Washington Mortgage Planner-straight up mortgage advice and commentary

To blog or not to blog. That is the question!

Thu, 05 Nov 2009 16:47:34 -0600

Hi all: Good afternoon! I was thinking about blogging this morning. This was after attending a seminar last night on SEO related stuff. The so-called expert recommended that we not write articles that are displayed on other people's websites ( In this case the site was a local one, Biznik, but it could just as easily apply to Active Rain). His point was that we have no control and its much easier to set up our own blog on Wordpress, etc.. I've heard this argument before.

I love being here on Active Rain. To me, it's about more than blogging; it's about building long-term relationships and learning. That being said, I also love to write. I would imagine most of the prolific bloggers here do as well.

So should a person blog or not? I don't think it's for everyone. Personally, if you don't enjoy writing or can't string two sentences together, it might not be worth it. The information you're putting out there in cyberspace needs to be concise and well written in my opinion. If you're going to blog, take the time to not only spellcheck (there's one here) but make sure it's grammatically correct. I know this sounds pretentious but, again, I think it's important that what you put out there reflects your knowledge. Part of that is being aware of correct sentence structure and spelling. Mind you this can be learned.

Again, I think it's important that we embrace new ideas and technology. I've read so many success stories here about Rainers' blogs working. I encourage you to give it a try if you haven't already. After all, you never know who might be reading! Have a fantastic day!

Paul McFadden

The New RESPA. What does it mean for us?

Thu, 05 Nov 2009 08:41:37 -0600

Good morning all! Yesterday I sat through an afternoon session on the new RESPA which will be implemented on January 2, 2010. Not my idea of a fun afternoon!

Here are my thoughts. One, I've noticed a lot of people seem to overreact about the changes in our industry. Case in point: The HVCC laws that were implemented May 1 of this year. Yes, we could no longer choose our favorite appraiser and values are occasionally coming in lower. But I've also seen a majority of reports come in fine and actually much quicker than before.

So what about the new RESPA changes to the Good Faith Estimate? The GFE will now be three pages long and there are a number of tolerance levels that are allowed. The big one that has zero tolerance is the interest rate cannot change from the Good Faith Estimate unless a new GFE is provided (re-disclosed). My company already does this anyway. The other big thing I noticed is that YSP must not only be disclosed (this has been enforced by wholesale lenders for a while now) but the borrower is paid this and then needs to pay the loan officer.

I'm sure there will be complaints about these new guidelines. Personally, I started in the mortgage business 3 1/2 years ago and have seen it all. I know we'll weather this storm as well. For those mortgage brokers out there who rely on YSP and hiding their pay, changing terms, etc., the gig is up. My boss commented that this may mean the end of the broker. I'm not so sure but will say this. As with anything it pays to be upfront. Disclose to your clients how you do business and how you get paid and there shouldn't be a problem. Ultimately, we're in the trust business. Our clients believe what we say. Shame on those who abuse the privilege. Thanks for reading! For more information on the new RESPA changes you are welcome to contact me. Have a wonderful day!

Paul McFadden

How well do you work from home?

Thu, 29 Oct 2009 09:09:50 -0500

Good morning all! I hope you're well. I decided to work from home today. I've been fortunate since the first of the year because I have such tremendous support from my company. In fact, I haven't worked from home this much in years.

Granted, my drive to Bellevue is 30 miles one way. This can take a minimum of 45 minutes and is often tiring. I also have the luxury of being all by myself most of the time. My wife works and the kids are grown and gone. How does working from home work for you?

I think the key is to minimize distractions. I could see how it might be difficult if you still have kids at home, for example. I also try and break up my day and get out of the house. Today I'll probably work out this morning and then come back and make phone calls, send emails, etc. This evening I'm meeting a couple buddies for a beer in Renton.

How often do you work from home? I keep hearing about the dawn of the virtual office. Personally, I like to have my cake and eat it too! Most of the time I head into out corporate office (probably 4 out of the 5 days a week I work). I find the camaraderie and support to be helpful.

But there are days where I just don't feel like being around the noise and chaos no matter how positive it might be. That's when I opt to work from home. So tell me your story. How productive are you working from home? I think if a person is disciplined enough it can work great. Have a fantastic day!

Paul McFadden

How real are you? Transparency is everything!

Fri, 16 Oct 2009 09:28:28 -0500

Good morning all: Up here in the great Northwest, it's Fall. Today is cloudy and cool and we've had quite a bit of rain this week.

I've been meaning to write this blog for some time because I think its important. The question is how tranparent are you? The reason this came to mind is I recently had to tell a client exactly how I got paid. Granted, I've always done this but, still, most clients don't understand or pay attention.

In my case, I was working on a huge loan and had tried to submit to an East Coast bank (big mistake) who didn't understand my client's income as much of it was in the form of bonuses. After that loan submission failed, we were scrambling as we had to pick a new lender with a higher rate and not much time to close. Needless to say, everyone was a little stressed.

I had to call my client and explain how not only was the rate higher but also how I got paid. In the first deal with the East Coast bank, I was being paid yield spread premium and wasn't charging my client any origination fee. When I submitted the loan to the second local bank, not only was the rate higher but I had to pay .25 and charge an origination fee. In the meantime, my client had gone to Lending Tree and gotten a quote for a no fee mortgage. I requested the Good Faith Estimate and saw that the competing lender had unnecessary junk fees in the loan and a slightly higher rate.

When I called my client, I levelled with him about how I got paid. I'm not sure how happy he was about the change but hope he appreciated my candor and transparency. The bottom line is we got a loan approval yesterday and it appears we will close on time. My client will be happy as they're realizing buying their dream house. I also learned something about going with the lowest rate projected. Most of the time, the lender either won't approve the loan or they can't honor that rate. How transparent is that?

In the three and a half years I've been in this business, I've seen so much. One of the things I didn't like was working with people who were in it just for the money. They weren't transparent at all in my opinion. So that should be everyone's goal; To tell it like it is. We all have our warts. But one way to build a great business is to be as upfront and honest as we can. If not, I'm not sure we belong! Thanks for reading. I invite you to share your stories about how transparent you are in your business. Have a great day!

Paul McFadden

Southeast King County Market Report

Wed, 21 Oct 2009 10:19:07 -0500

Good morning! Today is cloudy, cool, and rainy; typical Pacific Northwest Fall weather. Have you carved your pumpkin yet?

I wanted to give you an update on Southeast King County and what I'm seeing. This is where I live. I actually work in Bellevue but have noticed some encouraging trends in the cities of Maple Valley, Kent, and Auburn.

I've started to see builders finishing their developments. For over a year, there were just vacant lots. Now, I'm seeing houses being finished which is a very good sign. With prices dropping by as much as $100,000 even on affordable homes (think $250,000-300,000 price range now) and the first-time homebuyer tax credit still in play, I'm hearing reports of increased closings.

All this needs to be tempered with the fact that banks are in serious trouble up here (there are several on the FDIC's watch list who can't lend money right now) and there are still over 1,000 homes scheduled for auction every week.

Are we out of the woods yet here in Southeast King County and other parts of Puget Sound. I think its too early to tell but, again, I'm encouraged by the return to commerce of the builders. I'll keep you posted! Have a great day!

Paul McFadden

It really IS all about the database . . .

Tue, 20 Oct 2009 08:02:41 -0500

This is a great post that really gets back to the heart of how we all can build a successful business. At least it's working for me! Have a great day!

Via Barry Owen (Keller Williams Realty):

We've just brought in a few new associates who have Super-Star potential.

I honestly believe that EVERY person has Super Star potential in whatever they do . . .

as long as they understand that business is not a solo adventure.

You gotta build a strong TEAM (Together Everyone Achieves More) to get to the top.

In this economic environment, your ability to build a strong TEAM while likely define your ability to survive.

Building a team begins with building a database.

Each new agent I coach is sticking a toe in the water with a measure of trepidation aware of all of the unknowns. Sure, there's a daunting mountain of stuff to learn when beginning a career in Real Estate (or any other business).

There's all the "mechanical" processes . . . Learning how to work with clients, the paperwork, the rules and laws, the local customs, the language . . . and the million (or so) nuances that go with all of that.

Just when you think you've got it licked, something else pops you in the head . . .

My advice to these folks is to allow some messiness . . . Live dangerously . . . Step into the unknown with reckless abandon by focusing 100% FIRST on building a strong database and quit worrying about the details.

Until there are leads, there will be no income . . .

The worst thing that could happen is that you could slip up and catch a client not knowing what to do with them.

AAACK!

So the first lesson in building a team is to find some people who "have your back" . . . Develop relationships with 4 or 5 people who are already doing what you want to do and doing it well and gain their permission to lean on them for advice and support when you catch a client.

This can be accomplished in a single pass through your office introducing yourself to everyone you see . . . and attending meetings and training sessions making a point of meeting EVERYONE with whom you cross paths. 4 or 5 people will connect with you, and you'll be on your way.

The Database . . .

If you don't have one, what do you use for email?

Odds are good there is no need for you to spend money on a fancy Contact Management software. the purpose of Building a database is to capture the contact information of EVERYONE you know and put it in a form that will be useful for "leveraging" communicating with all those people in a systematic way.

So . . .

Whatever the platform, just be sure that it is searchable so you can find someones info when you need it.

Be certain that it has the ability for you to organize people into "categories" or "Groups" so you can mass communicate specific targeted messages when you wish.

It's best if it is "infinitely accessible" . . . Meaning On-Line so you can get it from any computer on the planet.

I LOVE Gmail as a good start.

SO many people are using gmail as an email provider and haven't the foggiest notion that it has (FREE) a great little Database Manager built in. Just click the "Contacts" link on the left column and begin playing in there.

Add everyone you know . . . one at a time . . . and make contact with each one as you add them. With each contact, let them know that you are creating your database and would like to up-date their information . . . and let them know that you are in the business of helping folks Buy and/or sell homes :-)

Gmail lets you "cheat" because if you have communicated with them previously, you can add them to your contacts with just a few clicks.

You can create groups.

You can mass email messages.

Use the calendar to track your appointments . . .

and use "Tasks" on your calendar to schedule follow-up calls.

Some of us are "more evolved technologically" than others and may scoff at this blog post because their "Crackberries" are already linked to their high powered database management systems . . . But there's a lesson here for YOU, too!

Doesn't matter who you are, the real point is that if you want to be all that you can be in ANY business, it all begins with your database . . . PERIOD!

IQ or talent are not relevant . . . It's who you know and who knows you and how effectively you are able to communicate with them (ie the strength and utility of your database) that separates the wheat from the chafe.

I'm just sayin'

Best,

b

-
Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

Paul McFadden

Injecting personality into your blog and elsewhere-do you do it?

Wed, 14 Oct 2009 09:02:41 -0500

Good morning: I keep reading about injecting your unique personality into your blog and elsewhere. The question is, do you do it? There are some wonderful writers here and, frankly, I love the writers who write something different and thought provoking. Yes, I know. We're supposed to be updating people on what's going on in our world. And I usually come here to get the latest information on our world. In fact, that's the reason I came to Active Rain in the first place! But, again, I like to get to know the person as well. What better way than by telling us something personal about yourself. I'll start.

I'm 50 (turned in March), married for 17 years (we met on a blind date), a brand new Grandpa (our grandson Samuel just turned one month old), and work for the coolest company around (The Legacy Group is either the largest or second largest privately held lender in the state of Washington) and feel blessed to have wonderful family and friends in my life.

I started over in the mortgage business 3 1/2 years ago and obviously have seen everything known to man in that timeframe! My business is just starting to gain traction and I'm thankful for all the referrals I increasingly get. In building my business, most other things that I enjoy have taken a back seat. I'm hopeful that will ease up a bit in the next couple years because I miss travelling and the other things I like to do.

I'd like to think I have a myriad of interests. Those include wine, good and different types of food, staying fit, and reading all types of literature. My personality has been tested and I'm a phlegamatic person so not so driven to conquer the world. In fact, I sometimes put off today what can be done tomorrow!

O.k. I got the ball rolling. If you're comfortable with sharing, let me know about you. We all have our own unique and interesting story to tell. Thanks for reading! Remember to always inject your unique personality in whatever you do. This will answer the question "How are you different?" Thanks for reading!

Paul McFadden

I Need Your Help. Your Reward? Great Blogs With Great Info. REBlogworld/Blogworld Expo In Las Vegas!

Mon, 28 Sep 2009 15:13:30 -0500

I'm happy to help one of my fellow Rainers in this blog competition. Matt: I wish you well!

Via Matt Stigliano (RE/MAX Access):

photo courtesy of nodomain1

I love blogging.

You may have noticed before, but it's a fact, I love to blog about real estate. It's good for my business, but I actually find it enjoyable too. In that vein, I would like to make it to this year's Blogworld and New Media Expo (including REBlogworld). Of course, these things cost money and there are expenses...blah blah blah. However, Alltop is sponsoring a contest to allow 3 lucky winners to attend this year's event.

I entered, but I need your help. First of all, I misread a rule, which has seriously put me behind the curve. I thought I was doing okay, but realized that the rule was rather specific and I needed to get moving - so I turn to you, the ActiveRain community for help.

The grand prize for the contest is entrance to the conference as well as hotel accommodations. With those two paid for, I can deal with the flights and food for the three days. I need to win this. Imagine how many blogs I'll churn out when I get back with all the new info I've acquired. Think of me as your Blogworld corespondent. I will report back to you - all you have to do is get me to the top! I don't know what it will take to get me there (I don't even know who's in the lead), but with the power of the ActiveRain and Twitter community, I'm willing to bet (Las Vegas - get it?) that I can win this!

Imagine how this will benefit the ActiveRain community as well! Having the power of 160K+ members pushing to help me accomplish this goal will certainly make people think that ActiveRain is the place to be.

Here's what I need:

First, reblog this post if you can. By spreading the word, there will be more opportunity for more people to act upon it. Put it in every category you can think of and make sure everyone of ActiveRain's members see it! I could care less about the points gained from the reblogs, so ActiveRain can pull the points - this is about getting me to Blogworld and REBlogworld.

Second, you need to retweet the information necessary in order for me to be counted. Visit MyAlltop page and at the bottom you will see a "retweet" button:

Click the retweet button. Click it whenever you have a few free seconds. Tell your friends to click it. Please don't sit there and click it 100 times in a row. I don't want to get the boot for "stuffing the ballot box." The contest ends at 8:00 am Pacific Time on October 1, 2009, so I need your clicks up until then. Let's get as many as we can and show everyone the power of ActiveRain, get me to Vegas, and let me bring back and share all that I have learned!

Please use the retweet button and have everyone you know retweet it too! This would be huge for me and I appreciate all the help I can get!
All content ©2008-2009 by Matt Stigliano, Realtor® unless otherwise noted.

Matt Stigliano, Realtor®

RE/MAX Access

(210) 646-HOME

www.RErockstar.com

"Your all access pass to San Antonio real estate."

Connect with me on Twitter and Facebook.

Paul McFadden

Observe your pet to understand relationships and friendships!

Thu, 24 Sep 2009 16:09:39 -0500

Good afternoon everyone! I hope you're well. I write this with a heavy heart as our Great Dane, Buster, has a very weak heart and we may need to put him down. He is almost 8 years old but has really struggled recently and we don't want to see him suffer. Buster was the first dog I owned as an adult and has been a wonderful companion. He will be sorely missed if he passes.

What is the point of all this? If you're like me, we sometimes take relationships and friendships for granted. Contrast that with our dog who loved unconditionally, was always agreeable for the most part, and was happy just being in our company.

After I finish writing this, I'm going to reach out and touch people I know. Let's face it. We're really not on this earth that long yet we all desire to have an impact. I challenge you to reach out to someone. If you have a pet, observe how they do it. I know. It's just a dog or cat. But sometimes we can learn so much from our pets. Have a great day today. Tomorrow is a new day!

Paul McFadden

Private money-when does it make sense?

Wed, 23 Sep 2009 11:32:39 -0500

Hello all: Good morning on an absolutely beautiful day! I was reading a blog about private money today and wanted to chime in. I have to admit when I used to think about private money, all I saw was how much it cost. True, private money can cost almost twice as much or more than conventional money. At The Legacy Group we charge 12% with 2 points usually. This is actually less than what a lot of other lenders charge (sometimes as much as 15% or higher with several points).

The benefit to private money is you may be able to close a deal quickly. Case in point: One of my co-workers bought a house for $350,000 in a highly sought after neighborhood. The appraisal came in at over $500,000. Our capital arm can get the short term financing and then the buyer can refinance into a lower rate. For either an owner-occupant or a flipper, this is a great deal. Another instance allowed one of our clients to buy a business with the equity he had in his house. The bank he was working with said no and he was in danger of losing the deal. The Legacy Group provided short term money which our client proceeded to refinance into a longer term note.

At The Legacy Group we encourage people to contact us if they have a short term need or sense an opportunity. You can also invest in our company and earn a 12% annualized rate of return. Contact Brent Ely at Brent.Ely@Legacyg.com if you're interested. I hope this clears up any confusion about private money. It can be an alternative solution. Have a great day!

Paul McFadden

Wa. Mu. one year later-it's hard to believe!

Sun, 20 Sep 2009 11:12:19 -0500

Hello all: I picked up our local paper this morning, The Seattle Times and the lead story was about the failure of Washington Mutual Savings Bank. To date, this has been the biggest bank failure in our history.

It's hard to believe it's been a year since this happened. It also added to the meltdown worldwide of our financial system and the loss of trillions of dollars of our assets, most of it tied up in our retirement. The failure of Washington Mutual and subsequent purchase by Chase was preceded by the implosion of Lehman Brothers, the bailing out of AIG and the forced shotgun marriage of Bank of America and Merrill Lynch.

What do you remember? For me, the slowdown started in August 2007 with the failure of American Home Mortgage. At the time they were the 10th largest wholesale lender in the country. After this, every lender immediately started tightening the screws and it wasn't soon thereafter that Countrywide was bought by Bank of America as it was failing also.

Here we are in September 2009 feeling a little better about the direction we're headed in. I think we all know that it's still a little tenuous. And I don't think any of us wants to go back to where we were. Ultimately time will tell. In Wa. Mu.'s case, bad decisions were made and they paid a heavy price. Have a great day today!

Paul McFadden

Great New Book-"The Go Giver".

Sun, 20 Sep 2009 10:49:35 -0500

Good morning! I was given a great new book "The Go-Giver" by a fellow Rainer after he mentioned it in his blog. Thanks for sending it to me.

What's remarkable about the "Go-Giver" is the paradoxical idea that a person should give first and keep on giving with no expectation of getting anything back. I'm the first to admit I've always liked "win-win" deals. According to the "Go-Giver", even this isn't right as there is an expectation of getting something back.

I know I'm on the right track as I build my business. In fact, I enter into any relationship these days with no expectation. If I can help my fellow man/woman I do so without any expectation of return. In the "Go-Giver", a young man meets an older mentor who proceeds to teach him how to give. This was something the young man hadn't learned yet.

If you haven't picked up the "Go-Giver" yet, I strongly encourage you to do so. I think I'm going to order several copies and dispense them to people in my sphere. This idea of giving first is not new. And it's been bandied about by several people including Ivan Misner of BNI, etc, etc. The interesting thing is how often I (and perhaps you) forget the golden rule. I'll repeat that here if you've forgotten it; "Do unto others as you would have them do unto you".

I strongly encourage you to give. Report to me how you are becoming a "Go-Giver". Thanks for reading!

Paul McFadden

Real estate classes offered in Renton starting Saturday September 26

Tue, 15 Sep 2009 09:31:48 -0500

Good morning! I wanted to let you locals know that I along with Rebecca Haas of Re/Max Metro Realty are going to start teaching real estate classes again on Saturday September 26. They will be held again at Renton Technical College. For times and related information, please go to the www.rtc.edu website. Also, please forward this along. Rebecca and I believe in education and hope to provide this series for years to come.

The first class will be "How to Get a Loan Today". Other subsequent real estate classes include "Short Sales and Foreclosures-Demystify the Process", " Real Estate for Women", and "Real Estate Investment Analysis". I hope you or a friend can attend. Feel free to contact me here if you need more information. Thanks for reading!

Paul McFadden

Pssst...Don't tell anyone...but I'm taking the day off!

Tue, 15 Sep 2009 09:22:26 -0500

Good morning: Another stellar day in the Northwest. And I'm taking the day off! Why? A high school classmate of mine has this big hairy audacious goal of playing every golf course in the state. I told him if he was ever over on my side of the mountains, let me know and we'd go play Gold Mountain in Bremerton, rated the favorite golf course in Western Washington by the public.

The opportunity to do something you love with people you want to spend time with should not be missed. Yes, I have my cell. with me and email comes to my phone. But I'm going to also enjoy the day with my best friend in the 3rd grade. I think it's important to take advantage of these opportunities. They don't come around very often.

So enjoy your day today. I was having lunch with a guy yesterday I really admire. I referred to him as Mr. Bellevue because he has done so much to promote the city and the Eastside. He commented to me that he finally was going to be able to start taking weekends off soon. I told him that was good. I don't know about you but I've had a pretty good year and also taken a lot of time to do other things. So what do you have planned this week? Is there room to take time out and away from your business? If not, see if you can break away. You'll come back refreshed and ready to hit it again! Have a great day!

Paul McFadden

Bellevue, WA. jumbo loans

Wed, 02 Sep 2009 09:07:10 -0500

Good morning all: I wanted to take a moment to talk about jumbo loans. My company, The Legacy Group, has several jumbo lenders we work with.

First, a bit of clarification. There are two types of jumbo loans. The first is called a conforming jumbo loan and in the tri-county area here (King, Snohomish, Pierce), the limit is $567,500 through the end of the year. Interest rates for a 30 year fixed conforming jumbo loan are running in the low 5's O.A.C. This is about .25% higher than a conforming loan (loan amount to $417,000). Down payments will either be 3.5% if you do an FHA loan or 10% if you do a conventional loan. Keep in mind that any down payment less than 20% will incur mortgage insurance.

The second type of loan is called a "super jumbo". This loan is for any loan amount above $567,500 for all practical purposes. Rates and terms on super jumbo loans are entirely different. There are fewer lenders in this niche and most will require at least 20% down. Some lenders will go up to $3 million on the loan amount although you should expect to have either significant equity or a large down payment if you need to borrow this much.

Recently I've been encouraged by the gradual easing of underwriting in the super jumbo market. For a while there, things were really tight. Now, I'm seeing lenders allowing more loans. Interest rates have also gotten attractive. I've even heard of 30 year fixed rates under 6%. Your best option is to do an ARM that is fixed for a certain period of time. Rates are quite a bit lower. For example, I have a client who is going to do a 7/1 ARM at 4.75%. Obviously, their payment will be quite a bit lower than if they chose a 30 year fixed rate.

So what can you expect to provide in order to do a "jumbo loan?" You will need to provide all the normal documentation including last 2 years W-2's or tax returns, asset statements showing you have reserves in most cases, last 2 paystubs, along with at least a 720 credit score for your best pricing. The portfolio lenders who usually do these loans will ask for alot. It's important that you work with a loan officer who understands this market. Feel free to contact me if I can be of further service. I'm located in Bellevue, WA. at the best-kept secret in the mortgage world! Have a great day!

Paul McFadden