Success is a TEAM Activity

When you look at the biography of sales people who are successful in their careers over a long period of time, they all have one common denominator, they were part of a cohesive, diverse skilled, and mission focused TEAM. 

Although humans tend to self-preserve and put their own and family's needs first, in business it takes a village to sustain scale and income growth. 

One person only has 24 hours a day, X amount of energy, and typically cannot master all skills in business.  There is no doubt self focused people can be successful in their career, the issue is their success is limited to their individual resources and health. 

Although I can individually sell with the best of them, I have never wanted to sell without a TEAM.  In Banking and in the Mortgage Industry, I have always ensured I had a caring competent TEAM with diverse skills around me.  There is no better feeling or more fun than working with people who care about each other and respect the trust required to support the TEAM's overall success and continued growth.  As a result, the TEAM provides you and your family with safety and stability. 

A sales person that has to make sales calls, follow up with clients, process loans, handle the inevitable client or Realtor Issue, close loans, and stay in touch with clients and Realtors after the closing has a daunting task and tends to be too much for any one person.  Something has to be forgone in this scenario given time, energy, and skill create restraints to incremental success. 

Less time with your family, Not Staying in touch with past clients and Realtors, and that one issue that takes up a whole day putting you further behind are the accumulated limiter to scaling the income from a large referral base of Realtors and closed happy Clients.  What if this sales person gets sick or disabled?  Who will step up during difficult times?  The one constant in life is the unexpected always happens.  There is a reason commercial airplanes have two engines.  Redundancy matters. 

To truly maximize a sales career, the most efficient and successful path is to be part of a TEAM or a Village that has one common goal and belief system.  http://southeastmortgage.blogspot.com/2013/03/the-village-by-cal-haupt.html  With this mentality, a person’s career can scale up due to complimentary resources supporting the individual’s efforts.  With a TEAM, a sales person can rely on competent processing, underwriting, closing, and Client Relationship Management to provide great experiences for Clients and Realtors while staying in front of them for years of consistent growing referrals and applications.  A TEAM focused sales person has 75% of their time to develop more business, provide more personalized service, and time to spend with their family or go see their kids play sports.  If the TEAM sales person gets sick or has another hardship, they have a TEAM of people supporting them and maintaining their pipeline and closings.  This ensures their income from years of referral growth and their family is protected. 

My life experience has taught me individual success is not mutually exclusive from TEAM success.  Individual scalable results (more results with less effort over time) can only be achieved through a TEAM approach.  TEAM really means TOGETHER EVERYONE ACHIEVES MORE.   

Cal Haupt
Chairman and Chief Executive Officer
Southeast Mortgage of Georgia, Inc.
www.southeastmortgage.com
770-279-0222

National Professional Mortgage Magazine - June 2014 - Fostering the Intangible Asset by Cal Haupt

Fostering the Intangible Asset: Corporate Culture


Every organization strives to be highly efficient, effective and achieve better results.  Meticulous business strategies, created through endless hours of meetings, brainstorming sessions, emails and research help to define and align those strategies with a company’s objectives.  Studies show, however, that many businesses oftentimes fail to see the big picture. Quite often the intangible assets of a firm such as employee loyalty and engagement, shared values and beliefs, internal relationships and problem-solving are passed over as either unimportant and irrelevant or given moderate attention only to be pushed aside as more pressing issues take priority.  The fact is, these intangible corporate assets, defined as a culture, have a profound impact on a company’s success. 

Some reports suggest that happy, engaged employees lead to increased success and even profits.  Though the subject is debatable, there’s certainly enough evidence out there to suggest that happy employees, in fact, do correlate to increased profits.  Last year, revenues increased by an average of 22.2 percent for the 2014 Fortune 100 Best Companies to Work For. If happy employees really do foster success and improve profits, how can an organization establish an interlocking set of goals, values, attitudes and communication that are actively encouraged and reinforced? Sometimes you have to throw the rule book out and get back to basics. 

      1.)    Refrain from outside influence

Defining and building a winning culture sounds pretty simple right? Just pick up a book, read an article or seek outside advice and you’ll be an expert in no time. The truth is there isn’t a book out there that can specifically define the best culture that will work for your firm.  A great corporate culture is masterfully blended from within a company.  And, because each firm is unique with diverse management beliefs and styles and employees from entirely different walks of life and skill levels, it would be nearly impossible to “cookie cut” a corporate culture. Sure, there are always a few lessons to be learned from the experts, but to be truly effective, a culture must be defined by its management, its people and the systems and reinforcements put in place to foster the corporate values and beliefs. 

2.)    Believe in your employees

One of the first steps to create a winning culture in any firm is to believe in your employees.  Establish a level of trust that begins at the top. Engage with employees, encourage them and, most importantly, empower them to make a difference and become a part of the vision of the firm.   Make a point to always recognize and reward employees for their input, insight, effort and contribution.  Humanize your approach to business and make your employees feel connected, important and valued. Make employees feel that they can talk and relate to management and clearly communicate what is expected of them and encourage their voices to be heard. 

3.)    Foster the character of your firm

Have you ever walked into a company and clearly felt upon entering the character (personality or temperament) of the firm?  Right off the bat you could tell employees seemed engaged and happy or, conversely, particularly detached or serious. Our employees seem happy and engaged is a statement we here from most who visit SEM for the first time.   Depending on the nature of your business and demographic make-up of your firm, the character of a firm will oftentimes be defined by its employees.  The culture (way of life, traditions), in turn, will reflect the character of your firm. Therefore, to foster a winning culture, a firm must first strive to understand and embrace its character and cultivate a way of life that is in sync with its personality and people. 

 

4.)    Respect one another

Clearly, the fastest way to break down corporate culture is to disregard the importance of respect within an organization.  Regardless of status, position, title, wage or salary, employees must respect one another’s opinions and contributions to the firm – no matter how insignificant they may seem from the top. Expectations for employees respect and interaction must be clearly defined and communicated with employees being held accountable for a breakdown. As Albert Einstein was quoted as saying, “Let every man be respected as an individual and no man idolized.” 

5.)    At the end of the day – have fun

It’s time to walk away from office politics and the corporate rat-race and make work fun again.  Companies need to find ways to reduce stress and build passion back into in the workplace and that strategy may involve a few non-traditional ideas of “employee engagement.” What makes a company fun to work for involves not only understanding what your employees need, but also what they want including such things as flexible schedules, great employee benefits, unique perks or services or opportunities to enhance and develop their careers.  Taking a step back and viewing “fun” from an out-of-the-box perspective may help you better strategize ways to put the passion back into your organization.

Cal Haupt, Chairman and Chief Executive Officer
Southeast Mortgage of Georgia, Inc.

Cal Haupt founded Southeast Mortgage in 1993 with the vision and goal to fill the void between banks and mortgage brokers for clients who want competent advice and great service from a direct lender.  Today, Southeast Mortgage has eleven office locations throughout Metro Atlanta and is licensed in Georgia, Alabama, Florida and South Carolina. Cal is a regular contributor to the Atlanta “Home Mortgages” section of SaportaReport where he reports on major changes in the housing industry and is the brainchild of Atlanta’s newest residential real estate index, The Cal-Culator.  He may be reached at Cal.Haupt@southeastmortgage.com

http://issuu.com/nmpmag/docs/gamp_june14/59?e=1230807/8481459  Page 87

20% growth trend confirms recovery in June 2014

Over the past few years, we have written about the recovery in the Metro Atlanta Real Estate Market; however, we continued to see barriers from activities in Washington, Weather, etc.

Normally new record months are set in August.  2014 is different supported by record volume arriving early in June.  The Cal-Culator  http://southeastmortgage.blogspot.com/2014/06/may-2014-cal-culator-atlanta.html indicated this trend would occur.

With a 20% growth in June, I can say with certainty 2014 will be a great year for the Real Estate Industry.

The issue we see in recovery periods is a lack of planning.  Volume surges are only as good as the production channel to close the applications.  Production channels (Mortgage Application Processing Structures) take years to develop and require a significant investment by the company to design and deploy them.  Pipelines have to be converted to closings in order to maintain referral relationships and add value to Real Estate Professionals.  Realtors demand great service to grow their business and clients need fast dependable communication and service to reduce the inherent uncertainty in buying a home.

Mortgage Originators will need a solid production platform that adapts quickly to volume surges to convert their pipelines to closings and grow their business.  If service and closing certainty is faltering at this level of volume, it is not ready for the months ahead.  This recovery is what everyone in the mortgage industry has been waiting for so ensure you have the service and production capacity to fully participate in the record months ahead.

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

Qualified Mortgage (QM) - Lender Responsibility and Definition

Residential Mortgage Lenders primary purpose is to provide consumer loans secured by single family housing to facilitate acquisition for a consumer purpose.  Consumer purpose is housing the primary borrower, co-borrower, and or family.  Residential Mortgage Lenders have due care responsibility to ensure applicants can afford the loan for the term of the loan and it fits the applicants purpose.
 
Commercial Purpose loans secured by residential zoned property (Rental Properties, Industrial, and general purpose) should be handled by a small business lender that is tasked to originate this type of credit facility.
 

IMO: Just because a Residential Non-Qualified Mortgage product is offered for a residential consumer purposes is not a justification for a licensed or registered residential mortgage professional to sell it.  Licensed Mortgage Loan Originators (NMLS and State License Compliant Mortgage Loan Originators) and Registered Bank Mortgage Employees (Bank Employees whose job is to Originate Mortgages and is not Licensed) should be a fiduciary for the consumer and ensure they recommend the right product.  Mortgage product recommendations should only be made after understanding the client's needs through an interview process and ensuring the client can afford the loan today and for the term of the loan.  In the future all Bank and Non-Bank Mortgage Professionals will be licensed to the same standard which will ensure all consumers have consistent protection when shopping for their mortgage.
This trust and due care is the key to referrals and the key to longevity in this business. 
 

In its simplest form, Qualified Mortgages (QM) meet the following requirements:
> A loan that meets the requirements of GSEs, FHA, VA, or USDA and can be sold in the primary secondary market
> Consumer has a documented and verified ability to repay
 

Starting January 10, 2014, you must assess the borrower’s ability to repay all term residential mortgage loans. All QMs are presumed to comply with this requirement. As described below, a loan that meets the product feature requirements can be a QM under any of three main categories:

 

 

Mandatory product feature requirements for all QMs

1. Points and fees must be less than or equal to 3% of the loan amount (amounts less than $100k, higher % thresholds are allowed);
2. No negative amortization, interest-only, or balloon loans that increase risk (BUT NOTE: balloon loans originated until January 10, 2016 that meet the other product features are QMs if originated and held in portfolio by small creditors);
3. Maximum loan term is less than or = 30 years. 

Three main categories (CFPB Definition) 
1. General definition of QMs

Any loan that meets the product feature requirements with a debt-to-income ratio of 43% or less is a QM

2. "GSE-eligible" category of QMs

 

Any loan that meets the product feature requirements and is eligible for purchase, guarantee, or insurance by a GSE, FHA, VA, or USDA is QM regardless of the debt-to-income ratio (this QM category applies for GSE loans as long as the GSEs are in FHFA conservatorship and for federal agency loans until an agency issues its own QM rules, or January 10, 2021, whichever occurs first).

 

3. Small creditor category of QMs  

 

If you have less than $2B in assets and originate 500 or fewer first mortgages per year, loans you make and hold in portfolio are QMs as long as you have considered and verified a borrower’s debt-to-income ratio (though no specific DTI limit applies).

I truly hope our industry learned from the last recession that mortgages are a cornerstone of the US economy.  We make a difference every day and should govern the products we offer consumers with due care at the fore front.  Today we are seeing a similar trend to 2006 - 2009 when the industry evolved product features to target a broader category of borrower to increase origination volume.  I believe there are some products that are needed for borrowers that are not currently participating in today's mortgage market; however, we need to ensure industry risk remains low.   

Cal Haupt
Chairman and CEO
Southeast Mortgage of Georgia, Inc.
770-279-0222
www.southeastmortgage.com

Atlanta's unique housing price rise due to its unique nature... S&P Case Shiller Index Confirms at 13.7%

Atlanta continues to lead the nation in residential real estate price stability and growth.

Due to Metro Atlanta's diverse economy, lack of industry concentration, and transportation; Atlanta housing fares better than most through a recession and recovers quickly and more dynamically than most states during recoveries.

With the economic growth now reporting what has been obvious from the wait times at restaurants, full airplanes, and congested traffic; consumers are rushing to participate in the housing recovery.  Whether it is the new home buyer, trading up, or baby boomers streamlining for retirement; housing demand is pushing Atlanta home prices up and will continue into the foreseeable future.  (See list below)

US prices are up 22.6% since bottoming out just over three years ago, but are still 18% below the peak set in July, 2006. The home price index covering 10 major U.S. cities increased 10.8% in the year ended in April according to the S&P/Case-Shiller Home Price Index report. The 20-city price index also advanced 10.8%. That is down from a 12.4% yearly pace in March and less than the 11.4% expected by economists.  Although many analyst are reporting year-over-year gains are slowing, this is not the case for Metro Atlanta, Georgia..

Cal Haupt
Chairman and CEO
Southeast Mortgage of Georgia, Inc.
www.southeastmortgage.com
770-279-0222

 

 

May 2014 Cal-Culator - Atlanta Residential Real Estate Rebounds

Atlanta Residential Real Estate Rebounds

Posted on June 9, 2014 by admin

     

After months of sluggish behavior in the Atlanta residential real estate industry, May finally demonstrated significant housing recovery. After two months of a score of 5.7, the May Cal-Culator ranks a 6.0 due to improvements across the board in pending home sales, foreclosures and home price gains.

The May Cal-Culator

The leading measure of U.S. home prices, the S&P/Case-Shiller Home Price Indices, latest data showed that home prices in the 20-City Composite, which includes Atlanta, increased 0.9 percent month-over-month.

Foreclosure levels are a  positive trend that has been steady in 2014. According to CoreLogic’s most recent monthly report, foreclosures are down 0.4 percent month-over-month and down 18 percent from the previous year. The data also revealed April marked the 16th consecutive month of at least a 20 percent year-over-year decline in the inventory of foreclosed homes.
“We now have registered two and a half years of continuous decreases in the number of homeowners who are in some stage of the foreclosure process,” said Anana Nallathambi, president and CEO of CoreLogic. “This consistent decline means fewer Americans are experiencing the distress of delinquency and default. The recovery may be slow, but it is steady.”

RealtyTrac found in its April 2014 Residential & Foreclosure Sales Report that sales of U.S. residential properties, which include distressed and non-distressed sales of single-family homes, condominiums and townhomes, increased year-over-year by 4 percent. The report also found median sales prices of U.S. residential properties had the largest yearly increase since prices hit rock bottom in March 2012.

For the second straight month, the Pending Homes Sales Index improved, according to the National Association of Realtors. The forward-looking indicator, based on contract signings, increased 0.4 percent from the previous month. The report also indicated projected increases in home prices during the remainder of 2014.

“Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective homebuyers’ confidence,” said Lawrence Yun, NAR chief economist. “An uptrend in closed sales is expected, although some months will encounter a modest setback.”

Unfortunately, every month experiences some hiccups when it comes to real estate. The NAR’s Realtors Confidence Index, compiled from a survey of more than 3,000 Realtors, revealed a dip in confidence levels among Realtors about current market conditions.

“Tight credit conditions and the lack of inventory, particularly for ‘middle-priced’ homes were reported as the major roadblocks to increased sales,” said the report headed by Yun. “With a tight supply, properties were generally on the market for fewer days, and prices continued to increased in many areas although not as strongly as in 2012-2013.”

www.southeastmortgage.com

10 Year Bond (Fact or Fiction) - This one is playing out real time - TBD

The 10 year Bond is one of the primary indicators Mortgage Professionals use to guess rate direction and analysts use for Bank Non-Interest Income potential.

Normally the 10 year bond yield would be higher with the Stock market at all-time highs, high consumer confidence, rising housing prices, and rising household income.

 

I read posts from originators in the industry cheering a lower bond yield and the prospects of lower mortgage rates.  This baffles me in that the originators doing this are missing the bigger picture.  Rates are already at historical lows and a further reduction in bond yields (higher bond prices) could cripple the foundation that supports their client’s confidence to buy.  Consumers buy homes for various reasons.  The most common is security for their family, a sense of belonging to a community, better schools for their children, and the benefits an investment in a home has over renting.  There is a saying “people forget rates but never forget poor service”.

 

As an industry and as a consumer, we should all appreciate the favorable rate environment QE1, QE2, and QE3 provided and understand a healthy economy is more important than short term gratification.

 

So why is the 10 year bond yield falling?  Is it an aberration or is something more insidious brewing?

Ø  Short Covering as the month is ending and quarter drawing to an end?

Ø  Flight to safety for foreign entities?

Ø  Veil Government monetary policy contrary to public taper?

 The consequences of a falling 10 year bond yield?

Ø  Given the reduced channels of income available to Banks, without spreads provided from deposits to overnight and mid-term investing, recovery could be in question and could facilitate a conservative credit posture thus slowing growth

Ø  If banks miss earnings due to Non-Interest Income, the market could interpret this as a slowing economy initiating an overreaction by the overall market creating a severe correction and consumer pull back

Ø  Investors could extrapolate bank earnings to other healthy sectors forcing a broad sell off and a reversion to 2009 mind sets

Ø  A broad sell off greater than 20% could impact consumer / business confidence enough to severely impact jobs and the current economic recovery pushing us closer to the next recession or worse

Recessions occur roughly every 7 years and the US is 5+ years out of the last one with the Stock Market at all-time highs.  As a business person and consumer, I prefer the growth periods versus the contraction periods.  The current economic growth can continue with a more stable base provided by a steeper yield curve and bonds coupled to historical relationships.

 
 

 

In my opinion all outcomes are possibilities; however, the Federal Reserve will ensure banks remain healthy and thus the 10 year yields will go north due to basic economic relationships or monetary intervention.  We should all hope there is a keen eye on this subject.

 

Cal Haupt

Chief Executive Officer

Southeast Mortgage of Georgia, Inc.
www.southeastmortgage.com