If you're a Loan Officer these days, you probably were hired as a salesmen/bird-dog hunting down potentials applicants. Spending money ‘Advertising' is the real answer to that task, but since that's what today's Broker/owners think is the primary role of a LO, you need to be careful not to get caught in this ‘referral' trap by an inexperienced employer.
One point you need to carefully consider, is just how talented is your employer and the degree to which they train you to be the best you can be(or is he/she merely a former LO and that's all they know about being an owner).
Because they don't know any better, far too many broker/owners push their newer LO's to attract potential applicants via the "referral" method. That's where you pester all your friends, relatives, and others to use you themselves, when they have a mortgage need, and to also send you their contacts.
The boss – who should already knows better – neglects to reveal to you those friends and family and the carefully cultivated referral sources will probably blow up in your face when one of their loans: 1). has an appraisal that comes in 'short'?; 2). The credit score doesn't support the loan they need; 3). your wholesaler stips you to death - and many of them are silly; 4). The doc prep girl at the wholesaler drops the ball getting your docs correct and out on time; 5). the notary/closer messes up the signing – oops; 6). and the next 50 things that DO go wrong on most loans every single day. So you simply CAN'T be efficient and keep your promises to the customer, providing excellent service like you want to. This is where your supplier/vendors make YOU look clueless and seriously unprofessional.
Consider at what's that will do to your 'relationships' -- be honest. I have found over the years the "referral" biz plan simply doesn't work over time. A definite way to stay small, Yep - on that issue I agree - but growth? Nope
What you seriously have to offer any applicant – if you get properly trained - is (a). your own skills at being an LO, (b). which includes the loan programs your employer makes available to you, AND (c). the supporting vendor/suppliers who have a major effect on all the moving parts that come into play between 1003 and funding. Instead of ‘referrals', These are where you should concentrate your attention, getting trained, clearly understand loan programs you'll use, understanding what all the vendor/suppliers do and how you can help manage them, as your loans move through your pipeline – focusing on referrals isn't gonna be a good idea, you'll quickly discover if you don't do these things.
Far as customer/potential borrowers, cold markets (strangers) are far easier to handle when things go wrong (plus they won't expect you to earn nearly near zero on their loans). If you don't have a boss who can supply you with these things, and to advertise for customers to come to his/her company, it's time to resolve to change employer's right away this new year! Get with a company that prides itself on its Integrity, Ethics, and solid Values - these are the characteristics which will help you the most in your career. CLICK HERE to tell us your views on our Discussion Board
Former Fannie Execs Face Charges
The Office of Federal Housing Enterprise Oversight has filed charges against three former Fannie Mae executives, including Franklin Raines, for manipulating earnings to maximize bonuses and for leading the mortgage giant into a $6.3 billion accounting scandal. Along with a notice of charges, OFHEO is seeking $100 million in civil money penalties and disgorgement of $115 million in 1998-2003 bonuses paid to Mr. Raines, a former chairman and chief executive officer; former chief financial officer Timothy Howard; and former comptroller Leanne Spencer. "The notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manor," OFHEO Director James Lockhart said. "The misconduct cost the enterprise and shareholders many billions of dollars and damaged the public trust." An attorney representing Mr. Raines said the charges are "false" and called the OFHEO director a "fatally biased regulator."
There should have been criminal charges filed against these people in my opinion. CLICK HERE and talk about this on our Discussion Board
CRL: 19% of '05/'06 B&C Loans Will Foreclose
Almost 20% of all subprime loans funded over the past two years will wind up in foreclosure, according to a new report issued by the Center for Responsible Lending. At a news conference on Dec. 19, CRL president Mike Calhoun said that when refinancings of troubled loans are factored into the equation, one-third of all B&C loans could go bust. In particular, the nonprofit chastised mortgage bankers for qualifying borrowers -- especially minorities -- using low teaser rates (instead of the fully indexed rate). Analyzing six million subprime loans funded since 1998, the CRL said foreclosures could eventually cost consumers $164 billion. The Mortgage Bankers Association criticized the group's findings, saying the CRL's numbers are cumulative and ignore the potential for delinquent loans to be worked out prior to foreclosure. "Their projections are incredibly pessimistic," said MBA senior economist Mike Fratantoni. At the end of the third quarter, just 3.8% of subprime loans were in foreclosure, according to the MBA. One in four loans in the foreclosure category are cured prior to actually being foreclosed upon, the MBA noted. Pat Vredevoogd, president-elect of the National Association of Realtors, participated with the CRL during the news conference, but the NAR did not fund the new report.
For those of you that have been around for a while and have much servicing in your backgrounds, you know this: "...at the end of the third quarter, just 3.8% of subprime loans were in foreclosure" is enough to make you gag!
CLICK HERE and talk about this on our Discussion Board
2006 Subprime Vintage Rumblings
The 2006 subprime vintage "is distinguishing itself as one of the worst performers," Dominion Bond Rating Service said in a recent report. Delinquencies on loans originated in 2006 that are 60 days or more past due are higher than the 2005 vintage, the agency said. The current year is approximately two-thirds higher than the 2004 vintage, according to the analysis report. CLICK HERE and give us your two cents on our Discussion Board
Credit Fees to Rise in 2007
Equifax and Experian will begin charging higher credit reporting fees on the first of January, 2007. "This significant increase in costs will ultimately limit consumers' ability to comparison shop for loans," the National Association of Mortgage Brokers was quick to say. CLICK HERE if you wanna give us your Opinion on our Discussion Board
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