Your MN Mortgage Mom's Blog

Have a Terrific Holiday Season,

Sherri Sherpy

MN Mortgage Mom

Very interesting article on the exiting of MN Mortgage Originators.  Personally, I am quite happy...I've always thought there was too much "riff raff" in the first place!  My belief is that many of these leaving the industry are those that got into it in the first place for the fast buck, with little regard for building a career with the consumer's best interest as a priority.

What have you seen in your own areas of the country? 

Today, the Federal Reserve is set to propose a new set of regulatory rules to crack down on abusive lending and protect homebuyers from predatory lending.

The proposal will address many issues:

Not allowing lenders to give homebuyers loans they cannot afford:  In the past, lenders have used and abused ARM loans that begin with a very low rate, only to raise substantially in 2-3 years.  In qualifying the borrower, lenders only needed to use the start rate...one reason for the state we are in, homeowner's rates are going up and they cannot afford the new higher payment.  This rule would restrict lenders to ONLY qualify homebuyers at the fully indexed rate, not the start rate.

MN Mortgage Lady's two cents:  Good!  Allow a potential homebuyer to reap the benefits of a low introductory rate, but qualified at the fully indexed rate.  I want to add: Disclosure, disclosure, disclosure!  We should also be required to fully disclose through CLEAR, signed documentation that the borrower is getting into an ARM and that this is what they truly want.

Restrict "Liar Loans":  The Fed is going to propose the restriction of stated income loans.  The thought is that homebuyers were qualified for loans based on a facetious income (thus, the liar loan) and in reality could not afford the home they were buying in the first place.

MN Mortgage Lady's two cents:  I have huge issues with this proposal, particularly for the self-employed borrower with stellar credit and reserves in the bank.  Stellar credit borrowers are savvy with their finances.  They have stellar credit for a reason.  The self-employed borrower utilizes every tax break and deduction known to mankind.  They have to.  And why not?  On paper (ie: tax returns), their income looks like dirt...good for tax purposes, bad for getting a mortgage.  Should the self-employed, stellar credit, reserves in the bank borrower be thrown out of the home financing ring because the Feds think that every stated loan is a "liar loan"?  Absolutely not, in my humble opinion.

Prohibit, or even limit prepayment penalties: Self explanatory

MN Mortgage Lady's two cents:  Woohoo!  I'm all for it.

Disclose broker incentives:  They are talking about "yield spread premium".  The spread, or dollar incentive, given to the broker for an interest rate given to a borrower above the par rate.  We're not clear on exactly how the Fed is going to address this issue, but disclosure is on the radar screen.

MN Mortgage Lady's two cents:  Don't take it away.  This is a free enterprise country and even brokers are entitled to be prosperous.  But disclosure to the borrower?  Absolutely...let's go.

Encourage or even require escrowing taxes and insurance:  In the past, subprime lenders did not collect for taxes and insurance.  Heck, they didn't even disclose the true cost of owning a home to the borrower...conveniently not mentioning taxes and insurance as part of the total cost.  In the end, the homeowner, once again, could not afford the home because taxes and insurance was not considered.  The Feds are considering, in the least, disclosure of this cost.

MN Mortgage Lady's two cents:  First, I can't believe that loan officers would deliberately hide this information in the first place.  Albeit, I can't believe many things that go on...shame on them.  Disclosure is great...I believe in disclosure whole heartedly.  But requiring escrows?  I say yes for less-than-good-credit borrowers.  We all need to reduce risk.  But back to the stellar credit borrower?  Again, these people are savvy...I think it should be their choice after disclosure.

Require better disclosure overall:  Again, disclosing all aspects of the mortgage loan in a clear and timely manner.  The feds want to ensure that consumers have the ability to avoid loans that are not in their best interest.

MN Mortgage Lady's two cents:  Although I do not need the Feds to tell me to disclose, obviously some do.  Again, I can't believe and it just shocks me that lenders and loan officers blatantly try to get away with sneaky practices...all in the name of making a buck...forgetting the borrower and homebuyer and the effects of their bad practice on their clients' lives.  Shame on them, shame on them.  In my humble opinion, I hope their butts end up on the curb.  Hats off to the Feds...Let's disclose all day long.

Sherri Sherpy

MN Mortgage Mom

Cash Donations.....

                        Made Easy!!

 As a member of the community, I am very excited to share a new program to financially assist our schools.

With 2 daughters of my own, I have a great interest in helping our schools to succeed.  With federal and state cuts, I am sad to see the sacrifices we have had to make.  These cuts affect our children, staff and faculty and everyone in our communities.

In an effort to "give back", I have developed the "Homes Supporting Schools" program. This program will help help our schools financially and add another resource to supplement our schools' needs.

As a Mortgage Loan Consultant, I have had the great pleasure in helping hundreds of people realize their home ownership dreams.  I have also had the great fortune of building incredible, long-lasting friendships.  Recently, I  had the opportunity to brainstorm ideas on how we can give back as a community.  I wanted to know how I could help.  The idea of supporting our schools came up time and time again...

To that end, The "Homes Supporting Schools" program was developed and the word has enthusiatically spread through the community.

Delivering the Cash Donation

Each time I am able to help a client with a mortgage loan, whether it is a refinance or purchase of a new home, a cash donation of $200.00 will be given to the client's school of choice, after closing.  The school can use the funds for PTA, individual classrooms that have specific needs, pay for sports equipment...The list is endless!

We don't want it to stop here...One client asked, "Can we spread this to other communities, too?"  Absolutely.  Spread the word to family and friends.  Our schools from all counties and across our state need help.  They only need to mention the "Homes Supporting Schools" program and I will be happy to donate the $200.00 to their school, after closing, too.

It is with great pleasure to be able to present this program to our schools.  With your help, I know that we can make this program a huge and profitable success.  Let's start now by giving back!

Sherri Sherpy

MN Mortgage Lady

ssherpy@minnmortgage.com

THE POWER OF A TESTIMONIAL 

In my opinion, a testimonial is the strongest marketing tool you can use that provides the biggest returns and guaranteed to increase your business.

Think about it, consumers are attracted to people and places that come highly recommended.  For all of us in a sales career, it's easy to toot our own horns.  We are all great at what we do, right?  To get someone else to believe in that and trust us can be quite another story.

The testimonial allows you to deliver a compelling "story" of yourself through the eyes of others you have served, creating credibility and believability.

How do you get a testimonial?  First, let's identify the 2 types:

• Client testimonial
• Expert/Industry testimonial

Which one do you get?  BOTH!  In my career, I have developed a folder of both client and industry testimonials.  I use them everywhere.  Everytime I meet with a new client, everytime I do a database mailing/emailing and everytime I meet with a new referral partner.  I also put them in with my flyers at open houses.

So, how do you get testimonials? ASK!  It is truly that simple...just ask.  Happy clients and appreciative referral partners are more than willing to help you.

Here are a few ways that I ask for them.  (Let me know yours, too!  I am always looking for new ideas.)

• The first time I meet with a client, I give them 3 business cards and a testimonial sheet (I print them in booklet form from Publisher).  I tell the client that one business card is for him/her.  I then go on to let them know that I am going to provide such wonderful service that they will WANT to give out the other 2 to friends, family or anyone they know who will need home financing in the near future.  I then show them the booklet and let them know that I would truly appreciate it if they would help to contribute to my Book of Fame and provide me a testimonial of their experience with me after the closing.
• Because I send out my testimonial booklet with my mailings, it makes it very easy for me to ask for a testimonial when I am making database calls.  It also give me a reason to call!
• After a closing, I will often ask the listing agent if he/she will just take a moment and email me a quick testimonial on my level of service and experience during the transaction.  No one has ever said No!

Start your 2008 with developing your own Book of Fame, if you haven't already.  Talk to your most recent clients, ask other agents, your broker /manager, your loan officer.  Just start!  It's cheap, it's easy and it is VERY REWARDING!  Makes you feel good, too, when you read all those kind words from people who appreciate what you do! :)

Sherri Sherpy

Minnesota Mortgage Loan Consultant

A few years ago, we lost a friend, a companion and a family member.  His name was Pup and he was a beautiful, 11 year old black lab.  Kidney disease took him.  He was incredibly special to us and the loss was sooo hard.  I remember the final days...his body was so weak, but his mind was just like it was when he was 2.  I couldn't let go just yet and I filled an air mattress, covered it with lots of comfy blankets and that's where Pup and I slept, cuddled and spent our final time together.  When the day came to say goodbye, we knew he was ready.  He would look at me on that mattress and say, "Mom, I'm too tired to fight anymore."  Uuugh...that was one of the worst days of my life.  I still reflect on his beautiful life...sometimes with tears and sometimes with smiles.  We loved him dearly and still miss him terribly.

And my husband and I said never again.  The loss was too hard to go through a second time.

Well, that didn't last long.  Our home was too lonely.  It was just too quiet.  Our kids said, "How bout a puppy?  P-L-E-A-S-E!!!"  A puppy!  Do you know how much work they are?  No way!

For any of you who have kids, well, they can be quite pursuasive and in their world, yes means yes and no means maybe.  They continued to "work" us...nothing like hitting mom and dad when we're down!  Our hearts were still broken and those little stinkers knew it...they preyed on our weakness.

So, a puppy it was!  What kind should we get?  Ha!  Not a cute little terrier that I could galavant around in my foo-foo bag to all my closings.  Not even another lab...we didn't want to feel like we were trying to replace Pup.  How about an Old English Mastiff?  "Mom, they are so cute and we can have lots of fun with it!"  Are you nuts???  Those things are HUGE!  But I couldn't help myself...I went straight to my handy dandy laptop and started doing the research...

The next thing we knew, we were driving to Cambridge, MN to pick up our cute little 8 week old Mastiff from a Mastiff breeder.  And cute he was!!!  11 pounds of wrinkly skin and baby slobber to boot.

That was 2 years ago.  Now, at 2 1/2 years old, everything is gotten REALLY BIG.  Big body (lordy, this guy is almost 200 pounds), big paws (or should I say massive), big slobber (our home is littered with bibs to catch it before it slings), even big poops.  Okay, I could have probably skipped the last visual, but dang, everything about this wonderful beast is BIG.  Sorry if I offended anyone.  Small digression...we keep teasing our next door neighbors, who are one of our dearest friends and non-pet owners that we're going to build sculptures out of the stuff...Ha!  Let me just say, it's a whole lot of poop.  Dad's daily clean up job...

Back to the 4-legged child.  His name is Mic.  He's cute, he's funny and he's a whole lot of work.  First came the potty training.  For all you who have a puppy, invest in Nature's Miracle.  It IS a miracle...the stuff WORKS.  We now own stock in the company :).  Let me tell you, potty training was not fun.  Mic just didn't understand...he was confused by the whole process, but we were successful...2 weeks and he figured it out.  Kind of reminds me of my First Time Home Buyer clients!  Now don't get me wrong...I love first time home buyers...they are my niche.  I really enjoy working with these people.  The lack of understanding and confusion about the whole process is what grounds me...keeps me to the basics with patience, kindness and understanding of my own.  Kind of like Mic and the whole potty training business.

And he whines...he whines when he is bored, he whines when he wants attention.  He's the perfect little toddler.  And when I want him to do something (we're STILL working on obedience and tricks) he just looks at me like "you're kidding, you really want me to do this?"  Think about all those underwriters out there that get paid the big bucks to make all of our lives a little bit miserable.  They want this, they want that...conditions, conditions.  I call my wonderful mortgage client and I can feel that look right through the telephone wires.  "Are you kidding?  You really want me to do this?"  Don't kill the messenger...we've got a doozy of an underwriter on our hands...we all take a deep breath and work through it together.

What makes it all worthwhile?  His love and appreciation.  When he wags his tail because he's so happy to see us.  When he slobbers on our face to show us his love.  It's unconditional.  When the day is done, all the work, the headaches and frustration melt away.  He adores us and shows it in so many wonderful ways.

I have been blessed with so many wonderful mortgage clients throughout the years.  Through the mutual patience, admiration and appreciation for hard work well done.  The appreciation of my clients does not go un-noticed.  It's what makes me tick and move forward.  It is rewarding and fills me up with warm fuzzies.  Just like Mic...warm fuzzies and a little slobber to boot.

This industry has gone, well, let's just say, completely bonkers.  With mortgage guidelines changing almost on a daily basis, it's hard for even the seasoned professional to keep up.  Buyers who were approved just 6 months ago, now may be ineligible due to tighter lending restrictions.

Now let's add to the craziness...mortgage rates and the upcoming Fannie Mae and Freddie Mac changes and we are ALL affected...the buyer, the Realtor and me, the mortgage consultant.  The buyers approved even 1 month ago could be tossed to the curb, fast.

You're probably thinking, "What in the world is she talking about??  Mortgage rates are at a 2 year low!"  You're absolutely right.  For the moment, everything looks great.  But, for buyers just "kickin' the tires" or waiting for the Spring Market, they could be terribly disappointed come March 1st.

First the good news...We all have a little time!  It's only December and with a little communication to our buyers, we can inform them and help them to move forward before these ugly changes take place.

Here's the dirt:  As of March 1st, 2008, Fannie and Freddie are implementing new Loan Level Price Adjustments (LLPA's), of up to 2 points, that will affect buyers under a 680 credit score, who are not making a down payment of at least 30%.  Who makes a 30% down payment anymore???  And how many buyers have a credit score below 680?  We are talking about a whole lot of people.   

This implementation will raise rates and ultimately out-price some buyers right out of the market.

What can we do?  Get out and talk to people!  Share the news.  For once, Fannie and Freddie have made an announcement with a little time to spare.  Get out and start talking.  I am and the information has been much appreciated.

Sherri Sherpy

Minnesota Mortgage Loan Consultant