Life In Wake Forest NC.....

I've made tens of thousands of dollars from people just like you.  Yep that's right, I make my living by taking from you every chance I get.  Best part is you make it so easy for me! I have so many ways to do this that it's hard for you to keep up with all of my methods. I'll exploit you, your buyers and make a ton of money!

This is likely the thought process from a criminal of a quickly growing crime called identity theft. What does this have to do with a real estate agent?

A prospect finds your blog and learns about the nuances of buying a home because you blog about it.  Eventually they call you and after a nice conversation you agree to meet.  When you meet the inevitable question arises:  Are you prequalified?  Usually the answer is no but I pay my bills on time and have a down payment.  With a smile on your face you think to yourself, alright!  Looks like I have a qualified buyer! What a great day!

Later that day the trusted loan officer you recommended to your prospect calls to tell you that this person won't qualify because someone stole their identity and ruined their credit. Ughh! Nothing could have prepared you or them for that. 

What you write on your blog is likely read by hundreds or thousands of people in your community.  You provide them information about local events, real estate market, quality of life but do you offer tips to secure their ability to get a loan?

That's the loan officers job! Maybe, but does this scenario affect your paycheck? This fact now makes it everyone's job.

I don't want to pay a monthly fee for credit monitoring or id theft protection and I doubt you and your prospect does either. So here are both free and low cost solutions that you can blog about:

Regular credit review: You can pull 3 credit reports a year at no cost.

Where: www.annualcreditreport.com   When: Instead of pulling all three at once pull one report from each credit bureau every four months.  If you choose to use a different source for a free credit report they will likely sell your information for a profit thus increasing your junk mail which now exposes your personal information even more.

Set up a fraud alert with the credit bureau.  You may have to do this on a regular basis.

Guaranteed protection without having to monitor anything.  Cost: A one time fee of about $30 ($10 to each credit bureau)

Credit Freeze.  Where: Experian    Transunion    Equifax 

For about a $10 fee each credit bureau will "freeze" your credit and issue you a PIN number. If you have already been a victim of ID theft it is free. Nobody can access your credit even if they have your social security number, birthdate etc.  They must have the PIN number.  In order to access your credit you must pay a $10 fee to "thaw" your credit and provide your PIN number.  You'll have to pay another $10 to re freeze your credit again.  This is better than a $30 monthly fee paid year after year.  Another downside is that if you apply for credit you will have to remember to "thaw" your credit first.  In case you wondering if I practice what I preach,  my wife and I both have security freeze with all credit bureaus.

Of course I won't personally exploit you or your buyers.  If I had titled it  "How to prevent ID theft"  would you have read it?  I didn't think so!

Feel free to copy and paste this info into your own blog.

A touching story I received from a friend.

At a fundraising dinner for a school that serves children with learning disabilities, the father of one of the students delivered a speech that would never be forgotten by all who attended. After extolling the
school and its dedicated staff, he offered a question:

'When not interfered with by outside influences, everything nature does, is done with perfection.

Yet my son, Shay, cannot learn things as other children do. He cannot understand things as other children do.

Where is the natural order of things in my son?

The audience was stilled by the query.

The father continued. 'I believe that when a child like Shay, who was mentally and physically disabled comes into the world, an opportunity to realize true human nature presents itself, and it comes in the way other people treat that child.’

Then he told the following story:

Shay and I had walked past a park where some boys Shay knew were playing baseball. Shay asked, 'Do you think they'll let me play?' I knew that most of the boys would not want someone like Shay on their team, but as a father I also understood that if my son were allowed to play, it would give him a much-needed sense of belonging and some confidence to be accepted by others in spite of his handicaps.

I approached one of the boys on the field and asked (not expecting much) if Shay could play. The boy looked around for guidance and said, 'We're losing by six runs and the game is in the eighth inning. I guess he can be on our team and we'll try to put him in to bat in the ninth inning.'

Shay struggled over to the team's bench and, with a broad smile, put on a team shirt. I watched with a small tear in my eye and

warmth in my heart. The boys saw my joy at my son being accepted.

In the bottom of the eighth inning, Shay's team scored a few runs but was still behind by three.

In the top of the ninth inning, Shay put on a glove and played in the right field. Even though no hits came his way, he was obviously ecstatic just to be in the game and on the field, grinning from ear to ear as I waved to him from the stands.

In the bottom of the ninth inning, Shay's team scored again.

Now, with two outs and the bases loaded, the potential winning run was on base and Shay was scheduled to be next at bat.

At this juncture, do they let Shay bat and give away their chance to win the game?

Surprisingly, Shay was given the bat. Everyone knew that a hit was all but impossible because Shay didn't even know how to hold the bat properly, much less connect with the ball.

However, as Shay stepped up to the
plate,
the pitcher, recognizing that the other team was putting winning aside for this moment in Shay's life, moved in a few steps to lob the ball in softly so Shay could at least make contact.

The first pitch came and Shay swung clumsily and missed.

The pitcher again took a few steps forward to toss the ball softly towards Shay.

As the pitch came in, Shay swung at the ball and hit a slow ground ball right back to the pitcher.

The game would now be over.

The pitcher picked up the soft grounder and could have easily thrown the ball to the first baseman.

Shay would have been out and that would have been the end of the game.

Instead, the pitcher threw the ball right over the first baseman's head, out of reach of all team mates.

Everyone from the stands and both teams started yelling, 'Shay, run to first!

Run to first!'

Never in his life had Shay ever run that far, but he made it

to first base.

He scampered down the baseline, wide-eyed and startled.

Everyone yelled, 'Run to second, run to second!'

Catching his breath, Shay awkwardly ran towards second, gleaming and struggling to make it to the base.

By the time Shay rounded towards second base, the right fielder had the ball . the smallest guy on their team who now had his first chance to be the hero for his team.

He could have thrown the ball to the second-baseman for the tag, but he understood the pitcher's intentions so he, too, intentionally threw the ball high and far over the third-baseman's head.

Shay ran toward third base deliriously as the runners ahead of him circled the bases toward home.

All were screaming, 'Shay, Shay, Shay, all the Way Shay'

Shay reached third base because the opposing shortstop ran to help him by turning him in the direction of third base, and shouted, 'Run to
third!

Shay, run to third!'

As Shay rounded third, the boys from both teams, and the spectators, were on their feet screaming, 'Shay, run home! Run home!'

Shay ran to home, stepped on the plate, and was cheered as the hero who hit the grand slam and won the game for his team

'That day', said the father softly with tears now rolling down his face, 'the boys from both teams helped bring a piece of true love and humanity into this world'.

Shay didn't make it to another summer. He died that winter, having never forgotten being the hero and making me so happy, and coming home and seeing his Mother tearfully embrace her little hero of the day!

I have not researched the authenticity of this story and frankly don't care.  Even if it's fiction it's still a nice story and worthy of reading with a powerful message.  Have a nice day!

I'm no gloom and doom kind of guy but I am concerned.  I've written a post about the government buying mortgages and how that has kept mortgage rates artificially low.  I also wrote that once the fed stops buying mortgages that rates would be determined by the purchase and sale of mortgages on the bond market and that I believe rates will rise.  Today on CNBC a short video clip was made available regarding this. 

WATCH VIDEO

Some experts are speculating that the rates may remain the same or only jump .50%. Considering that most of the Nation's real estate is not recovering just yet (some places are) it's safe to say that if home values continue to drop in hard hit areas that these newer mortgages could default from borrowers walking away.  Not likely, but possible.  That possibility is the fear factor that I believe will drive away investors appetite for mortgage backed securities.  Also, what will happen to interest rates when the fed starts to sell the mortgages that they bought?

I hope I am wrong and they are right.  A 1% increase in rate would price some entry level buyers out of the market.  Combine this with the proposed increase in FHA up front mortgage insurance premium, the monthly mortgage insurance premium and you have a "double whammy".

Many seasoned home owners are choosing to sit in their homes and do nothing and investors are preferring to swoop up deals with all cash offers.  There are a limited number of cash buyers. If seasoned homeowners sit and entry level buyers are priced out of the market, this will certainly make our ability to make a living that much more challenging.

However,  I also believe that the sooner the government gets out of our business and allows free market to control it the sooner we will see real recovery.  The other large hurdle in real estate will be HVCC reform.

IS THERE MORE?

Yes.  I've addressed real estate but haven't commented on the US economy.  I found a video that is really interesting about what people predict to happen if the government doesn't get out of the "rescue" business.  This is a business news clip not Glen Beck. It says Glen Beck but for those who do not like him he does not air until 8 minutes and 45 seconds into the video.  Out of respect for my readers my political preferences remain private.  Feel free to fast forward the first 90 seconds of video where the "good stuff" starts being discussed.

Hyper inflation, shortages and lines for food and energy, higher interest rates and a devalued dollar. Some think this can and will happen in America.  I regretfully agree.  Therefore I'm glad the Fed is finally beginning to step away from their current role but be prepared for the shorter term ripple effect in our industry.  Short term meaning a couple of years. To survive I recommend you keep as much cash flow as possible (liquidity) even if it may not get you the best return. Save your money and refrain from spending on non essentials. Write a budget. A budget in your head rarely gets enforced. If you have to spend money, spend it on your business.

I hope that our government gets out of every facet of bailing out failed business models so we can get the recovery underway and allow entrepreneurship and small business to thrive. I'm in the same boat you are and if you and your referral partners meet and put together a plan of action it will make these bumps a little bit smoother. Unfortunately, some people don't have the luxury of time to be able and wait for the recovery. We should go out of our way to help them especially when they request our services.

Commentary
I'll explain in the easiest terms possible. The fed says that this is not a signal that they will be raising interest rates but a majorty of Wall Street investors disagree.  The feds raised the discount rate from .50% to .75% sooner than anyone anticipated and many speculate that it may be the start of rising interest rates.  Many believe a halt of the fed providing liquidity (money) to banks is near.  The fed states that they don't view inflation a concern and don't plan to hike interest rates. 

Remember, interest rates and mortgage interest rates are two separate things.  The government controls interest rates that banks charge each other for loans.  The selling and buying of mortgages on the bond market (we call them MBS-mortgage backed securities) determines mortgage rates.  Right now the feds are buying MBS(bottle feeding) but when they stop if nobody else wants to buy them, mortgage rates will rise. Do you want to buy mortgages and be the banks "sippy cup"?

Market insight
Mortgage rates have increased this week and there is a bearish attitude regarding rates.  In a nutshell,  mortgage rates are on the rise and don't expect them to come down.  The fed may allow the current stimulus programs to expire.  This includes the fed being the buyer of mortgages (remember when MBS are bought mortgages rates stay low)  so what does this mean for you?

Opinion
Extension of the home buyer tax credit may be in jeopardy.  Higher mortgage rates will make it harder for people to qualify, adding pressure to sellers to offer higher seller concessions to allow for "rate buy downs" to help buyers qualify.  If the the fed waits for strong signs that the housing market is indeed in recovery before stripping all liquidity from the markets and pressures banks to ease underwriting guidelines then a quick recovery is likely.

Providing access to loans to qualified borrowers without ridiculous conditions including a stated income loan program backed by Fannie Mae and Freddie Mac for self employed borrowers will help stabilize recovery efforts.  Amend HVCC and provide the $8,000 tax credit to employers who hire full time employees.  An employed buyer is more qualified that an unemployed buyer with $8,000.

Market Snapshot in financial geek terms

Markets were shaken yesterday with the January PPI jump of 1.4%.  The CPI today was expected to be .3% but came in at .2% with the core rate expected to be .2% was .1%.  The 10 year note was generally flat but mortgage prices -2/32 (.06) bps from yesterday.

After a strong sell off yesterday treasuries are slowly improving this morning.  The 10 year note may hit 3.92% but people holding out for lower rates will be disappointed as mortgage rates are expected to climb.  Only a substantial "market shock" would likely bring down mortgage rates.

Summary

Rates are rising,  fed may be pulling the plug and expect government stimulus programs to go away.  Prepare for a slowly recovering market and if you are "floating" lock your rate now.  Share this information with your prospective buyers and the likelihood of a shift in higher seller concessions to your sellers to assist buyers in qualifying.

First Priority Financial is looking for loan officers/mortgage brokers for it's busy Raleigh office.  First Priority is one of the largest mortgage brokerage companies in the United States.  Founded in 1977 we have over 200 wholesale lenders and 2 correspondent lines.  We recently bought Austin Perry Financial and will be Full Eagle by April. First Priority also created and owns Think Big Work Small a national loan officer and real estate professional news program which is the leading voice of our industry.  We currently have 300 branch offices and over 1,000 loan officers.

I am seeking 2 loan officers with at least 2 years experience in loan origination for my Raleigh office.  We pay high splits and do not push production.  We are seeking full time loan officers who exercise the highest standards of ethics and will represent our company professionally.  Call Nevin Williams (888) 206-5781 x 1017 if interested.  We are licensed in 14 states and growing. 

If you are a branch manager or would like to become a branch office of First Priority Financial and have experience we are also looking to expand by increasing our branches in North Carolina.  Call for more information.

Why would a bank not care if a property goes into foreclosure?  Click the picture of money to watch the video:

This video is compliments of Frank and Brian of Think Big Work Small a daily internet news source.  They have assisted the California Association of Mortgage Brokers in getting critical information out to our loan officers.  They collected 100,000 HVCC petitions, flew to New York and hand delivered them to Attorney General Andrew Cuomo's office who incidentally knew all about them.  With around 100,000 subscribers, TBWS has become one of the largest voices for the real estate profession including appraisers, brokers, lenders and real estate agents.  I was fortunate enough to watch them produce one of their daily news casts and these guys work hard to bring us up to date info related to real estate.  Sign up for free.

Whether you're seeking a lower payment with a refinance, cash out to pay bills or looking to purchase a home we have all kinds of loans!  FHA,VA, Conventional, Jumbo and USDA rural housing loans.

It costs you $0 to get a free quote and only takes a few minutes.  If you could pay off your home 7-10 years faster making the same or similar payment you make now would you investigate your options?  Of course you would.  Contact me today and let's see if we can help you pay off your home more quickly. 

If we can't then you get a free credit report.  You should check your credit regularly anyway so you still get something out of it!

Purchase a home with no money down using a USDA rural housing loan.  Seller can provide funds to cover your closing costs.  Also, if the home appraises for more than the purchase price you can roll closing costs into the loan up to 100% of the appraised value.

Home prices and rates will eventually start to creep up again.  When they do you may find yourself in multiple offer situations and could have a hard time getting into a home.  Lastly, the $8,000 tax credit is due to expire in April so get a movin'!

                                          DIRECT LENDER

Since 1977

 5106 Oak Park Road Suite A Raleigh NC 27612

 First Priority Financial Lic #B-146523-101  Nevin's NC lic#139451

  The opinions expressed in this blog are not necessarily those of First Priority Financial.

                                        Credit restrictions apply.  This is not a guarantee to lend.

*These are estimates only to draw a hypothetical example of what monthly payments might be.  This is not a guarantee to lend. Certain credit restrictions apply.  Equal housing opportunity lender.  Rates subject to change.

Many self employed folks ask this question.  In my opinion, yes. I think stated income loans will once again be a prodcut offered by most banks. Here is why I think this will happen:  Mortgages are bundled up and sold as securities (bonds).  Right now the federal government is buying most of these securities. Hence the reason for such low interest rates and strict underwriting guidelines.

When the Feds stop buying mortgage backed securities and private investors begin buying them it's my belief that they will eventually get tired of a paltry 2%-3% return on their bond investments.  This desire for a higher rate of return I believe will once again spur creative financing options.

Why would banks do this?  Because investors are often willing to take higher risks for a higher rate of return.  If any of you reading this own stock in a company or a mutual fund then you have likely taken risk higher than that of a US Treasury.  It's a matter of demand - if investors want it then banks will produce it.  However I seriously doubt you will ever see underwriting as liberal as it used to be.

Approximately 10.4 million Americans are self employed. During the housing crises many of the stated income loans were available to wage earners (W2 employees).  This loan product was initially created for self employed borrowers with complicated tax returns.  But with a strong demand for higher returns the stated income wage earner and no doc loans were born. The stated income wage earner loan was the main culprit for mortgage defaults on the stated income loan versus those for the self employed borrower.

Bond rating agencies are to blame for our housing crisis.

These were rated as AAA (low risk) mortgages when in fact there were a lot of high risk loans mixed with the low risk loans. Sort of like selling a bag of apples with rotten ones hidden at the bottom but then telling you they are all fresh. Had the bond rating agencies rated the bonds accurately and had investors knew what they were buying the crisis would have unfolded differently.  Less people have an appetite for low rated bonds and a much smaller segment of the mortgages would have defaulted.

As long as regulators carefully screen bond ratings on mortgage backed securities then I don't see more stated income loan issues when they come back.

You have braved the real estate crises, plummeting stock market, waves of foreclosures, dropping property values and distrust from the public.  If you're reading this, you're to close! To close to succeeding! Don't give up, quit or throw in the towel.  We as an industry need you. You must have been doing something right if you're still here. It's not time to walk, it's time to build.

Maybe you've tried building a team in the past with no luck.  Maybe it's because you haven't had formal training on team building or how to properly manage people.  Maybe managing IS the problem rather than the solution.

When you have the time watch this motivational video.  It's suggestions could change the way you view your business.  With the large audience watching this speaker I have to think they paid money for this information.  Luckily this video allows me to share.  Enjoy!

Home loan junk fees.  What an ambiguous term.  So many things can be mistakenly classified as home loan junk fees including fees that are bona fide. Mortgage loan fees nationwide amount to roughly 110 billion annually.  You may wonder why that figure is so high after all it's just a home loan.

With each loan that funds there are multiple people working to complete the loan.  Many of the people involved in the transaction will never meet some of those who assist the loan officer in completing the loan process.  This includes

* a loan processor

* escrow officer

* title insurance company

* appraiser

* underwriter

* underwriting assistant

* lenders account executive

* funder

* doc drawer

* county recorder 

* courier

None of these fees are junk if they are bona fide meaning normal and customary charges for services performed.

A junk fee, essentially is a fee charged for a service that is not performed.

Home loan junk fees can also be a padded fee for a service that is performed. 

Example would be:  If recording your deed cost $85 and the lender or broker charged $125, this would be padding fees. 

With the housing crises into its second year junk fees fall under a term known as Predatory lending.  Lenders are in fear of loan buy backs so they are monitoring these types of charges very carefully.