Great News...A new lending avenue has reopened for "Distressed Market" areas, including Maricopa County in AZ. Go to www.fanniemae.com and you can read the news release from today.

Highlights

• New Changes go into effect June 1, 2008
• "Fannie Mae will accept up to 97% LTV ratios for conventional, conforming mortgages processed through its Desktop Underwriter® (DU®) automated underwriting system"
  95% LTV on loans underwritten outside of DU
• Down Payment requirements will be for purhase transactions of Primary Residences.
• DPA will be available through Community Seconds® and MyCommunityMortgage® products

Read the article if you are interested in some of the remaining comments from contributors to the press realease. This just gives realtors and lenders more options for helping people into their new home. Have a great weekend.

Let me know if this article is useful...

Housing Starts reach lowest levels since '91

Click on the title to see the article from Bloomberg today regarding the low levels of housing starts.

Points of Note:

"Starts increased in three of four regions, led by a 24 percent jump in the Midwest. Construction rose 19 percent in the West and 3.6 percent in the South. Starts dropped 13 percent in the Northeast", (Schlisserman, Bloomberg 5/16/2008)

"Home construction and property values ``seem likely to decline well into 2009,'' Federal Reserve Bank of San Francisco President Janet Yellen said May 13. She also said the risks around her forecasts are ``unusually large because of uncertainty'' about financial markets, housing and commodity prices." (Schlisserman, Bloomberg 5/16/2008)

" Economists surveyed by Bloomberg forecast growth from April through June would slow to a 0.1 percent pace and consumer spending would advance at a 0.5 percent rate, the smallest increase in 17 years" (Schlisserman, Bloomberg 5/16/2008)

Just keep moving along. Everything we do is about attitude, communication, and dedication. We must educate people about how to get into houses without hurting their financial condition. We may be reaching the bottom and then there is only one way to go...UP.

Have a great day.

Home Sales are UP???

Not sure if you saw this article today on azcentral.com, “ASU Report: Home sales up in the Valley.”, if you haven’t read it take a second (it isn’t long) and think about what is “wrong” with the title. (I put wrong in quotations because it is a subjective wrong in my opinion) Home sales are NOT up in the valley. Month over month sales from March to April were up and from April of 2007 to April of 2008 they were up. But the actual numbers and trends are in the remainder of the article.

“Home resale transactions for March and April totaled 9,920 sales, compared with 10,245 sales during the same two months last year. The current year-to-date total is 16,975 sales, compared with 19,045 sales during the same period in 2007.”

Home sales are NOT up. Based on this information we are still considerably down in year over year sales and didn’t even match last March and April’s number of sales. If you look in the comments section a reader asked what the number of homes for sale on the market was compared to last year. I think that is a great question to ask.

I have nothing against the article itself. I do have an issue with the title of the article as I feel it is misleading. I am all for positive reporting and believe there are many positives out there, i.e. Lending standards are back to their former self, realtors and lenders are needing to work and discover new ways to educate people about home buying. But I don’t think it is necessarily an article worth writing if it doesn’t stay real to the current trends of the market.

I would like to read articles about mortgage loan originators and realtors that are reinventing the way they do business, and/or finding ways to educate the consumer about what it takes to be a homeowner. Give me those articles and let's change the way people view the professions and in time the housing market will begin to correct itself.

Another Day, Another Dollar...Another Person!

I was fortunate enough to have the opportunity to listen to Greg Swann of Bloodhound Realty.com, and Brian Brady of World Wide Wealth Advisors, deliver a short presentation last Friday for Mortgage Brokers and Bankers regarding Web 2.0 and Social Media Marketing. The event was hosted by Chicago Title through their Phoenix branch. I can tell you that I was intrigued by the ideas and held captive by their willingness to share what they have found to be successful in their business.

I learned many different tips, ideas, and techniques that I hope to use in my Social Media Marketing and Weblog. There was one part of Brian’s presentation that stuck with me and of course it had to do with numbers. (Since I am a numbers guy which further has to do with my organizational and pattern personality it naturally stuck) The final number was 1200. Based on a previous book he had read, “The Millionaire Real Estate Agent”, he gleaned the basic principle of the amount of people in your database directly reflects the amount of business you will do. This concept isn’t new to me but at this time I felt it stick, mostly due to the way it further broke down. As he was continuing his presentation we began talking about prospecting and finding new leads. The basic idea was that if you aren’t prospecting 2-3 hours a day and talking to at least 10 new people a day, then you aren’t really selling.

So I got to thinking and those numbers were dancing around in my head and the idea that if I wasn’t prospecting daily, conjuring up leads, and meeting new people, then I wasn’t selling (which means I am not doing my job) started to eat at me. A little background for you: I have always wanted to know as many people as possible. I love meeting new people, not sure why, but I feel they have interesting stories and each person has something to tell. People’s stories fascinate me and the way we think about situations, handle pressure, and deal with problems individually makes us all so unique. However, I do know that I have a draw back…call it past history, grade school insecurities, etc…I don’t know if people will enjoy meeting me. I am not sure if what I have to offer is really all that unique and so it binds me from starting conversations in person or on the phone. Truthfully, I get a bit tongue tied, don’t know what to ask, hate the introductory part, and when making cold calls generally feel like I am ruining the person on the other end of the phone’s day.

But that thinking isn’t conducive to helping me become a productive Loan Officer, which became even more clear when I read this blog from Jeff Brown, “#1 Myth in Real Estate: Agents Don’t Know Why They’re Failing”. I know it is directed towards Real estate agents but it really is for all people from Pharmaceutical Sales Reps to Loan Officers to Stock Brokers and everything in between. I know I want to be productive, I want to be the top producing loan officer in my office and I want to meet as many people as possible. I believe I can do that by meeting 10 new people a day and prospecting relentlessly.

The process can seem overwhelming if you look at the end result (having 1200 people in your database) but when broken down to meeting or talking with 10 new people a day it isn’t that daunting of a task. It is just determination, grit, and honestly looking at what we do daily that will take us to the end of the road.

Let me put it to you this way:

10 people /day x 5 days/week x 52 weeks/year = 2600 new contacts in 1 calendar year.

Those are huge numbers and not all will make it to your database but if you capture half of that then you will have affected more people through your work and personality than you could think possible in one year.

I have challenged myself to reaching this single goal. I don’t care about how many deals I close this month or next month. I just want to meet people to learn what they do and to hopefully have them know what I do so if we are ever in need in either direction (they need me or I need them) the connection will be there.

This will be my: 10-A-Day Campaign.

If you are in the sales profession in any line of work and are interested in joining this campaign, email me at emurrietta@silverstatebank.com and let’s get started.

Web 2.0: Good or Bad for Small Businesses

I read an insightful answer to a consumer’s question today at CNN Money.com entitled, “Should your business be on Facebook?” The FSB experts cited some pitfalls as well as some tips when navigating the Web 2.0 environment.

What are your experiences with Web 2.0? Do you find it useful? Are you excited about the future for your company and products?

Let me know what you think.

Character and your Credit Score

In my post on Tuesday, I made the following statement, "...(Many companies are beginning to use Credit Reports on applicants as an evaluation tool.)" I want to go into more detail on this comment and what some companies may believe your credit history says about you.

First, let me explain a basic fundamental taught at colleges across the U.S. This fundamental is that there are 5 C's to your credit worthiness as a borrower. They are Capacity (ability to repay loan), Capital (money you have personally invested in the business, home, etc.), Collateral (pledging an asset you own - mortgages are in most cases based on the home), Conditions (what is the money being used for...), and Character (general impression you make on the lender, experiences, past history etc.).

Banks and other Lending Institutions use your credit score/history, which displays the above 5 C's, to evaluate your "worthiness" as a borrower to receive a loan against your new home or business. Your credit score takes into account your past history on "credit" you have been granted through these various channels. So at some point, your character/responsibility level to repay these debts comes into question. Now employers are beginning to use, with permission from the job applicant, a credit report to further examine the applicant.

I read a past bloggers take (See Tech Republic) on Companies using credit scores/history as an evaluation tool. I then read the article by Diane Lewis, "Qualification: Must have a good credit history." and researched a few more websites including this report in early April by Channel 7 ABC in Los Angeles (ABC 7 Report). Note the retraction regarding the credit score vs. credit history. The companies don't care about your score but they do about your history because many times history is an indicator for the future.
Since researching I am sure: 1) That if the credit history gives a clearer picture of a person's background than a reference or resume it should be used and 2) That I am not clear as to what the public believes regarding this issue.

What do you think? Do you believe that a person's credit history should determine whether they are hired by a company or not? Does credit history really speak to a person's character?

I read many of the comments from the Tech Republic blog site and most of them discussed extenuating circumstances that led to difficulty in past credit history. However, I do believe that how one handles those circumstances does speak to their character/financial responsibility/integrity. And if there were extenuating circumstances surrounding a person's history and they believe it may cause an issue with a potential company, should they not explain the situation and speak to how they are repairing/dealing with the past situation?

I am very interested to hear what you think. Please don't hesitate to comment on this article.

Walking Away from Your Home

"Walking Away from Your Home" has become a disturbing trend over the last couple of months. The company, You Walk Away, began in January according to this ABC Nightline Report and they definitely paint a picture of desperation and of "walking away" being an OPTION for some. They did a decent job of explaining the consequences of this course of action. However, it is frustrating to have so much negativity surrounding lenders and the mortgage lending industry, especially in the face of what this company may gain financially.

There were definitely Mortgage Lenders that worked under the guise of providing the customer a service and then getting them into their dream home by qualifying them for mortgages they could not afford down the road. In my opinion, this company, "You Walk Away" is doing the same thing. Providing a service that people pay for that will cause them to lose the ability to get decent interest rates on Credit Cards, Buy a Home, Finance a Car, maybe even Get a Job. Short term, this may be a solution but what happens in three years when they can't get the car they need because of past credit history, or they are not hired because of past credit history. (Many companies are beginning to use Credit Reports on applicants as an evaluation tool.)

I am not naive and understand that foreclosures are inevitable for some given recent market conditions. But it isn't an OPTION. It isn't like choosing what to eat at McDonald's, there you have options. The word OPTION shouldn't be used because a foreclosure is the bottom of the barrel. It was a gross miscalculation by the borrower to believe that they could or would be able to refinance/sell etc. in x number of years no matter what the lender/broker/banker told them. They should have thought worse case scenario.

Sample questions that would have been prudent and are prudent now to ask during the lending process:

• How long are my payments the same?
• What will my payments adjust to?
• Can I qualify for those payments if it adjusts?
• What is the LTV on this home? If values hold steady are there options to refinance? If they go down are there options?
• Am I buying this house for the speculated future value or because I want to live in it with my family?

I believe that this company is not doing the public or the housing market any favors. Just as people thought short term when buying the house, they are thinking short term in getting out of the house. Some may be willing to deal with the ramifications of this course of action but I hope that they are fully given the extent of the ramifications. A foreclosure has to be reported on the 1003 for any application to purchase a home. Fannie Mae recently released a statement saying that they have increased the amount of time from 4 years to 5 years in accepting an application from a home loan applicant with a past foreclosure. And the foreclosure will affect their credit score for up to 7 years. That is a long time to deal with the consequences of this OPTION.

We are in unprecedented territory with regards to the housing market. This, however, doesn't change the fact that this company is getting paid for providing the customer a package that may very well reap the same result: A customer blaming the provider for their bad misfortune. There must be accountability to some degree. Whether from the lenders, the borrower or now this new company. The cycle of taking advantage of dreamers who over extend and become desperate has to stop somewhere.

Note: If you are beginning to go through the unfortunate proceedings of foreclosure and haven't been able to work a solution with your Lender, please find the time to research the necessary steps and information about foreclosures and how it affects you, the consumer. There are many ways to go about finding information without paying a service. I scanned this website and it had some good quick information and research about foreclosure laws, etc. for AZ. Use it as a resource: http://www.foreclosurecounseling.com/foreclosure_help/index.html

Remember: A foreclosure isn't about living payment/rent free or using it as a tool to help your financial situation...a foreclosure is about saying that what you signed and agreed to pay back is not possible. Make sure that the situation was caused by an extenuating circumstance(s) that must end in foreclosure (Divorce, Loss of Job, Injury, Death, etc.). Not because it was your OPTION to stick it to the lenders or prove a point. It won't do anybody any favors in the long run.