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

Traveling across the globe gets tiring after a while, and getting back early in the morning certainly doesn’t help the situation.  Mortgage backed securities appear to be tired of the current situation as well, unable to rally further and mortgage rates ended the week slightly higher as a result.

Last week saw a bit of a correction as was expected, offering a brief chance to float for a lower rate.  There wasn’t a lot of data plays, though Retail Sales didn’t assist mortgage bonds’ attempts to rally by beating expectations, and doing so dramatically.  It is certainly too early to call it a reversal, but it did open some eyes to say the least.  The majority of the week played to the media’s coverage of the upcoming stimulus package.  As the week drew to a close on a shortened trading day, bonds’ succumbed to pressures and fell back, failing to break through tough resistance at their 50-day moving average.

As for the stimulus package, it keeps going back and forth between the House and Senate.  In the House, there has not been one Republican to vote for it yet.  Even in the Senate, the Republicans have not been overly happy with the outcome as they believe it is overspending and will not stimulate the economy the way it is intended to.  With 1,071 pages, along with the speed at which the vote is going, it is inevitable that “agendas” will get pushed through and the best things about the program will get cut out, or minimized.  One case in point is the first-time homebuyers credit, which has been reduced from $15,000 to $8,000.  The bill has yet to pass, and Obama’s administration is already looking for new ways to provide handouts to those potentially facing foreclosure, so more harm is one the way. 

Enough politics, let’s get down to business for this week.  The week starts off dead, at least with the markets closed and that may very well be a good thing.  Unlike last week, we will have more than one major player regarding data.  We will see the Fed “unplugged”, as well as data plays on the economy and inflation with the week ending with the CPI report.  here is the breakdown…

• Monday:  President’s Day – markets closed, Fed Gov Duke Speech (09:40)
• Tuesday:  Empire State Index (8:30), Housing Market Index (1:00), 3-mo T-Bill Auction (1:00), 6-mo T-Bill Auction (1:00)
• Wednesday:  MBA Purchase Applications (7:00), Housing Starts (8:30), Import/Export Prices (8:30), G.17 Statistical Release (9:15), Crude Inventories (10:30), Bernanke Speech (1:00), (4-week T-Bill Auction (1:00), FOMC Minutes (2:00)
• Thursday:  Jobless Claims (8:30), PPI (8:30), LEI (10:00), Philadelphia Fed Index (10:00), Money Supply (4:30)
• Friday:  CPI (8:30)

As you can see, as the week progresses, we will be seeing opportunities for mortgage bonds to rally, or get beaten down.  Data tends to move the markets at times opposite of what the charts indicate, but so far the charts have been correctly identifying the current trend.  Looking at the charts, we see that bonds remain trapped below their 50-day moving average, despite the government talk about lower mortgage rates.  Part of the reason mortgage rates haven’t gone down further, even with the Fed buying MBS every week, is the Fed is buying the higher coupon bonds in general and basically continue to keep rates from spiking higher rather than driving them lower.

As we look to what will happen this week in regards to mortgage rates, without government intervention or some major surprise in the markets, mortgage bonds look to fall further as they will likely test support, and that is verified by a negative stochastic crossover and their fall below their 10-day moving average.  Expect mortgage rates to tick higher this week.