Loan Think

Have all yield spread premium (YSPs) payments been banned under the just passed 'Mortgage Reform and Anti-Predatory Lending Bill of 2009' (H.R. 1728)? It all depends on who you ask. Legislation can be a funny thing but brokers aren't happy with the language because it means that going forward they could have a tough time getting paid -- unless they can work out some other type of arrangement with their wholesalers that doesn't violate RESPA. If anything, brokers probably don't have much to worry about. The Senate is notorious for tying up bills forever and never passing them -- unless (of course) there's an impending "must act" crisis like the meltdown of our nation's entire financial system or a war…

Over the years, I have been very fortunate to have a number of different mentors that have helped me overcome roadblocks that I have faced. I have also had a few consultants. They thought their primary job was to continue to have me pay them while hoping that they would eventually give me an answer. Of course, they never did.

THIS JUST IN: The Government National Mortgage Association is apparently on board with a warehouse lending solution for funders of FHA and VA loans. Now it must approach the Treasury Department. See Brian Collins' story on the National Mortgage News website at http://www.nationalmortgagenews.com...

It's been almost a week since the 'Home Valuation Code of Conduct' (HVCC) became the law of the land for GSE loans. And just how are loan brokers reacting? Let's just say they're not happy -- and that's putting it nicely. This comes from a Connecticut-based mortgage broker: "We are not operating on a level playing field. Processors at mortgage banking firms are allowed to interact with appraisers. It is only brokers who are cut off entirely. There are mortgage banking firms out there who are actively and aggressively now recruiting LOs from brokers, saying they do not have to comply with HVCC. What a mess!" In case you're wondering, the brokerage community won't be sending any campaign donations to New York AG Andrew Cuomo when he runs for governor. You might say Mr. Cuomo is persona-non-grata in the industry. Then again, I'm sure the AG isn't losing any sleep over the matter…

I know you won't do this but I'm going to at least try, ok? Turn off your TV and radio. Stop reading all the negative talk in the newspapers. I'm here to tell you that there is still business to be had. Yes, the market is tougher. Yes, deals are harder to come by. But, people are still buying and selling homes. People are still relocating, dying, moving into nursing homes. People are still in need of you and your services, so go out there and make them find you.

The biggest driver of residential mortgage delinquencies is the unemployment rate and this Friday is 'E-Day' -- when the Bureau of Labor Statistics issues the job cut figures for April. It's pretty much a lock that U.S. businesses shed jobs during the month, the big question being how many. Barclays Capital estimates the national unemployment rate will rise to 8.9% (for April) compared to 8.5% the previous month. The increase means less income for consumers and less income means less money to pay the mortgage. However, because there are foreclosure moratoriums in place in many states we may not see the loan delinquency numbers rise much, at least not immediately. In other news, there's an unconfirmed report that there could be a new large entrant in the warehouse lending sector. Again, we stress that it's unconfirmed. If we learn more the story will appear in National Mortgage News and on its website…

FTC DELAYS IMPLEMENTATION OF THE RED FLAGS RULE UNTIL AUGUST

In our last piece we touched on some of the ways that you cannot only market effectively but really become a part of the senior experience. Let's take that a couple of steps further and look at some high impact, low (or no) cost alternatives for outreach and expert positioning.

Perhaps someone at the Treasury Department and/or Federal Reserve woke up and realized that the nation's seven mortgage insurance firms cover the first 20% of losses on conventional loans held by Fannie Mae and Freddie Mac -- which means that if the MI industry goes south Uncle Sam has a 20% "loss coverage" problem on (potentially) $5 trillion of mortgages. Where am I going with this? MI stocks rallied a bit yesterday and some are up again today. For instance, The PMI Group was up 28% in trading today. On the surface 28% sounds quite impressive but when your stock sells for $1 (and once traded in the low $40s) it's not that big of a deal. But why are the MIs rallying the past two days? Could it be that Treasury might be coming to their aid in one fashion or another? Stay tuned…

Survival in the post-mortgage meltdown world will depend on the marketing that your business does today. However, we all must realize such marketing efforts need to be accomplished in an era of tighter budgets.But according to some marketing experts, it can be done. Joanne Rigby, managing director, Asia Pacific for Premiere Global Services Inc., an Atlanta-based provider of applied communication technologies, said many businesses are turning to cost-effective strategies like e-mail marketing, which can measurable and return-on-investment-driven results.But, when it comes to doing an e-mail campaign, marketers must "identify and implement the right processes, procedures and measurements so that a successful campaign can be established."Her steps towards accomplishing this:1. Establish your objectives. "Take the time to invest in understanding your target's background and key characteristics to ensure there's a clear focus on your offerings and messages that you want to communicate across."2. Define your target audience. "It is essential that you know, and understand who your target audience is and look at the world from their point of view. Gain further insight into your customers' segments and what's most relevant to them by collating demographic and psychographic data. Once that's done, break your audience into smaller groups and then target your messages accordingly to each group based on their commonalities."3. Build your message. "If you want your e-mail messages to be read, you need to relay your message in a clear and straightforward manner. Make a point to develop a message that is interesting, personal, easy to read, and relevant to the recipient's interests. Be sure to add value with each e-mail that you send - by doing this, your e-mail becomes relevant and interesting to your readers. Always remember to write in a friendly, approachable tone and encourage quick response with click-through to your company's Web site and eye-catching visuals."4. Determine your offer. "Lead generation offers such as free samples, free gifts, white papers, sweepstakes/contests, and free webinars, have all proven effective."5. Test and measure. "In a tough economy, it doesn't make sense for businesses to waste money and effort on executing marketing campaigns that doesn't yield results they need. Testing and measuring is an important strategy in e-mail marketing as it helps businesses find out what works best and is most effective in generating good results for their efforts in 24 to 72 hours."Ms. Rigby continued, "During the current gloom, companies need to think of creative, innovative and out-of-the-box ideas in order to remain competitive. It is the ability to make significant changes to your marketing efforts and strategies without incurring significant business risk that provides marketers with a fantastic platform to improve business performance."Companies need not necessarily increase spending, but analyze results and choose activities that are more likely to reap rewards and in the long run, help them emerge from the current economic slump. By taking these actions now, marketers will be able to survive and eventually ride out the storm and more importantly, be well positioned to build and strengthen its market share when market conditions start to improve."Patricia Fripp, a sales presentation trainer, has teamed up with business copywriter David Garfinkel to offer their "five sure cures for marketing woes."Their first cure is an obvious one, going through your database and reconnecting with past customers. A suggestion is to use a "welcome back" gift such as a discount or a bonus when they resume doing business with you.Next is to offer prospective customers "a free sample." This sample doesn't have to be something physical. Ms. Fripp offers potential clients a complementary coaching conversation. A suggestion from Karen Deis has been to make a free report offer with your marketing efforts.The third cure is to make better use of your "best sales person," your website. "Look at your site, and make sure it is easy to navigate, content-rich and full of the keywords that get attention. Ms. Fripp and Mr. Garfinkel also suggested Googling yourself and your competition and writing a blog.The fourth tip is another one that Ms. Deis has recommended: past customer testimonials and referrals.Finally, they suggest speaking to local service clubs such as Rotary, Kiwanis and Lions.For more information about Ms. Rigby, visit http://www.premiereinboxseries.com; Ms. Fripp, visit http://www.fripp.com; and Mr. Garfinkel, http://www.davidgarfinkel.com.