As our industry has begun to heat up, I’ve found looking ‘back to the basics’ to help guide our students during these challenging times is worthwhile. Many of you know there is a significant philosophical difference between my approach to the business vs. the other residential mortgage industry educators & trainers.
As I think through the differences I have with many, I have been able to break it down fairly clearly in my own head. It appears the preponderance of those I interact with, whether they are potential students, folks inside an industry discussion board, those that I speak with who author industry publications – it looks almost like everybody started in our business since the cycle ‘correction' of August 1998. I see that as a serious problem as we try to rebuild the industry on a more solid footing!
It appears to me, the generation of people that started during this post-98 cycle/correction, entered the industry for the 'big easy money' that was at hand via the new 'big-commission' business notion that developed back then. It’s been self-evident for the most part, that compassion toward the customer, has been substituted for 'selling & closing' clients with this latest bunch.
In my lifetime I have seen too many sales pros use various props, scripts, and tricks of all sorts, to ‘close' people. Even after all these years in the biz, I'm still idealistic about our industry. So this philosophical aversion to ‘sales' which I have - as evidenced by most of my writings which highlight an increased need for Integrity and Ethical behavior - I think many actually want to have faith in my approach ... yet our competition in the training and education niche, all seem to market themselves as 'sales' guru's and promise to show their seminar attendees how to earn the big bucks! And, considering those attendees came to the industry for the 'big bucks' and 'easy money' in the first place, those motivational speaker types - who prey on pumping up everyone's ego - looks like the sort of industry education and training they are attracted to vs. the more wide-ranging career minded approach we offer through Secret! University.
And I know why this is; back when I started as a trainee it was salary and small bonuses, and all face to face with customers - not websites, cyberspace, text messages, & e-mails like now days - more personal. As a newbie, we were never promised the opportunity to earn enough income in a year or two, to purchase a house outright, so the 'big-bucks' wasn't the draw like it has been lately – it was a ‘career' I entered. We signed-up customers, hundreds and even thousands of loan customers face to face; often seeing their fears, desperation ... relief and joy when approved. All of which made a lasting impression on me from my early days in training. I believe these two major differences are why I think so much like I still do. I can still see many of their faces in my mind.
I believe a move for everybody 'back to the basics' of providing Ethical Customer Service to customers, instead of “putting them together” is at hand during this defining period in our noble industry’s history. I hope you'll join with me in this old-fashioned approach ... it works!
Economist: Short-Term Is "Dismal;" 2nd Half May Be Better
If economics is the "dismal science," then Frank Nothaft is living up to his billing as the chief economist at Freddie Mac, at least in the short term. "The only good thing I have is that mortgage rates are at a record low," Mr. Nothaft told the National Association of Home Builders' convention. But even that bit of good news is problematic, the economist said, because lenders' underwriting requirements are so stringent these days that it is far more difficult to qualify for financing. Still, he told a convention session that he expects a housing recovery to begin in the second half of 2009 and pick up a solid head of steam in 2010. Former Fannie Mae chief economist David Berson also expects sales to stabilize and grow stronger into next year. But Mr. Berson, who now is chief economist and strategist at PMI, Walnut Creek, Calif., also believes house prices will continue to fall. In 97% of the metropolitan statistical areas PMI follows, the probability is that prices will be lower in two years than they are now, he told the convention. "The risk has gone up almost everywhere, and there's a better than 50-50 chance of lower prices in slightly more than half the markets." At the same time, Mr. Berson assured the meeting that this too shall pass. "Eventually, the unsold inventory will get worked off," he said. "I don't want to minimize the problems we're going through now, but ultimately we will get through this period and get back to basic demographic trends."
MBA: Cramdown Supporters Gaining Momentum " 2nd Half May Be Better
While remaining steadfast in their opposition to "cramdowns," the Mortgage Bankers Association acknowledges that supporters are gaining momentum and the trade group has outlined parameters it would like to see included in legislation that would allow bank ruptcy judges to reduce the secured portion of a mortgage loan. In a conference call with reporters, MBA representatives said a bill that allows bank ruptcy judges to alter the contractual terms of a mortgage should limit the discretion judges have to reduce principal, lower rates or extend terms on a mortgage. MBA chairman David Kittle said that if Congress does go this route, cramdowns should only be allowed after a "waterfall" of other loss mitigation options have been exhausted, including repayment plans, loan modifications, an extension of terms and principal deferral. He also proposed that cramdowns be limited to subprime loans originated during the peak of the housing boom and that cramdown relief should be temporary. "We need to set a permanent sunset date after which judges will no longer have this extraordinary power to alter the terms of a mortgage," Mr. Kittle said, noting that two thirds of bank ruptcy repayment plans fail, in which case the borrower typically loses their home to foreclosure anyway. Steve O'Connor, MBA's senior vice president of government affairs, acknowledged that "clearly there is political momentum" favoring supporters of cramdown relief. "We recognize the realities of the landscape. And if in fact cramdowns are implemented, we think there should be some constraints to limit damage to the marketplace."
| |
By now, reading my thoughts here and also in my own personal