Washington Mortgage Planner-straight up mortgage advice and commentary

Good morning! I hope everyone is well. I wanted to touch on the new buzzword in our industry "declining markets". This came about because last Friday I lost a loan to another lender who I believe may not have the necessary information to make the loan work. Once again, it's critical that we know what we're doing these days so as to avoid borrower, realtor, etc. disappointment.

Declining or soft markets are categorized by properties being on the market for more than 6 months. Also, please note that condo's are considered riskier loans than homes these days. For a list of all the criteria lenders use to determine a "declining market", log onto to their website, call your rep., or Google "declining markets". The bottom line is your client may not be able to borrow as much as they thought. For example, it looks like the loan I lost will need to put 10% down on their purchase rather than 5. This may kill the deal.

I'm curious if banks will follow the same critieria. It definitely puts a crimp in our arsenal. The one piece of good news is it appears FHA will not be affected. Of course if it's a condo. not all condo's are FHA approved. In sum, declining markets appear to be a way of life for the next several months. It could mean your borrower isn't able to borrow as much as they would like to. Do your due diligence so we're not all disappointed. Have a great day!

On Wednesday, I was crying the blues. Business has been challenging and I was upset because a loan I probably could have done 3 months ago was a no go for now. So I decided to send out an email asking for referrals. I sent this to my database of over 500 and probably got between 50-100 responses. What a great way to finish the week! Needless to say, I was fired up for another day.

Out of these responses, obviously several were supportive even if they didn't have anything for me. The most important thing was they appreciated hearing from me and wanted to help if they could. The interesting thing was several responders were actually interested in having me look at a loan for them. So now I have several people I'm potentially going to be working with.

The moral of the story? Never give up. Keep on plugging. Market to your database. Grow your database big-it will only pay dividends for you. If you haven't implemented email as a part of your marketing campaign, do it now! It's free except for your time. It probably took me 5-10 minutes to craft my message and it was sent personally to over 500 people. Let me know If you'd be interested in hearing how I set this up. This applies to any business. It's important to touch your customers again and again in different ways.

The onus is on us. What are we doing to make a difference and be different in a "normal" market? Have a fantastic weekend!

Paul

Hi all: I've been in the mortgage business for 2 years now and found myself today needing to take a break. It all started when I had a borrower who is self-employed with a 700 credit score and significant assets send me their tax return. In the loan application, I documented all the income, ran it through DU (FNMA's desktop underwriter) and got an approval. I then submitted the loan to my preferred lender only to have the underwriter want to look at tax returns (even though DU didn't call for that). So I got the tax returns and, of course, they show a lot less income due to writeoffs. I called the underwriter and they stated that unless the income on the 2007 tax return is significantly higher, the loan probably won't get approved.

Here's the rub. My borrower got approved by her other lender (they had the mortgage on one of her rental properties which she refinanced) with no documentation at a very favorable rate. And I told my borrower there's a good chance that the current servicer might be able to get a refinance done without documentation. Again, this is a long-time borrower with good credit, significant assets, and a low loan-to-value. 3-6 months ago, I could do this loan at a great interest rate. Now, it doesn't make sense. Let's hope she has the patience to stick with me. If you're a consumer, you can still get a loan. This is contrary to public perception. You just need to be patient and make sure you're responsible with your credit and finances.

I'm glad tomorrow is a new day. I always know when I'm at the boiling point. Most of the time, I find I can't help people these days even though that's my goal. But I remain hopeful; who knows what tomorrow will bring! Have a great night!

Paul

Hello from the great Northwest! It probably wasn't more than 3 months ago that I attended a seminar co-sponsored by Genworth Financial and Washington Mutual. Wa. Mu. assured all of us brokers that wholesale was here to stay and was actually quite profitable. Fast forward to today and Washington Mutual announced that they are exiting the wholesale loan business, closing all of their home loan centers, and originating loans exclusively through their retail branches. How far the mighty have fallen.

Nor only do I have friends who work for Wa. Mu. but my company had a significant number of loans placed with Wa. Mu. the last few years. I think Washington Mutual is a class outfit and I'm pulling for their survival. I remember when they were a much smaller Northwest only bank. Now who knows. Their shareholders meeting is April 15; it will be very interesting to see what happens.

Eventually all these bad things will shake themselves out. It may take the rest of this year but the hangers-on will prosper. In the meantime, obviously, the wild ride isn't over. Who's next? Will Countrywide actually complete its merger with Bof A? Are there other Bear Stearns out there? I'm always interested in your thoughts. I believe Wa. Mu. will survive although it might be a takeover candidate now; especially if they keep losing money which is projected. Have a great night and keep the faith!

Paul