Jennifer Robinson-NMLSR# 190994/AL#50092 Conventional, FHA, VA, Step Up and USDA

Being honest paid off - and put $15,000 in my client's pocket!

I admit it, I am kind of a geek when it comes to comparing loan scenarios for clients. Yesterday I made a call to a client who had asked me to watch rates for them. They are on a 15 year loan with 8 1/2 years left and a rate of 5.375%. By this point in a 15 year amortization, more than half of their payment is going toward principal. Why refinance it, right?

They asked me to run several scenarios for a new 10 year loan. The loan would shave $300 off their payment so they wanted to know how it would look if they paid an additional $300 on the new loan I was proposing. And what about $500? And how much would they need to pay to pay it off in 7 years? This is the kind of thing that really gets me excited (now you see my inner geek, don't you?). If it weren't for this awesome website I found, it might not be as much fun. I ran my numbers and anxiously awaited their arrival in my office.

Sometimes I am honest to a fault and it costs me a loan. But I believe it is better to do what is best for my client's needs then my own. So I threw down the interest card. Since so much of their payment is going towards principal already, would it really be a big enough interest savings to make it worthwhile? This is where I thought I was going to cost myself the deal...so I ran the numbers and fireworks went off. By refinancing their loan to a lower rate they can continue making the same payment they have been making (which included a few hundred dollars extra to principal) and they will SAVE $15,000 in interest over the next 7 years!

Want to guess whose application is being delivered today?

2012...What will your bookends look like?

A friend of mine completed "photo a day" in 2011. He ended his challenge with a picture similar to the picture that launched his challenge - a photo of his precious children asleep before midnight on New Year's Eve. Simple. Understated. A quiet end to a good year. But I had to go back to the first picture. His children have grown tremendously. His daughter has undergone eye surgery. His son started school. Though so incredibly similar, the photos serve a beautiful bookends to some tremendous milestones...and it got me thinking...

What will my bookends look like? I've launched a new chapter in my career and know that 2012 will be full of "firsts" just like a child's first few years. Of course, I have goals to I plan to reach (and hopefully surpass) but something tells me that this is my year of unkowns...twists in my road of life that I don't see coming. I am prepared as I will ever be...I mean how prepared can you be for the unexpected, right? I am excited because I know that each day will hold something for me to unwrap...and who doesn't love a gift? Most importantly, I am supported by co-workers, colleagues, friends and family who I know will see me through every twist and turn and be there to celebrate my successes.

I am holding the first bookend. It's the first picture in my own 365 day challenge. There will be many titles, stories, photos, chapters and books between now and December 31, 2012 some of which I will write, others that I will read. I will be anxious to see what the other bookend looks like. And I am excited to share and learn from each of you in my journey to find it!

The Truth About the Housing Bubble

In years past a borrower would visit their local savings and loan to obtain a mortgage. The Loan Officer at the bank would approve the mortgage and fund it with cash reserves from the vault. This system worked great until the bank ran out of money to lend. Borrowers would come to the bank looking for a loan and were told to come back when a current mortgage paid off. What the bank needed was a way to sell the loans they made freeing up the capital to lend to new borrowers. This way they could lend the "same" money over and over, earning an income from servicing the loans and assisting the community by offering a near limitless pool of money.

To address this issue, FNMA and GNMA were established. The goal was to provide cheap mortgage money to prospective homeowners and a high quality bond for the investment community. The bond or Mortgage Backed Security (MBS) take mortgages with similar risk characteristics and pool them together. Investors in the MBS's know ahead of time the return they are going to receive, much like a Certificate of Deposit. To ensure the performance of the bond, each mortgage is underwritten to specific guidelines.

During the past real estate boom underwriting guidelines were relaxed giving way to a whole new menu of mortgage products such as 100% financing. In addition, to streamline the influx of applications, income and asset verification took a back seat to a borrower with strong credit. With housing prices rising rapidly, the property could be sold to cover the note and foreclosure costs if this occurred. This cycle worked well until the price of houses moderated in 2006. Once the housing market began to cool and prices moderated, foreclosed homes were being sold for less than the notes. To add insult to

injury, the loans underwritten to the looser guidelines did not perform as hoped. With the value of the collateral in question (falling home prices) and the future performance of the borrowers unknown, investors' appetite for this risk waned. Unfortunately the liquidity issues associated with Alt A and subprime loans carried over to more secure AAA GNMA and FNMA loans. Sellers of AAA MBS's found it more difficult to find buyers. Fortunately the Fed eventually stepped up and purchased mortgage-backed securities in an unprecedented effort to keep rates low, the housing market from crumbling, and the entire economy afloat. For all the criticism the Fed receives, these efforts have been successful so far.

How this all plays out in the long term is still up for debate. The one thing that is certain is that rates remain historically very favorable. Now is a great time to take advantage of these low mortgage interest rate.

It's Christmas Eve and I have enjoyed spending much of my day in the kitchen. After I thought I was coming under attack by a sore throat and a fever and took a quick power nap, I forced myself into the kitchen and medicated myself with butter, spices and carbs galore. For a minute there I was having a little pity party for myself. As I sat and pondered what pithy facebook post I could make about being sick on Christmas Eve, my thoughts turned quickly to a precious 3 year old I have never met who is spending Christmas in Children's Hospital in Birmingham, AL.

We are a strong network of professionals who bring people HOME. I ask each of you to stop for a minute or two today and do whatever it is you feel compelled to do - pray, send healing vibes or a pounds of positive thoughts - to a little girl named Karlie Gill. I have never met this sweet girl but have had the opportunity to meet her dad once or twice. Karlie contracted e-coli and a parasite and has been in Children's Hospital since October. I have been following her progress and it is a constant "two steps forward - three steps back" roller coaster.

Christmas should be spent at HOME...not in a hospital. Especially not for a little girl with dreams of sleeping by the Christmas tree in hopes of catching a glimpse of Santa. Please stop for a moment and say whatever type of prayer or thought you are compelled to send. Hug your family and be grateful that you CAN spend Christmas in your HOME. And if you are so inclined, click here and follow her progress. Together let's bring Karlie HOME where she belongs!

Not quite sure about the rest of you but I am sensing a slight panic attack coming on... It's December 21st. I basically have 3 days to complete the picture perfect Christmas Extravaganza. But, alas, I have yet to put a skirt beneath my tree and haven't wrapped the first gift. Many thanks to my amazing mother (which you will soon learn is a HUGE asset to my business), my fridge is chalk full of all the necessary ingredients for a table fit for a king.

The old real estate addage is that "no one shops for a house during the holidays." Really? I beg to differ. I think my new Christmas theme song may become "Deck the Halls with Executed Contracts....fa la la la la la la la la..." Just because it's Christmas time, doesn't mean we should all go on a mental vacation. While many lenders may choose to take a little break, I see this as the perfect time to be even more attentive to Realtors needs. They are trying to get the deal signed before Old Saint Nick comes to town. Why not be the lender that can send out a quick estimate or approval in a snap?

I see this as a perfect time to show your agents, or agents you don't typically work with, that you are ready to work for them! When others are taking a break and are tough to reach, be the "golden lender". I have seen three contracts come across my desk in just one day. Every agent has an approval letter and each client has a firm estimate. It's that simple. Be available when others are not. Capitalize on a traditionally slow season. They will remember you!