We tend to concentrate only on what's happening in our own world of mortgage lending. All to often, there are things that are happening around you that could have a direct effect on your business.
Here are some news items you should know about:
Leads for 1 penny!
You have probably noticed a glut of email advertising, "Mortgage leads for just one cent". While the ad tells you these are OLD leads, they don't go quite far enough and tell you JUST HOW OLD they are.
In addition, the minimum order is $500. At 1 cent per lead, that's 50,000 leads. Come on! What are you going to do with 50,000 leads?
Back to my story. I routinely "reply" to email ads to refinance my mortgage.
I recently received this email:
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AmeriFund has a lender that has inquired about your 327 Soo Line Road home loan.
You had been in the market for a new loan back on 5/7/2004 10:00:00AM and do to current Hudson market changes you can take advantage of a new loan package that was designed with your home in mind.
You qualify for a $4013.00 payment reduction along with an $80000.00 equity cash out.
For more information and to get this quote sent to your email. Please visit us below and you have an option of getting 4 additional quotes for other lenders.
www.FirstFiscalExchange.com.
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Note the date. This solicitation is from an email REPLY that I made over one year ago. When you click thru, you will find a "brochure" website sponsored by a company called CyberCents.com.
On a side note, I received an email from a company marketing penny mortgage leads. The server is located in Germany but the address (in the email) was in Houston, TX. The speculation is they may have been banned from spamming in the U.S. and switched to an email service overseas where the rules are not as strict. What this might mean is to watch out - if the company switched their email server outside the U.S., they might be in deep trouble with anti-spam or do-not-call regs.
Word of advice: Don't throw your money away - unless you don't have anything better to do with your $500.
Realtors® Display Properties with New Mapping Website
Over 60 MLS boards throughout the United States have signed on to a new service called MapTracks.
It's a system where consumers access a real estate agent's website, click on ANY area of a map, and instantly see all the properties for sale. Listing can be searched by city, zip code, school district and even by the name of the street. Consumers also have the ability to create a "wish list" where they can request to be notified if a property that meets their search criteria comes up for sale in the future.
So why would you care about this? It's your chance to work with real estate agents who have this unique service and provide financing information (or website links) for ALL the properties that are on the site. So let's say that I go to the website and search a school district and 12 properties show up. You could provide an additional link for each property for the 3 different financing options along with payment information.
Checkout www.wolfnettech.com for more information on the markets currently on the system.
Builders Take Steps to Curb Speculation by Investors Out to Make a Quick Buck!
In recent testimony about housing prices, Alan Greenspan warned the Joint Economic Committee, "speculation by investors has played a greater role in generating recent housing price increases".
What he meant was that investors, buying the first phases of subdivisions or condo/town home developments have the effect of driving up housing prices way above inflation, labor and material increases.
In a recent survey of single-family homes (or condos) sold within the last year, the National Association of Home Builders (NAHB) has said builders report that speculative investment has tripled. While underwriting is stiffer with larger down payments, higher interest rates and cash reserves, it's the "interest-only" mortgage product that is being used.
As a loan officer, if one of the pillars of your business is working with investors who are purchasing 1st phase, speculation-type houses, be aware that builders are now limiting the number of non-owner occupied homes, per phase. Nor will they allow the contract to be assigned to another person before closing and almost 1/3 have included a provision that if the property is sold prior to one year, that the builder has an option to buy it back - but only at the price they paid for the home.
With builders limiting the number of investors, you might want to re-position your business to include Real Estate Investment Clubs - which will be covered in our next issue.
Karen Deis
Ace Reporter
Copyright, 2005, LoanOfficerMagazine.com
