America's #1 Mortgage Broker

Here's Mark Victor Hansen on a "Seminar at Sea", sponsored by iLearningGlobal faculty member, Bob Proctor.  In this presentation, Hansen discusses Roger Hamilton's Eight Styles of Entrepreneurship:

• Creator- Bill Gates
• Star- Martha Stewart
• Supporter- Steve Ballmer
• Dealmaker- Donald Trump
• Trader-George Soros
• Accumulator- Warren Buffett
• Lord- J. Paul Getty
• Mechanic-Sam Walton

Hansen finished his presentation with a story about a young boy names Tommy Tighe and goal-setting. (transcript here).  Light-hearted and fun, the moral is that if you get a clear vision about what you want, write down your goals, develop and act upon a plan, you can get anything you want.

Watvch the video on iLearnSales.com

Good grief!  I suggested that you, as a borrower, put your "best face forward" when shopping for a mortgage online and a hockey game broke out in the comments section.  It seems that REALTORs and loan originators were DYING to show you, the online consumer, that they don't care about your dress or appearance.

They obviously didn't read the full article.  I referenced the Rice University study that suggested that pictures on a profile lent credibility to borrowers on an online lending site.  Armed with that bit of information, I explained that bias towards appearance was natural.  More importantly, authenticity online lends credibility to both sellers and buyers alike.  If you want a mortgage loan, you'll judge my online efforts by the way I look, write, and interact with you.  Loan originators will do the same towards you...WHETHER THEY INTEND TO OR NOT; bias towards appearance is a natural emotion.

Nobody cares how you "dress" online, right?  Well...while we can't "see" you shopping for your loan in your pajamas, we can see your online "presence".  Google has made online privacy a thing of the past so...I'm gonna find out eventually when I "Google" your name.

Why not "dress for success" when you apply for a loan online?  Here are three things you can do to give you an edge over hundreds of thousands of borrowers looking for a loan online

1- Link to an online profile in your email to me.  I can't tell you how useful this is.  If I know information about you, I'm more apt to speak with you than the nameless, faceless e-mails that inquire about loan programs each day.  I'm on Facebook and LinkedIn.  If you connect with me there, I'll learn more about your career and family.  I'm eventually learn about this stuff in the loan application (a mortgage is a VERY personal financial transaction) so get it out in the open.

2- Be clear and concise in your communication with a loan originator.  Loan variables include:

• value of the home (link to your Zillow Zestimate and you'll provide some "social proof")
• capacity to pay the debt (link to your LinkedIn profile to show your employment)
• credit- no link necessary but you might guess at how your credit is.
• loan amount requested along with a the purpose of the loan (purchasing a home, refinancing an original loan, refinancing and paying off high interest debt, etc).

3- Offer multiple contact points: phone numbers (cell phones sound tinny) and email.

Here's a great example of a loan request:

Hello.  My name is Brian Brady and I'm in escrow to purchase the home at 413 Bay Meadows Way, Solana Beach for $450,000.  The Zillow Zestimate shows it for sale at $535,000 but I it was on the market for over six months so I got a deal.

I'm looking to put $33,000 down and buy the house with a $417,000 loan.  I earn $90,000 as a Managing Director for a financial services company (see my LinkedIn profile) and fell my income will justify my loan.  If you sign into LinkedIn, you'll see my picture that shows I have a trustworthy face (haha)

I have good credit although I don't know my score.  I just know that I pay cash for most things and pay off my credit card balances quickly.

You can contact me at brian@12mortgage.com or 858-777-9751.  My home number is 858-222-XXXX.  I'm talking to a couple of mortgage companies and would appreciate any insight you might give me.

PS:  I've attached a family picture with my new baby- We can't wait to move into our new home and hope you can get us affordable financing.

Why should you be "selling yourself" to a lender?  Contrary to popular belief, we aren't hurting for business in the mortgage industry; we're hurting for good, clean business.  Finding borrowers who need money isn't the problem; funding borrowers is.  The "mock" e-mail, while admittedly extreme, would open a loan originators eyes.  When followed up with a phone call, you would COMMAND attention.

Put your best foot forward when you want a loan.  It could save you thousands of dollars.

I hosted a webinar tonight about VA home loans, targeted at REALTORS, to better help them understand:

• how to present VA offers that get accepted.
• the alternative underwriting model the VA uses for income analysis
• how a VA home loan is a better choice, in some California counties, than a jumbo conventional loan
• why 10% down payment conventional is more expensive than 10% down VA

The AUDIO IS HERE and will open in a new window. The links are here.  Listen along and click through the links as I discuss them.

The FDIC developed an acroynm for the composite ratios it runs to “rate” the financial health of its member banking concerns.   An index, ranging from one to five is calculated and the FDIC premium charged to the institution is commensurate with its CAMELS rating.  “CAMELS” stands for:

• Capital Adequacy
• Asset Quality
• Management
• Earnings
• Liquidity
• Sensitivity

The Federal Reserve Bank of San Francisco explains the CAMELS ratings and the highly-sensitive nature of the findings:

Read More

Wanna have some fun?  I have an idea about how to “save” the banking industry.  Through mergers and acquisitions, the banking cartel grew to become infallible.  Dave Shafer pins the tipping point of this crisis to the repeal of The Glass-Steagall Act of 1933.  I’m not so certain he’s incorrect.

The intention of The Glass-Steagall Act of 1933 was to avoid this:

Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks

Do the 1920’s sound like this decade? As Dave Shafer points out,  the Gramm-Leach-Bliley Act of 1999 ENCOURAGED  the financial behemoths  explaining  “economies of scale” as the primary reason for the repeal of Glass-Steagall.  While financial institutions with strong technology infrastructures can reduce the cost of banking processing functions, the GLB act of 1999 discouraged what Greg Swann calls “flinty banking practices” and encouraged rampant speculation, this time in risky home loans rather than new stock issues.

We were so interested in free online banking that we fed the growing gorilla until he bloated to 1600 pounds. Today, we’re shocked that he busted out of the cage and is chewing up the zookeepers and zoo patrons.

Read the rest of this article

From Mark Madsen on the Mortgage Sales Blog:

My friends Mark Green and Brian Brady are hosting another webinar about mortgage social networking tomorrow.

Brian has mastered the art of mining social networking sites such as Facebook and Linkedin for the purpose of meeting new mortgage clients and referral partners.

I just wanted to quickly update everyone who reads the Mortgage Sales blog.

Here is the info from their invite:

Session One of our “Social Networking” webinar series focused on Facebook.  Thanks to the 190 of you who attended - we loved the feedback.  If you missed it, you can view the replay here:

http://www.topofmind.com/blog/index.php/2009/02/webinar-replay-brian-brady-on-facebook-and-social-networking/

You’ve asked for more, so please join Top of Mind Networks President Mark Green and “America’s #1 Mortgage Broker” and social networking expert Brian Brady for another exclusive webinar.

During this 45-minute session Brian Brady will explain how he uses Linked In and Meet Up to

1)  Position himself as an authority figure with clients and referral sources
2)  Stimulate conversations that drive selling opportunities
3)  Create warm introductions instead of cold calling

REGISTER FOR THE 10AM PST Webinar Here

Remember those impetuous, ne’er do well subprime borrowers and those greedy subprime lenders?  Writing about them is sooo… 2007 but I’m happy to report that both greed and reckless abandon are alive and well today….

…at Bank of America.

Remember Ken Lewis?  He’s that sober-faced, bespectacled CEO of the Charlotte-based behemoth that started out as North Carolina National Bank and the Bank of Italy in San Francisco.  Ken has presided over Bank of America since 2001.  Since then, he’s been binging on banks like a subprime borrower stripped equity out of the old ranch:  He bought Fleet Bank in 2004, MBNA in 2005, and ABN-AMRO, LaSalle Bank, and US Trust Company in 2007.

That wasn’t enough.  Like a subprime borrower addicted to Vegas, strippers, and shiny new Hummers,  he was having too much fun to see the market turn.  What did Ken do while the house of cards was a-tumblin’?

Read the whole story...

California REALTORs can be heroes with three simple words;

DID YOU SERVE?

One in ten Californians, between the ages of 21 and 55 are eligible for a VA Home Loan.

DID YOU SERVE?

VA loan limits, for zero-down home loans, in five Northern California counties go as high as $1,094,000

DID YOU SERVE?

California's economy is tanking but we, the REALTORS and lenders of California, can right this ship and stabilize this housing market, one house at a time.  We can spread the word about houses that were once out of reach but now are affordable with three simple words...

DID YOU SERVE?

Ask these three words of every potential homebuyer and you'll look like a hero if they served.  You'll introduce them to a power they might not have fully understood.  Veterans with down payments can use the VA home loan and get subsidized loan rates.  Veterans with little or no money for downpayments can tap billions of dollars, available for them, to buy a home.  If they answer "Yes. Sir!" (like they are prone to do) you must then ask yourself this question...

DO YOU KNOW?

Do you know about how the VA home loan works?  Are you scared to present offers for fear that they won't be understood?  Is your knowledge lacking in this very important and economy saving tool?  If so...

I CAN HELP.

Next Wednesday, March 11, 2000, at 7:30PM-8:30PM (P.S.T.), I'll teach you about these loans.  I'll host a webinar and explain:

• the zero-down loan limits for California counties
• how a purchase price, above the VA loan limit, might not require a 20-30% down payment
• why returning Iraq and Afghanistan veterans are buzzing about the fact that they can buy a home
• how residual income analysis is used instead of debt-to-income ratios for underwriting purposes
• how to assuage the fear associated with a VA offer
• why VA underwriters hardly ever challenge the VA appraisal
• how VA home loans can be a less costly alternative to jumbo and FHA jumbo financing
• why the VA home loans are a better alternative than Cal-Vet loans
• How to verify that a condominium complex is VA-approved
• How to secure a VA approval for a condominium complex

The webinar will be hosted at MeetBrianBrady.com and the call in line will be:

• Phone Number: (724) 444-7444
• Call ID: 81328
• PIN: 858-699-4590

We can help our state's ravaged economy by leading the turnaround, of this housing recession where it began...in California.  You can do your part, every single day, with three simple words, asked to every homebuyer you meet...

DID YOU SERVE?

Get educated by reading these informational articles about the VA Home Loan program:

VA Home Loans Offer Zero Down For Million Dollar Contra Costa County Home Buyers

San Diego VA Home Loan Limit Remains $697,500 Through 2012

Can More Than One Person Be On a VA Home Loan?

San Diego's VA Home Loan Broker

VA Home Loan Basics For Realtors

If you're buying a home in Contra Costa County, you need to let your REALTOR know that you served our country honorably.  There is a credit crunch going on and the new VA loan limits, for 2009, allow Contra Costa County veterans to purchase a home, with NO MONEY DOWN, up to $1,094,000.  Let me repeat that for you;

ZERO DOWN PAYMENT UP TO A MILLION DOLLAR PURCHASE PRICE IN CONTRA COSTA COUNTY

The word isn't out about this, yet.  Contra Costa County REALTOR Wendy Cutrufelli made this observation today:

Let me preface my response with the following information:  I am located in Contra Costa county (northern California) and VA financing hasn't been used in this market for close to 10 years.  So the fact that his realtor got a bank to accept VA financing AND pay for Section 1 repairs.......every fiber of my being wanted to tell this buyer to genuflect at his realtor's feet for accomplishing a miracle.

This is my fault, not the Contra Costa County real estate agents'; I should be screaming this message to them at the top of my lungs.  With a median price of $659,000 in Contra Costa County, more than half of the homes selling are covered by the new VA home loans.  With the higher limits, that percentage steadily increases as prices drop there.  Contra Costa County REALTORs would do well to ask homebuyers if the are eligible for VA home loan benefits.  After all, one in ten Californians between the ages of 21 and 55 have VA eligibility.

How do VA home loans work?  From an article I wrote on the HomeGain Blog:

The VA Home Loan Program is the only national 100% financing loan program. Veterans can purchase a home with no down payment and the seller can contribute up to 4% of the sales price for their non-recurring closing costs and impounds.

Often referred to as the VA No-No program, combining the max sellers’ closing cost contribution with a VA home loan affords buyers the chance to “get into a home”, for no money, at a below market rate.

There are no “stated income” options nor “interest-only” options for a VA home loan. Veterans must qualify on full income documentation. Their total monthly obligations (including the proposed mortgage payment) must be under 43% of their monthly income unless they meet the VA residual income qualification. Current service members receive an allowance for housing (BAH) and food (BAS) and those figures can be “grossed up” 115% for income qualification.

Appraisals are assigned by VA and ordered by the lender. Many lenders participate in a delegated underwriting program (LAPP) but some opt to let the VA underwrite the appraisal. General guidelines suggest that if the home is inhabitable, the loan can’t be made. VA appraisers, however, are not so stringent that the home needs to be “new home perfect”.

There is no minimum credit score requirement for a VA home loan although a 12-24 month history of good payments is required. Some lenders have imposed credit score minimums but a good mortgage broker always has a lender who will fund VA loans on the more relaxed VA-compliant credit requirements.

Frequently Asked Questions:

Are VA loans more expensive?

Heck no.  A VA home loan, with a balance under $417,000, offers rates that are equivalent to what a conventional loan costs.  Today, that interest rate is about 5.0%.  Loans from $417,001 to the $1,094,000 limit carry an interest rate of about 5.25%.  Compare that to the jumbo rates of 5.5% to 8% and the VA home loan program offers even better rates than the conventional loans.

Doesn't the VA funding fee make it more expensive?

I don't think so.  For a first-time VA home loan user, a 100% loan requires a 2.15% charge (added to the loan) but eliminates the need for costly PMI.  There are no 100% conventional loan options in Contra Costa County.

A 95% conventional loan (if you can get one) has an annual PMI charge equivalent to .875%.  The VA funding fee for a 95% loan is just 1.5%; that money is "recouped" in 20 months.  If you plan to own the home for at least two years, the VA home loan is much less expensive.

A 90% conventional loan requires an annual PMI charge equivalent to .625%.  The VA funding fee for a 90% loan is just 1.25%.  Again, the money is recouped in less than two years.

Do VA home loans have higher qualification standards?

Nope,  Quite the opposite. 

The appraisal can be a tad more onerous but that benefits you, the buyer, because they really analyze the property in greater depth than a conventional appraiser. 

The VA credit requirements don't have a minimum credit score but most lenders require a 620 credit score today.  Conventional loans become more expensive with credit scores under 740 and conventional loans over $417,000 require 660 credit scores.

Income calculations are more pragmatic as the VA home loan underwriters use residual income analysis in addition to the traditional debt-to-income ratios conventional underwriters use.  The VA also uses residual income analysis for determining "capacity".  From the VA website:

The primary method of evaluating a veteran's income is the residual income method.  Under this method, the underwriter determines that a veteran has sufficient income to cover day-to-day living expenses after paying housing expenses, taxes, and other debts such as car payments and credit card payments.

For example, if an 0-2 (with three years service) were receiving a base pay of $3484, a BAH of $2000 and BAS of $300, her total monthly income would be $5784.  We would deduct her taxes (on the base pay), of about $800.  She's single, without dependents so there are no childcare expenses.  This gives her contributory income of $5084.  If she had $1200 in monthly expenses (credit cards, car loans, etc), her contributory income is reduced to $3884.  The VA requires a residual income of $491.  In order to "trump" the debt-to-income ratio analysis, we would need residual income of 120% of that, or about $600; this would allow for a maximum housing expense of $3,200.

Using the "eight dollars per thousand" estimate, Lt (jg) Smith would be approved for a $400,000 VA home loan.

VA home loans offer Contra County Homebuyers a great chance to take advantage of fallen property prices and more generous underwriting guidelines.  I can't think of any other time, in my fifteen years of lending, where someone could buy a million dollar home with no money down.

Veterans in Contra Costa County can do that today.  Remember to remind your REALTOR that YOU are eligible and call me at (858)-777-9751.  You've EARNED it by proudly serving our great country.

PS:  Ask some of the Navy and Marine Corps veterans, whom I've helped, about my VA home loan expertise.

Can’t afford your mortgage?  Call your lender and ask them to modify the loan to a payment you can afford.  The lender representative will ask you for a stack of paperwork and try to get you to keep paying “something…as a sign of good faith”.  After three or four months, you may receive an offer to reduce your rate to 2-3%, for a five year period, to “get you over the hump”.

You still owe the money you borrowed, though.

The house is worth less than what you borrowed?  Ask for a principal reduction.  I tried helping distressed borrowers with the Hope For Homeowners Program; my efforts failed miserably.  Andrew Adams told me it would flop and it did.  We did SOME good (without the H4H program)…for about half the borrowers but the program was a flop.  Now, President Obama is trying to “entice” lenders to refinance your loan to 105% of its current value and empower bankruptcy judges to “cram a reduced loan amount” down the lenders’ throats.

I’m not so certain that will work, either.

The social ramifications of what Greg Swann calls middle class welfare are far reaching.  An angry cauldron, fueled by the resentment of the folks who are current on their mortgage, is bubbling over today.  Let me give you an example:

Two houses, on the same street in Santee, CA, were bought for $500,000, in the summer of 2006.  Eileen was a move-up buyer who plunked $150,000 down on her home.  Lou bought the home with zero-down financing.  Eileen refinanced her home loan to 4.75% last month, bringing about $35,000 to the closing.  Lou hasn’t made a payment in three months, has had his foreclosure stalled, and is hoping that March 4 will bestow a bailout upon him.

Eileen is pissed off and she ain’t alone.  What worries me isn’t whether or not the Obama mortgage plan is fair, it’s that the implementation of it could result in civil unrest.  Don’t get me wrong, the bailouts of the stupid banks who financed you are perhaps the greatest evil foisted upon our economy but now we’re pitting neighbor against neighbor.

Let me recap the “bailout” for you; not the banks but YOU.  The government tried to mitigate with a program that offered hope; FLOP.  Now, you can get your mortgage refinanced….maybe…IF, you can demonstrate that you can’t make your payment and miss a few of them.  If the lenders won’t play ball with this plan, you can voluntarily file bankruptcy and hold your breath that you get a compassionate judge to force the banks to give give you another shot.

There is another option. Let me show you an example of what I see in the same street:

Lou is paying $3,500/month for those mortgages (which he can’t afford).  Tanya is renting the house next door for $1,500/month.

Here’s the solution, Lou; walk from the mortgage.  Mail your keys to the bank and rent the house down the street. If the “teaser” payment was $2,500 (and you could afford that), save the $1,000 each month, for the next three years, and buy back your old house in 2012.  The FHA 203-b loan program allows borrowers, who have a foreclosure that is older than 36 months and have re-established credit , to obtain an approval.

Walk today and buy that same house back in 2012. Do you really think it’s going to cost a whole lot more than it’s worth today?

Consider a comeback if you will. It’s a great American tradition.