Loan Think

Much of the world and even many in the U.S. are right now engrossed in what is happening in South Africa, where the 2010 World Cup soccer tournament is underway.

Who says the financial crisis wasn't good for something? Apparently, apartment rentals are getting dirt cheap in Orange County, Calif., once the headquarters of every subprime lender that mattered. Veteran Orange County apartment owner and manager Ray Maggi told The Orange County Register that the current apartment rental market is "the worst I've ever seen." Worst for landlords, that is — which means good for renters. Maggi is a former past president of the Apartment Association of Orange County. He has been in the business for three decades. Now, if only renters in New York City should be so lucky…

There has been a great deal of focus and articles written on maintaining constantly changing rules and regulations in today’s mortgage market. While this continues to be a top priority for most lenders and technology providers, one surprising technology that is being referenced much more frequently today, is mortgage specific CRM. Yes, you heard me correctly, CRM.

How would you like to buy a $755 billion asset company for just $310 million? On the surface it sounds like a bargain until I tell you that the company is Freddie Mac. Fannie Mae, which has $789 billion of on-balance sheet assets can be had for just $436 million. (The prices I just mentioned are based on the 'market cap' of each which is derived by taking the stock price and multiplying it by the number of shares outstanding.) Of course, neither is for sale and both (as you know) have contingent liabilities. Bottomline: you can't sell either without an act of Congress since both have charters issued by Uncle Sam. Also, the share price of each is half of what it was on Monday, thanks to a decision by their regulator to pull them off the New York Stock Exchange. (The industry is still waiting for a more detailed explanation from Federal Housing Finance Agency chief Ed DeMarco but no one is holding their breath.) The NYSE move by FHFA, though, accomplished one thing: penny stock investors have cut back on speculating in GSEs shares. At 48 cents (Freddie), and 39 cents (Fannie), there isn't much upside unless unemployment falls to 5% overnight and delinquencies to 1%. And hey, it looks like the Orioles are going to win the World Series this year...

Over the years, I have given advice to a number of friends and associates who have gone through some trying times. Everyone always asks, "When will this change?"

THIS JUST IN: One trade group official working on the regulatory reform bill passed on this piece of intel about Section 1403 of the base text yet: "If you read it carefully you realize that it mandates that all lenders now have to offer no fees, no points loans, or they cannot pay their origination personnel. An originator can be paid by the borrower or he/she can be paid by another party. However if they are paid by another party, the borrower cannot pay any fees or points, except fees paid to bonafide third parties. The creditor, i.e. the lender making the loan, is not considered a bonafide third party. Hence the lender cannot collect any fees or points if they pay their loan officer or if they pay the broker!" More on this early next week...

Plenty of mortgages executives and consultants — including at least one former GSE regulator I'm told — are still scratching their heads over the Federal Housing Finance Agency's decision to push Fannie Mae and Freddie Mac off the New York Stock Exchange and onto the Over-the-Counter Bulletin Board market. FHFA chief Ed DeMarco isn't exactly sharing his thought process with the media, including me, nor is his public relations staff waxing poetic on the matter. Just be thankful you didn't buy any Fannie/Freddie stock the day before the announcement at $1 (or so) only to see it fall by 50% the next day, before recovering slightly. I would assume that the move to the OTC market will have no affect on preferred stockholders of the GSEs who — I've been told — have already marked down the value of such shares to nil. Feel free to correct me if I am wrong...

Do you remember your favorite teacher? One of the unique ways to get business from real estate agents is to provide training, seminars and webinars on a regular basis.It's not about lectures or lunches. It's about easy to implement, in your face, regularly scheduled events, where "participation" is the key to get them to not only remember you, but become their favorite teacher.This is article No. 1 (within a series of four ideas) and if you hold every other month, you'll have eight months' worth of events.Hold a "Discover Your Sales Strengths" EventThe book, "Discover Your Sales Strengths: How the World's Greatest Salespeople Develop Winning Careers" by Benson Smith and Tony Rutigliano is an easy read-with huge "face-time" impact.First, read the book. It's an easy read. The "impact" is that the book has a website and a unique code to go online, where you can take the "sales strengths" test, which identifies your best sales attributes. (The code is unique and can only be used once.)So, identify six or eight agents, tell them that you just read this awesome book. Ask them if they will read the book within the next 30 days, because you are holding a mastermind meeting with a select group to discuss and compare notes.Tell them that halfway through the book, they'll find the website and special code where they can take their own, personal sales strengths test.Set up a date and time to meet in your office (Olive Garden carry-out is always a winner). Pick out a couple of key chapters and discuss the book with them.When it comes to the "strength-finder" results, you could discuss this one of two ways-as a group-or meet with each one individually. Roxanne Ander, a loan officer from Wisconsin, prefers to meet with each Realtor privately because she compares her strengths to their strengths to see how they are alike, how they are different, and see if how they can work together based upon their unique abilities.The beauty of the strength-find test is that no one sales strength is better than the other. It just shares the top five-how to build upon your strengths-and ignore your weaknesses.Oh, one more thing: Check around for pricing. You can save as much as $10 per book if you buy 10 or more.Karen Deis is president of LoanOfficerTraining.com. She can be contacted at Karen@LoanOfficerTraining.com.

Whenever I hear the phrase "The Pink Sheets" I think of the mob, as in organized crime and the five New York-based mafia families running penny stock scams. It probably just reflects my upbringing in the New York metropolitan area and too much time spent reading books about the mob and (of course) watching movies like 'The Godfather,' 'Donny Brasco,' and 'Boiler Room.' Where am I going with all this? In case you missed the news flash on the National Mortgage News website this morning, the Federal Housing Finance Agency is pushing Fannie Mae and Freddie Mac onto the pink sheets. So long New York Stock Exchange! (Who needs that NYSE snobbery, anyway?) FHFA is telling us that the move isn't a reflection of Fannie and Freddie's future, though that's sort of like saying, "Yes, there is an Easter Bunny." Why didn't Uncle Sam engineer a reverse stock split like they did with American International Group? They wouldn't say. Maybe it's more fun to watch the share price of the two plunge by 50% on the day. That's correct: 50% on the day…

I read an article last week (on Wednesday) in USA Today that discussed a topic I found to be disheartening but not surprising. Bankruptcies are once again on the rise and expected to hit levels not seen since 2005 when the new filing regulations took effect. It got me thinking about our seniors.