Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans

Consumer - "I have been approved for that mortgage."

Me (loan officer) - "How do you know this for sure?"

Consumer - "Because I was told by the loan officer that they ran it in their system and it came back with an approval."

Me - "That sounds great. So did you show them all of your information, your pay stubs and bank statements?"

Consumer - "No, they had my information from before."

Me - "Okay, I am confused. They said that you are approved, but they didn't physically see any of your W-2's, pay stubs, or even your bank statements?"

Consumer - "No..... what's the big deal then?"

Me - "Sorry for the chuckle, but you aren't approved. Let me explain to you the whole process from start to finish."

I wrote this blog a few weeks ago :The difference between a Pre-Approval and a Pre-Qualification letter. I wanted to bring this up again because this just happened to me last week. As many have mentioned, we not only need to educate the consumer, but others within the real estate business. As PROFESSIONALS, we need to RAISE the bar & educate consumers.........

Getting back to the issue. My client had been approved by two other lenders. Most lenders have a system call DU or LP. DU is Fannie Mae's automated Desktop Underwriting technology. LP is Freddie Mac's version which is called Loan Prospector. These tools allow lenders to put your information into the computer in order to get a loan approved or denied. Some companies have their own versions. These systems will look at your credit, income, years on the job, etc etc and match it to the proper guidelines written for the loan program that you are being approved for.

The main thing to remember here is that your information is being inputed by a human. It doesn't matter if it's the loan officer or the the processor, mistakes can be made. Most importantly, an underwriter needs to review the information to make sure if was inputed correctly. In the case of my client? I asked to see his pay stubs. As I reviewed them, my mouth dropped open when I noticed that they were from his brother, in his brother's name, and not the company that he works for. This could become a major issue for several reasons. The computer isn't going to know this. Hence the reason why I said, "you aren't approved."

I just have a problem with consumer's being misled. I always state that I am not perfect nor god. But know your job at least. Be upfront with consumers and clarify things when talking to them. Have you ever been told that you were approved, later to find out that you aren't?

Another must read : The difference between a Pre-Approval and a Pre-Qualification letter.

Updated Blog - 7-23-09 : Pre-qualification letters vs pre-approvals letters and knowing what a commitment letter is....

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2007 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Do you know the difference, as a consumer or even as a realtor? It can be deceiving when shopping for a home, because you might think that you are fully approved, but you aren't. Why doe this matter? There are several reasons why.

Pre-Qualification Letter

Just a standard letter by the lender stating that they have either verified your information over the phone or from your originals. The loan officer will review the information, anything from credit, to income, and with regards to assets. They then will place you in a certain program and go over the details with you. Usually to put an offer on a house, the realtor would want a pre-qual letter to accompany the offer that they will give the seller's agent. It will usually have a specified loan amount that you are qualified up to in regards to purchasing of your home. This paper doesn't always have the weight that one might think. There are many reasons why to this.

• There have been some loan officers known to not even check your credit.
• Some lenders just put anything down to get you comfortable, thinking that it's easy as 1-2-3.
  
• Some consumers who thought were pre-qualified actually weren't, because the loan officer didn't really know how to qualify. Meaning, they didn't know how to read the credit, came up with the wrong income, etc etc. These mistakes could put you into a new loan program that might have a higher rate. Worst of all, that you wouldn't be qualified period.

Now, don't get me wrong. I am not saying that this happens often, but that it has happened in the past.

Here is a good blog written by Herb Hamilton : Choosing the Right Lender My 22 questions and the Answers to the Questions. This can help some consumers on how to shop for a lender and what to look for.

Pre-Approval Letter

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Above is a copy of a Pre-Approval letter, better known as a Commitment Letter or a Loan Approval Letter.

This type of letter and or approval is very important for several reasons.

• All of your information has been verified and approved by an underwriter. The only time that this might need to be updated is if there is a change in your income or if the approval has expired. Depending on the type of mortgage program, your credit is good for 45 to 90 days and would be listed on the commitment letter.
• With this approval, you might have a better chance at getting your offer accepted. Why? Because this would supersede any pre-qual letter. I have seen a few clients actually get a lower offer accepted because of this type of approval. This is a more powerful tool than anything else offered.
• Basically, this form states that you are fully approved. Everything except for an appraisal, which would state "subject to an appraisal" and possibly in regards to title insurance also.

This commitment letter would show you what is still need to finalize the approval.

As a consumer, you want to be careful on how you shop for your lender. It's recommended to speak to friends, family, and co-workers for a referral of someone that they have used and trusted in the past. Sometimes your realtor has a few trusted lenders that they have worked with over the past several years. If you trust the realtor, this might be your best option.

One last thing to always keep in mind. When interviewing your loan officer, a very good one would ask you about your goals. He/she would want to give you different options and always be looking out for your best interest. Not just giving you what you want or think might be best for you. Just because your friend received a certain type of mortgage, doesn't mean it might be best suited for you. Remember, there is a Big Difference in regards to the different types of letters.

Another must read: Are you really approved for that mortgage?

If you ever have any questions or would like to be pre-approved or qualified, please don't hesitate to contact me.

Jeffrey J. Belonger

Branch Manager

888-835-1663

Jbelonger@ihmci.com

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For more information on FHA loans, please go to this link. The FHA Expert

For more information on how you can obtain your dream home, please click here : Mortgage Financing Options

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2007 by Jeff Belonger

Understanding people and connecting with them can seem hard at times. Especially when that client seems that they think they know what's best for them and just wants to hear what they want to hear.

Example: I had a client the other day that apparently was shopping his mortgage around and had spoken to 8 other lenders. The kicker, everyone was giving him indefinite answers. And one company even said they could do it, but changed things around last minute.

I start to ask him questions and some appear to be personal. ie: income, how much money do you have and can you show, etc etc. Sure, these can be personal, especially if I ask you to show them to me and I am a stranger on the phone.

He interrupts me and states that I am asking to many questions and that the other lenders didn't ask to see everything, not ask as many questions as I did. I had to put my foot down and take control at this moment. Sure, fear sat in, thinking that I could lose this client. But I also want to distinguish myself from the other lenders. And here is my perfect opportunity. After speaking in a strong willed manner, but still being polite in tone, I basically told him that he was seeking my professional help and that in order for me to give him the best product, rate, and service....I needed to ask these questions. He still resisted a 2nd time. Then I defined and separated myself from my competition and basically told him that if he won't answer my questions, that I he will have to seek another lender again. Hence what I said to him next, "You are begging me to lie to you."

Do you understand and fulfill the needs of others:

You need to assert yourself and not let others take control of you or the situation. Having confidence, not true cockiness. This goes back to my example of the client telling me what the other lenders were asking and that I had to keep it short and sweet. The long and short of it is that I wouldn't be able to do my job the way I know how to. Again, defining my character, expertise, professionalism, and able to acknowledge my clients needs. At the same time, treating them the way that I would want to be treated and not just bait and switch them, because they didn't have time to answer my questions. Basically giving them what they are asking for... a possibility or a maybe, but making it sound like a definite.

When you increase your skills in working with others, you increase your ability to succeed in almost all aspects of work and life. Better communication wins.

Conclusion:
The whole idea of being people skilled is knowing or finding how to bring out the best in others in any situation, rather than their worst.

In People Skills Part 2: Here I am going to examine the different aspects and types of people skills, behavior, and identifying certain situations.

My inspiration for writing this blog came from Renee Burrows :Lose the 'Tude Preface: The Value of Being Open-Minded and Objective

Here is Part 2 to this : Okay, so you know what you want? -- People Skills -- Part 2 of 2

In my first post, we talked about Baby Boomers & Echo Boomers and in my second post, we talked about Single Women. With the growing population of Hispanics in many communities, these three groups represent a large part of the demographics that we as business people need to truly focus our attentions on.

In 1983, an estimated 8.5 percent of Hispanic renters were saving to buy a home, compared with 12.4 percent of white renters. In 2001, 22 percent of Hispanic renters and 17 percent of white renters were saving up for a home, according to the study.

Location is also a big part of this. California and Texas will greatly benefit from the housing boom because so many of their residents are immigrants. There are such agencies as ACORN Housing Authority, a HUD-approved housing counseling agency. Fannie Mae and Freddie Mac require that the borrowers for loans that they underwrite be legal residents, but Freddie Mac will allow alternative credit data. Individuals in both real estate and mortgages need to understand what these programs are and help to educate them so they can get the American dream also.

DEMOGRAPHIC SHIFT

In the 1960s and '70s, it was baby boomers with rock and disco, sexual liberation and political activism. In the '80s and '90s, it was African Americans and hip-hop that transformed the way we sang, danced, talked and dressed. And now, at the start of the 21st century, it's a new generation of Hispanics who are poised to become the next major cultural drivers.

U.S. marketers are not effectively reaching the burgeoning population of U.S. Hispanics because, according to the Association of Hispanic Advertising Agencies Chairman Carl Kravetz, most marketers "are not speaking" that demographics' language -- but he made clear he was not talking about Spanish.

The movement is driven by numbers. A 2003 study by Roberto Suro, director of the Washington-based Pew Hispanic Center, showed the numbers behind the trend. According to Suro, U.S. Hispanics make up 19 percent of people 20 to 34 years old, the crucial years when people move into adulthood and establish careers. By 2020, Latinos will make up almost one-fourth of children 5 to 19, a study by the California consulting firm Cheskin predicted.

Second-generation Hispanics are the fastest-growing portion of this country's largest minority, and by 2020 they will outnumber their immigrant parents. Their numbers are increasing more quickly than those of their white or black counterparts in the younger age groups that shape culture.

Image

Things are changing. There are more Hispanics on network television -- ABC's fall lineup features several, including Colombian actress Sofia Vergara on the comedy series Knights of Prosperity, and Jay Hernandez in a drama called Six Degrees. Carlos Mencia's Mind of Mencia is the second-most-popular show on Comedy Central.

Sports: On the Fast Track With Milka Duno Milka Duno is setting the pace for Hispanic race car drivers-male or female. She is pictured left.

MEDIA: Jeff Valdez
Jeff Valdez has come a long way from the days in which he worried about staying warm and fed in the housing projects of Pueblo, Colorado. Now living in Beverly Hills, Valdez is the genius behind SíTV, the nation's first and only English-language Latino television network-one that appears to be redefining the future of Hispanic media.

BUSINESS: Jorge Pérez
As the founder of a company that raked in nearly $2.1 billion last year, some might think Jorge Pérez of The Related Group of Florida is aiming to replace a certain real estate mogul whose ego is as big as his hair.

FOOD: Homaru Cantu
Onion soup topped with billowing clouds of liquid nitrogen, laser-zapped steak that's perfectly raw on the outside and cooked on the inside and, for dessert, a nice pipette-sized helping of hot ice cream. Sounds like the kind of items most likely found on the set of a science fiction show rather than a dinner table.

Conclusion

The study, using federal and industry figures from 2004 to analyze a sample of 50,000 loans, found that among subprime borrowers with similar credit ratings, blacks and Hispanics were 30 percent more likely than whites to be charged the highest interest.

In response to earlier studies of racial disparities, the mortgage industry has argued that the varied financial backgrounds of borrowers and a tendency for minority buyers to offer lower down payments were mainly responsible.

A spokesman for the mortgage banking industry challenged the conclusion, saying the report did not take into account all the legitimate questions about family wealth and debt, house appraisal and other factors that underwriters must consider when making a loan.

Overall, it comes down to educating the borrower, making them feel welcomed, and treating them like anyone else that you would work with. And yes, there is going to be a language barrier, unless you or someone else in your office can speak Spanish.

Here is a link for more information obtaining help through special financing programs. info@HispanicFoundations.org

Top Trendsetters series for your market areas:

• Top Trendsetters to watch in your upcoming markets...... Part 1 Baby Boomers & Echo Boomers

• Top Trendsetters to watch in your upcoming markets...... Part 2 ... Single Women

• Top Trendsetters to watch in your upcoming markets…… Part 3 of 3. The Hispanic Sector

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2008-2009 Tax Credit for First Time Homebuyers : 2008 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2006 by Jeff Belonger

Reviewing the rate issues at hand, job losses, and more homes on the market with fewer buyers, one of the most basic questions that you should be asking is.... "Who's buying homes now?" And we can take the next step to a larger question at hand. "Who will be driving the residential real estate market?" And "Who is my business."

There are a few key emerging markets transpiring. The baby boomers & echo boomers, single women, and the Hispanic sector. Basically trying to understand these markets by figuring out how they influence the market and where to find them.

We need to educate ourselves by training each other or your organization about the specific desires and concerns of these three critical groups. By doing this, you will be better poised to successfully sell to these customers.

1. A. Baby boomers

This traditional economic powerhouse behind the U.S. housing industry trends has for a long time been that generation born between 1946 and 1964. We call this group the baby boomers.

Many investors believe as this group turns into their 60's that many of them will move their investments from the stock market into real estate. And this is good because this group seems to be more responsible which has propelled record numbers in the second home/vaction home sector.

According to the National Association of Realtors (NAR), in 1980, only about 150,000 families owner second homes. Now second homes account for more than one-third of all homes purchased.

I had the chance to talk to Colleen Kulikowski this past Sunday and she mentioned that we would be a good connection because many of her clients buy 2nd homes in Florida. Especially for the fact that she lives in Marco Island, Florida. And she went on to say that many of these refinance their homes in NJ to buy in Florida and that they do fall into the baby boomer group.

Marketing the savvy baby boomer

Keep in mind that baby boomers grew up in the turbulent, idealistic '60s and this generation is characterized by values. This group is far more active, health conscious, and are redefining retirement.

Remember that baby boomers are sophisticated shoppers who have historically been brand loyal. At times, think American or for some us, think of your parents and their friends. You can also compare them to the younger generation which for the most part, proves these examples.

To effectively reach this group, your marketing and customer service should demostrate both respect and good manners. These baby boomers respond to soft selling techniques that emphasize them and their needs and make them feel like winners. Don't play the gimmicks and provide solid, concrete information about your product and services. In regards to loans or real estate from this group, if they have a positive experience, they'll probably tell their pees and generate additional referrals. Take the time to earn their trust. This just happened to me today. I refinanced an older couple in Georgia and it was just the way I treated them and serviced their needs. But at the end, he sent me a letter thanking me for all of my help and always being available. And that they don't forget things like this and would be honored to send me their friends, family, and people from their church. This is a great feeling when you get a letter like this. And I think it helped that I had the title clerk go to their house around 7 pm.

And here is a startling fact to think about. Over the next decade, baby boomers stand to inherit even more money, around $41 trillion. You could then concentrate your messaging efforts on why it's still a good idea to have a second home. Emphasize the tax savings and underscore that they'll remain diversified in their assets.

1. B. Gen Xers & Echo boomers

The Gen Xers are born from 1964 to 1981 and then you the Echo boomers which were born from 1982 to 1995. Echo boomers are also referred to as "Generation Y".

Looking ahead, 37 percent of the Gen Xers and 27 percent of the echo boomers plan on buying new homes. And these homes will be bigger and better than what we see now. These two groups are unlike their parents because they are more risk takers and have a multitude of affordable mortgage options to choose from, as well as historically low rates. And with parental help in regards to their down payments and closing costs, this group has fewer barriers to securing mortgages. I have seen this off and on since I have been in the mortgage industry since 1992.

These two groups have more of an attitude of what I can have and are characterized by the fast-paced schedules and a team attitude. Effective marketing to these groups would require techno-savvy techniques and vehicles to attract these 2 specific groups. 42 percent of the buyers who use the internet to search for a house are 34 or younger. Making the mortgage process simple and efficient, will hook these buyers who expect instant gratification and quick results.

Conclusion/Summary:

Selling to these groups would require that you focus your services and products to meet the unique needs of each group. Take time to review your marketing and communication strategies to ensure that the tone and values that you convey reflect the core dynamics of each generation. Whether your customer is entering the prime of his life or just getting started out of college, the importance of you delivering the right message would be an effective format and likely enhance your business.

Top Trendsetters series for your market areas:

• Top Trendsetters to watch in your upcoming markets...... Part 1 Baby Boomers & Echo Boomers

• Top Trendsetters to watch in your upcoming markets...... Part 2 ... Single Women

• Top Trendsetters to watch in your upcoming markets…… Part 3 of 3. The Hispanic Sector

________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2008-2009 Tax Credit for First Time Homebuyers : 2008 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!

Copyright © 2006 by Jeff Belonger