It is a little after noon and high time to get this update delivered to you as you may be wondering where it is.  I just arrived back from a flight from St. Thomas where the day was beautiful, though I actually forgot what day of the week it really was in all honesty.  Unfortunately, the mortgage backed securities market is far from being beautiful and the outlook remains ugly.

Last week saw many headline events that brought some confusion into the bond markets.  With continued job market weakness, the Jobless Claims reaching a rolling 4-week average of 619K and painting a very bleak future, at least for the short term.  Inflation was also on the minds of traders as yet another stimulus package was signed into law by Barack Obama and followed by increases in the PPI numbers.  CPI calmed the markets a bit, but if you look solely at the core numbers, inflation is far from being thrown into the back seat and may simply be a sleeping giant.  By week’s end, mortgage rates had bounced around and ended basically where they started.

This week will start of slow, but will have plenty of data coming into play.  Despite the level of data, however, the only typically major player will be Friday’s Chicago PMI numbers.  Here is this week’s schedule of data and known events…

• Monday:  3-month T-Bill Auction (1:00), 6-month T-Bill Auction (1:00)
• Tuesday:  Case-Shiller HPI (9:00), Consumer Confidence (10:00) Bernanke Testimony (10:00), 4-week T-Bill Auction (11:30), Duke Speech (12:00), 2-year T-Note Auction (1:00)
• Wednesday:  MBA Purchase Applications (7:00), Existing Home Sales (10:00), Bernanke Testimony (10:00), EIA Petroleum Status (10:30), 5-year T-Note Auction (1:00)
• Thursday:  Jobless Claims (8:30), Durable Goods Orders (8:30), New Home Sales (10:00), Money Supply (4:30)
• Friday:  GDP (8:30), Chicago PMI (9:45), Consumer Sentiment (9:55)

As I mentioned before, the Chicago PMI is the only major player typically.  However, you have Bernanke testifying to the Senate on Tuesday and the House on Wednesday, each of which could stir the markets.  Additionally, other data may play a larger than normal role, such as the Jobless Claims have been lately.

As we look at the charts, the picture is not very bright to say the least.  Mortgage backed securities have failed to penetrate their overhead resistance for the forth time, two of those times within the last week.  Adding to that fact, stochastics have again turned negative with a negative crossover pattern and plenty of space remaining before becoming oversold again.  In a normal market, these signs all point to mortgage rates climbing, but we are not in a normal market so things can change quickly.

What is abnormal about the markets?  Actually, not a whole lot.  The abnormalities rest primarily in Bernanke and his government buddies.  They have the ability to talk up, or otherwise artificially inflate the markets, as they have done so in the past.  Currently, mortgage bond traders have seen through the crap and are trying to drive mortgage rates higher.  This can be seen in the markets because the Fed increased their buying of FNMA 4.5% coupons, having purchased $8.0B last week alone and failed to get prices through resistance.

The bottom line is that it appears the markets are stronger than the Fed right now, which means mortgage rates will continue to hold steady, or break out higher unless the Fed manages to push them through the ceiling, a task they have been unable to accomplish thus far.

By Jeanne Johnson of LandRecs.com

The Title Insurance industry has slowed to a crawl. Most of the business at the closing table is either a foreclosure or a short sales. And with Congress’ plan to modify existing mortgages, even that pittance will be drying up. 

Congress plans to modify existing mortgages to lower rates so borrowers can afford their monthly payments.  How does this affect the title industry you ask? In the past, when mortgages were modified, title policies were still in the picture, because intervening liens were a concern. For example, let’s say Sam Smith wanted to modify the terms of his loan by increasing the loan amount. You were the first mortgage lender. If you modified the loan, you had to worry about what that would do to your 1^st lien position. If there was a second mortgage or a tax lien on the property, changing the terms of your loan might bump you into second place or third place. The title industry therefore stepped forward with updates to the policies. we checked for intervening liens, we got subordination agreements from the secondary lien holders, we recorded lots of documentation, and endorsed the policy with matching fees for our work.

So, how is this different? Think about it. Titles on all of these troubled loans have already been insured. But this time, they likely won’t need to be insured again. The new loan modification law will generally decrease the interest rate and that will be an advantage to any secondary lien holders, putting them in a stronger position. Therefore, the modification should stand on its face, and no endorsements should be needed. So, there won’t be any need for that title review, or an endorsement to the policy, or new title insurance premium fees. Their might be a pittance for sitting down with the consumer to sign the modification agreement and record it (and with the new RESPA law, title companies won’t even be able to mark up the recording fee.)

Loan modifications are good for the consumer, and good for the economy. They help neighborhoods. They keep banks out of the painful REO business. But they provide little role for title companies. Ouch – another big ding for an already hurting industry.

Mortgage Broker Training + Time Travel = interesting blog post that you gotta read!

What if you could just start all over? What would you do differently? What if you could go back in time, and shake some sense into yourself? Laugh all you want, but as I was sitting back and vegetating this past weekend (I had a busy week – cut me some slack!) when Back to the Future came on. I enjoyed the show as a kid, so I decided to watch it again to see if I would still enjoy it.

The week previous, I had picked up a book from Borders called Time Travel in Einsteins Universe. An amazing book that details some of the most fringe scientific theories today regarding time travel, (Go figure) and what it would would be like based on current understandings. It’s a lot more fun to read than I’m making it sound…. No really!

So what has this got to do with loan officers, mortgage brokers, and lead generation? The combination of the book, the movie, and a whole lot of Cherry coke and wine ice cream (Wine ice cream sounds gross doesn’t it? It was better than I anticipated. You should try it sometime) got my imagination burning: “What would I do differently in my career if I could go back in time?”

While some things never change within a sales and marketing industry, some things have evolved quite a bit. If I were a loan officer training to get started ASAP, here’s what I would do:

1. Start building Realtor relationships the right way

When I first started working with Realtors, I was a machine. Nearly 40 Realtors in 90 days is a heck of a lot of agents to have. But would I choose to go that route a second time around? Yes and no. Yes I would still use the same techniques to market, and yes I would still want as many agents as I could handle. The no comes into place when we look at why there were so many realtors.

See, as I got started, I was not aware of that all important figure that can be found at NAR: “Around 70% of real estate agents close fewer than 4 transactions per year.” I learned this the hard way! By the time I reached the 6 month mark, I had taken that group of 40 agents and filtered it down to 25. I reduced the number further still as time went on.

I took my lumps and learned from them. Real estate referral business was my primary source of business, but I had to learn how to be picky. If I had an opportunity to start over, I would be much more selective and target my efforts to market to agents who were closing at least 3 – 5 million per year in production. If I’m going to work my rear off to add value to the relationship, I want to know without a doubt that they have something to reciprocate with.

2. Create and use a database/follow up system earlier

I laugh when I look at how much business was wasted in my early career. They’re not laughs of joy though. More like chuckles of the near deranged as I contemplate just how oblivious I was to the large number of loans just slipping through the cracks as my antiquated hand written records laughably served as my follow up system.

It’s not that I was unaware of what a database was, or how valuable it could be. I simply thought I was “too busy” to be bothered with the details of selecting a system and writing the follow up messages. It wasn’t until my 3^rd year in the business that I got serious about follow up, and I’m still angry with myself!

In today’s market where every single lead matters – you cannot afford to keep ignoring follow up! There are 139 excuses not to setup a follow up system, and only 1 reason to set it up: Because it will make you more money. There… Is that a good enough reason for you?

I’m bombarded with all these question and reasons for not proceeding with a follow up system. “But I don’t know what my follow up emails should say” is the most common.

Something is better than nothing as long as the email does not say “I’m just checking up on you,” (Shudders) that’s a quick way to get people to stop reading your emails. Put pen to paper imaging what you would want to hear from a service provider… That’s a start.

3. Online Marketing

What Mortgage Broker Training issue would be complete without at least 3 “Here’s what Chad regrets” examples? I was for all intents and purposes a ‘technophobe’ until 2003 – 2004. Even after setting up my first website, I did not truly understand the finer points of online marketing.

I was one of those guys who thought that online marketing began and ended with setting up the site. After paying over $1,500 for a website, and $150 per month for nearly 6 months without a single lead to show for it, I decided that I needed to find out what was wrong. (Notice I didn’t scrap it because it wasn’t working? I decided to troubleshoot!)

My biggest revelation came from reading how important it is to get good search engine rankings. I thought “Wait a minute… I’m already on the front page of the search engines!” I went to Google, Yahoo, etc, and typed in the name of my site, and poof! There I was!

It took a phone call to my “SEO Guy” to learn what now seems an embarrassingly simple concept. If I could go back in time, I’d shake myself while saying “Hey Chad! People don’t already know who you are! They’re typing in keywords such as st louis mortgage, st louis loan officer, and st louis real estate! Those are the words you want to be on the front page with!”

If I could push that restart button, I’d have my website up and running at least 1 year sooner, and have it optimized for search engine marketing right from day 1. I would then use it as a tool to funnel in dozens of extra leads each week, and show off those leads (I would target home buyers, not just refi leads) to my local real estate community to attract the heavy hitters earlier.

Ahhhh… What if, what if… Would you like to know what the real great part of this article is? You can learn from my mistakes and take action right here and right now.

We may not be able to jump back in time, or restart the cycle, but we can sure as heck make certain that we’re not looking back a year or 2 from now frustrated that we wasted a bunch of time not doing things the smart way!

This issue of Mortgage Broker Training is officially over with! I hope you learned something. If not. Well, if only I could click the restart button and rewrite thi….. Naaaah…

Mortgage Broker Training