are, you’ll never get ahead.

Option 5: Move into another area of the mortgage industry.

As you know, I work in training and help loan officers and mortgage brokers succeed in the industry. I’ve been there, and done that already. After selling and closing thousands of loans, I know what works and what doesn’t. When I got burnt out from originating full-time, I decided to use my knowledge and experience to help train others.

This way, I am still a part of the mortgage industry I love, and have all the freedom and control over my life I want. You can do the same. This industry is in dire need of professional trainers. Like many people I’ve spoken to, I’m sure your training wasn’t much more than a cold telephone and a couple of bum leads. Mortgage training is a great area to consider.

And if not mortgage training, why not become an appraiser, title company owner, real estate attorney, loan processor, notary public, underwriter, wholesale account representative, etc. These are all great careers and still in the mortgage field.

Ultimately, where you go in the mortgage business is entirely up to you. The sky is the limit and your opportunities are endless. I’ve only just opened your eyes to a few of them.



By: Robert Lawrence

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How many times have you answered the phone and heard “What’s your rate?” from a customer? I guarantee it comes-up on every phone call, usually within the first 30 seconds of the conversation. Customers ask it because they don’t know any better. To them you are just like every other loan monkey out there. They don’t care about you, they just care about THEIR interest rate they’re going to get and that’s all that want to know. Anything else you say is in one ear and out the other.

But you the loan officer, don’t care about the rate. Your concern is trying to figure out the customer and seeing what loan program you can get them into. You care about their property type, loan amount, FICO score, etc. Then after all this is said and done, the rate then becomes of INTEREST to you. But the customer doesn’t care about all that!!! They just want the rate! Now won’t you just give it to them, so they can hang-up and call someone else? You know what will happen…POOOOOFFFF! THEY’RE GONE!

One of the best ways I’ve found to steer a customer off of rate…rate…rate is to ask open-ended questions. No longer am I just asking about the property type and loan amount, but rather asking if they would like to take cash-out of the property, how long they intend to stay there, what their future plans are and so on.

I ask questions other loan officers don’t and it helps me to get in touch with my customers true internal motivation. No longer am I an order taker, the customer now sees me as a helpful friend and trusted advisor. In today’s competitive marketplace, this is truly the best hassle-free way to sell. It really works…works…works!

Here are some open-ended questions you can use to get the customer to open-up to you, creating trust and minimizing the “rate” question:

* What timeframes are we looking at for this loan?

* Do you know what type of program you might be interested in?

* Have you been shopping for a while?

* What kind of property are you buying, tell me a bit more about it? (People love to talk about their new home!!!)

* How long do you intend to stay in the property?

* Have you done any remodeling on the house which may increase it’s value? (Again, this has little to do with the actual loan pricing, but is a great conversation starter and trust builder as Mr. Handyman can tell you about all the wonderful projects he’s done, etc.)

* What are your long term goals and plans?

* Do you know what your credit score is, and what’s on your credit report?

* Haven’t you heard horror stories of people being burned at the closing table?

* Have you considered rolling any other debt into the mortgage in order to lower payments and save money on interest?

* Has anyone ever told you what a true “no closing cost” loan is?

* Has anyone ever explained the loan process to you step-by-step?

* Have you had any problems in getting a loan in the past?

* Is there anyone else involved in the mortgage or is it just yourself?

* How soon would you like to close by?

* And my favorite question, “Have you seen any other rates you liked?” (this tells me if they are a hard-core shopper or not and lets me know what I am up against).

These are just some of the questions to get the customer to tell you their “story” and open-up. (I cover hundreds of questions in my training at http://www.loanclosingsystem.com ). It is important to ask questions that don’t have a firm yes or no answer. The sooner you get people off rate, the more likely you are to capture their business and close their loan. The next time someone calls, try using one or more of my open-ended questions above and you’ll see the difference! The results will amaze you!



By: Robert Lawrence

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