Doug Walker

Two very good articles are in Jeffrey Gitomer's most recent ezine,

1. Think "Why" not "How."

2. Top Ten Tie Breakers

... and the "Sales Rant" video outlines a discipline that few if any of us ever utilize - how we lost the deal.

There is usually huge growth realized when you take a little time and go through this exercise and be brutally honest with yourself. It usually leads to changing just a few key elements of your presentation that pay off big.
But you have to be honest. It would help to listen to the video twice.

If you really are serious about getting better at your career, you have to schedule some time to "sharpen the saw."
Growth is often a combination of reviewing what you have heard before and know works (but don't do consistently), and learning new things that are working for those that are presently more successful than you.

There really is no "secret" formula, just the normal building blocks as follows:

1. Be 100% Sure You Are Consistently Doing The Basics Every Day;

2. Review your activities and accomplishments at the end of each week so you can make adjustments where needed;

3. When you are certain you have created consistency with your basic system and it works well, schedule and spend time learning about new things.

Our tendency is to only do #3 when we think we are in a rut or sales slump, because that is easier than reviewing and changing our current habits. But looking for new techniques does not address the real issue - we have cracks in our foundational sales system.

Address the cracks first, then decide how you can add more rooms to your system that works. Experience the lift in your business from a better foundational system, then look to add on to that system.

Have your best day today!

- Doug

On September 22-23, the FOMC (Federal Open Market Committee) will meet to discuss the government's MBS purchase program (Mortgage Backed Securities).

What Does This Mean In English?
At this meeting, it is expected the Fed will make comments about the government's desire to continue buying mortgage securities so the rates stay artificially low.

What Does This Mean To You?
If you are looking at refinancing or purchasing a home before the end of the year, you might want to get it in gear! All it will take is one negative comment or insinuation, and the bond market could tank, sending mortgage rates higher.

Fannie Mae's chief economist, Doug Duncan, expects the Fed will extend it's MBS purchase program, then slowly wind down. That could mean more time, but once the news starts circulating about an "end" to the gov't buying program, the markets usually respond well in advance to the actual event.

Best Course Of Action: If you are going to refinance or purchase, now is a great time to lock in a rate to avoid the market swings. The bond market has come up over 300 basis points since its lows in June, which has equated to a rate improvement of about .75%. Now sure seems like the time to take advantage and avoid gambling that things will get even better - especially knowing the above news is looming.

Have a great day!

Doug Walker
Churchill Mortgage
Vice President - Sales and Marketing
(615) 370-8888 ext. 109

The only Mortgage Company Endorsed by Dave Ramsey

Yesterday a bill was introduced to the House calling for an 18 month moratorium on the Home Valuation Code of Conduct (HVCC).

Q: What is the Home Valuation Code of Conduct (HVCC)? See my post below called "Great Income and Credit? Watch Out For The Appraisal" and read down to about the 7th paragraph.

The National Association of Mortgage Brokers is applauding the introduction of this bill, and I have to say I join them. Just since its introduction in May, it has been blamed for delays and additional costs to homeowners and would-be homeowners all across the country.

The bill has been introduced by Representatives Childers (D-MS) and Miller (R-CA), but please understand this has a long way to go before it becomes active - if it even gets passed. I'm sure Attorney General Andrew Cuomo - who is responsible for the program - will defend the bill and ask his supporters in the House to back him to keep the HVCC in place. My opinion, it is just a very bad way to attack the real problem - a few bad loan officers and appraisers that are inflating home values to fraudulently close loans. There is a much better way to handle this that does not create such problems for the customers and the majority of the good lenders and appraisers that work hard to help people every day.

Let's hope something is done soon to correct the issues that are negatively impacting homeowners and buyers today.

Have a great day!

Doug

All over the country we are hearing and experiencing the same howls of pain from both loan officers and borrowers.

What is causing the pain? Low Appraisals.

If you watch your newspaper or monitor the web you will find a growing number of stories about people who have bought homes for a certain price 2, 3, even 5 years ago only to discover it is now worth less than when they bought it. This is keeping many homeowners from refinancing to the great low rates that are available right now, and causing a lot of frustration.

Those who have homes under construction or are purchasing a home are not immune either.

One story I have received was about a person who is building a home and received a construction appraisal of $300,000 at the time they started construction. But now the property is appraising for $265,000 and it is time to close and pay the builder. What to do?? the builder does not have the ability to drop the price because they still have to at least break even, and the borrower has signed a contract to buy. Yikes!

I have listened to several borrowers that are buying a home, and the appraisal comes in $10k or $20k lower than the contract price. The Sellers don't want to sell and of course think the appraisal is wrong. They want to challenge the value, but when the comparable homes in the report are reviewed, the value stands. So they decide not to sell and the borrowers have to start all over - costing them for another appraisal.

And the new Home Valuation Code of Conduct (HVCC) does not help matters.
This law passed earlier this year went into effect on May 1, 2009 and severs the ability of the loan officer to contact the appraiser - period. The loan officer usually has the ability to review an appraisal and spot errors - such as inadequate square footage listed - or find other comparable properties that the appraiser either did not know about or were not yet in the county records. But this law restricted that ability and forced mortgage companies to use Appraisal Management Companies in many cases. The problem you will hear regarding an AMC is the appraisers they use are not the best in the area, and the direct communication with the appraiser is forced to go through a "middle man" at the AMC. This all creates delays in the process, and in many cases undervalued appraisals.

So How Do You Avoid This From Happening To You?

Wow, good question. Wish I had a definitive answer.
The best you can do is have a Realtor do a CMA (Comparable Market Analysis) on the property in advance of spending money for an appraisal. that will at least give you a ballpark of the comparable sales that will be used to establish the value of your home. Other than that, I suggest having the appraisal done as far in advance as possible so any disputes or challenges to the value can occur without forcing an extension of your rate lock - which costs money.

Hope this information is helpful to you. Have a great day!

Doug

Mortgage rates have increased sharply since Memorial Day, now approaching 6.0%.

Why is this happening?

Oversupply of bonds and fears of inflation.
There are so many loans being pooled and sold out there that the government does not have the ability to buy them all. So if the next "bidder" for a pool of loans is only buying if the returns are a little higher, that takes the available rates up, and up, until the supply has been exhausted.
Inflation fears are still rumbling, and will continue to rumble if the news about the economy seems remotely positive. We all know its coming, we just don't know when, and traders like to be ahead of the curve. So they may pass on lower returns in bonds while fears of inflation still looms.

Rates May Get Better

Because the low rates are mostly due to the government's buying of treasuries and mortgage bonds, if they continue to buy there is a good chance the rates will improve in a few weeks. Once the government decides to buy more mortgage bonds at their "artificially" low buy price, the rates charged for the mortgages decrease. In fact, this could occur in a rather dramatic fashion - much like my rate spikes I cautioned about in my may 7th post below "Low Interest Rate Window For Mortgage Rates - Running Out?." Rates jumped dramatically on at least 3 days since that post and have taken mortgage rates up over 1%.

If you or one of your clients is looking to purchase or refinance and has not locked, you need to be connected with a loan officer that has the tools to watch the FNMA bond throughout the day. Without this, they will always be behind the curve when rates change.

Have a great day!

Doug