Monday, July 31, 2017

99% Financing = 100% Hype... Always Experience Challenged

If only one or two Companies in a universe of thousands offers a "Special Mortgage Product" and the rest of the Industry does not follow, is it because everyone else is off the reservation or is that company playing the hype game or worst does not understand risk / sustainable lending practices. 

During the late 1990s and early 2000s until 2007, the beginning of the collapse of subprime lending, the mortgage industry saw a massive proliferation of alternative unsustainable product that, in the beginning, were created to answer a congressional mandate from the 1990s to grant more access to home ownership, specifically for low and moderate income families. We all know what happened when the house of cards began to weaken at the base. The worst financial crisis since the Great Depression ensued because of the collapse of risky usustainable mortgage products that, because of greed, transformed from a design to help the underserved to mortgage products that, at the height of insanity, allowed mortgages with no down payments and no income, asset or even job verification. 

Typical Hype Advertising
Fast forward only a few years to 2014 and Fannie Mae and Freddie Mac, still in government conservatorship, roll out a 3% down payment program to compete with FHA's minimum 3.5% down payment. As if 2007 were a distant memory, a few large lenders begin to negotiate with Fannie and Freddie in late 2015 through early 2017 to offer "grants or gifts" for 2%, leaving the borrower only 1% of the purchase price to pay as their down payment. What seems to escape people who are in the throws of an emotional transaction like purchasing a home is that "there's no such thing as a free lunch".  That 2% "grant" came at the cost, higher interest rate - additional profits, that the lenders received from Fannie and Freddie "gifted" to the borrowers to offset most of their down payment requirement. 

Like so many short-lived products and schemes before them, this program is now dying.  Freddie Mac just announced that it is ending the 1% down payment option for all lenders beginning Nov 1, which means that lenders will most likely stop offering the product immediately. 

So now what? Certainly there will be some other program that pops up to capture the attention of those looking for the "product du jour" to sell. Why? Because they fail to realize that what truly matters is timeless. 

Service and a Licensed Mortgage Originator that puts a Client's needs first is the mandate for prudent mortgage companies.  Matching client need to a sustainable mortgage product that fits that need is what Southeast Mortgage has done since 1993.  We never chase unsustainable products for profit and always put our clients first.  If one company offers a product that we feel is more hype, we do not follow and wait for time to balance the equation.  It always does.

Products come and go. Rates fluctuate with bond market daily moves, geopolitical events, confidence or uncertainty. Costs are a function of rate and must be competitive in any market. 

Service is what differentiates one company from another. Service is what creates clients for life and motivates those clients and business partners to refer their friends, family, and coworkers. 

Cal Haupt
Chairman and CEO, Southeast Mortgage of Georgia, Inc.

JD Crowe
President, Southeast Mortgage of Georgia, Inc.

Thursday, July 20, 2017

Chase the Horizon Beyond your Goals

Chase the Horizon Beyond your Goals
> Accomplish what has been un-accomplished
> Go beyond your safety zone
> Get uncomfortable with new experiences
> Be bold before you are too old
> The journey is the reward

Certified and tested by Cal Haupt.

Sunday, July 16, 2017

Headline: Realtors Can Be Registered & Not Licensed

The headline is shocking and luckily fiction today; however,  it is a Hidden Reality in the Mortgage Industry today and most Realtors and Clients do not know.

What if a large Hedge Fund decided to enter the Real Estate Business and found a loophole to only Register Realtors exempt from State licensing.  Imagine they only have to pay Registered Realtors 1/3 what a Licensed Realtors make pocketing the difference.  Registered Realtors are not required to comply with Continuing Education, or State Regulation?

Trades (Realtors, Mortgage Lenders, Attorneys, Appraisers, Etc.) should support and insist on working with State Licensed Professionals who have met State Standards of Education, Credit, and Ethics.  Would you use an unlicensed Architect, Attorney, Doctor, Electrician, Plumber, Teacher, Appraiser, etc.  I certainly would not!

Does anyone ask if their Mortgage Originator is State Licensed?  That should be one of the first questions for a Realtor before referring a client and a client before applying with a Mortgage Originator. Just check if they are licensed at Mortgage Originators do not have a GAR or DBF for client complaint resolution.  Clients and Realtors can only file a complaint with their employer which is a Bank.

Southeast Mortgage works with Licensed Attorneys, Appraisers, and Realtors.  Support the integrity of State Licensing and only work with Licensed Mortgage Originators.  Protect the integrity of the Real Estate Industry and ensure we do not see another 2008-2009.  Everyone knows what and who caused it.


Monday, July 10, 2017

I am Still in Shock? Licenses Matter!

After the 2009 financial Crisis, I assumed everyone understood risky and unsustainable Mortgage Loans were created by Non-Licensed Mortgage Originators which caused the financial disaster that hurt so many families?  There was a reason Congress passed a law requiring Mortgage Originators to be Licensed.  8 years later, the lesson was missed.

Over the weekend, I was working with a Licensed Real Estate Agent, Realtor, to sell a house.  The Realtor I chose knew the market very well and has a proven track record.  I only work with Licensed Real Estate Agents and I always check their license at .  The Realtors I know appreciate people who choose Licensed Real Estate Agents and many have the same view with respect to Mortgage Lending.

Over the weekend, I got an offer on the house with a Bank Originator written into the contract.  I happen to know the Bank Originator given I hired the person into the Banking Industry from the waste disposal industry a long time ago.  The person has a super personality and is likable.  I explained to the Realtor that I did not have confidence in an agreement that was contingent on a Non-Licensed Mortgage Originator handling the buyers loan.  You can find out if a Loan Officer is Licensed by clicking here .  See picture below.  Look for there State license below that will also have a consumer complaint link.  If the are just registered "Not Licensed" there is no State License information nor Consumer Complaint Link.

The Realtor had no idea that there are Non-Licensed Mortgage Originators engaged in the Georgia Mortgage Industry.  I explained it to her this way.  Would you buy your home from a Non-Licensed Real Estate Agent?  She said NO.  My POINT.  Just because someone is likable is not a basis to put a client's home purchase or sale in the hands of someone NOT State Licensed to do it.  They deserve a Mortgage Originator that has passed a competency test and is regulated by the State they are taking mortgage applications.
  • Would you hire a Plumber who is registered with his supplier and not licensed?
  • Would you hire an Electrician who is registered with his supplier and not licensed?
  • Would you trust your health to a Doctor who is registered with a drug supplier rather than licensed?  Should your Doctor be required to pass competency exams?
  • Would you hire a Realtor who is registered with their employer and not licensed?
Bank Mortgage Originators are Registered and do not have State Licenses, they have not passed a standardized competency test, and there is no State Regulatory Complaint Recourse for Consumers.  If a Licensed Real Estate Agent creates an issue for you, you can complain  to (Real Estate Agents State Regulator).  Attorneys have the State BAR.   If you have an issue with a Federally Registered Non-Licensed Bank Mortgage Originator, who do you complain to?  Who regulates them?  Their Employer?  Remember 2009.  

Friday, June 2, 2017

Putting Builder and Realtor Value First

Although 85% of Southeast Mortgage's volume is derived from retail clients, we are very proud of our accomplishment in the New Homes Sales Channel.

"Builders want to work with Southeast Mortgage due to our value added proposition.  We are the best at delivering great predictable service; however, the videos and other media we co-market with our Builders and Realtors simply drives more potential clients to their open houses and subdivisions.  More traffic = more sales.  We believe in adding value to our partner's franchises rather than just taking applications."  Cal Haupt, Chairman and CEO of Southeast Mortgage of Georgia, Inc.

With our extremely high pull through from application to close and accurate reporting to partners, Southeast Mortgage delivers the best overall solution to its partners and is why we are growing rapidly and earning more Builder and Realtor requests to partner.

Friday, May 19, 2017

Fake News is a Path Best Avoided

In my opinion, the truth is always the righteous path to good works.  History has proven that "green eyed monsters" orchestrate stratagems but the smoke always clears uncovering their true intent before it has any tangible effect.

Recruiters probably have one of the toughest occupations in our industry.  They are on the phone all day talking to hundreds of people trying to differentiate one company from the others.  In our business if you exist after 2009, you are probably doing a few things right.

Very few good Originators leave because of a company, they leave to fill a void or a need not being met.  The void could be a breach of trust, health care coverage, pay, an argument, the list is long.  The need not being met by their current company is what recruiters should focus on and like a good originator they just have to uncover the need not being met to close the deal.
Text to an MLO at SEM
The problem with “Fake News” is it eventually makes the person creating it unbelievable and their ability to recruit tougher.  I am sure everyone knows some of the characters in our industry that make outrageous fake statements.  As the target of many “fake statements” over the past 24 years, I learned that “fake statement” purveyors always attack your strengths.

If someone says you are running out of money and you will be out of business next week, you probably bank mid-8 figures in reserves.  If someone says you are a crook, you are probably a trusted fiduciary.  If someone says you are a bully, you probably care deeply about your team’s welfare and protect their livelihood and families from deceptive practices.
History has proven it is always good to be talked about whether good or bad.  If it’s good and truthful the world is working the way it should and good deeds are appreciated, if it’s bad assume the reverse.

I encourage everyone in our small industry to take the high ground and recruit based on need.  Need based selling is more effective with clients and recruits.  It is the righteous sustainable way to effectively accomplish your goals.