Thanks to those who made donations on behalf of the FCC as we adopted two children and sent them back to school with many needed school supplies and clothing. The program was presented by Frisco Family Services Center (FFSC) and we were happy to partner. The kids came into a location provided by Frisco Square for a day of picking up gifts, hair cuts, shots and even nails done by volunteers. And FCC was on hand doing nails, well, Jeff Ellis' wife did that part as that is not a skill set I have.
We were also asked to help do a safety inspection of a few donated bicycles for the children, 6 in all. Several FCC members meet with a staff member of FFSC one afternoon and got the bikes literally going the right direction (3 of them had their forks turned the wrong direction)
Looking for a large group of Volunteers to caulk, screw boards and paint during the week of September 8th through September 11th.
Interested? E-mail Lura and let her know the day you can help please.
September 8, 2009 6pm - 9pm
September 9, 2009 6pm - 9pm
September 10, 2009 6pm - 9pm
September 11, 2009 9am - 1pm
Looking for a Mentor to ride with? The FCC has a tremendous amount of cycling history. Be it racing on the road, track, mountain, BMX and triathlon. Be it riding cause rides and rallies to riding all over the world. We have, been there done that. So Rodney Crowe is starting up a new Sunday ride focused just on that, easy riding with good conversations. He is currently designing the route and making sure he has enough for everyone, well, all but the fast folks- we have other ideas for you on Sunday and Kent McQuade will have that ride going soon enough.
Lewisville Hike and Bike expansion. An article appeared in the Dallas Morning News the other day with the story. Wendy Hundley wrote; Lewisville currently has about 12 miles of hike-and-bike trails throughout the city but officials are planning to expand the trail system. They're beginning that process by creating a Trails Master Plan. So you might log on to the city's site and connect with their coordinator to be a part of this growth and help them as they plan.
Here are some events coming up that you should have written into your calendar:
Interested in a Road ID? How about one at a reduced rate? Gathering names now for a bulk order that they will allow us a special price. E-mail me today so I can add you to the list.
Go out and ride some miles!
Geoffrey Davis
FCC President FriscoCycling.com
p.s. Bib Shorts are here. Right before Hotter n Hell 100 the FCC bib shorts are back in stock. Log on today to order yours.
p.p.s. There are 4200 names on this survey via Bike Texas, you there?
Chunk Your Junk August 22, 8 am-Noon. This popular program is sponsored by the City of Frisco Environmental Services Division. In order to provide the best service, no vehicles will be allowed in line after 11:30 am to make sure everyone already there can make it through the drop-off stations. Have no Junk but want to stay green, or get dirty? Then join a group that will meet at IKEA that same day at 7:15am and spread some mulch around the Welcome to Frisco sign. Call 972-292-5914 for details.
Typically, the first words I usually hear from a new client are 'What are your rates' or 'What is your fee'. I learned early on that clients treat a mortgage as they do any commodity-- anything that you pull off the shelf - laundry detergent, jeans, a shirt.
All mortgage fees depend on many factors: what is your down payment? what does your credit look like? what is the size of the loan? Lenders typically judge a loan on three parameters. Your FICO score, your debt to income (DTI) and what your loan to value (LTV) is.
When I work with a lender there are always fees that are set and not subject to change such as underwriting and legal work. The title company, the survey fee, the appraisal fee etc., are also set fees. As I thought about it I began to see the merit of using a set fee for my services, also. Why could I not use a flat fee vs. a percentage for my business?
When I started in the business I was told to charge 1% and never to come off that number (smaller loans we were told to add to that 1%). Still today when I look in the business section of the Dallas Morning News on Friday there is information from Bankrate.com showing the different lenders that participate in the program, their interest rates, their fees, their percentages, what amount down and the APR - what amount of money it is going to cost you to get that interest rate. So 1½ years ago I launched my flat fee lending program. I do the same amount of work whether the loan is for $70,000, $700,000. It's the exact same process, the steps are exactly the same every time. Every product needs to have a margin and the margin in this business is based on what the cost is to handle that transaction and see the loan successfully closed.
The next thing about loans is something called a Yield Spread Premium (YSP). It has been around for a long time and is an amount of money on the back of a file that the lenders pay to the brokers for sending in the loan. Bankers make YSP, lenders make YSP, brokers make YSP, loan officers make YSP. I've never been comfortable taking a large amount of yield spread from the back but when I first came into the industry, I was taught that it was one and one: you made 1 point on the front and 1 point on the back and that was the only way to price your loan. There was not an alternative. I found that as the industry changed and the internet became more popular for doing loans, people began bypassing the traditional way of lending which was to walk into a broker's office and fill out a loan application. There is a great deal more shopping around so the '1 point on the front and 1 on the back' slowly eroded. It got way too competitive and many companies went out of business because they were not as profitable as they needed to be. When you hear a company advertising over and over, you know that they are adjusting their fees to afford that advertising. So when I look through the Dallas Morning News and I see all the brokers and look at their interest rates and points, the points are one way the broker is going to get paid. Typically, a broker will charge an origination fee and a processing fee. Some brokers will also add a credit report, a lock fee and an application fee. My company just has a flat fee origination of $1850 and a processing of $495.
My average loan size last year was $275,000. Technically, a 1% should net me $2700 every time I do a loan. Right there, every person who did a loan with me saved $850 by working with me. As I looked at the interest rates that the other lenders were showing and I know that, for the most part, brokers see the same rate sheets from about the same lenders. In other words, when I look at a rate sheet from Wells Fargo and one of my competitors looks at a rate sheet from Wells Fargo, each of us has about the same idea of what our cost structure and yield spread premium is going to be. I have worked my company up to what Wells Fargo calls 'Tier 1' status which means that I get better pricing, I get better turn times and I get better underwriting because of that. To be at Tier 1 status means we are doing something right!
The other day I looked at one of the highly advertised companies and found that I was showing an interest rate of 4.875% with my flat fee and they were showing an interest rate of 5.25% with 1%. Right there they were more than .375 higher than my interest rate and $850 higher based on a loan of $275,000.
My hope is you appreciate the flat fee and that this helps you understand why I chose to use it. When you are referring me to your friends and co-workers I hope this will make it easier to explain that we do things a bit differently here. We are very transparent, very aboveboard and our goal is always to give you the lowest possible rate with the lowest possible fees.
I have been fortunate to do loans for some wonderful people in Frisco and the State of Texas. I look forward to continuing to meet great people in the coming year and help them as I help them realize their housing dreams.
Your feedback would be greatly appreciated. I always enjoy hearing from you.
It was good to see so many of you out attending the Frisco Family Fun Ride a few weeks ago. New location in Frisco Square worked out real well for the organizers and the booth space was so much nicer to be on the grass this year instead of that hot concrete of last year. The $50 Lochrann's gift card went to Dionne Williams!
Track racing tonight and tomorrow, come watch. The Superdrome has their final point's series race tonight starting at 7:30pm. That series went all summer long so you know there will be an action packed night of folks looking to take all the remaining points they can. Then tomorrow night, starting at 5pm you have the Festival of Speed. It is a TX Cup Event so tonight and Saturday we should see a fair amount of folks in from out of town. Hope to see you out there.
Like to learn more about the track, then mark August 15th at 9am down on your calendar. That is the day for the next development class at the Superdrome, the class you need to take to be able to ride. Remember, the track is not just for racing. I go out on Tuesday and Thursday mornings for training. Thursdays is a great day because club member, Uncle Joe is there giving training tips for the FCC riders who show up. You can view the Superdrome calendar here and see all the open days to go out to train and you don't even need a bike. Richardson Bike Mart maintains a small army of rental bikes that are stored at the Superdrome and can be used, after you take the class.
There are some events coming up that you should have written into your calendar:
Be happy and go ride your bike,
Geoffrey Davis FCC President 214-529-9622 Frisco Cycling Club
p.s. Follow the FCC on Twitter p.p.s. There are 3400 names on this survey via Bike Texas, you there?
I graduated from Manhattan High School, Manhattan, KS in 1986 with no clear vision of what I wanted to do with my life---just that I wanted to be around family; I wanted to be happy and I wanted to have a little bit of fun! The amazing track racing in the 1984 Olympics was very inspiring to me. I decided that I wanted to try racing bicycles and that my graduation present should be a racing bike. My parents and I went to the Pathfinder Bike Shop in Manhattan for a real high-end racing bike but the salesman did a great job of talking us into a Fuji DelRay...just a step down from the higher end racing bicycle. It had a little bit wider tires and was a little more of a touring bike. The reason it was so good for me was that it was heavier duty and could take more abuse since I didn't know anything about what I was doing!
When a friend asked me to do the Coors Light Biathlon (Run-Bike-Run), I quickly agreed as I had been a runner all through high school and had run intramurals in college and by then I had some experience on long-range bicycling. Well, I actually got just destroyed on the bicycle part by some really big guys and I thought to myself...'I'm a 5'9" guy; I'm really lean and I can see my ribs. Those guys haven't been able to see their ribs for years. Why are they passing me?' After that I began to focus more intensely on the bicycle.
What I learned about myself at that point was that if I had something I really wanted to accomplish and it was something that I figured out for myself - nothing that anyone had told me I should do - but something that I wanted to achieve.........get out of my way because I am going to achieve it! I am a goal-oriented person and I believe that is the reason I am good at what I do. A loan is very simple: get to the closing line with papers; have the money there to fund and have the clients be happy!
So I started to concentrate on bicycle racing and, the next thing you know, I became the best cyclist in my area. By that time we had moved to Lawrence where I started a cycling team and moved up to a Category 1 racer. At that time a Category 1 license through the United States Cycling Association was $35 a year; a pro license was $500, so why go Pro? We raced the same races that the pros raced. Lance Armstrong and I raced against each other once or twice. He chose to stay near the front of the race and my ability kept me a bit nearer the middle of the race!
One of the reasons I left full time bicycle racing is attributable to a conversation I had at my older brother's 40th birthday party in Houston years ago. My brother is in the oil business, as were many of those at the party. One of the gentlemen asked what I did and when I said that I raced bicycles he asked if there was good money in that. I said "Nope." And he said, "Then get out." While that was not the only reason, it did remind me that perhaps it was time to become a little more serious about making some money so I went to work for the bicycling industry. I was with Specialized Bicycles for a number of years and learned a great deal about the inner workings of corporate America. I learned that the sales department and the credit department and everybody has to get along and that sometimes if you hear the word 'No' from a department and you believe in the mission that you have, you need to find another avenue to get to the 'Yes'. I continue to learn that there is a 'right flow' and a 'wrong flow' to who you go around but when I am working on behalf of a client, I want to make sure they get to the 'Yes' answers so I will go around a department if I need to.
When I became a lender, I recognized that it was the same corporate structure. If I got turned down by an underwriter and I knew that I was right, then I would get the sales manager or the underwriting supervisor involved and usually it would turn out well for my client. Just as I did when I became a bicycle racer, I have done a great deal of research on the mortgage industry and knew that I could do it well with good training. I have learned the value of the industry requirement for continuing education every year. As a lender, I must fulfill a certain number of hours each year to maintain my license. You can choose the type of education you would like to attend and for the last 7 years I have chosen to attend as many credit seminars as possible to learn the ins and outs of credit. The seminars have increased my confidence in my ability to advise people who are ready to purchase a home. Along with that I have studied the bond market and the credit market watching for curves and watching for new loan programs. What I have not done is waste my time with too many crazy salesman-type loans. I have always stuck with the standard 30 yr fixed or 15 yr fixed. I like Dave Ramsey's principles - always do a 15 yr fixed loan with 20% down! Not all of us can do that (certainly Julie and I have not done that yet) but it is a great goal.
So I believe the reason you will listen to me or read what I write and give my company a chance to be your lender is that we are constantly learning and studying the intricacies of lending and that our advice to you comes from a firm understanding of our business. We are present with you from the first appointment to the closing, assisting you with whatever is needed throughout the entire process so that your loan goes smoothly and without undue stress.
I help my clients find the best deal possible on a mortgage that meets their needs whether they are looking for a competitive interest rate, certain monthly payment or special loan terms.
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