Loan Think

So far we have covered having people discover their sales strengths, assisting real estate agents with tax planning and teaching people self defense. This idea takes a little more time-but it's worth the effort.

Now more than ever, with the limited amount of product selection available, mortgage origination is a commodity business. Therefore, one must compete on service more so than price.

Thanks to all who wrote in last week and liked the idea of using nostalgia or the "back in the day" type of story to illustrate the benefits of the reverse mortgage. Often a story can make a point that is much more poignant than all the facts and figures we like to collect.

At the recent Mortgage Bankers Association's Secondary Market Conference in New York City, I got to moderate a panel that discussed both originations and servicing issues.

First the good news: it appears that mortgage profits should stay healthy for some time. How do I know that? The answer is simple: the cost of funds for mortgage lenders (depositories, that is) continues to be quite low and the yield on the 10-year Treasury is at just under 3%. Mortgage rates are at 4.5%. Do the math. Of course, with the jobs picture looking (to put it nicely) not-so-good, applicants that want to purchase new and existing homes will continue to fence sit until they see a clear sign the economy is improving and their jobs are secure. Cash is king, and based on what's been going on in the stock market the past 60 days it appears that investors are content to sit on huge wads of money. They are not putting it in stocks or real estate. It's just sitting there, a trend that may continue for two, three, four years. Of course, market conditions can change on a dime but the stock market has a significant effect on consumer confidence and most people believe the market is a leading indicator for the overall economy...

I saw an advertisement on TV last week that really made me think. It was for a handyman service so not at all related to our industry, but no matter. It painted a picture and transported you immediately. Does your marketing allow the senior to really visualize how the reverse mortgage can change his/her life?

RESPA CAN BE VIOLATED EVEN WHEN THERE IS NO OVERCHARGE ON REFERRALS

Very few mortgage brokers have ever had the money to advertise on television, even on one of the now many ubiquitous cable television outlets.

Well, we have us a regulatory reform bill. Some factions of the mortgage banking industry were popping champagne this morning while others were moaning about a socialist takeover of the mortgage industry, one in which anything that isn't plain vanilla won't be funded at all. In some quarters Ayn Rand's name was being invoked. But let's get one thing clear: when it comes to MBS risk retention and the 5% rule, the key will be what exactly is a "qualified mortgage." On that score, we know that balloon payment loans and negative amortization are out. And quite a bit of it will be left up to regulators. In other words, the war is over, but there's still a lot to sort out....

You are what you eat. Right? If that is true, what are you? A cholesterol and grease saturated hamburger or a healthy reflection of food that you decided to eat?