Written By: Karen Deis
(Disclaimer - We do not have any financial interest in The Freedman Report nor do we receive any referral fees.)
Aaron Freedman is President and Chief Analyst of The Freedman Report, a company that provides daily float/lock recommendations, mortgage market analysis and live MBS pricing to loan originators. Aaron is also a busy public speaker and the author of numerous articles on the mortgage market. For more information, visit www.FreedmanReport.com.
Just recently, I received a couple of emails from loan officers who have raved about The Freedman Report and the accuracy of the info provided.
The Freedman Report is a “lock or float” e-mail service, with commentary on both long-term and short-term economic forecasts. So, I decided to pick up the phone and find out what Aaron’s service is all about.
Karen: How did you get started in the mortgage business?
Aaron: Before I started as a loan originator at First Rate Financial in 2001 (Tim Braheem’s company that he sold), I was a currency trader. Part of the training I received from my mentor (at First Rate) was a quick review of how interest rates were determined. He regularly watched the bond market.
With my background, I said, hey, I can do this and started to do my own analysis.
Karen: What happened next?
Aaron: In doing my own research, I told my mentor that I thought the rates would drop within the next 2 months and that he should not lock any loans. The bond market changed to the level I predicted within 3 weeks. It happened again and again and another loan officer suggested that I email the other loan officers with market info and lock-or-float advice.
I started by sending the internal staff an email update every Monday, added a mid-week correction email and eventually I was sending an email notice every day.
Karen: When did you launch The Freedman Report?
Aaron: My website went live in June 2005 and it’s been a huge hit with loan originators.
Karen: What do you think the reason is for your success?
Aaron: My members have told me that they have tracked my predictions with other people who offer this service and they say it’s more accurate than other services they have used.
Karen: Have you tracked your predictions?
Aaron: Yes, and the accuracy rate has been 81% over the last 3 years.
Karen: What are some reasons why you think loan officers benefit from your service?
Aaron: I give them a clear, concise recommendation every day and never take a “neutral” position. My service helps loan officers save time and make or save extra money. We also help keep them informed about why rates are moving and what is happening in the industry in general. Plus, we provide information and material that helps them market themselves.
Karen: Who else offers this type of service?
Aaron: Market Alert, MBSQuoteline, Mortgage Market Guide and RateLink are a few of the other companies out there.
Karen: MMG is the 900-pound guerilla in the room. How is your service different?
Aaron: We don’t try to be all things to all people. We specialize in providing easy to understand reports and concise advice. We also consider our website to be extremely user-friendly.
Our subscription prices are only $599 per year or $59 per month for the report.
Karen: Loan officers want to know what the outlook is for the next 6 to 9 months!
Aaron: Here’s what I think will happen:
Mild Recession by the end of the year! The economy will weaken and the Fed’s will be forced to cut interest rates. It will result in a weakened stock market and investors will move their money into the bond market and I predict that rates will be at the 2003 refinance levels.
Housing prices will soften. Sales prices and values will decrease but this a huge opportunity for loan officers. With prices going down in conjunction with interest rates, you will see a new surge in purchase business. Homebuyers in the 21 to 28 years old range will be your new market because this will be a new opportunity for them to get into a home.
Small Refi-Boom will occur. People will attempt to qualify for a lower interest rate because their rates are adjusting upward or because they have a higher fixed rate from the last two years. I would recommend that you review your files for higher interest rate borrowers, as well as start working with your sub-prime clients to help them increase their credit scores so they can meet the stricter guidelines.
Karen: What effect will the predicted, higher foreclosure rate have on the economy?
Aaron: It will have an effect on housing prices and they will become more affordable for 1st time buyers. I think we will experience the largest pool of homebuyers that we have ever seen in the past. That will help support values in most areas, unlike previous price declines.
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Karen: I ran a mortgage branch in Texas during the oil crisis and the foreclosure rate was out of this world. I did not look at it as a problem but an opportunity because the foreclosed properties were selling for 70 cents on the dollar and real estate investors flocked to buy them—both for long-term investments and fix-and-flip strategies.
I remember one investor I worked with who purchased 29 foreclosed homes at one time and I completed one 1003, changing in just the property address and disclosing the other 28 properties to be purchased. One deal—29 closings and commissions.
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Karen: What should loan officers do now to prepare for the changes you mentioned?
Aaron: There are 4 things I would recommend:
- Mine you database and prioritize “by interest rates”. Look at who has the highest rates, if an ARM, when is it scheduled to adjust, and get on the phone and talk to them. As the interest rates drop, create a new list and start making calls.
- Mine your database for credit scores and work on helping your past clients increase theirs so you have the opportunity to refinance their mortgages in the future.
- Partner with financial planners. With stocks predicted to decrease by the end of the year, their clients should consider real estate as an alternative investment.
- Niche Marketing – Find real estate agents who work with bank & mortgage foreclosures. Join a Real Estate Investment Club. Find clients who fix and flip properties.
Karen: Would you mind sharing a sample of your newsletter?
Aaron: Sure, and I would also like to offer your subscribers a 30-day free trail so they can compare with the service they are currently using!
Sample Newsletter
Special link to 30-day Free Trial Offer
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