My Perspective

Wow, it’s been quite a week for me. I’ve put the finishing touches on our November 1st newsletter; brought our eductional & training CD Lessons inventory to up where it needs to be – since our Buy Two Get One Free Sale starts Tuesday and runs for two weeks – these mortgage lessons are always well received, especially during our annual Halloween Sale. Last year we ran out of a few lessons mid-sale, but got ‘em out anyway, though it was hectic!

I have started to read and learn about RSS and added a feed to this blog (which I’m not all that sure I did correctly) and plan on adding an RSS feed to our newsletters as well, once I figure it out sufficiently, right now I know that I know just enough to still be materially ignorant on the subject.

And, our Boys from Oakland are now 2 and 5 — I think they call that a winning streak! Two in a row.

I haven’t been feeling too well the last few days, I have good days and bad ones – been lucky I guess, since I had a few bad ones in a row! But, have been doing some reading about ‘blogging for beginners’ and I think my brain’s going to explode!

There’s loads of info out there telling me the who, what, where, when, and why on blogging. Had a long conversation with Doug, a real sharp guy His site is HERE and picked up some good info; from what I heard and saw on his site, I suggest you contact him (tell him I sent you!).

Been working on our November 1st newsletter these last couple of days. Our 3rd Annual Halloween Sale will be announced in that edition. Each year we run a ‘Buy 2 get One Free’ on our educational & training CD Lessons for 2 weeks. Be sure you get our Free newsletter and pick up a couple of them.

Where did username Secret! come from?

I got asked this question the other day, here’s the story. Several years ago, the premiere industry publisher (people I have known for 3 decades) started a home-made discussion board, the Mortgage Grapevine was born with no bells and whistles; we all used our real names and employer names as well. I was a regular contributator there for several years (and at the time their longest running individual paid advertiser for 18 months as well), posted over 7,000 times. They quickly discovered real names was a mistake, since many people would post using the name of anoher, so they went to ‘usernames.’ Since this was my very first exposure to a discussion board, I thought I would be clever – so I selected Secret! (translation “who I am is none of your business”). At that time I thought it was pretty funny.

I developed a mortgage originator’s website, and spoke about Internet originations openly there daily, all my stats etc. Many people back then, lived the experience through me (all the joys and all the mistakes), so I stated teaching a Live class on Websites & Internet Originations – after I had operated the website in the real world for 39 months. After a short while I retired from operations and decided to get my teaching credential and teach, then evolved that one class into a larger enterprise – now Secret! University.

Oh by the way, my Raiders WON!!! And did any of you see that hit the Colts quarterback took in the second quarter, looked like they snapped his spine to me – it was ugly.

I’m in yet another debate on an industry discussion board about ‘salesmen’ loan officers … “they” incorrecty believe it’s a ‘sales’ job. Some days it seems like everybody who originates loans anymore, has no history or understanding on how this industry ran for many decades. I kinda think of it as the internet generation, ‘QUICK’ this and ‘Quick’ that, no time for anything except ‘what can I do to put you into this loan today?’ – “Closer’ talk. And, everything surrounds how much commissions they earn. It seems they don’t realize the job discription of a loan officer did not include Big Commissions or Sales before the beginning of this last cycle (Black Friday August 1998). With the advent of big commissions and sales into the industry entry level position of loan originator, 9 years ago, now the loan officer’s commission interests tend to come before the interests of their customers. It’s really all about credibility, have strong principals, Integrity, and behaving in an Ethical manner with customers — who rally don’t like dealing with a former used car salesmen (and his/her attitude) when it comes to the largest financial transaction in their lives. I feel like the only voice out there in the wilderness talking about these non-sales issues.

Grand-Daughter’s soccer team WON yesterday One to Zero! They dominated the other team the entire day. It was a good day, Grandpa told her, ‘better to win then lose huh honey?’ … she gave me a knowing nod.

HOW CAN WE IMPROVE ?

I am hoping with this blog to discover and learn more about what our present and future students may want from Secret! U. I am trying to spark our small community of readers into conversation here. I want to have a conversation with you about how we can improve what we do and therefore make our offerings of materials and services more helpful, and therefore meaningful for your career. Your voice will be heard. Please ‘comment’ – Thanks.

I spend several hours weekly visiting a handful of industry discussion boards, and have done so for a few years now. I go to these 21st Century versions of the ‘local pub’ to keep myself up with what’s on the minds of those that post; I learn a lot about the degree of industry training and education that’s out there! I also learn from some of the answers that are given; the replies tell me almost as much as do some of the questions … they keep me in-touch.

I receive a half dozen webmaster newsletters monthly, so I can have a hand into that industry as well, since websites are so very critical to our consumer residential real estate mortgage loan industry. I spotted some stats in one of them a couple of days ago – about discussion board visitors. These are the reasons that newsletter reported about why people frequent discussion boards: 78% – Meet people 47% – find entertainment 38% – learn something new 23% – influence others. Kinda fascinating.

By the way, if you’re not a major league baseball fan, the league champion contests ar eover – the World Series starts tomorrow in Detroit 4:30PM (Pacific time).

Gosh, I remember when I first went out on my own, had big dreams – no way was I going to operate a one-man company for long, I fancied myself as an empire builder. Studying and passing the test to get my own license was first on my list. I remember speaking with one landlord after another, to finally find one that would trust be enough to lease me office space, then I recall chocking on the reality of being on my own (not everybody is fit to be self-employed) – and having to sign a multi-year occupancy space lease (putting me in debt tens of thousands of dollars), then the joy of buying or leasing a $7,500 copier, and because I had no intention of staying small, lobby furniture, customer water cooler, coffee service, customer interviewing table, chairs etc. external & internal signage, I bought several desks, cement fire-safe filing cabinets, a telephone instrument system, office plants, pictures, chairs, wall clock, staplers, pencils, paperclips and all the other office supplies I imagined, fax machine, computers, and swallowing hard to hire (NON commissioned salaried personnel) where I got to pay the employer’s share of payroll taxes plus their payroll whether or not loans were closing, of course talking real fast to influence wholesalers to take a chance with an unknown (me) and accept business from me, several told me nope! It all was a ‘barrier to entry’ I didn’t truly appreciate until years later (and I saw the riff-raff it kept out) … it all ran me (and others back then) somewhere between $10,000 and $30,000 to “go out on my own” and start my own little company.

Unlike today, where many are working in their jammies with the attached bunny feet, unshaven for days on end, out of a furnished 2 bedroom apartment, dealing with the single largest financial transaction most Americas ever face, which was (rightfully) not allowed then – however, all that jammed a commitment inside my brain to be a good industry citizen (if for no other reason but to protect my investment). Sometimes ‘principals’ are effected by what you have committed to an endeavor.

Again, my NFL Team punished me for being a loyal fan – today they’re ZERO and 5. They really taught me a lesson, as I watched every minute of the game last night, one goof after another – they continue to look pretty good then they shot themselves in the foot, over and over.

For those of you that have seen my Resume (there’s a link to it off our Mentor page on the main Secret! U website), you may have spotted my company and I were members of several trade associations over the years (it was smart business as I look back) – the absolute finest #1 Best one was always the Mortgage Bankers Association – a first class organization. Their conventions & expos always had vendor suppliers, who were first class – I learned a great deal attending their functions and walking the expo to see all the new things out there which I didn’t yet know about.

MBA’s 93rd Annual Convention & Expo is at the Hyatt Regency Chicago October 22-25 this year – I strongly urge all of you industry employed people to attend (NOT TO PLAY) but to Learn, this is one place to help your own career with perspectives, and education you may not have considered.

I saw this nice little pieced the other day, about the cyclical nature of the industry and the correction we’re experiencing – albeit it gently instead of crashing as I had predicted in several articles written for our newsletters and posted in several industry discussion boards earlier this year:

“The National Association of Realtors joins Alan Greenspan in saying “we think housing has now hit bottom.” Why do they think it has hit bottom already? What kind of bottom is it that is less than 2% below the all-time high? What kind of world is that allows consumers, homeowners and speculators to go on the biggest, debt-fueled binge of all time pushing up housing so much that the typical house went up more than 50% in the last five years, and permitting Americans to ‘take out’ $1.3 trillion from their houses over a two-year period and then, when the bubble finally pops, punishes them with a decline of less than 2%? The median house in August was worth precisely 1.7% less than it was worth the year before.” There’s a definate sarcastic tone to this writers comment – but he’s hit it right on the nose in my view!

The pendulum swong in the direction of hyper-inflation for residential real property values and at the same time mortgage interest rates took a nose-dive to all-time historical lows, while wholesale funding sources – on a greed binge – offered ever more reckless loan products (called “exotics”), all resulted in residential mortgage lending industry employments numbers to soar with hundreds of thousands of new commissioned salesmen, to well over 500,000, primarily being driven by the opportunity to make a lot of money (unlike previous cycles which attracted new people who were far more career minded), and therefore placing their own interests before those of their own customers; the net branch paradigm grew from nowhere to more than 20% of industry employed people (in my opinion), most with no investment in their branch or career, and all poking around in the unlicensed and unsupervised darkness, brutalizing one customer after another as they learned (from their kitchen table) by delivering punishing mistakes to customer dreams, time and time again. Results? A real mess. Loads of income earned by commissioned sales-types, a mega number of homeowners punished due to listening to many of them and accepting loan products offered which neither the loan officer nor the borrower understood – even though the borrowers thought their loan officer knew his/her own loan products (what they really understood was how to influence borrowers to selected the loan type that made them the most commisisons in far too many cases – can you say STATED/MARGIN/YSP?).

As this pendulum now swings back the other way, we’re seeing home property values sinking and rates climbing. This is the fourth cycle I have seen, the early casualties tend to be those larger firms that grew the most during this period – they’ve had/have large overhead expenses – and now with production numbers sinking – they choke first.

The more nimble loan officers/mortgage brokers – who during this period did all they could not to invest in their own companies (as they should have), but instead withdrew the income out of the biz and plopped it into their own payroll; so today they continue to work out of their homes (sometimes in their jammies with bunny feet still attached) with little or no commercial business expenses or overhead (or assets either). They’ll hang on the longest hoping the correction will be short lived, it won’t … it’s gonna run a few years in this reversed direction, heading back to a more normal reality unlike the last 8 years or so of easy-times.

One early casualty NetBank Inc. sold $8.5 billion in mortgage servicing rights, according to an announcement Friday. The rights represented the majority of the company’s MSRs. A more significant victim ‘ECC Capital Corp’ announced it will sell certain operating asset to Bear Stearns Residential Mortgage Corp. The assets are those used in ECC’s subprime wholesale mortgage unit (Encore Credit). Bear was both warehousing and buying loans from the non-depository subprime firm. Sometime in the past there were loan “buyback” issues between the two parties, but a spokeswoman for Bear has said the matter was settled long ago. Golden West Financial, parent of World Savings, one of the last of the Savings & Loans — and a payment-option ARM giant — has been swallowed up by Wachovia Corp. Late this past week, Centex, which recently sold its subprime unit, reported a 28% drop in orders and a huge uptick in home purchase cancellations. Two more subprime firms going … Morgan Stanley initiated coverage of Accredited Home Lenders, calling the subprime company an “underweight.” Accredited recently saw its loan buyback requests surge. Morgan, of course, is in the process of buying Saxon Capital, which is also a subprime funder.

These are merely a small handful of what’s to come, I predict probably another 2 dozen wholesale funding sources will be gone before end of the first quarter 2007; plus another 100,000 LO’s and Brokers will also be gone.

This news piece came to my attention yesterday, it hits home quite squarely: http://www.usatoday.com/news/nation/2006-10-10-internet-defamation-case_x.htm … I think it’s good there’s interest in this potentially harmful area. Based upon what I have seen on the Internet, some calm measured hand needs to be inserted here and there frequently; some people do go too far.