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Adjustable rate mortgages, ARMs for short, are the most misunderstood, misused, and maligned financial instrument.  The have been abused by consumers, Realtors and loan originators alike these past 3-4 years and are now the subject of national scourge.  Much like our Second Constitutional Amendment critics, the ARM critics are usually misinformed and preying upon the fear of catastrophe. 

These inexperienced mortgage sales people or "loan hacks" as I like to call them, are banking upon your fear of catastrophe.  Loan hacks sold you ARMs in 2003 and negative amortization ARMs in 2005.  After they ride the fixed rate mortgage trend, they'll move on to reverse mortgages.  They lack original thought and critical analysis.  They'll sell you any loan that is on the front page of USA Today.

ARMs don't cause foreclosures, loan hacks cause foreclosures.

READ:   I am an American ARMs dealer.

Fixed rate mortgages, for the lion's share of the population, are an inappropriate recommendation.  Mortgage advertisers, unschooled in financial planning , are aggressively advertising fixed rate mortgages as a cure to the rising ARM rates.   They're encouraging you to sell low and buy high. 

SAY WHAT?   DID THEY FORGET THAT RATES GO DOWN, TOO?

You should lock in a fixed rate mortgage at the low end of an interest rate cycle, not the high end of it.  It is easier to sell fear than to properly counsel you so these loan hacks will try to baffle you with slick sounding "Myths".  

Three Myths Fixed Rate Loan Hacks Love to "Quote": 

Have you ever heard of a "natural-born salesperson" ?  The enterprising kid who organizes the neighborhood car wash grows up sell derivatives to hedge funds.  She's described as a "natural-born salesperson".

That's not fair.  She worked hard at it, probably since age six. 

I listened to a training presentation by Greg Frost today, President of Frost Mortgage in Albuquerque.  Greg recounted a funny story in his presentation and expanded upon it at the cocktail hour, sponsored by American Brokers Conduit.  Let me start off by saying that I relate to Greg Frost.  He's an old-school originator and the first billion dollar producer.  We chuckled over a beer about our "first sales managers".  

Graduates of Catholic grade schools have an unfair advantage; we were trained in sales early in life. 

Now, some of you will relate to this.  Your parents spent money to send you to Our Lady of the Lakes School and bought you the uniforms and textbooks. What did we do on our first day of Catholic grade school?

The boxes showed up.   Boxes filed with candy bars...the product.

Sister Mary got up and talked about how tasty the candy was...product knowledge. Sister Brigid told us to knock on all of our neighbor's doors and ask for their support...the sales plan. Sister Margaret invited two children to "rehearse" what we would say...role playing. Finally, Monsignor Sharkey came in and had us say a prayer for the children trapped in the Godless world of Communism...the compelling reason.

Sister Brigid was my first sales manager.  She was very effective in her tactics.  I was a pretty competitive child and wanted so much to win the trip to Dorney Park but had some stiff competition.  Her name was Analisa Salvatore. She was a tiger and Sister Brigid knew how to work our impressionable minds. 

"Mr. Brady, please stand up and tell the class how many candy bars you sold last night."  (I was six so I was afforded the courtesy of the title)

"Five, Sister Brigid"

Sister Brigid continued to poll the room, saving Analisa Salvatore for last.  Now mind you, I grew to despise Analisa.  Not only was she beautiful, pigtails flowing in the breeze, she was smart.  Apparently, she was pretty darned successful, also.

"I sold eleven candy bars, Sister Brigid !" 

Analisa went on, in detail, about her tireless prospecting, practiced pitch in front of the mirror, and superior closing skills, complete with a flip book about the starving children in Africa.

My point is this.  There is no such thing as a natural-born salesperson.  Sales takes training and practice. Products change.  Pricing changes.  Marketing strategies fail.  Consumer tastes evolve.  It is imperative that you train yourself in the art of salesmanship, over and over again.

Training isn't enough.  You have to implement the skills you learn and perfect them with rote repetition.  I sold five candy bars my first day of Catholic grade school but visited some fifteen or twenty houses.  You'll never sell everybody, no matter how good you are.  But each no, when analyzed, brings you closer and closer to the next yes.

Not everybody can be Analisa Salvatore...but we can certainly model her success.

How is baseball like applying for a home loan?  Read the title.

I am thoroughly amazed at how normal, sober, upstanding members of the community purposefully commit mortgage fraud.   Like baseball, they don't cheat alone; they have plenty of help.  Lazy Realtors and shady mortgage brokers will gladly "go the distance". 

The buyers were encouraged to lie on their loan application.

www.RealEstateAgentSearch.info  is a scam.

Real Estate Agent Search, run by IMS Leads and Lisa Scherzer, is nothing more than a veiled attempt to steal your money.  It's a hoax, a joke, a fly by night operation that doesn't respond to repeated attempts by phone or e-mail to explain or justify their service offering.  They are a company certainly deserving of the "Cheeseball Award" bestowed upon them and their induction to the Active Rain Hall of Shame.

Lisa lists the following "Associates" on her profile:

If any of you can contact her, please suggest that this thief return my phone calls.  My number is 858-699-4590. 

Let me give you some background:

This advertisement, FREE REAL ESTATE LEADS, was run by Lisa Scherzer of IMS Leads on March 26, 2007 here on Active Rain.

I put my money where my mouth is and actually paid ten bucks for the 90-day trial period.

NO GOOD DEED GOES UNPUNISHED 

I gave you all a thirty day update with its tepid results.  This is when I started e-mailing Lisa to see how I might improve my "listing".  Clearly, this is not new ground for me.  I've advertised on Zillow, Yahoo, and Google. I was always treated fairly even though the ads didn't always work out as I might have hoped.

I was quite surprised that she didn't embrace my attempt to legitimize her new directory.  I have been fortunate enough to garner some readership here on Active Rain.  One would think that success with me might silence her critics and generate quite a bit of business for her.

Scam artists are in it for the hustle, though.  They're never in it for the long term.

I have e-mailed and called Lisa over ten times in the past 30 days.  I knew I was about to get charged $27 for three months and didn't feel comfortable pursuing an ongoing advertising relationship with IMS Leads.

Lisa's phone has been turned off.  Her cell phone goes straight to voice-mail.  The e-mail address, which worked fine when she took my money, doesn't seem to respond.

Lisa's Pay Pal account works, though.  She charged me $27 last week.  Against my wishes.  I'll bet it takes me months to stop Lisa from stealing more of my money.

Todd Duncan suggests that we need to be more concerned with our Direction rather than our Perfection.

Here Are Six Questions to see if you are focused on Direction rather than Perfection:

1- Why are you in this business? 

We usually get exactly what we want.  Most of us made a conscious decision to be in our own businesses and then fell into the trap of acting as an employee of one.  If you aren't clear on the "why" of being in business and align your actions with that "why", you'll always be an employee of "one".  Robert Kiyosaki wrote Cash Flow Quadrant which explains how we can earn income.  Most Realtors and Originators are stuck in the "self-employed" quadrant, which Kiyosaki describes as high-risk and low-return.

READ:  Interview with Lenn Harley 

2- Do you have a written plan for your goals ? 

Most Realtors and Originators are not acting purposefully.  They are traveling aimlessly on this journey without a clear vision about what they really want.  After you have established the "why" of being in business, it is important to create a business plan which aligns your actions with your goal.  Here's the problem, those that do create a business plan, usually write on for one year.  That's all well and good but business planning should encompass a five or ten year period, also.

READ:  The Marriott Group Business Plan- Part One 

           The Marriott Group Business Plan- Part Two 

3- Are you aware of the daily disciplines you must have for success? 

Too often, we focus on the daily activities that drive us to "perfection" rather than the ones that are aligned with our direction.  If you have made the conscious effort to reflect on what you want and written a business plan that is aligned with your values, why would you do anything other than the actions that are consistent with reaching your goals.  We often get hung up in activities to provide perfection and chalk them up to customer service.  I often hear the phrase "If I don't do it, it'll never get done". 

We define "Mortgage Independence Day" differently than your parents or grandparents did.  Rather than having your loan paid in full, we prefer to identify "Mortgage Independence Day" as the day when you have enough money , IN A SEPARATE ACCOUNT, to pay off the home loan...IF THAT IS WHAT YOU CHOOSE TO DO.  We think that lots of cash in the bank (or investments) is the ultimate form of independence.  

It appears that our mantra of equity splitting and investing for your future is catching on.  The New York Times ran an article about Baby Boomers who are rejecting the traditional Boomer Economics model for our Asset Optimization Strategy.

CLICK HERE FOR THE FULL STORY AND NEW YORK TIMES ARTICLE 

An excerpt from this post:

Private mortgage loans are not a license to jack up the fees. I often turn away brokered business because of originator greed. Lenders charge points to enhance their yield. A common practice in our industry is for the originating broker to increase his/her brokerage fee to equal or better the lender-charged points. The result is an unrealistic fee financed by the lender and subsequent decline. If brokers are charging a borrower 1-2 points for a subprime loan, and the loan turns into a private mortgage loan, brokers should not automatically raise their fees because the borrower is “stuck”.

Do you want some FREE ADVICE about life?

How about some help for the real estate brokerage business when the market is slow and you're just trying to get things started?

I'm going to give you a glimpse at greatness.  Amazing advice.  Tony Robbins couldn't give it to you this straight.  Zig Ziglar couldn't.  Only Rocky Balboa, the mythical but realistic character, created by Sylvester Stallone, could impart this wisdom.

From the sixth and final offering in the Rocky series:

CLICK HERE FOR AN AMAZING TWO MINUTE PODCAST FROM THE MOVIE ROCKY BALBOA  

Here's the important line (it comes in around 1:22 in the 2:00 minute audio):