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Big News!

I wanted to post a quick note to let everyone know that I am changing mortgage companies. I know that it was only five months ago that many of you were alerted of my switch to Homestead Mortgage, but the time has come for me to move again. I am moving my business to a closer local company that has a long standing good reputation in the community: Alpine Mortgage. I invite you to check them out on the web by clicking their name above.

I think this is a good move for me and my business. I have been meeting with the president of the company as well as their head of development for a while now and am ready to make the move. As of Monday the 9th of Feb, I am going to be brokered with my new company. My phone number remains unchanged, as will all other methods of contact except for my company email address. Only a few people use it, but jwagher@homestead-mortgage.com will no doubt start bouncing emails soon. Instead, use my Gmail account if you need to send me a mail. Click Here to email me and save my address.

I would love to discuss why I left with all of you if you are curious, and I’m sure that I’ll talk to many of you in the coming days and weeks. Feel free to give me a call or watch for a letter in the mailbox from me that will tell you all more about the switch.

I know that there are several of you that currently have applications in with me and are definitely wondering what is going to happen to your file. Please understand that I have everything under control and have taken a lot of time to make sure that this transition will go smoothly. The only detail that you may notice is that if we are currently working on a loan together I will need to meet with you and have you sign a new set of disclosures specific to my new company. All terms of your loan are not going to change and everything will hum along just fine.

Thanks so much for reading,

Jon

2009: 02/08
CATEGORY: Uncategorized
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Float or Lock: Part 2

As promised, I’ll write a little about what happens when you lock your loan…

There’s a little more involved with locking than just faxing a piece of paper with a bunch of numbers and loan details. Before I offer you (or any client) a lock I have to do my research. There’s a lot more to finding the right loan than just checking the interest rates. Not all banks are created equal when it comes to service. If they aren’t going to be able to underwrite the loan in a reasonable amount of time, then that definitely affects the lock period that is required. If you go beyond your lock period, it typically costs money to extend- therefore, choosing the right bank for each client and their unique needs is essential.

There are also other considerations with locks. For instance, there is the concept of “pull-through.” This term relates to the ratio of loans locked with a particular lender or investor versus the number of loans closed. This is a very important concept because it has a direct impact on the interest rates that I am able to offer to my clients. It is important to lenders that their locks perform because when a loan is locked a process begins. When a lock is registered with a particular lender, their secondary marketing department begins the packaging process and bundles the loan into blocks with other mortgages to sell to investors. It the locks are blown, the block of mortgages lose value and that chips into the bank’s yield. With little exception, your loan is packaged and awaiting delivery soon after registration. Who’s buying these loans anyways, you ask? Typically it’s either going to be a bigger bank with more money to lend or Fannie/Freddie themselves.

At this point you may be seeing the problem. If it is a falling interest rate environment, this is where my job can become a lot more stressful. It is no easy task figuring out when the right time for my clients to lock is, or answering the calls if the rates fall lower after they do lock. It’s important for me to always make sure that my clients are getting a good interest rate and don’t feel like they can do better anywhere else.

Lenders aren’t unreasonable though, they understand that if interest rates are falling, lenders are going to want to move their locks to different banks to capitalize on lower rates. As a result, many offer “float-down’s” or other incentives to keep the loans right where they are. It nearly always costs some money, around .125-.5% (of the loan amount) depending on the lender, but it’s nearly always worth it for me to pay to preserve the relationship with the lender and to get my client a great rate.

If I have a large number of locked loans fall through or don’t properly manage my pipeline then I risk not having access to competitive rates and losing business (not good). Pipeline management and market analysis is key. With the volitility that we are seeing in the market these days it’s more important than ever to be a full-time mortgage professional and pay attention to what’s happening in the market.