A Good Plan needs no BOX

We are not here to be Average, We are here to be Awesome!

www.southeastmortgage.com

770-279-0222



Closing times increasing? Check your undercarriage... by Cal Haupt

No matter how big your engine is or how fancy your marketing is you have to have all cylinders firing in the right sequence to get the speed and power with a chassis that can deliver the power to the road.  Operations and mortgage loan file flow is no different.  You have to have the right people working together in a sequence that optimizes speed and accuracy with a foundation that conveys the service to the client.

JD Crowe, President, Southeast Mortgage, sent me an article this morning.

I glanced at it the other day.  I disregarded the catchy title given SEM continues to execute in our 8 - 10 day time frames even with the new layers of client protection.

This morning it dawned on me what is happening.  The industry apparently is processing with the same methodology used since 2007-2008.

New regulation and client protection requires an updated and innovative approach to processing.  Even SEM had to evaluate the final implementation of TRID before we crafted the final map and sequence to guarantee our 8-10 day turns at volume.

The best way to look at it is to refer to a 1908 Ford Model T suspension.  Would a 1908 suspension work with modern engines in the shiny new cars with the flashy marketing of today?  The car looks modern, it sounds great, and smells new BUT how do you think it will drive with a 1908 suspension?  Our industry has new improved regulations and risk models that require a NEW suspension to harness the power and provide the client and referral sources with the Competent FAST service that a shiny new car portrays in their marketing.

In my opinion, look underneath the car before believing the flashy marketing or be prepared to dance for the 50 days to close.

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

Let's LEARN FROM HISTORY NOT REPEAT HISTORY

I am starting to see more data and articles referencing the rise in subprime mortgages.  The stewards of our Mortgage Industry would do well by having longer memories.  There is a reason prudent risk assessment and the 5 Cs of credit hold true through all economic cycles.

A subprime mortgage is a type of loan granted to individuals with poor credit histories (often below 600), who, as a result of their deficient credit ratings, would not be able to qualify for conventional mortgages.  “The United States (U.S.) subprime mortgage crisis was a nationwide banking emergency that coincided with the U.S. recession of December 2007 – June 2009.  It was triggered by a large decline in home prices after the collapse of a housing bubble, leading to mortgage delinquencies and foreclosures and the devaluation of housing-related securities. The expansion of household debt was financed with mortgage-backed securities (MBS) and collateralized debt obligations (CDO)” with high concentrations of subprime mortgages “offered attractive rates of return due to the higher interest rates on the mortgages; however, the lower credit quality ultimately caused massive defaults.  While elements of the crisis first became more visible during 2007, several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.  A proximate cause was the rise in subprime lending. The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006, with much higher ratios in some parts of the U.S.  These two changes were part of a broader trend of lowered lending standards and higher-risk mortgage products.^{”  https://en.wikipedia.org/wiki/Subprime_mortgage_crisis}

The Five Cs of Credit: A method used by lenders to determine the credit worthiness of potential borrowers. The system weighs five characteristics of the borrower, attempting to gauge the chance of default. 

The five Cs of credit are:

Character    - Borrowers reputation and intent to comply with agreement
Capacity      - Debt to income before the new loan and after “Affordability”
Capital         - Down payment and ability to survive periods of loss of income
Collateral     - Mental reminder and commitment to loan by having “skin in the deal”
Conditions   - Risk vs Rate must be acceptable to the Lender to extend the loan

Subprime lending generally disregards the above proven standards for approving loans in return for higher rates and fees. 

The 2007-2008 financial crisis was built on lending from 2002 through 2006.  The 2002 economic data and markets have a strong similarity to what we are starting to see today.  The same players are beginning to emerge under new name plates with the same sales pitch as 2002 hoping time has dulled the industry’s memory.  Their misguided sales pitch "You can close more deals and make more money on the backs of those who could not meet conforming mortgage guidelines.  You can do deals others turned down and win favor from referral sources"  Awesome Competent Service and not creating a default concentration in your referral sources projects is the only way to protect clients and your trusted partners.

How many companies that concentrated in subprime products survived the financial crisis of 2007-2008? 

How many of you reading this lost a job due to your company’s choice to originate subprime loans? 

How many of you had to reinvent yourself due to the company you trusted making this choice? 

How many of you built a successful career at a subprime company only to have your world turned upside down?

Let’s not repeat this pattern……  If your company makes the choice to concentrate in subprime lending, look at the history. 

I am passionate about the Mortgage Lending Industry and feel compelled to remind our industry of 2007-2008.  As stewards of our industry, we should forgo the appearance of easy approvals or unsustainable products just for profit.  We should put our Employees, Shareholders, Clients, and the Stability of our Financial System first.  There is no short cut to success, it is a slow methodical process that builds a solid foundation for growth.  We have a fantastic 5 years ahead of us; however, to sustain it we must be prudent and hold firm to sustainable strategies.

Cal Haupt

Chairman and Chief Executive Officer

Southeast Mortgage of Georgia, Inc.

www.southeastmortgage.com

770-279-0222

Testimonial - Awesome Service Creates More Clients for Builders and Realtors

"Adding value back to our Builders and Realtors is why we focus on Awesome Service one client at a time.  We do not focus on doing more loans than everyone else, we focus on creating new clients for our Builders and Realtors from providing their Clients Awesome Service who refer their friends and family.  Organic word of mouth growth is sustainable in economic expansion cycles and contraction.  We are not here to be Average, We are here to be Awesome!"  Kathleen, Ben, and Wilson Parker Homes exemplify that belief as attested by our client.

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

From: Paula Worthy

Sent: Thursday, January 21, 2016 5:13 PM
To: Kathleen Westbrook
Cc: Ben Richardson
Subject: Re: Clear to Close

Kathleen,

Words fail me at this moment. You have exceeded my every expectation!!! You provided outstanding customer service and support, and made me feel as though I were your only client. I have purchased several houses in my lifetime, this is the first purchase were I felt I had little to do and my lifelong friends were doing all the work for me.

You always made yourself available to me, even after hours. Candice always showed courtesy and love, and Adrian was like the big brother with the calm guidance. Let me not forget my awesome Realtor, Ben Richardson. This man knew what I was thinking, wanted to know, and researched answers before I asked the questions! He knew what I was thinking, feeling, and wanted in a home despite the words coming out of my mouth. God gave me the greatest blessing by putting you all together to work for my good in this home purchase. 

You all worked tirelessly and wonderfully to bring me to this magnificent end and I am eternally grateful for you all, as a cohesive team and individually. 

If anyone ever asked for help in purchasing a home, my first words will be BEN RICHARDSON (Harry Norman) and KATHLEEN WESTBROOK (Southeast Mortgage)!!! Every person who graces my home will know Candice and Adrian are the greatest team Wilson Parker Homes have. 

Thank you all for bringing me to and through this awesome transition in my life. I expect to see every one of you at my home warming, for you are all a part of my home. 

Home is where your heart is, and you all are a permanent part of my heart. 

Paula Worthy

 

 

www.southeastmortgage.com

770-279-0222

 

Cal-Culator - How Did 2015 End for the Atlanta Housing Industry?

How Did 2015 End for the Atlanta Housing Industry?

 The Atlanta housing industry ended the year on a more sluggish note than expected. The

Cal-Culator, Atlanta’s residential real estate index, remained stagnant at 6.9 for October and November, then took a slight dip to 6.8 in December. Tight inventory, home sales and a variety of other housing indicators were factors in the end-of-year decline. Although inventory was tight and the index was relatively flat, we did see a consumer, builder and Realtor shift to licensed service oriented mortgage providers.

 

On December 16, the Federal Reserve increased the Federal funds rate ¼ point for the first time in nearly a decade since the 2007-2009 financial crisis. Based on historical data in Georgia, the start of a tightening policy by the Federal Reserve, signals strong future mortgage growth for a defined period.
While the index holds true for the macro Georgia mortgage market, Southeast Mortgage posted a 99.3 percent growth in December compared to same period 2014.

Tight Inventory
According to Zillow’s November Market Report, the number of homes on the market fell 1.7 percent in November and 7.6 percent from the year prior, marking 10 months of year-over-year inventory declines. However, on a positive note, Atlanta experienced one of the biggest year-over-year inventory increases in the nation ­– a respectable 17 percent.

Home Sales
For the third time in the last quarter of 2015, pending home sales slightly declined due to increasing home prices and inventory, according to the National Association of Realtors. However, pending home sales in the South increased slightly by 1.3 percent in November.

“Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains,” said NAR Chief Economist Lawrence Yun. “While feedback from Realtors continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”

RE/MAX’s National Report
RE/MAX’s December National Report, available for download here, revealed a number of stagnant factors about the housing industry:

• The average Days On Market for all homes sold was up three days, to 65 days, from RE/MAX’s national October average.
• The average number of home sales in 53 metro areas in November decreased 22.6 percent from October and was 1.4 percent lower than the previous year.
• The median sales price for all homes sold in November was down 5 percent from October, though this factor can help in housing affordability.

“Moderating prices help keep homeownership more affordable as we approach the end of a year that saw prices reach pre-recession levels in many markets. Even with anticipated rate hikes, mortgage rates are near historic lows, which also helps home affordability. Many home buyers find better availability and affordability in the winter months, before the traditional spring buying season starts,” said RE/MAX CEO Dave Linger.

Home Values           
Despite the dip, a bright spot at the end of last year was increased home values. Home values rose nationally 3.9 percent while many cities experienced double-digit growth, according to Zillow. Zillow also found the values of all U.S. homes grew $1.1 trillion, up 4.1 percent from 2014, though the year’s pace was slower than 2014.

The first Cal-Culator of 2016 will be released February 9, which will hopefully reveal a break in the sluggish performance.

http://leadership.saportareport.com/homemortgages/

www.southeastmortgage.com
770-279-0222
 

Southeast Mortgage 2016 Mission Statement

Southeast Mortgage 2016 Mission Statement

Southeast Mortgage is dedicated to providing Clients COMPETENT advice and AWESOME Service via Licensed Mortgage Originators and a “We Can” Operations TEAM.

Southeast Mortgage has re-aligned its methodology to adapt to industry changes and capitalize on critical paths and learning identified through objective analysis.  The result is a highly accurate efficient decision and verification process that expedites a file to the closing queue.

“I am a Georgia Tech grad, so I am an engineer at heart that also understands finance, sales theory, and production management.  The enhancements for 2016 are simply amazing.  Our MLOs will have a competitive advantage to leverage organic growth from our client’s life cycle and win more Builder and Realtor relationships through smarter underwriting and fantastic communication.  2016 will be a year to remember”  Cal Haupt, Chairman and CEO. 

 

www.southeastmortgage.com

Happy New Year 2016 Letter to our Team and Clients

I want to personally thank all our teammates that make Southeast Mortgage what it is and enables us to deliver best in class service with the most competitive mortgage product offering in the markets we serve.  As forecasted, SEM executed its strategic plan achieving a 40.1% growth as compared to last year. 

With a record volume in December we continue to be impressed with the calm across all operations units and that we were relatively complete with closings and the calendar by 4PM.  By record volume I mean more volume than any month in the history of SEM.  This is what is unique about SEM, we execute better as volumes surge which is a testament to the structure and teamwork that makes us best in class.

With interest rates finally on the rise and other economic recovery inputs trending north we will continue the surge experienced in December 2015.  All the data we use for forecasting points to an incredible 2016.
 

On behalf of the shareholders of Southeast Mortgage, I would like to thank you for a great 2015 and the happy clients you created that will refer their friends and family and secure our organic growth for many years to come. 

Happy New Year 2016…..

 

 

Cal Haupt

Chairman and CEO

Southeast Mortgage of Georgia, Inc.